Press Release - OCTOBER 18, 2017

A.M. Best Assigns Issue Credit Ratings to UnitedHealth Group Incorporated’s Forthcoming New Senior Unsecured Notes


CONTACTS:
 Bridget Maehr
Senior Financial Analyst
+1 908 439 2200, ext. 5321
bridget.maehr@ambest.com

Sally Rosen
Senior Director
+1 908 439 2200, ext. 5280
sally.rosen@ambest.com
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - OCTOBER 18, 2017
A.M. Best has assigned Long-Term Issue Credit Ratings of “bbb+” to the forthcoming $300 million floating rate senior unsecured notes due 2020, the $900 million senior unsecured notes due 2020, the $900 million senior unsecured notes due 2022, the $950 million senior unsecured notes due 2027 and the $950 million senior unsecured notes due 2047 that will be issued by UnitedHealth Group Incorporated (UnitedHealth) (Minnetonka, MN) [NYSE:UNH]. The outlook assigned to these Credit Ratings (ratings) is stable. A.M. Best expects the proceeds from this offering to be used by UnitedHealth for debt maturities in the fourth quarter of 2017 and February 2018, to pay down outstanding commercial paper borrowings and for general corporate purposes. The existing ratings of UnitedHealth and its subsidiaries are unchanged.

A.M. Best anticipates that these issuances will be within UnitedHealth’s plan for its financial leverage to be approximately 40% by the end of 2017. Furthermore, UnitedHealth maintains good interest coverage of 12 times driven by the strong operating earnings from its UnitedHealthcare and Optum platforms. Nevertheless, UnitedHealth’s ratio of goodwill plus intangibles to shareholders’ equity remains high due to the company’s history of acquisition activity and exceeds 130%, which puts pressure on UnitedHealth’s balance sheet. However, the company has no history of sizeable goodwill write-downs and recent acquisitions, including Catamaran Corporation, have had a favorable impact on revenues and earnings.

UnitedHealth has a good level of financial flexibility, which is supported by its commercial paper program, parent company cash, subsidiary dividends and credit facility. Moreover, UnitedHealth’s non-regulated operating earnings and cash flows are materially higher than that of its peers. The company’s net income increased significantly over the past two years driven by enrollment growth and margin expansion for its core UnitedHealthcare business, and the strong and growing earnings contribution from the Optum operations. Consolidated earnings are anticipated to remain strong through year-end 2017.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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AMB# Company Name
058106 UnitedHealth Group Incorporated