UnitedHealth Group Incorporated

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker	Analyst	Analyst Email
Leerink Partners	Ana Gupte	ana.gupte@leerink.com
CRT Capital Group	Brian Wright	bwright@sterneageecrt.com
Susquehanna Financial Group	Chris Rigg	chris.rigg@sig.com
Cowen & Company	Christine Arnold	christine.arnold@cowen.com
Jefferies	David Windley	dwindley@jefferies.com
RBC Capital Markets	Frank G. Morgan	frank.morgan@rbccm.com
Cantor Fitzgerald	Joseph D. France	jfrance@cantor.com
Raymond James	Michael J. Baker	michael.baker@raymondjames.com
Oppenheimer	Michael Wiederhorn	michael.wiederhorn@opco.com
Wells Fargo Securities	Peter Costa	peter.costa@wellsfargo.com
Wedbush Securities	Sarah James	sarah.james@wedbush.com
Credit Suisse	Scott Fidel	scott.fidel@credit-suisse.com
Piper Jaffray	Sean W. Wieland	sean.w.wieland@pjc.com
Mizuho Securities USA	Sheryl R. Skolnick	sheryl.skolnick@us.mizuho-sc.com
FBR Capital Markets & Co	Steven Halper	shalper@fbr.com
Stifel Nicolaus	Thomas A. Carroll	tacarroll@stifel.com

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Primary Input Data

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Derived Input Data

Derived Input	Label	2015 Value	2016 Value	Equational Form
Net Operating Profit Less Adjusted Taxes	NOPLAT	7,178	8,434	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	8,184	8,090	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	339	433	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	102,605	114,885	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	7.00%	7.34%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	23,244	12,280	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	323.83%	145.61%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	10.61%	16.15%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	6.94%	7.30%
Enterprise value	EV_Market	130,079	172,419	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	127,141	167,705
Long-Run Growth	g = IR x ROIC	22.65%	10.69%	Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
Long-Run Growth	g = % $\Delta$ GDP	2.50%	2.50%
Margin from Operations	M	7.03%	7.02%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	0.00%	0.00%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form	Observed Value		Single-stage multiple g solution		Two-stage valuation model g solution
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	0.83	0.93	24.11%	33.37%	20.03%	21.23%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	11.78	13.29	24.11%	33.37%	20.03%	21.23%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	18.12	20.44	24.11%	33.37%	20.03%	21.23%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	15.89	21.31	24.11%	33.37%	20.03%	21.23%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	11.78	13.29	24.11%	33.37%	20.03%	21.23%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	1.27	1.50	24.11%	33.37%	20.03%	21.23%

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