EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

UnitedHealth Group Inc., economic profit calculation

US$ in millions

	12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Net operating profit after taxes (NOPAT)¹
	Cost of capital²
	Invested capital³

	Economic profit⁴

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2019 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =

Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	UnitedHealth Group Inc.’s economic profit increased from 2017 to 2018 and from 2018 to 2019.

UnitedHealth Group Inc., NOPAT calculation

US$ in millions

	12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Net earnings attributable to UnitedHealth Group common shareholders
	Deferred income tax expense (benefit)¹
	Increase (decrease) in receivables allowances²
	Increase (decrease) in unearned revenues³
	Increase (decrease) in equity equivalents⁴
	Interest expense
	Interest expense, operating lease liability⁵
	Adjusted interest expense
	Tax benefit of interest expense⁶
	Adjusted interest expense, after taxes⁷
	(Gain) loss on marketable securities
	Investment income, before taxes
	Tax expense (benefit) of investment income⁸
	Investment income, after taxes⁹
	Net income (loss) attributable to noncontrolling interest
	Net operating profit after taxes (NOPAT)

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in receivables allowances.

³ Addition of increase (decrease) in unearned revenues.

⁴ Addition of increase (decrease) in equity equivalents to net earnings attributable to UnitedHealth Group common shareholders.

⁵ 2019 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

⁶ 2019 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =

⁷ Addition of after taxes interest expense to net earnings attributable to UnitedHealth Group common shareholders.

⁸ 2019 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

⁹ Elimination of after taxes investment income.

Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	UnitedHealth Group Inc.’s NOPAT increased from 2017 to 2018 and from 2018 to 2019.

UnitedHealth Group Inc., cash operating taxes calculation

US$ in millions

	12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Provision for income taxes
	Less: Deferred income tax expense (benefit)
	Add: Tax savings from interest expense
	Less: Tax imposed on investment income
	Cash operating taxes

Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	UnitedHealth Group Inc.’s cash operating taxes decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

UnitedHealth Group Inc., invested capital calculation (financing approach)

US$ in millions

		Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Commercial paper and current maturities of long-term debt
	Long-term debt, less current maturities
	Operating lease liability¹
	Total reported debt & leases
	Shareholders’ equity attributable to UnitedHealth Group
	Net deferred tax (assets) liabilities²
	Receivables allowances³
	Unearned revenues⁴
	Equity equivalents⁵
	Accumulated other comprehensive (income) loss, net of tax⁶
	Redeemable noncontrolling interests
	Nonredeemable noncontrolling interests
	Adjusted shareholders’ equity attributable to UnitedHealth Group
	Investments⁷
	Invested capital

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of unearned revenues.

⁵ Addition of equity equivalents to shareholders’ equity attributable to UnitedHealth Group.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of investments.

Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	UnitedHealth Group Inc.’s invested capital increased from 2017 to 2018 and from 2018 to 2019.

UnitedHealth Group Inc., cost of capital calculations


Equity²	÷	=	×		=
Commercial paper, long-term debt and other financing obligations³	÷	=	×	× (1 – 21.00%)	=
Operating lease liability⁴	÷	=	×	× (1 – 21.00%)	=
Total:

¹ US$ in millions