What changed in this filing

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Item 1. Financial Statements

2023-05-03 compared with 2022-11-02 · 64 added, 152 removed, 377 unchanged (36% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(in millions, except per share data) September 30,

(in millions, except per share data) March 31,

2023 December 31,

9 unchanged sentences

Property, equipment and capitalized software, net

10,637 10,128

Goodwill 100,406 93,352

28 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in millions, except per share data) 2023 2022

27 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2023 2022

Net earnings $ 5,774 $ 5,148

Other comprehensive loss:

Gross unrealized losses on investment securities during the period ( 1,471 ) ( 192 ) ( 4,825 ) ( 705 )

Other comprehensive income (loss):

Gross unrealized gains (losses) on investment securities during the period 640 ( 2,023 )

Income tax effect ( 147 ) 465

Total unrealized losses, net of tax ( 1,131 ) ( 133 ) ( 3,716 ) ( 530 )

Total unrealized gains (losses), net of tax 493 ( 1,558 )

Gross reclassification adjustment for net realized losses (gains) included in net earnings 13 ( 3 )

1 unchanged sentence

Total reclassification adjustment, net of tax

106 ( 16 ) 103 ( 28 )

Total foreign currency translation losses ( 331 ) ( 621 ) ( 89 ) ( 484 )

Other comprehensive loss ( 1,356 ) ( 770 ) ( 3,702 ) ( 1,042 )

Total foreign currency translation gains 341 918

Other comprehensive income (loss) 844 ( 642 )

Comprehensive income 6,618 4,506

7 unchanged sentences

(Loss) Income Nonredeemable Noncontrolling Interests Total

Three months ended September 30,

(in millions) Shares Amount Net Unrealized (Losses) Gains on Investments Foreign Currency Translation Losses

Balance at June 30, 2022 935 $ 10 $ — $ 80,540 $ ( 2,165 ) $ ( 5,565 ) $ 3,385 $ 76,205

5,262 99 5,361

Other comprehensive loss ( 1,025 ) ( 331 ) ( 1,356 )

Issuances of common stock, and related tax effects

Share-based compensation

Common share repurchases ( 2 ) — ( 462 ) ( 538 ) ( 1,000 )

Cash dividends paid on common shares ($ 1.65 per share)

( 1,542 ) ( 1,542 )

Redeemable noncontrolling interests fair value and other adjustments

Acquisition and other adjustments of nonredeemable noncontrolling interests

Distribution to nonredeemable noncontrolling interests

( 98 ) ( 98 )

Balance at September 30, 2022 935 $ 10 $ — $ 83,722 $ ( 3,190 ) $ ( 5,896 ) $ 3,418 $ 78,064

Balance at June 30, 2021 943 $ 10 $ — $ 73,090 $ 927 $ ( 5,013 ) $ 3,008 $ 72,022

4,086 86 4,172

Other comprehensive loss ( 149 ) ( 621 ) ( 770 )

Issuances of common stock, and related tax effects

Share-based compensation

Common share repurchases ( 2 ) — ( 365 ) ( 685 ) ( 1,050 )

Cash dividends paid on common shares ($ 1.45 per share)

( 1,367 ) ( 1,367 )

Redeemable noncontrolling interests fair value and other adjustments

( 85 ) ( 85 )

Acquisition and other adjustments of nonredeemable noncontrolling interests ( 26 ) ( 26 )

Distribution to nonredeemable noncontrolling interests

( 87 ) ( 87 )

Balance at September 30, 2021 942 $ 10 $ — $ 75,124 $ 778 $ ( 5,634 ) $ 2,981 $ 73,259

See Notes to the Condensed Consolidated Financial Statements

UnitedHealth Group

Condensed Consolidated Statements of Changes in Equity

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive

Income (Loss) Nonredeemable Noncontrolling Interests Total

Nine months ended September 30,

(in millions) Shares Amount Net Unrealized Gains (Losses) on Investments Foreign Currency Translation Losses

Three months ended March 31,

(in millions) Shares Amount Net Unrealized (Losses) Gains on Investments Foreign Currency Translation (Losses) Gains

Balance at January 1, 2023 934 $ 9 $ — $ 86,156 $ ( 2,778 ) $ ( 5,615 ) $ 3,678 $ 81,450

5,611 113 5,724

Other comprehensive loss ( 3,613 ) ( 89 ) ( 3,702 )

Other comprehensive income 503 341 844

Issuances of common stock, and related tax effects

4 unchanged sentences

Redeemable noncontrolling interests fair value and other adjustments

( 83 ) ( 83 )

Acquisition and other adjustments of nonredeemable noncontrolling interests

1 unchanged sentence

( 101 ) ( 101 )

Balance at September 30, 2022 935 $ 10 $ — $ 83,722 $ ( 3,190 ) $ ( 5,896 ) $ 3,418 $ 78,064

Balance at March 31, 2023 932 $ 9 $ — $ 88,852 $ ( 2,275 ) $ ( 5,274 ) $ 4,509 $ 85,821

Balance at January 1, 2022 941 $ 10 $ — $ 77,134 $ 423 $ ( 5,807 ) $ 3,285 $ 75,045

5,027 88 5,115

Other comprehensive loss ( 558 ) ( 484 ) ( 1,042 )

Other comprehensive (loss) income ( 1,560 ) 918 ( 642 )

Issuances of common stock, and related tax effects

5 unchanged sentences

( 131 ) ( 131 )

Acquisitions and other adjustments of nonredeemable noncontrolling interests 125 125

Acquisition and other adjustments of nonredeemable noncontrolling interests 91 91

Distribution to nonredeemable noncontrolling interests

( 102 ) ( 102 )

Balance at September 30, 2021 942 $ 10 $ — $ 75,124 $ 778 $ ( 5,634 ) $ 2,981 $ 73,259

Balance at March 31, 2022 939 $ 10 $ — $ 78,782 $ ( 1,137 ) $ ( 4,889 ) $ 3,362 $ 76,128

See Notes to the Condensed Consolidated Financial Statements

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2023 2022

26 unchanged sentences

Repayments of long-term debt ( 1,375 ) ( 1,100 )

Repayments of short-term borrowings, net ( 16 ) ( 1,301 )

Proceeds from short-term borrowings, net 7,349 3,148

Proceeds from issuance of long-term debt 6,401 —

Customer funds administered 5,012 5,120

Purchases of redeemable noncontrolling interests ( 176 ) ( 1,338 )

Other, net ( 1,004 ) ( 1,552 )

Cash flows used for financing activities ( 166 ) ( 3,828 )

Cash flows from financing activities 13,190 2,304

Effect of exchange rate changes on cash and cash equivalents 51 157

20 unchanged sentences

The impact of any change in estimates is included in earnings in the period in which the estimate is adjusted.

Revenues - Products and Services

As of March 31, 2023 and December 31, 2022, accounts receivable related to products and services were $ 8.1 billion and $ 7.1 billion, respectively.

Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracting having an original expected duration of one year or less, contracts where revenue recognized as invoiced and contracts with variable consideration related undelivered performance obligations, was $ 12.3 billion, of which approximately half is expected to be recognized in the next three years .

A summary of debt securities by major security type is as follows:

(in millions) Amortized

September 30, 2022

March 31, 2023

Debt securities - available-for-sale:

25 unchanged sentences

Total debt securities $ 46,622 $ 59 $ ( 3,681 ) $ 43,000

The Company held $ 3.4 billion and $ 3.5 billion of equity securities as of September 30, 2022 and December 31, 2021, respectively.

The Company’s investments in equity securities primarily consist of employee savings plan related investments, other venture investments and shares of Brazilian real denominated fixed-income funds with readily determinable fair values.

Additionally, the Company’s investments included $ 1.6 billion and $ 1.3 billion of equity method investments in operating businesses in the health care sector as of September 30, 2022 and December 31, 2021, respectively.

The allowance for credit losses on held-to-maturity securities at September 30, 2022 and December 31, 2021 was not material.

The amortized cost and fair value of debt securities as of September 30, 2022, by contractual maturity, were as follows:

The Company held $ 3.9 billion and $ 3.7 billion of equity securities as of March 31, 2023 and December 31, 2022, respectively.

The Company’s investments in equity securities primarily consist of employee savings plan related investments, venture investments and shares of Brazilian real denominated fixed-income funds with readily determinable fair values.

Additionally, the Company’s investments included $ 1.5 billion of equity method investments in operating businesses in the health care sector as of March 31, 2023 and December 31, 2022.

The allowance for credit losses on held-to-maturity securities at March 31, 2023 and December 31, 2022 was not material.

The amortized cost and fair value of debt securities as of March 31, 2023, by contractual maturity, were as follows:

Available-for-Sale Held-to-Maturity

11 unchanged sentences

(in millions) Fair

September 30, 2022

March 31, 2023

Debt securities - available-for-sale:

17 unchanged sentences

Total debt securities - available-for-sale $ 24,899 $ ( 1,750 ) $ 12,320 $ ( 1,914 ) $ 37,219 $ ( 3,664 )

The Company’s unrealized losses from debt securities as of September 30, 2022 were generated from approximately 36,000 positions out of a total of 40,000 positions.

The Company’s unrealized losses from debt securities as of March 31, 2023 were generated from approximately 32,000 positions out of a total of 42,000 positions.

The Company believes that it will collect the timely principal and interest due on its debt securities that have an amortized cost in excess of fair value.

The unrealized losses were caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities that impacted the Company’s assessment on collectability of principal and interest.

The unrealized losses were primarily caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities which impacted the Company’s assessment on collectability of principal and interest.

At each reporting period, the Company evaluates available-for-sale debt securities for any credit-related impairment when the fair value of the investment is less than its amortized cost.

The Company evaluated the expected cash flows, the underlying credit quality and credit ratings of the issuers noting no significant credit deterioration since purchase.

As of September 30, 2022, the Company did not have the intent to sell any of the available-for-sale debt securities in an unrealized loss position.

As of March 31, 2023, the Company did not have the intent to sell any of the available-for-sale debt securities in an unrealized loss position.

Therefore, the Company believes these losses to be temporary.

The allowance for credit losses on available-for-sale debt securities at September 30, 2022 and December 31, 2021 was not material.

The allowance for credit losses on available-for-sale debt securities at March 31, 2023 and December 31, 2022 was not material.

Certain assets and liabilities are measured at fair value in the Condensed Consolidated Financial Statements or have fair values disclosed in the Notes to the Condensed Consolidated Financial Statements.

7 unchanged sentences

Fair and Carrying

September 30, 2022

March 31, 2023

Cash and cash equivalents $ 41,851 $ 62 $ — $ 41,913

23 unchanged sentences

Percentage of total assets at fair value 42 % 57 % 1 % 100 %

There were no transfers in or out of Level 3 financial assets or liabilities during the nine months ended September 30, 2022 or 2021.

There were no transfers in or out of Level 3 financial assets or liabilities during the three months ended March 31, 2023 or 2022.

The following table presents a summary of fair value measurements by level and carrying values for certain financial instruments not measured at fair value on a recurring basis in the Condensed Consolidated Balance Sheets:

4 unchanged sentences

Value Total Carrying Value

September 30, 2022

March 31, 2023

Debt securities - held-to-maturity $ 595 $ 74 $ — $ 669 $ 682

4 unchanged sentences

Nonfinancial assets and liabilities or financial assets and liabilities that are measured at fair value on a nonrecurring basis are subject to fair value adjustments only in certain circumstances, such as when the Company records an impairment.

There were no significant fair value adjustments for these assets and liabilities recorded during the nine months ended September 30, 2022 or 2021.

There were no significant fair value adjustments for these assets and liabilities recorded during the three months ended March 31, 2023 or 2022.

Medical Costs Payable

The following table shows the components of the change in medical costs payable for the nine months ended September 30:

The following table shows the components of the change in medical costs payable for the three months ended March 31:

(in millions) 2023 2022

11 unchanged sentences

Medical costs payable, end of period $ 31,809 $ 28,676

For the nine months ended September 30, 2022, prior years’ medical cost reserve development included no individual factors that were significant.

For the nine months ended September 30, 2021, prior years’ medical cost reserve development was primarily driven by lower than expected health system utilization and the uncertainty of care patterns due to the disruption of the health care system caused by COVID-19.

Medical costs payable included reserves for claims incurred by insured customers but not yet reported to the Company of $ 20.0 billion and $ 17.1 billion at September 30, 2022 and December 31, 2021, respectively.

For the three months ended March 31, 2023 and 2022, prior years’ medical cost reserve development included no individual factors that were significant.

Medical costs payable included reserves for claims incurred by insured customers but not yet reported to the Company of $ 21.7 billion and $ 20.0 billion at March 31, 2023 and December 31, 2022, respectively.

Short-Term Borrowings and Long-Term Debt

In May 2022, the Company issued $ 6.0 billion of senior unsecured notes consisting of the following:

(in millions, except percentages) Par Value

3.700 % notes due May 2027

4.000 % notes due May 2029

4.200 % notes due May 2032

4.750 % notes due May 2052

4.950 % notes due May 2062

In October 2022, the Company issued $ 9.0 billion of senior unsecured notes consisting of the following:

In March 2023, the Company issued $ 6.5 billion of senior unsecured notes consisting of the following:

(in millions, except percentages) Par Value

5.000 % notes due October 2024

5.150 % notes due October 2025

5.250 % notes due February 2028

5.300 % notes due February 2030

5.350 % notes due February 2033

5.875 % notes due February 2053

6.050 % notes due February 2063

4.250 % notes due January 2029

4.500 % notes due April 2033

5.050 % notes due April 2053

5.200 % notes due April 2063

As of March 31, 2023, the Company had $ 8.2 billion of commercial paper outstanding, with a weighted-average annual interest rate of 5.2 %.

For more information on the Company’s short-term borrowings, debt covenants and long-term debt, see Note 8 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2022 10-K.

In June 2022, the Company’s Board of Directors increased the Company’s quarterly cash dividend to shareholders to an annual rate of $6.60 compared to $5.80 per share, which the Company had paid since June 2021.

Declaration and payment of future quarterly dividends is at the discretion of the Board of Directors and may be adjusted as business needs or market conditions change.

The following table provides details of the Company’s 2022 dividend payments:

Payment Date Amount per Share Total Amount Paid

(in millions)

March 22 $ 1.45 $ 1,363

June 28 1.65 1,545

September 20 1.65 1,542

Commitments and Contingencies

Pending Business Combinations

As of September 30, 2022, the Company has entered into agreements to acquire companies in the health care sector, most notably Change Healthcare (NASDAQ:

CHNG) and LHC Group, Inc (NASDAQ:

LHCG), subject to regulatory approval and other customary closing conditions.

As of that date, the total anticipated capital required for these business combinations, excluding associated disposition proceeds and the payoff of acquired indebtedness, was approximately $ 14 billion.

The Company completed the acquisition of Change Healthcare on October 3, 2022.

Legal Matters

Because of the nature of its businesses, the Company is frequently made party to a variety of legal actions and regulatory inquiries, including class actions and suits brought by members, care providers, consumer advocacy organizations, customers and regulators, relating to the Company’s businesses, including management and administration of health benefit plans and other services.

The Company is frequently made party to a variety of legal actions and regulatory inquiries, including class actions and suits brought by members, care providers, consumer advocacy organizations, customers and regulators, relating to the Company’s businesses, including management and administration of health benefit plans and other services.

These matters include medical malpractice, employment, intellectual property, antitrust, privacy and contract claims and claims related to health care benefits coverage and other business practices.

6 unchanged sentences

or could result in a change in business practices.

Accordingly, the Company is often unable to estimate the losses or ranges of losses for those matters where there is a reasonable possibility or it is probable that a loss may be incurred.

Accordingly, the Company is often unable to estimate the losses or ranges of losses for those matters where there is a reasonable possibility or it is probable a loss may be incurred.

Government Investigations, Audits and Reviews

The Company has been involved or is currently involved in various governmental investigations, audits and reviews.

These include routine, regular and special investigations, audits and reviews by the Centers for Medicare and Medicaid Services (CMS), state insurance and health and welfare departments, state attorneys general, the Office of the Inspector General, the Office of Personnel Management, the Office for Civil Rights, the Government Accountability Office, the Federal Trade Commission, U.S.

Congressional committees, the Department of Justice (DOJ), the SEC, the Internal Revenue Service, the U.S.

These include routine, regular and special investigations, audits and reviews by the Centers for Medicare and Medicaid Services (CMS), state insurance and health and welfare departments, state attorneys general, the Office of the Inspector General, the Office of Personnel Management, the Office of Civil Rights, the Government Accountability Office, the Federal Trade Commission, U.S.

Congressional committees, the U.S.

Department of Justice (DOJ), the SEC, the Internal Revenue Service, the U.S.

Drug Enforcement Administration, the U.S.

5 unchanged sentences

On February 14, 2017, the DOJ announced its decision to pursue certain claims within a lawsuit initially asserted against the Company and filed under seal by a whistleblower in 2011.

The whistleblower’s complaint, which was unsealed on February 15, 2017, alleges that the Company made improper Medicare risk adjustment submissions and violated the False Claims Act.

The whistleblower’s complaint, which was unsealed on February 15, 2017, alleges the Company made improper risk adjustment submissions and violated the False Claims Act.

On February 12, 2018, the court granted in part and denied in part the Company’s motion to dismiss.

1 unchanged sentence

In March 2019, the court denied the government’s motion for partial summary judgment and dismissed the Company’s counterclaims without prejudice.

The Company cannot reasonably estimate the outcome that may result from this matter given its procedural status.

The Company cannot reasonably estimate the outcome which may result from this matter given its procedural status.

Business Combinations

During the nine months ended September 30, 2022, the Company completed several business combinations for total consideration of $ 8.2 billion.

During the three months ended March 31, 2023, the Company completed several business combinations for total consideration of $ 8.0 billion.

Acquired assets (liabilities) at acquisition date were:

16 unchanged sentences

The preliminary purchase price allocations for the various business combinations are subject to adjustment as valuation analyses, primarily related to intangible assets and contingent liabilities, are finalized.

The acquisition date fair values and weighted-average useful lives assigned to finite-lived intangible assets were:

The acquisition date fair values and weighted-average useful lives assigned to intangible assets were:

(in millions, except years) Fair Value Weighted-Average Useful Life

Acquired finite-lived intangible assets:

Customer-related $ 234 13 years

2 unchanged sentences

Total acquired finite-lived intangible assets 464 9 years

Total acquired indefinite-lived intangible assets - operating licenses and certificates 1,677

Total acquired intangible assets $ 2,141

The results of operations and financial condition of acquired entities have been included in the Company’s consolidated results and the results of the corresponding operating segment as of the date of acquisition.

Through September 30, 2022, acquired entities impact on revenues and net earnings was not material.

Unaudited pro forma revenues and net earnings for the nine months ended September 30, 2022 and 2021 as if the business combinations had occurred on January 1, 2021 were immaterial for both periods.

Through March 31, 2023, acquired entities impact on revenues and net earnings was not material.

Unaudited pro forma revenues and net earnings for the three months ended March 31, 2023 and 2022, as if the business combinations had occurred on January 1, 2022, were immaterial for both periods.

Segment Financial Information

1 unchanged sentence

For more information on the Company’s segments, see Part I, Item I, “Business” and Note 14 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2022 10-K.

Total assets at Optum Health and Optum Rx increased to $ 67.8 billion and $ 47.2 billion as of September 30, 2022 compared to $ 60.5 billion and $ 40.2 billion as of December 31, 2021, respectively.

The increase in total assets at Optum Health and Optum Rx was primarily due to goodwill from business combinations of $ 4.5 billion and $ 3.8 billion, respectively.

On January 1, 2022, the Company realigned its operating segments to combine UnitedHealthcare Global and UnitedHealthcare Employer & Individual.

The realignment had no impact on the Company’s reportable segments.

Total assets at Optum Health increased to $ 80.4 billion as of March 31, 2023 compared to $ 69.0 billion as of December 31, 2022, primarily due to goodwill from business combinations of $ 5.9 billion.

The following tables present reportable segment financial information:

1 unchanged sentence

Eliminations Consolidated

Three Months Ended September 30, 2022

Revenues - unaffiliated customers:

Premiums $ 59,375 $ 5,116 $ — $ — $ — $ 5,116 $ — $ 64,491

Products — 2 37 9,151 — 9,190 — 9,190

Services 2,435 2,756 1,067 442 — 4,265 — 6,700

Total revenues - unaffiliated customers

61,810 7,874 1,104 9,593 — 18,571 — 80,381

Total revenues - affiliated customers

— 10,302 2,566 15,592 ( 800 ) 27,660 ( 27,660 ) —

Investment and other income

185 287 23 18 — 328 — 513

Total revenues $ 61,995 $ 18,463 $ 3,693 $ 25,203 $ ( 800 ) $ 46,559 $ ( 27,660 ) $ 80,894

Earnings from operations $ 3,799 $ 1,575 $ 1,007 $ 1,081 $ — $ 3,663 $ — $ 7,462

Interest expense — — — — — — ( 516 ) ( 516 )

Earnings before income taxes

$ 3,799 $ 1,575 $ 1,007 $ 1,081 $ — $ 3,663 $ ( 516 ) $ 6,946

Three Months Ended September 30, 2021

Revenues - unaffiliated customers:

Premiums $ 53,345 $ 3,622 $ — $ — $ — $ 3,622 $ — $ 56,967

Products — 8 37 8,658 — 8,703 — 8,703

Services 2,407 2,515 970 272 — 3,757 — 6,164

Total revenues - unaffiliated customers

55,752 6,145 1,007 8,930 — 16,082 — 71,834

Total revenues - affiliated customers

— 7,441 2,037 14,400 ( 503 ) 23,375 ( 23,375 ) —

Investment and other income

175 226 95 7 — 328 — 503

Total revenues $ 55,927 $ 13,812 $ 3,139 $ 23,337 $ ( 503 ) $ 39,785 $ ( 23,375 ) $ 72,337

Earnings from operations $ 2,651 $ 1,143 $ 906 $ 1,012 $ — $ 3,061 $ — $ 5,712

Interest expense — — — — — — ( 422 ) ( 422 )

Earnings before income taxes

$ 2,651 $ 1,143 $ 906 $ 1,012 $ — $ 3,061 $ ( 422 ) $ 5,290

(in millions) UnitedHealthcare Optum Health Optum Insight Optum Rx Optum Eliminations Optum Corporate and

Eliminations Consolidated

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Revenues - unaffiliated customers:

13 unchanged sentences

$ 4,343 $ 1,776 $ 907 $ 1,060 $ — $ 3,743 $ ( 754 ) $ 7,332

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Revenues - unaffiliated customers:

14 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements