UNITEDHEALTH GROUP INC 10-Q

ITEM 1. FINANCIAL STATEMENTS UnitedHealth Group Condensed Consolidated Balance Sheets (Unaudited) (in millions, except per share data) March 31, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 28,414 $ 25,427 Short-term investments 4,296 4,201 Accounts receivable, net 27,197 21,276 Other current receivables, net 19,284 17,694 Assets under management 3,619 3,755 Prepaid expenses and other current assets 6,132 6,084 Total current assets 88,942 78,437 Long-term investments 45,928 47,609 Property, equipment and capitalized software, net 10,429 11,450 Goodwill 105,664 103,732 Other intangible assets, net 15,543 15,194 Other assets 17,704 17,298 Total assets $ 284,210 $ 273,720 Liabilities, redeemable noncontrolling interests and equity Current liabilities: Medical costs payable $ 34,032 $ 32,395 Accounts payable and accrued liabilities 30,738 31,958 Short-term borrowings and current maturities of long-term debt 9,787 4,274 Unearned revenues 3,206 3,355 Other current liabilities 26,668 27,072 Total current liabilities 104,431 99,054 Long-term debt, less current maturities 63,850 58,263 Deferred income taxes 4,167 3,021 Other liabilities 14,844 14,463 Total liabilities 187,292 174,801 Commitments and contingencies (Note 6) Redeemable noncontrolling interests 4,548 4,498 Equity: Preferred stock, $ 0.001 par value - 10 shares authorized; no shares issued or outstanding — — Common stock, $ 0.01 par value - 3,000 shares authorized; 920 and 924 issued and outstanding 9 9 Retained earnings 90,118 95,774 Accumulated other comprehensive loss ( 3,439 ) ( 7,027 ) Nonredeemable noncontrolling interests 5,682 5,665 Total equity 92,370 94,421 Total liabilities, redeemable noncontrolling interests and equity $ 284,210 $ 273,720 See Notes to the Condensed Consolidated Financial Statements 1 Table of Contents UnitedHealth Group Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, (in millions, except per share data) 2024 2023 Revenues: Premiums $ 77,988 $ 72,786 Products 11,909 10,267 Services 8,888 8,080 Investment and other income 1,011 798 Total revenues 99,796 91,931 Operating costs: Medical costs 65,735 59,845 Operating costs 14,077 13,625 Cost of products sold 11,056 9,405 Depreciation and amortization 997 970 Total operating costs 91,865 83,845 Earnings from operations 7,931 8,086 Interest expense ( 844 ) ( 754 ) Loss on sale of subsidiary ( 7,086 ) — Earnings before income taxes 1 7,332 Provision for income taxes ( 1,222 ) ( 1,558 ) Net (loss) earnings ( 1,221 ) 5,774 Earnings attributable to noncontrolling interests ( 188 ) ( 163 ) Net (loss) earnings attributable to UnitedHealth Group common shareholders $ ( 1,409 ) $ 5,611 (Loss) earnings per share attributable to UnitedHealth Group common shareholders: Basic $ ( 1.53 ) $ 6.01 Diluted $ ( 1.53 ) $ 5.95 Basic weighted-average number of common shares outstanding 922 933 Dilutive effect of common share equivalents — 10 Diluted weighted-average number of common shares outstanding 922 943 Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents 15 5 See Notes to the Condensed Consolidated Financial Statements 2 Table of Contents UnitedHealth Group Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended March 31, (in millions) 2024 2023 Net (loss) earnings $ ( 1,221 ) $ 5,774 Other comprehensive income: Gross unrealized (losses) gains on investment securities during the period ( 290 ) 640 Income tax effect 68 ( 147 ) Total unrealized (losses) gains, net of tax ( 222 ) 493 Gross reclassification adjustment for net realized (gains) losses included in net earnings ( 32 ) 13 Income tax effect 7 ( 3 ) Total reclassification adjustment, net of tax ( 25 ) 10 Foreign currency translation (losses) gains ( 293 ) 341 Reclassification adjustment for translation losses included in net (loss) earnings 4,128 — Total foreign currency translation gains 3,835 341 Other comprehensive income 3,588 844 Comprehensive income 2,367 6,618 Comprehensive income attributable to noncontrolling interests ( 188 ) ( 163 ) Comprehensive income attributable to UnitedHealth Group common shareholders $ 2,179 $ 6,455 See Notes to the Condensed Consolidated Financial Statements 3 Table of Contents UnitedHealth Group Condensed Consolidated Statements of Changes in Equity (Unaudited) Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Nonredeemable Noncontrolling Interests Total Equity Three months ended March 31, (in millions) Shares Amount Net Unrealized (Losses) Gains on Investments Foreign Currency Translation (Losses) Gains Balance at January 1, 2024 924 $ 9 $ — $ 95,774 $ ( 1,971 ) $ ( 5,056 ) $ 5,665 $ 94,421 Net (loss) earnings ( 1,409 ) 149 ( 1,260 ) Other comprehensive (loss) income ( 247 ) 3,835 3,588 Issuances of common stock, and related tax effects 2 — 242 242 Share-based compensation 352 352 Common share repurchases ( 6 ) — ( 574 ) ( 2,518 ) ( 3,092 ) Cash dividends paid on common shares ($ 1.88 per share) ( 1,729 ) ( 1,729 ) Redeemable noncontrolling interests fair value and other adjustments ( 20 ) ( 20 ) Acquisition and other adjustments of nonredeemable noncontrolling interests 19 19 Distribution to nonredeemable noncontrolling interests ( 151 ) ( 151 ) Balance at March 31, 2024 920 $ 9 $ — $ 90,118 $ ( 2,218 ) $ ( 1,221 ) $ 5,682 $ 92,370 Balance at January 1, 2023 934 $ 9 $ — $ 86,156 $ ( 2,778 ) $ ( 5,615 ) $ 3,678 $ 81,450 Net earnings 5,611 113 5,724 Other comprehensive income 503 341 844 Issuances of common stock, and related tax effects 2 — 350 350 Share-based compensation 366 366 Common share repurchases ( 4 ) — ( 633 ) ( 1,378 ) ( 2,011 ) Cash dividends paid on common shares ($ 1.65 per share) ( 1,537 ) ( 1,537 ) Redeemable noncontrolling interests fair value and other adjustments ( 83 ) ( 83 ) Acquisition and other adjustments of nonredeemable noncontrolling interests 819 819 Distribution to nonredeemable noncontrolling interests ( 101 ) ( 101 ) Balance at March 31, 2023 932 $ 9 $ — $ 88,852 $ ( 2,275 ) $ ( 5,274 ) $ 4,509 $ 85,821 See Notes to the Condensed Consolidated Financial Statements 4 Table of Contents UnitedHealth Group Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, (in millions) 2024 2023 Operating activities Net (loss) earnings $ ( 1,221 ) $ 5,774 Noncash items: Depreciation and amortization 997 970 Deferred income taxes ( 27 ) ( 332 ) Share-based compensation 372 362 Loss on sale of subsidiary 7,086 — Other, net 179 69 Net change in other operating items, net of effects from acquisitions, dispositions and changes in AARP balances: Accounts receivable ( 6,162 ) ( 4,306 ) Other assets ( 1,927 ) ( 1,875 ) Medical costs payable 2,069 2,467 Accounts payable and other liabilities ( 231 ) 1,796 Unearned revenues 9 11,402 Cash flows from operating activities 1,144 16,327 Investing activities Purchases of investments ( 4,798 ) ( 4,894 ) Sales of investments 2,976 456 Maturities of investments 2,314 2,119 Cash paid for acquisitions, net of cash assumed ( 3,006 ) ( 7,826 ) Purchases of property, equipment and capitalized software ( 743 ) ( 760 ) Other, net ( 3,083 ) ( 115 ) Cash flows used for investing activities ( 6,340 ) ( 11,020 ) Financing activities Common share repurchases ( 3,072 ) ( 2,000 ) Cash dividends paid ( 1,729 ) ( 1,537 ) Proceeds from common stock issuances 486 344 Repayments of long-term debt ( 750 ) ( 1,375 ) Proceeds from short-term borrowings, net 6,189 7,349 Proceeds from issuance of long-term debt 5,925 6,401 Customer funds administered 1,745 5,012 Other, net ( 563 ) ( 1,004 ) Cash flows from financing activities 8,231 13,190 Effect of exchange rate changes on cash and cash equivalents ( 48 ) 51 Increase in cash and cash equivalents 2,987 18,548 Cash and cash equivalents, beginning of period 25,427 23,365 Cash and cash equivalents, end of period $ 28,414 $ 41,913 See Notes to the Condensed Consolidated Financial Statements 5 Table of Contents UnitedHealth Group Notes to the Condensed Consolidated Financial Statements (Unaudited) 1. Basis of Presentation UnitedHealth Group Incorporated (individually and together with its subsidiaries, “UnitedHealth Group” and the “Company”) is a health care and well-being company with a mission to help people live healthier lives and help make the health system work better for everyone. The Company’s two distinct, yet complementary businesses — Optum and UnitedHealthcare — are working to help build a modern, high-performing health system through improved access, affordability, outcomes and experiences for the individuals and organizations the Company is privileged to serve. The Company has prepared the Condensed Consolidated Financial Statements according to U.S. Generally Accepted Accounting Principles (GAAP) and has included the accounts of UnitedHealth Group and its subsidiaries. The year-end condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. In accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC), the Company has omitted certain footnote disclosures that would substantially duplicate the disclosures contained in its annual audited Consolidated Financial Statements. Therefore, these Condensed Consolidated Financial Statements should be read together with the Consolidated Financial Statements and the Notes included in Part II, Item 8, “Financial Statements and Supplementary Data” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC (2023 10-K). The accompanying Condensed Consolidated Financial Statements include all normal recurring adjustments necessary to present the interim financial statements fairly. Use of Estimates These Condensed Consolidated Financial Statements include certain amounts based on the Company’s best estimates and judgments. The Company’s most significant estimates relate to estimates and judgments for medical costs payable and goodwill. Certain of these estimates require the application of complex assumptions and judgments, often because they involve matters that are inherently uncertain and will likely change in subsequent periods. 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, 2024 and December 31, 2023, accounts receivable related to products and services were $ 10.3 billion and $ 8.6 billion, respectively. As of March 31, 2024, revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts having an original expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, was $ 14.3 billion, of which approximately half is expected to be recognized in the next three years . 6 Table of Contents 2. Investments A summary of debt securities by major security type is as follows: (in millions) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value March 31, 2024 Debt securities - available-for-sale: U.S. government and agency obligations $ 4,730 $ 1 $ ( 262 ) $ 4,469 State and municipal obligations 7,228 7 ( 357 ) 6,878 Corporate obligations 22,756 20 ( 1,225 ) 21,551 U.S. agency mortgage-backed securities 9,395 7 ( 850 ) 8,552 Non-U.S. agency mortgage-backed securities 2,901 1 ( 220 ) 2,682 Total debt securities - available-for-sale 47,010 36 ( 2,914 ) 44,132 Debt securities - held-to-maturity: U.S. government and agency obligations 510 — ( 5 ) 505 State and municipal obligations 28 — ( 3 ) 25 Corporate obligations 59 — — 59 Total debt securities - held-to-maturity 597 — ( 8 ) 589 Total debt securities $ 47,607 $ 36 $ ( 2,922 ) $ 44,721 December 31, 2023 Debt securities - available-for-sale: U.S. government and agency obligations $ 4,674 $ 3 $ ( 234 ) $ 4,443 State and municipal obligations 7,636 39 ( 322 ) 7,353 Corporate obligations 23,136 67 ( 1,186 ) 22,017 U.S. agency mortgage-backed securities 8,982 22 ( 708 ) 8,296 Non-U.S. agency mortgage-backed securities 3,023 3 ( 240 ) 2,786 Total debt securities - available-for-sale 47,451 134 ( 2,690 ) 44,895 Debt securities - held-to-maturity: U.S. government and agency obligations 506 1 ( 6 ) 501 State and municipal obligations 28 — ( 2 ) 26 Corporate obligations 69 — — 69 Total debt securities - held-to-maturity 603 1 ( 8 ) 596 Total debt securities $ 48,054 $ 135 $ ( 2,698 ) $ 45,491 The Company held $ 4.1 billion and $ 4.9 billion of equity securities as of March 31, 2024 and December 31, 2023, respectively. The Company’s investments in equity securities primarily consist of venture investments and employee savings plan related investments. Additionally, the Company’s investments included $ 1.4 billion of equity method investments primarily in operating businesses in the health care sector as of March 31, 2024 and December 31, 2023. The allowance for credit losses on held-to-maturity securities at March 31, 2024 and December 31, 2023 was not material. 7 Table of Contents The amortized cost and fair value of debt securities as of March 31, 2024, by contractual maturity, were as follows: Available-for-Sale Held-to-Maturity (in millions) Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 4,430 $ 4,398 $ 336 $ 334 Due after one year through five years 14,686 14,061 219 216 Due after five years through ten years 10,690 9,813 24 23 Due after ten years 4,908 4,626 18 16 U.S. agency mortgage-backed securities 9,395 8,552 — — Non-U.S. agency mortgage-backed securities 2,901 2,682 — — Total debt securities $ 47,010 $ 44,132 $ 597 $ 589 The fair value of available-for-sale debt securities with gross unrealized losses by major security type and length of time that individual securities have been in a continuous unrealized loss position were as follows: Less Than 12 Months 12 Months or Greater Total (in millions) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses March 31, 2024 Debt securities - available-for-sale: U.S. government and agency obligations $ 2,005 $ ( 18 ) $ 2,053 $ ( 244 ) $ 4,058 $ ( 262 ) State and municipal obligations 1,736 ( 18 ) 4,334 ( 339 ) 6,070 ( 357 ) Corporate obligations 4,046 ( 33 ) 13,881 ( 1,192 ) 17,927 ( 1,225 ) U.S. agency mortgage-backed securities 2,686 ( 46 ) 5,197 ( 804 ) 7,883 ( 850 ) Non-U.S. agency mortgage-backed securities 159 ( 1 ) 2,265 ( 219 ) 2,424 ( 220 ) Total debt securities - available-for-sale $ 10,632 $ ( 116 ) $ 27,730 $ ( 2,798 ) $ 38,362 $ ( 2,914 ) December 31, 2023 Debt securities - available-for-sale: U.S. government and agency obligations $ 1,270 $ ( 7 ) $ 2,077 $ ( 227 ) $ 3,347 $ ( 234 ) State and municipal obligations 907 ( 7 ) 4,063 ( 315 ) 4,970 ( 322 ) Corporate obligations 1,826 ( 17 ) 14,696 ( 1,169 ) 16,522 ( 1,186 ) U.S. agency mortgage-backed securities 1,337 ( 12 ) 5,069 ( 696 ) 6,406 ( 708 ) Non-U.S. agency mortgage-backed securities 279 ( 6 ) 2,202 ( 234 ) 2,481 ( 240 ) Total debt securities - available-for-sale $ 5,619 $ ( 49 ) $ 28,107 $ ( 2,641 ) $ 33,726 $ ( 2,690 ) The Company’s unrealized losses from debt securities as of March 31, 2024 were generated from approximately 32,000 positions out of a total of 39,000 positions. The Company believes that it will timely collect the principal and interest due on its debt securities that have an amortized cost in excess of fair value. 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 March 31, 2024, 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 March 31, 2024 and December 31, 2023 was not material. 8 Table of Contents 3. Fair Value 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. These assets and liabilities are classified into one of three levels of a hierarchy defined by GAAP. For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see Note 4 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2023 10-K. The following table presents a summary of fair value measurements by level and carrying values for items measured at fair value on a recurring basis in the Condensed Consolidated Balance Sheets: (in millions) Quoted Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Total Fair and Carrying Value March 31, 2024 Cash and cash equivalents $ 28,367 $ 47 $ — $ 28,414 Debt securities - available-for-sale: U.S. government and agency obligations 4,275 194 — 4,469 State and municipal obligations — 6,878 — 6,878 Corporate obligations 28 21,324 199 21,551 U.S. agency mortgage-backed securities — 8,552 — 8,552 Non-U.S. agency mortgage-backed securities — 2,682 — 2,682 Total debt securities - available-for-sale 4,303 39,630 199 44,132 Equity securities 1,640 16 69 1,725 Assets under management 1,636 1,876 107 3,619 Total assets at fair value $ 35,946 $ 41,569 $ 375 $ 77,890 Percentage of total assets at fair value 46 % 53 % 1 % 100 % December 31, 2023 Cash and cash equivalents $ 25,345 $ 82 $ — $ 25,427 Debt securities - available-for-sale: U.S. government and agency obligations 4,167 276 — 4,443 State and municipal obligations — 7,353 — 7,353 Corporate obligations 15 21,800 202 22,017 U.S. agency mortgage-backed securities — 8,296 — 8,296 Non-U.S. agency mortgage-backed securities — 2,786 — 2,786 Total debt securities - available-for-sale 4,182 40,511 202 44,895 Equity securities 2,468 16 69 2,553 Assets under management 1,505 2,140 110 3,755 Total assets at fair value $ 33,500 $ 42,749 $ 381 $ 76,630 Percentage of total assets at fair value 44 % 55 % 1 % 100 % There were no transfers in or out of Level 3 financial assets or liabilities during the three months ended March 31, 2024 or 2023. 9 Table of Contents 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: (in millions) Quoted Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Total Fair Value Total Carrying Value March 31, 2024 Debt securities - held-to-maturity $ 522 $ 67 $ — $ 589 $ 597 Long-term debt and other financing obligations $ — $ 63,489 $ — $ 63,489 $ 66,299 December 31, 2023 Debt securities - held-to-maturity $ 524 $ 72 $ — $ 596 $ 603 Long-term debt and other financing obligations $ — $ 59,851 $ — $ 59,851 $ 61,449 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 three months ended March 31, 2024 or 2023. 4. Medical Costs Payable The following table shows the components of the change in medical costs payable for the three months ended March 31: (in millions) 2024 2023 Medical costs payable, beginning of period $ 32,395 $ 29,056 Acquisitions (dispositions), net ( 687 ) 1 Reported medical costs: Current year 66,045 60,315 Prior years ( 310 ) ( 470 ) Total reported medical costs 65,735 59,845 Medical payments: Payments for current year ( 38,652 ) ( 35,087 ) Payments for prior years ( 24,759 ) ( 22,006 ) Total medical payments ( 63,411 ) ( 57,093 ) Medical costs payable, end of period $ 34,032 $ 31,809 For the three months ended March 31, 2024 and 2023, prior years’ medical cost reserve development included no individual factors that were significant. Medical costs payable included reserves for claims incurred by consumers but not yet reported to the Company of $ 25.3 billion and $ 22.3 billion at March 31, 2024 and December 31, 2023, respectively. 5. Short-Term Borrowings and Long-Term Debt In March 2024, the Company issued $ 6.0 billion of senior unsecured notes consisting of the following: (in millions, except percentages) Par Value 4.600 % notes due April 2027 $ 500 4.700 % notes due April 2029 400 4.900 % notes due April 2031 1,000 5.000 % notes due April 2034 1,250 5.375 % Notes due April 2054 1,750 5.500 % Notes due April 2064 1,100 As of March 31, 2024, the Company had $ 7.3 billion of commercial paper outstanding, with a weighted-average annual interest rate of 5.4 %. 10 Table of Contents 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 2023 10-K. 6. Commitments and Contingencies Pending Acquisitions As of March 31, 2024, the Company has entered into agreements to acquire companies in the health care sector, subject to regulatory approval and other customary closing conditions. The total anticipated consideration required for these acquisitions, excluding the payoff of acquired indebtedness, is approximately $ 4 billion. Legal Matters 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. The Company records liabilities for its estimates of probable costs resulting from these matters where appropriate. Estimates of costs resulting from legal and regulatory matters involving the Company are inherently difficult to predict, particularly where the matters: involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or represent a shift in regulatory policy; involve a large number of claimants or regulatory bodies; are in the early stages of the proceedings; 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 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 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. Department of Labor, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau (CFPB), the Defense Contract Audit Agency and other governmental authorities. Similarly, the Company’s international businesses are also subject to investigations, audits and reviews by applicable foreign governments. The Company has also been responding to subpoenas, information requests and investigations from governmental entities. The Company can provide no assurance as to the scope and outcome of these matters and no assurance as to whether its business, financial condition or results of operations will be materially adversely affected. Certain of the Company’s businesses have been reviewed or are currently under review, including for, among other matters, compliance with coding and other requirements under the Medicare risk-adjustment model. CMS has selected certain of the Company’s local plans for risk adjustment data validation (RADV) audits to validate the coding practices of and supporting documentation maintained by health care providers and such audits may result in retrospective adjustments to payments made to the Company’s health plans. 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 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. In May 2018, the DOJ moved to dismiss the Company’s counterclaims, which were filed in March 2018, and moved for partial summary judgment. 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 which may result from this matter given its procedural status. 11 Table of Contents 7. Disposition On February 6, 2024, the Company completed the sale of its Brazil operations. During the three months ended March 31, 2024, the Company recorded a loss of $ 7.1 billion within the Consolidated Statement of Operations, of which $ 4.1 billion related to the impact of cumulative foreign currency translation losses previously included in accumulated other comprehensive loss. The assets and liabilities of the disposal group as of the date of the sale were as follows: (in millions) Assets Cash and cash equivalents $ 778 Accounts receivable and other current assets 515 Long-term investments 788 Property, equipment and capitalized software 1,052 Deferred tax assets 1,035 Other intangible assets 317 Other long-term assets 439 Total assets 4,924 Liabilities Medical costs payable 701 Accounts payable and other current liabilities 834 Other long-term liabilities 136 Total liabilities $ 1,671 12 Table of Contents 8. Segment Financial Information The Company’s four reportable segments are UnitedHealthcare, Optum Health, Optum Insight and Optum Rx. 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 2023 10-K. The following tables present reportable segment financial information: Optum (in millions) UnitedHealthcare Optum Health Optum Insight Optum Rx Optum Eliminations Optum Corporate and Eliminations Consolidated Three Months Ended March 31, 2024 Revenues - unaffiliated customers: Premiums $ 72,293 $ 5,695 $ — $ — $ — $ 5,695 $ — $ 77,988 Products — 59 41 11,809 — 11,909 — 11,909 Services 2,529 3,970 1,702 687 — 6,359 — 8,888 Total revenues - unaffiliated customers 74,822 9,724 1,743 12,496 — 23,963 — 98,785 Total revenues - affiliated customers — 16,617 2,731 18,281 ( 1,016 ) 36,613 ( 36,613 ) — Investment and other income 535 390 28 58 — 476 — 1,011 Total revenues $ 75,357 $ 26,731 $ 4,502 $ 30,835 $ ( 1,016 ) $ 61,052 $ ( 36,613 ) $ 99,796 Earnings from operations $ 4,395 $ 1,899 $ 490 $ 1,147 $ — $ 3,536 $ — $ 7,931 Interest expense — — — — — — ( 844 ) ( 844 ) Loss on sale of subsidiary ( 7,086 ) — — — — — — ( 7,086 ) Earnings before income taxes $ ( 2,691 ) $ 1,899 $ 490 $ 1,147 $ — $ 3,536 $ ( 844 ) $ 1 Three Months Ended March 31, 2023 Revenues - unaffiliated customers: Premiums $ 67,458 $ 5,328 $ — $ — $ — $ 5,328 $ — $ 72,786 Products — 44 40 10,183 — 10,267 — 10,267 Services 2,555 3,089 1,926 510 — 5,525 — 8,080 Total revenues - unaffiliated customers 70,013 8,461 1,966 10,693 — 21,120 — 91,133 Total revenues - affiliated customers — 14,266 2,510 16,679 ( 859 ) 32,596 ( 32,596 ) — Investment and other income 455 277 20 46 — 343 — 798 Total revenues $ 70,468 $ 23,004 $ 4,496 $ 27,418 $ ( 859 ) $ 54,059 $ ( 32,596 ) $ 91,931 Earnings from operations $ 4,343 $ 1,776 $ 907 $ 1,060 $ — $ 3,743 $ — $ 8,086 Interest expense — — — — — — ( 754 ) ( 754 ) Earnings before income taxes $ 4,343 $ 1,776 $ 907 $ 1,060 $ — $ 3,743 $ ( 754 ) $ 7,332 13 Table of Contents