UNITEDHEALTH GROUP INC 10-Q

ITEM 1. FINANCIAL STATEMENTS UnitedHealth Group Condensed Consolidated Balance Sheets (Unaudited) (in millions, except per share data) June 30, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 26,286 $ 25,427 Short-term investments 5,037 4,201 Accounts receivable, net 23,115 21,276 Other current receivables, net 26,762 17,694 Assets under management 3,414 3,755 Prepaid expenses and other current assets 7,424 6,084 Total current assets 92,038 78,437 Long-term investments 46,113 47,609 Property, equipment and capitalized software, net 9,801 11,450 Goodwill 105,436 103,732 Other intangible assets, net 14,729 15,194 Other assets 17,939 17,298 Total assets $ 286,056 $ 273,720 Liabilities, redeemable noncontrolling interests and equity Current liabilities: Medical costs payable $ 32,547 $ 32,395 Accounts payable and accrued liabilities 30,886 31,958 Short-term borrowings and current maturities of long-term debt 11,371 4,274 Unearned revenues 2,572 3,355 Other current liabilities 27,294 27,072 Total current liabilities 104,670 99,054 Long-term debt, less current maturities 63,727 58,263 Deferred income taxes 3,631 3,021 Other liabilities 14,794 14,463 Total liabilities 186,822 174,801 Commitments and contingencies (Note 7) Redeemable noncontrolling interests 4,558 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; 921 and 924 issued and outstanding 9 9 Additional paid-in capital 373 — Retained earnings 92,400 95,774 Accumulated other comprehensive loss ( 3,423 ) ( 7,027 ) Nonredeemable noncontrolling interests 5,317 5,665 Total equity 94,676 94,421 Total liabilities, redeemable noncontrolling interests and equity $ 286,056 $ 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 June 30, Six Months Ended June 30, (in millions, except per share data) 2024 2023 2024 2023 Revenues: Premiums $ 76,897 $ 72,474 $ 154,885 $ 145,260 Products 12,211 10,651 24,120 20,918 Services 8,750 8,663 17,638 16,743 Investment and other income 997 1,115 2,008 1,913 Total revenues 98,855 92,903 198,651 184,834 Operating costs: Medical costs 65,458 60,268 131,193 120,113 Operating costs 13,162 13,809 27,239 27,434 Cost of products sold 11,340 9,748 22,396 19,153 Depreciation and amortization 1,020 1,021 2,017 1,991 Total operating costs 90,980 84,846 182,845 168,691 Earnings from operations 7,875 8,057 15,806 16,143 Interest expense ( 985 ) ( 828 ) ( 1,829 ) ( 1,582 ) Loss on sale of subsidiary and subsidiaries held for sale ( 1,225 ) — ( 8,311 ) — Earnings before income taxes 5,665 7,229 5,666 14,561 Provision for income taxes ( 1,244 ) ( 1,572 ) ( 2,466 ) ( 3,130 ) Net earnings 4,421 5,657 3,200 11,431 Earnings attributable to noncontrolling interests ( 205 ) ( 183 ) ( 393 ) ( 346 ) Net earnings attributable to UnitedHealth Group common shareholders $ 4,216 $ 5,474 $ 2,807 $ 11,085 Earnings per share attributable to UnitedHealth Group common shareholders: Basic $ 4.58 $ 5.89 $ 3.05 $ 11.91 Diluted $ 4.54 $ 5.82 $ 3.02 $ 11.77 Basic weighted-average number of common shares outstanding 921 930 921 931 Dilutive effect of common share equivalents 7 10 8 11 Diluted weighted-average number of common shares outstanding 928 940 929 942 Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents 8 7 7 6 See Notes to the Condensed Consolidated Financial Statements 2 Table of Contents UnitedHealth Group Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (in millions) 2024 2023 2024 2023 Net earnings $ 4,421 $ 5,657 $ 3,200 $ 11,431 Other comprehensive income (loss): Gross unrealized (losses) gains on investment securities during the period ( 75 ) ( 431 ) ( 365 ) 209 Income tax effect 17 99 85 ( 48 ) Total unrealized (losses) gains, net of tax ( 58 ) ( 332 ) ( 280 ) 161 Gross reclassification adjustment for net realized gains included in net earnings ( 26 ) ( 47 ) ( 58 ) ( 34 ) Income tax effect 6 11 13 8 Total reclassification adjustment, net of tax ( 20 ) ( 36 ) ( 45 ) ( 26 ) Foreign currency translation gains (losses) 8 267 ( 285 ) 608 Reclassification adjustment for translation losses included in net earnings 86 — 4,214 — Total foreign currency translation gains 94 267 3,929 608 Other comprehensive income (loss) 16 ( 101 ) 3,604 743 Comprehensive income 4,437 5,556 6,804 12,174 Comprehensive income attributable to noncontrolling interests ( 205 ) ( 183 ) ( 393 ) ( 346 ) Comprehensive income attributable to UnitedHealth Group common shareholders $ 4,232 $ 5,373 $ 6,411 $ 11,828 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 June 30, (in millions) Shares Amount Net Unrealized (Losses) Gains on Investments Foreign Currency Translation (Losses) Gains Balance at March 31, 2024 920 $ 9 $ — $ 90,118 $ ( 2,218 ) $ ( 1,221 ) $ 5,682 $ 92,370 Net earnings 4,216 158 4,374 Other comprehensive (loss) income ( 78 ) 94 16 Issuances of common stock, and related tax effects 1 — 196 196 Share-based compensation 210 210 Common share repurchases — — 3 1 4 Cash dividends paid on common shares ($ 2.10 per share) ( 1,935 ) ( 1,935 ) Redeemable noncontrolling interests fair value and other adjustments ( 36 ) ( 36 ) Acquisition and other adjustments of nonredeemable noncontrolling interests ( 338 ) ( 338 ) Distribution to nonredeemable noncontrolling interests ( 185 ) ( 185 ) Balance at June 30, 2024 921 $ 9 $ 373 $ 92,400 $ ( 2,296 ) $ ( 1,127 ) $ 5,317 $ 94,676 Balance at March 31, 2023 932 $ 9 $ — $ 88,852 $ ( 2,275 ) $ ( 5,274 ) $ 4,509 $ 85,821 Net earnings 5,474 139 5,613 Other comprehensive (loss) income ( 368 ) 267 ( 101 ) Issuances of common stock, and related tax effects 1 — 218 218 Share-based compensation 232 232 Common share repurchases ( 6 ) — ( 442 ) ( 2,585 ) ( 3,027 ) Cash dividends paid on common shares ($ 1.88 per share) ( 1,747 ) ( 1,747 ) Redeemable noncontrolling interests fair value and other adjustments ( 8 ) ( 8 ) Acquisition and other adjustments of nonredeemable noncontrolling interests 478 478 Distribution to nonredeemable noncontrolling interests ( 111 ) ( 111 ) Balance at June 30, 2023 927 $ 9 $ — $ 89,994 $ ( 2,643 ) $ ( 5,007 ) $ 5,015 $ 87,368 See Notes to the Condensed Consolidated Financial Statements 4 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 Six months ended June 30, (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 earnings 2,807 307 3,114 Other comprehensive (loss) income ( 325 ) 3,929 3,604 Issuances of common stock, and related tax effects 3 — 438 438 Share-based compensation 562 562 Common share repurchases ( 6 ) — ( 571 ) ( 2,517 ) ( 3,088 ) Cash dividends paid on common shares ($ 3.98 per share) ( 3,664 ) ( 3,664 ) Redeemable noncontrolling interests fair value and other adjustments ( 56 ) ( 56 ) Acquisition and other adjustments of nonredeemable noncontrolling interests ( 319 ) ( 319 ) Distribution to nonredeemable noncontrolling interests ( 336 ) ( 336 ) Balance at June 30, 2024 921 $ 9 $ 373 $ 92,400 $ ( 2,296 ) $ ( 1,127 ) $ 5,317 $ 94,676 Balance at January 1, 2023 934 $ 9 $ — $ 86,156 $ ( 2,778 ) $ ( 5,615 ) $ 3,678 $ 81,450 Net earnings 11,085 252 11,337 Other comprehensive income 135 608 743 Issuances of common stock, and related tax effects 3 — 568 568 Share-based compensation 598 598 Common share repurchases ( 10 ) — ( 1,075 ) ( 3,963 ) ( 5,038 ) Cash dividends paid on common shares ($ 3.53 per share) ( 3,284 ) ( 3,284 ) Redeemable noncontrolling interests fair value and other adjustments ( 91 ) ( 91 ) Acquisition and other adjustments of nonredeemable noncontrolling interests 1,297 1,297 Distribution to nonredeemable noncontrolling interests ( 212 ) ( 212 ) Balance at June 30, 2023 927 $ 9 $ — $ 89,994 $ ( 2,643 ) $ ( 5,007 ) $ 5,015 $ 87,368 See Notes to the Condensed Consolidated Financial Statements 5 Table of Contents UnitedHealth Group Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, (in millions) 2024 2023 Operating activities Net earnings $ 3,200 $ 11,431 Noncash items: Depreciation and amortization 2,017 1,991 Deferred income taxes ( 358 ) ( 482 ) Share-based compensation 594 604 Loss on sale of subsidiary and subsidiaries held for sale 8,311 — Other, net 459 ( 91 ) Net change in other operating items, net of effects from acquisitions, dispositions and changes in AARP balances: Accounts receivable ( 2,471 ) 197 Other assets ( 4,121 ) ( 2,001 ) Medical costs payable 777 2,408 Accounts payable and other liabilities 36 1,547 Unearned revenues ( 554 ) 11,755 Cash flows from operating activities 7,890 27,359 Investing activities Purchases of investments ( 10,130 ) ( 9,225 ) Sales of investments 5,288 3,188 Maturities of investments 4,621 4,463 Cash paid for acquisitions, net of cash assumed ( 3,031 ) ( 8,161 ) Purchases of property, equipment and capitalized software ( 1,596 ) ( 1,589 ) Loans to providers - cyberattack ( 8,100 ) — Other, net ( 809 ) ( 424 ) Cash flows used for investing activities ( 13,757 ) ( 11,748 ) Financing activities Common share repurchases ( 3,072 ) ( 5,000 ) Cash dividends paid ( 3,664 ) ( 3,284 ) Proceeds from common stock issuances 744 628 Repayments of long-term debt ( 1,750 ) ( 2,125 ) Proceeds from short-term borrowings, net 8,615 3,426 Proceeds from issuance of long-term debt 5,925 6,394 Customer funds administered 990 4,069 Other, net ( 753 ) ( 1,377 ) Cash flows from financing activities 7,035 2,731 Effect of exchange rate changes on cash and cash equivalents ( 44 ) 106 Increase in cash and cash equivalents, including cash within businesses held for sale 1,124 18,448 Less: cash within businesses held for sale ( 265 ) — Net increase in cash and cash equivalents 859 18,448 Cash and cash equivalents, beginning of period 25,427 23,365 Cash and cash equivalents, end of period $ 26,286 $ 41,813 See Notes to the Condensed Consolidated Financial Statements 6 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 June 30, 2024 and December 31, 2023, accounts receivable related to products and services were $ 9.0 billion and $ 8.6 billion, respectively. As of June 30, 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 $ 14.0 billion, of which approximately half is expected to be recognized in the next three years . 7 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 June 30, 2024 Debt securities - available-for-sale: U.S. government and agency obligations $ 5,007 $ — $ ( 264 ) $ 4,743 State and municipal obligations 7,299 4 ( 397 ) 6,906 Corporate obligations 23,193 14 ( 1,222 ) 21,985 U.S. agency mortgage-backed securities 9,320 3 ( 899 ) 8,424 Non-U.S. agency mortgage-backed securities 2,894 — ( 218 ) 2,676 Total debt securities - available-for-sale 47,713 21 ( 3,000 ) 44,734 Debt securities - held-to-maturity: U.S. government and agency obligations 413 — ( 4 ) 409 State and municipal obligations 28 — ( 3 ) 25 Corporate obligations 124 — — 124 Total debt securities - held-to-maturity 565 — ( 7 ) 558 Total debt securities $ 48,278 $ 21 $ ( 3,007 ) $ 45,292 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 $ 4.2 billion and $ 4.9 billion of equity securities as of June 30, 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 $ 1.7 billion and $ 1.4 billion of equity method investments primarily in operating businesses in the health care sector as of June 30, 2024 and December 31, 2023, respectively. The allowance for credit losses on held-to-maturity securities at June 30, 2024 and December 31, 2023 was not material. 8 Table of Contents The amortized cost and fair value of debt securities as of June 30, 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 $ 5,172 $ 5,137 $ 363 $ 362 Due after one year through five years 14,656 14,021 171 168 Due after five years through ten years 10,930 10,044 14 13 Due after ten years 4,741 4,432 17 15 U.S. agency mortgage-backed securities 9,320 8,424 — — Non-U.S. agency mortgage-backed securities 2,894 2,676 — — Total debt securities $ 47,713 $ 44,734 $ 565 $ 558 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 June 30, 2024 Debt securities - available-for-sale: U.S. government and agency obligations $ 1,187 $ ( 9 ) $ 2,773 $ ( 255 ) $ 3,960 $ ( 264 ) State and municipal obligations 1,942 ( 30 ) 4,584 ( 367 ) 6,526 ( 397 ) Corporate obligations 5,334 ( 49 ) 13,570 ( 1,173 ) 18,904 ( 1,222 ) U.S. agency mortgage-backed securities 2,511 ( 45 ) 5,757 ( 854 ) 8,268 ( 899 ) Non-U.S. agency mortgage-backed securities 403 ( 4 ) 2,157 ( 214 ) 2,560 ( 218 ) Total debt securities - available-for-sale $ 11,377 $ ( 137 ) $ 28,841 $ ( 2,863 ) $ 40,218 $ ( 3,000 ) 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 June 30, 2024 were generated from approximately 33,000 positions out of a total of 40,000 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 June 30, 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 June 30, 2024 and December 31, 2023 was not material. 9 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 June 30, 2024 Cash and cash equivalents $ 26,070 $ 216 $ — $ 26,286 Debt securities - available-for-sale: U.S. government and agency obligations 4,571 172 — 4,743 State and municipal obligations — 6,906 — 6,906 Corporate obligations 20 21,768 197 21,985 U.S. agency mortgage-backed securities — 8,424 — 8,424 Non-U.S. agency mortgage-backed securities — 2,676 — 2,676 Total debt securities - available-for-sale 4,591 39,946 197 44,734 Equity securities 1,701 16 69 1,786 Assets under management 1,414 1,893 107 3,414 Total assets at fair value $ 33,776 $ 42,071 $ 373 $ 76,220 Percentage of total assets at fair value 44 % 55 % 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 six months ended June 30, 2024 or 2023. 10 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 June 30, 2024 Debt securities - held-to-maturity $ 531 $ 27 $ — $ 558 $ 565 Long-term debt and other financing obligations $ — $ 61,144 $ — $ 61,144 $ 65,186 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. The assets and liabilities within our South American operations held for sale as of June 30, 2024 were measured at the lower of carrying value or fair value less cost to sell. Fair value is measured based upon unobservable amounts, such as estimated selling price derived from Company-specific information and market conditions. There were no other significant fair value adjustments for assets and liabilities recorded during the six months ended June 30, 2024 or 2023. 4. Medical Costs Payable The following table shows the components of the change in medical costs payable for the six months ended June 30: (in millions) 2024 2023 Medical costs payable, beginning of period $ 32,395 $ 29,056 Acquisitions (dispositions), net ( 687 ) 1 Reported medical costs: Current year 131,583 120,773 Prior years ( 390 ) ( 660 ) Total reported medical costs 131,193 120,113 Medical payments: Payments for current year ( 102,288 ) ( 91,621 ) Payments for prior years ( 27,887 ) ( 25,602 ) Total medical payments ( 130,175 ) ( 117,223 ) Less: medical costs payable included within businesses held for sale ( 179 ) — Medical costs payable, end of period $ 32,547 $ 31,947 For the six months ended June 30, 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 $ 23.6 billion and $ 22.3 billion at June 30, 2024 and December 31, 2023, respectively. 11 Table of Contents 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 In July 2024, the Company issued $ 12.0 billion of senior unsecured notes consisting of the following: (in millions, except percentages) Par Value Floating rate notes due July 2026 $ 500 4.750 % notes due July 2026 650 4.800 % notes due January 2030 1,250 4.950 % notes due January 2032 1,500 5.150 % notes due July 2034 2,000 5.500 % notes due July 2044 1,500 5.625 % notes due July 2054 2,750 5.750 % notes due July 2064 1,850 As of June 30, 2024, the Company had $ 9.9 billion of commercial paper outstanding, with a weighted-average annual interest rate of 5.4 %. In May 2024, the Company entered into an additional $ 3 billion 364 -day revolving bank credit facility and a $ 5 billion 364 -day delayed draw term loan. As of June 30, 2024 no amount had been drawn on any of the bank credit facilities. 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. Shareholders’ Equity Share Repurchase Program In June 2024, the Company’s Board of Directors amended the Company’s share repurchase program to authorize the repurchase of up to 35 million shares of Common Stock, in addition to all remaining shares authorized to be repurchased under the Board’s 2018 renewal of the program. As of June 30, 2024, the Company had 44 million shares remaining available under its share repurchase authorization. Dividends In June 2024, the Company’s Board of Directors increased the Company’s quarterly cash dividend to shareholders to an annual rate of $8.40 compared to $7.52 per share, which the Company had paid since June 2023. 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 dividend payments during the six months ended June 30, 2024: Payment Date Amount per Share Total Amount Paid (in millions) March 19 $ 1.88 $ 1,729 June 25 2.10 1,935 12 Table of Contents 7. Commitments and Contingencies Pending Transactions As of June 30, 2024, the Company had entered into transaction agreements in the health care sector, subject to regulatory approval and/or other customary closing conditions. The total anticipated consideration required for these transactions, excluding the payoff of acquired indebtedness, was approximately $ 6 billion . In July, 2024, the Company completed transactions in the health care sector for total consideration of approximately $ 10 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. 13 Table of Contents 8. Disposition and Held for Sale On February 6, 2024, the Company completed the sale of its Brazil operations. During the six months ended June 30, 2024, the Company recorded a loss of $ 7.1 billion within the Condensed 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. In the second quarter of 2024, the Company initiated a plan to sell its remaining South American operations. The sales are expected to close within a year, subject to regulatory and other customary closing conditions. The Company determined that the businesses are classified as held for sale. Assets and liabilities held for sale have been included within prepaid and other current assets and other current liabilities on the Condensed Consolidated Balance Sheet, respectively. In the second quarter of 2024, the Company recorded a loss of $ 1.2 billion within the Condensed Consolidated Statements of Operations, of which $ 867 million related to the impact of cumulative foreign currency translation losses. The assets and liabilities of the Brazil and held for sale disposal groups as of the date of the sale and as of June 30, 2024, respectively, were as follows: (in millions) Brazil Disposition Businesses Held for Sale Assets Cash and cash equivalents $ 778 $ 265 Accounts receivable and other current assets 515 608 Long-term investments 788 39 Property, equipment and capitalized software 1,052 633 Deferred tax assets 1,035 — Goodwill and other intangible assets 317 445 Other long-term assets 439 246 Remeasurement of assets of businesses held for sale to fair value less cost to sell (1) — ( 1,225 ) Total assets $ 4,924 $ 1,011 Liabilities Medical costs payable $ 701 $ 179 Accounts payable and other current liabilities 834 378 Other long-term liabilities 136 524 Total liabilities $ 1,671 $ 1,081 (1) Includes the effect of $ 867 million of cumulative foreign currency translation losses and $ 52 million of noncontrolling interests. 14 Table of Contents 9. 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 June 30, 2024 Revenues - unaffiliated customers: Premiums $ 70,950 $ 5,947 $ — $ — $ — $ 5,947 $ — $ 76,897 Products — 62 41 12,108 — 12,211 — 12,211 Services 2,388 4,083 1,405 874 — 6,362 — 8,750 Total revenues - unaffiliated customers 73,338 10,092 1,446 12,982 — 24,520 — 97,858 Total revenues - affiliated customers — 16,576 3,070 19,373 ( 1,129 ) 37,890 ( 37,890 ) — Investment and other income 528 382 27 60 — 469 — 997 Total revenues $ 73,866 $ 27,050 $ 4,543 $ 32,415 $ ( 1,129 ) $ 62,879 $ ( 37,890 ) $ 98,855 Earnings from operations $ 4,004 $ 1,919 $ 546 $ 1,406 $ — $ 3,871 $ — $ 7,875 Interest expense — — — — — — ( 985 ) ( 985 ) Loss on sale of subsidiary and subsidiaries held for sale ( 1,225 ) — — — — — — ( 1,225 ) Earnings before income taxes $ 2,779 $ 1,919 $ 546 $ 1,406 $ — $ 3,871 $ ( 985 ) $ 5,665 Three Months Ended June 30, 2023 Revenues - unaffiliated customers: Premiums $ 67,047 $ 5,427 $ — $ — $ — $ 5,427 $ — $ 72,474 Products — 51 39 10,561 — 10,651 — 10,651 Services 2,584 3,541 1,995 543 — 6,079 — 8,663 Total revenues - unaffiliated customers 69,631 9,019 2,034 11,104 — 22,157 — 91,788 Total revenues - affiliated customers — 14,454 2,615 17,496 ( 893 ) 33,672 ( 33,672 ) — Investment and other income 600 444 25 46 — 515 — 1,115 Total revenues $ 70,231 $ 23,917 $ 4,674 $ 28,646 $ ( 893 ) $ 56,344 $ ( 33,672 ) $ 92,903 Earnings from operations $ 4,358 $ 1,525 $ 968 $ 1,206 $ — $ 3,699 $ — $ 8,057 Interest expense — — — — — — ( 828 ) ( 828 ) Earnings before income taxes $ 4,358 $ 1,525 $ 968 $ 1,206 $ — $ 3,699 $ ( 828 ) $ 7,229 15 Table of Contents Optum (in millions) UnitedHealthcare Optum Health Optum Insight Optum Rx Optum Eliminations Optum Corporate and Eliminations Consolidated Six Months Ended June 30, 2024 Revenues - unaffiliated customers: Premiums $ 143,243 $ 11,642 $ — $ — $ — $ 11,642 $ — $ 154,885 Products — 121 82 23,917 — 24,120 — 24,120 Services 4,917 8,053 3,107 1,561 — 12,721 — 17,638 Total revenues - unaffiliated customers 148,160 19,816 3,189 25,478 — 48,483 — 196,643 Total revenues - affiliated customers — 33,193 5,801 37,654 ( 2,145 ) 74,503 ( 74,503 ) — Investment and other income 1,063 772 55 118 — 945 — 2,008 Total revenues $ 149,223 $ 53,781 $ 9,045 $ 63,250 $ ( 2,145 ) $ 123,931 $ ( 74,503 ) $ 198,651 Earnings from operations $ 8,399 $ 3,818 $ 1,036 $ 2,553 $ — $ 7,407 $ — $ 15,806 Interest expense — — — — — — ( 1,829 ) ( 1,829 ) Loss on sale of subsidiary and subsidiaries held for sale ( 8,311 ) — — — — — — ( 8,311 ) Earnings before income taxes $ 88 $ 3,818 $ 1,036 $ 2,553 $ — $ 7,407 $ ( 1,829 ) $ 5,666 Six Months Ended June 30, 2023 Revenues - unaffiliated customers: Premiums $ 134,505 $ 10,755 $ — $ — $ — $ 10,755 $ — $ 145,260 Products — 95 79 20,744 — 20,918 — 20,918 Services 5,139 6,630 3,921 1,053 — 11,604 — 16,743 Total revenues - unaffiliated customers 139,644 17,480 4,000 21,797 — 43,277 — 182,921 Total revenues - affiliated customers — 28,720 5,125 34,175 ( 1,752 ) 66,268 ( 66,268 ) — Investment and other income 1,055 721 45 92 — 858 — 1,913 Total revenues $ 140,699 $ 46,921 $ 9,170 $ 56,064 $ ( 1,752 ) $ 110,403 $ ( 66,268 ) $ 184,834 Earnings from operations $ 8,701 $ 3,301 $ 1,875 $ 2,266 $ — $ 7,442 $ — $ 16,143 Interest expense — — — — — — ( 1,582 ) ( 1,582 ) Earnings before income taxes $ 8,701 $ 3,301 $ 1,875 $ 2,266 $ — $ 7,442 $ ( 1,582 ) $ 14,561 16 Table of Contents