What changed in this filing

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Item 1. Financial Statements

2024-11-04 compared with 2024-08-09 · 84 added, 67 removed, 476 unchanged (24% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

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

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

2024 December 31,

9 unchanged sentences

Property, equipment and capitalized software, net

10,139 11,450

Goodwill 105,978 103,732

30 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions, except per share data) 2024 2023 2024 2023

29 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2024 2023 2024 2023

1 unchanged sentence

Other comprehensive income (loss):

Gross unrealized (losses) gains on investment securities during the period ( 75 ) ( 431 ) ( 365 ) 209

Gross unrealized gains (losses) on investment securities during the period 1,434 ( 893 ) 1,069 ( 684 )

Income tax effect ( 328 ) 204 ( 243 ) 156

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 )

Total unrealized gains (losses), net of tax 1,106 ( 689 ) 826 ( 528 )

Gross reclassification adjustment for net realized (gains) losses included in net earnings ( 291 ) 7 ( 349 ) ( 27 )

Income tax effect 67 ( 2 ) 80 6

3 unchanged sentences

Reclassification adjustment for translation losses included in net earnings — — 4,214 —

Total foreign currency translation gains 94 267 3,929 608

Total foreign currency translation gains (losses) 88 ( 354 ) 4,017 254

Other comprehensive income (loss) 970 ( 1,038 ) 4,574 ( 295 )

6 unchanged sentences

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Nonredeemable Noncontrolling Interests Total

Three months ended June 30,

Three months ended September 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

Balance at June 30, 2024 921 $ 9 $ 373 $ 92,400 $ ( 2,296 ) $ ( 1,127 ) $ 5,317 $ 94,676

Net earnings 6,055 155 6,210

Other comprehensive (loss) income ( 78 ) 94 16

Other comprehensive income 882 88 970

Issuances of common stock, and related tax effects

4 unchanged sentences

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

( 154 ) ( 154 )

Balance at September 30, 2024 923 $ 9 $ 461 $ 96,518 $ ( 1,414 ) $ ( 1,039 ) $ 5,346 $ 99,881

Balance at June 30, 2023 927 $ 9 $ — $ 89,994 $ ( 2,643 ) $ ( 5,007 ) $ 5,015 $ 87,368

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

5,841 149 5,990

Other comprehensive (loss) income ( 368 ) 267 ( 101 )

Other comprehensive loss ( 684 ) ( 354 ) ( 1,038 )

Issuances of common stock, and related tax effects

4 unchanged sentences

Redeemable noncontrolling interests fair value and other adjustments

( 42 ) ( 42 )

Acquisition and other adjustments of nonredeemable noncontrolling interests 42 42

1 unchanged sentence

( 136 ) ( 136 )

Balance at June 30, 2023 927 $ 9 $ — $ 89,994 $ ( 2,643 ) $ ( 5,007 ) $ 5,015 $ 87,368

Balance at September 30, 2023 925 $ 9 $ — $ 93,173 $ ( 3,327 ) $ ( 5,361 ) $ 5,070 $ 89,564

See Notes to the Condensed Consolidated Financial Statements

2 unchanged sentences

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Nonredeemable Noncontrolling Interests Total

Six months ended June 30,

Nine months ended September 30,

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

1 unchanged sentence

Net earnings 8,862 462 9,324

Other comprehensive (loss) income ( 325 ) 3,929 3,604

Other comprehensive income 557 4,017 4,574

Issuances of common stock, and related tax effects 7 — 1,280 1,280

6 unchanged sentences

Distribution to nonredeemable noncontrolling interests ( 490 ) ( 490 )

Balance at June 30, 2024 921 $ 9 $ 373 $ 92,400 $ ( 2,296 ) $ ( 1,127 ) $ 5,317 $ 94,676

Balance at September 30, 2024 923 $ 9 $ 461 $ 96,518 $ ( 1,414 ) $ ( 1,039 ) $ 5,346 $ 99,881

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

16,926 401 17,327

Other comprehensive income 135 608 743

Other comprehensive (loss) income ( 549 ) 254 ( 295 )

Issuances of common stock, and related tax effects

8 unchanged sentences

( 348 ) ( 348 )

Balance at June 30, 2023 927 $ 9 $ — $ 89,994 $ ( 2,643 ) $ ( 5,007 ) $ 5,015 $ 87,368

Balance at September 30, 2023 925 $ 9 $ — $ 93,173 $ ( 3,327 ) $ ( 5,361 ) $ 5,070 $ 89,564

See Notes to the Condensed Consolidated Financial Statements

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

(in millions) 2024 2023

7 unchanged sentences

Other, net ( 610 ) ( 59 )

Net change in other operating items, net of effects from acquisitions, dispositions and changes in AARP balances:

Net change in other operating items, net of effects from acquisitions and dispositions:

Accounts receivable 685 ( 2,574 )

8 unchanged sentences

Maturities of investments 6,738 6,474

Cash paid for acquisitions, net of cash assumed ( 3,031 ) ( 8,161 )

Cash paid for acquisitions and other transactions, net of cash assumed ( 11,674 ) ( 8,389 )

Purchases of property, equipment and capitalized software ( 2,587 ) ( 2,427 )

Loans to providers - cyberattack ( 8,100 ) —

Loans to care providers - cyberattack ( 8,904 ) —

Repayments of care provider loans - cyberattack 3,189 —

Other, net ( 1,284 ) ( 721 )

5 unchanged sentences

Repayments of long-term debt ( 2,500 ) ( 2,125 )

Proceeds from short-term borrowings, net 8,615 3,426

(Repayments of) proceeds from short-term borrowings, net ( 191 ) 1,579

Proceeds from issuance of long-term debt 17,811 6,394

1 unchanged sentence

Other, net ( 1,213 ) ( 1,774 )

Cash flows from financing activities 7,035 2,731

Cash flows from (used for) financing activities 4,830 ( 4,373 )

Effect of exchange rate changes on cash and cash equivalents ( 30 ) 49

23 unchanged sentences

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 .

As of September 30, 2024 and December 31, 2023, accounts receivable related to products and services were $ 9.2 billion and $ 8.6 billion, respectively.

As of September 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 $ 13.0 billion, of which approximately half is expected to be recognized in the next three years .

Assets Under Management

In July 2024, the Company amended and restated its Medicare Supplement Program with a membership organization (the Medicare Supplement Program).

The amendments provide the Company the right to use a trade name and other intellectual property in marketing efforts for Medicare Supplement offerings.

Amounts previously reported as assets under management are now included within the Company’s Condensed Consolidated Balance Sheet based upon their classification.

For periods prior to the amended and restated Medicare Supplement Program, the Company excluded the effects of certain balance sheet amounts in its Condensed Consolidated Statements of Cash Flows, while these effects are included for periods after the amendments .

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

(in millions) Amortized

June 30, 2024

September 30, 2024

Debt securities - available-for-sale:

25 unchanged sentences

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 held $ 4.9 billion of equity securities as of September 30, 2024 and December 31, 2023.

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.

The amortized cost and fair value of debt securities as of June 30, 2024, by contractual maturity, were as follows:

Additionally, the Company’s investments included $ 1.8 billion and $ 1.4 billion of equity method investments primarily in operating businesses in the health care sector as of September 30, 2024 and December 31, 2023, respectively.

The allowance for credit losses on held-to-maturity securities at September 30, 2024 and December 31, 2023 was not material.

The amortized cost and fair value of debt securities as of September 30, 2024, by contractual maturity, were as follows:

Available-for-Sale Held-to-Maturity

11 unchanged sentences

(in millions) Fair

June 30, 2024

September 30, 2024

Debt securities - available-for-sale:

17 unchanged sentences

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’s unrealized losses from debt securities as of September 30, 2024 were generated from approximately 27,000 positions out of a total of 41,000 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.

2 unchanged sentences

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.

As of September 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.

The allowance for credit losses on available-for-sale debt securities at September 30, 2024 and December 31, 2023 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

June 30, 2024

September 30, 2024

Cash and cash equivalents $ 32,230 $ 170 $ — $ 32,400

7 unchanged sentences

Equity securities 1,833 25 65 1,923

Assets under management 1,414 1,893 107 3,414

Total assets at fair value $ 38,772 $ 41,442 $ 372 $ 80,586

13 unchanged sentences

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.

There were no transfers in or out of Level 3 financial assets or liabilities during the nine months ended September 30, 2024 or 2023.

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

June 30, 2024

September 30, 2024

Debt securities - held-to-maturity $ 435 $ 26 $ — $ 461 $ 464

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.

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.

The assets and liabilities within our South American operations held for sale as of September 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.

There were no other significant fair value adjustments for assets and liabilities recorded during the nine months ended September 30, 2024 or 2023.

Medical Costs Payable

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

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

(in millions) 2024 2023

12 unchanged sentences

Medical costs payable, end of period $ 33,951 $ 32,792

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.

For the nine months ended September 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 $ 24.1 billion and $ 22.3 billion at September 30, 2024 and December 31, 2023, respectively.

Short-Term Borrowings and Long-Term Debt

17 unchanged sentences

5.750 % notes due July 2064

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 %.

As of September 30, 2024, the Company had $ 1.2 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.

The $ 5 billion 364 -day delayed draw term loan was terminated in September 2024.

As of September 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.

Other Intangible Assets

The fair values and weighted-average useful lives assigned to intangible assets as a result of transactions completed during the nine months ended September 30, 2024 consisted of the following:

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

Customer-related $ 1,070 13 years

Trademarks and technology 509 5 years

Other 20 8 years

Total finite-lived $ 1,599 11 years

Total indefinite-lived - trade names, trademarks, operating licenses and certificates and other 8,793

Total intangible assets $ 10,392

Shareholders’ Equity

1 unchanged sentence

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.

As of September 30, 2024, the Company had 42 million shares remaining available under its share repurchase authorization.

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:

The following table provides details of the Company’s dividend payments during the nine months ended September 30, 2024:

Payment Date Amount per Share Total Amount Paid

2 unchanged sentences

June 25 2.10 1,935

September 24 2.10 1,937

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.

As of September 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 $ 5 billion .

In July, 2024, the Company completed transactions in the health care sector for total consideration of approximately $ 10 billion.

Legal Matters

11 unchanged sentences

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.

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 U.S.

1 unchanged sentence

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.

Department of Labor, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, the Defense Contract Audit Agency, the Food and Drug Administration and other governmental authorities.

Similarly, the Company’s international businesses are also subject to investigations, audits and reviews by applicable foreign governments.

2 unchanged sentences

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.

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.

4 unchanged sentences

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

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.

Dispositions and Held for Sale

During the nine months ended September 30, 2024, the Company completed or initiated various business portfolio and asset disposition activities.

The Company recorded a loss of $ 7.1 billion related to the sale of its Brazil operations, of which $ 4.1 billion related to the impact of cumulative foreign currency translation losses previously included in accumulated other comprehensive loss, and a loss of $ 1.2 billion related to the reclassification of the Company’s remaining South American operations as held for sale, of which $ 876 million related to the impact of cumulative foreign currency translation losses.

The Company also sold other businesses and assets for $ 1.0 billion in total consideration, with a carrying value of $ 241 million, and the difference reflected in the Condensed Consolidated Statement of Operations.

The sales of the Company’s remaining South American assets are expected to close within a year, subject to regulatory and other customary closing conditions.

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:

The assets and liabilities of the Brazil and held for sale disposal groups as of the date of the sale and as of September 30, 2024, respectively, were as follows:

(in millions) Brazil

21 unchanged sentences

Eliminations Consolidated

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Revenues - unaffiliated customers:

14 unchanged sentences

$ 4,192 $ 2,161 $ 791 $ 1,544 $ — $ 4,496 $ ( 1,074 ) $ 7,614

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Revenues - unaffiliated customers:

15 unchanged sentences

Eliminations Consolidated

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Revenues - unaffiliated customers:

14 unchanged sentences

$ 4,280 $ 5,979 $ 1,827 $ 4,097 $ — $ 11,903 $ ( 2,903 ) $ 13,280

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

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