UNITEDHEALTH GROUP INC 10-Q

ITEM 1. FINANCIAL STATEMENTS UnitedHealth Group Condensed Consolidated Balance Sheets (Unaudited) (in millions, except per share data) September 30, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 32,400 $ 25,427 Short-term investments 4,734 4,201 Accounts receivable, net 20,024 21,276 Other current receivables, net 27,461 17,694 Assets under management — 3,755 Prepaid expenses and other current assets 7,639 6,084 Total current assets 92,258 78,437 Long-term investments 48,689 47,609 Property, equipment and capitalized software, net 10,139 11,450 Goodwill 105,978 103,732 Other intangible assets, net 23,594 15,194 Other assets 18,651 17,298 Total assets $ 299,309 $ 273,720 Liabilities, redeemable noncontrolling interests and equity Current liabilities: Medical costs payable $ 33,951 $ 32,395 Accounts payable and accrued liabilities 33,080 31,958 Short-term borrowings and current maturities of long-term debt 3,909 4,274 Unearned revenues 3,320 3,355 Other current liabilities 27,305 27,072 Total current liabilities 101,565 99,054 Long-term debt, less current maturities 74,101 58,263 Deferred income taxes 4,014 3,021 Other liabilities 15,174 14,463 Total liabilities 194,854 174,801 Commitments and contingencies (Note 8) Redeemable noncontrolling interests 4,574 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; 923 and 924 issued and outstanding 9 9 Additional paid-in capital 461 — Retained earnings 96,518 95,774 Accumulated other comprehensive loss ( 2,453 ) ( 7,027 ) Nonredeemable noncontrolling interests 5,346 5,665 Total equity 99,881 94,421 Total liabilities, redeemable noncontrolling interests and equity $ 299,309 $ 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 September 30, Nine Months Ended September 30, (in millions, except per share data) 2024 2023 2024 2023 Revenues: Premiums $ 77,442 $ 72,339 $ 232,327 $ 217,599 Products 12,631 10,354 36,751 31,272 Services 9,104 8,671 26,742 25,414 Investment and other income 1,643 997 3,651 2,910 Total revenues 100,820 92,361 299,471 277,195 Operating costs: Medical costs 65,957 59,550 197,150 179,663 Operating costs 13,280 13,855 40,519 41,289 Cost of products sold 11,834 9,423 34,230 28,576 Depreciation and amortization 1,041 1,007 3,058 2,998 Total operating costs 92,112 83,835 274,957 252,526 Earnings from operations 8,708 8,526 24,514 24,669 Interest expense ( 1,074 ) ( 834 ) ( 2,903 ) ( 2,416 ) Loss on sale of subsidiary and subsidiaries held for sale ( 20 ) — ( 8,331 ) — Earnings before income taxes 7,614 7,692 13,280 22,253 Provision for income taxes ( 1,356 ) ( 1,654 ) ( 3,822 ) ( 4,784 ) Net earnings 6,258 6,038 9,458 17,469 Earnings attributable to noncontrolling interests ( 203 ) ( 197 ) ( 596 ) ( 543 ) Net earnings attributable to UnitedHealth Group common shareholders $ 6,055 $ 5,841 $ 8,862 $ 16,926 Earnings per share attributable to UnitedHealth Group common shareholders: Basic $ 6.56 $ 6.31 $ 9.61 $ 18.20 Diluted $ 6.51 $ 6.24 $ 9.53 $ 18.01 Basic weighted-average number of common shares outstanding 923 926 922 930 Dilutive effect of common share equivalents 7 10 8 10 Diluted weighted-average number of common shares outstanding 930 936 930 940 Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents 4 6 6 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 September 30, Nine Months Ended September 30, (in millions) 2024 2023 2024 2023 Net earnings $ 6,258 $ 6,038 $ 9,458 $ 17,469 Other comprehensive income (loss): 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 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 Total reclassification adjustment, net of tax ( 224 ) 5 ( 269 ) ( 21 ) Foreign currency translation gains (losses) 88 ( 354 ) ( 197 ) 254 Reclassification adjustment for translation losses included in net earnings — — 4,214 — Total foreign currency translation gains (losses) 88 ( 354 ) 4,017 254 Other comprehensive income (loss) 970 ( 1,038 ) 4,574 ( 295 ) Comprehensive income 7,228 5,000 14,032 17,174 Comprehensive income attributable to noncontrolling interests ( 203 ) ( 197 ) ( 596 ) ( 543 ) Comprehensive income attributable to UnitedHealth Group common shareholders $ 7,025 $ 4,803 $ 13,436 $ 16,631 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 September 30, (in millions) Shares Amount Net Unrealized (Losses) Gains on Investments Foreign Currency Translation (Losses) Gains 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 income 882 88 970 Issuances of common stock, and related tax effects 4 — 842 842 Share-based compensation 208 208 Common share repurchases ( 2 ) — ( 957 ) — ( 957 ) Cash dividends paid on common shares ($ 2.10 per share) ( 1,937 ) ( 1,937 ) Redeemable noncontrolling interests fair value and other adjustments ( 5 ) ( 5 ) Acquisition and other adjustments of nonredeemable noncontrolling interests 28 28 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 Net earnings 5,841 149 5,990 Other comprehensive loss ( 684 ) ( 354 ) ( 1,038 ) Issuances of common stock, and related tax effects 1 — 395 395 Share-based compensation 235 235 Common share repurchases ( 3 ) — ( 588 ) ( 923 ) ( 1,511 ) Cash dividends paid on common shares ($ 1.88 per share) ( 1,739 ) ( 1,739 ) Redeemable noncontrolling interests fair value and other adjustments ( 42 ) ( 42 ) Acquisition and other adjustments of nonredeemable noncontrolling interests 42 42 Distribution to nonredeemable noncontrolling interests ( 136 ) ( 136 ) 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 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 Nine months ended September 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 8,862 462 9,324 Other comprehensive income 557 4,017 4,574 Issuances of common stock, and related tax effects 7 — 1,280 1,280 Share-based compensation 770 770 Common share repurchases ( 8 ) — ( 1,528 ) ( 2,517 ) ( 4,045 ) Cash dividends paid on common shares ($ 6.08 per share) ( 5,601 ) ( 5,601 ) Redeemable noncontrolling interests fair value and other adjustments ( 61 ) ( 61 ) Acquisition and other adjustments of nonredeemable noncontrolling interests ( 291 ) ( 291 ) Distribution to nonredeemable noncontrolling interests ( 490 ) ( 490 ) 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 Net earnings 16,926 401 17,327 Other comprehensive (loss) income ( 549 ) 254 ( 295 ) Issuances of common stock, and related tax effects 4 — 963 963 Share-based compensation 833 833 Common share repurchases ( 13 ) — ( 1,663 ) ( 4,886 ) ( 6,549 ) Cash dividends paid on common shares ($ 5.41 per share) ( 5,023 ) ( 5,023 ) Redeemable noncontrolling interests fair value and other adjustments ( 133 ) ( 133 ) Acquisition and other adjustments of nonredeemable noncontrolling interests 1,339 1,339 Distribution to nonredeemable noncontrolling interests ( 348 ) ( 348 ) 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 5 Table of Contents UnitedHealth Group Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended September 30, (in millions) 2024 2023 Operating activities Net earnings $ 9,458 $ 17,469 Noncash items: Depreciation and amortization 3,058 2,998 Deferred income taxes ( 234 ) ( 494 ) Share-based compensation 831 851 Loss on sale of subsidiary and subsidiaries held for sale 8,331 — Other, net ( 610 ) ( 59 ) Net change in other operating items, net of effects from acquisitions and dispositions: Accounts receivable 685 ( 2,574 ) Other assets ( 2,988 ) ( 2,358 ) Medical costs payable 2,235 3,837 Accounts payable and other liabilities 1,250 2,370 Unearned revenues ( 181 ) 12,221 Cash flows from operating activities 21,835 34,261 Investing activities Purchases of investments ( 19,951 ) ( 12,998 ) Sales of investments 15,065 3,674 Maturities of investments 6,738 6,474 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 care providers - cyberattack ( 8,904 ) — Repayments of care provider loans - cyberattack 3,189 — Other, net ( 1,284 ) ( 721 ) Cash flows used for investing activities ( 19,408 ) ( 14,387 ) Financing activities Common share repurchases ( 4,028 ) ( 6,500 ) Cash dividends paid ( 5,601 ) ( 5,023 ) Proceeds from common stock issuances 1,611 1,039 Repayments of long-term debt ( 2,500 ) ( 2,125 ) (Repayments of) proceeds from short-term borrowings, net ( 191 ) 1,579 Proceeds from issuance of long-term debt 17,811 6,394 Customer funds administered ( 1,059 ) 2,037 Other, net ( 1,213 ) ( 1,774 ) Cash flows from (used for) financing activities 4,830 ( 4,373 ) Effect of exchange rate changes on cash and cash equivalents ( 30 ) 49 Increase in cash and cash equivalents, including cash within businesses held for sale 7,227 15,550 Less: cash within businesses held for sale ( 254 ) — Net increase in cash and cash equivalents 6,973 15,550 Cash and cash equivalents, beginning of period 25,427 23,365 Cash and cash equivalents, end of period $ 32,400 $ 38,915 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 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 . 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 September 30, 2024 Debt securities - available-for-sale: U.S. government and agency obligations $ 5,005 $ 5 $ ( 182 ) $ 4,828 State and municipal obligations 7,301 23 ( 256 ) 7,068 Corporate obligations 23,752 82 ( 781 ) 23,053 U.S. agency mortgage-backed securities 9,209 21 ( 600 ) 8,630 Non-U.S. agency mortgage-backed securities 2,832 6 ( 154 ) 2,684 Total debt securities - available-for-sale 48,099 137 ( 1,973 ) 46,263 Debt securities - held-to-maturity: U.S. government and agency obligations 414 1 ( 2 ) 413 State and municipal obligations 28 — ( 2 ) 26 Corporate obligations 22 — — 22 Total debt securities - held-to-maturity 464 1 ( 4 ) 461 Total debt securities $ 48,563 $ 138 $ ( 1,977 ) $ 46,724 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 $ 4.9 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 $ 1.8 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. 8 Table of Contents 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 (in millions) Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 4,881 $ 4,861 $ 320 $ 319 Due after one year through five years 15,152 14,810 113 114 Due after five years through ten years 10,993 10,432 14 13 Due after ten years 5,032 4,846 17 15 U.S. agency mortgage-backed securities 9,209 8,630 — — Non-U.S. agency mortgage-backed securities 2,832 2,684 — — Total debt securities $ 48,099 $ 46,263 $ 464 $ 461 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 September 30, 2024 Debt securities - available-for-sale: U.S. government and agency obligations $ 894 $ ( 7 ) $ 2,448 $ ( 175 ) $ 3,342 $ ( 182 ) State and municipal obligations 726 ( 6 ) 4,278 ( 250 ) 5,004 ( 256 ) Corporate obligations 3,499 ( 18 ) 12,174 ( 763 ) 15,673 ( 781 ) U.S. agency mortgage-backed securities 2,140 ( 20 ) 5,018 ( 580 ) 7,158 ( 600 ) Non-U.S. agency mortgage-backed securities 138 ( 1 ) 1,990 ( 153 ) 2,128 ( 154 ) Total debt securities - available-for-sale $ 7,397 $ ( 52 ) $ 25,908 $ ( 1,921 ) $ 33,305 $ ( 1,973 ) 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 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. 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, 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 September 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 September 30, 2024 Cash and cash equivalents $ 32,230 $ 170 $ — $ 32,400 Debt securities - available-for-sale: U.S. government and agency obligations 4,682 146 — 4,828 State and municipal obligations — 7,068 — 7,068 Corporate obligations 27 22,719 307 23,053 U.S. agency mortgage-backed securities — 8,630 — 8,630 Non-U.S. agency mortgage-backed securities — 2,684 — 2,684 Total debt securities - available-for-sale 4,709 41,247 307 46,263 Equity securities 1,833 25 65 1,923 Total assets at fair value $ 38,772 $ 41,442 $ 372 $ 80,586 Percentage of total assets at fair value 48 % 51 % 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 nine months ended September 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 September 30, 2024 Debt securities - held-to-maturity $ 435 $ 26 $ — $ 461 $ 464 Long-term debt and other financing obligations $ — $ 75,798 $ — $ 75,798 $ 76,780 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 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 nine months ended September 30, 2024 or 2023. 4. Medical Costs Payable The following table shows the components of the change in medical costs payable for the nine months ended September 30: (in millions) 2024 2023 Medical costs payable, beginning of period $ 32,395 $ 29,056 Acquisitions (dispositions), net ( 755 ) 1 Reported medical costs: Current year 197,750 180,423 Prior years ( 600 ) ( 760 ) Total reported medical costs 197,150 179,663 Medical payments: Payments for current year ( 165,544 ) ( 149,671 ) Payments for prior years ( 29,095 ) ( 26,257 ) Total medical payments ( 194,639 ) ( 175,928 ) Less: medical costs payable included within businesses held for sale ( 200 ) — Medical costs payable, end of period $ 33,951 $ 32,792 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. 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 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. 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. 6. 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 12 Table of Contents 7. 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 September 30, 2024, the Company had 42 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 nine months ended September 30, 2024: Payment Date Amount per Share Total Amount Paid (in millions) March 19 $ 1.88 $ 1,729 June 25 2.10 1,935 September 24 2.10 1,937 8. Commitments and Contingencies Pending Transactions 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 . 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 for 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, 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. 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 13 Table of Contents 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. 9. 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. 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 Disposition Businesses Held for Sale Assets Cash and cash equivalents $ 778 $ 254 Accounts receivable and other current assets 515 652 Long-term investments 788 36 Property, equipment and capitalized software 1,052 674 Deferred tax assets 1,035 — Goodwill and other intangible assets 317 450 Other long-term assets 439 253 Remeasurement of assets of businesses held for sale to fair value less cost to sell (1) — ( 1,245 ) Total assets $ 4,924 $ 1,074 Liabilities Medical costs payable $ 701 $ 200 Accounts payable and other current liabilities 834 395 Other long-term liabilities 136 544 Total liabilities $ 1,671 $ 1,139 (1) Includes the effect of $ 876 million of cumulative foreign currency translation losses and $ 54 million of noncontrolling interests. 14 Table of Contents 10. 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 September 30, 2024 Revenues - unaffiliated customers: Premiums $ 71,624 $ 5,818 $ — $ — $ — $ 5,818 $ — $ 77,442 Products — 84 41 12,506 — 12,631 — 12,631 Services 2,422 3,953 1,700 1,029 — 6,682 — 9,104 Total revenues - unaffiliated customers 74,046 9,855 1,741 13,535 — 25,131 — 99,177 Total revenues - affiliated customers — 15,448 3,086 20,554 ( 1,130 ) 37,958 ( 37,958 ) — Investment and other income 807 614 104 118 — 836 — 1,643 Total revenues $ 74,853 $ 25,917 $ 4,931 $ 34,207 $ ( 1,130 ) $ 63,925 $ ( 37,958 ) $ 100,820 Earnings from operations $ 4,212 $ 2,161 $ 791 $ 1,544 $ — $ 4,496 $ — $ 8,708 Interest expense — — — — — — ( 1,074 ) ( 1,074 ) Loss on sale of subsidiary and subsidiaries held for sale ( 20 ) — — — — — — ( 20 ) Earnings before income taxes $ 4,192 $ 2,161 $ 791 $ 1,544 $ — $ 4,496 $ ( 1,074 ) $ 7,614 Three Months Ended September 30, 2023 Revenues - unaffiliated customers: Premiums $ 66,709 $ 5,630 $ — $ — $ — $ 5,630 $ — $ 72,339 Products — 61 40 10,253 — 10,354 — 10,354 Services 2,550 3,629 1,938 554 — 6,121 — 8,671 Total revenues - unaffiliated customers 69,259 9,320 1,978 10,807 — 22,105 — 91,364 Total revenues - affiliated customers — 14,227 2,964 17,999 ( 961 ) 34,229 ( 34,229 ) — Investment and other income 594 317 35 51 — 403 — 997 Total revenues $ 69,853 $ 23,864 $ 4,977 $ 28,857 $ ( 961 ) $ 56,737 $ ( 34,229 ) $ 92,361 Earnings from operations $ 4,592 $ 1,568 $ 1,109 $ 1,257 $ — $ 3,934 $ — $ 8,526 Interest expense — — — — — — ( 834 ) ( 834 ) Earnings before income taxes $ 4,592 $ 1,568 $ 1,109 $ 1,257 $ — $ 3,934 $ ( 834 ) $ 7,692 15 Table of Contents Optum (in millions) UnitedHealthcare Optum Health Optum Insight Optum Rx Optum Eliminations Optum Corporate and Eliminations Consolidated Nine Months Ended September 30, 2024 Revenues - unaffiliated customers: Premiums $ 214,867 $ 17,460 $ — $ — $ — $ 17,460 $ — $ 232,327 Products — 205 123 36,423 — 36,751 — 36,751 Services 7,339 12,006 4,807 2,590 — 19,403 — 26,742 Total revenues - unaffiliated customers 222,206 29,671 4,930 39,013 — 73,614 — 295,820 Total revenues - affiliated customers — 48,641 8,887 58,208 ( 3,275 ) 112,461 ( 112,461 ) — Investment and other income 1,870 1,386 159 236 — 1,781 — 3,651 Total revenues $ 224,076 $ 79,698 $ 13,976 $ 97,457 $ ( 3,275 ) $ 187,856 $ ( 112,461 ) $ 299,471 Earnings from operations $ 12,611 $ 5,979 $ 1,827 $ 4,097 $ — $ 11,903 $ — $ 24,514 Interest expense — — — — — — ( 2,903 ) ( 2,903 ) Loss on sale of subsidiary and subsidiaries held for sale ( 8,331 ) — — — — — — ( 8,331 ) Earnings before income taxes $ 4,280 $ 5,979 $ 1,827 $ 4,097 $ — $ 11,903 $ ( 2,903 ) $ 13,280 Nine Months Ended September 30, 2023 Revenues - unaffiliated customers: Premiums $ 201,214 $ 16,385 $ — $ — $ — $ 16,385 $ — $ 217,599 Products — 156 119 30,997 — 31,272 — 31,272 Services 7,689 10,259 5,859 1,607 — 17,725 — 25,414 Total revenues - unaffiliated customers 208,903 26,800 5,978 32,604 — 65,382 — 274,285 Total revenues - affiliated customers — 42,947 8,089 52,174 ( 2,713 ) 100,497 ( 100,497 ) — Investment and other income 1,649 1,038 80 143 — 1,261 — 2,910 Total revenues $ 210,552 $ 70,785 $ 14,147 $ 84,921 $ ( 2,713 ) $ 167,140 $ ( 100,497 ) $ 277,195 Earnings from operations $ 13,293 $ 4,869 $ 2,984 $ 3,523 $ — $ 11,376 $ — $ 24,669 Interest expense — — — — — — ( 2,416 ) ( 2,416 ) Earnings before income taxes $ 13,293 $ 4,869 $ 2,984 $ 3,523 $ — $ 11,376 $ ( 2,416 ) $ 22,253 16 Table of Contents