What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-05 compared with 2025-10-28 · 99 added, 89 removed, 219 unchanged (46% of the section changed)

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Readers are cautioned that the statements, estimates, projections or outlook contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations, including discussions regarding financial prospects, economic conditions, trends and uncertainties contained in this Item 2, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA).

These forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the results discussed or implied in the forward-looking statements.

These forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations expressed or implied in the forward-looking statements.

A description of some of the risks and uncertainties is set forth in Part I, Item 1A, “Risk Factors” in our 2025 10-K and in the discussion below.

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Further information on our business is presented in Part I, Item 1, “Business” and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 10-K and additional information on our segments can be found in this Item 2 and in Note 9 of Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report.

Net Portfolio Divestitures and Restructuring and Other Actions

Net Portfolio Divestitures

In the fourth quarter of 2025, the Company took various actions as a result of a strategic review of its assets and businesses aimed at advancing and scaling its core operations, including the value-based care business at Optum Health.

In the first quarter of 2026, these actions resulted in a net gain of $230 million reflecting gains on the sales of businesses previously held for sale as of December 31, 2025, partially offset by incremental losses on other businesses held for sale.

By segment, this included gains of $528 million and $8 million at Optum Insight and Optum Rx, respectively, partially offset by a net loss of $306 million at Optum Health.

Gains and losses on portfolio actions were recorded within operating costs on the Condensed Consolidated Statements of Operations.

Restructuring and Other Actions

In the first quarter of 2026, restructuring and other items included a $400 million contribution to the United Health Foundation funded by the cash gain on the disposition of an Optum Insight business.

This was partially offset by a $137 million reduction of loss contract reserves established in the fourth quarter of 2025 and $59 million of net valuation gains on equity securities.

Restructuring and other actions resulted in an impact of $339 million at Optum Insight, partially offset by $135 million at Optum Health.

These items increased operating costs by $415 million, partially offset by an increase to investment and other income of $74 million and decreased medical costs of $137 million on the Condensed Consolidated Statements of Operations.

Business Trends

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We expect overall spending on health care to continue to grow in the future, due to inflation, medical technology and pharmaceutical advancement, regulatory requirements, demographic trends in the population and national interest in health and well-being.

The rate of market growth may be affected by a variety of factors, including macroeconomic conditions and regulatory changes, which could impact our results of operations, including our continued efforts to control health care costs.

The rate of market growth may be affected

by a variety of factors, including macroeconomic conditions and regulatory changes, which could impact our results of operations, including our continued efforts to control health care costs.

Pricing Trends.

To price our health care benefits, products and services, we start with our view of expected future costs, including medical care patterns, the mix and health status of people served, inflation and labor market dynamics.

For 2025, our pricing trends and patient and member health status assumptions were well-short of the medical cost trends incurred, significantly impacting our earnings.

We continually evaluate and adjust our approach in each of the local markets we serve, considering relevant factors, such as product positioning, price competitiveness and environmental, competitive, legislative and regulatory considerations, including minimum medical loss ratio thresholds and similar revenue adjustments.

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We expect broad-based competition to continue as the industry adapts to individual and employer needs.

Continued increased medical costs may impact both future pricing and benefit design, including for our individual exchange products in markets where we choose to remain, and result in shifts between product categories for our employer benefits.

These potential changes, along with certain regulatory impacts, may result in decreased membership in future periods.

Medicare Advantage funding continues to be pressured, as discussed below in “Regulatory Trends and Uncertainties , ” and we have observed increased care patterns as discussed below in “Medical Cost Trends,” which may impact pricing and benefit design in future periods.

Optum Health’s fully accountable value-based care businesses have been impacted by Medicare funding reductions and have also seen continued medical cost trend pressures, which may impact future pricing in the markets we continue to participate.

The Medicaid redetermination process has caused a timing mismatch between the health status of people served through Medicaid and state rate updates.

Due to elevated care activity, specifically related to behavioral, pharmacy and home health, there continues to be a mismatch between the updated rates in 2025 and underlying member acuity.

Continued increased medical costs may impact both future pricing and benefit design, including for our individual exchange products, and may result in shifts between product categories for our employer benefits.

These changes, along with certain regulatory impacts, have resulted in a reduction in people served in the first quarter and may continue in future periods.

Additionally, we have voluntarily pledged to rebate 2026 profits on our individual exchange products to customers as policymakers continue to work to determine how to improve affordability in this marketplace.

Medicare Advantage funding continues to be pressured, as discussed below in “Regulatory Trends and Uncertainties,” and we have observed a continued increase in care patterns and health care unit costs as discussed below in “Medical Cost Trends,” which we have contemplated in our 2026 benefit design approach.

Continued funding pressures have resulted in benefit and pricing actions, causing contraction in our Medicare Advantage membership in the first quarter, which we expect to continue throughout 2026.

As a result of increased pricing in response to anticipated care patterns in 2026, the exit from certain markets and decreased people served through UnitedHealthcare Medicare Advantage offerings, the number of people served under value-based care arrangements has contracted in the first quarter and is expected to continue throughout 2026.

Due to elevated care activity in Medicaid, specifically related to behavioral, pharmacy and home health, there continues to be a timing mismatch between the health status of people served and state rate updates.

The funding and payment rate environment remains insufficient to meet the health needs of patients and creates the risk of continued downward pressure on Medicaid margin percentages.

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We continue to advocate for actuarially sound rates commensurate with our medical cost trends and we remain dedicated to partnering with those states that are committed to the long-term viability of their programs.

Additionally, we expect some Medicaid membership losses in 2026 as a result of early adoption of recent legislation.

People served by Medicaid offerings has declined in the first quarter of 2026 due to reduced Medicaid eligibility with further contraction expected during the remainder of 2026 due to reduced Medicaid eligibility and the exit from one state.

Medical Cost Trends.

Our medical cost trends primarily relate to changes in unit costs, care activity and prescription drug costs.

We have observed increased care patterns, more notably related to physician and outpatient care, and to a lesser extent inpatient and emergency room utilization, that are above what we expected and contemplated in our pricing and benefits design.

We have also observed an increase in health care unit costs and in the intensity of services delivered, driven by increases in provider pricing and additional services bundled per visit.

Additionally, the member profile of newly added patients under value-based care arrangements, people served in Medicare Advantage in markets where other have plans exited, and people served within our individual exchange business have contributed to increased medical costs.

As expected and contemplated in our benefits design and pricing, we have continued to observe increased care patterns;

health care unit costs;

and the intensity of services delivered, which are driven by increases in provider pricing and additional services bundled per visit.

These trends may continue in future periods.

The Inflation Reduction Act (IRA) altered the Medicare Part D model and benefits, shifting more risk to plans, which results in both increased premiums and medical costs.

The IRA also changed the quarterly relationship of medical costs to premiums, altering the seasonal progression and creating a more consistent relationship between medical costs and premiums throughout the year.

We endeavor to mitigate medical cost increases by engaging hospitals, physicians and consumers with information and helping them make clinically sound choices, with the objective of helping them achieve high-quality, affordable care.

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Medicare Advantage Rates.

Medicare Advantage rate notices for numerous years have resulted in industry base rates well below the industry forward medical cost trend, with the Final Notice for 2026 beginning to approach the industry forward medical cost trend.

Additionally, increased medical costs in 2025, which are significantly above initial cost trend estimates, adds to the compounding impact of the previous multi-year rate shortfalls creating sustained pressure on the Medicare Advantage program.

Medicare Advantage rate notices for numerous years have resulted in industry base rates well below the industry forward medical cost trend.

While the Final Notice for 2027 moved towards the expected industry forward medical cost trend, it remains below.

The compounding impact of multi-year rate shortfalls have created sustained pressure on the Medicare Advantage program.

Further, substantial revisions to the risk adjustment model, which serves to adjust rates to reflect a patient’s health status and care resource needs, have resulted and will continue to result in reduced funding and potentially benefits for people, especially those with some of the greatest health and social challenges.

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SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS

The following summarizes select third quarter 2025 year-over-year operating comparisons to third quarter 2024 and other financial results.

• Consolidated revenues grew 12%, UnitedHealthcare revenues grew 16% and Optum revenues grew 8%.

• UnitedHealthcare served 795,000 more people, primarily driven by growth in Medicare Advantage.

• Consolidated earnings from operations of $4.3 billion compared to $8.7 billion last year, with 2025 impacted by elevated medical cost trend and 2024 impacted by the Change Healthcare cyberattack.

The following summarizes select first quarter 2026 year-over-year operating comparisons to first quarter 2025 and other financial results.

• Consolidated revenues grew 2%, UnitedHealthcare revenues grew 2% and Optum revenues were consistent.

• UnitedHealthcare served 1.1 million fewer people due to benefit design and pricing actions and reduced Medicaid eligibility.

• Consolidated earnings from operations of $9.0 billion compared to $9.1 billion last year.

• Diluted earnings per common share were $6.90.

• Cash flows from operations for the nine months ended September 30, 2025 were $18.6 billion.

• Cash flows from operations for the three months ended March 31, 2026 were $8.9 billion.

RESULTS SUMMARY

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(in millions, except percentages and per share data) Three Months Ended

September 30, Increase/

(Decrease) Nine Months Ended

September 30, Increase/

2025 2024 2025 vs.

March 31, Increase/

2026 2025 2026 vs.

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Consolidated Financial Results

The increases in revenues were primarily driven by growth in people served through Medicare Advantage and those with higher acuity needs within Medicaid, growth at Optum Rx and pricing trends.

The increases in revenues were primarily driven by pricing trends at UnitedHealthcare and growth at Optum Rx, partially offset by decreased people served through Medicare Advantage, commercial risk-based offerings and Medicaid and a decrease in patients served under value-based arrangements at Optum Health.

Medical Costs and MCR

Medical costs increased primarily due to the IRA-driven impacts on Medicare Part D plans, elevated medical cost trend and growth in people served through Medicare Advantage and those with higher acuity needs.

The MCR increased as a result of the revenue effects of the Medicare funding reductions, elevated medical cost trend, the member profile of newly added patients under value-based care arrangements, the seasonal impacts of the IRA on Medicare Part D and the impacts of market morbidity changes on our individual exchange offerings.

For the nine months ended September 30, 2025, the MCR also increased due to decreased favorable reserve development, partially offset by the incremental medical costs for accommodations made to care providers in 2024 as a result of the Change Healthcare cyberattack.

The acceleration of anticipated future losses related to our individual exchange offerings recorded in the second quarter of 2025 decreased the MCR for the three months ended September 30, 2025 and increased the MCR for the nine months ended September 30, 2025.

Medical costs were consistent, with expected elevated medical cost trend offset by decreased people served across UnitedHealthcare and Optum Health and increased favorable reserve development.

The MCR decreased due to increased favorable reserve development, affordability initiatives and pricing trends, partially offset by expected elevated medical costs trend.

Operating Cost Ratio

The operating cost ratio for the three months ended September 30, 2025, increased primarily due to decreased gains related to business portfolio refinement, business mix and investments to support future growth;

partially offset by the revenue impacts of government programs, including the IRA-driven impacts on Medicare Part D plans and operating cost management.

For the nine months ended September 30, 2025 the operating cost ratio decreased due to the revenue impacts of government programs, including the IRA-driven impacts on Medicare Part D plans;

operating cost management and our direct response efforts to the Change Healthcare cyberattack in 2024;

partially offset by business mix, investments to support future growth and decreased gains related to business portfolio refinement.

The effective income tax rate decreased for the nine months ended September 30, 2025 due to non-deductible losses on the sale of subsidiary and subsidiaries held for sale in 2024.

The operating cost ratio increased primarily due to investments in people, process and technology to drive improved consumer and care provider experiences and greater operating efficiencies;

business mix and the impacts of restructuring and other actions;

partially offset by the revenue impacts of government programs, operating cost management and net portfolio divestitures in 2026.

Reportable Segments

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The metrics also allow management and investors to evaluate and understand business mix, including the level and scope of services provided to people, and pricing trends when comparing the metrics to revenue by segment.

2026 Business Realignment

On January 1, 2026, we realigned certain businesses to respond to changes in the markets we serve and the opportunities that are emerging as the health system evolves.

Optum Financial, including Optum Bank, which was historically included in Optum Health is now included in Optum Insight.

Our reportable segments remain unchanged;

with prior period segment financial information, including people served by Optum;

recast to conform to the 2026 presentation.

The following table presents a summary of the reportable segment financial information:

Three Months Ended

September 30, Increase/

(Decrease) Nine Months Ended

September 30, Increase/

March 31, Increase/

(in millions, except percentages) 2026 2025 2026 vs.

2024 2025 2024 2025 vs.

UnitedHealthcare $ 86,265 $ 84,617 $ 1,648 2 %

Optum Health 25,900 25,917 (17) — 76,414 79,698 (3,284) (4)

Optum Insight 4,915 4,931 (16) — 14,373 13,976 397 3

Optum Health (a) 24,109 24,837 (728) (3)

Optum Insight (a) 5,125 5,027 98 2

Optum Rx 35,736 35,132 604 2

Optum eliminations (1,317) (1,130) (187) 17 (3,770) (3,275) (495) 15

Optum eliminations (a) (1,221) (1,111) (110) 10

Optum 63,749 63,885 (136) —

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UnitedHealthcare $ 5,694 $ 5,226 $ 468 9 %

Optum Health 255 2,161 (1,906) (88) 2,505 5,979 (3,474) (58)

Optum Insight 706 791 (85) (11) 2,665 1,827 838 46

Optum Health (a) 1,141 1,411 (270) (19)

Optum Insight (a) 963 1,164 (201) (17)

Optum Rx 1,192 1,318 (126) (10)

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UnitedHealthcare 6.6 % 6.2 % 0.4 %

Optum Health 1.0 8.3 (7.3) 3.3 7.5 (4.2)

Optum Insight 14.4 16.0 (1.6) 18.5 13.1 5.4

Optum Health (a) 4.7 5.7 (1.0)

Optum Insight (a) 18.8 23.2 (4.4)

Optum Rx 3.3 3.8 (0.5)

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Consolidated operating margin 8.0 % 8.3 % (0.3) %

(a) Prior period amounts have been recast to reflect the realignment of Optum Financial.

UnitedHealthcare

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Three Months Ended

September 30, Increase/

(Decrease) Nine Months Ended

September 30, Increase/

March 31, Increase/

(in millions, except percentages) 2026 2025 2026 vs.

2024 2025 2024 2025 vs.

UnitedHealthcare Employer & Individual - Domestic $ 19,206 $ 19,066 $ 140 1 %

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The following table summarizes the number of people served by our UnitedHealthcare businesses, by major market segment and funding arrangement:

September 30, Increase/(Decrease)

March 31, Increase/(Decrease)

(in thousands, except percentages) 2026 2025 2026 vs.

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South American businesses held for sale 1,160 1,160 — — %

UnitedHealthcare’s revenues increased due to the IRA-driven impacts on Medicare Part D plans and growth in the number of people served through Medicare Advantage, fee-based commercial offerings and those with higher acuity needs, partially offset by decreased people served through risk-based commercial offerings and Medicaid offerings.

Earnings from operations decreased primarily due to the impacts of Medicare Advantage funding reductions, elevated medical cost trend, the impacts of market morbidity changes on our individual exchange offerings and other write-offs and settlements.

For the three months ended September 30, 2025, decreased earnings from operations was also due to the seasonal impact of the IRA on Medicare Part D.

For the nine months ended September 30, 2025, decreased earnings from operations was partially offset by the seasonal impact of the IRA on Medicare Part D and the incremental medical costs for accommodations to support care providers in 2024 as a result of the Change Healthcare cyberattack.

The acceleration of anticipated future losses related to our individual exchange offerings recorded in the second quarter of 2025 increased earnings from operations for the three months ended September 30, 2025 and decreased operating earnings for the nine months ended September 30, 2025.

Total revenues increased primarily due to growth at Optum Rx.

For the nine months ended September 30, 2025, increased revenues were partially offset by Optum Health.

Earnings from operations decreased due to Optum Health, partially offset by the impacts of the Change Healthcare cyberattack in 2024.

UnitedHealthcare’s revenues and earnings from operations increased due to pricing trends and actions, including increased Medicaid rates, and growth in people served through fee-based commercial offerings;

partially offset by a contraction in people served through Medicare Advantage, risk-based commercial offerings and Medicaid offerings;

and our pledge to rebate profits on our individual exchange products to customers.

Earnings from operations also increased due to affordability initiatives and increased favorable reserve development, partially offset by investments to support future growth.

Total revenues decreased due to Optum Health, partially offset by growth in Optum Rx.

Earnings from operations decreased across the Optum segments.

The results by segment were as follows:

Revenues at Optum Health decreased primarily due to the conversion of risk-based contracts, Medicare Advantage funding reductions and the profile of members served, partially offset by growth in patients served under value-based arrangements.

Earnings from operations decreased due to Medicare Advantage funding reductions, the member profile of newly added patients under value-based care arrangements, elevated medical cost trends and decreased gains related to business portfolio refinement, partially offset by cost management initiatives.

For the three months ended September 30, 2025 decreased earnings from operations was also due to lower investment income, partially offset by decreased contractual settlements.

For the nine months ended September 30, 2025, decreased earnings from operations was also partially offset by the incremental medical costs for accommodations to support care providers in 2024 as a result of the Change Healthcare cyberattack.

Optum Health served approximately 96 million people and 104 million people as of September 30, 2025 and September 30, 2024, respectively.

Revenues at Optum Health decreased primarily due to fewer patients served under value-based arrangements, partially offset by business combinations.

Earnings from operations decreased due to continued elevated medical cost trends, the impacts of net portfolio divestitures and investments to support future growth, partially offset by cost management, favorable reserve development and the reduction of loss contract reserves established in the fourth quarter of 2025.

Optum Health served approximately 93 million people and 95 million people as of March 31, 2026 and March 31, 2025, respectively.

Optum Insight

Revenues and earnings from operations at Optum Insight decreased for the three months ended September 30, 2025 due to lower volumes within business services, partially offset by growth in technology services and decreased impacts related to the Change Healthcare cyberattack.

Revenues and earnings from operations increased for the nine months ended September 30, 2025 due to decreased impacts related to the Change Healthcare cyberattack and growth in technology services, partially offset by lower volumes within business services.

Revenues at Optum Rx increased due to higher script volumes from both new clients and growth in existing clients and growth in pharmacy services.

Earnings from operations increased due to the factors impacting revenue and operating cost efficiencies, partially offset by decreased investment income.

Optum Rx fulfilled 414 million and 407 million adjusted scripts in the third quarters of 2025 and 2024, respectively.

Revenues at Optum Insight increased due to elevated investment and other income and growth in technology services, partially offset by lower volumes within business services.

Earnings from operations decreased due to investments in people, technology and new products;

the impacts of restructuring and other actions and lower volumes within business services;

partially offset by net portfolio divestitures in 2026, elevated investment and other income and growth in technology services.

Revenues at Optum Rx increased due to growth in specialty pharmacy partially offset by decreased script volume due to contraction in people served at UnitedHealthcare.

Earnings from operations decreased due to lower script volumes and investments in people, partially offset by growth in specialty pharmacy.

Optum Rx fulfilled 383 million and 408 million adjusted scripts in the first quarters of 2026 and 2025, respectively.

LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES

Summary of our Major Sources and Uses of Cash and Cash Equivalents

Nine Months Ended September 30, Increase/(Decrease)

Three Months Ended March 31, Increase/(Decrease)

(in millions) 2026 2025 2026 vs.

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Issuances of short-term borrowings and long-term debt, net of repayments — 3,911 (3,911)

Cash received from dispositions and other strategic transactions, net 1,081 21 1,060

Proceeds from common stock issuances 231 360 (129)

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Repayments of care provider loans - cyberattack 82 891 (809)

Customer funds administered 600 1,245 (645)

Total sources of cash 10,906 13,101 (2,195)

Uses of cash:

Cash dividends paid (2,005) (1,912) (93)

Common stock repurchases — (3,000) 3,000

Repayments of short-term borrowings and long-term debt, net of issuances (400) — (400)

Cash paid for acquisitions and other transactions, net of cash assumed — (702) 702

Purchases of investments, net of sales and maturities (2,352) — (2,352)

Purchases of property, equipment and capitalized software (763) (898) 135

Cash dividends paid (5,914) (5,601) (313)

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

Customer funds administered (1,792) (1,059) (733)

Originations and purchases of loans, net of repayments and maturities (516) (579) 63

Other (1,397) (529) (868)

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2026 Cash Flows Compared to 2025 Cash Flows

Decreased cash flows provided by operating activities were driven by decreased net earnings, partially offset by changes in working capital accounts and the impacts of the Change Healthcare cyberattack in 2024.

Other significant changes in sources or uses of cash year-over-year included net repayments of loans to care providers in response to the Change Healthcare cyberattack and decreased cash paid for acquisitions and other transactions, offset by decreased net issuances of short-term borrowings and long-term debt, increased share repurchases, decreased proceeds from common stock issuances and decreased customer funds administered.

Increased cash flows provided by operating activities were driven by legislative changes from the Inflation Reduction Act impacting pharmacy rebates and other changes in working capital accounts.

Other significant changes in sources or uses of cash year-over-year included decreased share repurchases, increased cash received from dispositions and decreased cash paid for acquisitions, offset by decreased issuances of short-term borrowings and long-term debt, increased net purchases of investments, decreased repayments of care provider loans and decreased customer funds administered.

Financial Condition

As of September 30, 2025, our cash, cash equivalent, available-for-sale debt securities and marketable equity securities balances of $76.3 billion included approximately $27.2 billion of cash and cash equivalents (of which $1.2 billion was available for general corporate use), $46.8 billion of debt securities and $2.2 billion of investments in marketable equity securities.

As of March 31, 2026, our cash, cash equivalent, available-for-sale debt securities and marketable equity securities balances of $80.0 billion included approximately $28.0 billion of cash and cash equivalents (of which $1.1 billion was available for general corporate use), $50.1 billion of debt securities and $1.9 billion of investments in marketable equity securities.

Additionally, we had $10.3 billion of loan receivables as of March 31, 2026.

Given the significant portion of our portfolio held in cash and cash equivalents, we do not anticipate fluctuations in the aggregate fair value of our financial assets to have a material impact on our liquidity or capital position.

Our available-for-sale debt securities portfolio had a weighted-average duration of 4.3 years and a weighted-average credit rating of “Double A” as of September 30, 2025.

Our available-for-sale debt securities portfolio had a weighted-average duration of 4.1 years and a weighted-average credit rating of “Double A” as of March 31, 2026.

When multiple credit ratings are available for an individual security, the average of the available ratings is used to determine the weighted-average credit rating.

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A summary of our cash requirements as of December 31, 2025 was disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 10-K.

During the nine months ended September 30, 2025, there were no material changes to this previously disclosed information outside the ordinary course of business.

During the three months ended March 31, 2026, there were no material changes to this previously disclosed information outside the ordinary course of business.

We believe our capital resources are sufficient to meet future, short-term and long-term, liquidity needs.

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For more information on our commercial paper and bank credit facilities, see Note 5 of the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report and Note 8 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” in our 2025 10-K.

As of September 30, 2025, we were in compliance with the various covenants under our bank credit facilities.

As of March 31, 2026, we were in compliance with the various covenants under our bank credit facilities.

Long-Term Debt.

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Credit Ratings.

Our credit ratings as of September 30, 2025 were as follows:

Our credit ratings as of March 31, 2026 were as follows:

Moody’s S&P Global Fitch A.M.

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Regulatory Capital.

As a result of an increased MCR impacting our regulated insurance and HMO subsidiaries, the specified levels of required statutory capital required to be maintained are expected to increase.

We entered into various agreements with reinsurers that could limit our risk of loss under certain circumstances, thus reducing our capital and surplus requirements.

Our regulated insurance and HMO subsidiaries have specified levels of statutory capital required to be maintained, which fluctuates based upon premiums received and the MCR of the regulated subsidiary.

We have various agreements with reinsurers that could limit our risk of loss under certain circumstances, thus reducing our capital and surplus requirements.

These agreements do not qualify for reinsurance accounting and are therefore accounted for under deposit accounting.

While we continue to maintain significant levels of excess statutory capital in our subsidiaries, the amount of dividends our subsidiaries are able to pay to their parent companies during the remainder of 2025 will be impacted.

During the nine months ended September 30, 2025, our domestic insurance and HMO subsidiaries paid their parent companies dividends, net of capital infusions, of $841 million.

Share Repurchase Program.

During the nine months ended September 30, 2025, we repurchased approximately 12.1 million shares of common stock at an average price of $454.82 per share.

As of September 30, 2025, we had Board of Directors’ authorization to purchase up to 21.0 million shares of our common stock.

During the three months ended March 31, 2026, a counterparty purchased and held 1.7 million shares at an average price of $285.68 per share pursuant to forward share repurchase contracts.

See Note 6 of Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report for more information on the Company’s forward share repurchase contracts.

As of March 31, 2026, we had Board of Directors’ authorization to purchase up to 19.3 million shares of our common stock.

The Board of Directors from time to time may further amend the share repurchase program in order to increase the authorized number of shares which may be repurchased under the program.

In June 2025, our Board of Directors increased our quarterly cash dividend to an annual rate of $8.84 compared to $8.40 per share, which we had paid since June 2024.

Our quarterly cash dividend to shareholders reflects an annual rate of $8.84.

For more information on our dividend, see Note 6 of Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report.

Pending Acquisitions.

As of March 31, 2026, we have entered into agreements to acquire companies in the health care sector, subject to regulatory approval and customary closing conditions, the majority of which are expected to close in the second half of 2026.

The total anticipated capital required for these acquisitions was approximately $3.0 billion.

For additional liquidity discussion, see Note 10 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 in our 2025 10-K.

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increases in costs and other liabilities associated with litigation, government investigations, audits or reviews;

risks and uncertainties associated with our increasing use of artificial intelligence and other emerging technologies;

failure to complete, manage or integrate strategic transactions;

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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 2. Management’s Discussion and Analysis