UNITEDHEALTH GROUP INC - Quarter Report: 2023 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________________

FORM 10-Q

__________________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 1-10864

__________________________________________________________

UnitedHealth Group Incorporated

(Exact name of registrant as specified in its charter)

__________________________________________________________


Delaware		41-1321939
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
UnitedHealth Group Center		55343
9900 Bren Road East
Minnetonka,	Minnesota
(Address of principal executive offices)		(Zip Code)

(952) 936-1300

(Registrant’s telephone number, including area code)

_________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.01 par value

UNH

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 31, 2023, there were 924,925,293 shares of the registrant’s Common Stock, $.01 par value per share, issued and outstanding.

UNITEDHEALTH GROUP

Table of Contents


			Page

Part I. Financial Information
Item 1.	Financial Statements (unaudited)		1
	Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022		1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022		2
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and 2022		3
	Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2023 and 2022		4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended Sept ember 30, 2023 and 2022		6
	Notes to the Condensed Consolidated Financial Statements		7
	1.	Basis of Presentation	7
	2.	Investments	8
	3.	Fair Value	10
	4.	Medical Costs Payable	11
	5.	Short-Term Borrowings and Long-Term Debt	11
	6.	Dividends	12
	7.	Commitments and Contingencies	12
	8.	Business Combinations	13
	9.	Segment Financial Information	14
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		23
Item 4.	Controls and Procedures		24
Part II. Other Information
Item 1.	Legal Proceedings		24
Item 1A.	Risk Factors		24
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities		24
Item 5.	Other Information		25
Item 6.	Exhibits		25
Signatures			26

PART I

ITEM 1. FINANCIAL STATEMENTS

UnitedHealth Group

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions, except per share data)	September 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	38,915	$	23,365
Short-term investments	5,182		4,546
Accounts receivable, net	20,673		17,681
Other current receivables, net	17,752		12,769
Assets under management	3,616		4,087
Prepaid expenses and other current assets	5,767		6,621
Total current assets	91,905		69,069
Long-term investments	45,474		43,728
Property, equipment and capitalized software, net	11,070		10,128
Goodwill	101,703		93,352
Other intangible assets, net	15,200		14,401
Other assets	16,711		15,027
Total assets	$	282,063	$	245,705
Liabilities, redeemable noncontrolling interests and equity
Current liabilities:
Medical costs payable	$	32,792	$	29,056
Accounts payable and accrued liabilities	31,164		27,715
Short-term borrowings and current maturities of long-term debt	5,290		3,110
Unearned revenues	15,311		3,075
Other current liabilities	29,622		26,281
Total current liabilities	114,179		89,237
Long-term debt, less current maturities	58,079		54,513
Deferred income taxes	2,210		2,769
Other liabilities	13,615		12,839
Total liabilities	188,083		159,358
Commitments and contingencies (Note 7)
Redeemable noncontrolling interests	4,416		4,897
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; 925 and 934 issued and outstanding	9		9
Retained earnings	93,173		86,156
Accumulated other comprehensive loss	(8,688)		(8,393)
Nonredeemable noncontrolling interests	5,070		3,678
Total equity	89,564		81,450
Total liabilities, redeemable noncontrolling interests and equity	$	282,063	$	245,705

See Notes to the Condensed Consolidated Financial Statements

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)	2023		2022		2023		2022
Revenues:
Premiums	$	72,339	$	64,491	$	217,599	$	192,457
Products	10,354		9,190		31,272		28,026
Services	8,671		6,700		25,414		19,717
Investment and other income	997		513		2,910		1,175
Total revenues	92,361		80,894		277,195		241,375
Operating costs:
Medical costs	59,550		52,635		179,663		157,251
Operating costs	13,855		11,663		41,289		34,773
Cost of products sold	9,423		8,306		28,576		25,389
Depreciation and amortization	1,007		828		2,998		2,418
Total operating costs	83,835		73,432		252,526		219,831
Earnings from operations	8,526		7,462		24,669		21,544
Interest expense	(834)		(516)		(2,416)		(1,416)
Earnings before income taxes	7,692		6,946		22,253		20,128
Provision for income taxes	(1,654)		(1,562)		(4,784)		(4,397)
Net earnings	6,038		5,384		17,469		15,731
Earnings attributable to noncontrolling interests	(197)		(122)		(543)		(372)
Net earnings attributable to UnitedHealth Group common shareholders	$	5,841	$	5,262	16,926		$	15,359
Earnings per share attributable to UnitedHealth Group common shareholders:
Basic	$	6.31	$	5.63	$	18.20	$	16.37
Diluted	$	6.24	$	5.55	$	18.01	$	16.15
Basic weighted-average number of common shares outstanding	926		935		930		938
Dilutive effect of common share equivalents	10		13		10		13
Diluted weighted-average number of common shares outstanding	936		948		940		951
Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents	6		3		6		3

See Notes to the Condensed Consolidated Financial Statements

Table of Contents

UnitedHealth Group

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2023		2022		2023		2022
Net earnings	$	6,038	$	5,384	$	17,469	$	15,731
Other comprehensive loss:
Gross unrealized losses on investment securities during the period	(893)		(1,471)		(684)		(4,825)
Income tax effect	204		340		156		1,109
Total unrealized losses, net of tax	(689)		(1,131)		(528)		(3,716)
Gross reclassification adjustment for net realized losses (gains) included in net earnings	7		138		(27)		134
Income tax effect	(2)		(32)		6		(31)
Total reclassification adjustment, net of tax	5		106		(21)		103
Total foreign currency translation (losses) gains	(354)		(331)		254		(89)
Other comprehensive loss	(1,038)		(1,356)		(295)		(3,702)
Comprehensive income	5,000		4,028		17,174		12,029
Comprehensive income attributable to noncontrolling interests	(197)		(122)		(543)		(372)
Comprehensive income attributable to UnitedHealth Group common shareholders	$	4,803	$	3,906	$	16,631	$	11,657

See Notes to the Condensed Consolidated Financial Statements

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 on Investments		Foreign Currency Translation Losses
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

Balance at June 30, 2022	935	$	10	$	—	$	80,540	$	(2,165)	$	(5,565)	$	3,385	$	76,205
Net earnings						5,262						99		5,361
Other comprehensive loss								(1,025)		(331)				(1,356)
Issuances of common stock, and related tax effects	2	—		294										294
Share-based compensation				163										163
Common share repurchases	(2)	—		(462)		(538)								(1,000)
Cash dividends paid on common shares ($1.65 per share)						(1,542)								(1,542)
Redeemable noncontrolling interests fair value and other adjustments				5										5
Acquisition and other adjustments of nonredeemable noncontrolling interests												32		32
Distribution to nonredeemable noncontrolling interests												(98)		(98)
Balance at September 30, 2022	935	$	10	$	—	$	83,722	$	(3,190)	$	(5,896)	$	3,418	$	78,064

See Notes to the Condensed Consolidated Financial Statements

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) Income				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, 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

Balance at January 1, 2022	941	$	10	$	—	$	77,134	$	423	$	(5,807)	$	3,285	$	75,045
Net earnings						15,359						281		15,640
Other comprehensive loss								(3,613)		(89)				(3,702)
Issuances of common stock, and related tax effects	6	—		801										801
Share-based compensation				639										639
Common share repurchases	(12)	—		(1,679)		(4,321)								(6,000)
Cash dividends paid on common shares ($4.75 per share)						(4,450)								(4,450)
Redeemable noncontrolling interests fair value and other adjustments				239										239
Acquisition and other adjustments of nonredeemable noncontrolling interests												135		135
Distribution to nonredeemable noncontrolling interests												(283)		(283)
Balance at September 30, 2022	935	$	10	$	—	$	83,722	$	(3,190)	$	(5,896)	$	3,418	$	78,064

See Notes to the Condensed Consolidated Financial Statements

Table of Contents

UnitedHealth Group

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
(in millions)	2023		2022
Operating activities
Net earnings	$	17,469	$	15,731
Noncash items:
Depreciation and amortization	2,998		2,418
Deferred income taxes	(494)		(590)
Share-based compensation	851		675
Other, net	(59)		—
Net change in other operating items, net of effects from acquisitions and changes in AARP balances:
Accounts receivable	(2,574)		(2,563)
Other assets	(2,358)		(741)
Medical costs payable	3,837		4,192
Accounts payable and other liabilities	2,370		1,416
Unearned revenues	12,221		10,201
Cash flows from operating activities	34,261		30,739
Investing activities
Purchases of investments	(12,998)		(14,183)
Sales of investments	3,674		5,376
Maturities of investments	6,474		4,740
Cash paid for acquisitions, net of cash assumed	(8,389)		(7,154)
Purchases of property, equipment and capitalized software	(2,427)		(1,936)
Other, net	(721)		50
Cash flows used for investing activities	(14,387)		(13,107)
Financing activities
Common share repurchases	(6,500)		(6,000)
Cash dividends paid	(5,023)		(4,450)
Proceeds from common stock issuances	1,039		1,084
Repayments of long-term debt	(2,125)		(2,100)
Proceeds from (repayments of) short-term borrowings, net	1,579		(16)
Proceeds from issuance of long-term debt	6,394		5,922
Customer funds administered	2,037		7,028
Other, net	(1,774)		(1,634)
Cash flows used for financing activities	(4,373)		(166)
Effect of exchange rate changes on cash and cash equivalents	49		4
Increase in cash and cash equivalents	15,550		17,470
Cash and cash equivalents, beginning of period	23,365		21,375
Cash and cash equivalents, end of period	$	38,915	$	38,845

See Notes to the Condensed Consolidated Financial Statements

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. Our two distinct, yet complementary business platforms — 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, 2022 as filed with the SEC (2022 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, 2023 and December 31, 2022, accounts receivable related to products and services were $8.0 billion and $7.1 billion, respectively. As of September 30, 2023, 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 $11.8 billion, of which approximately half is expected to be recognized in the next three years.

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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, 2023
Debt securities - available-for-sale:
U.S. government and agency obligations	$	5,739	$	—	$	(340)	$	5,399
State and municipal obligations	7,695		1		(643)		7,053
Corporate obligations	23,511		5		(1,857)		21,659
U.S. agency mortgage-backed securities	8,632		—		(1,158)		7,474
Non-U.S. agency mortgage-backed securities	3,091		—		(324)		2,767
Total debt securities - available-for-sale	48,668		6		(4,322)		44,352
Debt securities - held-to-maturity:
U.S. government and agency obligations	466		—		(10)		456
State and municipal obligations	28		—		(5)		23
Corporate obligations	188		—		—		188
Total debt securities - held-to-maturity	682		—		(15)		667
Total debt securities	$	49,350	$	6	$	(4,337)	$	45,019
December 31, 2022
Debt securities - available-for-sale:
U.S. government and agency obligations	$	4,093	$	1	$	(285)	$	3,809
State and municipal obligations	7,702		25		(479)		7,248
Corporate obligations	23,675		17		(1,798)		21,894
U.S. agency mortgage-backed securities	7,379		15		(808)		6,586
Non-U.S. agency mortgage-backed securities	3,077		1		(294)		2,784
Total debt securities - available-for-sale	45,926		59		(3,664)		42,321
Debt securities - held-to-maturity:
U.S. government and agency obligations	578		—		(14)		564
State and municipal obligations	29		—		(3)		26
Corporate obligations	89		—		—		89
Total debt securities - held-to-maturity	696		—		(17)		679
Total debt securities	$	46,622	$	59	$	(3,681)	$	43,000

The Company held $4.2 billion and $3.7 billion of equity securities as of September 30, 2023 and December 31, 2022, respectively. The Company’s investments in equity securities primarily consist of employee savings plan related investments, venture investments and shares of Brazilian real denominated fixed-income funds with readily determinable fair values. Additionally, the Company’s investments included $1.4 billion and $1.5 billion of equity method investments in operating businesses in the health care sector as of September 30, 2023 and December 31, 2022, respectively. The allowance for credit losses on held-to-maturity securities at September 30, 2023 and December 31, 2022 was not material.

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The amortized cost and fair value of debt securities as of September 30, 2023, by contractual maturity, were as follows:


	Available-for-Sale				Held-to-Maturity
(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	5,372	$	5,340	$	375	$	372
Due after one year through five years	15,098		14,183		262		255
Due after five years through ten years	11,256		9,898		25		24
Due after ten years	5,219		4,690		20		16
U.S. agency mortgage-backed securities	8,632		7,474		—		—
Non-U.S. agency mortgage-backed securities	3,091		2,767		—		—
Total debt securities	$	48,668	$	44,352	$	682	$	667

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, 2023
Debt securities - available-for-sale:
U.S. government and agency obligations	$	2,023	$	(34)	$	2,081	$	(306)	$	4,104	$	(340)
State and municipal obligations	2,872		(124)		4,042		(519)		6,914		(643)
Corporate obligations	5,563		(149)		14,821		(1,708)		20,384		(1,857)
U.S. agency mortgage-backed securities	2,562		(140)		4,867		(1,018)		7,429		(1,158)
Non-U.S. agency mortgage-backed securities	480		(21)		2,249		(303)		2,729		(324)
Total debt securities - available-for-sale	$	13,500	$	(468)	$	28,060	$	(3,854)	$	41,560	$	(4,322)
December 31, 2022
Debt securities - available-for-sale:
U.S. government and agency obligations	$	2,007	$	(96)	$	1,290	$	(189)	$	3,297	$	(285)
State and municipal obligations	4,630		(288)		1,178		(191)		5,808		(479)
Corporate obligations	13,003		(893)		6,637		(905)		19,640		(1,798)
U.S. agency mortgage-backed securities	3,561		(345)		2,239		(463)		5,800		(808)
Non-U.S. agency mortgage-backed securities	1,698		(128)		976		(166)		2,674		(294)
Total debt securities - available-for-sale	$	24,899	$	(1,750)	$	12,320	$	(1,914)	$	37,219	$	(3,664)

The Company’s unrealized losses from debt securities as of September 30, 2023 were generated from approximately 37,000 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, 2023, 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, 2023 and December 31, 2022 was not material.

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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 2022 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, 2023
Cash and cash equivalents	$	38,880		$	35		$	—		$	38,915
Debt securities - available-for-sale:
U.S. government and agency obligations	5,050			349			—			5,399
State and municipal obligations	—			7,053			—			7,053
Corporate obligations	15			21,462			182			21,659
U.S. agency mortgage-backed securities	—			7,474			—			7,474
Non-U.S. agency mortgage-backed securities	—			2,767			—			2,767
Total debt securities - available-for-sale	5,065			39,105			182			44,352
Equity securities	2,231			31			70			2,332
Assets under management	1,420			2,094			102			3,616
Total assets at fair value	$	47,596		$	41,265		$	354		$	89,215
Percentage of total assets at fair value	53		%	46		%	1		%	100		%
December 31, 2022
Cash and cash equivalents	$	23,202		$	163		$	—		$	23,365
Debt securities - available-for-sale:
U.S. government and agency obligations	3,505			304			—			3,809
State and municipal obligations	—			7,248			—			7,248
Corporate obligations	7			21,695			192			21,894
U.S. agency mortgage-backed securities	—			6,586			—			6,586
Non-U.S. agency mortgage-backed securities	—			2,784			—			2,784
Total debt securities - available-for-sale	3,512			38,617			192			42,321
Equity securities	2,043			35			70			2,148
Assets under management	1,788			2,203			96			4,087
Total assets at fair value	$	30,545		$	41,018		$	358		$	71,921
Percentage of total assets at fair value	42		%	57		%	1		%	100		%

There were no transfers in or out of Level 3 financial assets or liabilities during the nine months ended September 30, 2023 or 2022.

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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, 2023
Debt securities - held-to-maturity	$	593	$	74	$	—	$	667	$	682
Long-term debt and other financing obligations	$	—	$	55,137	$	—	$	55,137	$	60,769
December 31, 2022
Debt securities - held-to-maturity	$	577	$	102	$	—	$	679	$	696
Long-term debt and other financing obligations	$	—	$	53,626	$	—	$	53,626	$	56,823

Nonfinancial assets and liabilities or financial assets and liabilities that are measured at fair value on a nonrecurring basis are subject to fair value adjustments only in certain circumstances, such as when the Company records an impairment. There were no significant fair value adjustments for these assets and liabilities recorded during the nine months ended September 30, 2023 or 2022.

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)	2023		2022
Medical costs payable, beginning of period	$	29,056	$	24,483
Acquisitions	1		177
Reported medical costs:
Current year	180,423		157,601
Prior years	(760)		(350)
Total reported medical costs	179,663		157,251
Medical payments:
Payments for current year	(149,671)		(130,788)
Payments for prior years	(26,257)		(22,059)
Total medical payments	(175,928)		(152,847)
Medical costs payable, end of period	$	32,792	$	29,064

For the nine months ended September 30, 2023 and 2022, 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 $22.7 billion and $20.0 billion at September 30, 2023 and December 31, 2022, respectively.

5. Short-Term Borrowings and Long-Term Debt

In March 2023, the Company issued $6.5 billion of senior unsecured notes consisting of the following:


(in millions, except percentages)	Par Value
4.250% notes due January 2029	$	1,250
4.500% notes due April 2033	1,500
5.050% notes due April 2053	2,000
5.200% notes due April 2063	1,750

As of September 30, 2023, the Company had $2.6 billion of commercial paper outstanding, with a weighted-average annual interest rate of 5.3%.

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 2022 10-K.

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6. Dividends

In June 2023, the Company’s Board of Directors increased the Company’s quarterly cash dividend to shareholders to an annual rate of $7.52 compared to $6.60 per share, which the Company had paid since June 2022. 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, 2023:


Payment Date	Amount per Share		Total Amount Paid
			(in millions)
March 21	$	1.65	$	1,537
June 27	1.88		1,747
September 19	1.88		1,739

7. Commitments and Contingencies

Pending Acquisitions

As of September 30, 2023, the Company has entered into agreements to acquire companies in the health care sector, subject to regulatory approval and other customary closing conditions. The total anticipated consideration required for these acquisitions, excluding the payoff of acquired indebtedness, is approximately $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 of Civil Rights, the Government Accountability Office, the Federal Trade Commission, U.S. Congressional committees, the U.S. Department of Justice (DOJ), the SEC, the Internal Revenue Service, the U.S. Drug Enforcement Administration, the U.S. Department of Labor, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau (CFPB), the Defense Contract Audit Agency and other governmental authorities. Similarly, the Company’s international businesses are also subject to investigations, audits and reviews by applicable foreign governments, including South American and other non-U.S. governmental authorities. Certain of the Company’s businesses have been reviewed or are currently under review, including for, among other matters, compliance with coding and other requirements under the Medicare risk-adjustment model. CMS has selected certain of the Company’s local plans for risk adjustment data validation (RADV) audits to validate the coding practices of and supporting documentation maintained by health care providers and such audits may result in retrospective adjustments to payments made to the Company’s health plans.

On February 14, 2017, the DOJ announced its decision to pursue certain claims within a lawsuit initially asserted against the Company and filed under seal by a whistleblower in 2011. The whistleblower’s complaint, which was unsealed on February 15, 2017, alleges the Company made improper risk adjustment submissions and violated the False Claims Act. On February 12, 2018, the court granted in part and denied in part the Company’s motion to dismiss. In May 2018, the DOJ moved to dismiss the Company’s counterclaims, which were filed in March 2018, and moved for partial summary judgment. In March 2019, the court denied the government’s motion for partial summary judgment and dismissed the Company’s counterclaims without prejudice. The Company cannot reasonably estimate the outcome which may result from this matter given its procedural status.

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8. Business Combinations

During the nine months ended September 30, 2023, the Company completed several business combinations for total consideration of $8.4 billion.

Acquired assets (liabilities) at acquisition date were:


(in millions)
Cash and cash equivalents	$	104
Accounts receivable and other current assets	587
Property, equipment and other long-term assets	573
Other intangible assets	1,800
Total identifiable assets acquired	3,064
Medical costs payable	(1)
Accounts payable and other current liabilities	(551)
Other long-term liabilities	(661)
Total identifiable liabilities acquired	(1,213)
Total net identifiable assets	1,851
Goodwill	8,073
Redeemable noncontrolling interests	(121)
Nonredeemable noncontrolling interests	(1,339)
Net assets acquired	$	8,464

The majority of goodwill is not deductible for income tax purposes. The preliminary purchase price allocations for the various business combinations are subject to adjustment as valuation analyses, primarily related to intangible assets and contingent liabilities, are finalized.

The acquisition date fair values and weighted-average useful lives assigned to intangible assets were:

(in millions, except years)

Fair Value

Weighted-Average Useful Life

Acquired finite-lived intangible assets:

Customer-related

223

12 years

Trademarks and technology

171

5 years

Other

6 years

Total acquired finite-lived intangible assets

436

9 years

Total acquired indefinite-lived intangible assets - operating licenses and certificates

1,364

Total acquired intangible assets

1,800

The results of operations and financial condition of acquired entities have been included in the Company’s consolidated results and the results of the corresponding operating segment as of the date of acquisition. Through September 30, 2023, acquired entities’ impact on revenues and net earnings was not material.

Unaudited pro forma revenues and net earnings for the nine months ended September 30, 2023 and 2022, as if the business combinations had occurred on January 1, 2022, were immaterial for both periods.

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9. Segment Financial Information

The Company’s four reportable segments are UnitedHealthcare, Optum Health, Optum Insight and Optum Rx. For more information on the Company’s segments, see Part I, Item I, “Business” and Note 14 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2022 10-K. Total assets at Optum Health increased to $86.9 billion as of September 30, 2023 compared to $69.0 billion as of December 31, 2022, including an increase to goodwill from business combinations of $7.3 billion.

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, 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
Three Months Ended September 30, 2022
Revenues - unaffiliated customers:
Premiums	$	59,375	$	5,116	$	—	$	—	$	—	$	5,116	$	—	$	64,491
Products	—		2		37		9,151		—		9,190		—		9,190
Services	2,435		2,756		1,067		442		—		4,265		—		6,700
Total revenues - unaffiliated customers	61,810		7,874		1,104		9,593		—		18,571		—		80,381
Total revenues - affiliated customers	—		10,302		2,566		15,592		(800)		27,660		(27,660)		—
Investment and other income	185		287		23		18		—		328		—		513
Total revenues	$	61,995	$	18,463	$	3,693	$	25,203	$	(800)	$	46,559	$	(27,660)	$	80,894
Earnings from operations	$	3,799	$	1,575	$	1,007	$	1,081	$	—	$	3,663	$	—	$	7,462
Interest expense	—		—		—		—		—		—		(516)		(516)
Earnings before income taxes	$	3,799	$	1,575	$	1,007	$	1,081	$	—	$	3,663	$	(516)	$	6,946

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			Optum
(in millions)	UnitedHealthcare		Optum Health		Optum Insight		Optum Rx		Optum Eliminations		Optum		Corporate and Eliminations		Consolidated
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
Nine Months Ended September 30, 2022
Revenues - unaffiliated customers:
Premiums	$	178,680	$	13,777	$	—	$	—	$	—	$	13,777	$	—	$	192,457
Products	—		14		135		27,877		—		28,026		—		28,026
Services	7,492		8,054		3,075		1,096		—		12,225		—		19,717
Total revenues - unaffiliated customers	186,172		21,845		3,210		28,973		—		54,028		—		240,200
Total revenues - affiliated customers	—		30,355		6,885		44,921		(1,941)		80,220		(80,220)		—
Investment and other income	523		528		99		25		—		652		—		1,175
Total revenues	$	186,695	$	52,728	$	10,194	$	73,919	$	(1,941)	$	134,900	$	(80,220)	$	241,375
Earnings from operations	$	11,447	$	4,340	$	2,693	$	3,064	$	—	$	10,097	$	—	$	21,544
Interest expense	—		—		—		—		—		—		(1,416)		(1,416)
Earnings before income taxes	$	11,447	$	4,340	$	2,693	$	3,064	$	—	$	10,097	$	(1,416)	$	20,128

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read together with the accompanying Condensed Consolidated Financial Statements and Notes and with our 2022 10-K, including the Consolidated Financial Statements and Notes included in Part II, Item 8, “Financial Statements and Supplementary Data” in that report. Unless the context indicates otherwise, references to the terms “UnitedHealth Group,” the “Company,” “we,” “our” or “us” used throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations refer to UnitedHealth Group Incorporated and its consolidated subsidiaries.

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. A description of some of the risks and uncertainties is set forth in Part I, Item 1A, “Risk Factors” in our 2022 10-K and in the discussion below.

EXECUTIVE OVERVIEW

General

UnitedHealth Group 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. Our two distinct, yet complementary business platforms — 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 we are privileged to serve.

We have four reportable segments:

•Optum Health;

•Optum Insight;

•Optum Rx; and

•UnitedHealthcare, which includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement and UnitedHealthcare Community & State.

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 2022 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.

Business Trends

Our businesses participate in the United States, South America and certain other international health markets. 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.

Pricing Trends. To price our health care benefits, products and services, we start with our view of expected future costs, including medical cost trends, inflation and labor market dynamics. We frequently evaluate and adjust our approach in each of the local markets we serve, considering all 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. We will continue seeking to balance growth and profitability across all these dimensions.

The commercial risk market remains highly competitive in the small group, large group and individual segments. We expect broad-based competition to continue as the industry adapts to individual and employer needs.

Government programs in the community and senior sector tend to receive lower rates of increase than the commercial market due to governmental budget pressures and lower cost trends.

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Medical Cost Trends. Our medical cost trends primarily relate to changes in unit costs, care activity and prescription drug costs. During the third quarter we continued to observe increased care patterns, primarily related to outpatient procedures for seniors, consistent with the levels observed in the second quarter, and which may continue in future periods. We endeavor to mitigate those increases by engaging physicians and consumers with information and helping them make clinically sound choices, with the objective of helping them achieve quality, affordable care.

Medicaid Redeterminations. The majority of states have resumed Medicaid redeterminations, which have impacted the number of people served through our Medicaid offerings, partially offset by an increase in consumers served through our commercial offerings as we endeavor to ensure that people and families have continued access to benefits.

Regulatory Trends and Uncertainties

Medicare Advantage Rates. Medicare Advantage rate notices over the years have at times resulted in industry base rates well below industry forward medical trend. For example, the Final Notice for 2024 rates resulted in an industry base rate decrease, well short of what is an increasing industry forward medical cost trend, creating continued pressure in 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, will result in reduced funding and potentially benefits for people, especially those with some of the greatest health and social challenges.

As a result of ongoing Medicare funding pressures, there are adjustments we can make to partially offset these rate pressures and reductions for a particular period. For example, we can seek to intensify our medical and operating cost management, make changes to the size and composition of our care provider networks, adjust member benefits and implement or increase the member premiums supplementing the monthly payments we receive from the government. Additionally, we decide annually on a county-by-county basis where we will offer Medicare Advantage plans.

SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS

The following summarizes select third quarter 2023 year-over-year operating comparisons to third quarter 2022 and other financial results.

•Consolidated revenues grew 14%, UnitedHealthcare revenues grew 13% and Optum revenues grew 22%.

•UnitedHealthcare served 1.5 million more people, driven by growth across each of our businesses.

•Consolidated earnings from operations of $8.5 billion compared to $7.5 billion last year, including growth of 21% at UnitedHealthcare and 7% at Optum.

•Diluted earnings per common share were $6.24.

•Cash flows from operations for the nine months ended September 30, 2023 were $34.3 billion.

•Return on equity was 28.0%.

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RESULTS SUMMARY

The following table summarizes our consolidated results of operations and other financial information:


(in millions, except percentages and per share data)	Three Months Ended September 30,						Increase/(Decrease)					Nine Months Ended September 30,						Increase/(Decrease)
	2023			2022			2023 vs. 2022					2023			2022			2023 vs. 2022
Revenues:
Premiums	$	72,339		$	64,491		$	7,848		12	%	$	217,599		$	192,457		$	25,142		13	%
Products	10,354			9,190			1,164			13		31,272			28,026			3,246			12
Services	8,671			6,700			1,971			29		25,414			19,717			5,697			29
Investment and other income	997			513			484			94		2,910			1,175			1,735			148
Total revenues	92,361			80,894			11,467			14		277,195			241,375			35,820			15
Operating costs:
Medical costs	59,550			52,635			6,915			13		179,663			157,251			22,412			14
Operating costs	13,855			11,663			2,192			19		41,289			34,773			6,516			19
Cost of products sold	9,423			8,306			1,117			13		28,576			25,389			3,187			13
Depreciation and amortization	1,007			828			179			22		2,998			2,418			580			24
Total operating costs	83,835			73,432			10,403			14		252,526			219,831			32,695			15
Earnings from operations	8,526			7,462			1,064			14		24,669			21,544			3,125			15
Interest expense	(834)			(516)			(318)			62		(2,416)			(1,416)			(1,000)			71
Earnings before income taxes	7,692			6,946			746			11		22,253			20,128			2,125			11
Provision for income taxes	(1,654)			(1,562)			(92)			6		(4,784)			(4,397)			(387)			9
Net earnings	6,038			5,384			654			12		17,469			15,731			1,738			11
Earnings attributable to noncontrolling interests	(197)			(122)			(75)			61		(543)			(372)			(171)			46
Net earnings attributable to UnitedHealth Group common shareholders	$	5,841		$	5,262		$	579		11	%	$	16,926		$	15,359		$	1,567		10	%
Diluted earnings per share attributable to UnitedHealth Group common shareholders	$	6.24		$	5.55		$	0.69				$	18.01		$	16.15		$	1.86
Medical care ratio (a)	82.3		%	81.6		%	0.7		%			82.6		%	81.7		%	0.9		%
Operating cost ratio	15.0			14.4			0.6					14.9			14.4			0.5
Operating margin	9.2			9.2			—					8.9			8.9			—
Tax rate	21.5			22.5			(1.0)					21.5			21.8			(0.3)
Net earnings margin (b)	6.3			6.5			(0.2)					6.1			6.4			(0.3)
Return on equity (c)	28.0		%	28.5		%	(0.5)		%			27.7		%	28.1		%	(0.4)		%

(a)Medical care ratio (MCR) is calculated as medical costs divided by premium revenue.

(b)Net earnings margin attributable to UnitedHealth Group shareholders.

(c)Return on equity is calculated as annualized net earnings attributable to UnitedHealth Group common shareholders divided by average shareholders’ equity. Average shareholders’ equity is calculated using the shareholders’ equity balance at the end of the preceding year and the shareholders’ equity balances at the end of each of the quarters in the year presented.

2023 RESULTS OF OPERATIONS COMPARED TO 2022 RESULTS OF OPERATIONS

Consolidated Financial Results

Revenues

The increases in revenues were primarily driven by growth in the number of people served through Medicare Advantage and Medicaid, pricing trends and growth across the Optum businesses. Revenues also increased due to increased investment income, primarily driven by increased interest rates.

Medical Costs and MCR

Medical costs increased primarily due to growth in people served through Medicare Advantage and Medicaid. The MCR increased as a result of elevated care activity, primarily relating to outpatient care for seniors, and business mix.

Operating Cost Ratio

The operating cost ratio increased primarily due to business mix and investments to support future growth, partially offset by continued productivity advances.

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Reportable Segments

See Note 9 of Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report for more information on our segments. We utilize various metrics to evaluate and manage our reportable segments, including people served by UnitedHealthcare by major market segment and funding arrangement, people served by Optum Health and adjusted scripts for Optum Rx. These metrics are the main drivers of revenue, earnings and cash flows at each business. 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.

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/ (Decrease)
(in millions, except percentages)	2023			2022			2023 vs. 2022					2023			2022			2023 vs. 2022
Revenues
UnitedHealthcare	$	69,853		$	61,995		$	7,858		13	%	$	210,552		$	186,695		$	23,857		13	%
Optum Health	23,864			18,463			5,401			29		70,785			52,728			18,057			34
Optum Insight	4,977			3,693			1,284			35		14,147			10,194			3,953			39
Optum Rx	28,857			25,203			3,654			14		84,921			73,919			11,002			15
Optum eliminations	(961)			(800)			(161)			20		(2,713)			(1,941)			(772)			40
Optum	56,737			46,559			10,178			22		167,140			134,900			32,240			24
Eliminations	(34,229)			(27,660)			(6,569)			24		(100,497)			(80,220)			(20,277)			25
Consolidated revenues	$	92,361		$	80,894		$	11,467		14	%	$	277,195		$	241,375		$	35,820		15	%
Earnings from operations
UnitedHealthcare	$	4,592		$	3,799		$	793		21	%	$	13,293		$	11,447		$	1,846		16	%
Optum Health	1,568			1,575			(7)			—		4,869			4,340			529			12
Optum Insight	1,109			1,007			102			10		2,984			2,693			291			11
Optum Rx	1,257			1,081			176			16		3,523			3,064			459			15
Optum	3,934			3,663			271			7		11,376			10,097			1,279			13
Consolidated earnings from operations	$	8,526		$	7,462		$	1,064		14	%	$	24,669		$	21,544		$	3,125		15	%
Operating margin
UnitedHealthcare	6.6		%	6.1		%	0.5		%			6.3		%	6.1		%	0.2		%
Optum Health	6.6			8.5			(1.9)					6.9			8.2			(1.3)
Optum Insight	22.3			27.3			(5.0)					21.1			26.4			(5.3)
Optum Rx	4.4			4.3			0.1					4.1			4.1			—
Optum	6.9			7.9			(1.0)					6.8			7.5			(0.7)
Consolidated operating margin	9.2		%	9.2		%	—		%			8.9		%	8.9		%	—		%

UnitedHealthcare

The following table summarizes UnitedHealthcare revenues by business:


	Three Months Ended September 30,				Increase/(Decrease)				Nine Months Ended September 30,				Increase/(Decrease)
(in millions, except percentages)	2023		2022		2023 vs. 2022				2023		2022		2023 vs. 2022
UnitedHealthcare Employer & Individual - Domestic	$	16,854	$	15,929	$	925	6	%	$	50,157	$	47,318	$	2,839	6	%
UnitedHealthcare Employer & Individual - Global	2,417		2,120		297		14		6,905		6,500		405		6
UnitedHealthcare Employer & Individual - Total	19,271		18,049		1,222		7		57,062		53,818		3,244		6
UnitedHealthcare Medicare & Retirement	32,022		27,895		4,127		15		97,468		85,620		11,848		14
UnitedHealthcare Community & State	18,560		16,051		2,509		16		56,022		47,257		8,765		19
Total UnitedHealthcare revenues	$	69,853	$	61,995	$	7,858	13	%	$	210,552	$	186,695	$	23,857	13	%

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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)
(in thousands, except percentages)	2023	2022	2023 vs. 2022
Commercial - Domestic:
Risk-based	8,120	8,055	65	1	%
Fee-based	19,130	18,500	630	3
Total Commercial - Domestic	27,250	26,555	695	3
Medicare Advantage	7,645	7,035	610	9
Medicaid	8,065	8,005	60	1
Medicare Supplement (Standardized)	4,345	4,370	(25)	(1)
Total Community and Senior	20,055	19,410	645	3
Total UnitedHealthcare - Domestic Medical	47,305	45,965	1,340	3
Commercial - Global	5,475	5,360	115	2
Total UnitedHealthcare - Medical	52,780	51,325	1,455	3	%
Supplemental Data:
Medicare Part D stand-alone	3,335	3,310	25	1	%

UnitedHealthcare’s revenues increased due to growth in the number of people served through individual and group Medicare Advantage plans; growth in people served with higher acuity needs partially offset by Medicaid redeterminations; and an increase in the number of people served through commercial offerings. Earnings from operations increased due to increased investment income and the factors impacting revenue, partially offset by elevated care activity, primarily relating to outpatient care for seniors.

Optum

Total revenues and earnings from operations increased due to growth across the Optum businesses. The results by segment were as follows:

Optum Health

Revenues at Optum Health increased primarily due to organic growth in patients served under value-based care arrangements and business combinations. For the nine months ended September 30, 2023, earnings from operations increased, while remaining consistent for the three months ended September 30, 2023, due to cost management initiatives and increased investment income, offset by higher senior outpatient and behavioral health care activity, costs associated with serving newly added patients under value-based care arrangements and decreased asset dispositions. Optum Health served approximately 103 million people as of September 30, 2023 compared to 101 million people as of September 30, 2022.

Optum Insight

Revenues and earnings from operations at Optum Insight increased due to growth in business services as a result of business combinations and growth in technology services.

Optum Rx

Revenues and earnings from operations at Optum Rx increased due to growth in pharmacy offerings and higher script volumes from both new clients and growth in existing clients. Earnings from operations also increased as a result of continued supply chain and operating cost management initiatives. Optum Rx fulfilled 383 million and 359 million adjusted scripts in the third quarters of 2023 and 2022, respectively.

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LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES

Liquidity

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


	Nine Months Ended September 30,				Increase/(Decrease)
(in millions)	2023		2022		2023 vs. 2022
Sources of cash:
Cash provided by operating activities	$	34,261	$	30,739	$	3,522
Issuances of short-term borrowings and long-term debt, net of repayments	5,848		3,806		2,042
Proceeds from common stock issuances	1,039		1,084		(45)
Customer funds administered	2,037		7,028		(4,991)
Other	—		50		(50)
Total sources of cash	43,185		42,707
Uses of cash:
Common stock repurchases	(6,500)		(6,000)		(500)
Cash paid for acquisitions, net of cash assumed	(8,389)		(7,154)		(1,235)
Purchases of investments, net of sales and maturities	(2,850)		(4,067)		1,217
Purchases of property, equipment and capitalized software	(2,427)		(1,936)		(491)
Cash dividends paid	(5,023)		(4,450)		(573)
Other	(2,495)		(1,634)		(861)
Total uses of cash	(27,684)		(25,241)
Effect of exchange rate changes on cash and cash equivalents	49		4		45
Net increase in cash and cash equivalents	$	15,550	$	17,470	$	(1,920)

2023 Cash Flows Compared to 2022 Cash Flows

Increased cash flows provided by operating activities were primarily driven by increased net earnings and the receipt of our October CMS premium payment of $11.9 billion and $9.8 billion in September 2023 and 2022, respectively. Other significant changes in sources or uses of cash year-over-year included increased net issuances of short-term borrowings and long-term debt and decreased net purchases of investments, partially offset by decreased customer funds administered, primarily driven by Medicare Part D timing, and increased cash paid for acquisitions.

Financial Condition

As of September 30, 2023, our cash, cash equivalent, available-for-sale debt securities and equity securities balances of $87.5 billion included approximately $38.9 billion of cash and cash equivalents (of which $1.5 billion was available for general corporate use), $44.4 billion of debt securities and $4.2 billion of investments in equity securities. 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 3.8 years and a weighted-average credit rating of “Double A” as of September 30, 2023. 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.

Capital Resources and Uses of Liquidity

In addition to cash flows from operations and cash and cash equivalent balances available for general corporate use, our capital resources and uses of liquidity are as follows:

Cash Requirements. A summary of our cash requirements as of December 31, 2022 was disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 10-K. During the nine months ended September 30, 2023, 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. We continually evaluate opportunities to expand our operations, including through internal development of new products, programs and technology applications and business combinations.

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Short-Term Borrowings. Our revolving bank credit facilities provide liquidity support for our commercial paper borrowing program, which facilitates the private placement of unsecured debt through independent broker-dealers, and are available for general corporate purposes. For more information on our commercial paper and bank credit facilities, see Note 5 of 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 2022 10-K.

Our revolving bank credit facilities contain various covenants, including covenants requiring us to maintain a defined debt to debt-plus-shareholders’ equity ratio of not more than 60%. As of September 30, 2023, our debt to debt-plus-shareholders’ equity ratio, as defined and calculated under the credit facilities, was approximately 38%.

Long-Term Debt. Periodically, we access capital markets and issue long-term debt for general corporate purposes, such as to meet our working capital requirements, to refinance debt, to finance acquisitions or for share repurchases. For more information on our long-term debt, see Note 5 of 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 2022 10-K.

Credit Ratings. Our credit ratings as of September 30, 2023 were as follows:

Moody’s

S&P Global

Fitch

A.M. Best

Ratings

Outlook

Ratings

Outlook

Ratings

Outlook

Ratings

Outlook

Senior unsecured debt

Stable

A+

Stable

Commercial paper

P-1

n/a

A-1

n/a

AMB-1+

n/a

The availability of financing in the form of debt or equity is influenced by many factors, including our profitability, operating cash flows, debt levels, credit ratings, debt covenants and other contractual restrictions, regulatory requirements and economic and market conditions. A significant downgrade in our credit ratings or adverse conditions in the capital markets may increase the cost of borrowing for us or limit our access to capital.

Share Repurchase Program. During the nine months ended September 30, 2023, we repurchased approximately 13 million shares at an average price of $485.10 per share. As of September 30, 2023, we had Board of Directors’ authorization to purchase up to 18 million shares of our common stock.

Dividends. In June 2023, the Company’s Board of Directors increased our quarterly cash dividend to shareholders to an annual rate of $7.52 compared to $6.60 per share. 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 September 30, 2023, we have entered into agreements to acquire companies in the health care sector, subject to regulatory approval and other customary closing conditions. The total anticipated consideration required for these acquisitions, excluding the payoff of acquired indebtedness, is approximately $5 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 2022 10-K.

RECENTLY ISSUED ACCOUNTING STANDARDS

There are no recently issued accounting standards that are expected to have a material impact on our Condensed Consolidated Financial Statements.

CRITICAL ACCOUNTING ESTIMATES

In preparing our Condensed Consolidated Financial Statements, we are required to make judgments, assumptions and estimates, which we believe are reasonable and prudent based on the available facts and circumstances. These judgments, assumptions and estimates affect certain of our revenues and expenses and their related balance sheet accounts and disclosure of our contingent liabilities. We base our assumptions and estimates primarily on historical experience and consider known and projected trends. On an ongoing basis, we re-evaluate our selection of assumptions and the method of calculating our estimates. Actual results, however, may materially differ from our calculated estimates, and this difference would be reported in our current operations.

Our critical accounting estimates include medical costs payable and goodwill. For a detailed description of our critical accounting estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 in our 2022 10-K. For a detailed discussion of our significant accounting policies, see Note 2 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” in our 2022 10-K.

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FORWARD-LOOKING STATEMENTS

The statements, estimates, projections, guidance or outlook contained in this document include “forward-looking” statements which are intended to take advantage of the “safe harbor” provisions of the federal securities law. The words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “forecast,” “outlook,” “plan,” “project,” “should” and similar expressions identify forward-looking statements. These statements may contain information about financial prospects, economic conditions and trends and involve risks and uncertainties. Actual results could differ materially from those that management expects, depending on the outcome of certain factors including: our ability to effectively estimate, price for and manage medical costs; new or changes in existing health care laws or regulations, or their enforcement or application; reductions in revenue or delays to cash flows received under government programs; changes in Medicare, the CMS star ratings program or the application of risk adjustment data validation audits; the DOJ’s legal action relating to the risk adjustment submission matter; our ability to maintain and achieve improvement in quality scores impacting revenue; failure to maintain effective and efficient information systems or if our technology products do not operate as intended; cyberattacks, other privacy/data security incidents, or our failure to comply with related regulations; risks and uncertainties associated with our businesses providing pharmacy care services; competitive pressures, including our ability to maintain or increase our market share; changes in or challenges to our public sector contract awards; failure to achieve targeted operating cost productivity improvements; failure to develop and maintain satisfactory relationships with health care payers, physicians, hospitals and other service providers; the impact of potential changes in tax laws and regulations; increases in costs and other liabilities associated with litigation, government investigations, audits or reviews; failure to complete, manage or integrate strategic transactions; risks associated with public health crises arising from large-scale medical emergencies, pandemics, natural disasters and other extreme events; failure to attract, develop, retain, and manage the succession of key employees and executives; our investment portfolio performance; impairment of our goodwill and intangible assets; failure to protect proprietary rights to our databases, software and related products; downgrades in our credit ratings; and our ability to obtain sufficient funds from our regulated subsidiaries or from external financings to fund our obligations, maintain our debt to total capital ratio at targeted levels, maintain our quarterly dividend payment cycle, or continue repurchasing shares of our common stock.

This above list is not exhaustive. We discuss these matters, and certain risks that may affect our business operations, financial condition and results of operations, more fully in our filings with the SEC, including our reports on Forms 10-K, 10-Q and 8-K. By their nature, forward-looking statements are not guarantees of future performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Actual results may vary materially from expectations expressed or implied in this document or any of our prior communications. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update or revise any forward-looking statements, except as required by law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We manage exposure to market interest rates by diversifying investments across different fixed-income market sectors and debt across maturities, as well as by matching a portion of our floating-rate assets and liabilities, either directly or through the use of interest rate swap contracts. Unrealized gains and losses on investments in available-for-sale debt securities are reported in comprehensive income.

The following table summarizes the impact of hypothetical changes in market interest rates across the entire yield curve by 1% point or 2% points as of September 30, 2023 on our investment income and interest expense per annum, and the fair value of our investments and debt (in millions, except percentages):


	September 30, 2023
Increase (Decrease) in Market Interest Rate	Investment Income Per Annum		Interest Expense Per Annum		Fair Value of Financial Assets		Fair Value of Financial Liabilities
2 %	$	971	$	419	$	(3,408)	$	(7,067)
1	486		209		(1,758)		(3,846)
(1)	(486)		(193)		1,858		4,635
(2)	(971)		(386)		3,800		10,274

Note: The impact of hypothetical changes in interest rates may not reflect the full 100 or 200 basis point change on interest income and interest expense or on the fair value of financial assets and liabilities as the rates are assumed to not fall below zero.

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ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

In connection with the filing of this quarterly report on Form 10-Q, management evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2023. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2023.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

A description of our legal proceedings is included in and incorporated by reference to Note 7 of Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” of our 2022 10-K, which could materially affect our business, financial condition or future results. The risks described in our 2022 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

There have been no material changes to the risk factors as disclosed in our 2022 10-K.

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

Issuer Purchases of Equity Securities (a)

Third Quarter 2023


For the Month Ended	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet Be Purchased Under The Plans or Programs
	(in millions)			(in millions)	(in millions)
July 31, 2023	1.2	$	481.19	1.2	19.6
August 31, 2023	1.0	501.09		1.0	18.6
September 30, 2023	0.9	488.62		0.9	17.7
Total	3.1	$	489.56	3.1

(a) In November 1997, our Board of Directors adopted a share repurchase program, which the Board of Directors evaluates periodically. In June 2018, the Board of Directors renewed our share repurchase program with an authorization to repurchase up to 100 million shares of our common stock in open market purchases or other types of transactions (including prepaid or structured repurchase programs). There is no established expiration date for the program.

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ITEM 5. OTHER INFORMATION

Trading Arrangements

During the quarter ended September 30, 2023, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any non-Rule 10b5-1 trading arrangement.

ITEM 6. EXHIBITS*

The following exhibits are filed or incorporated by reference herein in response to Item 601 of Regulation S-K. The Company files Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K pursuant to the Securities Exchange Act of 1934 under Commission File No. 1-10864.


3.1						Certificate of Incorporation of UnitedHealth Group Incorporated (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 8-A/A filed on July 1, 2015)
3.2						Amended and Restated Bylaws of UnitedHealth Group Incorporated, effective February 23, 2021 (incorporated by reference to Exhibit 3.2 to UnitedHealth Group Incorporated’s Current Report on Form 8-K filed on February 26, 2021)
4.1						Amended and Restated Indenture, dated as of April 27, 2023, between UnitedHealth Group Incorporated and Wilmington Trust Company, as successor trustee (incorporated by reference to Exhibit 4.1 to UnitedHealth Group Incorporated’s Current Report on Form 8-K filed on April 28, 2023)
4.2						Indenture, dated as of February 4, 2008, between UnitedHealth Group Incorporated and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3, SEC File Number 333-149031, filed on February 4, 2008)
4.3						Supplemental Indenture, dated as of April 18, 2023, between UnitedHealth Group Incorporated and U.S. Bank Trust Company, National Association, as trustee, relating to the 6.875% Senior Notes due 2038 (incorporated by reference to Exhibit 4.1 to UnitedHealth Group Incorporated’s Current Report on Form 8-K filed on April 24, 2023)
31.1						Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1						Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document.
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104						Cover Page Interactive Data File (formatted as Inline XBRL and embedded within Exhibit 101).

________________


*						Pursuant to Item 601(b)(4)(iii) of Regulation S-K, copies of instruments defining the rights of certain holders of long-term debt are not filed. The Company will furnish copies thereof to the SEC upon request.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

UNITEDHEALTH GROUP INCORPORATED

/s/ ANDREW WITTY

Chief Executive Officer
(principal executive officer)

Dated:

November 6, 2023

Andrew Witty

/s/ JOHN REX

Executive Vice President and
Chief Financial Officer
(principal financial officer)

Dated:

November 6, 2023

John Rex

/s/ THOMAS ROOS

Senior Vice President and
Chief Accounting Officer
(principal accounting officer)

Dated:

November 6, 2023

Thomas Roos