UNITEDHEALTH GROUP INC

Previous wording

We have made substantial progress in mitigating the impact to consumers and care providers of the unprecedented cyberattack on the U.S. health system and certain Change Healthcare services. To support care providers, we accelerated funding and provided interest-free loans of approximately $3.9 billion through March 31, 2024, which has increased to over $6.5 billion through April 30, 2024. For the three months ended March 31, 2024, we incurred $593 million of direct response costs, including network restoration and increased medical care expenditures, as we suspended some care management activities to help care providers with their workflow processes. Optum Insight also experienced estimated business disruption impacts of $279 million for the three months ended March 31, 2024, reflecting lost revenue while maintaining full readiness of the affected Change Healthcare services. We expect to continue to incur direct response costs and experience business disruption impacts over the remainder of the year, including costs to continue to restore Change Healthcare’s services and the impact of suspended care management activities.

Current wording

We have made substantial progress in mitigating the impact to consumers and care providers of the unprecedented cyberattack on the U.S. health system and have restored the majority of the affected Change Healthcare services. To support care providers, we accelerated funding and provided interest-free loans of more than $9 billion through June 30, 2024. For the three and six months ended June 30, 2024, we incurred $776 million and $1.4 billion of direct response costs, respectively, including network restoration and increased medical care expenditures, as we suspended some care management activities to help care providers with their workflow processes. Optum Insight also experienced estimated business disruption impacts of $334 million and $613 million for the three and six months ended June 30, 2024, respectively, reflecting lost revenue while maintaining full readiness of the affected Change Healthcare services. We expect to continue to incur direct response costs and experience business disruption impacts over the remainder of the year, including costs to continue to restore Change Healthcare’s services.

Previous wording

In April 2024, we also announced that based on initial targeted data sampling to date, we have found files containing protected health information (PHI) or personally identifiable information (PII), which could cover a substantial proportion of people in America. The investigation of impacted data is ongoing. It is possible that future risks and uncertainties resulting from the Change Healthcare cyberattack, including risks related to impacted data, litigation, reputational harm, and regulatory actions could adversely affect our financial condition or results of operations.

Current wording

Based upon our ongoing review of the impacted data, we have found files containing protected health information (PHI) or personally identifiable information (PII), which cover a substantial proportion of people in America. In June 2024, Change Healthcare gave public notice of the breach under HIPAA and began notifying affected customer entities in June and individuals in late July. The investigation of impacted data is ongoing. It is possible that future risks and uncertainties resulting from the Change Healthcare cyberattack, including risks related to impacted data, litigation, reputational harm, and regulatory actions could adversely affect our financial condition or results of operations.

Previous wording

Medical Cost Trends. Our medical cost trends primarily relate to changes in unit costs, care activity and prescription drug costs. As expected and contemplated in our benefits design, during the first quarter we continued to observe increased care patterns, primarily related to outpatient procedures for seniors, 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.

Current wording

Medical Cost Trends. Our medical cost trends primarily relate to changes in unit costs, care activity and prescription drug costs. As expected and contemplated in our benefits design, we have continued to observe increased care patterns, primarily related to outpatient procedures for seniors, 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.

Previous wording

In the first quarter 2024, as a result of the Change Healthcare cyberattack, we incurred $340 million of medical costs related to the temporary suspension of some care management activities, impacting our UnitedHealthcare and Optum Health businesses, to help care providers with their workflow processes. Early in the second quarter we have resumed these activities. Additionally, the business disruption impacted claims receipt timing for payer customers, including UnitedHealthcare, which could potentially result in increased variability to our medical cost reserve development in future periods.

Current wording

As a result of the Change Healthcare cyberattack, we incurred medical costs related to the impact of the temporary suspension of some care management activities, impacting our UnitedHealthcare and Optum Health businesses, to help care providers with their workflow processes. Early in the second quarter we resumed these activities. For the three and six months June 30, 2024, medical costs related to the temporary suspension of some care management activities were $290 million and $630 million, respectively.

Previous wording

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 Notices for 2024 and 2025 rates resulted in an industry base rate decrease, both well short of 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.

Current wording

Medicare Advantage Rates. Medicare Advantage rate notices over the years have at times resulted in industry base rates well below the industry forward medical trend. For example, the Final Notices for 2024 and 2025 rates resulted in an industry base rate decrease, both well short of 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.

Previous wording

The following summarizes select first quarter 2024 year-over-year operating comparisons to first quarter 2023 and other financial results.

Current wording

The following summarizes select second quarter 2024 year-over-year operating comparisons to second quarter 2023 and other financial results.

Previous wording

•Consolidated revenues grew 9%, UnitedHealthcare revenues grew 7% and Optum revenues grew 13%.

Current wording

•Consolidated revenues grew 6%, UnitedHealthcare revenues grew 5% and Optum revenues grew 12%.

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•UnitedHealthcare served 1.6 million more people domestically, driven by growth in commercial and Medicare offerings.

Current wording

•UnitedHealthcare served 1.6 million more people domestically, driven by growth in commercial offerings, partially offset by the impact of Medicaid redeterminations.

Previous wording

•Diluted loss per common share was $1.53, impacted by the loss on the sale of our Brazil operations and the Change Healthcare cyberattack.

Current wording

•Diluted earnings per common share was $4.54, impacted by the loss on our South American subsidiaries held for sale and the Change Healthcare cyberattack.

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•Cash flows from operations for the three months ended March 31, 2024 were $1.1 billion.

Current wording

•Cash flows from operations for the six months ended June 30, 2024 were $7.9 billion.

Previous wording

The increases in revenues were primarily driven by growth in the number of people served through Medicare Advantage and domestic commercial offerings, pricing trends and growth in Optum Health and Optum Rx.

Current wording

The increases in revenues were primarily driven by growth in Optum Rx and Optum Health, growth across our UnitedHealthcare domestic offerings and pricing trends, partially offset by decreased UnitedHealthcare international revenue due to the sale of our Brazil operations.

Previous wording

Medical costs increased primarily due to growth in people served through Medicare Advantage and domestic commercial offerings. The MCR increased as a result of the revenue effects of the Medicare funding reductions, incremental medical costs for accommodations made to care providers as a result of the Change Healthcare cyberattack and decreased favorable reserve development.

Current wording

Medical costs increased primarily due to growth in people served through Medicare Advantage, those with higher acuity needs and domestic commercial offerings. The MCR increased as a result of the revenue effects of the Medicare funding reductions, incremental medical costs for accommodations made to care providers as a result of the Change Healthcare cyberattack, South American impacts and decreased favorable reserve development.

Previous wording

The operating cost ratio decreased primarily due to operating cost management, partially offset by the impact of our direct response efforts to the Change Healthcare cyberattack, business mix and investments to support future growth.

Current wording

The operating cost ratio decreased primarily due to operating cost management, partially offset by the impact of our direct response efforts to the Change Healthcare cyberattack and investments to support future growth.

Previous wording

On February 6, 2024, the Company completed the sale of its Brazil operations. During the three months ended March 31, 2024, we recorded a loss of $7.1 billion, of which $4.1 billion related to the impact of cumulative foreign currency translation losses previously included in accumulated other comprehensive loss. As a result of the loss, which was non-deductible for income tax purposes, the income tax rate and return on equity were not meaningful for the three months ended March 31, 2024.

Current wording

On February 6, 2024, the Company completed the sale of its Brazil operations. During the six months ended June 30, 2024, we recorded a loss of $7.1 billion, of which $4.1 billion related to the impact of cumulative foreign currency translation losses previously included in accumulated other comprehensive loss.

Previous wording

UnitedHealthcare’s revenues increased due to growth in the number of people served through Medicare Advantage, those with higher acuity needs and domestic commercial offerings, partially offset by decreased people served globally due to the sale of our Brazil operations and Medicaid offerings due to continued redeterminations. Earnings from operations increased due to the factors impacting revenue, partially offset by Medicare Advantage funding reductions and incremental medical costs for accommodations to support care providers as a result of the Change Healthcare cyberattack.

Current wording

UnitedHealthcare’s revenues increased due to growth in the number of people served through Medicare Advantage, domestic commercial offerings and those with higher acuity needs, partially offset by decreased people served globally due to the sale of our Brazil operations and Medicaid offerings due to continued redeterminations. Earnings from operations increased due to the factors impacting revenue, partially offset by Medicare Advantage funding reductions and incremental medical costs for accommodations to support care providers as a result of the Change Healthcare cyberattack.

Previous wording

Total revenues increased due to growth at Optum Health and Optum Rx. Earnings from operations decreased due to the impacts of the Change Healthcare cyberattack. The results by segment were as follows:

Current wording

Total revenues increased due to growth at Optum Rx and Optum Health. Earnings from operations increased for the three months ended June 30, 2024 and were consistent for the six months ended June 30, 2024, with growth at Optum Rx and Optum Health offset by the impacts of the Change Healthcare cyberattack. The results by segment were as follows:

Previous wording

Revenues at Optum Health increased primarily due to organic growth in patients served under value-based care arrangements. Earnings from operations increased due to cost management initiatives, partially offset by costs associated with serving newly added patients under value-based care arrangements and incremental medical costs for accommodations to support care providers as a result of the Change Healthcare cyberattack. Optum Health served approximately 104 million people and 103 million people as of March 31, 2024 and March 31, 2023, respectively.

Current wording

Revenues at Optum Health increased primarily due to organic growth in patients served under value-based care arrangements. Earnings from operations increased due to cost management initiatives, partially offset by costs associated with serving newly added patients under value-based care arrangements. For the six months ended June 30, 2024, earnings from operations increases were also partially offset by incremental medical costs for accommodations to support care providers as a result of the Change Healthcare cyberattack. Optum Health served approximately 104 million people and 103 million people as of June 30, 2024 and June 30, 2023, respectively.

Previous wording

Revenues at Optum Insight were consistent due to growth in technology services, offset by the business disruption impacts from the Change Healthcare cyberattack. Earnings from operations decreased primarily due to the business disruption impacts and direct response costs related to the Change Healthcare cyberattack.

Current wording

Revenues at Optum Insight decreased due the business disruption impacts from the Change Healthcare cyberattack, partially offset by growth in technology services. Earnings from operations decreased primarily due to the business disruption impacts and direct response costs related to the Change Healthcare cyberattack.

Previous wording

Revenues and earnings from operations at Optum Rx increased due to higher script volumes from both new clients and growth in existing clients and growth in pharmacy services. Optum Rx fulfilled 395 million and 378 million adjusted scripts in the first quarters of 2024 and 2023, respectively.

Current wording

Revenues and earnings from operations at Optum Rx increased due to higher script volumes from both new clients and growth in existing clients and growth in pharmacy services. Optum Rx fulfilled 399 million and 381 million adjusted scripts in the second quarters of 2024 and 2023, respectively.

Previous wording

Decreased cash flows provided by operating activities were primarily driven by the receipt of the April CMS premium payment of $11.2 billion in March 2023 and Change Healthcare cyberattack response actions, including the acceleration of provider payments and the timing of public-sector cash receipts. Other significant changes in sources or uses of cash year-over-year included decreased cash paid for acquisitions and net purchases of investments; offset by decreased customer funds administered; loans to care providers in response to the Change Healthcare cyberattack, included in other uses of cash; increased common stock repurchases and decreased net issuances of short-term borrowings and long-term debt.

Current wording

Decreased cash flows provided by operating activities were primarily driven by the receipt of the July CMS premium payment of $11.8 billion in June 2023 and Change Healthcare cyberattack response actions, including the acceleration of provider payments. Other significant changes in sources or uses of cash year-over-year included decreased cash paid for acquisitions, increased net issuances of short-term borrowings and long-term debt, decreased share repurchases and net purchases of investments, offset by loans to care providers in response to the Change Healthcare cyberattack and decreased customer funds administered.

Previous wording

As of March 31, 2024, our cash, cash equivalent, available-for-sale debt securities and equity securities balances of $76.7 billion included approximately $28.4 billion of cash and cash equivalents (of which $2.1 billion was available for general corporate use), $44.1 billion of debt securities and $4.1 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 4.0 years and a weighted-average credit rating of “Double A” as of March 31, 2024. 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.

Current wording

As of June 30, 2024, our cash, cash equivalent, available-for-sale debt securities and equity securities balances of $75.2 billion included approximately $26.3 billion of cash and cash equivalents (of which $4.1 billion was available for general corporate use), $44.7 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 4.0 years and a weighted-average credit rating of “Double A” as of June 30, 2024. 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.

Previous wording

Cash Requirements. A summary of our cash requirements as of December 31, 2023 was disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 10-K. During the three months ended March 31, 2024, 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.

Current wording

Cash Requirements. A summary of our cash requirements as of December 31, 2023 was disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 10-K. During the six months ended June 30, 2024, 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.

Previous wording

Share Repurchase Program. During the three months ended March 31, 2024, we repurchased approximately 6 million shares at an average price of $505.46 per share. As of March 31, 2024, we had Board of Directors’ authorization to purchase up to 9 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.

Current wording

Share Repurchase Program. During the six months ended June 30, 2024, we repurchased approximately 6 million shares at an average price of $505.46 per share. In June 2024, our Board of Directors amended our share repurchase program to authorize the repurchase of up to 35 million shares of Common Stock, in addition to all remaining shares authorized to be repurchased under the Board’s 2018 renewal of the program. As of June 30, 2024, we had Board of Directors’ authorization to purchase up to 44 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.

Previous wording

Dividends. Our quarterly cash dividend to shareholders reflects an annual rate of $7.52.

Current wording

Dividends. In June 2024, our Board of Directors increased our quarterly cash dividend to an annual rate of $8.40 compared to $7.52 per share, which we had paid since June 2023. For more information on our dividend, see Note 6 of Notes to the Condensed Consolidated Fina ncial Statements included in Part I, Item 1 of this report.

Previous wording

Pending Acquisitions. As of March 31, 2024, 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 $4 billion.

Current wording

Pending Transactions. As of June 30, 2024, the Company had entered into transaction agreements in the health care sector, subject to regulatory approval and/or other customary closing conditions. The total anticipated consideration required for these transactions, excluding the payoff of acquired indebtedness, was approximately $6 billion. In July, 2024, the Company completed transactions in the health care sector for total consideration of approximately $10 billion.

Previous wording

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 laws. 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; cyberattacks, other privacy/data security incidents, or our failure to comply with related regulations; 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; 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, reinvest in our business, maintain our debt to total capital ratio at targeted levels, maintain our quarterly dividend payment cycle, or continue repurchasing shares of our common stock.

Current wording

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 laws. 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; cyberattacks, other privacy/data security incidents, or our failure to comply with related regulations; 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; 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; risk and uncertainties associated with the continuing sale of operations in South America; 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, reinvest in our business, maintain our debt to total capital ratio at targeted levels, maintain our quarterly dividend payment cycle, or continue repurchasing shares of our common stock.