UNH Fourth 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) October 31, 2023##1.0##$##524.30##1.0##16.7 November 30, 2023##0.9####537.53##0.9##15.8 December 31, 2023##0.9####544.83##0.9##14.9 Total##2.8##$##535.34##2.8##


UNH Fourth Quarter 2023

(a) In November 1997, our Board of Directors adopted a share repurchase program, which the Board 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. 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.


UNH PERFORMANCE GRAPH

The following performance graph compares the cumulative five-year total return to shareholders on our common stock relative to the cumulative total returns of the S&P Health Care Index, the Dow Jones US Industrial Average Index and the S&P 500 Index for the five-year period ended December 31, 2023. The comparisons assume the investment of $100 on December 31, 2018 in our common stock and in each index, and the reinvestment of dividends when paid. ####12/18####12/19####12/20####12/21####12/22####12/23 UnitedHealth Group##$##100.00##$##119.99##$##145.43##$##211.18##$##225.85##$##227.65 S&P Health Care Index####100.00####120.82####137.07####172.89####169.51####172.99 Dow Jones US Industrial Average####100.00####125.34####137.53####166.34####154.92####180.00 S&P 500 Index####100.00####131.49####155.68####200.37####164.08####207.21


UNH PERFORMANCE GRAPH

The stock price performance included in this graph is not necessarily indicative of future stock price performance. The preceding stock performance graph shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates such information by reference, and shall not otherwise be deemed filed under such Acts.


UNH  Reserved

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


UNH  Reserved

The following discussion should be read together with the accompanying Consolidated Financial Statements and Notes to the Consolidated Financial Statements thereto included in Part II Item 8, “Financial Statements and Supplementary Data.” Readers are cautioned the statements, estimates, projections or outlook contained in this report, including discussions regarding financial prospects, economic conditions, trends and uncertainties contained in this Item 7, may constitute forward-looking statements within the meaning of the PSLRA. These forward-looking statements involve risks and uncertainties which may cause our actual results to differ materially from the expectations expressed or implied in the forward-looking statements. A description of some of the risks and uncertainties can be found further below in this Item 7 and in Part I, Item 1A, “Risk Factors.”


UNH  Reserved

Discussions of year-over-year comparisons between 2022 and 2021 are not included in this Form 10-K and can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Form 10-K for the fiscal year ended December 31, 2022.


UNH 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 businesses — Optum and UnitedHealthcare — are working to help build a modern, high-performing health system through improved access, affordability, outcomes and experiences for the individuals and organizations we are privileged to serve.


UNH General

We have four reportable segments across our two businesses: •Optum Health; •Optum Insight; •Optum Rx; and •UnitedHealthcare, which includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement and UnitedHealthcare Community & State.


UNH General

Further information on our business and reportable segments is presented in Part I, Item 1, “Business” and in Note 14 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”


UNH Business Trends

Our businesses participate in the United States and certain other international health markets. In the United States, health care spending has grown consistently for many years and comprises 18% of gross domestic product (GDP). 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, which could impact our results of operations, including our continued efforts to control health care costs.


UNH Business Trends

Pricing Trends. To price our health care benefits, products and services, we start with our view of expected future costs, including care patterns, inflation and labor market dynamics. We frequently evaluate and adjust our approach in each of the local markets we serve, considering relevant factors, such as product positioning, price competitiveness and environmental, competitive, legislative and regulatory considerations, including minimum medical loss ratio (MLR) thresholds and similar revenue adjustments. We will continue seeking to balance growth and profitability across all these dimensions.


UNH Business Trends

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.


UNH Business Trends

Medicare Advantage funding continues to be pressured, as discussed below in “Regulatory Trends and Uncertainties” and we have observed increased care patterns as discussed below in “Medical Cost Trends.” Our 2024 benefit design approach contemplates these trends.


UNH Business Trends

In Medicaid, we believe the payment rate environment creates the risk of continued downward pressure on Medicaid margin percentages. We continue to take a prudent, market-sustainable posture for both new business and maintenance of existing relationships. We continue to advocate for actuarially sound rates commensurate with our medical cost trends and we remain dedicated to partnering with those states that are committed to the long-term viability of their programs.


UNH Business Trends

Medical Cost Trends. Our medical cost trends primarily relate to changes in unit costs; care activity; and prescription drug costs. During 2023, we observed increased care patterns, primarily related to outpatient procedures for seniors, which we expect will persist throughout 2024, and 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 high-quality, affordable care.


UNH Business Trends

Medicaid Redeterminations. The resumption of Medicaid redeterminations 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 care.


UNH Business Trends

Delivery System and Payment Modernization. The health care market continues to change based on demographic shifts, new regulations, political forces and both payer and patient expectations. Health plans and care providers are being called upon to work together to close gaps in care and improve overall care quality and patient experience, improve the health of populations and reduce costs. We are working to accelerate this vision through the innovation and integration of our care delivery models including in-clinic, in-home, behavioral and virtual care, and by using our data and analytics to provide clinicians with the necessary information in order to provide the best possible care in the most cost efficient setting. We continue to see a greater number of people enrolled in fully accountable value-based plans rewarding high-quality, affordable care and fostering collaboration.


UNH Business Trends

This trend is creating needs for health management services which can coordinate care around the primary care physician, including new primary care channels, and for investments in new clinical and administrative information and management systems, which we believe provide growth opportunities for our Optum business platform. A key focus of our future growth is to accelerate the transition from fee-for-service care delivery and payment models to fully accountable value-based care. This transition requires initial costs such as system enhancements, integrated care coordination technology, physician training and clinical engagement. Enhanced clinical engagement is a critical step to improving the health outcomes of the people we serve and should result in lower costs to the overall health system over time.


UNH Regulatory Trends and Uncertainties

Following is a summary of management’s view of the trends and uncertainties related to regulatory matters. For additional information regarding regulatory trends and uncertainties, see Part I, Item 1 “Business - Government Regulation” and Item 1A, “Risk Factors.”


UNH 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, as did the January 2024 Advance Notice for 2025 rates, both of which are 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 continue to result in reduced funding and potentially benefits for people, especially those with some of the greatest health and social challenges.


UNH Regulatory Trends and Uncertainties

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.


UNH Regulatory Trends and Uncertainties

Pending Disposition. On December 22, 2023, we entered into an agreement to sell our operations in Brazil to a private investor, subject to regulatory approval and other closing conditions. We completed the disposition on February 6, 2024, and will record a loss of approximately $7 billion in the quarter ended March 31, 2024, the majority of which was due to foreign currency translation losses in accumulated other comprehensive income.


UNH SELECTED OPERATING PERFORMANCE ITEMS

The following represents a summary of select 2023 year-over-year operating comparisons to 2022. •Consolidated revenues increased by 15%, UnitedHealthcare revenues increased 13% and Optum revenues grew 24%. •UnitedHealthcare served nearly 1.1 million more people, driven by growth in commercial and senior offerings. •Earnings from operations increased by 14%, including an increase of 14% at UnitedHealthcare and 13% at Optum. •Diluted earnings per common share increased 13% to $23.86. •Cash flows from operations were $29.1 billion. •Return on equity was 27.0%.


UNH RESULTS SUMMARY

The following table summarizes our consolidated results of operations and other financial information: (in millions, except percentages and per share data)##########For the Years Ended December 31,################Change#### ####2023######2022######2021##########2023 vs. 2022#### Revenues:############################## Premiums##$##290,827####$##257,157####$##226,233####$##33,670######13##% Products####42,583######37,424######34,437######5,159######14## Services####34,123######27,551######24,603######6,572######24## Investment and other income####4,089######2,030######2,324######2,059######101## Total revenues####371,622######324,162######287,597######47,460######15## Operating costs:############################## Medical costs####241,894######210,842######186,911######31,052######15## Operating costs####54,628######47,782######42,579######6,846######14## Cost of products sold####38,770######33,703######31,034######5,067######15## Depreciation and amortization####3,972######3,400######3,103######572######17## Total operating costs####339,264######295,727######263,627######43,537######15## Earnings from operations####32,358######28,435######23,970######3,923######14## Interest expense####(3,246)######(2,092)######(1,660)######(1,154)######55## Earnings before income taxes####29,112######26,343######22,310######2,769######11## Provision for income taxes####(5,968)######(5,704)######(4,578)######(264)######5## Net earnings####23,144######20,639######17,732######2,505######12## Earnings attributable to noncontrolling interests####(763)######(519)######(447)######(244)######47## Net earnings attributable to UnitedHealth Group common shareholders##$##22,381####$##20,120####$##17,285####$##2,261######11##% Diluted earnings per share attributable to UnitedHealth Group common shareholders##$##23.86####$##21.18####$##18.08####$##2.68######13##% Medical care ratio (a)####83.2##%####82.0##%####82.6##%####1.2##%###### Operating cost ratio####14.7######14.7######14.8######—######## Operating margin####8.7######8.8######8.3######(0.1)######## Tax rate####20.5######21.7######20.5######(1.2)######## Net earnings margin (b)####6.0######6.2######6.0######(0.2)######## Return on equity (c)####27.0##%####27.2##%####25.2##%####(0.2)##%######


UNH ________

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


UNH ________

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


UNH ________

(c)Return on equity is calculated as 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 four quarters of the year presented.


UNH Revenues

The increases in revenues were primarily driven by growth in the number of people served throughout the year in 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.


UNH Medical Costs and MCR

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


UNH Operating Cost Ratio

The operating cost ratio was consistent primarily due to operating cost management, offset by business mix and investments to support future growth.


UNH Reportable Segments

See Note 14 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for more information on our segments. We utilize various metrics to evaluate and manage our reportable segments, including individuals 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.


UNH Reportable Segments

The following table presents a summary of the reportable segment financial information: ##########For the Years Ended December 31,################Change#### (in millions, except percentages)####2023######2022######2021##########2023 vs. 2022#### Revenues############################## UnitedHealthcare##$##281,360####$##249,741####$##222,899####$##31,619######13##% Optum Health####95,319######71,174######54,065######24,145######34## Optum Insight####18,932######14,581######12,199######4,351######30## Optum Rx####116,087######99,773######91,314######16,314######16## Optum eliminations####(3,703)######(2,760)######(2,013)######(943)######34## Optum####226,635######182,768######155,565######43,867######24## Eliminations####(136,373)######(108,347)######(90,867)######(28,026)######26## Consolidated revenues##$##371,622####$##324,162####$##287,597####$##47,460######15##% Earnings from operations############################## UnitedHealthcare##$##16,415####$##14,379####$##11,975####$##2,036######14##% Optum Health####6,560######6,032######4,462######528######9## Optum Insight####4,268######3,588######3,398######680######19## Optum Rx####5,115######4,436######4,135######679######15## Optum####15,943######14,056######11,995######1,887######13## Consolidated earnings from operations##$##32,358####$##28,435####$##23,970####$##3,923######14##% Operating margin############################## UnitedHealthcare####5.8##%####5.8##%####5.4##%####—##%###### Optum Health####6.9######8.5######8.3######(1.6)######## Optum Insight####22.5######24.6######27.9######(2.1)######## Optum Rx####4.4######4.4######4.5######—######## Optum####7.0######7.7######7.7######(0.7)######## Consolidated operating margin####8.7##%####8.8##%####8.3##%####(0.1)##%######


UNH UnitedHealthcare

The following table summarizes UnitedHealthcare revenues by business: ########For the Years Ended December 31,##########Change#### (in millions, except percentages)####2023####2022####2021######2023 vs. 2022#### UnitedHealthcare Employer & Individual - Domestic##$##67,187##$##63,599##$##60,023##$##3,588####6##% UnitedHealthcare Employer & Individual - Global (a)####9,307####8,668####8,345####639####7## UnitedHealthcare Employer & Individual - Total (a)####76,494####72,267####68,368####4,227####6## UnitedHealthcare Medicare & Retirement####129,862####113,671####100,552####16,191####14## UnitedHealthcare Community & State####75,004####63,803####53,979####11,201####18## Total UnitedHealthcare revenues##$##281,360##$##249,741##$##222,899##$##31,619####13##%


UNH UnitedHealthcare

(a) On January 1, 2022, we realigned our operating segments to combine UnitedHealthcare Global and UnitedHealthcare Employer & Individual.


UNH UnitedHealthcare

The following table summarizes the number of individuals served by our UnitedHealthcare businesses, by major market segment and funding arrangement: ####December 31,######Change#### (in thousands, except percentages)##2023##2022##2021####2023 vs. 2022#### Commercial - domestic:############## Risk-based##8,115##8,045##7,985##70####1##% Fee-based##19,200##18,640##18,595##560####3## Total commercial - domestic##27,315##26,685##26,580##630####2## Medicare Advantage##7,695##7,105##6,490##590####8## Medicaid##7,845##8,170##7,655##(325)####(4)## Medicare Supplement (Standardized)##4,355##4,375##4,395##(20)####—## Total community and senior##19,895##19,650##18,540##245####1## Total UnitedHealthcare - domestic medical##47,210##46,335##45,120##875####2## Commercial - global##5,540##5,360##5,510##180####3## Total UnitedHealthcare - medical##52,750##51,695##50,630##1,055####2##% Supplemental Data:############## Medicare Part D stand-alone##3,315##3,295##3,700##20####1##%


UNH UnitedHealthcare

UnitedHealthcare’s revenues increased due to growth in the number of people served throughout the year in Medicare Advantage, Medicaid and commercial offerings. People served in Medicaid as of December 31, 2023 decreased primarily due to redeterminations, largely occurring in the second half of 2023, partially offset by increased people served with higher acuity needs. 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.


UNH Optum

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


UNH Optum

Revenues at Optum Health increased primarily due to organic growth in patients served under value-based care arrangements and business combinations. Earnings from operations increased due to cost management initiatives and increased investment income, partially offset by higher senior outpatient and behavioral health care activity and costs associated with serving newly added patients under value-based care arrangements. Optum Health served approximately 103 million people as of December 31, 2023 compared to 102 million people as of December 31, 2022.


UNH 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.


UNH 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 1,542 million and 1,438 million adjusted scripts in 2023 and 2022, respectively.


UNH Introduction

We manage our liquidity and financial position in the context of our overall business strategy. We continually forecast and manage our cash, investments, working capital balances and capital structure to meet the short-term and long-term obligations of our businesses while seeking to maintain liquidity and financial flexibility. Cash flows generated from operating activities are principally from earnings before noncash expenses.


UNH Introduction

Our regulated subsidiaries generate significant cash flows from operations and are subject to, among other things, minimum levels of statutory capital, as defined by their respective jurisdictions, and restrictions on the timing and amount of dividends paid to their parent companies.


UNH Introduction

Our U.S. regulated subsidiaries paid their parent companies dividends of $8.0 billion and $8.8 billion in 2023 and 2022, respectively. See Note 10 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for further detail concerning our regulated subsidiary dividends.


UNH Introduction

Our nonregulated businesses also generate significant cash flows from operations available for general corporate use. Cash flows generated by these entities, combined with dividends from our regulated entities and financing through the issuance of long-term debt as well as issuance of commercial paper or the ability to draw under our committed credit facilities, further strengthen our operating and financial flexibility. We use these cash flows to expand our businesses through acquisitions, reinvest in our businesses through capital expenditures, repay debt and return capital to our shareholders through dividends and repurchases of our common stock.


UNH Introduction

Summary of our Major Sources and Uses of Cash and Cash Equivalents ########For the Years Ended December 31,########Change (in millions)####2023####2022####2021####2023 vs. 2022 Sources of cash:################ Cash provided by operating activities##$##29,068##$##26,206##$##22,343##$##2,862 Issuances of long-term debt and short-term borrowings, net of repayments####4,280####12,536####2,481####(8,256) Proceeds from common share issuances####1,353####1,253####1,355####100 Customer funds administered####—####5,548####622####(5,548) Cash received for dispositions####685####3,414####15####(2,729) Total sources of cash####35,386####48,957####26,816#### Uses of cash:################ Cash paid for acquisitions, net of cash assumed####(10,136)####(21,458)####(4,821)####11,322 Common share repurchases####(8,000)####(7,000)####(5,000)####(1,000) Cash dividends paid####(6,761)####(5,991)####(5,280)####(770) Purchases of property, equipment and capitalized software####(3,386)####(2,802)####(2,454)####(584) Purchases of investments, net of sales and maturities####(1,777)####(6,837)####(1,843)####5,060 Purchases of redeemable noncontrolling interests####(730)####(176)####(1,338)####(554) Customer funds administered####(521)####—####—####(521) Other####(2,110)####(2,737)####(1,564)####627 Total uses of cash####(33,421)####(47,001)####(22,300)#### Effect of exchange rate changes on cash and cash equivalents####97####34####(62)####63 Net increase in cash and cash equivalents##$##2,062##$##1,990##$##4,454##$##72


UNH 2023 Cash Flows Compared to 2022 Cash Flows

Increased cash flows provided by operating activities were driven by changes in working capital accounts and increased net earnings. 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 net issuances of short-term borrowings and long-term debt, customer funds administered and cash from dispositions.


UNH Financial Condition

As of December 31, 2023, our cash, cash equivalent, available-for-sale debt securities and equity securities balances of $75.2 billion included $25.4 billion of cash and cash equivalents (of which $1.3 billion was available for general corporate use), $44.9 billion of debt securities and $4.9 billion of equity securities. Given the significant portion of our portfolio held in 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. Other sources of liquidity, primarily from operating cash flows and our commercial paper program, which is fully supported by our bank credit facilities, reduce the need to sell investments during adverse market conditions. See Note 4 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for further detail concerning our fair value measurements.


UNH Financial Condition

Our available-for-sale debt portfolio had a weighted-average duration of 4.0 years and a weighted-average credit rating of “Double A” as of December 31, 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.


UNH Capital Resources and Uses of Liquidity

Cash Requirements. The Company’s cash requirements within the next twelve months include medical costs payable, accounts payable and accrued liabilities, short-term borrowings and current maturities of long-term debt, other current liabilities, and purchase commitments and other obligations. We expect the cash required to meet these obligations to be primarily generated through cash flows from current operations; cash available for general corporate use; and the realization of current assets, such as accounts receivable.


Our long-term cash requirements under our various contractual obligations and commitments include: •Debt obligations. See Note 8 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for further detail of our long-term debt and the timing of expected future payments. Interest coupon payments are typically paid semi-annually. •Operating leases. See Note 12 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for further detail of our obligations and the timing of expected future payments. •Purchase and other obligations. These include $7.9 billion, $3.7 billion of which is expected to be paid within the next twelve months, of fixed or minimum commitments under existing purchase obligations for goods and services, including agreements cancelable with the payment of an early termination penalty, and remaining capital commitments for venture capital funds and other funding commitments. These amounts exclude agreements cancelable without penalty and liabilities to the extent recorded in our Consolidated Balance Sheets as of December 31, 2023. •Other liabilities. These include other long-term liabilities reflected in our Consolidated Balance Sheets as of December 31, 2023, including obligations associated with certain employee benefit programs, unrecognized tax benefits and various long-term liabilities, which have some inherent uncertainty in the timing of these payments. •Redeemable noncontrolling interests. See Note 2 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for further detail. We do not have any material potential required redemptions in the next twelve months.


We expect the cash required to meet our long-term obligations to be primarily generated through future cash flows from operations. However, we also have the ability to generate cash to satisfy both our current and long-term requirements through the issuance of commercial paper, issuance of long-term debt, or drawing under our committed credit facilities or the ability to sell investments. We believe our capital resources are sufficient to meet future, short-term and long-term, liquidity needs.


Short-Term Borrowings. Our revolving bank credit facilities provide liquidity support for our commercial paper borrowing program, which facilitates the private placement of senior 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 8 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”


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%, subject to increase in certain circumstances set forth in the applicable credit agreement. As of December 31, 2023, our debt to debt-plus-shareholders’ equity ratio, as defined and calculated under the credit facilities, was 38%.


Long-Term Debt. Periodically, we access capital markets to 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 debt, see Note 8 of the Notes to the Consolidated Financial Statements included in Part II, Item 8 “Financial Statements and Supplementary Data.”


Credit Ratings. Our credit ratings as of December 31, 2023 were as follows: ####Moody’s######S&P Global######Fitch######A.M. Best## ##Ratings####Outlook##Ratings####Outlook##Ratings####Outlook##Ratings####Outlook Senior unsecured debt##A2####Stable##A+####Stable##A####Stable##A####Stable Commercial paper##P-1####n/a##A-1####n/a##F1####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. As of December 31, 2023, we had Board of Directors’ authorization to purchase up to 15 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. For more information on our share repurchase program, see Note 10 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”


Dividends. In June 2023, our 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. For more information on our dividend, see Note 10 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”


Pending Acquisitions. As of December 31, 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 capital required for these acquisitions, excluding the payoff of acquired indebtedness, is approximately $6 billion.


We do not have other significant contractual obligations or commitments requiring cash resources. However, we continually evaluate opportunities to expand our operations, which include internal development of new products, programs and technology applications and may include acquisitions.


UNH CRITICAL ACCOUNTING ESTIMATES

Critical accounting estimates are those estimates requiring management to make challenging, subjective or complex judgments, often because they must estimate the effects of matters inherently uncertain and may change in subsequent periods. Critical accounting estimates involve judgments and uncertainties which are sufficiently sensitive and may result in materially different results under different assumptions and conditions.


UNH Medical Costs Payable

Medical costs and medical costs payable include estimates of our obligations for medical care services rendered on behalf of consumers, but for which claims have either not yet been received or processed. Depending on the health care professional and type of service, the typical billing lag for services can be up to 90 days from the date of service. Approximately 90% of claims related to medical care services are known and settled within 90 days from the date of service.


UNH Medical Costs Payable

In each reporting period, our operating results include the effects of more completely developed medical costs payable estimates associated with previously reported periods. If the revised estimate of prior period medical costs is less than the previous estimate, we will decrease reported medical costs in the current period (favorable development). If the revised estimate of prior period medical costs is more than the previous estimate, we will increase reported medical costs in the current period (unfavorable development). Medical costs in 2023, 2022 and 2021 included favorable medical cost development related to prior years of $840 million, $410 million and $1.7 billion, respectively.


UNH Medical Costs Payable

In developing our medical costs payable estimates, we apply different estimation methods depending on the month for which incurred claims are being estimated. For example, for the most recent two months, we estimate claim costs incurred by applying


UNH Medical Costs Payable

observed medical cost trend factors to the average per member per month (PMPM) medical costs incurred in prior months for which more complete claim data is available, supplemented by a review of near-term completion factors.


UNH Medical Costs Payable

Completion Factors. A completion factor is an actuarial estimate, based upon historical experience and analysis of current trends, of the percentage of incurred claims during a given period adjudicated by us at the date of estimation. Completion factors are the most significant factors we use in developing our medical costs payable estimates for periods prior to the most recent two months. Completion factors include judgments in relation to claim submissions such as the time from date of service to claim receipt, claim levels and processing cycles, as well as other factors. If actual claims submission rates from providers (which can be influenced by a number of factors, including provider mix and electronic versus manual submissions), actual care activity incurred (which can be influenced by pandemics or seasonal illnesses, such as influenza), or our claim processing patterns are different than estimated, our reserve estimates may be significantly impacted.


UNH Medical Costs Payable

The following table illustrates the sensitivity of these factors and the estimated potential impact on our medical costs payable estimates for those periods as of December 31, 2023: Completion Factors (Decrease) Increase in Factors####Increase (Decrease) In Medical Costs Payable ####(in millions) (0.75)%##$##880 (0.50)####585 (0.25)####292 0.25####(290) 0.50####(579) 0.75####(867)


UNH Medical Costs Payable

Medical Cost Per Member Per Month Trend Factors. Medical cost PMPM trend factors are significant factors we use in developing our medical costs payable estimates for the most recent two months. Medical cost trend factors are developed through a comprehensive analysis of claims incurred in prior months, provider contracting and expected unit costs, benefit design and a review of a broad set of health care utilization indicators. These factors include but are not limited to pharmacy utilization trends, inpatient hospital authorization data and seasonal and other incidence data from the National Centers for Disease Control. We also consider macroeconomic variables such as GDP growth, employment and disposable income. A large number of factors can cause the medical cost trend to vary from our estimates, including: our ability and practices to manage medical and pharmaceutical costs, changes in level and mix of services utilized; mix of benefits offered, including the impact of co-pays and deductibles; changes in medical practices; and catastrophes, epidemics and pandemics.


UNH Medical Costs Payable

The following table illustrates the sensitivity of these factors and the estimated potential impact on our medical costs payable estimates for the most recent two months as of December 31, 2023: Medical Cost PMPM Quarterly Trend Increase (Decrease) in Factors####Increase (Decrease) In Medical Costs Payable ####(in millions) 3%##$##1,128 2####752 1####376 (1)####(376) (2)####(752) (3)####(1,128)


UNH Medical Costs Payable

The completion factors and medical costs PMPM trend factors analyses above include outcomes considered reasonably likely based on our historical experience estimating liabilities for incurred but not reported benefit claims.


UNH Medical Costs Payable

Management believes the amount of medical costs payable is reasonable and adequate to cover our liability for unpaid claims as of December 31, 2023; however, actual claim payments may differ from established estimates as discussed above. Assuming a hypothetical 1% difference between our December 31, 2023 estimates of medical costs payable and actual medical costs payable, excluding AARP Medicare Supplement Insurance and any potential offsetting impact from premium rebates, 2023 net earnings would have increased or decreased by approximately $245 million.


UNH Medical Costs Payable

For more detail related to our medical cost estimates, see Note 2 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”


UNH Goodwill

We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change indicating the carrying value may not be recoverable. When testing goodwill for impairment, we may first assess qualitative factors to determine if it is more likely than not the carrying value of a reporting unit exceeds its estimated fair value. During a qualitative analysis, we consider the impact of changes, if any, to the following factors: macroeconomic, industry and market factors; cost factors; changes in overall financial performance; and any other relevant events and uncertainties impacting a reporting unit. If our qualitative assessment indicates a goodwill impairment is more likely than not, we perform additional quantitative analyses. We may also elect to skip the qualitative testing and proceed directly to the quantitative testing. For reporting units where a quantitative analysis is performed, we perform a test measuring the fair values of the reporting units and comparing them to their carrying values, including goodwill. If the fair value is less than the carrying value of the reporting unit, an impairment is recognized for the difference, up to the carrying amount of goodwill.


UNH Goodwill

We estimate the fair values of our reporting units using a discounted cash flow method which includes assumptions about a wide variety of internal and external factors. Significant assumptions used in the discounted cash flow method include financial projections of free cash flow, including revenue trends, medical costs trends, operating productivity, income taxes and capital levels; long-term growth rates for determining terminal value beyond the discretely forecasted periods; and discount rates. For each reporting unit, comparative market multiples are used to corroborate the results of our discounted cash flow test.


UNH Goodwill

Financial projections and long-term growth rates used for our reporting units are consistent with, and use inputs from, our internal long-term business plan and strategies. Discount rates are determined for each reporting unit and include consideration of the implied risk inherent in their forecasts. Our most significant estimate in the discount rate determinations involves our adjustments to the peer company weighted average costs of capital reflecting reporting unit-specific factors. We have not made any adjustments to decrease a discount rate below the calculated peer company weighted average cost of capital for any reporting unit. Company-specific adjustments to discount rates are subjective and thus are difficult to measure with certainty. The passage of time and the availability of additional information regarding areas of uncertainty with respect to the reporting units’ operations could cause these assumptions to change in the future. Additionally, as part of our quantitative impairment testing, we perform various sensitivity analyses on certain key assumptions, such as discount rates and cash flow projections to analyze the potential for a material impact. As of October 1, 2023, we completed our annual impairment tests for goodwill with all of our reporting units having fair values substantially in excess of their carrying values.


UNH LEGAL MATTERS

A description of our legal proceedings is presented in Note 12 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”


UNH CONCENTRATIONS OF CREDIT RISK

Investments in financial instruments such as marketable securities and accounts receivable may subject us to concentrations of credit risk. Our investments in marketable securities are managed under an investment policy authorized by our Board of Directors. This policy limits the amounts which may be invested in any one issuer and generally limits our investments to U.S. government and agency securities, state and municipal securities and corporate debt obligations of investment grade. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of employer groups and other customers constituting our client base. As of December 31, 2023, there were no significant concentrations of credit risk.


UNH QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary market risks are exposures to changes in interest rates impacting our investment income and interest expense and the fair value of certain of our fixed-rate investments and debt, as well as foreign currency exchange rate risk of the U.S. dollar primarily to the Brazilian real and Chilean peso.


As of December 31, 2023, we had $34 billion of financial assets on which the interest rates received vary with market interest rates, which may significantly impact our investment income. Also as of December 31, 2023, $20 billion of our financial liabilities, which include debt and deposit liabilities, were at interest rates which vary with market rates, either directly or through the use of related interest rate swap contracts.


The fair value of our fixed-rate investments and debt also varies with market interest rates. As of December 31, 2023, $43 billion of our investments were fixed-rate debt securities and $44 billion of our debt was non-swapped fixed-rate term debt. An increase in market interest rates decreases the market value of fixed-rate investments and fixed-rate debt. Conversely, a decrease in market interest rates increases the market value of fixed-rate investments and fixed-rate debt.


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 tables summarize the impact of hypothetical changes in market interest rates across the entire yield curve by 1% point or 2% points as of December 31, 2023 and 2022 on our investment income and interest expense per annum and the fair value of our investments and debt (in millions, except percentages): ##########December 31, 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 %##$##688##$##393####$##(3,642)##$##(8,142) 1####344####196######(1,871)####(4,444) (1)####(344)####(180)######1,954####5,391 (2)####(688)####(360)######3,964####11,992 ##########December 31, 2022######## 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%##$##629##$##327####$##(3,390)##$##(7,365) 1####314####164######(1,746)####(4,002) (1)####(314)####(135)######1,838####4,808 (2)####(629)####(266)######3,746####10,641


UNH 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.

We have an exposure to changes in the value of foreign currencies, primarily the Brazilian real and the Chilean peso, to the U.S. dollar in translation of UnitedHealthcare Employer & Individual’s international business operating results at the average exchange rate over the accounting period, and assets and liabilities at the exchange rate at the end of the accounting period. The gains or losses resulting from translating foreign assets and liabilities into U.S. dollars are included in equity and comprehensive income.


An appreciation of the U.S. dollar against the Brazilian real or Chilean peso reduces the carrying value of the net assets denominated in those currencies. For example, as of December 31, 2023, a hypothetical 10% and 25% increase in the value of the U.S. dollar against those currencies would have caused a reduction in net assets of approximately $590 million and $1.3 billion, respectively. We manage exposure to foreign currency earnings risk primarily by conducting our international business operations in their functional currencies.


As of December 31, 2023, we had $4.9 billion of investments in equity securities, primarily consisting of venture investments, employee savings plan related investments and non-U.S. dollar fixed-income funds. Valuations in non-U.S. dollar funds are subject to foreign exchange rates.


UNH FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

##Page Report of Independent Registered Public Accounting Firm (PCAOB ID No 34)##36 Consolidated Balance Sheets##38 Consolidated Statements of Operations##39 Consolidated Statements of Comprehensive Income##40 Consolidated Statements of Changes in Equity##41 Consolidated Statements of Cash Flows##42


UNH Notes to the Consolidated Financial Statements##43

1. Description of Business##43 2. Basis of Presentation, Use of Estimates and Significant Accounting Policies##43 3. Investments##48 4. Fair Value##49 5. Property, Equipment and Capitalized Software##52 6. Goodwill and Other Intangible Assets##52 7. Medical Costs Payable##53 8. Short-Term Borrowings and Long-Term Debt##55 9. Income Taxes##57 10. Shareholders’ Equity##59 11. Share-Based Compensation##60 12. Commitments and Contingencies##62 13. Business Combinations##63 14. Segment Financial Information##64


UNH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of UnitedHealth Group Incorporated and Subsidiaries: Opinion on the Financial Statements


We have audited the accompanying consolidated balance sheets of UnitedHealth Group Incorporated and Subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.


We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2024 expressed an unqualified opinion on the Company’s internal control over financial reporting.


UNH Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


UNH Basis for Opinion

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.


UNH Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the Audit and Finance Committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.


UNH Critical Audit Matter

Medical Care Services Incurred but not Reported (IBNR) - Refer to Notes 2 and 7 to the financial statements.


UNH Critical Audit Matter Description

Medical costs payable includes estimates of the Company’s obligations for medical care services rendered on behalf of insured consumers, for which claims have either not yet been received or processed. The Company develops estimates for medical care services incurred but not reported (IBNR) using an actuarial model that requires management to exercise certain judgments in developing its estimates. Judgments made by management include medical cost per member per month trend factors and completion factors, which include assumptions over the time from date of service to claim receipt, the impact of actual care activity, and processing cycles.


UNH Critical Audit Matter Description

We identified medical care services IBNR as a critical audit matter because it requires significant management assumptions in estimating the liability. This required complex auditor judgment, and an increased extent of effort, including the involvement of actuarial specialists in performing procedures to evaluate the reasonableness of management’s methods, assumptions, and judgments in developing estimates for medical care services IBNR.


UNH How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to medical care services IBNR included the following, among others: •We tested the effectiveness of controls over management’s estimate of the IBNR for these services, including controls over the judgments in both the completion factors and the medical cost per member per month trend factors, as well as controls over the claims and membership data used in the estimation process. •We tested the underlying claims and membership data and other information that served as the basis for the actuarial analysis, to test that the inputs to the actuarial estimate were complete and accurate. •With the assistance of actuarial specialists, we evaluated the reasonableness of the actuarial methods and assumptions used by management to estimate IBNR for these services by:


–Performing an overlay of the historical claims data used in management’s current year model to the data used in prior periods to validate that there were no material changes to the claims data tested in prior periods.


–Developing an independent estimate of the IBNR for these services and comparing our estimate to management’s estimate.


–Performing a retrospective review comparing management’s prior year estimate of IBNR to claims processed in 2023 with dates of service in 2022 or prior.


UNH February 28, 2024

We have served as the Company's auditor since 2002.


UNH Consolidated Balance Sheets

(in millions, except per share data)####December 31, 2023####December 31, 2022 Assets######## Current assets:######## Cash and cash equivalents##$##25,427##$##23,365 Short-term investments####4,201####4,546 Accounts receivable, net of allowances of $1,000 and $877####21,276####17,681 Other current receivables, net of allowances of $2,084 and $1,433####17,694####12,769 Assets under management####3,755####4,087 Prepaid expenses and other current assets####6,084####6,621 Total current assets####78,437####69,069 Long-term investments####47,609####43,728 Property, equipment and capitalized software, net of accumulated depreciation and amortization of $7,039 and $6,930####11,450####10,128 Goodwill####103,732####93,352 Other intangible assets, net of accumulated amortization of $7,279 and $6,137####15,194####14,401 Other assets####17,298####15,027 Total assets##$##273,720##$##245,705 Liabilities, redeemable noncontrolling interests and equity######## Current liabilities:######## Medical costs payable##$##32,395##$##29,056 Accounts payable and accrued liabilities####31,958####27,715 Short-term borrowings and current maturities of long-term debt####4,274####3,110 Unearned revenues####3,355####3,075 Other current liabilities####27,072####26,281 Total current liabilities####99,054####89,237 Long-term debt, less current maturities####58,263####54,513 Deferred income taxes####3,021####2,769 Other liabilities####14,463####12,839 Total liabilities####174,801####159,358 Commitments and contingencies (Note 12)######## Redeemable noncontrolling interests####4,498####4,897 Equity:######## Preferred stock, $0.001 par value - 10 shares authorized; no shares issued or outstanding####—####— Common stock, $0.01 par value - 3,000 shares authorized; 924 and 934 issued and outstanding####9####9 Retained earnings####95,774####86,156 Accumulated other comprehensive loss####(7,027)####(8,393) Nonredeemable noncontrolling interests####5,665####3,678 Total equity####94,421####81,450 Total liabilities, redeemable noncontrolling interests and equity##$##273,720##$##245,705


UNH Consolidated Statements of Operations

########For the Years Ended December 31,#### (in millions, except per share data)####2023####2022####2021 Revenues:############ Premiums##$##290,827##$##257,157##$##226,233 Products####42,583####37,424####34,437 Services####34,123####27,551####24,603 Investment and other income####4,089####2,030####2,324 Total revenues####371,622####324,162####287,597 Operating costs:############ Medical costs####241,894####210,842####186,911 Operating costs####54,628####47,782####42,579 Cost of products sold####38,770####33,703####31,034 Depreciation and amortization####3,972####3,400####3,103 Total operating costs####339,264####295,727####263,627 Earnings from operations####32,358####28,435####23,970 Interest expense####(3,246)####(2,092)####(1,660) Earnings before income taxes####29,112####26,343####22,310 Provision for income taxes####(5,968)####(5,704)####(4,578) Net earnings####23,144####20,639####17,732 Earnings attributable to noncontrolling interests####(763)####(519)####(447) Net earnings attributable to UnitedHealth Group common shareholders##$##22,381##$##20,120##$##17,285 Earnings per share attributable to UnitedHealth Group common shareholders:############ Basic##$##24.12##$##21.47##$##18.33 Diluted##$##23.86##$##21.18##$##18.08 Basic weighted-average number of common shares outstanding####928####937####943 Dilutive effect of common share equivalents####10####13####13 Diluted weighted-average number of common shares outstanding####938####950####956 Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents####6####3####1


UNH Consolidated Statements of Comprehensive Income

########For the Years Ended December 31,#### (in millions)####2023####2022####2021 Net earnings##$##23,144##$##20,639##$##17,732 Other comprehensive income (loss):############ Gross unrealized gains (losses) on investment securities during the period####1,139####(4,292)####(1,028) Income tax effect####(263)####984####248 Total unrealized gains (losses), net of tax####876####(3,308)####(780) Gross reclassification adjustment for net realized (gains) losses included in net earnings####(90)####139####(173) Income tax effect####21####(32)####40 Total reclassification adjustment, net of tax####(69)####107####(133) Total foreign currency translation gains (losses)####559####192####(657) Other comprehensive income (loss)####1,366####(3,009)####(1,570) Comprehensive income####24,510####17,630####16,162 Comprehensive income attributable to noncontrolling interests####(763)####(519)####(447) Comprehensive income attributable to UnitedHealth Group common shareholders##$##23,747##$##17,111##$##15,715


UNH Consolidated Statements of Changes in Equity

####Common Stock########Additional Paid-In Capital####Retained Earnings######Accumulated Other Comprehensive Income (Loss)########Nonredeemable Noncontrolling Interests (in millions, except per share data)##Shares######Amount############Net Unrealized Gains (Losses) on Investments######Foreign Currency Translation (Losses) Gains#### Balance at January 1, 2021##946####$##10##$##—##$##69,295##$##1,336####$##(5,150)##$##2,837 Net earnings################17,285##############360 Other comprehensive loss####################(913)######(657)#### Issuances of common stock, and related tax effects##8######—####1,100################## Share-based compensation############729################## Common share repurchases##(13)######—####(940)####(4,060)############## Cash dividends paid on common shares ($5.60 per share)################(5,280)############## Redeemable noncontrolling interests fair value and other adjustments############(889)####(106)############## Acquisition and other adjustments of nonredeemable noncontrolling interests##############################407 Distributions to nonredeemable noncontrolling interests##############################(319) Balance at December 31, 2021##941######10####—####77,134####423######(5,807)####3,285 Net earnings################20,120##############406 Other comprehensive (loss) gains####################(3,201)######192#### Issuances of common stock, and related tax effects##7######—####903################## Share-based compensation############875################## Common share repurchases##(14)######(1)####(1,892)####(5,107)############## Cash dividends paid on common shares ($6.40 per share)################(5,991)############## Redeemable noncontrolling interests fair value and other adjustments############114################## Acquisition and other adjustments of nonredeemable noncontrolling interests##############################374 Distributions to nonredeemable noncontrolling interests##############################(387) Balance at December 31, 2022##934######9####—####86,156####(2,778)######(5,615)####3,678 Net earnings################22,381##############575 Other comprehensive income####################807######559#### Issuances of common stock, and related tax effects##6######—####1,231################## Share-based compensation############1,027################## Common share repurchases##(16)######—####(2,057)####(6,002)############## Cash dividends paid on common shares ($7.29 per share)################(6,761)############## Redeemable noncontrolling interests fair value and other adjustments############(201)################## Acquisition and other adjustments of nonredeemable noncontrolling interests##############################1,928 Distributions to nonredeemable noncontrolling interests##############################(516) Balance at December 31, 2023##924####$##9##$##—##$##95,774##$##(1,971)####$##(5,056)##$##5,665


UNH Consolidated Statements of Cash Flows

########For the Years Ended December 31,#### (in millions)####2023####2022####2021 Operating activities############ Net earnings##$##23,144##$##20,639##$##17,732 Noncash items:############ Depreciation and amortization####3,972####3,400####3,103 Deferred income taxes####(245)####(673)####130 Share-based compensation####1,059####925####800 Other, net####(505)####(331)####(944) Net change in other operating items, net of effects from acquisitions and changes in AARP balances:############ Accounts receivable####(3,114)####(2,523)####(1,000) Other assets####(2,444)####(1,374)####(1,031) Medical costs payable####3,482####4,053####2,701 Accounts payable and other liabilities####3,516####1,964####1,162 Unearned revenues####203####126####(310) Cash flows from operating activities####29,068####26,206####22,343 Investing activities############ Purchases of investments####(18,314)####(18,825)####(17,139) Sales of investments####7,307####5,907####7,045 Maturities of investments####9,230####6,081####8,251 Cash paid for acquisitions, net of cash assumed####(10,136)####(21,458)####(4,821) Purchases of property, equipment and capitalized software####(3,386)####(2,802)####(2,454) Cash received from dispositions####685####3,414####15 Other, net####(960)####(793)####(1,269) Cash flows used for investing activities####(15,574)####(28,476)####(10,372) Financing activities############ Common share repurchases####(8,000)####(7,000)####(5,000) Cash dividends paid####(6,761)####(5,991)####(5,280) Proceeds from common stock issuances####1,353####1,253####1,355 Repayments of long-term debt####(2,125)####(3,015)####(3,150) Proceeds from (repayments of) short-term borrowings, net####11####732####(1,302) Proceeds from issuance of long-term debt####6,394####14,819####6,933 Customer funds administered####(521)####5,548####622 Purchases of redeemable noncontrolling interests####(730)####(176)####(1,338) Other, net####(1,150)####(1,944)####(295) Cash flows (used for) from financing activities####(11,529)####4,226####(7,455) Effect of exchange rate changes on cash and cash equivalents####97####34####(62) Increase in cash and cash equivalents####2,062####1,990####4,454 Cash and cash equivalents, beginning of period####23,365####21,375####16,921 Cash and cash equivalents, end of period##$##25,427##$##23,365##$##21,375 Supplemental cash flow disclosures############ Cash paid for interest##$##3,035##$##1,945##$##1,653 Cash paid for income taxes####6,078####5,222####3,966


UNH 1.Description of Business

UnitedHealth Group Incorporated (individually and together with its subsidiaries, “UnitedHealth Group” and “the Company”) is a health care and well-being company with a mission to help people live healthier lives and help make the health system work better for everyone. The Company’s two distinct, yet complementary businesses — Optum and UnitedHealthcare — are working to help build a modern, high-performing health system through improved access, affordability, outcomes and experiences for the individuals and organizations the Company is privileged to serve.


UNH Basis of Presentation

The Company has prepared the Consolidated Financial Statements according to U.S. Generally Accepted Accounting Principles (GAAP) and has included the accounts of UnitedHealth Group and its subsidiaries.


UNH Use of Estimates

These 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 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.


UNH Premiums

Premium revenues are primarily derived from risk-based arrangements in which the premium is typically at a fixed rate per individual served for a one-year period, and the Company assumes the economic risk of funding its customers’ health care and related administrative costs.


UNH Premiums

Premium revenues are recognized in the period in which eligible individuals are entitled to receive health care benefits. Health care premium payments received from the Company’s customers in advance of the service period are recorded as unearned revenues. Fully insured commercial products of U.S. health plans, Medicare Advantage and Medicare Prescription Drug Benefit (Medicare Part D) plans with medical loss ratios (MLRs) as calculated under the definitions in the Patient Protection and Affordable Care Act (ACA) and related federal and state regulations and implementing regulation, falling below certain targets are required to rebate ratable portions of their premiums annually. Commercial premiums within the Company’s individual and small group markets are also subject to the ACA risk adjustment program. Medicare Advantage premium revenue includes the impact of the Centers for Medicare & Medicaid Services (CMS) quality bonuses based on plans’ Star rating. Certain of the Company’s Medicaid business is also subject to state minimum MLR rebates.


UNH Premiums

Premium revenues are recognized based on the estimated premiums earned, net of projected rebates, because the Company is able to reasonably estimate the ultimate premiums of these contracts. The Company also records premium revenues for certain value-based arrangements at its Optum Health care delivery businesses. Under these value-based arrangements, the Company enters into agreements with health plans to stand ready to deliver, integrate, direct and control certain health care services for patients. In exchange, the Company receives a premium that is typically paid on a per-patient per-month basis. The Company considers these value-based arrangements to represent a single performance obligation where premium revenues are recognized in the period in which health care services are made available.


UNH Premiums

The Company’s Medicare Advantage and Medicare Part D premium revenues are subject to periodic adjustment under CMS’ risk adjustment payment methodology. CMS deploys a risk adjustment model which apportions premiums paid to all health plans according to health severity and certain demographic factors. The CMS risk adjustment model provides higher per member payments for enrollees diagnosed with certain conditions and lower payments for enrollees who are healthier. Under this risk adjustment methodology, CMS calculates the risk adjusted premium payment using diagnosis and encounter data from hospital inpatient, hospital outpatient and physician treatment settings. The Company and health care providers collect, capture and submit the necessary and available data to CMS within prescribed deadlines. The Company estimates risk adjustment premium revenues based upon the data submitted and expected to be submitted to CMS. Risk adjustment data for the Company’s plans are subject to review by the government, including audit by regulators. See Note 12 for additional information regarding these audits.


UNH Products and Services

For the Company’s Optum Rx pharmacy care services business, the majority of revenues are derived from products sold through a contracted network of retail pharmacies or home delivery, specialty and community health pharmacies. Product revenues include the cost of pharmaceuticals (net of rebates), a negotiated dispensing fee and customer co-payments. Pharmacy products are billed to customers based on the number of transactions occurring during the billing period. Product revenues are recognized when the prescriptions are dispensed. The Company has entered into contracts in which it is primarily obligated to pay its network pharmacy providers for benefits provided to their customers regardless of whether the Company is paid. The Company is also involved in establishing the prices charged by retail pharmacies, determining which drugs will be included in formulary listings and selecting which retail pharmacies will be included in the network offered to plan sponsors’ members and accordingly, product revenues are reported on a gross basis.


UNH Products and Services

Services revenue includes a number of services and products sold through Optum. Optum Health’s service revenues include net patient service revenues recorded based upon established billing rates, less allowances for contractual adjustments, and are recognized as services are provided. For its financial services offerings, Optum Health charges fees and earns investment income on managed funds. Optum Insight provides software and information products, advisory consulting arrangements and managed services outsourcing contracts, which may be delivered over several years. Optum Insight revenues are generally recognized over time and measured each period based on the progress to date as services are performed or made available to customers.


UNH Products and Services

Services revenue also consists of fees derived from services performed for customers who self-insure the health care costs of their employees and employees’ dependents. Under service fee contracts, the Company receives a monthly fixed fee per employee, which is recognized as revenue as the Company performs, or makes available, the applicable services to the customer. The customers retain the risk of financing health care costs for their employees and employees’ dependents, and the Company administers the payment of customer funds to physicians and other health care professionals from customer-funded bank accounts. As the Company has neither the obligation for funding the health care costs, nor the primary responsibility for providing the medical care, the Company does not recognize premium revenue and medical costs for these contracts in its Consolidated Financial Statements. For these fee-based customer arrangements, the Company provides coordination and facilitation of medical services; transaction processing; customer, consumer and care professional services; and access to contracted networks of physicians, hospitals and other health care professionals. These services are performed throughout the contract period.


UNH Products and Services

As of December 31, 2023 and 2022, accounts receivables related to products and services were $8.6 billion and $7.1 billion, respectively. In 2023 and 2022, the Company had no material bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the Consolidated Balance Sheets as of December 31, 2023 or 2022.


UNH Products and Services

For the years ended December 31, 2023, 2022 and 2021, revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price) was not material.


UNH Products and Services

As of December 31, 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.


UNH Products and Services

See Note 14 for disaggregation of revenue by segment and type.


UNH Medical Costs and Medical Costs Payable

The Company’s estimate of medical costs payable represents management’s best estimate of its liability for unpaid medical costs as of December 31, 2023.


Each period, the Company re-examines previously established medical costs payable estimates based on actual claim submissions and other changes in facts and circumstances. As more complete claim information becomes available, the Company adjusts the amount of the estimates and includes the changes in estimates in medical costs in the period in which the change is identified. Approximately 90% of claims related to medical care services are known and settled within 90 days from the date of service and substantially all within twelve months.


Medical costs and medical costs payable include estimates of the Company’s obligations for medical care services rendered on behalf of consumers, but for which claims have either not yet been received, processed, or paid. The Company develops estimates for medical care services incurred but not reported (IBNR), which includes estimates for claims which have not been received or fully processed, using an actuarial process consistently applied, centrally controlled and automated. The actuarial models consider factors such as time from date of service to claim processing, seasonal variances in medical care consumption, health care professional contract rate changes, care activity and other medical cost trends, membership volume and


demographics, the introduction of new technologies, benefit plan changes and business mix changes related to products, customers and geography.


In developing its medical costs payable estimates, the Company applies different estimation methods depending on which incurred claims are being estimated. For the most recent two months, the Company estimates claim costs incurred by applying observed medical cost trend factors to the average per member per month medical costs incurred in prior months for which more complete claim data are available, supplemented by a review of near-term completion factors (actuarial estimates, based upon historical experience and analysis of current trends, of the percentage of incurred claims during a given period adjudicated by the Company at the date of estimation). For months prior to the most recent two months, the Company applies the completion factors to actual claims adjudicated-to-date to estimate the expected amount of ultimate incurred claims for those months.


UNH Cost of Products Sold

The Company’s cost of products sold includes the cost of pharmaceuticals dispensed to unaffiliated customers either directly at its home delivery, specialty and community pharmacy locations, or indirectly through its nationwide network of participating pharmacies. Rebates attributable to unaffiliated clients are accrued as rebates receivable and a reduction of cost of products sold, with a corresponding payable for the amounts of the rebates to be remitted to those unaffiliated clients in accordance with their contracts and recorded in the Consolidated Statements of Operations as a reduction of product revenue. Cost of products sold also includes the cost of personnel to support the Company’s transaction processing services, system sales, maintenance and professional services.


UNH Cash, Cash Equivalents and Investments

Cash and cash equivalents are highly liquid investments having an original maturity of three months or less. The fair value of cash and cash equivalents approximates their carrying value because of the short maturity of the instruments. Investments with maturities of less than one year are classified as short-term. Because of regulatory requirements, certain investments are included in long-term investments regardless of their maturity date. The Company classifies these investments as held-to-maturity and reports them at amortized cost. Substantially all other investments are classified as available-for-sale and reported at fair value based on quoted market prices, where available. Equity investments are measured at fair value, with certain exceptions where the Company has elected to measure investments with unobservable inputs at cost, subject to fair value adjustments upon an impairment or a transaction of the same or similar security. Changes in fair value of equity investments are recognized in net earnings.


The Company excludes unrealized gains and losses on available-for-sale debt securities from net earnings and reports them as comprehensive income and, net of income tax effects, as a separate component of equity. To calculate realized gains and losses on the sale of debt securities, the Company specifically identifies the cost of each investment sold.


The Company evaluates an available-for-sale debt security for credit-related impairment by considering the present value of expected cash flows relative to a security’s amortized cost, the extent to which fair value is less than amortized cost, the financial condition and near-term prospects of the issuer and specific events or circumstances which may influence the operations of the issuer. Credit-related impairments are recorded as an allowance, with an offset to investment and other income. Non-credit related impairments are recorded through other comprehensive income. If the Company intends to sell an impaired security, or will likely be required to sell a security before recovery of the entire amortized cost, the entire impairment is included in net earnings.


New information and the passage of time can change these judgments. The Company manages its investment portfolio to limit its exposure to any one issuer or market sector, and largely limits its investments to investment grade quality.


UNH Assets Under Management

The Company provides health insurance products and services to members of AARP under a Supplemental Health Insurance Program (the AARP Program) and to AARP members and non-members under separate Medicare Advantage and Medicare Part D arrangements. The products and services under the AARP Program include supplemental Medicare benefits, hospital indemnity insurance, including insurance for individuals between 50 to 64 years of age, and other related products.


UNH Assets Under Management

Pursuant to the Company’s agreement with AARP, program assets are managed separately from the Company’s general investment portfolio and are used to pay costs associated with the AARP Program. These assets are invested at the Company’s discretion, within investment guidelines approved by AARP. The Company does not guarantee any rates of return on these investments and, upon any transfer of the AARP Program contract to another entity, the Company would transfer cash equal in amount to the fair value of these investments at the date of transfer to the entity. Because the purpose of these assets is to fund the medical costs payable, the rate stabilization fund (RSF) liabilities and other related liabilities associated with this AARP contract, assets under management are classified as current assets, consistent with the classification of these liabilities.


UNH Assets Under Management

The effects of changes in other balance sheet amounts associated with the AARP Program also accrue to the overall benefit of the AARP policyholders through the RSF balance. Accordingly, the Company excludes the effect of such changes in its Consolidated Statements of Cash Flows.


UNH Other Current Receivables

Other current receivables include amounts due from pharmaceutical manufacturers for rebates and Medicare Part D drug discounts, accrued interest and other miscellaneous amounts due to the Company.


UNH Other Current Receivables

The Company’s pharmacy care services businesses contract with pharmaceutical manufacturers, some of which provide rebates based on use of the manufacturers’ products by its affiliated and unaffiliated clients. The Company accrues rebates as they are earned by its clients on a monthly basis based on the terms of the applicable contracts, historical data and current estimates. The pharmacy care services businesses bill these rebates to the manufacturers on a monthly or quarterly basis depending on the contractual terms and record rebates attributable to affiliated clients as a reduction to medical costs. The Company generally receives rebates two to five months after billing. As of December 31, 2023 and 2022, total pharmaceutical manufacturer rebates receivable included in other receivables in the Consolidated Balance Sheets amounted to $11.0 billion and $8.2 billion, respectively.


UNH Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets included pharmaceutical drug and supplies inventory of $2.8 billion and $3.5 billion as of December 31, 2023 and 2022, respectively.


UNH Property, Equipment and Capitalized Software

Property, equipment and capitalized software are stated at cost, net of accumulated depreciation and amortization. Capitalized software consists of certain costs incurred in the development of internal-use software, including external direct costs of materials and services and applicable payroll costs of employees devoted to specific software development.


The Company calculates depreciation and amortization using the straight-line method over the estimated useful lives of the assets. The useful lives for property, equipment and capitalized software are: Furniture, fixtures and equipment 3 to 10 years


UNH Capitalized software 3 to 5 years

Leasehold improvements are depreciated over the shorter of the remaining lease term or their estimated useful economic life.


UNH Operating Leases

The Company leases facilities and equipment under long-term operating leases which are non-cancelable and expire on various dates. At the lease commencement date, lease right-of-use (ROU) assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term, which includes all fixed obligations arising from the lease contract. If an interest rate is not implicit in a lease, the Company utilizes its incremental borrowing rate for a period closely matching the lease term.


UNH Operating Leases

The Company’s ROU assets are included in other assets, and lease liabilities are included in other current liabilities and other liabilities in the Company’s Consolidated Balance Sheet.


UNH Goodwill

To determine whether goodwill is impaired, annually or more frequently if needed, the Company performs impairment tests. The Company may first assess qualitative factors to determine if it is more likely than not the carrying value of a reporting unit exceeds its estimated fair value. The Company may also elect to skip the qualitative testing and proceed directly to the quantitative testing. When performing quantitative testing, the Company first estimates the fair values of its reporting units using discounted cash flows. To determine fair values, the Company must make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include financial projections of free cash flow (including significant assumptions about operations, capital levels and income taxes), long-term growth rates for determining terminal value and discount rates. Comparative market multiples are used to corroborate the results of the discounted cash flow test. If the fair value is less than the carrying value of the reporting unit, an impairment is recognized for the difference, up to the carrying amount of goodwill.


UNH Goodwill

There was no impairment of goodwill during the years ended December 31, 2023, 2022 and 2021.


UNH Intangible Assets

The Company’s finite-lived intangible assets are subject to impairment tests when events or circumstances indicate an intangible asset (or asset group) may be impaired. The Company’s indefinite-lived intangible assets are also tested for impairment annually. There was no impairment of intangible assets during the years ended December 31, 2023, 2022 and 2021.


UNH Other Current Liabilities

Other current liabilities include health savings account deposits ($13.5 billion as of December 31, 2023 and 2022), accruals for premium rebates payable, the RSF associated with the AARP Program, the current portion of future policy benefits and customer balances.


UNH Policy Acquisition Costs

The Company’s short duration health insurance contracts typically have a one-year term and may be canceled by the customer with at least 30 days’ notice. Costs related to the acquisition and renewal of short duration customer contracts are primarily charged to expense as incurred.


UNH Redeemable Noncontrolling Interests

Redeemable noncontrolling interests in the Company’s subsidiaries whose redemption is outside of the Company’s control are classified as temporary equity. These interests primarily relate to put options on unowned shares, which are typically redeemable at fair value after a certain time period. The Company accretes changes in the redemption value to the earliest redemption date utilizing the interest method. If all interests were currently redeemable, the difference between the carrying value and the estimated redemption value is not material. The following table provides details of the Company's redeemable noncontrolling interests’ activity for the years ended December 31, 2023 and 2022: (in millions)####2023####2022 Redeemable noncontrolling interests, beginning of period##$##4,897##$##1,434 Net earnings####188####113 Acquisitions####122####3,108 Redemptions####(730)####(176) Distributions####(144)####(82) Fair value and other adjustments####165####500 Redeemable noncontrolling interests, end of period##$##4,498##$##4,897


UNH Share-Based Compensation

The Company recognizes compensation expense for share-based awards, including stock options and restricted stock and restricted stock units (collectively, restricted shares), on a straight-line basis over the related service period (generally the vesting period) of the award, or to an employee’s eligible retirement date under the award agreement, if earlier. Restricted shares vest ratably, primarily over four years, and compensation expense related to restricted shares is based on the share price on the date of grant. Stock options vest ratably primarily over four years and may be exercised up to 10 years from the date of grant. Compensation expense related to stock options is based on the fair value at the date of grant, which is estimated on the date of grant using a binomial option-pricing model. Under the Company’s Employee Stock Purchase Plan (ESPP), eligible employees are allowed to purchase the Company’s stock at a discounted price, which is 90% of the market price of the Company’s common stock at the end of the six-month purchase period. Share-based compensation expense for all programs is recognized in operating costs in the Consolidated Statements of Operations.


UNH Net Earnings Per Common Share

The Company computes basic earnings per common share attributable to UnitedHealth Group common shareholders by dividing net earnings attributable to UnitedHealth Group common shareholders by the weighted-average number of common shares outstanding during the period. The Company determines diluted net earnings per common share attributable to UnitedHealth Group common shareholders using the weighted-average number of common shares outstanding during the period, adjusted for potentially dilutive shares associated with stock options, restricted shares and the ESPP (collectively, common stock equivalents), using the treasury stock method. The treasury stock method assumes a hypothetical issuance of shares to settle the share-based awards, with the assumed proceeds used to purchase common stock at the average market price for the period. Assumed proceeds include the amount the employee must pay upon exercise and the average unrecognized compensation cost. The difference between the number of shares assumed issued and number of shares assumed purchased represents the dilutive shares.


UNH 3. 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 December 31, 2023################ Debt securities - available-for-sale:################ U.S. government and agency obligations##$##4,674##$##3##$##(234)##$##4,443 State and municipal obligations####7,636####39####(322)####7,353 Corporate obligations####23,136####67####(1,186)####22,017 U.S. agency mortgage-backed securities####8,982####22####(708)####8,296 Non-U.S. agency mortgage-backed securities####3,023####3####(240)####2,786 Total debt securities - available-for-sale####47,451####134####(2,690)####44,895 Debt securities - held-to-maturity:################ U.S. government and agency obligations####506####1####(6)####501 State and municipal obligations####28####—####(2)####26 Corporate obligations####69####—####—####69 Total debt securities - held-to-maturity####603####1####(8)####596 Total debt securities##$##48,054##$##135##$##(2,698)##$##45,491 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


UNH 3. Investments

Nearly all of the Company’s investments in mortgage-backed securities were rated “Double A” or better as of December 31, 2023.


UNH 3. Investments

The Company held $4.9 billion and $3.7 billion of equity securities as of December 31, 2023 and 2022, respectively. The Company’s investments in equity securities primarily consist of venture investments, employee savings plan related 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 primarily in operating businesses in the health care sector, as of December 31, 2023 and 2022, respectively. The allowance for credit losses on held-to-maturity securities as of December 31, 2023 and 2022 was not material.


UNH 3. Investments

The amortized cost and fair value of debt securities as of December 31, 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##$##4,286####$##4,260##$##313####$##310 Due after one year through five years####15,124######14,556####246######244 Due after five years through ten years####10,844######10,036####26######25 Due after ten years####5,192######4,961####18######17 U.S. agency mortgage-backed securities####8,982######8,296####—######— Non-U.S. agency mortgage-backed securities####3,023######2,786####—######— Total debt securities##$##47,451####$##44,895##$##603####$##596


UNH 3. Investments

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 December 31, 2023############################## U.S. government and agency obligations##$##1,270####$##(7)##$##2,077####$##(227)##$##3,347####$##(234) State and municipal obligations####907######(7)####4,063######(315)####4,970######(322) Corporate obligations####1,826######(17)####14,696######(1,169)####16,522######(1,186) U.S. agency mortgage-backed securities####1,337######(12)####5,069######(696)####6,406######(708) Non-U.S. agency mortgage-backed securities####279######(6)####2,202######(234)####2,481######(240) Total debt securities - available-for-sale##$##5,619####$##(49)##$##28,107####$##(2,641)##$##33,726####$##(2,690) December 31, 2022############################## 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)


UNH 3. Investments

The Company’s unrealized losses from all securities as of December 31, 2023 were generated from approximately 30,000 positions out of a total of 40,000 positions. The Company believes 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 December 31, 2023, the Company did not have the intent to sell any of the 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 as of December 31, 2023 and 2022 was not material.


UNH 4. Fair Value

Certain assets and liabilities are measured at fair value in the Consolidated Financial Statements or have fair values disclosed in the Notes to the Consolidated Financial Statements. These assets and liabilities are classified into one of three levels of a hierarchy defined by GAAP. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement is categorized in its entirety based on the lowest level input which is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.


UNH 4. Fair Value

The fair value hierarchy is summarized as follows:


UNH 4. Fair Value

Level 1 — Quoted prices (unadjusted) for identical assets/liabilities in active markets.