UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________________ 

Form 10-Q

__________________________________________________________ 

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

FOR THE QUARTERLY PERIOD ENDED September 30, 2020

or

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

FOR THE TRANSITION PERIOD FROM _______ TO _______

Commission File Number: 1-10864

__________________________________________________________ 

UnitedHealth Group Incorporated

(Exact name of registrant as specified in its charter)

 __________________________________________________________ 

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

(952) 936-1300

(Registrant’s telephone number, including area code)

_________________________________________________________  

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	UNH	NYSE

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

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

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

Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐			Emerging growth company	☐

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

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

As of October 30, 2020, there were 948,820,710 shares of the registrant’s Common Stock, $.01 par value per share, issued and outstanding.

UNITEDHEALTH GROUP

Table of Contents

			Page
Part I. Financial Information
Item 1.	Financial Statements (unaudited)		1
	Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019		1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2020 and 2019		2
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2020 and 2019		3
	Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2020 and 2019		4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019		6
	Notes to the Condensed Consolidated Financial Statements		7
	1.	Basis of Presentation	7
	2.	Investments	8
	3.	Fair Value	10
	4.	Medical Costs Payable	11
	5.	Short-Term Borrowings and Long-Term Debt	12
	6.	Dividends	13
	7.	Commitments and Contingencies	13
	8.	Segment Financial Information	14
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		25
Item 4.	Controls and Procedures		25
Part II. Other Information
Item 1.	Legal Proceedings		25
Item 1A.	Risk Factors		26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		26
Item 6.	Exhibits		27
Signatures			28

PART I

ITEM 1.    FINANCIAL STATEMENTS

UnitedHealth Group

Condensed Consolidated Balance Sheets

(Unaudited)

(in millions, except per share data)	September 30, 2020		December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	17,550	$	10,985
Short-term investments	3,259		3,260
Accounts receivable, net	12,171		11,822
Other current receivables, net	13,231		9,640
Assets under management	3,788		3,076
Prepaid expenses and other current assets	4,822		3,851
Total current assets	54,821		42,634
Long-term investments	39,184		37,209
Property, equipment and capitalized software, net	8,151		8,704
Goodwill	68,088		65,659
Other intangible assets, net	10,373		10,349
Other assets	10,352		9,334
Total assets	$	190,969	$	173,889
Liabilities, redeemable noncontrolling interests and equity
Current liabilities:
Medical costs payable	$	21,167	$	21,690
Accounts payable and accrued liabilities	21,173		19,005
Short-term borrowings and current maturities of long-term debt	3,899		3,870
Unearned revenues	2,391		2,622
Other current liabilities	17,967		14,595
Total current liabilities	66,597		61,782
Long-term debt, less current maturities	39,895		36,808
Deferred income taxes	3,340		2,993
Other liabilities	11,186		10,144
Total liabilities	121,018		111,727
Commitments and contingencies (Note 7)
Redeemable noncontrolling interests	1,847		1,726
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; 949 and 948 issued and outstanding	10		9
Additional paid-in capital	—		7
Retained earnings	69,715		61,178
Accumulated other comprehensive loss	(4,494)		(3,578)
Nonredeemable noncontrolling interests	2,873		2,820
Total equity	68,104		60,436
Total liabilities, redeemable noncontrolling interests and equity	$	190,969	$	173,889

See Notes to the Condensed Consolidated Financial Statements

1

UnitedHealth Group

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share data)	2020		2019		2020		2019
Revenues:
Premiums	$	50,863	$	47,397	$	150,897	$	142,074
Products	8,777		7,546		25,455		23,971
Services	5,124		4,942		14,265		13,756
Investment and other income	351		466		1,057		1,453
Total revenues	65,115		60,351		191,674		181,254
Operating costs:
Medical costs	41,636		39,041		117,314		117,164
Operating costs	10,174		8,960		30,190		25,892
Cost of products sold	7,935		6,627		23,123		21,606
Depreciation and amortization	719		709		2,159		2,002
Total operating costs	60,464		55,337		172,786		166,664
Earnings from operations	4,651		5,014		18,888		14,590
Interest expense	(395)		(449)		(1,262)		(1,267)
Earnings before income taxes	4,256		4,565		17,626		13,323
Provision for income taxes	(1,000)		(936)		(4,209)		(2,752)
Net earnings	3,256		3,629		13,417		10,571
Earnings attributable to noncontrolling interests	(84)		(91)		(226)		(273)
Net earnings attributable to UnitedHealth Group common shareholders	$	3,172	$	3,538	$	13,191	$	10,298
Earnings per share attributable to UnitedHealth Group common shareholders:
Basic	$	3.34	$	3.73	$	13.90	$	10.82
Diluted	$	3.30	$	3.67	$	13.73	$	10.65
Basic weighted-average number of common shares outstanding	950		949		949		952
Dilutive effect of common share equivalents	12		14		12		15
Diluted weighted-average number of common shares outstanding	962		963		961		967
Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents	6		12		9		10

See Notes to the Condensed Consolidated Financial Statements

2

UnitedHealth Group

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2020		2019		2020		2019
Net earnings	$	3,256	$	3,629	$	13,417	$	10,571
Other comprehensive income (loss):
Gross unrealized gains on investment securities during the period	148		230		919		1,243
Income tax effect	(37)		(53)		(214)		(285)
Total unrealized gains, net of tax	111		177		705		958
Gross reclassification adjustment for net realized gains included in net earnings	(21)		(69)		(50)		(70)
Income tax effect	5		16		12		16
Total reclassification adjustment, net of tax	(16)		(53)		(38)		(54)
Total foreign currency translation losses	(39)		(560)		(1,583)		(453)
Other comprehensive income (loss)	56		(436)		(916)		451
Comprehensive income	3,312		3,193		12,501		11,022
Comprehensive income attributable to noncontrolling interests	(84)		(91)		(226)		(273)
Comprehensive income attributable to UnitedHealth Group common shareholders	$	3,228	$	3,102	$	12,275	$	10,749

See Notes to the Condensed Consolidated Financial Statements

3

UnitedHealth Group

Condensed Consolidated Statements of Changes in Equity

(Unaudited)

	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)				Nonredeemable Noncontrolling Interests		Total Equity
Three months ended September 30, (in millions)	Shares	Amount						Net Unrealized Gains on Investments		Foreign Currency Translation Losses
Balance at June 30, 2020	950	$	10	$	388	$	67,776	$	1,161	$	(5,711)	$	2,891	$	66,515
Net earnings						3,172						62		3,234
Other comprehensive income (loss)								95		(39)				56
Issuances of common stock, and related tax effects	2	—		321										321
Share-based compensation				131										131
Common share repurchases	(3)	—		(805)		(45)								(850)
Cash dividends paid on common shares ($1.25 per share)						(1,188)								(1,188)
Redeemable noncontrolling interests fair value and other adjustments				(35)										(35)
Acquisition and other adjustments of nonredeemable noncontrolling interests												(8)		(8)
Distribution to nonredeemable noncontrolling interests												(72)		(72)
Balance at September 30, 2020	949	$	10	$	—	$	69,715	$	1,256	$	(5,750)	$	2,873	$	68,104
Balance at June 30, 2019	948	$	9	$	—	$	56,367	$	516	$	(3,789)	$	2,751	$	55,854
Net earnings						3,538						82		3,620
Other comprehensive income (loss)								124		(560)				(436)
Issuances of common stock, and related tax effects	2	—		277										277
Share-based compensation				130										130
Common share repurchases	(3)	—		(415)		(185)								(600)
Cash dividends paid on common shares ($1.08 per share)						(1,024)								(1,024)
Redeemable noncontrolling interests fair value and other adjustments				8										8
Acquisition and other adjustments of nonredeemable noncontrolling interests												(7)		(7)
Distribution to nonredeemable noncontrolling interests												(66)		(66)
Balance at September 30, 2019	947	$	9	$	—	$	58,696	$	640	$	(4,349)	$	2,760	$	57,756

See Notes to the Condensed Consolidated Financial Statements

4

UnitedHealth Group

Condensed Consolidated Statements of Changes in Equity

(Unaudited)

	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)				Nonredeemable Noncontrolling Interests		Total Equity
Nine months ended September 30, (in millions)	Shares	Amount						Net Unrealized Gains (Losses) on Investments		Foreign Currency Translation Losses
Balance at January 1, 2020	948	$	9	$	7	$	61,178	$	589	$	(4,167)	$	2,820	$	60,436
Adjustment to adopt ASU 2016-13						(28)								(28)
Net earnings						13,191						159		13,350
Other comprehensive income (loss)								667		(1,583)				(916)
Issuances of common stock, and related tax effects	10	1		928										929
Share-based compensation				509										509
Common share repurchases	(9)	—		(1,315)		(1,226)								(2,541)
Cash dividends paid on common shares ($3.58 per share)						(3,400)								(3,400)
Redeemable noncontrolling interests fair value and other adjustments				(129)										(129)
Acquisition and other adjustments of nonredeemable noncontrolling interests												42		42
Distribution to nonredeemable noncontrolling interests												(148)		(148)
Balance at September 30, 2020	949	$	10	$	—	$	69,715	$	1,256	$	(5,750)	$	2,873	$	68,104
Balance at January 1, 2019	960	$	10	$	—	$	55,846	$	(264)	$	(3,896)	$	2,623	$	54,319
Adjustment to adopt ASU 2016-02						(13)						(5)		(18)
Net earnings						10,298						196		10,494
Other comprehensive income (loss)								904		(453)				451
Issuances of common stock, and related tax effects	8	—		438										438
Share-based compensation				521										521
Common share repurchases	(21)	(1)		(573)		(4,527)								(5,101)
Cash dividends paid on common shares ($3.06 per share)						(2,908)								(2,908)
Redeemable noncontrolling interests fair value and other adjustments				(277)										(277)
Acquisition and other adjustments of nonredeemable noncontrolling interests				(109)								157		48
Distribution to nonredeemable noncontrolling interests												(211)		(211)
Balance at September 30, 2019	947	$	9	$	—	$	58,696	$	640	$	(4,349)	$	2,760	$	57,756

See Notes to the Condensed Consolidated Financial Statements

5

UnitedHealth Group

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
(in millions)	2020		2019
Operating activities
Net earnings	$	13,417	$	10,571
Noncash items:
Depreciation and amortization	2,159		2,002
Deferred income taxes	119		177
Share-based compensation	527		525
Other, net	48		(181)
Net change in other operating items, net of effects from acquisitions and changes in AARP balances:
Accounts receivable	(194)		957
Other assets	(2,697)		(2,181)
Medical costs payable	(615)		223
Accounts payable and other liabilities	3,441		105
Unearned revenues	(132)		60
Cash flows from operating activities	16,073		12,258
Investing activities
Purchases of investments	(11,570)		(13,386)
Sales of investments	4,887		6,198
Maturities of investments	5,297		5,160
Cash paid for acquisitions, net of cash assumed	(4,326)		(8,200)
Purchases of property, equipment and capitalized software	(1,477)		(1,421)
Other, net	(165)		338
Cash flows used for investing activities	(7,354)		(11,311)
Financing activities
Common share repurchases	(2,541)		(5,101)
Cash dividends paid	(3,400)		(2,908)
Proceeds from common stock issuances	1,206		740
Repayments of long-term debt	(1,500)		(1,250)
(Repayments of) proceeds from short-term borrowings, net	(423)		3,998
Proceeds from issuance of long-term debt	4,864		5,444
Customer funds administered	249		420
Other, net	(449)		(756)
Cash flows (used for) from financing activities	(1,994)		587
Effect of exchange rate changes on cash and cash equivalents	(160)		(37)
Increase in cash and cash equivalents	6,565		1,497
Cash and cash equivalents, beginning of period	10,985		10,866
Cash and cash equivalents, end of period	$	17,550	$	12,363

See Notes to the Condensed Consolidated Financial Statements

6

UnitedHealth Group

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

1.    Basis of Presentation

UnitedHealth Group Incorporated (individually and together with its subsidiaries, “UnitedHealth Group” and “the Company”) is a diversified health care company dedicated to helping people live healthier lives and helping make the health system work better for everyone.

Through its diversified family of businesses, the Company leverages core competencies in data and health information, advanced technology and clinical expertise. These core competencies are deployed within two distinct, but strategically aligned, business platforms: health benefits operating under UnitedHealthcare and health services operating under Optum.

The Company has prepared the Condensed Consolidated Financial Statements according to U.S. Generally Accepted Accounting Principles (GAAP) and has included the accounts of UnitedHealth Group and its subsidiaries. The year-end condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. In accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC), the Company has omitted certain footnote disclosures that would substantially duplicate the disclosures contained in its annual audited Consolidated Financial Statements. Therefore, these Condensed Consolidated Financial Statements should be read together with the Consolidated Financial Statements and the Notes included in Part II, Item 8, “Financial Statements and Supplementary Data” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the SEC (2019 10-K). The accompanying Condensed Consolidated Financial Statements include all normal recurring adjustments necessary to present the interim financial statements fairly.

Use of Estimates

These Condensed Consolidated Financial Statements include certain amounts based on the Company’s best estimates and judgments. The Company’s most significant estimates include medical costs payable and goodwill. Certain of these estimates require the application of complex assumptions and judgments, often because they involve matters that are inherently uncertain and will likely change in subsequent periods. The impact of any change in estimates is included in earnings in the period in which the estimate is adjusted.

Revenue from Products

For the three and nine months ended September 30, 2020, the Company recognized revenue and cost of products sold for retail pharmacy co-payments related to its OptumRx business. Revenue recognized in prior periods related to retail pharmacy transactions excludes the member’s applicable co-payment. There was no impact on earnings from operations, net earnings, earnings per share or total equity.

Recently Adopted Accounting Standards

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326)” (ASU 2016-13). ASU 2016-13 requires the use of the current expected credit loss impairment model to develop an estimate of expected credit losses for certain financial assets. ASU 2016-13 also requires expected credit losses on available-for-sale debt securities to be recognized through an allowance for credit losses and revises certain disclosure requirements. The Company adopted ASU 2016-13 on January 1, 2020 using a cumulative effect upon adoption approach. The adoption of ASU 2016-13 was immaterial to the Company’s consolidated balance sheet, results of operations, equity and cash flows.

Under the current expected credit loss impairment model, 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 that 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.

The Company has determined that there have been no other recently adopted or issued accounting standards that had, or will have, a material impact on its Condensed Consolidated Financial Statements.

7

2.    Investments

A summary of debt securities by major security type is as follows:

(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2020
Debt securities - available-for-sale:
U.S. government and agency obligations	$	3,374	$	160	$	—	$	3,534
State and municipal obligations	6,311		377		(4)		6,684
Corporate obligations	18,461		778		(35)		19,204
U.S. agency mortgage-backed securities	6,523		270		(3)		6,790
Non-U.S. agency mortgage-backed securities	2,033		98		(6)		2,125
Total debt securities - available-for-sale	36,702		1,683		(48)		38,337
Debt securities - held-to-maturity:
U.S. government and agency obligations	422		7		—		429
State and municipal obligations	31		2		—		33
Corporate obligations	245		1		—		246
Total debt securities - held-to-maturity	698		10		—		708
Total debt securities	$	37,400	$	1,693	$	(48)	$	39,045
December 31, 2019
Debt securities - available-for-sale:
U.S. government and agency obligations	$	3,502	$	55	$	(4)	$	3,553
State and municipal obligations	5,680		251		(5)		5,926
Corporate obligations	17,910		343		(11)		18,242
U.S. agency mortgage-backed securities	6,425		109		(6)		6,528
Non-U.S. agency mortgage-backed securities	1,811		37		(3)		1,845
Total debt securities - available-for-sale	35,328		795		(29)		36,094
Debt securities - held-to-maturity:
U.S. government and agency obligations	402		2		—		404
State and municipal obligations	32		2		—		34
Corporate obligations	538		—		(1)		537
Total debt securities - held-to-maturity	972		4		(1)		975
Total debt securities	$	36,300	$	799	$	(30)	$	37,069

The Company held $2.1 billion and $2.0 billion of equity securities as of September 30, 2020 and December 31, 2019, respectively. The Company’s investments in equity securities primarily consist of 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 $1.3 billion and $1.4 billion of equity method investments in operating businesses in the health care sector as of September 30, 2020 and December 31, 2019, respectively. The allowance for credit losses on held-to-maturity securities at September 30, 2020 was not material.

8

The amortized cost and fair value of debt securities as of September 30, 2020, 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	$	3,388	$	3,407	$	400	$	401
Due after one year through five years	11,253		11,678		246		252
Due after five years through ten years	9,179		9,826		30		31
Due after ten years	4,326		4,511		22		24
U.S. agency mortgage-backed securities	6,523		6,790		—		—
Non-U.S. agency mortgage-backed securities	2,033		2,125		—		—
Total debt securities	$	36,702	$	38,337	$	698	$	708

The fair value of available-for-sale debt securities with gross unrealized losses by major security type and length of time that individual securities have been in a continuous unrealized loss position were as follows:

	Less Than 12 Months				12 Months or Greater				Total
(in millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2020
Debt securities - available-for-sale:
State and municipal obligations	$	366	$	(4)	$	—	$	—	$	366	$	(4)
Corporate obligations	2,314		(30)		400		(5)		2,714		(35)
U.S. agency mortgage-backed securities	687		(3)		—		—		687		(3)
Non-U.S. agency mortgage-backed securities	278		(3)		55		(3)		333		(6)
Total debt securities - available-for-sale	$	3,645	$	(40)	$	455	$	(8)	$	4,100	$	(48)
December 31, 2019
Debt securities - available-for-sale:
U.S. government and agency obligations	$	616	$	(4)	$	—	$	—	$	616	$	(4)
State and municipal obligations	440		(5)		—		—		440		(5)
Corporate obligations	1,903		(7)		740		(4)		2,643		(11)
U.S. agency mortgage-backed securities	657		(3)		333		(3)		990		(6)
Non-U.S. agency mortgage-backed securities	406		(3)		—		—		406		(3)
Total debt securities - available-for-sale	$	4,022	$	(22)	$	1,073	$	(7)	$	5,095	$	(29)

The Company’s unrealized losses from debt securities as of September 30, 2020 were generated from approximately 3,000 positions out of a total of 34,000 positions. The Company believes that it will collect the timely 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 that impacted our 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, and the potential economic impacts of COVID-19 on the issuers, noting no significant credit deterioration since purchase. As of September 30, 2020, the Company did not have the intent to sell any of the available-for-sale debt securities in an unrealized loss position. Therefore, the Company believes these losses to be temporary. The allowance for credit losses on available-for-sale debt securities at September 30, 2020 was not material.

9

3.    Fair Value

Certain assets and liabilities are measured at fair value in the Condensed Consolidated Financial Statements or have fair values disclosed in the Notes to the Condensed Consolidated Financial Statements. These assets and liabilities are classified into one of three levels of a hierarchy defined by GAAP.

For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see Note 4 of Notes to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2019 10-K.

The following table presents a summary of fair value measurements by level and carrying values for items measured at fair value on a recurring basis in the Condensed Consolidated Balance Sheets:

(in millions)	Quoted Prices in Active Markets (Level 1)			Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)			Total Fair and Carrying Value
September 30, 2020
Cash and cash equivalents	$	17,472		$	78		$	—		$	17,550
Debt securities - available-for-sale:
U.S. government and agency obligations	3,336			198			—			3,534
State and municipal obligations	—			6,684			—			6,684
Corporate obligations	44			18,881			279			19,204
U.S. agency mortgage-backed securities	—			6,790			—			6,790
Non-U.S. agency mortgage-backed securities	—			2,125			—			2,125
Total debt securities - available-for-sale	3,380			34,678			279			38,337
Equity securities	1,593			30			—			1,623
Assets under management	1,690			2,050			48			3,788
Total assets at fair value	$	24,135		$	36,836		$	327		$	61,298
Percentage of total assets at fair value	39		%	60		%	1		%	100		%
December 31, 2019
Cash and cash equivalents	$	10,837		$	148		$	—		$	10,985
Debt securities - available-for-sale:
U.S. government and agency obligations	3,369			184			—			3,553
State and municipal obligations	—			5,926			—			5,926
Corporate obligations	70			17,923			249			18,242
U.S. agency mortgage-backed securities	—			6,528			—			6,528
Non-U.S. agency mortgage-backed securities	—			1,845			—			1,845
Total debt securities - available-for-sale	3,439			32,406			249			36,094
Equity securities	1,734			22			—			1,756
Assets under management	1,123			1,918			35			3,076
Total assets at fair value	$	17,133		$	34,494		$	284		$	51,911
Percentage of total assets at fair value	33		%	66		%	1		%	100		%

There were no transfers in or out of Level 3 financial assets or liabilities during the nine months ended September 30, 2020 or 2019.

10

The following table presents a summary of fair value measurements by level and carrying values for certain financial instruments not measured at fair value on a recurring basis in the Condensed Consolidated Balance Sheets:

(in millions)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Total Fair Value		Total Carrying Value
September 30, 2020
Debt securities - held-to-maturity	$	531	$	99	$	78	$	708	$	698
Long-term debt and other financing obligations	$	—	$	51,785	$	—	$	51,785	$	43,794
December 31, 2019
Debt securities - held-to-maturity	$	541	$	181	$	253	$	975	$	972
Long-term debt and other financing obligations	$	—	$	45,078	$	—	$	45,078	$	40,278

Nonfinancial assets and liabilities or financial assets and liabilities that are measured at fair value on a nonrecurring basis are subject to fair value adjustments only in certain circumstances, such as when the Company records an impairment. There were no significant fair value adjustments for these assets and liabilities recorded during either the nine months ended September 30, 2020 or 2019.

4.    Medical Costs Payable

The following table shows the components of the change in medical costs payable for the nine months ended September 30:

(in millions)	2020		2019
Medical costs payable, beginning of period	$	21,690	$	19,891
Acquisitions	186		868
Reported medical costs:
Current year	118,114		117,624
Prior years	(800)		(460)
Total reported medical costs	117,314		117,164
Medical payments:
Payments for current year	(98,548)		(99,487)
Payments for prior years	(19,475)		(17,497)
Total medical payments	(118,023)		(116,984)
Medical costs payable, end of period	$	21,167	$	20,939

For the nine months ended September 30, 2020, prior years medical cost reserve development was primarily driven by lower than expected health system utilization. For the nine months ended September 30, 2019, the prior years medical cost reserve development included no individual factors that were significant. Medical costs payable included reserves for claims incurred by insured customers but not yet reported to the Company of $14.7 billion and $13.8 billion at September 30, 2020 and December 31, 2019, respectively.

11

5.    Short-Term Borrowings and Long-Term Debt

Short-term borrowings and senior unsecured long-term debt consisted of the following:

	September 30, 2020						December 31, 2019
(in millions, except percentages)	Par Value		Carrying Value		Fair Value		Par Value		Carrying Value		Fair Value
Commercial paper	$	—	$	—	$	—	$	400	$	400	$	400
2.700% notes due July 2020	—		—		—		1,500		1,499		1,506
Floating rate notes due October 2020	300		300		300		300		300		300
3.875% notes due October 2020	450		450		451		450		450		455
1.950% notes due October 2020	900		900		901		900		899		900
4.700% notes due February 2021	400		403		402		400		403		410
2.125% notes due March 2021	750		749		756		750		749		753
Floating rate notes due June 2021	350		350		351		350		349		350
3.150% notes due June 2021	400		400		408		400		399		407
3.375% notes due November 2021	500		509		513		500		501		512
2.875% notes due December 2021	750		765		774		750		753		765
2.875% notes due March 2022	1,100		1,115		1,133		1,100		1,087		1,121
3.350% notes due July 2022	1,000		998		1,054		1,000		998		1,036
2.375% notes due October 2022	900		897		937		900		896		911
0.000% notes due November 2022	15		13		14		15		13		14
2.750% notes due February 2023	625		646		656		625		624		638
2.875% notes due March 2023	750		793		794		750		770		770
3.500% notes due June 2023	750		748		811		750		747		786
3.500% notes due February 2024	750		746		825		750		746		792
2.375% notes due August 2024	750		747		799		750		747		760
3.750% notes due July 2025	2,000		1,992		2,283		2,000		1,990		2,161
3.700% notes due December 2025	300		298		343		300		298		325
1.250% notes due January 2026	500		496		513		—		—		—
3.100% notes due March 2026	1,000		996		1,118		1,000		996		1,048
3.450% notes due January 2027	750		746		853		750		746		804
3.375% notes due April 2027	625		620		713		625		620		667
2.950% notes due October 2027	950		940		1,060		950		939		988
3.850% notes due June 2028	1,150		1,143		1,357		1,150		1,142		1,269
3.875% notes due December 2028	850		843		1,010		850		843		941
2.875% notes due August 2029	1,000		1,104		1,115		1,000		993		1,029
2.000% notes due May 2030	1,250		1,233		1,310		—		—		—
4.625% notes due July 2035	1,000		992		1,317		1,000		992		1,215
5.800% notes due March 2036	850		839		1,231		850		838		1,129
6.500% notes due June 2037	500		492		778		500		492		712
6.625% notes due November 2037	650		641		1,027		650		641		940
6.875% notes due February 2038	1,100		1,077		1,772		1,100		1,076		1,631
3.500% notes due August 2039	1,250		1,241		1,436		1,250		1,241		1,313
2.750% notes due May 2040	1,000		964		1,057		—		—		—
5.700% notes due October 2040	300		296		438		300		296		396
5.950% notes due February 2041	350		346		525		350		345		475
4.625% notes due November 2041	600		589		787		600		589		716
4.375% notes due March 2042	502		485		639		502		484		580
3.950% notes due October 2042	625		608		760		625		607		688
4.250% notes due March 2043	750		735		949		750		735		856
4.750% notes due July 2045	2,000		1,973		2,730		2,000		1,973		2,463
4.200% notes due January 2047	750		738		950		750		738		861
4.250% notes due April 2047	725		717		923		725		717		839
3.750% notes due October 2047	950		934		1,130		950		934		1,023
4.250% notes due June 2048	1,350		1,330		1,721		1,350		1,330		1,569
4.450% notes due December 2048	1,100		1,086		1,457		1,100		1,086		1,316
3.700% notes due August 2049	1,250		1,235		1,496		1,250		1,235		1,344
2.900% notes due May 2050	1,250		1,208		1,318		—		—		—
3.875% notes due August 2059	1,250		1,228		1,529		1,250		1,228		1,350
3.125% notes due May 2060	1,000		968		1,073		—		—		—
Total short-term borrowings and long-term debt	$	42,917	$	42,662	$	50,597	$	39,817	$	39,474	$	44,234

12

The Company’s long-term debt obligations also included $1.1 billion and $1.2 billion of other financing obligations, of which $347 million and $322 million were classified as current as of September 30, 2020 and December 31, 2019, respectively.

Commercial Paper and Bank Credit Facilities

Commercial paper consists of short-duration, senior unsecured debt privately placed on a discount basis through broker-dealers.

The Company has $4.4 billion five-year, $4.4 billion three-year and $3.8 billion 364-day revolving bank credit facilities with 25 banks, which mature in December 2024, December 2022 and December 2020, respectively. These facilities provide liquidity support for the Company’s commercial paper program and are available for general corporate purposes. As of September 30, 2020, no amounts had been drawn on any of the bank credit facilities. The annual interest rates, which are variable based on term, are calculated based on the London Interbank Offered Rate (LIBOR) plus a credit spread based on the Company’s senior unsecured credit ratings. If amounts had been drawn on the bank credit facilities as of September 30, 2020, annual interest rates would have ranged from 0.8% to 1%.

Debt Covenants

The Company’s bank credit facilities contain various covenants, including covenants requiring the Company to maintain a defined debt to debt-plus-shareholders’ equity ratio of not more than 60%. The Company was in compliance with its debt covenants as of September 30, 2020.

6.    Dividends

In June 2020, the Company’s Board of Directors increased the Company’s quarterly cash dividend to shareholders to an annual rate of $5.00 compared to $4.32 per share, which the Company had paid since June 2019. Declaration and payment of future quarterly dividends is at the discretion of the Board and may be adjusted as business needs or market conditions change.

The following table provides details of the Company’s 2020 dividend payments:

Payment Date	Amount per Share		Total Amount Paid
			(in millions)
March 24	$	1.08	$	1,024
June 30	1.25		1,188
September 22	1.25		1,188

7.    Commitments and Contingencies

Legal Matters

Because of the nature of its businesses, the Company is frequently made party to a variety of legal actions and regulatory inquiries, including class actions and suits brought by members, care providers, consumer advocacy organizations, customers and regulators, relating to the Company’s businesses, including management and administration of health benefit plans and other services. These matters include medical malpractice, employment, intellectual property, antitrust, privacy and contract claims and claims related to health care benefits coverage and other business practices.

The Company records liabilities for its estimates of probable costs resulting from these matters where appropriate. Estimates of costs resulting from legal and regulatory matters involving the Company are inherently difficult to predict, particularly where the matters: involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or represent a shift in regulatory policy; involve a large number of claimants or regulatory bodies; are in the early stages of the proceedings; or could result in a change in business practices. Accordingly, the Company is often unable to estimate the losses or ranges of losses for those matters where there is a reasonable possibility or it is probable that a loss may be incurred.

Government Investigations, Audits and Reviews

The Company has been involved or is currently involved in various governmental investigations, audits and reviews. These include routine, regular and special investigations, audits and reviews by the Centers for Medicare and Medicaid Services (CMS), state insurance and health and welfare departments, state attorneys general, the Office of the Inspector General, the Office of Personnel Management, the Office of Civil Rights, the Government Accountability Office, the Federal Trade Commission, U.S. Congressional committees, the U.S. Department of Justice, the SEC, the Internal Revenue Service, the U.S. Drug Enforcement Administration, the U.S. Department of Labor, the Federal Deposit Insurance Corporation, the Defense Contract Audit Agency and other governmental authorities. Similarly, our international businesses are also subject to investigations, audits and reviews by applicable foreign governments, including South American and other non-U.S. governmental authorities. Certain of the Company’s businesses have been reviewed or are currently under review, including

13

for, among other matters, compliance with coding and other requirements under the Medicare risk-adjustment model. CMS has selected certain of the Company’s local plans for risk adjustment data validation (RADV) audits to validate the coding practices of and supporting documentation maintained by health care providers and such audits may result in retrospective adjustments to payments made to the Company’s health plans.

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

8.    Segment Financial Information

The Company’s four reportable segments are UnitedHealthcare, OptumHealth, OptumInsight and OptumRx. For more information on the Company’s segments see Part I, Item I, “Business” and Note 14 of Notes to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2019 10-K.

The following tables present reportable segment financial information:

			Optum
(in millions)	UnitedHealthcare		OptumHealth		OptumInsight		OptumRx		Optum Eliminations		Optum		Corporate and Eliminations		Consolidated
Three Months Ended September 30, 2020
Revenues - unaffiliated customers:
Premiums	$	48,121	$	2,742	$	—	$	—	$	—	$	2,742	$	—	$	50,863
Products	—		10		34		8,733		—		8,777		—		8,777
Services	2,075		1,834		974		241		—		3,049		—		5,124
Total revenues - unaffiliated customers	50,196		4,586		1,008		8,974		—		14,568		—		64,764
Total revenues - affiliated customers	—		5,748		1,755		13,102		(424)		20,181		(20,181)		—
Investment and other income	177		165		4		5		—		174		—		351
Total revenues	$	50,373	$	10,499	$	2,767	$	22,081	$	(424)	$	34,923	$	(20,181)	$	65,115
Earnings from operations	$	2,068	$	835	$	785	$	963	$	—	$	2,583	$	—	$	4,651
Interest expense	—		—		—		—		—		—		(395)		(395)
Earnings before income taxes	$	2,068	$	835	$	785	$	963	$	—	$	2,583	$	(395)	$	4,256
Three Months Ended September 30, 2019
Revenues - unaffiliated customers:
Premiums	$	45,557	$	1,840	$	—	$	—	$	—	$	1,840	$	—	$	47,397
Products	—		6		29		7,511		—		7,546		—		7,546
Services	2,274		1,487		988		193		—		2,668		—		4,942
Total revenues - unaffiliated customers	47,831		3,333		1,017		7,704		—		12,054		—		59,885
Total revenues - affiliated customers	—		4,630		1,594		10,734		(441)		16,517		(16,517)		—
Investment and other income	274		170		6		16		—		192		—		466
Total revenues	$	48,105	$	8,133	$	2,617	$	18,454	$	(441)	$	28,763	$	(16,517)	$	60,351
Earnings from operations	$	2,655	$	748	$	632	$	979	$	—	$	2,359	$	—	$	5,014
Interest expense	—		—		—		—		—		—		(449)		(449)
Earnings before income taxes	$	2,655	$	748	$	632	$	979	$	—	$	2,359	$	(449)	$	4,565

14

			Optum
(in millions)	UnitedHealthcare		OptumHealth		OptumInsight		OptumRx		Optum Eliminations		Optum		Corporate and Eliminations		Consolidated
Nine Months Ended September 30, 2020
Revenues - unaffiliated customers:
Premiums	$	143,753	$	7,144	$	—	$	—	$	—	$	7,144	$	—	$	150,897
Products	—		26		90		25,339		—		25,455		—		25,455
Services	6,248		4,607		2,629		781		—		8,017		—		14,265
Total revenues - unaffiliated customers	150,001		11,777		2,719		26,120		—		40,616		—		190,617
Total revenues - affiliated customers	—		16,623		5,140		38,843		(1,275)		59,331		(59,331)		—
Investment and other income	547		430		34		46		—		510		—		1,057
Total revenues	$	150,548	$	28,830	$	7,893	$	65,009	$	(1,275)	$	100,457	$	(59,331)	$	191,674
Earnings from operations	$	11,963	$	2,388	$	1,882	$	2,655	$	—	$	6,925	$	—	$	18,888
Interest expense	—		—		—		—		—		—		(1,262)		(1,262)
Earnings before income taxes	$	11,963	$	2,388	$	1,882	$	2,655	$	—	$	6,925	$	(1,262)	$	17,626
Nine Months Ended September 30, 2019
Revenues - unaffiliated customers:
Premiums	$	138,088	$	3,986	$	—	$	—	$	—	$	3,986	$	—	$	142,074
Products	—		23		74		23,874		—		23,971		—		23,971
Services	6,603		4,131		2,532		490		—		7,153		—		13,756
Total revenues - unaffiliated customers	144,691		8,140		2,606		24,364		—		35,110		—		179,801
Total revenues - affiliated customers	—		13,366		4,522		30,786		(1,181)		47,493		(47,493)		—
Investment and other income	904		488		17		44		—		549		—		1,453
Total revenues	$	145,595	$	21,994	$	7,145	$	55,194	$	(1,181)	$	83,152	$	(47,493)	$	181,254
Earnings from operations	$	8,251	$	2,062	$	1,589	$	2,688	$	—	$	6,339	$	—	$	14,590
Interest expense	—		—		—		—		—		—		(1,267)		(1,267)
Earnings before income taxes	$	8,251	$	2,062	$	1,589	$	2,688	$	—	$	6,339	$	(1,267)	$	13,323

15

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

The following discussion should be read together with the accompanying Condensed Consolidated Financial Statements and Notes and with our 2019 10-K, including the Consolidated Financial Statements and Notes in Part II, Item 8, “Financial Statements and Supplementary Data” in that report. Unless the context indicates otherwise, references to the terms “UnitedHealth Group,” “we,” “our” or “us” used throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations refer to UnitedHealth Group Incorporated and its consolidated subsidiaries.

Readers are cautioned that the statements, estimates, projections or outlook contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations, including discussions regarding financial prospects, economic conditions, trends and uncertainties contained in this Item 2, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). These forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the results discussed or implied in the forward-looking statements. A description of some of the risks and uncertainties is set forth in Part I, Item 1A, “Risk Factors” in our 2019 10-K and in the discussion below.

EXECUTIVE OVERVIEW

General

UnitedHealth Group is a diversified health care company dedicated to helping people live healthier lives and helping make the health system work better for everyone. Through our diversified family of businesses, we leverage core competencies in data and health information; advanced technology; and clinical expertise, focused on improving health outcomes, lowering health care costs and creating a better experience for patients, their caregivers and physicians. These core competencies are deployed within our two distinct, but strategically aligned, business platforms: health benefits operating under UnitedHealthcare and health services operating under Optum.

Further information on our business is presented in Part I, Item 1, “Business” and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2019 10-K and additional information on our segments can be found in this Item 2 and in Note 8 of Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report.

COVID-19 Trends and Uncertainties

The COVID-19 pandemic continues to evolve and the ultimate impact on our business, results of operations, financial condition and cash flows remains uncertain and difficult to predict. During the second quarter, the global health system experienced unprecedented levels of care deferral, which impacted all of our businesses. As the pandemic advanced, access to and demand for care was most constrained from mid-March through April, began to recover in May and June and restored to near normal seasonal levels in the third quarter. The temporary deferral of care may cause care patterns to moderately exceed normal baselines in future periods as utilization of health system capacity continues to increase. From time to time, health system capacity may be subject to possible increased volatility due to the pandemic. Specific trends and uncertainties related to our two business platforms are as follows:

UnitedHealthcare.We have expanded benefit coverage in areas such as COVID-19 care and testing, telemedicine, and pharmacy benefits; provided customers assistance in the form of co-pay waivers and premium forgiveness; offered additional enrollment opportunities to those who previously declined employer-sponsored offerings; extended certain premium payment terms for customers experiencing financial hardship; simplified administrative practices; and accelerated payments to care providers, all with the aim of assisting our customers, providers and members in addressing the COVID-19 crisis. Temporary care deferrals significantly impacted UnitedHealthcare’s results of operations for the nine months ended September 30, 2020, contributing to a lower medical care ratio and higher operating earnings than in previous periods. For the three months ended September 30, 2020, the impact of temporary care deferrals was more than offset by COVID-19 related care and testing, the significant financial assistance we continued to provide our customers and broader economic impacts. Enrollment in our commercial products declined primarily due to employer actions.

Increased consumer demand for care, potentially even higher acuity care, along with continued COVID-19 care and testing costs are expected to result in increased future medical costs. Disrupted care patterns, as a result of the pandemic, may temporarily affect the ability to obtain complete member health status information, impacting future revenue in businesses that utilize risk adjustment methodologies. The ultimate overall impact is uncertain and dependent on the future pacing and intensity of the pandemic, the duration of policies and initiatives to address COVID-19, and the progress of an uncertain economic recovery.

16

Optum. The temporary deferral of care also meaningfully impacted the Optum businesses for the nine months ended September 30, 2020. For example, our fee-for-service care delivery business, such as traditional procedure work at our ambulatory surgery centers, was negatively impacted, while our risk-based care delivery business performance reflected lower demand for care. Our OptumInsight and OptumRx volume-based businesses were negatively impacted by the lower level of care encounters which took place, as well as by broader economic factors, contributing to lower managed services and prescription volume. As the health system continues to return to normal seasonally adjusted levels of care, we have seen business activity approach more normal levels. COVID-19 will also continue to influence customer and consumer behavior, both during and after the pandemic, which could impact how care is delivered and the manner in which consumers wish to receive their prescription drugs or infusion services. The impact of COVID-19 on our care provider and payer clients could impact the volume and types of services that Optum provides, as well as the pacing of potential new business opportunities. As a result of the dynamic situation and broad-reaching impact to the health system, the ultimate impact of COVID-19 on our Optum businesses is uncertain.

Business Trends

Our businesses participate in the United States, South American and certain other international health markets. Overall spending on health care is impacted by inflation; utilization; 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 macro-economic conditions, such as the economic impact of COVID-19, and regulatory changes, which could impact our results of operations, including our continued efforts to control health care costs.

Pricing Trends. To price our health care benefit products, we start with our view of expected future costs, including any potential impacts from COVID-19 and the Health Insurance Tax. We frequently evaluate and adjust our approach in each of the local markets we serve, considering all relevant factors, such as product positioning, price competitiveness and environmental, competitive, legislative and regulatory considerations, including minimum medical loss ratio (MLR) thresholds. We will continue seeking to balance growth and profitability across all these dimensions.

The commercial risk market remains highly competitive in both the small group and large group segments. We expect broad-based competition to continue as the industry adapts to individual and employer needs amid reform changes. Pricing for contracts that cover some portion of calendar year 2021 will reflect the permanent repeal of the Health Insurance Tax.

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

Medical Cost Trends. Our medical cost trends primarily relate to changes in unit costs, health system utilization and prescription drug costs. COVID-19 care and testing costs and certain of our customer assistance initiatives have also impacted medical cost trends in the current year and may continue in future years. 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. The uncertain impact of COVID-19 may impact our ability to estimate medical costs payable, which could result in increased variability to medical cost reserve development in future periods.

Regulatory Trends and Uncertainties

Following is a summary of management’s view of regulatory trends and uncertainties. For additional information regarding regulatory trends and uncertainties, see Part I, Item 1 “Business - Government Regulation,” Part 1, Item 1A, “Risk Factors,” Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2019 10-K and “Risk Factors” in Part II, Item 1A of this report.

Medicare Advantage Rates. Final 2021 Medicare Advantage rates resulted in an increase in industry base rates of approximately 1.7%, short of the industry forward medical cost trend, creating continued pressure in the Medicare Advantage program.

Affordable Care Act (ACA) Tax. After a moratorium in 2019, the industry-wide amount of the Health Insurance Tax for 2020, which is primarily borne by customers, is $15.5 billion, with our portion being approximately $3.0 billion. The return of the tax impacts year-over-year comparability of our financial statements, including revenues, operating costs, medical care ratio (MCR), operating cost ratio, effective tax rate and cash flows from operations. The ACA Tax was permanently repealed by Congress, effective January 1, 2021.

17

SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS

The following summarizes select third quarter 2020 year-over-year operating comparisons to third quarter 2019, which were significantly impacted by the effects of COVID-19 on the health system.

•Consolidated revenues grew 8%, UnitedHealthcare revenues grew 5% and Optum revenues grew 21%.

•UnitedHealthcare served 635,000 fewer people domestically primarily due to increased unemployment and expected attrition in commercial group benefits.

•Consolidated earnings from operations decreased 7%, including a decrease of 22% at UnitedHealthcare primarily due to COVID-19 impacts, partially offset by an increase of 9% at Optum.

•Diluted earnings per common share decreased to $3.30.

•Cash flows from operations for the nine months ended September 30, 2020 were $16.1 billion.

•Return on equity was 19.7%.

RESULTS SUMMARY

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

(in millions, except percentages and per share data)	Three Months Ended September 30,						Increase/(Decrease)					Nine Months Ended September 30,						Increase/(Decrease)
	2020			2019			2020 vs. 2019					2020			2019			2020 vs. 2019
Revenues:
Premiums	$	50,863		$	47,397		$	3,466		7	%	$	150,897		$	142,074		$	8,823		6	%
Products	8,777			7,546			1,231			16		25,455			23,971			1,484			6
Services	5,124			4,942			182			4		14,265			13,756			509			4
Investment and other income	351			466			(115)			(25)		1,057			1,453			(396)			(27)
Total revenues	65,115			60,351			4,764			8		191,674			181,254			10,420			6
Operating costs:
Medical costs	41,636			39,041			2,595			7		117,314			117,164			150			—
Operating costs	10,174			8,960			1,214			14		30,190			25,892			4,298			17
Cost of products sold	7,935			6,627			1,308			20		23,123			21,606			1,517			7
Depreciation and amortization	719			709			10			1		2,159			2,002			157			8
Total operating costs	60,464			55,337			5,127			9		172,786			166,664			6,122			4
Earnings from operations	4,651			5,014			(363)			(7)		18,888			14,590			4,298			29
Interest expense	(395)			(449)			54			(12)		(1,262)			(1,267)			5			—
Earnings before income taxes	4,256			4,565			(309)			(7)		17,626			13,323			4,303			32
Provision for income taxes	(1,000)			(936)			(64)			7		(4,209)			(2,752)			(1,457)			53
Net earnings	3,256			3,629			(373)			(10)		13,417			10,571			2,846			27
Earnings attributable to noncontrolling interests	(84)			(91)			7			(8)		(226)			(273)			47			(17)
Net earnings attributable to UnitedHealth Group common shareholders	$	3,172		$	3,538		$	(366)		(10)	%	$	13,191		$	10,298		$	2,893		28	%
Diluted earnings per share attributable to UnitedHealth Group common shareholders	$	3.30		$	3.67		$	(0.37)		(10)	%	$	13.73		$	10.65		$	3.08		29	%
Medical care ratio (a)	81.9		%	82.4		%	(0.5)		%			77.7		%	82.5		%	(4.8)		%
Operating cost ratio	15.6			14.8			0.8					15.8			14.3			1.5
Operating margin	7.1			8.3			(1.2)					9.9			8.0			1.9
Tax rate	23.5			20.5			3.0					23.9			20.7			3.2
Net earnings margin (b)	4.9			5.9			(1.0)					6.9			5.7			1.2
Return on equity (c)	19.7		%	26.2		%	(6.5)		%			28.9		%	26.0		%	2.9		%

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

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

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

18

2020 RESULTS OF OPERATIONS COMPARED TO 2019 RESULTS OF OPERATIONS

Consolidated Financial Results

Revenue

The increases in revenue were primarily driven by the increase in the number of individuals served through Medicare Advantage and Medicaid; pricing trends; and organic and acquisition growth across the Optum business, primarily due to expansion in pharmacy care services and care delivery. The increases were partially offset by decreased individuals served through our commercial and Global benefits businesses and certain customer assistance programs. For the nine months ended September 30, 2020, revenues were also negatively impacted by decreases in our fee-for-service care delivery and other volume-based businesses, primarily as a result of the impacts of COVID-19 on the economy.

Medical Costs and MCR

Medical costs increased as a result of growth in people served through Medicare Advantage and Medicaid, medical cost trends and COVID-19 care and testing costs, partially offset by decreased people served in commercial and Global and modestly lower care patterns. For the nine months ended September 30, 2020, the MCR decreased primarily due to the temporary deferral of care and the revenue effects of the return of the Health Insurance Tax, partially offset by COVID-19 care and testing costs and customer assistance measures.

Operating Cost Ratio

The operating cost ratio increased primarily due to the impact of the return of the Health Insurance Tax and business mix.

Income Tax Rate

Our effective tax rate increased primarily due to the impact of the return of the nondeductible Health Insurance Tax.

19

Reportable Segments

See Note 8 of Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report for more information on our segments. We utilize various metrics to evaluate and manage our reportable segments, including individuals served by UnitedHealthcare by major market segment and funding arrangement, people served by OptumHealth and adjusted scripts for OptumRx. 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, customer penetration and pricing trends when comparing the metrics to revenue by segment.

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

	Three Months Ended September 30,						Increase/(Decrease)					Nine Months Ended September 30,						Increase/(Decrease)
(in millions, except percentages)	2020			2019			2020 vs. 2019					2020			2019			2020 vs. 2019
Revenues
UnitedHealthcare	$	50,373		$	48,105		$	2,268		5	%	$	150,548		$	145,595		$	4,953		3	%
OptumHealth	10,499			8,133			2,366			29		28,830			21,994			6,836			31
OptumInsight	2,767			2,617			150			6		7,893			7,145			748			10
OptumRx	22,081			18,454			3,627			20		65,009			55,194			9,815			18
Optum eliminations	(424)			(441)			17			(4)		(1,275)			(1,181)			(94)			8
Optum	34,923			28,763			6,160			21		100,457			83,152			17,305			21
Eliminations	(20,181)			(16,517)			(3,664)			22		(59,331)			(47,493)			(11,838)			25
Consolidated revenues	$	65,115		$	60,351		$	4,764		8	%	$	191,674		$	181,254		$	10,420		6	%
Earnings from operations
UnitedHealthcare	$	2,068		$	2,655		$	(587)		(22)	%	$	11,963		$	8,251		$	3,712		45	%
OptumHealth	835			748			87			12		2,388			2,062			326			16
OptumInsight	785			632			153			24		1,882			1,589			293			18
OptumRx	963			979			(16)			(2)		2,655			2,688			(33)			(1)
Optum	2,583			2,359			224			9		6,925			6,339			586			9
Consolidated earnings from operations	$	4,651		$	5,014		$	(363)		(7)	%	$	18,888		$	14,590		$	4,298		29	%
Operating margin
UnitedHealthcare	4.1		%	5.5		%	(1.4)		%			7.9		%	5.7		%	2.2		%
OptumHealth	8.0			9.2			(1.2)					8.3			9.4			(1.1)
OptumInsight	28.4			24.1			4.3					23.8			22.2			1.6
OptumRx	4.4			5.3			(0.9)					4.1			4.9			(0.8)
Optum	7.4			8.2			(0.8)					6.9			7.6			(0.7)
Consolidated operating margin	7.1		%	8.3		%	(1.2)		%			9.9		%	8.0		%	1.9		%

UnitedHealthcare

The following table summarizes UnitedHealthcare revenues by business:

	Three Months Ended September 30,				Increase/(Decrease)				Nine Months Ended September 30,				Increase/(Decrease)
(in millions, except percentages)	2020		2019		2020 vs. 2019				2020		2019		2020 vs. 2019
UnitedHealthcare Employer & Individual	$	14,081	$	14,291	$	(210)	(1)	%	$	41,324	$	42,407	$	(1,083)	(3)	%
UnitedHealthcare Medicare & Retirement	22,606		20,698		1,908		9		68,613		62,649		5,964		10
UnitedHealthcare Community & State	11,820		10,670		1,150		11		34,796		33,038		1,758		5
UnitedHealthcare Global	1,866		2,446		(580)		(24)		5,815		7,501		(1,686)		(22)
Total UnitedHealthcare revenues	$	50,373	$	48,105	$	2,268	5	%	$	150,548	$	145,595	$	4,953	3	%

20

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

	September 30,		Increase/(Decrease)
(in thousands, except percentages)	2020	2019	2020 vs. 2019
Commercial:
Risk-based	7,950	8,605	(655)	(8)	%
Fee-based	18,400	19,230	(830)	(4)
Total commercial	26,350	27,835	(1,485)	(5)
Medicare Advantage	5,670	5,230	440	8
Medicaid	6,435	5,965	470	8
Medicare Supplement (Standardized)	4,450	4,510	(60)	(1)
Total public and senior	16,555	15,705	850	5
Total UnitedHealthcare - domestic medical	42,905	43,540	(635)	(1)
Global	5,285	5,845	(560)	(10)
Total UnitedHealthcare - medical	48,190	49,385	(1,195)	(2)	%
Supplemental Data:
Medicare Part D stand-alone	4,075	4,415	(340)	(8)	%

Fee-based and risk-based commercial business decreased primarily due to increased unemployment and expected attrition. Medicare Advantage increased due to growth in people served through individual Medicare Advantage plans. The increase in people served through Medicaid was primarily driven by states easing redetermination requirements due to COVID-19 and growth in people served via Dual Special Needs Plans. The decrease in people served by UnitedHealthcare Global is a result of our continued affordability efforts, underwriting discipline and increased unemployment.

UnitedHealthcare’s revenue increased due to growth in the number of individuals served through Medicare Advantage and Medicaid, a greater mix of people with higher acuity needs and the return of the Health Insurance Tax, partially offset by a decrease in the number of individuals served through the commercial and Global businesses and foreign currency impacts. For the three months ended September 30, 2020, earnings from operations decreased due to direct COVID-19 care and testing costs, our customer assistance measures as well as broader economic effects, partially offset by modestly lower care patterns. For the nine months ended September 30, 2020, earnings from operations increased due to the deferral of care caused by COVID-19 on the health system and the factors impacting revenue, partially offset by the return of the Health Insurance Tax, COVID-19 care and testing costs, customer assistance programs and broader economic effects.

Optum

Total revenues increased as each segment reported revenue growth. Earnings from operations increased due to growth at OptumHealth and OptumInsight.

The results by segment were as follows:

OptumHealth

Revenue and earnings at OptumHealth increased primarily due to organic growth and acquisitions in risk-based care delivery. For the nine months ended September 30, 2020, reduced care volumes in fee-for-service arrangements as a result of COVID-19, partially offset the increases in revenues and earnings. OptumHealth served approximately 98 million people as of September 30, 2020 compared to 95 million people as of September 30, 2019.

OptumInsight

Revenue and earnings from operations at OptumInsight increased primarily due to growth in technology and managed services, partially offset by decreased activity levels in volume-based services due to the impact of COVID-19 on payer and care provider clients.

21

OptumRx

Revenue at OptumRx and the corresponding eliminations increased due to the inclusion of retail pharmacy co-payments. See Note 1 of Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report for further detail. Revenue at OptumRx also increased due to organic and acquisition growth in specialty pharmacy and new client wins, partially offset by an expected large client transition and lower script volumes driven by COVID-19 related care deferral, primarily related to first fill script volumes. Earnings from operations decreased primarily due to COVID-19 impacts, partially offset by improved supply chain management. OptumRx fulfilled 325 million adjusted scripts in both the third quarters of 2020 and 2019, with growth offset by the large client transition.

LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES

Liquidity

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

	Nine Months Ended September 30,				Increase/(Decrease)
(in millions)	2020		2019		2020 vs. 2019
Sources of cash:
Cash provided by operating activities	$	16,073	$	12,258	$	3,815
Issuances of short-term borrowings and long-term debt, net of repayments	2,941		8,192		(5,251)
Proceeds from common stock issuances	1,206		740		466
Customer funds administered	249		420		(171)
Other	—		338		(338)
Total sources of cash	20,469		21,948
Uses of cash:
Common stock repurchases	(2,541)		(5,101)		2,560
Cash paid for acquisitions, net of cash assumed	(4,326)		(8,200)		3,874
Purchases of investments, net of sales and maturities	(1,386)		(2,028)		642
Purchases of property, equipment and capitalized software	(1,477)		(1,421)		(56)
Cash dividends paid	(3,400)		(2,908)		(492)
Other	(614)		(756)		142
Total uses of cash	(13,744)		(20,414)
Effect of exchange rate changes on cash and cash equivalents	(160)		(37)		(123)
Net increase in cash and cash equivalents	$	6,565	$	1,497	$	5,068

2020 Cash Flows Compared to 2019 Cash Flows

Increased cash flows provided by operating activities were primarily driven by increased net earnings as a result of the temporary deferral of care experienced at our benefits businesses related to COVID-19, partially offset by the payment of the Health Insurance Tax in the third quarter. Other significant changes in sources or uses of cash year-over-year included decreased cash paid for acquisitions, common stock repurchases and net purchases of investments, partially offset by decreased issuances of long-term debt.

Financial Condition

As of September 30, 2020, our cash, cash equivalent, available-for-sale debt securities and equity securities balances of $58.0 billion included approximately $17.6 billion of cash and cash equivalents (of which $2.9 billion was available for general corporate use), $38.3 billion of debt securities and $2.1 billion of investments in equity securities. Given the significant portion of our portfolio held in cash and cash equivalents, we do not anticipate fluctuations in the aggregate fair value of our financial assets to have a material impact on our liquidity or capital position. Our available-for-sale debt portfolio had a weighted-average duration of 3.6 years and a weighted-average credit rating of “Double A” as of September 30, 2020. 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.

22

Capital Resources and Uses of Liquidity

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

Commercial Paper and Bank Credit Facilities. Our revolving bank credit facilities provide liquidity support for our commercial paper borrowing program, which facilitates the private placement of unsecured debt through independent broker-dealers, and are available for general corporate purposes. For more information on our commercial paper and bank credit facilities, see Note 5 of Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report.

Our revolving bank credit facilities contain various covenants, including covenants requiring us to maintain a defined debt to debt-plus-shareholders’ equity ratio of not more than 60%. As of September 30, 2020, our debt to debt-plus-shareholders’ equity ratio, as defined and calculated under the credit facilities, was approximately 38%.

Long-Term Debt. Periodically, we access capital markets and issue long-term debt for general corporate purposes, such as, to meet our working capital requirements, to refinance debt, to finance acquisitions or for share repurchases. For more information on our long-term debt, see Note 5 of Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report.

Credit Ratings. Our credit ratings as of September 30, 2020 were as follows:

	Moody’s		S&P Global		Fitch		A.M. Best
	Ratings	Outlook	Ratings	Outlook	Ratings	Outlook	Ratings	Outlook
Senior unsecured debt	A3	Stable	A+	Stable	A	Stable	A-	Positive
Commercial paper	P-2	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, including the impacts of COVID-19 and related governmental market stabilization programs. A significant downgrade in our credit ratings or adverse conditions in the capital markets may increase the cost of borrowing for us or limit our access to capital.

Share Repurchase Program. During the nine months ended September 30, 2020, we repurchased 9 million shares at an average price of $281.37 per share. As of September 30, 2020, we had Board authorization to purchase up to 63 million shares of our common stock.

Dividends. In June 2020, the Company’s Board of Directors increased the Company’s quarterly cash dividend to shareholders to an annual rate of $5.00 compared to $4.32 per share. For more information on our dividend, see Note 6 of Notes to the Condensed Consolidated Financial Statements included in Part 1, Item 1 of this report.

For additional liquidity discussion, see Note 10 of Notes to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 in our 2019 10-K.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

A summary of future obligations under our various contractual obligations and commitments as of December 31, 2019 was disclosed in our 2019 10-K. During the nine months ended September 30, 2020, there were no material changes to this previously disclosed information outside the ordinary course of business. However, we continually evaluate opportunities to expand our operations, including through internal development of new products, programs and technology applications and acquisitions.

RECENTLY ISSUED ACCOUNTING STANDARDS

See Note 1 of Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this report for a discussion of new accounting pronouncements that affect us.

23

CRITICAL ACCOUNTING ESTIMATES

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

Our critical accounting estimates include medical costs payable and goodwill. For a detailed description of our critical accounting estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 in our 2019 10-K. For a detailed discussion of our significant accounting policies, see Note 2 of Notes to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data” in our 2019 10-K.

FORWARD-LOOKING STATEMENTS

The statements, estimates, projections, guidance or outlook contained in this document include “forward-looking” statements which are intended to take advantage of the “safe harbor” provisions of the federal securities law. The words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “forecast,” “outlook,” “plan,” “project,” “should” and similar expressions identify forward-looking statements. These statements may contain information about financial prospects, economic conditions and trends and involve risks and uncertainties. Actual results could differ materially from those that management expects, depending on the outcome of certain factors including: risks associated with public health crises, large-scale medical emergencies and pandemics, such as the COVID-19 pandemic; our ability to effectively estimate, price for and manage medical costs; new or changes in existing health care laws or regulations, or their enforcement or application; the DOJ’s legal action relating to the risk adjustment submission matter; our ability to maintain and achieve improvement in quality scores impacting revenue; reductions in revenue or delays to cash flows received under government programs; changes in Medicare, the CMS star ratings program or the application of risk adjustment data validation audits; failure to maintain effective and efficient information systems or if our technology products do not operate as intended; cyber-attacks, other privacy/data security incidents, or our failure to comply with related regulations; risks and uncertainties associated with the pharmacy benefits management industry; competitive pressures; changes in or challenges to our public sector contract awards; our ability to contract on competitive terms with physicians, hospitals and other service providers; failure to achieve targeted operating cost productivity improvements; increases in costs and other liabilities associated with litigation, government investigations, audits or reviews; failure to manage successfully our strategic alliances or complete or receive anticipated benefits of strategic transactions; fluctuations in foreign currency exchange rates; downgrades in our credit ratings; our investment portfolio performance; impairment of our goodwill and intangible assets; and our ability to obtain sufficient funds from our regulated subsidiaries or from external financings to fund our obligations, maintain our debt to total capital ratio at targeted levels, maintain our quarterly dividend payment cycle, or continue repurchasing shares of our common stock. This above list is not exhaustive. We discuss these matters, and certain risks that may affect our business operations, financial condition and results of operations more fully in our filings with the SEC, including our reports on Forms 10-K, 10-Q and 8-K. By their nature, forward-looking statements are not guarantees of future performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Actual results may vary materially from expectations expressed or implied in this document or any of our prior communications. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update or revise any forward-looking statements, except as required by law.

24

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

The following table summarizes the impact of hypothetical changes in market interest rates across the entire yield curve by 1% point or 2% points as of September 30, 2020 on our investment income and interest expense per annum, and the fair value of our investments and debt (in millions, except percentages):

	September 30, 2020
Increase (Decrease) in Market Interest Rate	Investment Income Per Annum (a)		Interest Expense Per Annum (a)		Fair Value of Financial Assets (b)		Fair Value of Financial Liabilities
2 %	$	412	$	176	$	(2,847)	$	(8,464)
1	206		88		(1,412)		(4,609)
(1)	(62)		(13)		636		4,792
(2)	(62)		(13)		675		6,424

(a)Given the low absolute level of short-term market rates on our floating-rate assets and liabilities as of September 30, 2020, the assumed hypothetical change in interest rates does not reflect the full 100 and 200 basis point reduction in interest income or interest expense, as the rates are assumed not to fall below zero.

(b)As of September 30, 2020, some of our investments had interest rates below 1% so the assumed hypothetical change in the fair value of investments does not reflect the full 100 and 200 basis point reduction.

ITEM 4.    CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

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

In connection with the filing of this quarterly report on Form 10-Q, management evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2020. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2020.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

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

25

ITEM 1A.    RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” of our 2019 10-K and Part II, Item 1A, “Risk Factors” of our 10-Q for the quarterly period ended March 31, 2020 (“2020 First Quarter 10-Q”), which could materially affect our business, financial condition or future results. The risks described in our 2019 10-K and 2020 First Quarter 10-Q, are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

There have been no other material changes to the risk factors as disclosed in our 2019 10-K and 2020 First Quarter 10-Q.

ITEM 2.    UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

In November 1997, our Board of Directors adopted a share repurchase program, which the Board evaluates periodically. There is no established expiration date for the program. During the third quarter 2020, we repurchased approximately 3 million shares at an average price of $303.76 per share. As of September 30, 2020, we had Board authorization to purchase up to 63 million shares of our common stock.

26

ITEM 6.    EXHIBITS*

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

3.1	Certificate of Incorporation of UnitedHealth Group Incorporated (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 8-A/A filed on July 1, 2015)
3.2	Bylaws of UnitedHealth Group Incorporated, effective August 15, 2017 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 16, 2017)
4.1	Senior Indenture, dated as of November 15, 1998, between United HealthCare Corporation and The Bank of New York (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3/A, SEC File Number 333-66013, filed on January 11, 1999)
4.2	Amendment, dated as of November 6, 2000, to Senior Indenture, dated as of November 15, 1998, between UnitedHealth Group Incorporated and The Bank of New York (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001)
4.3	Instrument of Resignation, Appointment and Acceptance of Trustee, dated January 8, 2007, pursuant to the Senior Indenture, dated as of November 15, 1998, amended November 6, 2000, among UnitedHealth Group Incorporated, The Bank of New York and Wilmington Trust Company (incorporated by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007)
4.4	Indenture, dated as of February 4, 2008, between UnitedHealth Group Incorporated and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3, SEC File Number 333-149031, filed on February 4, 2008)
31.1	Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and embedded within Exhibit 101).

 ________________

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

27

SIGNATURES

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

UNITEDHEALTH GROUP INCORPORATED

/s/ DAVID S. WICHMANN	Chief Executive Officer (principal executive officer)	Dated:	November 2, 2020
David S. Wichmann
/s/ JOHN F. REX	Executive Vice President and Chief Financial Officer (principal financial officer)	Dated:	November 2, 2020
John F. Rex
/s/ THOMAS E. ROOS	Senior Vice President and Chief Accounting Officer (principal accounting officer)	Dated:	November 2, 2020
Thomas E. Roos

28