Group 1 - The Pragmatic Investor focuses on global macro, international equities, commodities, tech, and cryptocurrencies, aiming to guide investors of all levels [1] - The platform offers features such as a portfolio, weekly market updates, actionable trades, technical analysis, and a chat room for investor engagement [1] - James Foord, an economist with a decade of experience in global market analysis, leads The Pragmatic Investor, emphasizing the creation of diversified portfolios to preserve and increase wealth [1]

Group 1 - UnitedHealth Group is experiencing its worst performance since 2008, with the stock down approximately 50% this year, closely approaching the 2008 decline of -54.3% [1] Group 2 - The investment strategy focuses on GARP (growth at a reasonable price) stocks while also seeking opportunities in other areas, with no specified time horizon for investments [2] - The analyst has developed market-beating algorithms using Python to identify attractive investment opportunities within their portfolio [2] - The analyst has experience working at TipRanks as an analysis/news writer and editor, which has enhanced their understanding of market interests and the importance of accurate information [2]

PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents UnitedHealth Group's unaudited condensed consolidated financial statements, along with detailed notes on key financial areas [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities increased from December 2024 to June 2025, driven by higher cash, receivables, and medical costs payable | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | Change (in millions) | % Change | | :----------------------------------- | :-------------------------- | :------------------------------ | :------------------- | :------- | | Total assets | $308,573 | $298,278 | $10,295 | 3.4% | | Total liabilities | $203,789 | $195,687 | $8,102 | 4.1% | | Total equity | $100,469 | $98,268 | $2,201 | 2.2% | | Cash and cash equivalents | $28,596 | $25,312 | $3,284 | 13.0% | | Medical costs payable | $38,427 | $34,224 | $4,203 | 12.3% | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total revenues increased for both periods, but three-month earnings from operations and net earnings decreased, while six-month earnings significantly rose due to lower subsidiary sale losses | Metric | 3 Months Ended June 30, 2025 (in millions) | 3 Months Ended June 30, 2024 (in millions) | Change (in millions) | % Change | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------- | :------- | | Total revenues | $111,616 | $98,855 | $12,761 | 12.9% | | Earnings from operations | $5,150 | $7,875 | $(2,725) | -34.6% | | Net earnings attributable to UnitedHealth Group common shareholders | $3,406 | $4,216 | $(810) | -19.2% | | Diluted EPS | $3.74 | $4.54 | $(0.80) | -17.6% | | Metric | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | Change (in millions) | % Change | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------- | :------- | | Total revenues | $221,191 | $198,651 | $22,540 | 11.3% | | Earnings from operations | $14,269 | $15,806 | $(1,537) | -9.7% | | Net earnings attributable to UnitedHealth Group common shareholders | $9,698 | $2,807 | $6,891 | 245.5% | | Diluted EPS | $10.61 | $3.02 | $7.59 | 251.3% | - The significant increase in net earnings and diluted EPS for the six months ended June 30, 2025, compared to 2024, is largely attributable to a substantially lower 'Loss on sale of subsidiary and subsidiaries held for sale' in 2025 (**$56 million**) compared to 2024 (**$8,311 million**)[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Total other comprehensive income significantly increased for both periods, driven by unrealized investment gains and foreign currency translation gains | Metric | 3 Months Ended June 30, 2025 (in millions) | 3 Months Ended June 30, 2024 (in millions) | Change (in millions) | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------- | | Net earnings | $3,572 | $4,421 | $(849) | | Total unrealized gains (losses), net of tax | $252 | $(58) | $310 | | Total foreign currency translation gains | $131 | $94 | $37 | | Other comprehensive income | $370 | $16 | $354 | | Comprehensive income attributable to UnitedHealth Group common shareholders | $3,776 | $4,232 | $(456) | | Metric | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | Change (in millions) | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------- | | Net earnings | $10,046 | $3,200 | $6,846 | | Total unrealized gains (losses), net of tax | $654 | $(280) | $934 | | Total foreign currency translation gains | $219 | $3,929 | $(3,710) | | Other comprehensive income | $852 | $3,604 | $(2,752) | | Comprehensive income attributable to UnitedHealth Group common shareholders | $10,550 | $6,411 | $4,139 | [Condensed Consolidated Statements of Changes in Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased from January to June 2025, driven by net earnings and comprehensive income, offset by share repurchases and dividends | Metric | June 30, 2025 (in millions) | January 1, 2025 (in millions) | Change (in millions) | | :----------------------------------- | :-------------------------- | :---------------------------- | :------------------- | | Total Equity | $100,469 | $98,268 | $2,201 | | Net earnings | $9,698 | N/A | N/A | | Other comprehensive income | $852 | N/A | N/A | | Common share repurchases | $(5,527) | N/A | N/A | | Cash dividends paid | $(3,912) | N/A | N/A | - The company repurchased **12 million shares** for **$5.5 billion** and paid **$3.9 billion** in cash dividends during the six months ended June 30, 2025[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flows significantly increased, while investing activities decreased substantially and financing activities shifted to a net outflow | Metric | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | Change (in millions) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------- | | Cash flows from operating activities | $12,644 | $7,890 | $4,754 | | Cash flows used for investing activities | $(1,516) | $(13,757) | $12,241 | | Cash flows (used for) from financing activities | $(7,848) | $7,035 | $(14,883) | | Net increase in cash and cash equivalents | $3,284 | $859 | $2,425 | - The substantial decrease in cash used for investing activities in 2025 is primarily due to the absence of large loans to care providers related to the Change Healthcare cyberattack, which amounted to **$8.1 billion** in 2024[19](index=19&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the financial statements, explaining accounting policies, financial instruments, liabilities, and segment performance [1. Basis of Presentation](index=10&type=section&id=1.%20Basis%20of%20Presentation) UnitedHealth Group operates through Optum and UnitedHealthcare, with financial statements prepared under U.S. GAAP, relying on significant estimates - UnitedHealth Group operates through two primary businesses: Optum and UnitedHealthcare, aiming to improve health system access, affordability, outcomes, and experiences[21](index=21&type=chunk) - The most significant estimates in the financial statements relate to medical costs payable and goodwill, which involve complex assumptions and inherent uncertainties[23](index=23&type=chunk) [2. Investments](index=11&type=section&id=2.%20Investments) The investment portfolio, primarily debt securities, had a fair value of **$47.1 billion** with temporary unrealized losses due to interest rate increases | Investment Type | June 30, 2025 (Fair Value, in millions) | December 31, 2024 (Fair Value, in millions) | | :----------------------------------- | :-------------------------------------- | :---------------------------------------- | | Total debt securities | $47,098 | $47,427 | | Equity securities | $5,400 | $4,900 | | Equity method investments | $3,400 | $3,800 | | Debt Securities - Available-for-Sale | Gross Unrealized Losses (in millions) | | :----------------------------------- | :------------------------------------ | | June 30, 2025 | $(2,206) | | December 31, 2024 | $(2,958) | - Unrealized losses on debt securities are primarily attributed to interest rate increases, not credit quality, and are considered temporary as the company does not intend to sell these positions[27](index=27&type=chunk) [3. Fair Value](index=13&type=section&id=3.%20Fair%20Value) Financial assets and liabilities are classified into a three-level fair value hierarchy, with most in Level 1 (**37%**) and Level 2 (**62%**) | Fair Value Level | June 30, 2025 (% of Total Assets at Fair Value) | December 31, 2024 (% of Total Assets at Fair Value) | | :----------------- | :---------------------------------------------- | :------------------------------------------------ | | Level 1 | 37% | 42% | | Level 2 | 62% | 57% | | Level 3 | 1% | 1% | - There were no transfers in or out of Level 3 financial assets or liabilities during the six months ended June 30, 2025 or 2024[30](index=30&type=chunk) [4. Medical Costs Payable](index=14&type=section&id=4.%20Medical%20Costs%20Payable) Medical costs payable increased to **$38.4 billion**, driven by higher reported current year medical costs and lower medical payments | Metric | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | | Medical costs payable, beginning of period | $34,224 | $32,395 | | Total reported medical costs | $151,996 | $131,193 | | Total medical payments | $(147,791) | $(130,175) | | Medical costs payable, end of period | $38,427 | $32,547 | - Reserves for claims incurred but not yet reported increased to **$26.8 billion** at June 30, 2025, from **$23.7 billion** at December 31, 2024[32](index=32&type=chunk) [5. Short-Term Borrowings and Long-Term Debt](index=15&type=section&id=5.%20Short-Term%20Borrowings%20and%20Long-Term%20Debt) In June 2025, the Company issued **$3.0 billion** of senior unsecured notes with varying maturities and interest rates | Note Type | Par Value (in millions) | | :------------------ | :---------------------- | | 4.4%, June 2028 | $500 | | 4.65%, January 2031 | $750 | | 5.3%, June 2035 | $1,000 | | 5.95%, June 2055 | $750 | [6. Dividends](index=15&type=section&id=6.%20Dividends) In June 2025, the Board increased the quarterly cash dividend to an annual rate of **$8.84 per share** - Quarterly cash dividend increased to an annual rate of **$8.84 per share** in June 2025, from **$8.40 per share**[35](index=35&type=chunk) | Payment Date | Amount per Share | Total Amount Paid (in millions) | | :----------- | :--------------- | :------------------------------ | | March 18, 2025 | $2.10 | $1,912 | | June 24, 2025 | $2.21 | $2,000 | [7. Commitments and Contingencies](index=15&type=section&id=7.%20Commitments%20and%20Contingencies) The company has **$4 billion** in pending acquisitions and is involved in various legal and government investigations with uncertain outcomes - Pending acquisitions in the healthcare sector require approximately **$4 billion** in capital, subject to regulatory approval[36](index=36&type=chunk) - The company is involved in numerous legal and regulatory matters, including a False Claims Act lawsuit by the DOJ, with outcomes that are inherently difficult to predict[37](index=37&type=chunk)[38](index=38&type=chunk)[40](index=40&type=chunk) [8. Held for Sale](index=16&type=section&id=8.%20Held%20for%20Sale) Remaining South American operations are expected to be sold, with assets remeasured to fair value less cost to sell, resulting in a **$(1,314) million** remeasurement impact - Planned sales of remaining South American operations are expected to close within the year[41](index=41&type=chunk) | Held for Sale Assets/Liabilities | Value (in millions) | | :--------------------------------- | :------------------ | | Total assets | $1,057 | | Total liabilities | $985 | | Remeasurement of assets to fair value less cost to sell | $(1,314) | [9. Segment Financial Information](index=17&type=section&id=9.%20Segment%20Financial%20Information) UnitedHealth Group operates through four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx, with detailed financial performance - The company's four reportable segments are UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx[42](index=42&type=chunk) **Three Months Ended June 30, 2025 vs. 2024 (in millions):** | Segment | Total Revenues 2025 | Total Revenues 2024 | Revenue Change | Earnings from Operations 2025 | Earnings from Operations 2024 | Earnings Change | | :---------------- | :------------------ | :------------------ | :------------- | :---------------------------- | :---------------------------- | :-------------- | | UnitedHealthcare | $86,103 | $73,866 | +17% | $2,075 | $4,004 | -48% | | Optum Health | $25,205 | $27,050 | -7% | $636 | $1,919 | -67% | | Optum Insight | $4,828 | $4,543 | +6% | $998 | $546 | +83% | | Optum Rx | $38,459 | $32,415 | +19% | $1,441 | $1,406 | +2% | | **Consolidated** | **$111,616** | **$98,855** | **+13%** | **$5,150** | **$7,875** | **-35%** | **Six Months Ended June 30, 2025 vs. 2024 (in millions):** | Segment | Total Revenues 2025 | Total Revenues 2024 | Revenue Change | Earnings from Operations 2025 | Earnings from Operations 2024 | Earnings Change | | :---------------- | :------------------ | :------------------ | :------------- | :---------------------------- | :---------------------------- | :-------------- | | UnitedHealthcare | $170,720 | $149,223 | +14% | $7,301 | $8,399 | -13% | | Optum Health | $50,514 | $53,781 | -6% | $2,250 | $3,818 | -41% | | Optum Insight | $9,458 | $9,045 | +5% | $1,959 | $1,036 | +89% | | Optum Rx | $73,591 | $63,250 | +16% | $2,759 | $2,553 | +8% | | **Consolidated** | **$221,191** | **$198,651** | **+11%** | **$14,269** | **$15,806** | **-10%** |[42](index=42&type=chunk)[43](index=43&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial performance, condition, and operational results, including an executive overview, business trends, and operating summary [EXECUTIVE OVERVIEW](index=19&type=section&id=EXECUTIVE%20OVERVIEW) UnitedHealth Group is a health care and well-being company operating through Optum and UnitedHealthcare, divided into four reportable segments - UnitedHealth Group's mission is to help people live healthier lives and improve the health system[46](index=46&type=chunk) - The company operates through four reportable segments: UnitedHealthcare (Employer & Individual, Medicare & Retirement, Community & State), Optum Health, Optum Insight, and Optum Rx[47](index=47&type=chunk)[52](index=52&type=chunk) [Business Trends](index=19&type=section&id=Business%20Trends) Healthcare spending is expected to grow, but 2025 pricing trends fell short of medical cost trends, impacted by regulatory changes and Medicaid redeterminations - Overall healthcare spending is expected to grow due to inflation, medical technology, pharmaceutical advancements, regulatory requirements, and demographic trends[48](index=48&type=chunk) - 2025 pricing trends and patient health status assumptions were insufficient to cover incurred medical cost trends, significantly impacting earnings[49](index=49&type=chunk) - Increased care patterns, particularly in physician and outpatient care, and higher unit costs/service intensity, are contributing to elevated medical cost trends[55](index=55&type=chunk) - Medicare Advantage funding is pressured by base rates below medical cost trends and substantial revisions to the risk adjustment model[58](index=58&type=chunk) - The Inflation Reduction Act (IRA) has altered the Medicare Part D model, shifting more risk to plans and impacting the seasonal relationship between medical costs and premiums[56](index=56&type=chunk) [SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS](index=20&type=section&id=SELECTED%20OPERATING%20PERFORMANCE%20AND%20OTHER%20SIGNIFICANT%20ITEMS) Q2 2025 consolidated revenues grew **13%**, UnitedHealthcare served **1.0 million** more people, but earnings from operations decreased to **$5.2 billion** due to elevated medical costs and the Change Healthcare cyberattack - Consolidated revenues grew **13%** year-over-year in Q2 2025[60](index=60&type=chunk) - UnitedHealthcare revenues grew **17%** and Optum revenues grew **7%** in Q2 2025[60](index=60&type=chunk) - UnitedHealthcare served **1.0 million** more people, driven by growth in Medicare Advantage and commercial offerings[60](index=60&type=chunk) - Consolidated earnings from operations were **$5.2 billion** in Q2 2025, down from **$7.9 billion** in Q2 2024, due to elevated medical cost trends in 2025 and the Change Healthcare cyberattack in 2024[60](index=60&type=chunk) - Diluted earnings per common share was **$3.74** in Q2 2025[60](index=60&type=chunk) - Cash flows from operations for the six months ended June 30, 2025, were **$12.6 billion**[60](index=60&type=chunk) [RESULTS SUMMARY](index=21&type=section&id=RESULTS%20SUMMARY) Consolidated revenues increased, but earnings from operations decreased, while six-month net earnings attributable to common shareholders increased **245%** due to lower subsidiary sale losses **Consolidated Financial Results (in millions, except percentages and per share data):** | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (2025 vs. 2024) | | :------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------- | | Total revenues | $111,616 | $98,855 | +13% | | Earnings from operations | $5,150 | $7,875 | -35% | | Net earnings attributable to UnitedHealth Group common shareholders | $3,406 | $4,216 | -19% | | Diluted earnings per share | $3.74 | $4.54 | -17.6% | | Medical care ratio (MCR) | 89.4% | 85.1% | +4.3% | | Operating cost ratio | 12.3% | 13.3% | -1.0% | | Operating margin | 4.6% | 8.0% | -3.4% | | Tax rate | 12.5% | 22.0% | -9.5% | | Net earnings margin | 3.1% | 4.3% | -1.2% | | Return on equity | 14.4% | 19.2% | -4.8% | | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (2025 vs. 2024) | | :------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------- | | Total revenues | $221,191 | $198,651 | +11% | | Earnings from operations | $14,269 | $15,806 | -10% | | Net earnings attributable to UnitedHealth Group common shareholders | $9,698 | $2,807 | +245% | | Diluted earnings per share | $10.61 | $3.02 | +251.3% | | Medical care ratio (MCR) | 87.1% | 84.7% | +2.4% | | Operating cost ratio | 12.4% | 13.7% | -1.3% | | Operating margin | 6.5% | 8.0% | -1.5% | | Tax rate | 17.6% | 43.5% | -25.9% | | Net earnings margin | 4.4% | 1.4% | +3.0% | | Return on equity | 20.6% | 6.4% | +14.2% |[61](index=61&type=chunk) [2025 RESULTS OF OPERATIONS COMPARED TO 2024 RESULTS OF OPERATIONS](index=22&type=section&id=2025%20Results%20of%20Operations%20Compared%20to%202024%20Results%20of%20Operations) This section details year-over-year changes in consolidated financial results and segment performance, highlighting medical cost trends, regulatory changes, and the Change Healthcare cyberattack [Consolidated Financial Results](index=22&type=section&id=Consolidated%20Financial%20Results) Consolidated revenues increased due to Medicare Advantage and Optum Rx growth, while medical costs and MCR rose from IRA impacts and elevated medical trends - Revenue growth was driven by Medicare Advantage and higher acuity Medicaid members, Optum Rx, and pricing trends[63](index=63&type=chunk) - Medical costs and MCR increased due to IRA impacts on Medicare Part D, elevated medical cost trends, and changes in member profiles, partially offset by lower Change Healthcare cyberattack-related costs[64](index=64&type=chunk) - Operating cost ratio decreased due to government program revenue impacts, operating cost management, and direct response efforts to the Change Healthcare cyberattack in 2024[65](index=65&type=chunk) - Effective income tax rate decreased due to tax benefits having a greater impact on lower pre-tax income in 2025, favorable taxable earnings mix, and the impact of updated full-year effective tax rate expectations[66](index=66&type=chunk) [Reportable Segments](index=23&type=section&id=Reportable%20Segments) This section provides a detailed breakdown of the financial performance and key metrics for each of UnitedHealth Group's reportable segments [UnitedHealthcare](index=23&type=section&id=UnitedHealthcare) UnitedHealthcare's revenues increased, driven by Medicare Advantage, but earnings from operations decreased due to funding reductions and elevated medical costs **UnitedHealthcare Revenues (in millions):** | Business Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | | :----------------------------------- | :--------------------------- | :--------------------------- | :----- | | Employer & Individual - Total | $19,769 | $19,237 | +3% | | Medicare & Retirement | $42,623 | $34,904 | +22% | | Community & State | $23,711 | $19,725 | +20% | | **Total UnitedHealthcare revenues** | **$86,103** | **$73,866** | **+17%** | **UnitedHealthcare People Served (in thousands):** | Market Segment | June 30, 2025 | June 30, 2024 | Change | | :----------------------------------- | :------------ | :------------ | :----- | | Total Commercial | 29,970 | 29,570 | +1% | | Medicare Advantage | 8,350 | 7,770 | +7% | | Medicaid | 7,490 | 7,410 | +1% | | Total UnitedHealthcare - Medical | 50,115 | 49,085 | +2% |[70](index=70&type=chunk)[71](index=71&type=chunk) - Earnings from operations decreased due to Medicare Advantage funding reductions, elevated medical cost trends, and market morbidity changes, partially offset by reduced incremental medical costs from the Change Healthcare cyberattack in 2024[71](index=71&type=chunk) [Optum](index=24&type=section&id=Optum) Optum's total revenues increased primarily from Optum Rx growth, but earnings from operations decreased mainly due to Optum Health's performance - Optum's total revenues increased primarily due to growth at Optum Rx, partially offset by Optum Health[72](index=72&type=chunk) - Optum's earnings from operations decreased due to Optum Health, partially offset by the impacts of the Change Healthcare cyberattack incurred in 2024 and Optum Rx[72](index=72&type=chunk) [Optum Health](index=24&type=section&id=Optum%20Health) Optum Health's revenues and earnings decreased due to contract conversions, Medicare Advantage funding reductions, and elevated medical cost trends - Revenues decreased primarily due to conversion of risk-based contracts, Medicare Advantage funding reductions, and member profile changes[72](index=72&type=chunk) - Earnings from operations decreased due to Medicare Advantage funding reductions, member profile of newly added patients under value-based care arrangements, elevated medical cost trends, and contractual settlements[72](index=72&type=chunk) - Optum Health served approximately **98 million** people as of June 30, 2025, down from **104 million** in 2024[72](index=72&type=chunk) [Optum Insight](index=24&type=section&id=Optum%20Insight) Optum Insight's revenues and earnings increased due to decreased business disruption impacts and direct response costs from the Change Healthcare cyberattack - Revenues and earnings from operations increased due to decreased business disruption impacts and direct response costs related to the Change Healthcare cyberattack[73](index=73&type=chunk) [Optum Rx](index=24&type=section&id=Optum%20Rx) Optum Rx experienced increased revenues and earnings, driven by higher script volumes from new and existing clients and growth in pharmacy services - Revenues and earnings from operations increased due to higher script volumes from new and existing clients and growth in pharmacy services[74](index=74&type=chunk) - Optum Rx fulfilled **414 million** adjusted scripts in Q2 2025, up from **399 million** in Q2 2024[74](index=74&type=chunk) [LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES](index=25&type=section&id=LIQUIDITY%2C%20FINANCIAL%20CONDITION%20AND%20CAPITAL%20RESOURCES) This section discusses the company's cash flows, financial position, and capital management strategies, highlighting increased operating cash flows and strong financial condition [Liquidity](index=25&type=section&id=Liquidity) Operating cash flows significantly increased due to working capital changes, IRA impacts, and reduced cyberattack effects, partially offset by decreased debt issuances and increased share repurchases | Source/Use of Cash | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | Change (2025 vs. 2024) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | :--------------------- | | Cash provided by operating activities | $12,644 | $7,890 | +$4,754 | | Issuances of short-term borrowings and long-term debt, net of repayments | $1,566 | $12,790 | -$11,224 | | Common stock repurchases | $(5,545) | $(3,072) | -$2,473 | | Loans to care providers - cyberattack | $0 | $(8,100) | +$8,100 | | Net increase in cash and cash equivalents | $3,284 | $859 | +$2,425 |[75](index=75&type=chunk) - Increased operating cash flows were driven by working capital changes, seasonal IRA impacts on Medicare Part D, and reduced impacts from the Change Healthcare cyberattack[76](index=76&type=chunk) [Financial Condition](index=25&type=section&id=Financial%20Condition) As of June 30, 2025, the company held **$77.3 billion** in cash and marketable securities, with its debt portfolio having a 'Double A' credit rating | Asset Type | June 30, 2025 (in millions) | | :----------------------------------- | :-------------------------- | | Cash and cash equivalents | $28,600 | | Available-for-sale debt securities | $46,600 | | Marketable equity securities | $2,100 | | **Total** | **$77,300** |[77](index=77&type=chunk) - The available-for-sale debt securities portfolio had a weighted-average duration of **4.3 years** and a 'Double A' credit rating as of June 30, 2025[77](index=77&type=chunk) [Capital Resources and Uses of Liquidity](index=26&type=section&id=Capital%20Resources%20and%20Uses%20of%20Liquidity) The company maintains sufficient capital resources, strong credit ratings, increased dividends, and authorized share repurchases, while anticipating **$4 billion** for pending acquisitions - The company believes its capital resources are sufficient to meet future short-term and long-term liquidity needs[78](index=78&type=chunk) **Credit Ratings as of June 30, 2025:** | Agency | Senior Unsecured Debt | Commercial Paper | | :----------- | :-------------------- | :--------------- | | Moody's | A2 (Negative) | P-1 | | S&P Global | A+ (Negative) | A-1 | | Fitch | A (Stable) | F1 | | A.M. Best | A (Negative) | AMB-1+ |[82](index=82&type=chunk) - Repurchased approximately **12.1 million shares** at an average price of **$454.82 per share** during the six months ended June 30, 2025[84](index=84&type=chunk) - Board authorization to purchase up to **21.0 million** additional common shares[85](index=85&type=chunk) - Quarterly cash dividend increased to an annual rate of **$8.84 per share** in June 2025[86](index=86&type=chunk) - Anticipated capital required for pending acquisitions is approximately **$4 billion**[86](index=86&type=chunk) [RECENTLY ISSUED ACCOUNTING STANDARDS](index=27&type=section&id=RECENTLY%20ISSUED%20ACCOUNTING%20STANDARDS) No recently issued accounting standards are expected to materially impact the Condensed Consolidated Financial Statements - No recently issued accounting standards are expected to materially impact the Condensed Consolidated Financial Statements[88](index=88&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=27&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) Critical accounting estimates, including medical costs payable and goodwill, involve significant judgments and assumptions, with actual results potentially differing materially - Critical accounting estimates include medical costs payable and goodwill, which require significant judgment and assumptions[90](index=90&type=chunk) [FORWARD-LOOKING STATEMENTS](index=27&type=section&id=FORWARD-LOOKING%20STATEMENTS) Forward-looking statements are subject to risks and uncertainties, including medical costs, regulatory changes, cyberattacks, and competitive pressures, with no obligation to update - Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from expectations[91](index=91&type=chunk) - Key risk factors include managing medical costs, regulatory changes, cyberattacks, reductions in government program revenue, and competitive pressures[91](index=91&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market interest rate exposure through diversified investments and debt maturities, with hypothetical changes impacting investment income, interest expense, and fair value **Impact of Hypothetical Changes in Market Interest Rates (June 30, 2025, in millions):** | 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% | $734 | $542 | $(4,202) | $(9,288) | | +1% | $367 | $271 | $(2,150) | $(5,058) | | -1% | $(367) | $(256) | $2,202 | $6,107 | | -2% | $(734) | $(510) | $4,416 | $13,549 |[94](index=94&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter [EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES](index=28&type=section&id=EVALUATION%20OF%20DISCLOSURE%20CONTROLS%20AND%20PROCEDURES) The CEO and CFO concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025 - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of June 30, 2025[96](index=96&type=chunk) [CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING](index=28&type=section&id=CHANGES%20IN%20INTERNAL%20CONTROL%20OVER%20FINANCIAL%20REPORTING) No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025 - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[97](index=97&type=chunk) PART II. OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=29&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings are incorporated by reference from Note 7 of the Notes to the Condensed Consolidated Financial Statements - Legal proceedings are detailed in Note 7 of the Condensed Consolidated Financial Statements[100](index=100&type=chunk) [ITEM 1A. RISK FACTORS](index=29&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors as previously disclosed in the company's 2024 10-K - No material changes to risk factors as disclosed in the 2024 10-K[102](index=102&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company repurchased **6.1 million shares** at an average price of **$407.06 per share** under its repurchase program **Issuer Purchases of Equity Securities (Second Quarter 2025):** | For the Month Ended | Total Number of Shares Purchased (in millions) | Average Price Paid Per Share | | :------------------ | :------------------------------------------- | :--------------------------- | | April 30, 2025 | 3.8 | $445.39 | | May 31, 2025 | 2.3 | $341.68 | | June 30, 2025 | — | — | | **Total** | **6.1** | **$407.06** |[104](index=104&type=chunk) - As of June 30, 2025, **21.0 million shares** remained authorized for repurchase under the program[104](index=104&type=chunk) [ITEM 5. OTHER INFORMATION](index=29&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during Q2 2025[105](index=105&type=chunk) [ITEM 6. EXHIBITS](index=30&type=section&id=Item%206.%20Exhibits) This section lists filed or incorporated exhibits, including corporate governance documents, debt indentures, an employment agreement, and various certifications - Exhibits include corporate governance documents (Certificate of Incorporation, Bylaws), debt indentures, an employment agreement, and Sarbanes-Oxley certifications[107](index=107&type=chunk) [SIGNATURES](index=31&type=section&id=SIGNATURES) The report was signed by the Chair and CEO, President and CFO, and SVP and Chief Accounting Officer on August 11, 2025 - The report was signed by the Chair and CEO, President and CFO, and SVP and Chief Accounting Officer on August 11, 2025[110](index=110&type=chunk)

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Core Viewpoint - Investor sentiment is highly pessimistic, and U.S. pharmaceutical stocks are facing the most severe challenges in decades [1][3]. Group 1: Market Performance - Major biopharmaceutical companies experienced significant sell-offs during the recent earnings season, leading to a weak overall performance of the sector [1][3]. - The healthcare sector's weight in the S&P 500 index has dropped to its lowest point in decades [1][9]. - Vertex Pharmaceuticals and Eli Lilly faced substantial declines, with Vertex dropping 20.6% on August 4 due to setbacks in its pain medication project, while Eli Lilly recorded its largest drop since the dot-com bubble [4][7]. Group 2: Stock Volatility - The average volatility of healthcare stocks during this earnings season reached ±6%, marking one of the highest volatility records in history [3][9]. - Other major healthcare stocks, including Novo Nordisk, McKesson Corp, and UnitedHealth Group, saw declines of 10% to 20% post-earnings [3][7]. Group 3: Policy Uncertainty - Policy uncertainties, particularly regarding the Trump administration's Most Favored Nation pricing proposal and potential tariffs on the pharmaceutical industry, are major challenges for pharmaceutical stocks [8][9]. - Analysts are closely monitoring the potential announcement of pharmaceutical tariffs, expected in mid-August, which could further impact the sector [8][9]. Group 4: Company-Specific Developments - Despite the overall weak performance, some companies like Johnson & Johnson and Gilead Sciences showed strong results, with Gilead's stock rising 6% last week and a year-to-date increase of 30% due to robust HIV business growth [7]. - The weight loss drug sector has been particularly hard hit, with Eli Lilly losing $100 billion in market value due to disappointing data on its oral weight loss medication [7].

Group 1 - The company maintains a bullish rating on UnitedHealth Group (NYSE: UNH) due to the addition of 770,000 new members served in Q2 2025 [1] - The analyst emphasizes a high likelihood of continued growth for UNH based on its current performance metrics [1] - The approach taken by the analyst involves breaking down complex financial and technological problems to identify overlooked investment opportunities [1] Group 2 - The analyst has a strong background in investment, private equity, and venture capital, which supports the credibility of the insights provided [1] - The focus of the articles includes emerging technologies, sustainable investing, and the intersection of innovation and finance [1] - The analyst expresses a commitment to sharing insights and learning from fellow investors to drive positive change in the investment landscape [1]

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

In my last analysis of UnitedHealth Group (NYSE: UNH )(NEOE: UNH:CA ), I called the stock an "uncomfortable buy". I don't think I need to emphasize this, but the stock was already in a storm of negative news and factors such Analyst's Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in UNH over the next 72 hours. I wrote th ...

Healthcare Network & Coverage - United Healthcare denied access to Dr Potter's surgery center, citing it was not in-network [1] - United Healthcare claims members have sufficient care options in the region without Dr Potter's center [3] - United Healthcare stated it informed Dr Potter on October 1st of the previous year that it wasn't accepting new surgery centers in her area [4] - Dr Potter alleges United Healthcare stopped ongoing discussions about her center joining the network after she started speaking out [4] - United Healthcare insists there were no ongoing negotiations with Dr Potter's surgery center [5] Financial & Operational Challenges - Dr Potter took out 350 万美元 (3.5 million) in personal loans to keep her center open [5] - Dr Potter has raised more than 50 万美元 (500,000) in online donations, but it's not enough to stay open [6] - Dr Potter expresses concern about the power imbalance with United Healthcare's ability to close its network, potentially impacting her center's viability [5] Patient Care & Advocacy - Dr Potter specializes in complex breast reconstruction, primarily serving cancer survivors [2] - Dr Potter criticizes United Healthcare, alleging the insurer interrupted a surgery in progress [2][3] - Dr Potter believes women's health is embattled and the stakes are high [6]

Core Insights - UnitedHealth Group Incorporated (UNH) has experienced a significant decline of 12.9% following disappointing Q2 2025 results and a drastic reduction in its full-year earnings outlook, raising concerns about rising medical costs and their impact on profitability [1][2][19] Financial Performance - UNH reported revenues of $111.6 billion for Q2 2025, a 12.9% increase year over year, but adjusted earnings per share (EPS) fell to $4.08, missing the Zacks Consensus Estimate of $4.84 and representing a 40% decline from the previous year [5][7] - The medical care ratio (MCR) for UNH was 89.4% in Q2, a deterioration of 430 basis points from the prior year, indicating reduced profitability after claims [6][7] - Total operating costs rose 17% year over year to $106.5 billion, with net margins declining to 3.1%, reflecting ongoing high utilization and cost pressures [6][19] Earnings Guidance and Market Sentiment - UNH has revised its adjusted net earnings forecast for 2025 down to at least $16 per share from a previous range of $26–$26.50, following significant earnings misses [7][19] - Analyst sentiment has worsened, with five downward revisions to 2025 and 2026 earnings estimates in just one week, indicating skepticism about the company's ability to convert revenue growth into sustainable profits [11][19] Market Position and Challenges - UNH has been removed from major growth-oriented indices, signaling a shift in market perception from a reliable growth stock to one facing significant margin pressures [13] - The company is under investigation by the DOJ regarding potential Medicare billing issues, which could lead to fines or regulatory challenges [14][15] Strategic Initiatives and Future Outlook - Despite current challenges, UNH maintains a strong market position and is taking steps to stabilize operations, including appointing a new CFO [16] - Future tailwinds may include expected Medicare Advantage rate increases in 2026 and investments in AI and digital technologies to enhance operational efficiency [17] - UNH continues to return capital to shareholders, distributing $4.5 billion in dividends and buybacks in Q2 2025, and raised its quarterly dividend by 5% [18] Valuation Comparison - UNH's stock trades at a forward P/E ratio of 13.24X, above the industry average of 12.12X, while competitors Molina Healthcare and Centene trade at lower multiples of 7.78X and 9.72X, respectively [9][20]