What changed in this filing

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Item 1. Financial Statements

2021-08-03 compared with 2021-05-05 · 123 added, 153 removed, 364 unchanged (43% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

(in millions, except per share data) March 31,

(in millions, except per share data) June 30,

2021 December 31,

41 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions, except per share data) 2021 2020 2021 2020

17 unchanged sentences

Net earnings attributable to UnitedHealth Group common shareholders $ 4,266 $ 6,637 $ 9,128 $ 10,019

$ 4,862 $ 3,382

Earnings per share attributable to UnitedHealth Group common shareholders:

$ 5.14 $ 3.56

$ 5.08 $ 3.52

Basic $ 4.52 $ 6.99 $ 9.66 $ 10.56

Diluted $ 4.46 $ 6.91 $ 9.55 $ 10.43

Basic weighted-average number of common shares outstanding 944 949 945 949

5 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2021 2020 2021 2020

Net earnings $ 4,372 $ 6,696 $ 9,350 $ 10,161

Other comprehensive loss:

Gross unrealized losses on investment securities during the period ( 764 ) ( 349 )

Other comprehensive income (loss):

Gross unrealized gains (losses) on investment securities during the period 251 1,120 ( 513 ) 771

Income tax effect ( 58 ) ( 257 ) 116 ( 177 )

Total unrealized losses, net of tax ( 590 ) ( 269 )

Total unrealized gains (losses), net of tax 193 863 ( 397 ) 594

Gross reclassification adjustment for net realized gains included in net earnings ( 9 ) ( 11 ) ( 16 ) ( 29 )

1 unchanged sentence

Total reclassification adjustment, net of tax

Total foreign currency translation losses

( 7 ) ( 8 ) ( 12 ) ( 22 )

Other comprehensive loss ( 1,012 ) ( 1,782 )

Total foreign currency translation gains (losses) 554 ( 45 ) 137 ( 1,544 )

Other comprehensive income (loss) 740 810 ( 272 ) ( 972 )

Comprehensive income 5,112 7,506 9,078 9,189

7 unchanged sentences

Income (Loss) Nonredeemable Noncontrolling Interests Total

Three months ended March 31,

(in millions) Shares Amount Net Unrealized Gains (losses) on Investments Foreign Currency Translation Losses

Balance at January 1, 2021 946 $ 10 $ — $ 69,295 $ 1,336 $ ( 5,150 ) $ 2,837 $ 68,328

Three months ended June 30,

(in millions) Shares Amount Net Unrealized Gains on Investments Foreign Currency Translation (Losses) Gains

Balance at March 31, 2021 944 $ 10 $ — $ 71,220 $ 741 $ ( 5,567 ) $ 2,909 $ 69,313

4,266 88 4,354

Other comprehensive loss ( 595 ) ( 417 ) ( 1,012 )

Other comprehensive income 186 554 740

Issuances of common stock, and related tax effects

8 unchanged sentences

( 74 ) ( 74 )

Balance at June 30, 2021 943 $ 10 $ — $ 73,090 $ 927 $ ( 5,013 ) $ 3,008 $ 72,022

Balance at March 31, 2020 947 $ 10 $ — $ 62,327 $ 306 $ ( 5,666 ) $ 2,886 $ 59,863

6,637 38 6,675

Other comprehensive income (loss) 855 ( 45 ) 810

Issuances of common stock, and related tax effects

Share-based compensation

Common share repurchases — — — — —

Cash dividends paid on common shares ($ 1.25 per share)

( 1,188 ) ( 1,188 )

Redeemable noncontrolling interests fair value and other adjustments

( 43 ) ( 43 )

Distribution to nonredeemable noncontrolling interests

( 33 ) ( 33 )

Balance at June 30, 2020 950 $ 10 $ 388 $ 67,776 $ 1,161 $ ( 5,711 ) $ 2,891 $ 66,515

See Notes to the Condensed Consolidated Financial Statements

UnitedHealth Group

Condensed Consolidated Statements of Changes in Equity

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive

Income (Loss) Nonredeemable Noncontrolling Interests Total

Six months ended June 30,

(in millions) Shares Amount Net Unrealized Gains (Losses) on Investments Foreign Currency Translation (Losses) Gains

Balance at January 1, 2021 946 $ 10 $ — $ 69,295 $ 1,336 $ ( 5,150 ) $ 2,837 $ 68,328

Adjustment to adopt ASU 2016-13 ( 28 ) ( 28 )

9,128 168 9,296

Other comprehensive loss ( 283 ) ( 1,499 ) ( 1,782 )

Other comprehensive (loss) income ( 409 ) 137 ( 272 )

Issuances of common stock, and related tax effects

8 unchanged sentences

( 148 ) ( 148 )

Balance at March 31, 2020 947 $ 10 $ — $ 62,327 $ 306 $ ( 5,666 ) $ 2,886 $ 59,863

Balance at June 30, 2021 943 $ 10 $ — $ 73,090 $ 927 $ ( 5,013 ) $ 3,008 $ 72,022

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 )

10,019 97 10,116

Other comprehensive income (loss) 572 ( 1,544 ) ( 972 )

Issuances of common stock, and related tax effects

Share-based compensation

Common share repurchases ( 6 ) — ( 510 ) ( 1,181 ) ( 1,691 )

Cash dividends paid on common shares ($ 2.33 per share)

( 2,212 ) ( 2,212 )

Redeemable noncontrolling interests fair value and other adjustments

( 94 ) ( 94 )

Acquisitions and other adjustments of nonredeemable noncontrolling interests 50 50

Distribution to nonredeemable noncontrolling interests

( 76 ) ( 76 )

Balance at June 30, 2020 950 $ 10 $ 388 $ 67,776 $ 1,161 $ ( 5,711 ) $ 2,891 $ 66,515

See Notes to the Condensed Consolidated Financial Statements

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended

(in millions) 2021 2020

26 unchanged sentences

Repayments of long-term debt ( 1,900 ) —

Proceeds from short-term borrowings, net 4,057 10,797

(Repayments of) proceeds from short-term borrowings, net ( 176 ) 351

Proceeds from issuance of long-term debt 6,934 4,864

Customer funds administered 2,395 1,263

Purchases of redeemable noncontrolling interests ( 1,338 ) —

Other, net ( 662 ) ( 421 )

15 unchanged sentences

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, 2020 as filed with the SEC (2020 10-K).

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” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC (2020 10-K).

The accompanying Condensed Consolidated Financial Statements include all normal recurring adjustments necessary to present the interim financial statements fairly.

6 unchanged sentences

(in millions) Amortized

March 31, 2021

June 30, 2021

Debt securities - available-for-sale:

25 unchanged sentences

Total debt securities $ 38,717 $ 1,780 $ ( 22 ) $ 40,475

The Company held $ 2.6 billion and $ 2.3 billion of equity securities as of March 31, 2021 and December 31, 2020, 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 of equity method investments in operating businesses in the health care sector for both March 31, 2021 and December 31, 2020, respectively.

The allowance for credit losses on held-to-maturity securities at March 31, 2021 and December 31, 2020 was not material.

The amortized cost and fair value of debt securities as of March 31, 2021, by contractual maturity, were as follows:

The Company held $ 2.8 billion and $ 2.3 billion of equity securities as of June 30, 2021 and December 31, 2020, respectively.

The Company’s investments in equity securities primarily consist of employee savings plan related investments, shares of Brazilian real denominated fixed-income funds with readily determinable fair values and other venture investments.

Additionally, the Company’s investments included $ 1.3 billion of equity method investments in operating businesses in the health care sector as of June 30, 2021 and December 31, 2020.

The allowance for credit losses on held-to-maturity securities at June 30, 2021 and December 31, 2020 was not material.

The amortized cost and fair value of debt securities as of June 30, 2021, by contractual maturity, were as follows:

Available-for-Sale Held-to-Maturity

11 unchanged sentences

(in millions) Fair

March 31, 2021

June 30, 2021

Debt securities - available-for-sale:

16 unchanged sentences

Total debt securities - available-for-sale $ 2,415 $ ( 16 ) $ 549 $ ( 6 ) $ 2,964 $ ( 22 )

The Company’s unrealized losses from debt securities as of March 31, 2021 were generated from approximately 8,000 positions out of a total of 37,000 positions.

The Company’s unrealized losses from debt securities as of June 30, 2021 were generated from approximately 6,500 positions out of a total of 38,000 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.

2 unchanged sentences

The Company evaluated the expected cash flows, the underlying credit quality and credit ratings of the issuers noting no significant credit deterioration since purchase.

As of March 31, 2021, the Company did not have the intent to sell any of the available-for-sale debt securities in an unrealized loss position.

As of June 30, 2021, 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 March 31, 2021 and December 31, 2020 was not material.

The allowance for credit losses on available-for-sale debt securities at June 30, 2021 and December 31, 2020 was not material.

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 2020 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:

4 unchanged sentences

Fair and Carrying

March 31, 2021

June 30, 2021

Cash and cash equivalents $ 19,703 $ 129 $ — $ 19,832

23 unchanged sentences

Percentage of total assets at fair value 38 % 61 % 1 % 100 %

There were no transfers in or out of Level 3 financial assets or liabilities during the three months ended March 31, 2021 or 2020.

There were no transfers in or out of Level 3 financial assets or liabilities during the six months ended June 30, 2021 or 2020.

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:

4 unchanged sentences

Value Total Carrying Value

March 31, 2021

June 30, 2021

Debt securities - held-to-maturity $ 494 $ 93 $ 8 $ 595 $ 590

4 unchanged sentences

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 three months ended March 31, 2021 or 2020.

There were no significant fair value adjustments for these assets and liabilities recorded during either the six months ended June 30, 2021 or 2020.

Medical Costs Payable

The following table shows the components of the change in medical costs payable for the three months ended March 31:

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

(in millions) 2021 2020

11 unchanged sentences

Medical costs payable, end of period $ 25,131 $ 19,200

For the three months ended March 31, 2021 and March 31, 2020, prior years medical cost reserve development was primarily driven by lower than expected health system utilization.

Medical costs payable included reserves for claims incurred by insured customers but not yet reported to the Company of $ 16.3 billion and $ 14.8 billion at March 31, 2021 and December 31, 2020, respectively.

For the six months ended June 30, 2021 and June 30, 2020, prior years medical cost reserve development was primarily driven by lower than expected health system utilization.

Medical costs payable included reserves for claims incurred by insured customers but not yet reported to the Company of $ 16.9 billion and $ 14.8 billion at June 30, 2021 and December 31, 2020, respectively.

Short-Term Borrowings and Long-Term Debt

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

March 31, 2021 December 31, 2020

(in millions, except percentages) Par Value Carrying Value Fair Value Par Value Carrying Value Fair Value

Commercial paper $ 5,356 $ 5,355 $ 5,355 $ 1,296 $ 1,296 $ 1,296

4.700 % notes due February 2021

— — — 400 400 401

2.125 % notes due March 2021

— — — 750 750 753

Floating rate notes due June 2021

350 350 350 350 350 350

3.150 % notes due June 2021

400 400 402 400 400 405

3.375 % notes due November 2021

500 505 506 500 507 509

2.875 % notes due December 2021

750 759 764 750 762 768

2.875 % notes due March 2022

1,100 1,110 1,120 1,100 1,113 1,127

3.350 % notes due July 2022

1,000 999 1,038 1,000 999 1,048

2.375 % notes due October 2022

900 898 929 900 897 935

0.000 % notes due November 2022

15 14 14 15 14 14

2.750 % notes due February 2023

625 641 648 625 644 654

2.875 % notes due March 2023

750 784 786 750 789 793

3.500 % notes due June 2023

750 748 801 750 748 809

3.500 % notes due February 2024

750 747 813 750 747 821

2.375 % notes due August 2024

750 748 790 750 747 799

3.750 % notes due July 2025

2,000 1,992 2,214 2,000 1,992 2,279

3.700 % notes due December 2025

300 298 333 300 298 344

1.250 % notes due January 2026

500 496 500 500 496 515

3.100 % notes due March 2026

1,000 997 1,086 1,000 997 1,121

3.450 % notes due January 2027

750 747 831 750 747 859

3.375 % notes due April 2027

625 620 686 625 620 714

2.950 % notes due October 2027

950 941 1,024 950 940 1,067

3.850 % notes due June 2028

1,150 1,144 1,290 1,150 1,143 1,367

3.875 % notes due December 2028

850 844 958 850 844 1,019

2.875 % notes due August 2029

1,000 1,015 1,057 1,000 1,086 1,137

In May 2021, the Company issued $ 7.0 billion of senior unsecured notes consisting of the following:

(in millions, except percentages) Par Value

0.550 % notes due May 2024

1,250 1,234 1,226 1,250 1,234 1,326

4.625 % notes due July 2035

1,000 992 1,216 1,000 992 1,340

5.800 % notes due March 2036

850 839 1,147 850 839 1,271

6.500 % notes due June 2037

500 492 725 500 492 800

6.625 % notes due November 2037

650 642 959 650 641 1,044

6.875 % notes due February 2038

1,100 1,077 1,648 1,100 1,077 1,802

3.500 % notes due August 2039

1,250 1,242 1,342 1,250 1,241 1,487

1.150 % notes due May 2026

1,000 964 976 1,000 964 1,085

5.700 % notes due October 2040

300 296 412 300 296 451

5.950 % notes due February 2041

350 346 494 350 346 540

4.625 % notes due November 2041

600 589 736 600 589 820

4.375 % notes due March 2042

502 485 593 502 485 661

3.950 % notes due October 2042

625 608 712 625 608 790

4.250 % notes due March 2043

750 735 878 750 735 982

4.750 % notes due July 2045

2,000 1,974 2,496 2,000 1,974 2,814

4.200 % notes due January 2047

750 738 875 750 738 991

4.250 % notes due April 2047

725 718 847 725 717 963

3.750 % notes due October 2047

950 934 1,031 950 934 1,180

4.250 % notes due June 2048

1,350 1,330 1,592 1,350 1,330 1,803

4.450 % notes due December 2048

1,100 1,087 1,345 1,100 1,086 1,517

3.700 % notes due August 2049

1,250 1,235 1,354 1,250 1,235 1,567

2.300 % notes due May 2031

1,250 1,208 1,193 1,250 1,208 1,384

3.875 % notes due August 2059

1,250 1,228 1,391 1,250 1,228 1,618

3.050 % notes due May 2041

1,000 963 979 1,000 965 1,161

Total short-term borrowings and long-term debt $ 45,473 $ 45,108 $ 50,462 $ 42,563 $ 42,280 $ 51,301

The Company’s long-term debt obligations also included $ 1.2 billion of other financing obligations as of both March 31, 2021 and December 31, 2020, of which $ 359 million and $ 354 million were classified as current as of March 31, 2021 and December 31, 2020, respectively.

Short-Term Borrowings

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

As of March 31, 2021, the Company’s outstanding commercial paper had a weighted average annual interest rate of 0.2 %.

The Company has $ 4.4 billion five-year, $ 4.4 billion three-year and $ 3.8 billion 364-day revolving bank credit facilities with 26 banks, which mature in December 2025, December 2023 and December 2021, respectively.

These facilities provide liquidity support for the Company’s commercial paper program and are available for general corporate purposes.

As of March 31, 2021, 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 March 31, 2021, annual interest rates would have ranged from 0.8 % to 0.9 %.

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 March 31, 2021.

3.250 % notes due May 2051

For more information on the Company’s short-term borrowings, debt covenants and long-term debt see Note 8 of Notes to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements” in the 2020 10-K.

In June 2021, the Company’s Board of Directors increased the Company’s quarterly cash dividend to shareholders to an annual rate of $5.80 compared to $5.00 per share, which the Company had paid since June 2020.

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 2021 dividend payments:

Payment Date Amount per Share Total Amount Paid

(in millions)

March 23 $ 1.25 $ 1,181

June 29 $ 1.45 $ 1,367

Commitments and Contingencies

1 unchanged sentence

The Company has entered into agreements to purchase companies in the health care sector, most notably Change Healthcare (NASDAQ:

CHNG), which is expected to close in the second half of 2021, subject to regulatory approvals and other customary closing conditions.

CHNG), subject to regulatory approvals and other customary closing conditions.

The total anticipated capital required for these acquisitions, excluding the payoff of acquired indebtedness, is approximately $ 9 billion.

29 unchanged sentences

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 2020 10-K.

The following tables present reportable segment financial information:

1 unchanged sentence

Eliminations Consolidated

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Revenues - unaffiliated customers:

13 unchanged sentences

$ 3,095 $ 1,128 $ 762 $ 993 $ — $ 2,883 $ ( 410 ) $ 5,568

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

Revenues - unaffiliated customers:

13 unchanged sentences

$ 7,007 $ 841 $ 561 $ 832 $ — $ 2,234 $ ( 430 ) $ 8,811

(in millions) UnitedHealthcare OptumHealth OptumInsight OptumRx Optum Eliminations Optum Corporate and

Eliminations Consolidated

Six Months Ended June 30, 2021

Revenues - unaffiliated customers:

Premiums $ 105,416 $ 6,303 $ — $ — $ — $ 6,303 $ — $ 111,719

Products — 17 70 16,686 — 16,773 — 16,773

Services 4,790 4,797 1,891 539 — 7,227 — 12,017

Total revenues - unaffiliated customers

110,206 11,117 1,961 17,225 — 30,303 — 140,509

Total revenues - affiliated customers

— 14,173 3,742 26,796 ( 953 ) 43,758 ( 43,758 ) —

Investment and other income

382 413 106 107 — 626 — 1,008

Total revenues $ 110,588 $ 25,703 $ 5,809 $ 44,128 $ ( 953 ) $ 74,687 $ ( 43,758 ) $ 141,517

Earnings from operations $ 7,203 $ 2,090 $ 1,541 $ 1,883 $ — $ 5,514 $ — $ 12,717

Interest expense — — — — — — ( 807 ) ( 807 )

Earnings before income taxes

$ 7,203 $ 2,090 $ 1,541 $ 1,883 $ — $ 5,514 $ ( 807 ) $ 11,910

Six Months Ended June 30, 2020

Revenues - unaffiliated customers:

Premiums $ 95,632 $ 4,402 $ — $ — $ — $ 4,402 $ — $ 100,034

Products — 16 56 16,606 — 16,678 — 16,678

Services 4,173 2,773 1,655 540 — 4,968 — 9,141

Total revenues - unaffiliated customers

99,805 7,191 1,711 17,146 — 26,048 — 125,853

Total revenues - affiliated customers

— 10,875 3,385 25,741 ( 851 ) 39,150 ( 39,150 ) —

Investment and other income

370 265 30 41 — 336 — 706

Total revenues $ 100,175 $ 18,331 $ 5,126 $ 42,928 $ ( 851 ) $ 65,534 $ ( 39,150 ) $ 126,559

Earnings from operations $ 9,895 $ 1,553 $ 1,097 $ 1,692 $ — $ 4,342 $ — $ 14,237

Interest expense — — — — — — ( 867 ) ( 867 )

Earnings before income taxes

$ 9,895 $ 1,553 $ 1,097 $ 1,692 $ — $ 4,342 $ ( 867 ) $ 13,370

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements