What changed in this filing

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Item 1. Financial Statements

2022-05-04 compared with 2021-11-03 · 59 added, 146 removed, 343 unchanged (37% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

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

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

2022 December 31,

31 unchanged sentences

939 and 941 issued and outstanding

Additional paid-in capital — —

Retained earnings 78,782 77,134

6 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in millions, except per share data) 2022 2021

17 unchanged sentences

Net earnings attributable to UnitedHealth Group common shareholders

$ 5,027 $ 4,862

Earnings per share attributable to UnitedHealth Group common shareholders:

Basic $ 4.33 $ 3.34 $ 14.00 $ 13.90

Diluted $ 4.28 $ 3.30 $ 13.82 $ 13.73

$ 5.34 $ 5.14

$ 5.27 $ 5.08

Basic weighted-average number of common shares outstanding 941 945

5 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2022 2021

Net earnings $ 5,148 $ 4,978

Other comprehensive (loss) income:

Gross unrealized (losses) gains on investment securities during the period ( 192 ) 148 ( 705 ) 919

Other comprehensive loss:

Gross unrealized losses on investment securities during the period ( 2,023 ) ( 764 )

Income tax effect 465 174

Total unrealized (losses) gains, net of tax ( 133 ) 111 ( 530 ) 705

Total unrealized losses, net of tax ( 1,558 ) ( 590 )

Gross reclassification adjustment for net realized gains included in net earnings

1 unchanged sentence

Total reclassification adjustment, net of tax

( 16 ) ( 16 ) ( 28 ) ( 38 )

Total foreign currency translation losses ( 621 ) ( 39 ) ( 484 ) ( 1,583 )

Other comprehensive (loss) income ( 770 ) 56 ( 1,042 ) ( 916 )

Total foreign currency translation gains (losses) 918 ( 417 )

Other comprehensive loss ( 642 ) ( 1,012 )

Comprehensive income 4,506 3,966

7 unchanged sentences

Income (Loss) Nonredeemable Noncontrolling Interests Total

Three months ended September 30,

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

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

4,086 86 4,172

Other comprehensive loss ( 149 ) ( 621 ) ( 770 )

Issuances of common stock, and related tax effects

Share-based compensation

Common share repurchases ( 2 ) — ( 365 ) ( 685 ) ( 1,050 )

Cash dividends paid on common shares ($ 1.45 per share)

( 1,367 ) ( 1,367 )

Redeemable noncontrolling interests fair value and other adjustments

( 85 ) ( 85 )

Acquisition and other adjustments of nonredeemable noncontrolling interests

( 26 ) ( 26 )

Distribution to nonredeemable noncontrolling interests

( 87 ) ( 87 )

Balance at September 30, 2021 942 $ 10 $ — $ 75,124 $ 778 $ ( 5,634 ) $ 2,981 $ 73,259

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

Three months ended March 31,

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

Balance at January 1, 2022 941 $ 10 $ — $ 77,134 $ 423 $ ( 5,807 ) $ 3,285 $ 75,045

5,027 88 5,115

Other comprehensive income (loss) 95 ( 39 ) 56

Other comprehensive (loss) income ( 1,560 ) 918 ( 642 )

Issuances of common stock, and related tax effects

8 unchanged sentences

( 102 ) ( 102 )

Balance at September 30, 2020 949 $ 10 $ — $ 69,715 $ 1,256 $ ( 5,750 ) $ 2,873 $ 68,104

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

Nine months ended September 30,

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

Balance at March 31, 2022 939 $ 10 $ — $ 78,782 $ ( 1,137 ) $ ( 4,889 ) $ 3,362 $ 76,128

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

11 unchanged sentences

( 74 ) ( 74 )

Balance at September 30, 2021 942 $ 10 $ — $ 75,124 $ 778 $ ( 5,634 ) $ 2,981 $ 73,259

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 )

13,191 159 13,350

Other comprehensive income (loss) 667 ( 1,583 ) ( 916 )

Issuances of common stock, and related tax effects

Share-based compensation

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 )

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

See Notes to the Condensed Consolidated Financial Statements

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2022 2021

26 unchanged sentences

Repayments of long-term debt ( 1,100 ) ( 1,150 )

Repayments of short-term borrowings, net ( 1,301 ) ( 423 )

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

Proceeds from short-term borrowings, net 3,148 4,057

Customer funds administered 5,120 2,131

Purchases of redeemable noncontrolling interests ( 1,338 ) —

Other, net ( 1,552 ) ( 1,856 )

Cash flows used for financing activities ( 3,828 ) ( 1,994 )

Cash flows from financing activities 2,304 787

Effect of exchange rate changes on cash and cash equivalents 157 ( 51 )

6 unchanged sentences

Basis of Presentation

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

Our two complementary business platforms — Optum and UnitedHealthcare — are driven by this unified mission and vision to improve health care access, affordability, experiences and outcomes for the individuals and organizations we are privileged to serve.

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

Our two distinct, yet complementary business platforms — Optum and UnitedHealthcare — are working to help build a modern, high-performing health system through improved access, affordability, outcomes and experiences for the individuals and organizations the Company is privileged to serve.

The Company has prepared the Condensed Consolidated Financial Statements according to U.S.

3 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” 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 and Supplementary Data” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC (2021 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

September 30, 2021

March 31, 2022

Debt securities - available-for-sale:

25 unchanged sentences

Total debt securities $ 40,310 $ 826 $ ( 276 ) $ 40,860

The Company held $ 2.9 billion and $ 2.3 billion of equity securities as of September 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 September 30, 2021 and December 31, 2020.

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

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

The Company held $ 3.5 billion of equity securities as of both March 31, 2022 and December 31, 2021.

The Company’s investments in equity securities primarily consist of employee savings plan related investments, other venture 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, as of both March 31, 2022 and December 31, 2021.

The allowance for credit losses on held-to-maturity securities at March 31, 2022 and December 31, 2021 was not material.

The amortized cost and fair value of debt securities as of March 31, 2022, by contractual maturity, were as follows:

Available-for-Sale Held-to-Maturity

11 unchanged sentences

(in millions) Fair

September 30, 2021

March 31, 2022

Debt securities - available-for-sale:

11 unchanged sentences

$ 1,976 $ ( 18 ) $ 249 $ ( 13 ) $ 2,225 $ ( 31 )

State and municipal obligations 1,386 ( 19 ) 31 ( 1 ) $ 1,417 $ ( 20 )

Corporate obligations 9,357 ( 130 ) 376 ( 15 ) $ 9,733 $ ( 145 )

3 unchanged sentences

Total debt securities - available-for-sale $ 17,118 $ ( 237 ) $ 886 $ ( 37 ) $ 18,004 $ ( 274 )

The Company’s unrealized losses from debt securities as of September 30, 2021 were generated from approximately 9,000 positions out of a total of 40,000 positions.

The Company’s unrealized losses from debt securities as of March 31, 2022 were generated from approximately 27,000 positions out of a total of 39,000 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.

The unrealized losses were caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities that impacted the Company’s assessment on collectability of principal and interest.

At each reporting period, the Company evaluates available-for-sale debt securities for any credit-related impairment when the fair value of the investment is less than its amortized cost.

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

As of September 30, 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 March 31, 2022, 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, 2021 and December 31, 2020 was not material.

The allowance for credit losses on available-for-sale debt securities at March 31, 2022 and December 31, 2021 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” 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

September 30, 2021

March 31, 2022

Cash and cash equivalents $ 25,382 $ 100 $ — $ 25,482

23 unchanged sentences

Percentage of total assets at fair value 42 % 57 % 1 % 100 %

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

There were no transfers in or out of Level 3 financial assets or liabilities during the three months ended March 31, 2022 or 2021.

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

September 30, 2021

March 31, 2022

Debt securities - held-to-maturity $ 525 $ 86 $ 7 $ 618 $ 626

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 nine months ended September 30, 2021 or 2020.

There were no significant fair value adjustments for these assets and liabilities recorded during either the three months ended March 31, 2022 or 2021.

Medical Costs Payable

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

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

(in millions) 2022 2021

11 unchanged sentences

Medical costs payable, end of period $ 28,676 $ 24,833

For the nine months ended September 30, 2021 and September 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 $ 17.6 billion and $ 14.8 billion at September 30, 2021 and December 31, 2020, respectively.

Short-Term Borrowings and Long-Term Debt

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

1.150 % notes due May 2026

2.300 % notes due May 2031

3.050 % notes due May 2041

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

September 21 1.45 1,367

For the three months ended March 31, 2022, prior years medical cost reserve development included no individual factors that were significant.

For the three months ended March 31, 2021, prior years’ medical cost reserve development was primarily driven by lower than expected health system utilization and the uncertainty of care patterns due to the disruption of the health care system caused by COVID-19.

Medical costs payable included reserves for claims incurred by insured customers but not yet reported to the Company of $ 19.5 billion and $ 17.1 billion at March 31, 2022 and December 31, 2021, respectively.

Commitments and Contingencies

Pending Acquisitions

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

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.

As of March 31, 2022, the Company has entered into agreements to acquire companies in the health care sector, most notably Change Healthcare (NASDAQ:

CHNG) and LHC Group, Inc.

LHCG), subject to regulatory approval and other customary closing conditions.

The total anticipated capital required for these acquisitions, excluding associated disposition proceeds and the payoff of acquired indebtedness, is approximately $ 15 billion.

Legal Matters

11 unchanged sentences

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 (DOJ), the SEC, the Internal Revenue Service, the U.S.

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 for Civil Rights, the Government Accountability Office, the Federal Trade Commission, U.S.

Congressional committees, the DOJ, the SEC, the Internal Revenue Service, the U.S.

Drug Enforcement Administration, the U.S.

5 unchanged sentences

On February 14, 2017, the 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.

The whistleblower’s complaint, which was unsealed on February 15, 2017, alleges that the Company made improper Medicare 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 May 2018, the 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.

1 unchanged sentence

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” in the 2020 10-K.

The Company’s four reportable segments are UnitedHealthcare, Optum Health, Optum Insight and Optum Rx.

For more information on the Company’s segments see Part I, Item I, “Business” and Note 13 of Notes to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2021 10-K.

On January 1, 2022, the Company realigned its operating segments to combine UnitedHealthcare Global and UnitedHealthcare Employer & Individual.

The realignment had no impact on the Company’s reportable segments.

The following tables present reportable segment financial information:

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

Eliminations Consolidated

Three Months Ended September 30, 2021

Revenues - unaffiliated customers:

Premiums $ 53,345 $ 3,622 $ — $ — $ — $ 3,622 $ — $ 56,967

Products — 8 37 8,658 — 8,703 — 8,703

Services 2,407 2,515 970 272 — 3,757 — 6,164

Total revenues - unaffiliated customers

55,752 6,145 1,007 8,930 — 16,082 — 71,834

Total revenues - affiliated customers

— 7,441 2,037 14,400 ( 503 ) 23,375 ( 23,375 ) —

Investment and other income

175 226 95 7 — 328 — 503

Total revenues $ 55,927 $ 13,812 $ 3,139 $ 23,337 $ ( 503 ) $ 39,785 $ ( 23,375 ) $ 72,337

Earnings from operations $ 2,651 $ 1,143 $ 906 $ 1,012 $ — $ 3,061 $ — $ 5,712

Interest expense — — — — — — ( 422 ) ( 422 )

Earnings before income taxes

$ 2,651 $ 1,143 $ 906 $ 1,012 $ — $ 3,061 $ ( 422 ) $ 5,290

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

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

(in millions) UnitedHealthcare Optum Health Optum Insight Optum Rx Optum Eliminations Optum Corporate and

Eliminations Consolidated

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Revenues - unaffiliated customers:

13 unchanged sentences

$ 3,798 $ 1,366 $ 847 $ 939 $ — $ 3,152 $ ( 433 ) $ 6,517

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Revenues - unaffiliated customers:

14 unchanged sentences

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