What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-03 compared with 2022-05-04 · 162 added, 46 removed, 356 unchanged (37% 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,

2022 December 31,

39 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended March 31,

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

(in millions, except per share data) 2022 2021 2022 2021

17 unchanged sentences

Net earnings attributable to UnitedHealth Group common shareholders $ 5,070 $ 4,266 $ 10,097 $ 9,128

$ 5,027 $ 4,862

Earnings per share attributable to UnitedHealth Group common shareholders:

$ 5.34 $ 5.14

$ 5.27 $ 5.08

Basic $ 5.41 $ 4.52 $ 10.75 $ 9.66

Diluted $ 5.34 $ 4.46 $ 10.61 $ 9.55

Basic weighted-average number of common shares outstanding 937 944 939 945

5 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended March 31,

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

(in millions) 2022 2021 2022 2021

Net earnings $ 5,199 $ 4,372 $ 10,347 $ 9,350

Other comprehensive loss:

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

Other comprehensive (loss) income:

Gross unrealized (losses) gains on investment securities during the period ( 1,331 ) 251 ( 3,354 ) ( 513 )

Income tax effect 304 ( 58 ) 769 116

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

Total unrealized (losses) gains, net of tax ( 1,027 ) 193 ( 2,585 ) ( 397 )

Gross reclassification adjustment for net realized gains included in net earnings ( 1 ) ( 9 ) ( 4 ) ( 16 )

1 unchanged sentence

Total reclassification adjustment, net of tax

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

Other comprehensive loss ( 642 ) ( 1,012 )

( 1 ) ( 7 ) ( 3 ) ( 12 )

Total foreign currency translation (losses) gains ( 676 ) 554 242 137

Other comprehensive (loss) income ( 1,704 ) 740 ( 2,346 ) ( 272 )

Comprehensive income 3,495 5,112 8,001 9,078

6 unchanged sentences

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

(Loss) Income Nonredeemable Noncontrolling Interests Total

Three months ended June 30,

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

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

5,070 94 5,164

Other comprehensive loss ( 1,028 ) ( 676 ) ( 1,704 )

Issuances of common stock, and related tax effects

Share-based compensation

Common share repurchases ( 5 ) — ( 733 ) ( 1,767 ) ( 2,500 )

Cash dividends paid on common shares ($ 1.65 per share)

( 1,545 ) ( 1,545 )

Redeemable noncontrolling interests fair value and other adjustments

Acquisition and other adjustments of nonredeemable noncontrolling interests

Distribution to nonredeemable noncontrolling interests

( 83 ) ( 83 )

Balance at June 30, 2022 935 $ 10 $ — $ 80,540 $ ( 2,165 ) $ ( 5,565 ) $ 3,385 $ 76,205

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

4,266 88 4,354

Other comprehensive income 186 554 740

Issuances of common stock, and related tax effects

Share-based compensation

Common share repurchases ( 3 ) — ( 221 ) ( 1,029 ) ( 1,250 )

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

( 1,367 ) ( 1,367 )

Redeemable noncontrolling interests fair value and other adjustments

( 229 ) ( 229 )

Acquisition and other adjustments of nonredeemable noncontrolling interests 85 85

Distribution to nonredeemable noncontrolling interests

( 74 ) ( 74 )

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

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

Three months ended March 31,

Six months ended June 30,

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

8 unchanged sentences

Redeemable noncontrolling interests fair value and other adjustments

( 131 ) ( 131 )

Acquisition and other adjustments of nonredeemable noncontrolling interests

1 unchanged sentence

( 185 ) ( 185 )

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

Balance at June 30, 2022 935 $ 10 $ — $ 80,540 $ ( 2,165 ) $ ( 5,565 ) $ 3,385 $ 76,205

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

9,128 168 9,296

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

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

Issuances of common stock, and related tax effects

5 unchanged sentences

( 727 ) ( 106 ) ( 833 )

Acquisition and other adjustments of nonredeemable noncontrolling interests

Acquisitions and other adjustments of nonredeemable noncontrolling interests 151 151

Distribution to nonredeemable noncontrolling interests

( 148 ) ( 148 )

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

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

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 June 30,

(in millions) 2022 2021

26 unchanged sentences

Repayments of long-term debt ( 1,100 ) ( 1,900 )

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

Proceeds from (repayments of) short-term borrowings, net 1,340 ( 176 )

Proceeds from issuance of long-term debt 5,922 6,934

Customer funds administered 5,786 2,395

Purchases of redeemable noncontrolling interests ( 97 ) ( 1,338 )

Other, net ( 1,449 ) ( 662 )

24 unchanged sentences

(in millions) Amortized

March 31, 2022

June 30, 2022

Debt securities - available-for-sale:

25 unchanged sentences

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

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

The Company held $ 3.4 billion and $ 3.5 billion of equity securities as of June 30, 2022 and December 31, 2021, respectively.

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:

Additionally, the Company’s investments included $ 1.7 billion and $ 1.3 billion of equity method investments in operating businesses in the health care sector as of June 30, 2022 and December 31, 2021, respectively.

The allowance for credit losses on held-to-maturity securities at June 30, 2022 and December 31, 2021 was not material.

The amortized cost and fair value of debt securities as of June 30, 2022, by contractual maturity, were as follows:

Available-for-Sale Held-to-Maturity

11 unchanged sentences

(in millions) Fair

March 31, 2022

June 30, 2022

Debt securities - available-for-sale:

17 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 March 31, 2022 were generated from approximately 27,000 positions out of a total of 39,000 positions.

The Company’s unrealized losses from debt securities as of June 30, 2022 were generated from approximately 33,000 positions out of a total of 40,000 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, 2022, 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, 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 March 31, 2022 and December 31, 2021 was not material.

The allowance for credit losses on available-for-sale debt securities at June 30, 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 and Supplementary Data” in the 2021 10-K.

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 included in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2021 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, 2022

June 30, 2022

Cash and cash equivalents $ 24,546 $ 66 $ — $ 24,612

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 three months ended March 31, 2022 or 2021.

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

March 31, 2022

June 30, 2022

Debt securities - held-to-maturity $ 597 $ 104 $ — $ 701 $ 714

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, 2022 or 2021.

There were no significant fair value adjustments for these assets and liabilities recorded during either the six months ended June 30, 2022 or 2021.

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) 2022 2021

11 unchanged sentences

Medical costs payable, end of period $ 28,978 $ 25,131

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.

For the six months ended June 30, 2022, prior years’ medical cost reserve development included no individual factors that were significant.

For the six months ended June 30, 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 $ 20.3 billion and $ 17.1 billion at June 30, 2022 and December 31, 2021, respectively.

Short-Term Borrowings and Long-Term Debt

In May 2022, the Company issued $6.0 billion of senior unsecured notes consisting of the following:

(in millions, except percentages) Par Value

3.700 % notes due May 2027

4.000 % notes due May 2029

4.200 % notes due May 2032

4.750 % notes due May 2052

4.950 % notes due May 2062

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 included in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2021 10-K.

In June 2022, the Company’s Board of Directors increased the Company’s quarterly cash dividend to shareholders to an annual rate of $6.60 compared to $5.80 per share, which the Company had paid since June 2021.

Declaration and payment of future quarterly dividends is at the discretion of the Board of Directors and may be adjusted as business needs or market conditions change.

The following table provides details of the Company’s 2022 dividend payments:

Payment Date Amount per Share Total Amount Paid

(in millions)

March 22 $ 1.45 $ 1,363

June 28 1.65 1,545

Commitments and Contingencies

Pending Acquisitions

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.

Pending Business Combinations

As of June 30, 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 (NASDAQ:

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.

The total anticipated capital required for these business combinations, excluding associated disposition proceeds and the payoff of acquired indebtedness, is approximately $ 14 billion.

Legal Matters

14 unchanged sentences

Drug Enforcement Administration, the U.S.

Department of Labor, the Federal Deposit Insurance Corporation, the Defense Contract Audit Agency and other governmental authorities.

Department of Labor, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau (CFPB), 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.

4 unchanged sentences

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.

February 12, 2018, the court granted in part and denied in part the Company’s motion to dismiss.

In May 2018, the DOJ moved to dismiss the Company’s counterclaims, which were filed in March 2018, and moved for partial summary judgment.

1 unchanged sentence

The Company cannot reasonably estimate the outcome that may result from this matter given its procedural status.

Business Combinations

During the six months ended June 30, 2022, the Company completed several business combinations for total consideration of $ 8.1 billion.

Acquired assets (liabilities) at acquisition date were:

(in millions)

Cash and cash equivalents $ 457

Accounts receivable and other current assets 585

Property, equipment and other long-term assets 1,494

Intangible assets 1,810

Total identifiable assets acquired 4,346

Medical costs payable ( 171 )

Accounts payable and other current liabilities ( 590 )

Other long-term liabilities ( 605 )

Total identifiable liabilities acquired ( 1,366 )

Total net identifiable assets 2,980

Goodwill 8,309

Redeemable noncontrolling interests ( 3,101 )

Nonredeemable noncontrolling interests ( 103 )

Net assets acquired $ 8,085

The majority of goodwill is not deductible for income tax purposes.

The preliminary purchase price allocations for the various business combinations are subject to adjustment as valuation analyses, primarily related to intangible assets and contingent liabilities, are finalized.

The acquisition date fair values and weighted-average useful lives assigned to finite-lived intangible assets were:

(in millions, except years) Fair Value Weighted-Average Useful Life

Customer-related $ 915 9 years

Trademarks and technology 800 9 years

Other 80 11 years

Total acquired finite-lived intangible assets $ 1,795 9 years

The results of operations and financial condition of acquired entities have been included in the Company’s consolidated results and the results of the corresponding operating segment as of the date of acquisition.

Through June 30, 2022, acquired entities impact on revenues and net earnings was not material.

Unaudited pro forma revenues and net earnings for the six months ended June 30, 2022 and 2021 as if the business combinations had occurred on January 1, 2021 were immaterial for both periods.

Segment Financial Information

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.

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

Total assets at Optum Health and Optum Rx increased to $ 67.9 billion and $ 46.2 billion as of June 30, 2022 compared to $ 60.5 billion and $ 40.2 billion as of December 31, 2021, respectively.

The increase in total assets at Optum Health and Optum Rx was primarily due to goodwill from business combinations of $ 4.5 billion and $ 3.8 billion, respectively.

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

3 unchanged sentences

Eliminations Consolidated

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Revenues - unaffiliated customers:

13 unchanged sentences

$ 3,850 $ 1,399 $ 839 $ 1,044 $ — $ 3,282 $ ( 467 ) $ 6,665

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

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

Eliminations Consolidated

Six Months Ended June 30, 2022

Revenues - unaffiliated customers:

Premiums $ 119,305 $ 8,661 $ — $ — $ — $ 8,661 $ — $ 127,966

Products — 12 98 18,726 — 18,836 — 18,836

Services 5,057 5,298 2,008 654 — 7,960 — 13,017

Total revenues - unaffiliated customers

124,362 13,971 2,106 19,380 — 35,457 — 159,819

Total revenues - affiliated customers

— 20,053 4,319 29,329 ( 1,141 ) 52,560 ( 52,560 ) —

Investment and other income

338 241 76 7 — 324 — 662

Total revenues $ 124,700 $ 34,265 $ 6,501 $ 48,716 $ ( 1,141 ) $ 88,341 $ ( 52,560 ) $ 160,481

Earnings from operations $ 7,648 $ 2,765 $ 1,686 $ 1,983 $ — $ 6,434 $ — $ 14,082

Interest expense — — — — — — ( 900 ) ( 900 )

Earnings before income taxes

$ 7,648 $ 2,765 $ 1,686 $ 1,983 $ — $ 6,434 $ ( 900 ) $ 13,182

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

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