UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________________

Form 10-Q

__________________________________________________________


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

FOR THE QUARTERLY PERIOD ENDED ~~June~~September 30, 2020


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

FOR THE TRANSITION PERIOD FROM _______ TO _______

Commission File Number: 1-10864

__________________________________________________________

UnitedHealth Group Incorporated

(Exact name of registrant as specified in its charter)

__________________________________________________________

Delaware

41-1321939

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

UnitedHealth Group Center

55343

9900 Bren Road East

Minnetonka,

Minnesota

(Address of principal executive offices)

(Zip Code)

(952) 936-1300

(Registrant’s telephone number, including area code)

_________________________________________________________

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.01 par value

UNH

NYSE

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

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

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

As of ~~July~~October 30, 2020, there were ~~950,335,762~~948,820,710 shares of the registrant’s Common Stock, $.01 par value per share, issued and outstanding.

UNITEDHEALTH GROUP

Table of Contents


				Page							Page

Part I. Financial Information	Part I. Financial Information									Part I. Financial Information
Item 1.	Item 1.		Financial Statements (unaudited)			1		Item 1.			Financial Statements (unaudited)		1
		Condensed Consolidated Balance Sheets as of June 3 0 , 2020 and December 31, 2019			1				Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019			1
		Condensed Consolidated Statements of Operations for the Thre e and Six M onths Ended June 3 0 , 2020 and 2019			2				Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2020 and 2019			2
		Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 3 0 , 2020 and 2019			3				Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2020 and 2019			3
		Condensed Consolidated Statements of Changes in Equity for the Three a nd Six Months Ended June 3 0 , 2020 and 2019			4				Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended Se ptember 30, 2020 and 2019			4
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2020 and 2019			6				Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019			6
		Notes to the Condensed Consolidated Financial Statements			7				Notes to the Condensed Consolidated Financial Statements			7
		1.	Basis of Presentation	7			1.		Basis of Presentation		7
		2.	Investments	8			2.		Investments		8
		3.	Fair Value	10			3.		Fair Value		10
		4.	Medical Costs Payable	11			4.		Medical Costs Payable		11
		5.	Short-Term Borrowings and Long-Term Debt	12			5.		Short-Term Borrowings and Long-Term Debt		12
		6.	Dividends	13			6.		Dividends		13
		7.	Commitments and Contingencies	13			7.		Commitments and Contingencies		13
		8.	Segment Financial Information	14			8.		Segment Financial Information		14
Item 2.	Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			16		Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3.	Item 3.		Quantitative and Qualitative Disclosures About Market Risk			25		Item 3.			Quantitative and Qualitative Disclosures About Market Risk		25
Item 4.	Item 4.		Controls and Procedures			25		Item 4.			Controls and Procedures		25
Part II. Other Information	Part II. Other Information									Part II. Other Information
Item 1.	Item 1.		Legal Proceedings			25		Item 1.			Legal Proceedings		25
Item 1A.	Item 1A.		Risk Factors			26		Item 1A.			Risk Factors		26
Item 2.	Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			26		Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds		26
Item 6.	Item 6.		Exhibits			27		Item 6.			Exhibits		27
Signatures	Signatures							28		Signatures				28

PART I

ITEM 1. FINANCIAL STATEMENTS

UnitedHealth Group

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions, except per share data)	(in millions, except per share data)	June 30, 2020		December 31, 2019		(in millions, except per share data)	September 30, 2020		December 31, 2019
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	22,327	$	10,985	Cash and cash equivalents	$	17,550	$	10,985
Short-term investments	Short-term investments	3,266		3,260		Short-term investments	3,259		3,260
Accounts receivable, net	Accounts receivable, net	12,546		11,822		Accounts receivable, net	12,171		11,822
Other current receivables, net	Other current receivables, net	11,430		9,640		Other current receivables, net	13,231		9,640
Assets under management	Assets under management	3,417		3,076		Assets under management	3,788		3,076
Prepaid expenses and other current assets	Prepaid expenses and other current assets	5,932		3,851		Prepaid expenses and other current assets	4,822		3,851
Total current assets	Total current assets	58,918		42,634		Total current assets	54,821		42,634
Long-term investments	Long-term investments	36,778		37,209		Long-term investments	39,184		37,209
Property, equipment and capitalized software, net	Property, equipment and capitalized software, net	8,126		8,704		Property, equipment and capitalized software, net	8,151		8,704
Goodwill	Goodwill	67,872		65,659		Goodwill	68,088		65,659
Other intangible assets, net	Other intangible assets, net	10,552		10,349		Other intangible assets, net	10,373		10,349
Other assets	Other assets	10,237		9,334		Other assets	10,352		9,334
Total assets	Total assets	$	192,483	$	173,889	Total assets	$	190,969	$	173,889
Liabilities, redeemable noncontrolling interests and equity	Liabilities, redeemable noncontrolling interests and equity					Liabilities, redeemable noncontrolling interests and equity
Current liabilities:	Current liabilities:					Current liabilities:
Medical costs payable	Medical costs payable	$	19,200	$	21,690	Medical costs payable	$	21,167	$	21,690
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	25,423		19,005		Accounts payable and accrued liabilities	21,173		19,005
Short-term borrowings and current maturities of long-term debt	Short-term borrowings and current maturities of long-term debt	6,156		3,870		Short-term borrowings and current maturities of long-term debt	3,899		3,870
Unearned revenues	Unearned revenues	2,299		2,622		Unearned revenues	2,391		2,622
Other current liabilities	Other current liabilities	16,805		14,595		Other current liabilities	17,967		14,595
Total current liabilities	Total current liabilities	69,883		61,782		Total current liabilities	66,597		61,782
Long-term debt, less current maturities	Long-term debt, less current maturities	39,901		36,808		Long-term debt, less current maturities	39,895		36,808
Deferred income taxes	Deferred income taxes	3,286		2,993		Deferred income taxes	3,340		2,993
Other liabilities	Other liabilities	11,056		10,144		Other liabilities	11,186		10,144
Total liabilities	Total liabilities	124,126		111,727		Total liabilities	121,018		111,727
Commitments and contingencies (Note 7)	Commitments and contingencies (Note 7)					Commitments and contingencies (Note 7)
Redeemable noncontrolling interests	Redeemable noncontrolling interests	1,842		1,726		Redeemable noncontrolling interests	1,847		1,726
Equity:	Equity:					Equity:
Preferred stock, $0.001 par value - 10 shares authorized; no shares issued or outstanding		—		—
Common stock, $0.01 par value - 3,000 shares authorized; 950 and 948 issued and outstanding		10		9
Preferred stock, $0.001 par value - 10 shares authorized; 0 shares issued or outstanding						Preferred stock, $0.001 par value - 10 shares authorized; 0 shares issued or outstanding	0		0
Common stock, $0.01 par value - 3,000 shares authorized; 949 and 948 issued and outstanding						Common stock, $0.01 par value - 3,000 shares authorized; 949 and 948 issued and outstanding	10		9
Additional paid-in capital	Additional paid-in capital	388		7		Additional paid-in capital	0		7
Retained earnings	Retained earnings	67,776		61,178		Retained earnings	69,715		61,178
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(4,550)		(3,578)		Accumulated other comprehensive loss	(4,494)		(3,578)
Nonredeemable noncontrolling interests	Nonredeemable noncontrolling interests	2,891		2,820		Nonredeemable noncontrolling interests	2,873		2,820
Total equity	Total equity	66,515		60,436		Total equity	68,104		60,436
Total liabilities, redeemable noncontrolling interests and equity	Total liabilities, redeemable noncontrolling interests and equity	$	192,483	$	173,889	Total liabilities, redeemable noncontrolling interests and equity	$	190,969	$	173,889

See Notes to the Condensed Consolidated Financial Statements

Table of Contents

UnitedHealth Group

Condensed Consolidated Statements of Operations

(Unaudited)


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share data)	(in millions, except per share data)	2020		2019		2020		2019		(in millions, except per share data)	2020		2019		2020		2019
Revenues:	Revenues:									Revenues:
Premiums	Premiums	$	49,394	$	47,164	$	100,034	$	94,677	Premiums	$	50,863	$	47,397	$	150,897	$	142,074
Products	Products	8,247		8,353		16,678		16,425		Products	8,777		7,546		25,455		23,971
Services	Services	4,156		4,496		9,141		8,814		Services	5,124		4,942		14,265		13,756
Investment and other income	Investment and other income	341		582		706		987		Investment and other income	351		466		1,057		1,453
Total revenues	Total revenues	62,138		60,595		126,559		120,903		Total revenues	65,115		60,351		191,674		181,254
Operating costs:	Operating costs:									Operating costs:
Medical costs	Medical costs	34,678		39,184		75,678		78,123		Medical costs	41,636		39,041		117,314		117,164
Operating costs	Operating costs	10,001		8,415		20,016		16,932		Operating costs	10,174		8,960		30,190		25,892
Cost of products sold	Cost of products sold	7,501		7,598		15,188		14,979		Cost of products sold	7,935		6,627		23,123		21,606
Depreciation and amortization	Depreciation and amortization	717		654		1,440		1,293		Depreciation and amortization	719		709		2,159		2,002
Total operating costs	Total operating costs	52,897		55,851		112,322		111,327		Total operating costs	60,464		55,337		172,786		166,664
Earnings from operations	Earnings from operations	9,241		4,744		14,237		9,576		Earnings from operations	4,651		5,014		18,888		14,590
Interest expense	Interest expense	(430)		(418)		(867)		(818)		Interest expense	(395)		(449)		(1,262)		(1,267)
Earnings before income taxes	Earnings before income taxes	8,811		4,326		13,370		8,758		Earnings before income taxes	4,256		4,565		17,626		13,323
Provision for income taxes	Provision for income taxes	(2,115)		(941)		(3,209)		(1,816)		Provision for income taxes	(1,000)		(936)		(4,209)		(2,752)
Net earnings	Net earnings	6,696		3,385		10,161		6,942		Net earnings	3,256		3,629		13,417		10,571
Earnings attributable to noncontrolling interests	Earnings attributable to noncontrolling interests	(59)		(92)		(142)		(182)		Earnings attributable to noncontrolling interests	(84)		(91)		(226)		(273)
Net earnings attributable to UnitedHealth Group common shareholders	Net earnings attributable to UnitedHealth Group common shareholders	6,637		3,293		$	10,019	$	6,760	Net earnings attributable to UnitedHealth Group common shareholders	$	3,172	$	3,538	$	13,191	$	10,298
Earnings per share attributable to UnitedHealth Group common shareholders:	Earnings per share attributable to UnitedHealth Group common shareholders:									Earnings per share attributable to UnitedHealth Group common shareholders:
Basic	Basic	$	6.99	$	3.47	$	10.56	$	7.09	Basic	$	3.34	$	3.73	$	13.90	$	10.82
Diluted	Diluted	$	6.91	$	3.42	$	10.43	$	6.97	Diluted	$	3.30	$	3.67	$	13.73	$	10.65
Basic weighted-average number of common shares outstanding	Basic weighted-average number of common shares outstanding	949		950		949		954		Basic weighted-average number of common shares outstanding	950		949		949		952
Dilutive effect of common share equivalents	Dilutive effect of common share equivalents	11		14		12		16		Dilutive effect of common share equivalents	12		14		12		15
Diluted weighted-average number of common shares outstanding	Diluted weighted-average number of common shares outstanding	960		964		961		970		Diluted weighted-average number of common shares outstanding	962		963		961		967
Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents	Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents	11		11		11		9		Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents	6		12		9		10

See Notes to the Condensed Consolidated Financial Statements

Table of Contents

UnitedHealth Group

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	(in millions)	2020		2019		2020		2019		(in millions)	2020		2019		2020		2019
Net earnings	Net earnings	$	6,696	$	3,385	$	10,161	$	6,942	Net earnings	$	3,256	$	3,629	$	13,417	$	10,571
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Gross unrealized gains on investment securities during the period	Gross unrealized gains on investment securities during the period	1,120		493		771		1,013		Gross unrealized gains on investment securities during the period	148		230		919		1,243
Income tax effect	Income tax effect	(257)		(113)		(177)		(232)		Income tax effect	(37)		(53)		(214)		(285)
Total unrealized gains, net of tax	Total unrealized gains, net of tax	863		380		594		781		Total unrealized gains, net of tax	111		177		705		958
Gross reclassification adjustment for net realized gains included in net earnings	Gross reclassification adjustment for net realized gains included in net earnings	(11)		(5)		(29)		(1)		Gross reclassification adjustment for net realized gains included in net earnings	(21)		(69)		(50)		(70)
Income tax effect	Income tax effect	3		1		7		—		Income tax effect	5		16		12		16
Total reclassification adjustment, net of tax	Total reclassification adjustment, net of tax	(8)		(4)		(22)		(1)		Total reclassification adjustment, net of tax	(16)		(53)		(38)		(54)
Total foreign currency translation (losses) gains		(45)		109		(1,544)		107
Total foreign currency translation losses										Total foreign currency translation losses	(39)		(560)		(1,583)		(453)
Other comprehensive income (loss)	Other comprehensive income (loss)	810		485		(972)		887		Other comprehensive income (loss)	56		(436)		(916)		451
Comprehensive income	Comprehensive income	7,506		3,870		9,189		7,829		Comprehensive income	3,312		3,193		12,501		11,022
Comprehensive income attributable to noncontrolling interests	Comprehensive income attributable to noncontrolling interests	(59)		(92)		(142)		(182)		Comprehensive income attributable to noncontrolling interests	(84)		(91)		(226)		(273)
Comprehensive income attributable to UnitedHealth Group common shareholders	Comprehensive income attributable to UnitedHealth Group common shareholders	$	7,447	$	3,778	$	9,047	$	7,647	Comprehensive income attributable to UnitedHealth Group common shareholders	$	3,228	$	3,102	$	12,275	$	10,749

See Notes to the Condensed Consolidated Financial Statements

Table of Contents

UnitedHealth Group

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


		Common Stock					Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)							Nonredeemable Noncontrolling Interests		Total Equity			Common Stock							Additional Paid-In Capital				Retained Earnings		Accumulated Other Comprehensive Income (Loss)					Nonredeemable Noncontrolling Interests	Total Equity
Three months ended June 30,		Shares	Amount								Net Unrealized Gains on Investments		Foreign Currency Translation (Losses) Gains
Balance at March 31, 2020		947	$	10	$	—	$	62,327	$	306	$	(5,666)	$	2,886	$	59,863
Three months ended September 30, (in millions)																	Three months ended September 30, (in millions)		Shares		Amount		Additional Paid-In Capital			Retained Earnings						Net Unrealized Gains on Investments				Foreign Currency Translation Losses		Nonredeemable Noncontrolling Interests			Total Equity
Balance at June 30, 2020																	Balance at June 30, 2020		950		$	10						$	1,161			$	(5,711)
Net earnings	Net earnings						6,637						38		6,675		Net earnings									3,172										62		3,234
Other comprehensive income (loss)	Other comprehensive income (loss)								855		(45)				810		Other comprehensive income (loss)													95				(39)				56
Issuances of common stock, and related tax effects	Issuances of common stock, and related tax effects	3	—		287										287		Issuances of common stock, and related tax effects		2		0				321															321
Share-based compensation	Share-based compensation				144										144		Share-based compensation						131															131
Common share repurchases	Common share repurchases	—	—		—		—								—		Common share repurchases		(3)		0		(805)			(45)												(850)
Cash dividends paid on common shares ($1.25 per share)	Cash dividends paid on common shares ($1.25 per share)						(1,188)								(1,188)		Cash dividends paid on common shares ($1.25 per share)									(1,188)												(1,188)
Redeemable noncontrolling interests fair value and other adjustments	Redeemable noncontrolling interests fair value and other adjustments				(43)										(43)		Redeemable noncontrolling interests fair value and other adjustments						(35)															(35)
Acquisition and other adjustments of nonredeemable noncontrolling interests																	Acquisition and other adjustments of nonredeemable noncontrolling interests																			(8)		(8)
Distribution to nonredeemable noncontrolling interests	Distribution to nonredeemable noncontrolling interests												(33)		(33)		Distribution to nonredeemable noncontrolling interests																			(72)		(72)
Balance at June 30, 2020		950	$	10	$	388	$	67,776	$	1,161	$	(5,711)	$	2,891	$	66,515
Balance at September 30, 2020																	Balance at September 30, 2020		949		$	10	$	0		$	69,715			$	1,256			$	(5,750)	$	2,873	$	68,104

Balance at March 31, 2019		953	$	10	$	—	$	55,472	$	140	$	(3,898)	$	2,727	$	54,451
Balance at June 30, 2019																	Balance at June 30, 2019		948		$	9	$	0		$	56,367			$	516			$	(3,789)	$	2,751	$	55,854
Net earnings	Net earnings						3,293						54		3,347		Net earnings									3,538										82		3,620
Other comprehensive income									376		109				485
Other comprehensive income (loss)																	Other comprehensive income (loss)													124				(560)				(436)
Issuances of common stock, and related tax effects	Issuances of common stock, and related tax effects	1	—		105										105		Issuances of common stock, and related tax effects		2		0		277															277
Share-based compensation	Share-based compensation				152										152		Share-based compensation						130															130
Common share repurchases	Common share repurchases	(6)	(1)		(124)		(1,374)								(1,499)		Common share repurchases		(3)		0		(415)			(185)												(600)
Cash dividends paid on common shares ($1.08 per share)	Cash dividends paid on common shares ($1.08 per share)						(1,024)								(1,024)		Cash dividends paid on common shares ($1.08 per share)									(1,024)												(1,024)
Redeemable noncontrolling interests fair value and other adjustments	Redeemable noncontrolling interests fair value and other adjustments				(133)										(133)		Redeemable noncontrolling interests fair value and other adjustments						8															8
Acquisition and other adjustments of nonredeemable noncontrolling interests	Acquisition and other adjustments of nonredeemable noncontrolling interests												32		32		Acquisition and other adjustments of nonredeemable noncontrolling interests																			(7)		(7)
Distribution to nonredeemable noncontrolling interests	Distribution to nonredeemable noncontrolling interests												(62)		(62)		Distribution to nonredeemable noncontrolling interests																			(66)		(66)
Balance at June 30, 2019		948	$	9	$	—	$	56,367	$	516	$	(3,789)	$	2,751	$	55,854
Balance at September 30, 2019																	Balance at September 30, 2019		947		$	9	$	0		$	58,696			$	640			$	(4,349)	$	2,760	$	57,756

See Notes to the Condensed Consolidated Financial Statements

Table of Contents

UnitedHealth Group

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


		Common Stock					Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)							Nonredeemable Noncontrolling Interests		Total Equity			Common Stock							Additional Paid-In Capital				Retained Earnings		Accumulated Other Comprehensive Income (Loss)					Nonredeemable Noncontrolling Interests	Total Equity
Six months ended June 30,		Shares	Amount								Net Unrealized Gains (Losses) on Investments		Foreign Currency Translation (Losses) Gains
Nine months ended September 30, (in millions)																	Nine months ended September 30, (in millions)		Shares		Amount		Additional Paid-In Capital			Retained Earnings						Net Unrealized Gains (Losses) on Investments				Foreign Currency Translation Losses		Nonredeemable Noncontrolling Interests			Total Equity
Balance at January 1, 2020	Balance at January 1, 2020	948	$	9	$	7	$	61,178	$	589	$	(4,167)	$	2,820	$	60,436	Balance at January 1, 2020		948		$	9						$	589			$	(4,167)
Adjustment to adopt ASU 2016-13	Adjustment to adopt ASU 2016-13						(28)								(28)		Adjustment to adopt ASU 2016-13									(28)												(28)
Net earnings	Net earnings						10,019						97		10,116		Net earnings									13,191										159		13,350
Other comprehensive income (loss)	Other comprehensive income (loss)								572		(1,544)				(972)		Other comprehensive income (loss)													667				(1,583)				(916)
Issuances of common stock, and related tax effects	Issuances of common stock, and related tax effects	8	1		607										608		Issuances of common stock, and related tax effects		10		1				928															929
Share-based compensation	Share-based compensation				378										378		Share-based compensation						509															509
Common share repurchases	Common share repurchases	(6)	—		(510)		(1,181)								(1,691)		Common share repurchases		(9)		0		(1,315)			(1,226)												(2,541)
Cash dividends paid on common shares ($2.33 per share)							(2,212)								(2,212)
Cash dividends paid on common shares ($3.58 per share)																	Cash dividends paid on common shares ($3.58 per share)									(3,400)												(3,400)
Redeemable noncontrolling interests fair value and other adjustments	Redeemable noncontrolling interests fair value and other adjustments				(94)										(94)		Redeemable noncontrolling interests fair value and other adjustments						(129)															(129)
Acquisition and other adjustments of nonredeemable noncontrolling interests	Acquisition and other adjustments of nonredeemable noncontrolling interests												50		50		Acquisition and other adjustments of nonredeemable noncontrolling interests																			42		42
Distribution to nonredeemable noncontrolling interests	Distribution to nonredeemable noncontrolling interests												(76)		(76)		Distribution to nonredeemable noncontrolling interests																			(148)		(148)
Balance at June 30, 2020		950	$	10	$	388	$	67,776	$	1,161	$	(5,711)	$	2,891	$	66,515
Balance at September 30, 2020																	Balance at September 30, 2020		949		$	10	$	0		$	69,715			$	1,256			$	(5,750)	$	2,873	$	68,104

Balance at January 1, 2019	Balance at January 1, 2019	960	$	10	$	—	$	55,846	$	(264)	$	(3,896)	$	2,623	$	54,319	Balance at January 1, 2019		960		$	10	$	0		$	55,846			$	(264)			$	(3,896)	$	2,623	$	54,319
Adjustment to adopt ASU 2016-02	Adjustment to adopt ASU 2016-02						(13)						(5)		(18)		Adjustment to adopt ASU 2016-02									(13)										(5)		(18)
Net earnings	Net earnings						6,760						114		6,874		Net earnings									10,298										196		10,494
Other comprehensive income									780		107				887
Other comprehensive income (loss)																	Other comprehensive income (loss)													904				(453)				451
Issuances of common stock, and related tax effects	Issuances of common stock, and related tax effects	6	—		161										161		Issuances of common stock, and related tax effects		8		0		438															438
Share-based compensation	Share-based compensation				391										391		Share-based compensation						521															521
Common share repurchases	Common share repurchases	(18)	(1)		(158)		(4,342)								(4,501)		Common share repurchases		(21)		(1)		(573)			(4,527)												(5,101)
Cash dividends paid on common shares ($1.98 per share)							(1,884)								(1,884)
Cash dividends paid on common shares ($3.06 per share)																	Cash dividends paid on common shares ($3.06 per share)									(2,908)												(2,908)
Redeemable noncontrolling interests fair value and other adjustments	Redeemable noncontrolling interests fair value and other adjustments				(285)										(285)		Redeemable noncontrolling interests fair value and other adjustments						(277)															(277)
Acquisition and other adjustments of nonredeemable noncontrolling interests	Acquisition and other adjustments of nonredeemable noncontrolling interests				(109)								164		55		Acquisition and other adjustments of nonredeemable noncontrolling interests						(109)													157		48
Distribution to nonredeemable noncontrolling interests	Distribution to nonredeemable noncontrolling interests												(145)		(145)		Distribution to nonredeemable noncontrolling interests																			(211)		(211)
Balance at June 30, 2019		948	$	9	$	—	$	56,367	$	516	$	(3,789)	$	2,751	$	55,854
Balance at September 30, 2019																	Balance at September 30, 2019		947		$	9	$	0		$	58,696			$	640			$	(4,349)	$	2,760	$	57,756

See Notes to the Condensed Consolidated Financial Statements

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UnitedHealth Group

Condensed Consolidated Statements of Cash Flows

(Unaudited)


		Six Months Ended June 30,							Nine Months Ended September 30,
(in millions)	(in millions)	2020		2019		(in millions)	2020		2019
Operating activities	Operating activities					Operating activities
Net earnings	Net earnings	$	10,161	$	6,942	Net earnings	$	13,417	$	10,571
Noncash items:	Noncash items:					Noncash items:
Depreciation and amortization	Depreciation and amortization	1,440		1,293		Depreciation and amortization	2,159		2,002
Deferred income taxes	Deferred income taxes	114		195		Deferred income taxes	119		177
Share-based compensation	Share-based compensation	388		398		Share-based compensation	527		525
Other, net	Other, net	124		(127)		Other, net	48		(181)
Net change in other operating items, net of effects from acquisitions and changes in AARP balances:	Net change in other operating items, net of effects from acquisitions and changes in AARP balances:					Net change in other operating items, net of effects from acquisitions and changes in AARP balances:
Accounts receivable	Accounts receivable	(439)		2,196		Accounts receivable	(194)		957
Other assets	Other assets	(3,784)		(1,774)		Other assets	(2,697)		(2,181)
Medical costs payable	Medical costs payable	(2,353)		447		Medical costs payable	(615)		223
Accounts payable and other liabilities	Accounts payable and other liabilities	7,591		(33)		Accounts payable and other liabilities	3,441		105
Unearned revenues	Unearned revenues	(296)		(429)		Unearned revenues	(132)		60
Cash flows from operating activities	Cash flows from operating activities	12,946		9,108		Cash flows from operating activities	16,073		12,258
Investing activities	Investing activities					Investing activities
Purchases of investments	Purchases of investments	(6,412)		(7,649)		Purchases of investments	(11,570)		(13,386)
Sales of investments	Sales of investments	3,548		2,680		Sales of investments	4,887		6,198
Maturities of investments	Maturities of investments	3,437		3,315		Maturities of investments	5,297		5,160
Cash paid for acquisitions, net of cash assumed	Cash paid for acquisitions, net of cash assumed	(3,952)		(4,751)		Cash paid for acquisitions, net of cash assumed	(4,326)		(8,200)
Purchases of property, equipment and capitalized software	Purchases of property, equipment and capitalized software	(920)		(977)		Purchases of property, equipment and capitalized software	(1,477)		(1,421)
Other, net	Other, net	(186)		504		Other, net	(165)		338
Cash flows used for investing activities	Cash flows used for investing activities	(4,485)		(6,878)		Cash flows used for investing activities	(7,354)		(11,311)
Financing activities	Financing activities					Financing activities
Common share repurchases	Common share repurchases	(1,691)		(4,501)		Common share repurchases	(2,541)		(5,101)
Cash dividends paid	Cash dividends paid	(2,212)		(1,884)		Cash dividends paid	(3,400)		(2,908)
Proceeds from common stock issuances	Proceeds from common stock issuances	870		448		Proceeds from common stock issuances	1,206		740
Repayments of long-term debt	Repayments of long-term debt	—		(1,250)		Repayments of long-term debt	(1,500)		(1,250)
Proceeds from short-term borrowings, net		351		6,924
(Repayments of) proceeds from short-term borrowings, net						(Repayments of) proceeds from short-term borrowings, net	(423)		3,998
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	4,864		—		Proceeds from issuance of long-term debt	4,864		5,444
Customer funds administered	Customer funds administered	1,263		1,435		Customer funds administered	249		420
Other, net	Other, net	(421)		(529)		Other, net	(449)		(756)
Cash flows from financing activities		3,024		643
Cash flows (used for) from financing activities						Cash flows (used for) from financing activities	(1,994)		587
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(143)		6		Effect of exchange rate changes on cash and cash equivalents	(160)		(37)
Increase in cash and cash equivalents	Increase in cash and cash equivalents	11,342		2,879		Increase in cash and cash equivalents	6,565		1,497
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	10,985		10,866		Cash and cash equivalents, beginning of period	10,985		10,866
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	22,327	$	13,745	Cash and cash equivalents, end of period	$	17,550	$	12,363

See Notes to the Condensed Consolidated Financial Statements

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UnitedHealth Group

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

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

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

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

Use of Estimates

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

Revenue from Products

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

Recently Adopted Accounting Standards

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

Under the current expected credit loss impairment model, the Company evaluates an available-for-sale debt security for credit-related impairment by considering the present value of expected cash flows relative to a security’s amortized cost, the extent to which fair value is less than amortized cost, the financial condition and near-term prospects of the issuer and specific events or circumstances that may influence the operations of the issuer. Credit-related impairments are recorded as an allowance, with an offset to investment and other income. Non-credit related impairments are recorded through other comprehensive income. If the Company intends to sell an impaired security, or will likely be required to sell a security before recovery of the entire amortized cost, the entire impairment is included in net earnings.

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

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2. Investments

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


(in millions)	(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2020
September 30, 2020										September 30, 2020
Debt securities - available-for-sale:	Debt securities - available-for-sale:									Debt securities - available-for-sale:
U.S. government and agency obligations	U.S. government and agency obligations	$	3,402	$	178	$	—	$	3,580	U.S. government and agency obligations	$	3,374	$	160	$	0	$	3,534
State and municipal obligations	State and municipal obligations	5,872		330		(3)		6,199		State and municipal obligations	6,311		377		(4)		6,684
Corporate obligations	Corporate obligations	17,324		728		(68)		17,984		Corporate obligations	18,461		778		(35)		19,204
U.S. agency mortgage-backed securities	U.S. agency mortgage-backed securities	6,005		274		—		6,279		U.S. agency mortgage-backed securities	6,523		270		(3)		6,790
Non-U.S. agency mortgage-backed securities	Non-U.S. agency mortgage-backed securities	1,875		83		(14)		1,944		Non-U.S. agency mortgage-backed securities	2,033		98		(6)		2,125
Total debt securities - available-for-sale	Total debt securities - available-for-sale	34,478		1,593		(85)		35,986		Total debt securities - available-for-sale	36,702		1,683		(48)		38,337
Debt securities - held-to-maturity:	Debt securities - held-to-maturity:									Debt securities - held-to-maturity:
U.S. government and agency obligations	U.S. government and agency obligations	421		8		—		429		U.S. government and agency obligations	422		7		0		429
State and municipal obligations	State and municipal obligations	31		2		—		33		State and municipal obligations	31		2		0		33
Corporate obligations	Corporate obligations	285		—		—		285		Corporate obligations	245		1		0		246
Total debt securities - held-to-maturity	Total debt securities - held-to-maturity	737		10		—		747		Total debt securities - held-to-maturity	698		10		0		708
Total debt securities	Total debt securities	$	35,215	$	1,603	$	(85)	$	36,733	Total debt securities	$	37,400	$	1,693	$	(48)	$	39,045
December 31, 2019	December 31, 2019									December 31, 2019
Debt securities - available-for-sale:	Debt securities - available-for-sale:									Debt securities - available-for-sale:
U.S. government and agency obligations	U.S. government and agency obligations	$	3,502	$	55	$	(4)	$	3,553	U.S. government and agency obligations	$	3,502	$	55	$	(4)	$	3,553
State and municipal obligations	State and municipal obligations	5,680		251		(5)		5,926		State and municipal obligations	5,680		251		(5)		5,926
Corporate obligations	Corporate obligations	17,910		343		(11)		18,242		Corporate obligations	17,910		343		(11)		18,242
U.S. agency mortgage-backed securities	U.S. agency mortgage-backed securities	6,425		109		(6)		6,528		U.S. agency mortgage-backed securities	6,425		109		(6)		6,528
Non-U.S. agency mortgage-backed securities	Non-U.S. agency mortgage-backed securities	1,811		37		(3)		1,845		Non-U.S. agency mortgage-backed securities	1,811		37		(3)		1,845
Total debt securities - available-for-sale	Total debt securities - available-for-sale	35,328		795		(29)		36,094		Total debt securities - available-for-sale	35,328		795		(29)		36,094
Debt securities - held-to-maturity:	Debt securities - held-to-maturity:									Debt securities - held-to-maturity:
U.S. government and agency obligations	U.S. government and agency obligations	402		2		—		404		U.S. government and agency obligations	402		2		0		404
State and municipal obligations	State and municipal obligations	32		2		—		34		State and municipal obligations	32		2		0		34
Corporate obligations	Corporate obligations	538		—		(1)		537		Corporate obligations	538		0		(1)		537
Total debt securities - held-to-maturity	Total debt securities - held-to-maturity	972		4		(1)		975		Total debt securities - held-to-maturity	972		4		(1)		975
Total debt securities	Total debt securities	$	36,300	$	799	$	(30)	$	37,069	Total debt securities	$	36,300	$	799	$	(30)	$	37,069

The Company held $2.1 billion and $2.0 billion of equity securities as of ~~June~~September 30, 2020 and December 31, ~~2019.~~2019, respectively. The Company’s investments in equity securities primarily consist of employee savings plan related investments and shares of Brazilian real denominated fixed-income funds with readily determinable fair values. Additionally, the Company’s investments included $1.3 billion and $1.4 billion of equity method investments in operating businesses in the health care sector as of ~~June~~September 30, 2020 and December 31, ~~2019.~~2019, respectively. The allowance for credit losses on held-to-maturity securities at ~~June~~September 30, 2020 was not material.

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The amortized cost and fair value of debt securities as of ~~June~~September 30, 2020, by contractual maturity, were as follows:


		Available-for-Sale						Held-to-Maturity							Available-for-Sale				Held-to-Maturity
(in millions)	(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	Due in one year or less	$	3,414	$	3,433	$	429	$	429	Due in one year or less	$	3,388	$	3,407	$	400	$	401
Due after one year through five years	Due after one year through five years	10,974		11,365		255		261		Due after one year through five years	11,253		11,678		246		252
Due after five years through ten years	Due after five years through ten years	8,481		9,083		31		33		Due after five years through ten years	9,179		9,826		30		31
Due after ten years	Due after ten years	3,729		3,882		22		24		Due after ten years	4,326		4,511		22		24
U.S. agency mortgage-backed securities	U.S. agency mortgage-backed securities	6,005		6,279		—		—		U.S. agency mortgage-backed securities	6,523		6,790		—		—
Non-U.S. agency mortgage-backed securities	Non-U.S. agency mortgage-backed securities	1,875		1,944		—		—		Non-U.S. agency mortgage-backed securities	2,033		2,125		—		—
Total debt securities	Total debt securities	$	34,478	$	35,986	$	737	$	747	Total debt securities	$	36,702	$	38,337	$	698	$	708

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


		Less Than 12 Months						12 Months or Greater							Total							Less Than 12 Months				12 Months or Greater		Total
(in millions)	(in millions)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		(in millions)		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
June 30, 2020
September 30, 2020														September 30, 2020
Debt securities - available-for-sale:	Debt securities - available-for-sale:													Debt securities - available-for-sale:

State and municipal obligations	State and municipal obligations	$	284	$	(3)	$	—	$	—	$	284	$	(3)	State and municipal obligations		$	366	$	(4)	$	0	$	0	$	366	$	(4)
Corporate obligations	Corporate obligations	1,908		(58)		375		(10)		2,283		(68)		Corporate obligations		2,314		(30)		400		(5)		2,714		(35)
U.S. agency mortgage-backed securities														U.S. agency mortgage-backed securities		687		(3)		0		0		687		(3)
Non-U.S. agency mortgage-backed securities	Non-U.S. agency mortgage-backed securities	249		(12)		42		(2)		291		(14)		Non-U.S. agency mortgage-backed securities		278		(3)		55		(3)		333		(6)
Total debt securities - available-for-sale	Total debt securities - available-for-sale	$	2,441	$	(73)	$	417	$	(12)	$	2,858	$	(85)	Total debt securities - available-for-sale		$	3,645	$	(40)	$	455	$	(8)	$	4,100	$	(48)
December 31, 2019	December 31, 2019													December 31, 2019
Debt securities - available-for-sale:	Debt securities - available-for-sale:													Debt securities - available-for-sale:
U.S. government and agency obligations	U.S. government and agency obligations	$	616	$	(4)	$	—	$	—	$	616	$	(4)	U.S. government and agency obligations		$	616	$	(4)	$	0	$	0	$	616	$	(4)
State and municipal obligations	State and municipal obligations	440		(5)		—		—		440		(5)		State and municipal obligations		440		(5)		0		0		440		(5)
Corporate obligations	Corporate obligations	1,903		(7)		740		(4)		2,643		(11)		Corporate obligations		1,903		(7)		740		(4)		2,643		(11)
U.S. agency mortgage-backed securities	U.S. agency mortgage-backed securities	657		(3)		333		(3)		990		(6)		U.S. agency mortgage-backed securities		657		(3)		333		(3)		990		(6)
Non-U.S. agency mortgage-backed securities	Non-U.S. agency mortgage-backed securities	406		(3)		—		—		406		(3)		Non-U.S. agency mortgage-backed securities		406		(3)		0		0		406		(3)
Total debt securities - available-for-sale	Total debt securities - available-for-sale	$	4,022	$	(22)	$	1,073	$	(7)	$	5,095	$	(29)	Total debt securities - available-for-sale		$	4,022	$	(22)	$	1,073	$	(7)	$	5,095	$	(29)

The Company’s unrealized losses from debt securities as of ~~June~~September 30, 2020 were generated from approximately 3,000 positions out of a total of ~~31,000~~34,000 positions. The Company believes that it will collect the timely principal and interest due on its debt securities that have an amortized cost in excess of fair value. The unrealized losses were primarily caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities that impacted our assessment on collectability of principal and interest. At each reporting period, the Company evaluates available-for-sale debt securities for any credit-related impairment when the fair value of the investment is less than its amortized cost. The Company evaluated the expected cash flows, the underlying credit quality and credit ratings of the issuers, and the potential economic impacts of COVID-19 on the issuers, noting no significant credit deterioration since purchase. As of ~~June~~September 30, 2020, the Company did not have the intent to sell any of the available-for-sale debt securities in an unrealized loss position. Therefore, the Company believes these losses to be temporary. The allowance for credit losses on available-for-sale debt securities at ~~June~~September 30, 2020 was not material.

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3. Fair Value

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

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

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


(in millions)	(in millions)	Quoted Prices in Active Markets (Level 1)			Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)			Total Fair and Carrying Value			(in millions)	Quoted Prices in Active Markets (Level 1)			Other Observable Inputs (Level 2)			Unobservable Inputs (Level 3)			Total Fair and Carrying Value
June 30, 2020
September 30, 2020														September 30, 2020
Cash and cash equivalents	Cash and cash equivalents	$	22,215		$	112		$	—		$	22,327		Cash and cash equivalents	$	17,472		$	78		$	0		$	17,550
Debt securities - available-for-sale:	Debt securities - available-for-sale:													Debt securities - available-for-sale:
U.S. government and agency obligations	U.S. government and agency obligations	3,419			161			—			3,580			U.S. government and agency obligations	3,336			198			0			3,534
State and municipal obligations	State and municipal obligations	—			6,199			—			6,199			State and municipal obligations	0			6,684			0			6,684
Corporate obligations	Corporate obligations	63			17,654			267			17,984			Corporate obligations	44			18,881			279			19,204
U.S. agency mortgage-backed securities	U.S. agency mortgage-backed securities	—			6,279			—			6,279			U.S. agency mortgage-backed securities	0			6,790			0			6,790
Non-U.S. agency mortgage-backed securities	Non-U.S. agency mortgage-backed securities	—			1,944			—			1,944			Non-U.S. agency mortgage-backed securities	0			2,125			0			2,125
Total debt securities - available-for-sale	Total debt securities - available-for-sale	3,482			32,237			267			35,986			Total debt securities - available-for-sale	3,380			34,678			279			38,337
Equity securities	Equity securities	1,530			23			—			1,553			Equity securities	1,593			30			0			1,623
Assets under management	Assets under management	1,441			1,932			44			3,417			Assets under management	1,690			2,050			48			3,788
Total assets at fair value	Total assets at fair value	$	28,668		$	34,304		$	311		$	63,283		Total assets at fair value	$	24,135		$	36,836		$	327		$	61,298
Percentage of total assets at fair value	Percentage of total assets at fair value	45		%	54		%	1		%	100		%	Percentage of total assets at fair value	39		%	60		%	1		%	100		%
December 31, 2019	December 31, 2019													December 31, 2019
Cash and cash equivalents	Cash and cash equivalents	$	10,837		$	148		$	—		$	10,985		Cash and cash equivalents	$	10,837		$	148		$	0		$	10,985
Debt securities - available-for-sale:	Debt securities - available-for-sale:													Debt securities - available-for-sale:
U.S. government and agency obligations	U.S. government and agency obligations	3,369			184			—			3,553			U.S. government and agency obligations	3,369			184			0			3,553
State and municipal obligations	State and municipal obligations	—			5,926			—			5,926			State and municipal obligations	0			5,926			0			5,926
Corporate obligations	Corporate obligations	70			17,923			249			18,242			Corporate obligations	70			17,923			249			18,242
U.S. agency mortgage-backed securities	U.S. agency mortgage-backed securities	—			6,528			—			6,528			U.S. agency mortgage-backed securities	0			6,528			0			6,528
Non-U.S. agency mortgage-backed securities	Non-U.S. agency mortgage-backed securities	—			1,845			—			1,845			Non-U.S. agency mortgage-backed securities	0			1,845			0			1,845
Total debt securities - available-for-sale	Total debt securities - available-for-sale	3,439			32,406			249			36,094			Total debt securities - available-for-sale	3,439			32,406			249			36,094
Equity securities	Equity securities	1,734			22			—			1,756			Equity securities	1,734			22			0			1,756
Assets under management	Assets under management	1,123			1,918			35			3,076			Assets under management	1,123			1,918			35			3,076
Total assets at fair value	Total assets at fair value	$	17,133		$	34,494		$	284		$	51,911		Total assets at fair value	$	17,133		$	34,494		$	284		$	51,911
Percentage of total assets at fair value	Percentage of total assets at fair value	33		%	66		%	1		%	100		%	Percentage of total assets at fair value	33		%	66		%	1		%	100		%

There were no0 transfers in or out of Level 3 financial assets or liabilities during the ~~six~~nine months ended ~~June~~September 30, 2020 or 2019.

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


(in millions)	(in millions)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Total Fair Value		Total Carrying Value		(in millions)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Total Fair Value		Total Carrying Value
June 30, 2020
September 30, 2020												September 30, 2020
Debt securities - held-to-maturity	Debt securities - held-to-maturity	$	566	$	96	$	85	$	747	$	737	Debt securities - held-to-maturity	$	531	$	99	$	78	$	708	$	698
Long-term debt and other financing obligations	Long-term debt and other financing obligations	$	—	$	53,119	$	—	$	53,119	$	45,284	Long-term debt and other financing obligations	$	0	$	51,785	$	0	$	51,785	$	43,794
December 31, 2019	December 31, 2019											December 31, 2019
Debt securities - held-to-maturity	Debt securities - held-to-maturity	$	541	$	181	$	253	$	975	$	972	Debt securities - held-to-maturity	$	541	$	181	$	253	$	975	$	972
Long-term debt and other financing obligations	Long-term debt and other financing obligations	$	—	$	45,078	$	—	$	45,078	$	40,278	Long-term debt and other financing obligations	$	0	$	45,078	$	0	$	45,078	$	40,278

Nonfinancial assets and liabilities or financial assets and liabilities that are measured at fair value on a nonrecurring basis are subject to fair value adjustments only in certain circumstances, such as when the Company records an impairment. There were no0 significant fair value adjustments for these assets and liabilities recorded during either the ~~six~~nine months ended ~~June~~September 30, 2020 or 2019.

4. Medical Costs Payable

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


(in millions)	(in millions)	2020		2019		(in millions)	2020		2019
Medical costs payable, beginning of period	Medical costs payable, beginning of period	$	21,690	$	19,891	Medical costs payable, beginning of period	$	21,690	$	19,891
Acquisitions	Acquisitions	41		522		Acquisitions	186		868
Reported medical costs:	Reported medical costs:					Reported medical costs:
Current year	Current year	76,338		78,523		Current year	118,114		117,624
Prior years	Prior years	(660)		(400)		Prior years	(800)		(460)
Total reported medical costs	Total reported medical costs	75,678		78,123		Total reported medical costs	117,314		117,164
Medical payments:	Medical payments:					Medical payments:
Payments for current year	Payments for current year	(59,482)		(60,707)		Payments for current year	(98,548)		(99,487)
Payments for prior years	Payments for prior years	(18,727)		(16,922)		Payments for prior years	(19,475)		(17,497)
Total medical payments	Total medical payments	(78,209)		(77,629)		Total medical payments	(118,023)		(116,984)
Medical costs payable, end of period	Medical costs payable, end of period	$	19,200	$	20,907	Medical costs payable, end of period	$	21,167	$	20,939

For the ~~six~~nine months ended ~~June~~September 30, 2020, prior years medical cost reserve development was primarily driven by lower than expected health system utilization. For the ~~six~~nine months ended ~~June~~September 30, 2019, the prior years medical cost reserve development included no individual factors that were significant. Medical costs payable included reserves for claims incurred by insured customers but not yet reported to the Company of ~~$13.7~~$14.7 billion and $13.8 billion at ~~June~~September 30, 2020 and December 31, 2019, respectively.

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5. Short-Term Borrowings and Long-Term Debt

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


		June 30, 2020										December 31, 2019											September 30, 2020				December 31, 2019
(in millions, except percentages)	(in millions, except percentages)	Par Value		Carrying Value		Fair Value		Par Value		Carrying Value		Fair Value		(in millions, except percentages)	Par Value		Carrying Value		Fair Value		Par Value		Carrying Value		Fair Value
Commercial paper	Commercial paper	$	773	$	773	$	773	$	400	$	400	$	400	Commercial paper	$	0	$	0	$	0	$	400	$	400	$	400
2.700% notes due July 2020	2.700% notes due July 2020	1,500		1,500		1,501		1,500		1,499		1,506		2.700% notes due July 2020	0		0		0		1,500		1,499		1,506
Floating rate notes due October 2020	Floating rate notes due October 2020	300		300		300		300		300		300		Floating rate notes due October 2020	300		300		300		300		300		300
3.875% notes due October 2020	3.875% notes due October 2020	450		452		451		450		450		455		3.875% notes due October 2020	450		450		451		450		450		455
1.950% notes due October 2020	1.950% notes due October 2020	900		900		904		900		899		900		1.950% notes due October 2020	900		900		901		900		899		900
4.700% notes due February 2021	4.700% notes due February 2021	400		405		406		400		403		410		4.700% notes due February 2021	400		403		402		400		403		410
2.125% notes due March 2021	2.125% notes due March 2021	750		749		759		750		749		753		2.125% notes due March 2021	750		749		756		750		749		753
Floating rate notes due June 2021	Floating rate notes due June 2021	350		350		350		350		349		350		Floating rate notes due June 2021	350		350		351		350		349		350
3.150% notes due June 2021	3.150% notes due June 2021	400		399		411		400		399		407		3.150% notes due June 2021	400		400		408		400		399		407
3.375% notes due November 2021	3.375% notes due November 2021	500		511		517		500		501		512		3.375% notes due November 2021	500		509		513		500		501		512
2.875% notes due December 2021	2.875% notes due December 2021	750		768		778		750		753		765		2.875% notes due December 2021	750		765		774		750		753		765
2.875% notes due March 2022	2.875% notes due March 2022	1,100		1,117		1,139		1,100		1,087		1,121		2.875% notes due March 2022	1,100		1,115		1,133		1,100		1,087		1,121
3.350% notes due July 2022	3.350% notes due July 2022	1,000		998		1,061		1,000		998		1,036		3.350% notes due July 2022	1,000		998		1,054		1,000		998		1,036
2.375% notes due October 2022	2.375% notes due October 2022	900		897		942		900		896		911		2.375% notes due October 2022	900		897		937		900		896		911
0.000% notes due November 2022	0.000% notes due November 2022	15		13		14		15		13		14		0.000% notes due November 2022	15		13		14		15		13		14
2.750% notes due February 2023	2.750% notes due February 2023	625		648		659		625		624		638		2.750% notes due February 2023	625		646		656		625		624		638
2.875% notes due March 2023	2.875% notes due March 2023	750		798		799		750		770		770		2.875% notes due March 2023	750		793		794		750		770		770
3.500% notes due June 2023	3.500% notes due June 2023	750		748		817		750		747		786		3.500% notes due June 2023	750		748		811		750		747		786
3.500% notes due February 2024	3.500% notes due February 2024	750		746		825		750		746		792		3.500% notes due February 2024	750		746		825		750		746		792
2.375% notes due August 2024	2.375% notes due August 2024	750		747		801		750		747		760		2.375% notes due August 2024	750		747		799		750		747		760
3.750% notes due July 2025	3.750% notes due July 2025	2,000		1,991		2,279		2,000		1,990		2,161		3.750% notes due July 2025	2,000		1,992		2,283		2,000		1,990		2,161
3.700% notes due December 2025	3.700% notes due December 2025	300		298		344		300		298		325		3.700% notes due December 2025	300		298		343		300		298		325
1.250% notes due January 2026	1.250% notes due January 2026	500		496		509		—		—		—		1.250% notes due January 2026	500		496		513		0		0		0
3.100% notes due March 2026	3.100% notes due March 2026	1,000		996		1,116		1,000		996		1,048		3.100% notes due March 2026	1,000		996		1,118		1,000		996		1,048
3.450% notes due January 2027	3.450% notes due January 2027	750		746		855		750		746		804		3.450% notes due January 2027	750		746		853		750		746		804
3.375% notes due April 2027	3.375% notes due April 2027	625		620		712		625		620		667		3.375% notes due April 2027	625		620		713		625		620		667
2.950% notes due October 2027	2.950% notes due October 2027	950		940		1,060		950		939		988		2.950% notes due October 2027	950		940		1,060		950		939		988
3.850% notes due June 2028	3.850% notes due June 2028	1,150		1,143		1,360		1,150		1,142		1,269		3.850% notes due June 2028	1,150		1,143		1,357		1,150		1,142		1,269
3.875% notes due December 2028	3.875% notes due December 2028	850		843		1,017		850		843		941		3.875% notes due December 2028	850		843		1,010		850		843		941
2.875% notes due August 2029	2.875% notes due August 2029	1,000		1,111		1,116		1,000		993		1,029		2.875% notes due August 2029	1,000		1,104		1,115		1,000		993		1,029
2.000% notes due May 2030	2.000% notes due May 2030	1,250		1,233		1,309		—		—		—		2.000% notes due May 2030	1,250		1,233		1,310		0		0		0
4.625% notes due July 2035	4.625% notes due July 2035	1,000		992		1,308		1,000		992		1,215		4.625% notes due July 2035	1,000		992		1,317		1,000		992		1,215
5.800% notes due March 2036	5.800% notes due March 2036	850		838		1,202		850		838		1,129		5.800% notes due March 2036	850		839		1,231		850		838		1,129
6.500% notes due June 2037	6.500% notes due June 2037	500		492		761		500		492		712		6.500% notes due June 2037	500		492		778		500		492		712
6.625% notes due November 2037	6.625% notes due November 2037	650		641		994		650		641		940		6.625% notes due November 2037	650		641		1,027		650		641		940
6.875% notes due February 2038	6.875% notes due February 2038	1,100		1,077		1,713		1,100		1,076		1,631		6.875% notes due February 2038	1,100		1,077		1,772		1,100		1,076		1,631
3.500% notes due August 2039	3.500% notes due August 2039	1,250		1,241		1,454		1,250		1,241		1,313		3.500% notes due August 2039	1,250		1,241		1,436		1,250		1,241		1,313
2.750% notes due May 2040	2.750% notes due May 2040	1,000		963		1,071		—		—		—		2.750% notes due May 2040	1,000		964		1,057		0		0		0
5.700% notes due October 2040	5.700% notes due October 2040	300		296		438		300		296		396		5.700% notes due October 2040	300		296		438		300		296		396
5.950% notes due February 2041	5.950% notes due February 2041	350		345		521		350		345		475		5.950% notes due February 2041	350		346		525		350		345		475
4.625% notes due November 2041	4.625% notes due November 2041	600		589		787		600		589		716		4.625% notes due November 2041	600		589		787		600		589		716
4.375% notes due March 2042	4.375% notes due March 2042	502		484		642		502		484		580		4.375% notes due March 2042	502		485		639		502		484		580
3.950% notes due October 2042	3.950% notes due October 2042	625		608		749		625		607		688		3.950% notes due October 2042	625		608		760		625		607		688
4.250% notes due March 2043	4.250% notes due March 2043	750		735		938		750		735		856		4.250% notes due March 2043	750		735		949		750		735		856
4.750% notes due July 2045	4.750% notes due July 2045	2,000		1,973		2,694		2,000		1,973		2,463		4.750% notes due July 2045	2,000		1,973		2,730		2,000		1,973		2,463
4.200% notes due January 2047	4.200% notes due January 2047	750		738		951		750		738		861		4.200% notes due January 2047	750		738		950		750		738		861
4.250% notes due April 2047	4.250% notes due April 2047	725		717		931		725		717		839		4.250% notes due April 2047	725		717		923		725		717		839
3.750% notes due October 2047	3.750% notes due October 2047	950		934		1,134		950		934		1,023		3.750% notes due October 2047	950		934		1,130		950		934		1,023
4.250% notes due June 2048	4.250% notes due June 2048	1,350		1,330		1,726		1,350		1,330		1,569		4.250% notes due June 2048	1,350		1,330		1,721		1,350		1,330		1,569
4.450% notes due December 2048	4.450% notes due December 2048	1,100		1,086		1,440		1,100		1,086		1,316		4.450% notes due December 2048	1,100		1,086		1,457		1,100		1,086		1,316
3.700% notes due August 2049	3.700% notes due August 2049	1,250		1,235		1,479		1,250		1,235		1,344		3.700% notes due August 2049	1,250		1,235		1,496		1,250		1,235		1,344
2.900% notes due May 2050	2.900% notes due May 2050	1,250		1,208		1,320		—		—		—		2.900% notes due May 2050	1,250		1,208		1,318		0		0		0
3.875% notes due August 2059	3.875% notes due August 2059	1,250		1,228		1,531		1,250		1,228		1,350		3.875% notes due August 2059	1,250		1,228		1,529		1,250		1,228		1,350
3.125% notes due May 2060	3.125% notes due May 2060	1,000		967		1,072		—		—		—		3.125% notes due May 2060	1,000		968		1,073		0		0		0
Total short-term borrowings and long-term debt	Total short-term borrowings and long-term debt	$	45,190	$	44,953	$	52,740	$	39,817	$	39,474	$	44,234	Total short-term borrowings and long-term debt	$	42,917	$	42,662	$	50,597	$	39,817	$	39,474	$	44,234

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The Company’s long-term debt obligations also included $1.1 billion and $1.2 billion of other financing obligations, of which ~~$328~~$347 million and $322 million were classified as current as of ~~June~~September 30, 2020 and December 31, 2019, respectively.

Commercial Paper and Bank Credit Facilities

Commercial paper consists of short-duration, senior unsecured debt privately placed on a discount basis through broker-dealers. ~~As of June 30, 2020, the Company’s outstanding commercial paper had a weighted average annual interest rate of 0.3%.~~

The Company has $4.4 billion five-year, $4.4 billion three-year and $3.8 billion 364-day revolving bank credit facilities with 25 banks, which mature in December 2024, December 2022 and December 2020, respectively. These facilities provide liquidity support for the Company’s commercial paper program and are available for general corporate purposes. As of ~~June~~September 30, 2020, no amounts had been drawn on any of the bank credit facilities. The annual interest rates, which are variable based on term, are calculated based on the London Interbank Offered Rate (LIBOR) plus a credit spread based on the Company’s senior unsecured credit ratings. If amounts had been drawn on the bank credit facilities as of ~~June~~September 30, 2020, annual interest rates would have ranged from 0.8% to ~~1.1%~~1%.

Debt Covenants

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

6. Dividends

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

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


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

7. Commitments and Contingencies

Legal Matters

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

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

Government Investigations, Audits and Reviews

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

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governmental authorities. Certain of the Company’s businesses have been reviewed or are currently under review, including

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

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

8. Segment Financial Information

The Company’s 4 reportable segments are UnitedHealthcare, OptumHealth, OptumInsight and ~~OptumRx~~. OptumRx. For more information on the Company’s segments see Part I, Item I, “Business” and Note 14 of Notes to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2019 10-K.

The following tables present reportable segment financial information:


				Optum																									Optum
(in millions)	(in millions)	UnitedHealthcare		OptumHealth		OptumInsight		OptumRx		Optum Eliminations		Optum		Corporate and Eliminations		Consolidated		(in millions)	UnitedHealthcare		OptumHealth		OptumInsight		OptumRx		Optum Eliminations		Optum		Corporate and Eliminations		Consolidated
Three Months Ended June 30, 2020
Three Months Ended September 30, 2020																		Three Months Ended September 30, 2020
Revenues - unaffiliated customers:	Revenues - unaffiliated customers:																	Revenues - unaffiliated customers:
Premiums	Premiums	$	47,039	$	2,355	$	—	$	—	$	—	$	2,355	$	—	$	49,394	Premiums	$	48,121	$	2,742	$	0	$	0	$	0	$	2,742	$	0	$	50,863
Products	Products	—		7		27		8,213		—		8,247		—		8,247		Products	0		10		34		8,733		0		8,777		0		8,777
Services	Services	1,895		1,225		764		272		—		2,261		—		4,156		Services	2,075		1,834		974		241		0		3,049		0		5,124
Total revenues - unaffiliated customers	Total revenues - unaffiliated customers	48,934		3,587		791		8,485		—		12,863		—		61,797		Total revenues - unaffiliated customers	50,196		4,586		1,008		8,974		0		14,568		0		64,764
Total revenues - affiliated customers	Total revenues - affiliated customers	—		5,423		1,823		12,865		(447)		19,664		(19,664)		—		Total revenues - affiliated customers	0		5,748		1,755		13,102		(424)		20,181		(20,181)		0
Investment and other income	Investment and other income	173		129		18		21		—		168		—		341		Investment and other income	177		165		4		5		0		174		0		351
Total revenues	Total revenues	$	49,107	$	9,139	$	2,632	$	21,371	$	(447)	$	32,695	$	(19,664)	$	62,138	Total revenues	$	50,373	$	10,499	$	2,767	$	22,081	$	(424)	$	34,923	$	(20,181)	$	65,115
Earnings from operations	Earnings from operations	$	7,007	$	841	$	561	$	832	$	—	$	2,234	$	—	$	9,241	Earnings from operations	$	2,068	$	835	$	785	$	963	$	0	$	2,583	$	0	$	4,651
Interest expense	Interest expense	—		—		—		—		—		—		(430)		(430)		Interest expense	0		0		0		0		0		0		(395)		(395)
Earnings before income taxes	Earnings before income taxes	$	7,007	$	841	$	561	$	832	$	—	$	2,234	$	(430)	$	8,811	Earnings before income taxes	$	2,068	$	835	$	785	$	963	$	0	$	2,583	$	(395)	$	4,256
Three Months Ended June 30, 2019
Three Months Ended September 30, 2019																		Three Months Ended September 30, 2019
Revenues - unaffiliated customers:	Revenues - unaffiliated customers:																	Revenues - unaffiliated customers:
Premiums	Premiums	$	46,030	$	1,134	$	—	$	—	$	—	$	1,134	$	—	$	47,164	Premiums	$	45,557	$	1,840	$	0	$	0	$	0	$	1,840	$	0	$	47,397
Products	Products	—		9		22		8,322		—		8,353		—		8,353		Products	0		6		29		7,511		0		7,546		0		7,546
Services	Services	2,188		1,370		790		148		—		2,308		—		4,496		Services	2,274		1,487		988		193		0		2,668		0		4,942
Total revenues - unaffiliated customers	Total revenues - unaffiliated customers	48,218		2,513		812		8,470		—		11,795		—		60,013		Total revenues - unaffiliated customers	47,831		3,333		1,017		7,704		0		12,054		0		59,885
Total revenues - affiliated customers	Total revenues - affiliated customers	—		4,449		1,521		10,439		(381)		16,028		(16,028)		—		Total revenues - affiliated customers	0		4,630		1,594		10,734		(441)		16,517		(16,517)		0
Investment and other income	Investment and other income	376		186		6		14		—		206		—		582		Investment and other income	274		170		6		16		0		192		0		466
Total revenues	Total revenues	$	48,594	$	7,148	$	2,339	$	18,923	$	(381)	$	28,029	$	(16,028)	$	60,595	Total revenues	$	48,105	$	8,133	$	2,617	$	18,454	$	(441)	$	28,763	$	(16,517)	$	60,351
Earnings from operations	Earnings from operations	$	2,642	$	688	$	525	$	889	$	—	$	2,102	$	—	$	4,744	Earnings from operations	$	2,655	$	748	$	632	$	979	$	0	$	2,359	$	0	$	5,014
Interest expense	Interest expense	—		—		—		—		—		—		(418)		(418)		Interest expense	0		0		0		0		0		0		(449)		(449)
Earnings before income taxes	Earnings before income taxes	$	2,642	$	688	$	525	$	889	$	—	$	2,102	$	(418)	$	4,326	Earnings before income taxes	$	2,655	$	748	$	632	$	979	$	0	$	2,359	$	(449)	$	4,565

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				Optum																									Optum
(in millions)	(in millions)	UnitedHealthcare		OptumHealth		OptumInsight		OptumRx		Optum Eliminations		Optum		Corporate and Eliminations		Consolidated		(in millions)	UnitedHealthcare		OptumHealth		OptumInsight		OptumRx		Optum Eliminations		Optum		Corporate and Eliminations		Consolidated
Six Months Ended June 30, 2020
Nine Months Ended September 30, 2020																		Nine Months Ended September 30, 2020
Revenues - unaffiliated customers:	Revenues - unaffiliated customers:																	Revenues - unaffiliated customers:
Premiums	Premiums	$	95,632	$	4,402	$	—	$	—	$	—	$	4,402	$	—	$	100,034	Premiums	$	143,753	$	7,144	$	0	$	0	$	0	$	7,144	$	0	$	150,897
Products	Products	—		16		56		16,606		—		16,678		—		16,678		Products	0		26		90		25,339		0		25,455		0		25,455
Services	Services	4,173		2,773		1,655		540		—		4,968		—		9,141		Services	6,248		4,607		2,629		781		0		8,017		0		14,265
Total revenues - unaffiliated customers	Total revenues - unaffiliated customers	99,805		7,191		1,711		17,146		—		26,048		—		125,853		Total revenues - unaffiliated customers	150,001		11,777		2,719		26,120		0		40,616		0		190,617
Total revenues - affiliated customers	Total revenues - affiliated customers	—		10,875		3,385		25,741		(851)		39,150		(39,150)		—		Total revenues - affiliated customers	0		16,623		5,140		38,843		(1,275)		59,331		(59,331)		0
Investment and other income	Investment and other income	370		265		30		41		—		336		—		706		Investment and other income	547		430		34		46		0		510		0		1,057
Total revenues	Total revenues	$	100,175	$	18,331	$	5,126	$	42,928	$	(851)	$	65,534	$	(39,150)	$	126,559	Total revenues	$	150,548	$	28,830	$	7,893	$	65,009	$	(1,275)	$	100,457	$	(59,331)	$	191,674
Earnings from operations	Earnings from operations	$	9,895	$	1,553	$	1,097	$	1,692	$	—	$	4,342	$	—	$	14,237	Earnings from operations	$	11,963	$	2,388	$	1,882	$	2,655	$	0	$	6,925	$	0	$	18,888
Interest expense	Interest expense	—		—		—		—		—		—		(867)		(867)		Interest expense	0		0		0		0		0		0		(1,262)		(1,262)
Earnings before income taxes	Earnings before income taxes	$	9,895	$	1,553	$	1,097	$	1,692	$	—	$	4,342	$	(867)	$	13,370	Earnings before income taxes	$	11,963	$	2,388	$	1,882	$	2,655	$	0	$	6,925	$	(1,262)	$	17,626
Six Months Ended June 30, 2019
Nine Months Ended September 30, 2019																		Nine Months Ended September 30, 2019
Revenues - unaffiliated customers:	Revenues - unaffiliated customers:																	Revenues - unaffiliated customers:
Premiums	Premiums	$	92,531	$	2,146	$	—	$	—	$	—	$	2,146	$	—	$	94,677	Premiums	$	138,088	$	3,986	$	0	$	0	$	0	$	3,986	$	0	$	142,074
Products	Products	—		17		45		16,363		—		16,425		—		16,425		Products	0		23		74		23,874		0		23,971		0		23,971
Services	Services	4,329		2,644		1,544		297		—		4,485		—		8,814		Services	6,603		4,131		2,532		490		0		7,153		0		13,756
Total revenues - unaffiliated customers	Total revenues - unaffiliated customers	96,860		4,807		1,589		16,660		—		23,056		—		119,916		Total revenues - unaffiliated customers	144,691		8,140		2,606		24,364		0		35,110		0		179,801
Total revenues - affiliated customers	Total revenues - affiliated customers	—		8,736		2,928		20,052		(740)		30,976		(30,976)		—		Total revenues - affiliated customers	0		13,366		4,522		30,786		(1,181)		47,493		(47,493)		0
Investment and other income	Investment and other income	630		318		11		28		—		357		—		987		Investment and other income	904		488		17		44		0		549		0		1,453
Total revenues	Total revenues	$	97,490	$	13,861	$	4,528	$	36,740	$	(740)	$	54,389	$	(30,976)	$	120,903	Total revenues	$	145,595	$	21,994	$	7,145	$	55,194	$	(1,181)	$	83,152	$	(47,493)	$	181,254
Earnings from operations	Earnings from operations	$	5,596	$	1,314	$	957	$	1,709	$	—	$	3,980	$	—	$	9,576	Earnings from operations	$	8,251	$	2,062	$	1,589	$	2,688	$	0	$	6,339	$	0	$	14,590
Interest expense	Interest expense	—		—		—		—		—		—		(818)		(818)		Interest expense	0		0		0		0		0		0		(1,267)		(1,267)
Earnings before income taxes	Earnings before income taxes	$	5,596	$	1,314	$	957	$	1,709	$	—	$	3,980	$	(818)	$	8,758	Earnings before income taxes	$	8,251	$	2,062	$	1,589	$	2,688	$	0	$	6,339	$	(1,267)	$	13,323

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

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

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

EXECUTIVE OVERVIEW

General

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

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

COVID-19 Trends and Uncertainties

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

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

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

progress of an uncertain economic recovery.

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

Business Trends

Our businesses participate in the United States, South American and certain other international health markets. Overall spending on health care is impacted by inflation; utilization; medical technology and pharmaceutical advancement; regulatory requirements; demographic trends in the population; and national interest in health and well-being. The rate of market growth may be affected by a variety of factors, including macro-economic conditions, such as the economic impact of COVID-19, and regulatory changes, which could impact our results of operations, including our continued efforts to control health care costs.

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

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

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

Medical Cost Trends. Our medical cost trends primarily relate to changes in unit costs, health system utilization and prescription drug costs. COVID-19 care and testing costs and certain of our customer assistance initiatives have also impacted medical cost trends in the current year and may continue in future years. We endeavor to mitigate those increases by engaging physicians and consumers with information and helping them make clinically sound choices, with the objective of helping them achieve high quality, affordable care. The uncertain impact of COVID-19 may impact our ability to estimate medical costs payable, which could result in increased variability to medical cost reserve development in future periods. ~~As a result of higher than expected care deferrals, favorable reserve development of $1.4 billion occurred in the second quarter.~~

Regulatory Trends and Uncertainties

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

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

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

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SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS

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

•Consolidated revenues grew 3%8%, UnitedHealthcare revenues grew 1%5% and Optum revenues grew ~~17%~~21%.

•UnitedHealthcare served ~~425,000~~635,000 fewer people domestically primarily due to increased unemployment and expected attrition in commercial group ~~benefits and the proactive withdrawal from a Medicaid market.~~benefits.

•Consolidated earnings from operations ~~increased,~~decreased 7%, including a decrease of 22% at UnitedHealthcare primarily due to ~~temporary care deferrals caused~~COVID-19 impacts, partially offset by ~~COVID-19, including increases~~an increase of 9% at ~~UnitedHealthcare and~~ Optum.

•Diluted earnings per common share ~~increased~~decreased to ~~$6.91.~~$3.30.

•Cash flows from operations for the ~~six~~nine months ended ~~June~~September 30, 2020 were ~~$12.9~~$16.1 billion.

•Return on equity was ~~44.0%~~19.7%.

RESULTS SUMMARY

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


(in millions, except percentages and per share data)	(in millions, except percentages and per share data)	Three Months Ended June 30,												Increase/(Decrease)									Six Months Ended June 30,										Increase/(Decrease)										(in millions, except percentages and per share data)			Three Months Ended September 30,							Increase/(Decrease)							Nine Months Ended September 30,		Increase/(Decrease)
					2020				2019				2020 vs. 2019									2020				2019			2020 vs. 2019								(in millions, except percentages and per share data)				2020				2019				2020 vs. 2019							2020			2019		2020 vs. 2019
Revenues:	Revenues:																												Revenues:
Premiums	Premiums	$	49,394			$	47,164			$	2,230			5	%	$	100,034		$	94,677			$	5,357			6	%	Premiums	$	50,863			$	47,397			$	3,466			7		%		$	150,897			$	142,074		$	8,823			6	%
Products	Products	8,247				8,353				(106)				(1)		16,678			16,425				253				2		Products	8,777				7,546				1,231				16				25,455				23,971			1,484				6
Services	Services	4,156				4,496				(340)				(8)		9,141			8,814				327				4		Services	5,124				4,942				182				4				14,265				13,756			509				4
Investment and other income	Investment and other income	341				582				(241)				(41)		706			987				(281)				(28)		Investment and other income	351				466				(115)				(25)				1,057				1,453			(396)				(27)
Total revenues	Total revenues	62,138				60,595				1,543				3		126,559			120,903				5,656				5		Total revenues	65,115				60,351				4,764				8				191,674				181,254			10,420				6
Operating costs:	Operating costs:																												Operating costs:
Medical costs	Medical costs	34,678				39,184				(4,506)				(11)		75,678			78,123				(2,445)				(3)		Medical costs	41,636				39,041				2,595				7				117,314				117,164			150				—
Operating costs	Operating costs	10,001				8,415				1,586				19		20,016			16,932				3,084				18		Operating costs	10,174				8,960				1,214				14				30,190				25,892			4,298				17
Cost of products sold	Cost of products sold	7,501				7,598				(97)				(1)		15,188			14,979				209				1		Cost of products sold	7,935				6,627				1,308				20				23,123				21,606			1,517				7
Depreciation and amortization	Depreciation and amortization	717				654				63				10		1,440			1,293				147				11		Depreciation and amortization	719				709				10				1				2,159				2,002			157				8
Total operating costs	Total operating costs	52,897				55,851				(2,954)				(5)		112,322			111,327				995				1		Total operating costs	60,464				55,337				5,127				9				172,786				166,664			6,122				4
Earnings from operations	Earnings from operations	9,241				4,744				4,497				95		14,237			9,576				4,661				49		Earnings from operations	4,651				5,014				(363)				(7)				18,888				14,590			4,298				29
Interest expense	Interest expense	(430)				(418)				(12)				3		(867)			(818)				(49)				6		Interest expense	(395)				(449)				54				(12)				(1,262)				(1,267)			5				—
Earnings before income taxes	Earnings before income taxes	8,811				4,326				4,485				104		13,370			8,758				4,612				53		Earnings before income taxes	4,256				4,565				(309)				(7)				17,626				13,323			4,303				32
Provision for income taxes	Provision for income taxes	(2,115)				(941)				(1,174)				125		(3,209)			(1,816)				(1,393)				77		Provision for income taxes	(1,000)				(936)				(64)				7				(4,209)				(2,752)			(1,457)				53
Net earnings	Net earnings	6,696				3,385				3,311				98		10,161			6,942				3,219				46		Net earnings	3,256				3,629				(373)				(10)				13,417				10,571			2,846				27
Earnings attributable to noncontrolling interests	Earnings attributable to noncontrolling interests	(59)				(92)				33				(36)		(142)			(182)				40				(22)		Earnings attributable to noncontrolling interests	(84)				(91)				7				(8)				(226)				(273)			47				(17)
Net earnings attributable to UnitedHealth Group common shareholders	Net earnings attributable to UnitedHealth Group common shareholders	$	6,637			$	3,293			$	3,344			102	%	$	10,019		$	6,760			$	3,259			48	%	Net earnings attributable to UnitedHealth Group common shareholders	$	3,172			$	3,538			$	(366)			(10)		%		$	13,191			$	10,298		$	2,893			28	%
Diluted earnings per share attributable to UnitedHealth Group common shareholders	Diluted earnings per share attributable to UnitedHealth Group common shareholders	$	6.91			$	3.42			$	3.49			102	%	$	10.43		$	6.97			$	3.46			50	%	Diluted earnings per share attributable to UnitedHealth Group common shareholders	$	3.30			$	3.67			$	(0.37)			(10)		%		$	13.73			$	10.65		$	3.08			29	%
Medical care ratio (a)	Medical care ratio (a)	70.2		%		83.1		%		(12.9)		%				75.7		%	82.5		%		(6.8)		%				Medical care ratio (a)	81.9		%		82.4		%		(0.5)		%						77.7		%		82.5		%	(4.8)		%
Operating cost ratio	Operating cost ratio	16.1				13.9				2.2						15.8			14.0				1.8						Operating cost ratio	15.6				14.8				0.8								15.8				14.3			1.5
Operating margin	Operating margin	14.9				7.8				7.1						11.2			7.9				3.3						Operating margin	7.1				8.3				(1.2)								9.9				8.0			1.9
Tax rate	Tax rate	24.0				21.8				2.2						24.0			20.7				3.3						Tax rate	23.5				20.5				3.0								23.9				20.7			3.2
Net earnings margin (b)	Net earnings margin (b)	10.7				5.4				5.3						7.9			5.6				2.3						Net earnings margin (b)	4.9				5.9				(1.0)								6.9				5.7			1.2
Return on equity (c)	Return on equity (c)	44.0		%		25.1		%		18.9		%				33.7		%	25.9		%		7.8		%				Return on equity (c)	19.7		%		26.2		%		(6.5)		%						28.9		%		26.0		%	2.9		%

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

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

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

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2020 RESULTS OF OPERATIONS COMPARED TO 2019 RESULTS OF OPERATIONS

Consolidated Financial Results

Revenue

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

Medical Costs and MCR

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

Operating Cost Ratio

The operating cost ratio increased primarily due to the impact of the return of the Health Insurance Tax and ~~the Company’s COVID-19 response efforts.~~business mix.

Income Tax Rate

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

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Reportable Segments

See Note 8 of Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report for more information on our segments. We utilize various metrics to evaluate and manage our reportable segments, including individuals served by UnitedHealthcare by major market segment and funding arrangement, people served by OptumHealth and adjusted scripts for OptumRx. These metrics are the main drivers of revenue, earnings and cash flows at each business. The metrics also allow management and investors to evaluate and understand business mix, customer penetration and pricing trends when comparing the metrics to revenue by segment.

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


		Three Months Ended June 30,									Increase/(Decrease)								Six Months Ended June 30,									Increase/(Decrease)									Three Months Ended September 30,						Increase/(Decrease)					Nine Months Ended September 30,	Increase/(Decrease)
(in millions, except percentages)	(in millions, except percentages)	2020			2019			2020 vs. 2019								2020			2019			2020 vs. 2019								(in millions, except percentages)		2020			2019		2020 vs. 2019						2020			2019		2020 vs. 2019
Revenues	Revenues																							Revenues
UnitedHealthcare	UnitedHealthcare	$	49,107		$	48,594		$	513		1	%	$	100,175		$	97,490		$	2,685		3	%	UnitedHealthcare	$	50,373			$	48,105		$	2,268		5	%	$	150,548		$	145,595		$	4,953		3	%
OptumHealth	OptumHealth	9,139			7,148			1,991			28		18,331			13,861			4,470			32		OptumHealth	10,499				8,133			2,366			29		28,830			21,994			6,836			31
OptumInsight	OptumInsight	2,632			2,339			293			13		5,126			4,528			598			13		OptumInsight	2,767				2,617			150			6		7,893			7,145			748			10
OptumRx	OptumRx	21,371			18,923			2,448			13		42,928			36,740			6,188			17		OptumRx	22,081				18,454			3,627			20		65,009			55,194			9,815			18
Optum eliminations	Optum eliminations	(447)			(381)			(66)			17		(851)			(740)			(111)			15		Optum eliminations	(424)				(441)			17			(4)		(1,275)			(1,181)			(94)			8
Optum	Optum	32,695			28,029			4,666			17		65,534			54,389			11,145			20		Optum	34,923				28,763			6,160			21		100,457			83,152			17,305			21
Eliminations	Eliminations	(19,664)			(16,028)			(3,636)			23		(39,150)			(30,976)			(8,174)			26		Eliminations	(20,181)				(16,517)			(3,664)			22		(59,331)			(47,493)			(11,838)			25
Consolidated revenues	Consolidated revenues	$	62,138		$	60,595		$	1,543		3	%	$	126,559		$	120,903		$	5,656		5	%	Consolidated revenues	$	65,115			$	60,351		$	4,764		8	%	$	191,674		$	181,254		$	10,420		6	%
Earnings from operations	Earnings from operations																							Earnings from operations
UnitedHealthcare	UnitedHealthcare	$	7,007		$	2,642		$	4,365		165	%	$	9,895		$	5,596		$	4,299		77	%	UnitedHealthcare	$	2,068			$	2,655		$	(587)		(22)	%	$	11,963		$	8,251		$	3,712		45	%
OptumHealth	OptumHealth	841			688			153			22		1,553			1,314			239			18		OptumHealth	835				748			87			12		2,388			2,062			326			16
OptumInsight	OptumInsight	561			525			36			7		1,097			957			140			15		OptumInsight	785				632			153			24		1,882			1,589			293			18
OptumRx	OptumRx	832			889			(57)			(6)		1,692			1,709			(17)			(1)		OptumRx	963				979			(16)			(2)		2,655			2,688			(33)			(1)
Optum	Optum	2,234			2,102			132			6		4,342			3,980			362			9		Optum	2,583				2,359			224			9		6,925			6,339			586			9
Consolidated earnings from operations	Consolidated earnings from operations	$	9,241		$	4,744		$	4,497		95	%	$	14,237		$	9,576		$	4,661		49	%	Consolidated earnings from operations	$	4,651			$	5,014		$	(363)		(7)	%	$	18,888		$	14,590		$	4,298		29	%
Operating margin	Operating margin																							Operating margin
UnitedHealthcare	UnitedHealthcare	14.3		%	5.4		%	8.9		%			9.9		%	5.7		%	4.2		%			UnitedHealthcare	4.1		%		5.5		%	(1.4)		%			7.9		%	5.7		%	2.2		%
OptumHealth	OptumHealth	9.2			9.6			(0.4)					8.5			9.5			(1.0)					OptumHealth	8.0				9.2			(1.2)					8.3			9.4			(1.1)
OptumInsight	OptumInsight	21.3			22.4			(1.1)					21.4			21.1			0.3					OptumInsight	28.4				24.1			4.3					23.8			22.2			1.6
OptumRx	OptumRx	3.9			4.7			(0.8)					3.9			4.7			(0.8)					OptumRx	4.4				5.3			(0.9)					4.1			4.9			(0.8)
Optum	Optum	6.8			7.5			(0.7)					6.6			7.3			(0.7)					Optum	7.4				8.2			(0.8)					6.9			7.6			(0.7)
Consolidated operating margin	Consolidated operating margin	14.9		%	7.8		%	7.1		%			11.2		%	7.9		%	3.3		%			Consolidated operating margin	7.1		%		8.3		%	(1.2)		%			9.9		%	8.0		%	1.9		%

UnitedHealthcare

The following table summarizes UnitedHealthcare revenues by business:


		Three Months Ended June 30,						Increase/(Decrease)						Six Months Ended June 30,							Increase/(Decrease)							Three Months Ended September 30,				Increase/(Decrease)				Nine Months Ended September 30,	Increase/(Decrease)
(in millions, except percentages)	(in millions, except percentages)	2020		2019		2020 vs. 2019						2020		2019		2020 vs. 2019							(in millions, except percentages)	2020		2019		2020 vs. 2019				2020		2019		2020 vs. 2019
UnitedHealthcare Employer & Individual	UnitedHealthcare Employer & Individual	$	12,963	$	14,032	$	(1,069)	(8)	%	$	27,243	$	28,116	$	(873)	(3)	%	UnitedHealthcare Employer & Individual	$	14,081		$	14,291	$	(210)	(1)	%	$	41,324	$	42,407	$	(1,083)	(3)	%
UnitedHealthcare Medicare & Retirement	UnitedHealthcare Medicare & Retirement	22,855		20,855		2,000		10		46,007		41,951		4,056		10		UnitedHealthcare Medicare & Retirement	22,606			20,698		1,908		9		68,613		62,649		5,964		10
UnitedHealthcare Community & State	UnitedHealthcare Community & State	11,523		11,186		337		3		22,976		22,368		608		3		UnitedHealthcare Community & State	11,820			10,670		1,150		11		34,796		33,038		1,758		5
UnitedHealthcare Global	UnitedHealthcare Global	1,766		2,521		(755)		(30)		3,949		5,055		(1,106)		(22)		UnitedHealthcare Global	1,866			2,446		(580)		(24)		5,815		7,501		(1,686)		(22)
Total UnitedHealthcare revenues	Total UnitedHealthcare revenues	$	49,107	$	48,594	$	513	1	%	$	100,175	$	97,490	$	2,685	3	%	Total UnitedHealthcare revenues	$	50,373		$	48,105	$	2,268	5	%	$	150,548	$	145,595	$	4,953	3	%

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


		June 30,			Increase/(Decrease)						September 30,			Increase/(Decrease)
(in thousands, except percentages)	(in thousands, except percentages)	2020	2019	2020 vs. 2019					(in thousands, except percentages)	2020	2019	2020 vs. 2019
Commercial:	Commercial:						Commercial:
Risk-based	Risk-based	8,065	8,325	(260)	(3)	%	Risk-based	7,950		8,605	(655)	(8)	%
Fee-based	Fee-based	18,705	19,090	(385)	(2)		Fee-based	18,400		19,230	(830)	(4)
Total commercial	Total commercial	26,770	27,415	(645)	(2)		Total commercial	26,350		27,835	(1,485)	(5)
Medicare Advantage	Medicare Advantage	5,605	5,190	415	8		Medicare Advantage	5,670		5,230	440	8
Medicaid	Medicaid	6,210	6,360	(150)	(2)		Medicaid	6,435		5,965	470	8
Medicare Supplement (Standardized)	Medicare Supplement (Standardized)	4,450	4,495	(45)	(1)		Medicare Supplement (Standardized)	4,450		4,510	(60)	(1)
Total public and senior	Total public and senior	16,265	16,045	220	1		Total public and senior	16,555		15,705	850	5
Total UnitedHealthcare - domestic medical	Total UnitedHealthcare - domestic medical	43,035	43,460	(425)	(1)		Total UnitedHealthcare - domestic medical	42,905		43,540	(635)	(1)
Global	Global	5,365	6,070	(705)	(12)		Global	5,285		5,845	(560)	(10)
Total UnitedHealthcare - medical	Total UnitedHealthcare - medical	48,400	49,530	(1,130)	(2)	%	Total UnitedHealthcare - medical	48,190		49,385	(1,195)	(2)	%
Supplemental Data:	Supplemental Data:						Supplemental Data:
Medicare Part D stand-alone	Medicare Part D stand-alone	4,120	4,430	(310)	(7)	%	Medicare Part D stand-alone	4,075		4,415	(340)	(8)	%

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

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

Optum

Total revenues increased as each segment reported revenue growth. Earnings from operations increased due to growth at OptumHealth and ~~OptumInsight, partially offset by decreased earnings from operations at OptumRx.~~OptumInsight.

The results by segment were as follows:

OptumHealth

Revenue and earnings at OptumHealth increased primarily due to ~~acquisitions~~organic growth and ~~organic growth~~acquisitions in risk-based care ~~delivery, partially offset by~~delivery. For the nine months ended September 30, 2020, reduced care volumes in fee-for-service arrangements as a result of ~~COVID-19. Earnings from operations also increased at our risk-based business due to~~COVID-19, partially offset the ~~deferral of care caused by COVID-19.~~increases in revenues and earnings. OptumHealth served approximately 9798 million people as of ~~June~~September 30, 2020 compared to 95 million people as of ~~June~~September 30, 2019.

OptumInsight

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

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OptumRx

Revenue at OptumRx and the corresponding eliminations increased due to the inclusion of retail pharmacy co-payments. See Note 1 of Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this report for further detail. Revenue at OptumRx also increased due to organic and acquisition growth in specialty pharmacy and new client wins, partially offset by an expected large client transition and lower script volumes driven by COVID-19 related care deferral, primarily related to first fill script volumes. Earnings from operations decreased primarily due to ~~the impact of lower script volumes,~~COVID-19 impacts, partially offset by improved supply chain management. OptumRx fulfilled ~~316 million and 343~~325 million adjusted scripts in both the ~~second~~third quarters of 2020 and 2019, ~~respectively. The decrease was due to~~with growth offset by the ~~expected~~ large client ~~transition and lower script volumes due to the impacts of COVID-19, partially offset by organic growth.~~transition.

LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES

Liquidity

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


		Six Months Ended June 30,							Increase/(Decrease)			Nine Months Ended September 30,				Increase/(Decrease)
(in millions)	(in millions)	2020		2019		2020 vs. 2019		(in millions)		2020		2019		2020 vs. 2019
Sources of cash:	Sources of cash:							Sources of cash:
Cash provided by operating activities	Cash provided by operating activities	$	12,946	$	9,108	$	3,838	Cash provided by operating activities		$	16,073	$	12,258	$	3,815
Issuances of short-term borrowings and long-term debt, net of repayments	Issuances of short-term borrowings and long-term debt, net of repayments	5,215		5,674		(459)		Issuances of short-term borrowings and long-term debt, net of repayments		2,941		8,192		(5,251)
Proceeds from common stock issuances	Proceeds from common stock issuances	870		448		422		Proceeds from common stock issuances		1,206		740		466
Customer funds administered	Customer funds administered	1,263		1,435		(172)		Customer funds administered		249		420		(171)
Sales and maturities of investments, net of purchases		573		—		573
Other	Other	—		504		(504)		Other		—		338		(338)
Total sources of cash	Total sources of cash	20,867		17,169				Total sources of cash		20,469		21,948
Uses of cash:	Uses of cash:							Uses of cash:
Common stock repurchases	Common stock repurchases	(1,691)		(4,501)		2,810		Common stock repurchases		(2,541)		(5,101)		2,560
Cash paid for acquisitions, net of cash assumed	Cash paid for acquisitions, net of cash assumed	(3,952)		(4,751)		799		Cash paid for acquisitions, net of cash assumed		(4,326)		(8,200)		3,874
Purchases of investments, net of sales and maturities	Purchases of investments, net of sales and maturities	—		(1,654)		1,654		Purchases of investments, net of sales and maturities		(1,386)		(2,028)		642
Purchases of property, equipment and capitalized software	Purchases of property, equipment and capitalized software	(920)		(977)		57		Purchases of property, equipment and capitalized software		(1,477)		(1,421)		(56)
Cash dividends paid	Cash dividends paid	(2,212)		(1,884)		(328)		Cash dividends paid		(3,400)		(2,908)		(492)
Other	Other	(607)		(529)		(78)		Other		(614)		(756)		142
Total uses of cash	Total uses of cash	(9,382)		(14,296)				Total uses of cash		(13,744)		(20,414)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(143)		6		(149)		Effect of exchange rate changes on cash and cash equivalents		(160)		(37)		(123)
Net increase in cash and cash equivalents	Net increase in cash and cash equivalents	$	11,342	$	2,879	$	8,463	Net increase in cash and cash equivalents		$	6,565	$	1,497	$	5,068

2020 Cash Flows Compared to 2019 Cash Flows

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

Financial Condition

As of ~~June~~September 30, 2020, our cash, cash equivalent, available-for-sale debt securities and equity securities balances of ~~$60.3~~$58.0 billion included approximately ~~$22.3~~$17.6 billion of cash and cash equivalents (of which ~~$4.2~~$2.9 billion was available for general corporate use), ~~$36.0~~$38.3 billion of debt securities and ~~$2.0~~$2.1 billion of investments in equity securities. Given the significant portion of our portfolio held in cash and cash equivalents, we do not anticipate fluctuations in the aggregate fair value of our financial assets to have a material impact on our liquidity or capital position. Our available-for-sale debt portfolio had a weighted-average duration of ~~3.5~~3.6 years and a weighted-average credit rating of “Double A” as of ~~June~~September 30, 2020. When multiple credit ratings are available for an individual security, the average of the available ratings is used to determine the weighted-average credit rating.

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Capital Resources and Uses of Liquidity

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

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

Our revolving bank credit facilities contain various covenants, including covenants requiring us to maintain a defined debt to debt-plus-shareholders’ equity ratio of not more than 60%. As of ~~June~~September 30, 2020, our debt to debt-plus-shareholders’ equity ratio, as defined and calculated under the credit facilities, was approximately ~~39%~~38%.

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

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

Moody’s

S&P Global

Fitch

A.M. Best

Ratings

Outlook

Ratings

Outlook

Ratings

Outlook

Ratings

Outlook

Senior unsecured debt

Stable

A+

Stable

A-

Positive

Commercial paper

P-2

n/a

A-1

n/a

AMB-1

n/a

The availability of financing in the form of debt or equity is influenced by many factors, including our profitability, operating cash flows, debt levels, credit ratings, debt covenants and other contractual restrictions, regulatory requirements and economic and market conditions, including the impacts of COVID-19 and related governmental market stabilization programs. A significant downgrade in our credit ratings or adverse conditions in the capital markets may increase the cost of borrowing for us or limit our access to capital.

Share Repurchase Program. During the ~~six~~nine months ended ~~June~~September 30, 2020, we repurchased 69 million shares at an average price of ~~$271.32~~$281.37 per share. As of ~~June~~September 30, 2020, we had Board authorization to purchase up to 6663 million shares of our common stock.

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

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

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

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

RECENTLY ISSUED ACCOUNTING STANDARDS

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

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CRITICAL ACCOUNTING ESTIMATES

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

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

FORWARD-LOOKING STATEMENTS

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

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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


		June 30, 2020															September 30, 2020
Increase (Decrease) in Market Interest Rate	Increase (Decrease) in Market Interest Rate	Investment Income Per Annum (a)		Interest Expense Per Annum (a)		Fair Value of Financial Assets (b)		Fair Value of Financial Liabilities		Increase (Decrease) in Market Interest Rate	Investment Income Per Annum (a)		Interest Expense Per Annum (a)		Fair Value of Financial Assets (b)		Fair Value of Financial Liabilities
2 %	2 %	$	504	$	200	$	(2,567)	$	(8,573)	2 %	$	412	$	176	$	(2,847)	$	(8,464)
1	1	252		100		(1,271)		(4,715)		1	206		88		(1,412)		(4,609)
(1)	(1)	(80)		(16)		623		4,676		(1)	(62)		(13)		636		4,792
(2)	(2)	(80)		(16)		657		6,214		(2)	(62)		(13)		675		6,424

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

(b)

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

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

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

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

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

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

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

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ITEM 1A. RISK FACTORS

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

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

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

In November 1997, our Board of Directors adopted a share repurchase program, which the Board evaluates periodically. There is no established expiration date for the program. During the ~~second~~third quarter 2020, we ~~did not repurchase any~~repurchased approximately 3 million shares at an average price of ~~our common stock.~~$303.76 per share. As of ~~June~~September 30, 2020, we had Board authorization to purchase up to 6663 million shares of our common stock.

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ITEM 6. EXHIBITS*

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


3.1						Certificate of Incorporation of UnitedHealth Group Incorporated (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form 8-A/A filed on July 1, 2015)
3.2						Bylaws of UnitedHealth Group Incorporated, effective August 15, 2017 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on August 16, 2017)
4.1						Senior Indenture, dated as of November 15, 1998, between United HealthCare Corporation and The Bank of New York (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3/A, SEC File Number 333-66013, filed on January 11, 1999)
4.2						Amendment, dated as of November 6, 2000, to Senior Indenture, dated as of November 15, 1998, between UnitedHealth Group Incorporated and The Bank of New York (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001)
4.3						Instrument of Resignation, Appointment and Acceptance of Trustee, dated January 8, 2007, pursuant to the Senior Indenture, dated as of November 15, 1998, amended November 6, 2000, among UnitedHealth Group Incorporated, The Bank of New York and Wilmington Trust Company (incorporated by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007)
4.4						Indenture, dated as of February 4, 2008, between UnitedHealth Group Incorporated and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3, SEC File Number 333-149031, filed on February 4, 2008)
~~10.1~~						~~UnitedHealth Group 2020 Stock Incentive Plan (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8, SEC File Number 333-238854, filed on June 1, 2020)~~
~~10.2~~						~~Form of Agreement for Restricted Stock Unit Award to Executives under UnitedHealth Group Incorporated’s 2020 Stock Incentive Plan~~
~~10.3~~						~~Form of Agreement for Nonqualified Stock Option Award to Executives under UnitedHealth Group Incorporated’s 2020 Stock Incentive Plan~~
~~10.4~~						~~Form of Agreement for Performance-Based Restricted Stock Unit Award to Executives under UnitedHealth Group Incorporated’s 2020 Stock Incentive Plan~~
~~10.5~~						~~Form of Agreement for Deferred Stock Unit Award to Non-Employee Directors under UnitedHealth Group Incorporated’s 2020 Stock Incentive Plan~~
31.1						Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1						Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document.
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104						Cover Page Interactive Data File (formatted as Inline XBRL and embedded within Exhibit 101).

________________


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

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SIGNATURES

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

UNITEDHEALTH GROUP INCORPORATED

/s/ DAVID S. WICHMANN

Chief Executive Officer
(principal executive officer)

Dated:

~~July 31,~~November 2, 2020

David S. Wichmann

/s/ JOHN F. REX

Executive Vice President and
Chief Financial Officer
(principal financial officer)

Dated:

~~July 31,~~November 2, 2020

John F. Rex

/s/ THOMAS E. ROOS

Senior Vice President and
Chief Accounting Officer
(principal accounting officer)

Dated:

~~July 31,~~November 2, 2020

Thomas E. Roos