UNITEDHEALTH GROUP INC. The following discussion should be read together with the accompanying Condensed Consolidated Financial Statements and Notes and with our 2020 10-K, including the Consolidated Financial Statements and Notes in Part II, Item 8, "Financial Statements" 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 toUnitedHealth 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 2020 10-K and in the discussion below. EXECUTIVE OVERVIEW GeneralUnitedHealth Group is a diversified health care company with a mission to help people live healthier lives and help make the health system work better for everyone. Our two complementary businesses - Optum and UnitedHealthcare - are driven by this unified mission and vision to improve health care access, affordability, experiences and outcomes for the individuals and organizations we are privileged to serve. We have four reportable segments across our two business platforms, Optum and UnitedHealthcare: •OptumHealth; •OptumInsight; •OptumRx; and •UnitedHealthcare, which includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement,UnitedHealthcare Community & State and UnitedHealthcare Global. 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 2020 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. Overall care activity approached seasonal baselines, including a mix of temporary deferral of care activity and COVID-19 related care costs. The temporary deferral of care was more than offset by COVID-19 related care and testing costs, rebate requirements, and general economic impacts, such as impacts of unemployment. In future periods, care patterns may moderately exceed normal baselines as previously deferred care is obtained and acuity temporarily rises due to missed regular care. From time to time, health system capacity may be subject to possible increased volatility due to the pandemic. Specific trends and uncertainties related to our two business platforms are as follows: Optum. COVID-19 related care costs continued to impact ourOptumHealth risk-based care delivery businesses, which were partially offset by the continued temporary deferral of care. The temporary deferral of care reduced fee-for-service care delivery volume, as well asOptumInsight andOptumRx volume-based business activity, although we expect the impact to continue decreasing as care returns to, and potentially exceeds, normal levels. We believe COVID-19 will continue to influence customer and consumer behavior, both during and after the pandemic, which could impact how and where care is delivered and the manner in which consumers wish to receive their prescription drugs or infusion services. We expect COVID-19 related care costs and other economic impacts to be only partially offset by remaining temporary deferrals of care in the second half of the year as health systems return to seasonally adjusted levels of care. 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. 15 -------------------------------------------------------------------------------- Table of Contents UnitedHealthcare. In 2021, we have continued expanded benefit coverage in areas such as COVID-19 related care and testing, telemedicine, and pharmacy; continuing to assist our customers, care providers, members and communities in addressing the COVID-19 crisis. UnitedHealthcare's results of operations were negatively impacted by COVID-19 related care and testing, rebate requirements and other revenue impacts and broader economic impacts, partially offset by the continued deferral of care. Enrollment in our commercial products declined primarily due to employer actions in response to the pandemic, while the increase in people served through Medicaid was attributable in part to continuing action by states to ease redetermination requirements due to the COVID-19 public health emergency. Increased consumer demand for care, potentially even higher acuity care, along with continued COVID-19 related care costs are expected to result in increased future medical costs in the second half of the year. Disrupted care patterns, as a result of the pandemic, have and may continue to temporarily affect the ability to obtain complete member health status information, impacting revenue in businesses utilizing risk adjustment methodologies. The ultimate overall impact is uncertain and dependent on the future pacing and intensity of the pandemic, the duration of policies and initiatives to address COVID-19, and general economic uncertainty. Business Trends Our businesses participate inthe 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 impacts of COVID-19, and regulatory changes, which could impact our results of operations, including our continued efforts to control health care costs. Pricing Trends. To price our health care benefit products, we start with our view of expected future costs, including any potential impacts from COVID-19. 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 and similar revenue adjustments. 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. Government programs in the community 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 related care costs as well as the deferral of care have also impacted medical cost trends in the current year and may continue in future years. Future medical cost trends may be impacted by increased consumer demand for care, potentially even higher acuity care, due to the temporary deferral of care since the onset of the pandemic. 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 continued uncertain impact of COVID-19 may impact our ability to estimate medical costs payable, which has resulted in, and could result in, increased variability to medical cost reserve development. 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 2020 10-K. Medicare Advantage Rates. Final 2022 Medicare Advantage rates resulted in an increase in industry base rates of approximately 4.1%, short of the industry forward medical cost trend. We continue to manage costs through improving and expanding our coordinated care models, value-based care arrangements and various consumer engagement tools. Affordable Care Act (ACA) Tax. The Health Insurance Tax was permanently repealed byCongress , effectiveJanuary 1, 2021 . The permanent repeal 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. 16 -------------------------------------------------------------------------------- Table of Contents SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS The following summarizes select second quarter 2021 year-over-year operating comparisons to second quarter 2020. •Consolidated revenues grew 15%, UnitedHealthcare revenues grew 13% and Optum revenues grew 17%. •UnitedHealthcare served 1.1 million more people domestically, driven by growth in community and senior programs, partially offset a decrease in people served by our commercial business. •Consolidated and UnitedHealthcare earnings from operations decreased due to lower temporary deferrals of care caused by COVID-19, partially offset by an increase at Optum. •Diluted earnings per common share were$4.46 . •Cash flows from operations for the six months endedJune 30, 2021 were$11.5 billion . •Return on equity was 25.2%. RESULTS SUMMARY The following table summarizes our consolidated results of operations and other financial information: Six Months Ended (in millions, except percentages and Three Months Ended June 30, Increase/(Decrease) June 30, Increase/(Decrease) per share data) 2021 2020 2021 vs. 2020 2021 2020 2021 vs. 2020 Revenues: Premiums$ 56,233 $ 49,394 $ 6,839 14 %$ 111,719 $ 100,034 $ 11,685 12 % Products 8,433 8,247 186 2 16,773 16,678 95 1 Services 6,099 4,156 1,943 47 12,017 9,141 2,876 31 Investment and other income 556 341 215 63 1,008 706 302 43 Total revenues 71,321 62,138 9,183 15 141,517 126,559 14,958 12 Operating costs: Medical costs 46,546 34,678 11,868 34 91,450 75,678 15,772 21 Operating costs 10,359 10,001 358 4 20,582 20,016 566 3 Cost of products sold 7,660 7,501 159 2 15,232 15,188 44 - Depreciation and amortization 778 717 61 9 1,536 1,440 96 7 Total operating costs 65,343 52,897 12,446 24 128,800 112,322 16,478 15 Earnings from operations 5,978 9,241 (3,263) (35) 12,717 14,237 (1,520) (11) Interest expense (410) (430) 20 (5) (807) (867) 60 (7) Earnings before income taxes 5,568 8,811 (3,243) (37) 11,910 13,370 (1,460) (11) Provision for income taxes (1,196) (2,115) 919 (43) (2,560) (3,209) 649 (20) Net earnings 4,372 6,696 (2,324) (35) 9,350 10,161 (811) (8) Earnings attributable to noncontrolling interests (106) (59) (47) 80 (222) (142) (80) 56 Net earnings attributable toUnitedHealth Group common shareholders$ 4,266 $ 6,637 $ (2,371) (36) %$ 9,128 $ 10,019 $ (891) (9) % Diluted earnings per share attributable toUnitedHealth Group common shareholders$ 4.46 $ 6.91 $ (2.45) (35) %$ 9.55 $ 10.43 $ (0.88) (8) % Medical care ratio (a) 82.8 % 70.2 % 12.6 % 81.9 % 75.7 % 6.2 % Operating cost ratio 14.5 16.1 (1.6) 14.5 15.8 (1.3) Operating margin 8.4 14.9 (6.5) 9.0 11.2 (2.2) Tax rate 21.5 24.0 (2.5) 21.5 24.0 (2.5) Net earnings margin (b) 6.0 10.7 (4.7) 6.5 7.9 (1.4) Return on equity (c) 25.2 % 44.0 % (18.8) % 27.3 % 33.7 % (6.4) % (a)Medical care ratio is calculated as medical costs divided by premium revenue. (b)Net earnings margin attributable toUnitedHealth Group shareholders. (c)Return on equity is calculated as annualized net earnings attributable toUnitedHealth 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. 17 -------------------------------------------------------------------------------- Table of Contents 2021 RESULTS OF OPERATIONS COMPARED TO 2020 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 and Medicaid; pricing trends; and organic and acquisition growth across the Optum business, primarily due to expansion in care delivery and managed services. The increases partially offset a decrease in individuals served through our commercial business due to the continued economic impacts of COVID-19. Medical Costs and MCR Medical costs increased as a result of increased COVID-19 related care costs, lower temporary care deferrals, growth in people served through Medicare Advantage and Medicaid and medical cost trends, partially offset by decreased people served in our commercial business. The MCR increased due to increased COVID-19 related care costs and the decreased deferral of care over the year ago quarter and the permanent repeal of the Health Insurance Tax. For the six months endedJune 30, 2021 , medical costs and the MCR were also impacted by increased prior year favorable reserve development. Operating Cost Ratio The operating cost ratio decreased primarily due to the permanent repeal of the Health Insurance Tax, COVID-19 impacts on revenue and operating costs in the prior year and operating efficiency gains, partially offset by business mix. Income Tax Rate Our effective tax rate decreased primarily due to the permanent repeal of the nondeductible Health Insurance Tax. 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 byOptumHealth and adjusted scripts forOptumRx . 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. 18
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Table of Contents 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)
(in millions, except percentages) 2021 2020 2021 vs. 2020 2021 2020 2021 vs. 2020
Revenues
UnitedHealthcare $ 55,474 $ 49,107 $ 6,367 13 % $ 110,588 $ 100,175 $ 10,413 10 %
OptumHealth 13,300 9,139 4,161 46 25,703 18,331 7,372 40
OptumInsight 2,957 2,632 325 12 5,809 5,126 683 13
OptumRx 22,524 21,371 1,153 5 44,128 42,928 1,200 3
Optum eliminations (478) (447) (31) 7 (953) (851) (102) 12
Optum 38,303 32,695 5,608 17 74,687 65,534 9,153 14
Eliminations (22,456) (19,664) (2,792) 14 (43,758) (39,150) (4,608) 12
Consolidated revenues $ 71,321 $ 62,138 $ 9,183 15 % $ 141,517 $ 126,559 $ 14,958 12 %
Earnings from operations
UnitedHealthcare $ 3,095 $ 7,007 $ (3,912) (56) % $ 7,203 $ 9,895 $ (2,692) (27) %
OptumHealth 1,128 841 287 34 2,090 1,553 537 35
OptumInsight 762 561 201 36 1,541 1,097 444 40
OptumRx 993 832 161 19 1,883 1,692 191 11
Optum 2,883 2,234 649 29 5,514 4,342 1,172 27
Consolidated earnings from operations $ 5,978 $ 9,241 $ (3,263) (35) % $ 12,717 $ 14,237 $ (1,520) (11) %
Operating margin
UnitedHealthcare 5.6 % 14.3 % (8.7) % 6.5 % 9.9 % (3.4) %
OptumHealth 8.5 9.2 (0.7) 8.1 8.5 (0.4)
OptumInsight 25.8 21.3 4.5 26.5 21.4 5.1
OptumRx 4.4 3.9 0.5 4.3 3.9 0.4
Optum 7.5 6.8 0.7 7.4 6.6 0.8
Consolidated operating margin 8.4 % 14.9 % (6.5) % 9.0 % 11.2 % (2.2) %
UnitedHealthcareThe following table summarizes UnitedHealthcare revenues by business:
Three Months Ended June 30 , Increase/(Decrease) Six Months Ended June 30 , Increase/(Decrease)
(in millions, except percentages) 2021 2020 2021 vs. 2020 2021 2020 2021 vs. 2020
UnitedHealthcare Employer & Individual $ 14,942 $ 12,963 $ 1,979 15 % $ 29,574 $ 27,243 $ 2,331 9 %
UnitedHealthcare Medicare & Retirement 25,304 22,855 2,449 11 50,778 46,007 4,771 10
UnitedHealthcare Community & State 13,110 11,523 1,587 14 26,083 22,976 3,107 14
UnitedHealthcare Global 2,118 1,766 352 20 4,153 3,949 204 5
Total UnitedHealthcare revenues $ 55,474 $ 49,107 $ 6,367 13 % $ 110,588 $ 100,175 $ 10,413 10 %
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Table of Contents The following table summarizes the number of individuals served by our UnitedHealthcare businesses, by major market segment and funding arrangement:
June 30, Increase/(Decrease)
(in thousands, except percentages) 2021 2020 2021 vs. 2020
Commercial:
Risk-based 7,840 8,065 (225) (3) %
Fee-based 18,395 18,705 (310) (2)
Total commercial 26,235 26,770 (535) (2)
Medicare Advantage 6,385 5,605 780 14
Medicaid 7,130 6,210 920 15
Medicare Supplement (Standardized) 4,390 4,450 (60) (1)
Total community and senior 17,905 16,265 1,640 10
Total UnitedHealthcare - domestic medical 44,140 43,035 1,105 3
Global 5,485 5,365 120 2
Total UnitedHealthcare - medical 49,625 48,400 1,225 3 %
Supplemental Data:
Medicare Part D stand-alone 3,750 4,120 (370) (9) %
Commercial business decreased primarily due to increased unemployment. Medicare
Advantage increased due to growth in people served through individual and group
Medicare Advantage plans. The increase in people served through Medicaid was
primarily driven by states continuing to ease redetermination requirements due
to COVID-19, new state-based awards and growth in people served through Dual
Special Needs Plans.
UnitedHealthcare's revenue increased due to growth in the number of individuals
served through Medicare Advantage and Medicaid and a greater mix of people with
higher acuity needs, partially offset by a decrease in the number of individuals
served through commercial benefits, the permanent repeal of the Health Insurance
Tax and the impacts of COVID-19 on risk adjusted business. Earnings from
operations for the three months ended June 30, 2021 decreased primarily due to
the lower temporary deferral of care. For the three and six months ended June
30, 2021 , earnings from operations decreased due to COVID-19 related care costs,
reduction in people served through commercial benefits and the impacts of
COVID-19 on risk adjusted business, partially offset by growth in people served
through Medicare Advantage and Medicaid and the repeal of the Health Insurance
Tax.
Optum
Total revenues and earnings from operations increased due to growth across the
Optum businesses. The results by segment were as follows:
OptumHealth
Revenue at OptumHealth increased primarily due to organic growth and
acquisitions in care delivery and the impact of COVID-19 at our fee-based
businesses as consumers resumed elective care. Earnings from operations
increased due to organic growth and acquisitions and cost management
initiatives. COVID-19 related care costs and temporary care deferrals affected
earnings from operations at our risk-based and fee-based businesses in
offsetting manners. OptumHealth served approximately 99 million people as of
June 30, 2021 compared to 97 million people as of June 30, 2020 .
OptumInsight
Revenue at OptumInsight increased primarily due to growth in technology and
managed services and increased activity levels in our volume-based services as a
result of care activity normalizing for payer and care provider clients.
Earnings from operations increased primarily due to productivity gains and cost
management initiatives, as well as the factors impacting revenue.
OptumRx
Revenue and earnings from operations at OptumRx increased due to higher script
volumes, pricing trends and organic growth in pharmacy care services. Revenue
for the six months ended June 30, 2021 also increased due to acquisitions.
Earnings from operations also increased as a result of continued supply chain
management initiatives. OptumRx fulfilled 342 million and 316 million adjusted
scripts in the second quarters of 2021 and 2020, respectively. The increase was
due to the continued recovery of script volumes from the second quarter of 2020
where volumes were negatively impacted by COVID-19, dispensing of COVID-19
vaccines and organic growth.
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Table of Contents
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)
(in millions) 2021 2020 2021 vs. 2020
Sources of cash:
Cash provided by operating activities $ 11,545 $ 12,946 $ (1,401)
Issuances of short-term borrowings and long-term debt, net of repayments
4,858 5,215 (357)
Proceeds from common stock issuances 764 870 (106)
Customer funds administered 2,395 1,263 1,132
Sales and maturities of investments, net of purchases - 573 (573)
Total sources of cash 19,562 20,867
Uses of cash:
Common stock repurchases (2,900) (1,691) (1,209)
Cash paid for acquisitions, net of cash assumed (4,642) (3,952) (690)
Purchases of investments, net of sales and maturities (2,789) - (2,789)
Purchases of property, equipment and capitalized software (1,130) (920) (210)
Cash dividends paid (2,548) (2,212) (336)
Purchases of redeemable noncontrolling interests (1,338) - (1,338)
Other (1,310) (607) (703)
Total uses of cash (16,657) (9,382)
Effect of exchange rate changes on cash and cash equivalents 6 (143) 149
Net increase in cash and cash equivalents $ 2,911 $ 11,342 $ (8,431)
2021 Cash Flows Compared to 2020 Cash Flows
Decreased cash flows provided by operating activities were primarily driven by
decreased net earnings due to the lower temporary deferral of care, the timing
of prior year federal income tax payments and changes in working capital
accounts. Other significant changes in sources or uses of cash year-over-year
included increased net purchases of investments, purchases of redeemable
noncontrolling interests and increased share repurchases, partially offset by
increased customer funds administered.
Financial Condition
As of June 30, 2021 , our cash, cash equivalent, available-for-sale debt
securities and equity securities balances of $64.7 billion included
approximately $19.8 billion of cash and cash equivalents (of which $1.5 billion
was available for general corporate use), $42.1 billion of debt securities and
$2.8 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 securities portfolio had a weighted-average duration of 3.8 years and a
weighted-average credit rating of "Double A" as of June 30, 2021 . 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.
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:
Cash Requirements. A summary of our cash requirements as of December 31, 2020
was disclosed in Part II, Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in our 2020 10-K. During the six
months ended June 30, 2021 , there were no material changes to this previously
disclosed information outside the ordinary course of business. We believe our
capital resources are sufficient to meet future, short-term and long-term,
liquidity needs. We continually evaluate opportunities to expand our operations,
including through internal development of new products, programs and technology
applications and acquisitions.
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Table of Contents
Short-Term Borrowings. 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 8 of Notes to the Consolidated
Financial Statements included in Part II, Item 8, "Financial Statements" in our
2020 10-K.
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 30, 2021 , our debt to
debt-plus-shareholders' equity ratio, as defined and calculated under the credit
facilities, was approximately 39%.
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 and Note 8 of Notes to the Consolidated Financial Statements
included in Part II, Item 8, "Financial Statements" in our 2020 10-K.
Credit Ratings. Our credit ratings as of June 30, 2021 were as follows:
Moody's S&P Global Fitch A.M. Best
Ratings Outlook Ratings Outlook Ratings Outlook Ratings Outlook
Senior unsecured debt A3 Stable A+ Stable A Stable A- Positive
Commercial paper P-2 n/a A-1 n/a F1 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. 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 months ended June 30, 2021 , we
repurchased approximately 8 million shares at an average price of $365.03 per
share. As of June 30, 2021 , we had Board authorization to purchase up to 50
million shares of our common stock.
Dividends. In June 2021 , the Company's Board of Directors increased the
Company's quarterly cash dividend to shareholders to an annual rate of $5.80
compared to $5.00 per share. For more information on our dividend, see Note 6
of Notes t o the Condensed Consolidated Fi nancial St atements
included in Part I, Item 1 of this report.
Pending Acquisitions. The Company has entered into agreements to purchase
companies in the health care sector, most notably Change Healthcare (NASDAQ:
CHNG), subject to regulatory approvals and other customary closing conditions.
The total anticipated capital required for these acquisitions, excluding the
payoff of acquired indebtedness, is approximately $9 billion .
For additional liquidity discussion, see Note 10 of Notes to the Consolidated
Financial Statements in Part II, Item 8, "Financial Statements" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Part II, Item 7 in our 2020 10-K.
RECENTLY ISSUED ACCOUNTING STANDARDS
There are no recently issued accounting standards that are expected to have a
material impact on our Condensed Consolidated Financial Statements.
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 2020 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" in our 2020
10-K.
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Table of Contents 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; cyberattacks, 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 attract, develop, retain, and manage the succession of key employees and executives; the impact of potential changes in tax laws and regulations (including any increase in theU.S. income tax rate applicable to corporations); 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 theSEC , 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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