Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

			Page
Report of Independent Registered Public Accounting Firm (PCAOB ID No 34)			38
Consolidated Balance Sheets			40
Consolidated Statements of Operations			41
Consolidated Statements of Comprehensive Income			42
Consolidated Statements of Changes in Equity			43
Consolidated Statements of Cash Flows			44
Notes to the Consolidated Financial Statements			45
1. Description of Business			45
2. Basis of Presentation, Use of Estimates and Significant Accounting Policies			45
3. Investments			50
4. Fair Value			51
5. Property, Equipment and Capitalized Software			54
6. Goodwill and Other Intangible Assets			54
7. Medical Costs Payable			55
8. Short-Term Borrowings and Long-Term Debt			57
9. Income Taxes			58
10. Shareholders’ Equity			60
11. Share-Based Compensation			61
12. Commitments and Contingencies			63
13. Segment Financial Information			64

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of UnitedHealth Group Incorporated and Subsidiaries:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of UnitedHealth Group Incorporated and Subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 15, 2022 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit and finance committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Incurred but not Reported (IBNR) Claim Liability - Refer to Notes 2 and 7 to the financial statements.

Critical Audit Matter Description

Medical costs payable includes estimates of the Company’s obligations for medical care services rendered on behalf of insured consumers, for which claims have either not yet been received or processed. These estimates are referred to as incurred but not reported (IBNR) claim liabilities. At December 31, 2021 the Company’s IBNR balance was $17 billion. The Company develops IBNR estimates using an actuarial model that requires management to exercise certain judgments in developing its estimates. Judgments made by management include medical cost per member per month trend factors and completion factors, which include assumptions over the time from date of service to claim receipt, the impact of claim levels, processing cycles, and consideration of COVID-19.

We identified the IBNR claim liability as a critical audit matter because of the significant assumptions made by management in estimating the liability. This required complex auditor judgment, and an increased extent of effort, including the involvement of actuarial specialists in performing procedures to evaluate the reasonableness of management’s methods, assumptions and judgments in developing the liability.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures included the following, among others:

• We tested the effectiveness of controls over management’s estimate of the IBNR claim liability balance, including controls over the judgments in both the completion factors and the medical cost per member per month trend factors, as well as controls over the claims and membership data used in the estimation process.

• We tested the underlying claims and membership data and other information that served as the basis for the actuarial analysis, to test that the inputs to the actuarial estimate were complete and accurate.

• With the assistance of actuarial specialists, we evaluated the reasonableness of the actuarial methods and assumptions used by management to estimate the IBNR claim liability by:

◦Performing an overlay of the historical claims data used in management’s current year model to the data used in prior periods to validate that there were no material changes to the claims data tested in prior periods.

◦Developing an independent estimate of the IBNR claim liability and comparing our estimate to management’s estimate.

◦Performing a retrospective review comparing management’s prior year estimate of IBNR to claims processed in 2021 with dates of service in 2020 or prior.

Goodwill - Refer to Notes 2 and 6 to the financial statements.

Critical Audit Matter Description

At December 31, 2021, the Company’s goodwill balance was $76 billion. As discussed in Note 2 of the financial statements, for reporting units where a quantitative analysis is performed, the Company performs an annual impairment test measuring the fair values of the reporting units and comparing them to their aggregate carrying values including goodwill. The estimates of the reporting unit fair values are calculated using a discounted cash flow method or a weighted combination of discounted cash flows and a market-based method. The discounted cash flow method includes assumptions about revenue trends, medical cost trends, and operating costs as well as discount rates. The market-based method requires determination of an appropriate group of peer companies whose securities are traded on an active market. The annual impairment test indicated that the fair values of the reporting units exceeded the carrying values as of the impairment testing date; therefore, no impairment was recognized.

We identified a critical audit matter related to the quantitative analysis performed for such reporting units because of the significant assumptions made by management to estimate the fair value of the reporting unit. This required increased auditor judgment and extent of effort, including involvement of fair value specialists to evaluate the reasonableness of management’s estimates and assumptions related to peer company selection and financial projections, which can be impacted by regulatory and macro-economic factors.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the valuation, business, and market assumptions including the discount rate, financial forecasts, and peer group used by management to estimate the fair value of reporting units where a quantitative analysis was performed, included the following, among others:

• We tested the effectiveness of controls over management’s annual goodwill impairment assessment, including those over the determination of the fair value such as controls related to management’s financial forecasts, as well as controls over the selection of discount rates, company specific risks, peer companies, and market multiples.

• We evaluated management’s ability to forecast and meet future revenue, medical cost trend, and operating costs by comparing:

◦Actual results to historical forecasts.

◦Forecasted information to: internal communications to management and the Board of Directors, industry and economic trends, and analyst reports of revenue and earnings expectations for the Company and its peers.

• We evaluated the impact of changes in management’s forecasts from the October 1, 2021 annual measurement date to December 31, 2021.

• We evaluated management’s selection of peer companies and market multiples.

• With the assistance of our fair value specialists, we evaluated the reasonableness of (1) the valuation methodologies, including testing the mathematical accuracy of the calculation, (2) the weighting of such valuation methodologies, and (3) discount rate and company specific risks by:

◦Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.

◦Developing a range of independent discount rate estimates and comparing to those selected by management.

/S/ DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
February 15, 2022

We have served as the Company's auditor since 2002.

UnitedHealth Group

Consolidated Balance Sheets

(in millions, except per share data)						December 31, 2021						December 31, 2020
Assets
Current assets:
Cash and cash equivalents						$	21,375					$	16,921
Short-term investments						2,532						2,860
Accounts receivable, net of allowances of $954 and $990						14,216						12,870
Other current receivables, net of allowances of $993 and $1,047						13,866						12,534
Assets under management						4,449						4,076
Prepaid expenses and other current assets						5,320						4,457
Total current assets						61,758						53,718
Long-term investments						43,114						41,242
Property, equipment and capitalized software, net of accumulated depreciation and amortization of $5,992 and $5,230						8,969						8,626
Goodwill						75,795						71,337
Other intangible assets, net of accumulated amortization of $5,636 and $5,455						10,044						10,856
Other assets						12,526						11,510
Total assets						$	212,206					$	197,289
Liabilities, redeemable noncontrolling interests and equity
Current liabilities:
Medical costs payable						$	24,483					$	21,872
Accounts payable and accrued liabilities						24,643						22,495
Short-term borrowings and current maturities of long-term debt						3,620						4,819
Unearned revenues						2,571						2,842
Other current liabilities						22,975						20,392
Total current liabilities						78,292						72,420
Long-term debt, less current maturities						42,383						38,648
Deferred income taxes						3,265						3,367
Other liabilities						11,787						12,315
Total liabilities						135,727						126,750
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests						1,434						2,211
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; 941 and 946 issued and outstanding						10						10
Additional paid-in capital						—						—
Retained earnings						77,134						69,295
Accumulated other comprehensive loss						(5,384)						(3,814)
Nonredeemable noncontrolling interests						3,285						2,837
Total equity						75,045						68,328
Total liabilities, redeemable noncontrolling interests and equity						$	212,206					$	197,289

See Notes to the Consolidated Financial Statements

UnitedHealth Group

Consolidated Statements of Operations

						For the Years Ended December 31,
(in millions, except per share data)						2021						2020						2019
Revenues:
Premiums						$	226,233					$	201,478					$	189,699
Products						34,437						34,145						31,597
Services						24,603						20,016						18,973
Investment and other income						2,324						1,502						1,886
Total revenues						287,597						257,141						242,155
Operating costs:
Medical costs						186,911						159,396						156,440
Operating costs						42,579						41,704						35,193
Cost of products sold						31,034						30,745						28,117
Depreciation and amortization						3,103						2,891						2,720
Total operating costs						263,627						234,736						222,470
Earnings from operations						23,970						22,405						19,685
Interest expense						(1,660)						(1,663)						(1,704)
Earnings before income taxes						22,310						20,742						17,981
Provision for income taxes						(4,578)						(4,973)						(3,742)
Net earnings						17,732						15,769						14,239
Earnings attributable to noncontrolling interests						(447)						(366)						(400)
Net earnings attributable to UnitedHealth Group common shareholders						$	17,285					$	15,403					$	13,839
Earnings per share attributable to UnitedHealth Group common shareholders:
Basic						$	18.33					$	16.23					$	14.55
Diluted						$	18.08					$	16.03					$	14.33
Basic weighted-average number of common shares outstanding						943						949						951
Dilutive effect of common share equivalents						13						12						15
Diluted weighted-average number of common shares outstanding						956						961						966
Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents						1						8						10

See Notes to the Consolidated Financial Statements

UnitedHealth Group

Consolidated Statements of Comprehensive Income

						For the Years Ended December 31,
(in millions)						2021						2020						2019
Net earnings						$	17,732					$	15,769					$	14,239
Other comprehensive (loss) income:
Gross unrealized (losses) gains on investment securities during the period						(1,028)						1,058						1,212
Income tax effect						248						(253)						(279)
Total unrealized (losses) gains, net of tax						(780)						805						933
Gross reclassification adjustment for net realized gains included in net earnings						(173)						(75)						(104)
Income tax effect						40						17						24
Total reclassification adjustment, net of tax						(133)						(58)						(80)
Total foreign currency translation losses						(657)						(983)						(271)
Other comprehensive (loss) income						(1,570)						(236)						582
Comprehensive income						16,162						15,533						14,821
Comprehensive income attributable to noncontrolling interests						(447)						(366)						(400)
Comprehensive income attributable to UnitedHealth Group common shareholders						$	15,715					$	15,167					$	14,421

See Notes to the Consolidated Financial Statements

UnitedHealth Group

Consolidated Statements of Changes in Equity

						Common Stock												Additional Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive (Loss) Income												Nonredeemable Noncontrolling Interests						Total Equity
(in millions)						Shares						Amount												Net Unrealized (Losses) Gains on Investments						Foreign Currency Translation Losses
Balance at January 1, 2019						960						$	10					$	—					$	55,846					$	(264)					$	(3,896)					$	2,623					$	54,319
Adjustment to adopt ASU 2016-02																								(13)																		(5)						(18)
Net earnings																								13,839																		285						14,124
Other comprehensive income (loss)																														853						(271)												582
Issuances of common stock, and related tax effects						10						—						696																														696
Share-based compensation																		673																														673
Common share repurchases						(22)						(1)						(937)						(4,562)																								(5,500)
Cash dividends paid on common shares ($4.14 per share)																								(3,932)																								(3,932)
Redeemable noncontrolling interest fair value and other adjustments																		(316)																														(316)
Acquisition and other adjustments of nonredeemable noncontrolling interests																		(109)																								196						87
Distributions to nonredeemable noncontrolling interest																																										(279)						(279)
Balance at December 31, 2019						948						9						7						61,178						589						(4,167)						2,820						60,436
Adjustment to adopt ASU 2016-13																								(28)																								(28)
Net earnings																								15,403																		254						15,657
Other comprehensive income (loss)																														747						(983)												(236)
Issuances of common stock, and related tax effects						12						1						1,119																														1,120
Share-based compensation																		647																														647
Common share repurchases						(14)						—						(1,576)						(2,674)																								(4,250)
Cash dividends paid on common shares ($4.83 per share)																								(4,584)																								(4,584)
Redeemable noncontrolling interest fair value and other adjustments																		(197)																														(197)
Acquisition and other adjustments of nonredeemable noncontrolling interests																																										40						40
Distributions to nonredeemable noncontrolling interest																																										(277)						(277)
Balance at December 31, 2020						946						10						—						69,295						1,336						(5,150)						2,837						68,328
Net earnings																								17,285																		360						17,645
Other comprehensive loss																														(913)						(657)												(1,570)
Issuances of common stock, and related tax effects						8						—						1,100																														1,100
Share-based compensation																		729																														729
Common share repurchases						(13)						—						(940)						(4,060)																								(5,000)
Cash dividends paid on common shares ($5.60 per share)																								(5,280)																								(5,280)
Redeemable noncontrolling interests fair value and other adjustments																		(889)						(106)																								(995)
Acquisition and other adjustments of nonredeemable noncontrolling interests																																										407						407
Distributions to nonredeemable noncontrolling interests																																										(319)						(319)
Balance at December 31, 2021						941						$	10					$	—					$	77,134					$	423					$	(5,807)					$	3,285					$	75,045

See Notes to the Consolidated Financial Statements

UnitedHealth Group

Consolidated Statements of Cash Flows

						For the Years Ended December 31,
(in millions)						2021						2020						2019
Operating activities
Net earnings						$	17,732					$	15,769					$	14,239
Noncash items:
Depreciation and amortization						3,103						2,891						2,720
Deferred income taxes						130						(8)						230
Share-based compensation						800						679						697
Other, net						(944)						(52)						(106)
Net change in other operating items, net of effects from acquisitions and changes in AARP balances:
Accounts receivable						(1,000)						(688)						162
Other assets						(1,031)						(2,195)						(1,563)
Medical costs payable						2,701						152						1,221
Accounts payable and other liabilities						1,162						5,348						733
Unearned revenues						(310)						278						130
Cash flows from operating activities						22,343						22,174						18,463
Investing activities
Purchases of investments						(17,139)						(16,577)						(18,131)
Sales of investments						7,045						6,489						8,536
Maturities of investments						8,251						7,252						7,091
Cash paid for acquisitions, net of cash assumed						(4,821)						(7,139)						(8,343)
Purchases of property, equipment and capitalized software						(2,454)						(2,051)						(2,071)
Other, net						(1,254)						(506)						219
Cash flows used for investing activities						(10,372)						(12,532)						(12,699)
Financing activities
Common share repurchases						(5,000)						(4,250)						(5,500)
Cash dividends paid						(5,280)						(4,584)						(3,932)
Proceeds from common stock issuances						1,355						1,440						1,037
Repayments of long-term debt						(3,150)						(3,150)						(1,750)
(Repayments of) proceeds from short-term borrowings, net						(1,302)						872						300
Proceeds from issuance of long-term debt						6,933						4,864						5,444
Customer funds administered						622						1,677						13
Purchases of redeemable noncontrolling interests						(1,338)						—						(618)
Other, net						(295)						(459)						(619)
Cash flows used for financing activities						(7,455)						(3,590)						(5,625)
Effect of exchange rate changes on cash and cash equivalents						(62)						(116)						(20)
Increase in cash and cash equivalents						4,454						5,936						119
Cash and cash equivalents, beginning of period						16,921						10,985						10,866
Cash and cash equivalents, end of period						$	21,375					$	16,921					$	10,985
Supplemental cash flow disclosures
Cash paid for interest						$	1,653					$	1,704					$	1,627
Cash paid for income taxes						3,966						4,935						3,542

See Notes to the Consolidated Financial Statements

UnitedHealth Group

Notes to the Consolidated Financial Statements

**1.**Description of Business

UnitedHealth Group Incorporated (individually and together with its subsidiaries, “UnitedHealth Group” and “the Company”) is a health care and well-being company with a mission to help people live healthier lives and help make the health system work better for everyone. Our two distinct, yet complementary business platforms — Optum and UnitedHealthcare — are working to help build a modern, high-performing health system through improved access, affordability, outcomes and experiences for the individuals and organizations we are privileged to serve.

**2.**Basis of Presentation, Use of Estimates and Significant Accounting Policies

Basis of Presentation

The Company has prepared the Consolidated Financial Statements according to U.S. Generally Accepted Accounting Principles (GAAP) and has included the accounts of UnitedHealth Group and its subsidiaries.

Use of Estimates

These Consolidated Financial Statements include certain amounts based on the Company’s best estimates and judgments. The Company’s most significant estimates relate to estimates and judgments for medical costs payable and goodwill. Certain of these estimates require the application of complex assumptions and judgments, often because they involve matters 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.

Revenues

Premiums

Premium revenues are primarily derived from risk-based health insurance arrangements in which the premium is typically at a fixed rate per individual served for a one-year period, and the Company assumes the economic risk of funding its customers’ health care and related administrative costs.

Premium revenues are recognized in the period in which eligible individuals are entitled to receive health care benefits. Health care premium payments received from the Company’s customers in advance of the service period are recorded as unearned revenues. Fully insured commercial products of U.S. health plans, Medicare Advantage and Medicare Prescription Drug Benefit (Medicare Part D) plans with medical loss ratios (MLRs) as calculated under the definitions in the Patient Protection and Affordable Care Act (ACA) and related federal and state regulations and implementing regulation, falling below certain targets are required to rebate ratable portions of their premiums annually. Commercial premiums within the Company’s individual and small group markets are also subject to the ACA risk adjustment program. Medicare Advantage premium revenue includes the impact of the Centers for Medicare & Medicaid Services (CMS) quality bonuses based on plans’ Star rating. Certain of the Company’s Medicaid business is also subject to state minimum MLR rebates.

Premium revenues are recognized based on the estimated premiums earned, net of projected rebates, because the Company is able to reasonably estimate the ultimate premiums of these contracts. The Company also records premium revenues for certain value-based arrangements at its Optum Health care delivery businesses. Under these value-based arrangements, the Company enters into agreements with health plans to stand ready to deliver, integrate, direct and control certain health care services for the individuals enrolled. In exchange, the Company receives a premium that is typically paid on a per-member per-month basis. The Company considers these value-based arrangements to represent a single performance obligation where premium revenues are recognized in the period in which health care services are made available.

The Company’s Medicare Advantage and Medicare Part D premium revenues are subject to periodic adjustment under CMS’ risk adjustment payment methodology. CMS deploys a risk adjustment model which apportions premiums paid to all health plans according to health severity and certain demographic factors. The CMS risk adjustment model provides higher per member payments for enrollees diagnosed with certain conditions and lower payments for enrollees who are healthier. Under this risk adjustment methodology, CMS calculates the risk adjusted premium payment using diagnosis and encounter data from hospital inpatient, hospital outpatient and physician treatment settings. The Company and health care providers collect, capture and submit the necessary and available data to CMS within prescribed deadlines. The Company estimates risk adjustment premium revenues based upon the data submitted and expected to be submitted to CMS. Risk adjustment data for the Company’s plans are subject to review by the government, including audit by regulators. See Note 12 for additional information regarding these audits.

Products and Services

For the Company’s Optum Rx pharmacy care services business, the majority of revenues are derived from products sold through a contracted network of retail pharmacies or home delivery, specialty and community health pharmacies. Product revenues include the cost of pharmaceuticals (net of rebates), a negotiated dispensing fee and customer co-payments for drugs dispensed through the Company’s home delivery, specialty and community pharmacies. For the years ended December 31, 2021 and 2020, the Company recognized revenue and cost of products sold for retail pharmacy co-payments related to its Optum Rx 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. Pharmacy products are billed to customers based on the number of transactions occurring during the billing period. Product revenues are recognized when the prescriptions are dispensed. The Company has entered into contracts in which it is primarily obligated to pay its network pharmacy providers for benefits provided to their customers regardless of whether the Company is paid. The Company is also involved in establishing the prices charged by retail pharmacies, determining which drugs will be included in formulary listings and selecting which retail pharmacies will be included in the network offered to plan sponsors’ members and accordingly, are reported on a gross basis.

Services revenue are comprised of a number of services and products sold through Optum. Optum Health’s service revenues include net patient service revenues recorded based upon established billing rates, less allowances for contractual adjustments, and are recognized as services are provided. For its financial services offerings, Optum Health charges fees and earns investment income on managed funds. Optum Insight provides software and information products, advisory consulting arrangements and managed services outsourcing contracts, which may be delivered over several years. Optum Insight revenues are generally recognized over time and measured each period based on the progress to date as services are performed or made available to customers.

Services revenue also consists of fees derived from services performed for customers who self-insure the health care costs of their employees and employees’ dependents. Under service fee contracts, the Company receives monthly, a fixed fee per employee, which is recognized as revenue as the Company performs, or makes available, the applicable services to the customer. The customers retain the risk of financing health care costs for their employees and employees’ dependents, and the Company administers the payment of customer funds to physicians and other health care professionals from customer-funded bank accounts. As the Company has neither the obligation for funding the health care costs, nor the primary responsibility for providing the medical care, the Company does not recognize premium revenue and medical costs for these contracts in its Consolidated Financial Statements. For these fee-based customer arrangements, the Company provides coordination and facilitation of medical services; transaction processing; customer, consumer and care professional services; and access to contracted networks of physicians, hospitals and other health care professionals. These services are performed throughout the contract period.

As of December 31, 2021 and 2020, accounts receivables related to products and services were $5.4 billion and $5.3 billion, respectively. In 2021 and 2020, the Company had no material bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the Consolidated Balance Sheets as of December 31, 2021 or 2020.

For the years ended December 31, 2021, 2020 and 2019, revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price) was not material.

Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts having an original expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, is not material.

See Note 13 for disaggregation of revenue by segment and type.

Medical Costs and Medical Costs Payable

The Company’s estimate of medical costs payable represents management’s best estimate of its liability for unpaid medical costs as of December 31, 2021.

Each period, the Company re-examines previously established medical costs payable estimates based on actual claim submissions and other changes in facts and circumstances. As more complete claim information becomes available, the Company adjusts the amount of the estimates and includes the changes in estimates in medical costs in the period in which the change is identified. Approximately 90% of claims related to medical care services are known and settled within 90 days from the date of service and substantially all within twelve months.

Medical costs and medical costs payable include estimates of the Company’s obligations for medical care services rendered on behalf of consumers, but for which claims have either not yet been received, processed, or paid. The Company develops estimates for medical care services incurred but not reported (IBNR), which includes estimates for claims which have not been received or fully processed, using an actuarial process consistently applied, centrally controlled and automated. The actuarial

models consider factors such as time from date of service to claim processing, seasonal variances in medical care consumption, health care professional contract rate changes, medical care utilization and other medical cost trends, membership volume and demographics, the introduction of new technologies, benefit plan changes, and business mix changes related to products, customers and geography. Judgments related to these factors contemplated the impact of COVID-19.

In developing its medical costs payable estimates, the Company applies different estimation methods depending on which incurred claims are being estimated. For the most recent two months, the Company estimates claim costs incurred by applying observed medical cost trend factors to the average per member per month (PMPM) medical costs incurred in prior months for which more complete claim data are available, supplemented by a review of near-term completion factors (actuarial estimates, based upon historical experience and analysis of current trends, of the percentage of incurred claims during a given period adjudicated by the Company at the date of estimation). For months prior to the most recent two months, the Company applies the completion factors to actual claims adjudicated-to-date to estimate the expected amount of ultimate incurred claims for those months.

Cost of Products Sold

The Company’s cost of products sold includes the cost of pharmaceuticals dispensed to unaffiliated customers either directly at its home delivery, specialty and community pharmacy locations, or indirectly through its nationwide network of participating pharmacies. Rebates attributable to unaffiliated clients are accrued as rebates receivable and a reduction of cost of products sold, with a corresponding payable for the amounts of the rebates to be remitted to those unaffiliated clients in accordance with their contracts and recorded in the Consolidated Statements of Operations as a reduction of product revenue. Cost of products sold also includes the cost of personnel to support the Company’s transaction processing services, system sales, maintenance and professional services.

Cash, Cash Equivalents and Investments

Cash and cash equivalents are highly liquid investments having an original maturity of three months or less. The fair value of cash and cash equivalents approximates their carrying value because of the short maturity of the instruments.

Investments with maturities of less than one year are classified as short-term. Because of regulatory requirements, certain investments are included in long-term investments regardless of their maturity date. The Company classifies these investments as held-to-maturity and reports them at amortized cost. Substantially all other investments are classified as available-for-sale and reported at fair value based on quoted market prices, where available. Equity investments, with certain exceptions, are measured at fair value with changes in fair value recognized in net earnings.

The Company excludes unrealized gains and losses on investments in available-for-sale debt securities from net earnings and reports them as comprehensive income and, net of income tax effects, as a separate component of equity. To calculate realized gains and losses on the sale of debt securities, the Company specifically identifies the cost of each investment sold.

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 which 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.

New information and the passage of time can change these judgments. The Company manages its investment portfolio to limit its exposure to any one issuer or market sector, and largely limits its investments to investment grade quality. Securities downgraded below policy minimums after purchase will be disposed of in accordance with the Company’s investment policy.

Assets Under Management

The Company provides health insurance products and services to members of AARP under a Supplemental Health Insurance Program (the AARP Program) and to AARP members and non-members under separate Medicare Advantage and Medicare Part D arrangements. The products and services under the AARP Program include supplemental Medicare benefits, hospital indemnity insurance, including insurance for individuals between 50 to 64 years of age, and other related products.

Pursuant to the Company’s agreement with AARP, program assets are managed separately from the Company’s general investment portfolio and are used to pay costs associated with the AARP Program. These assets are invested at the Company’s discretion, within investment guidelines approved by AARP. The Company does not guarantee any rates of return on these investments and, upon any transfer of the AARP Program contract to another entity, the Company would transfer cash equal in amount to the fair value of these investments at the date of transfer to the entity. Because the purpose of these assets is to fund the medical costs payable, the rate stabilization fund (RSF) liabilities and other related liabilities associated with this AARP contract, assets under management are classified as current assets, consistent with the classification of these liabilities.

The effects of changes in other balance sheet amounts associated with the AARP Program also accrue to the overall benefit of the AARP policyholders through the RSF balance. Accordingly, the Company excludes the effect of such changes in its Consolidated Statements of Cash Flows.

Other Current Receivables

Other current receivables include amounts due from pharmaceutical manufacturers for rebates and Medicare Part D drug discounts, accrued interest and other miscellaneous amounts due to the Company.

The Company’s pharmacy care services businesses contract with pharmaceutical manufacturers, some of which provide rebates based on use of the manufacturers’ products by its affiliated and unaffiliated clients. The Company accrues rebates as they are earned by its clients on a monthly basis based on the terms of the applicable contracts, historical data and current estimates. The pharmacy care services businesses bill these rebates to the manufacturers on a monthly or quarterly basis depending on the contractual terms and record rebates attributable to affiliated clients as a reduction to medical costs. The Company generally receives rebates two to five months after billing. As of December 31, 2021 and 2020, total pharmaceutical manufacturer rebates receivable included in other receivables in the Consolidated Balance Sheets amounted to $7.2 billion and $6.3 billion, respectively.

As of December 31, 2021 and 2020, the Company’s Medicare Part D receivables amounted to $3.4 billion and $2.9 billion, respectively.

Property, Equipment and Capitalized Software

Property, equipment and capitalized software are stated at cost, net of accumulated depreciation and amortization. Capitalized software consists of certain costs incurred in the development of internal-use software, including external direct costs of materials and services and applicable payroll costs of employees devoted to specific software development.

The Company calculates depreciation and amortization using the straight-line method over the estimated useful lives of the assets. The useful lives for property, equipment and capitalized software are:

Furniture, fixtures and equipment			3 to 10 years
Buildings			35 to 40 years
Capitalized software			3 to 5 years

Leasehold improvements are depreciated over the shorter of the remaining lease term or their estimated useful economic life.

Operating Leases

The Company leases facilities and equipment under long-term operating leases which are non-cancelable and expire on various dates. At the lease commencement date, lease right-of-use (ROU) assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term, which includes all fixed obligations arising from the lease contract. If an interest rate is not implicit in a lease, the Company utilizes its incremental borrowing rate for a period closely matching the lease term.

The Company’s ROU assets are included in other assets, and lease liabilities are included in other current liabilities and other liabilities in the Company’s Consolidated Balance Sheet.

Goodwill

To determine whether goodwill is impaired, annually or more frequently if needed, the Company performs impairment tests. The Company may first assess qualitative factors to determine if it is more likely than not the carrying value of a reporting unit exceeds its estimated fair value. The Company may also elect to skip the qualitative testing and proceed directly to the quantitative testing. When performing quantitative testing, the Company first estimates the fair values of its reporting units using discounted cash flows or a weighted combination of discounted cash flows and a market-based method. To determine fair values, the Company must make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include financial projections of free cash flow (including significant assumptions about operations, capital requirements and income taxes), long-term growth rates for determining terminal value, discount rates and the selection of comparable peer companies. If the fair value is less than the carrying value of the reporting unit, an impairment is recognized for the difference, up to the carrying amount of goodwill.

There was no impairment of goodwill during the years ended December 31, 2021, 2020 and 2019.

Intangible Assets

The Company’s intangible assets are subject to impairment tests when events or circumstances indicate an intangible asset (or asset group) may be impaired. The Company’s indefinite-lived intangible assets are also tested for impairment annually. There was no impairment of intangible assets during the years ended December 31, 2021, 2020 and 2019.

Other Current Liabilities

Other current liabilities include health savings account deposits ($11.4 billion and $10.2 billion as of December 31, 2021 and 2020, respectively), accruals for premium rebates payable, the RSF associated with the AARP Program, the current portion of future policy benefits and customer balances.

Policy Acquisition Costs

The Company’s short duration health insurance contracts typically have a one-year term and may be canceled by the customer with at least 30 days’ notice. Costs related to the acquisition and renewal of short duration customer contracts are primarily charged to expense as incurred.

Redeemable Noncontrolling Interests

Redeemable noncontrolling interests in the Company’s subsidiaries whose redemption is outside the control of the Company are classified as temporary equity. The following table provides details of the Company's redeemable noncontrolling interests’ activity for the years ended December 31, 2021 and 2020:

(in millions)						2021						2020
Redeemable noncontrolling interests, beginning of period						$	2,211					$	1,726
Net earnings						87						112
Acquisitions						28						321
Redemptions						(1,338)						—
Distributions						(255)						(149)
Fair value and other adjustments						701						201
Redeemable noncontrolling interests, end of period						$	1,434					$	2,211

Share-Based Compensation

The Company recognizes compensation expense for share-based awards, including stock options and restricted stock and restricted stock units (collectively, restricted shares), on a straight-line basis over the related service period (generally the vesting period) of the award, or to an employee’s eligible retirement date under the award agreement, if earlier. Restricted shares vest ratably, primarily over four years and compensation expense related to restricted shares is based on the share price on the date of grant. Stock options vest ratably primarily over four years and may be exercised up to 10 years from the date of grant. Compensation expense related to stock options is based on the fair value at the date of grant, which is estimated on the date of grant using a binomial option-pricing model. Under the Company’s Employee Stock Purchase Plan (ESPP), eligible employees are allowed to purchase the Company’s stock at a discounted price, which is 90% of the market price of the Company’s common stock at the end of the six-month purchase period. Share-based compensation expense for all programs is recognized in operating costs in the Consolidated Statements of Operations.

Net Earnings Per Common Share

The Company computes basic earnings per common share attributable to UnitedHealth Group common shareholders by dividing net earnings attributable to UnitedHealth Group common shareholders by the weighted-average number of common shares outstanding during the period. The Company determines diluted net earnings per common share attributable to UnitedHealth Group common shareholders using the weighted-average number of common shares outstanding during the period, adjusted for potentially dilutive shares associated with stock options, restricted shares and the ESPP (collectively, common stock equivalents), using the treasury stock method. The treasury stock method assumes a hypothetical issuance of shares to settle the share-based awards, with the assumed proceeds used to purchase common stock at the average market price for the period. Assumed proceeds include the amount the employee must pay upon exercise and the average unrecognized compensation cost. The difference between the number of shares assumed issued and number of shares assumed purchased represents the dilutive shares.

ACA Tax

The Health Insurance Tax was permanently repealed by Congress, effective January 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.

3. Investments

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

(in millions)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
December 31, 2021
Debt securities - available-for-sale:
U.S. government and agency obligations						$	3,206					$	23					$	(31)					$	3,198
State and municipal obligations						6,829						297						(20)						7,106
Corporate obligations						20,947						372						(145)						21,174
U.S. agency mortgage-backed securities						5,868						88						(55)						5,901
Non-U.S. agency mortgage-backed securities						2,819						42						(23)						2,838
Total debt securities - available-for-sale						39,669						822						(274)						40,217
Debt securities - held-to-maturity:
U.S. government and agency obligations						511						2						(2)						511
State and municipal obligations						30						2						—						32
Corporate obligations						100						—						—						100
Total debt securities - held-to-maturity						641						4						(2)						643
Total debt securities						$	40,310					$	826					$	(276)					$	40,860
December 31, 2020
Debt securities - available-for-sale:
U.S. government and agency obligations						$	3,335					$	133					$	(3)					$	3,465
State and municipal obligations						6,893						435						—						7,328
Corporate obligations						18,886						863						(12)						19,737
U.S. agency mortgage-backed securities						6,849						245						(3)						7,091
Non-U.S. agency mortgage-backed securities						2,116						95						(4)						2,207
Total debt securities - available-for-sale						38,079						1,771						(22)						39,828
Debt securities - held-to-maturity:
U.S. government and agency obligations						420						6						—						426
State and municipal obligations						31						2						—						33
Corporate obligations						187						1						—						188
Total debt securities - held-to-maturity						638						9						—						647
Total debt securities						$	38,717					$	1,780					$	(22)					$	40,475

Nearly all of the Company’s investments in mortgage-backed securities were rated “Triple A” as of December 31, 2021.

The Company held $3.5 billion and $2.3 billion of equity securities as of December 31, 2021 and 2020, respectively. The Company’s investments in equity securities primarily consist of employee savings plan related investments, other venture investments and shares of Brazilian real denominated fixed-income funds with readily determinable fair values. Additionally, the Company’s investments included $1.3 billion of equity method investments in operating businesses in the health care sector, as of both December 31, 2021 and 2020. The allowance for credit losses on held-to-maturity securities as of December 31, 2021 and 2020 was not material.

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

						Available-for-Sale												Held-to-Maturity
(in millions)						Amortized Cost						Fair Value						Amortized Cost						Fair Value
Due in one year or less						$	2,603					$	2,614					$	235					$	236
Due after one year through five years						12,885						13,065						355						354
Due after five years through ten years						11,342						11,524						28						29
Due after ten years						4,152						4,275						23						24
U.S. agency mortgage-backed securities						5,868						5,901						—						—
Non-U.S. agency mortgage-backed securities						2,819						2,838						—						—
Total debt securities						$	39,669					$	40,217					$	641					$	643

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
(in millions)						Fair Value						Gross Unrealized Losses						Fair Value						Gross Unrealized Losses						Fair Value						Gross Unrealized Losses
December 31, 2021
U.S. government and agency obligations						$	1,976					$	(18)					$	249					$	(13)					$	2,225					$	(31)
State and municipal obligations						1,386						(19)						31						(1)						$	1,417					$	(20)
Corporate obligations						9,357						(130)						376						(15)						9,733						(145)
U.S. agency mortgage-backed securities						3,078						(52)						116						(3)						3,194						(55)
Non-U.S. agency mortgage-backed securities						1,321						(18)						114						(5)						1,435						(23)
Total debt securities - available-for-sale						$	17,118					$	(237)					$	886					$	(37)					$	18,004					$	(274)
December 31, 2020
U.S. government and agency obligations						$	346					$	(3)					$	—					$	—					$	346					$	(3)
Corporate obligations						1,273						(9)						456						(3)						1,729						(12)
U.S. agency mortgage-backed securities						601						(3)						—						—						601						(3)
Non-U.S. agency mortgage-backed securities						195						(1)						93						(3)						288						(4)
Total debt securities - available-for-sale						$	2,415					$	(16)					$	549					$	(6)					$	2,964					$	(22)

The Company’s unrealized losses from all securities as of December 31, 2021 were generated from approximately 13,000 positions out of a total of 39,000 positions. The Company believes it will collect the timely principal and interest due on its debt securities having 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 which impacted the Company’s assessment on collectability of principal and interest. At each reporting period, the Company evaluates available-for-sale debt securities for any credit-related impairment when the fair value of the investment is less than its amortized cost. The Company evaluated the expected cash flows, the underlying credit quality and credit ratings of the issuers noting no significant credit deterioration since purchase. As of December 31, 2021, the Company did not have the intent to sell any of the 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 as of December 31, 2021 and 2020 was not material.

4. Fair Value

Certain assets and liabilities are measured at fair value in the Consolidated Financial Statements or have fair values disclosed in the Notes to the Consolidated Financial Statements. These assets and liabilities are classified into one of three levels of a hierarchy defined by GAAP. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement is categorized in its entirety based on the lowest level input which is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

The fair value hierarchy is summarized as follows:

Level 1 — Quoted prices (unadjusted) for identical assets/liabilities in active markets.

Level 2 — Other observable inputs, either directly or indirectly, including:

• Quoted prices for similar assets/liabilities in active markets;

• Quoted prices for identical or similar assets/liabilities in inactive markets (e.g., few transactions, limited information, noncurrent prices, high variability over time);

• Inputs other than quoted prices observable for the asset/liability (e.g., interest rates, yield curves, implied volatilities, credit spreads); and

• Inputs corroborated by other observable market data.

Level 3 — Unobservable inputs cannot be corroborated by observable market data.

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

Nonfinancial assets and liabilities or financial assets and liabilities 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. For the year ended December 31, 2021, the Company recognized $840 million of unrealized gains in investment and other income related to fair value adjustments on equity securities primarily in our venture portfolio, based on transactions of the same or similar security. There were no other significant fair value adjustments for these assets and liabilities recorded during the years ended December 31, 2021 or 2020.

The following methods and assumptions were used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument included in the tables below:

Cash and Cash Equivalents. The carrying value of cash and cash equivalents approximates fair value as maturities are less than three months. Fair values of cash equivalent instruments which do not trade on a regular basis in active markets are classified as Level 2.

Debt and Equity Securities. Fair values of debt and equity securities are based on quoted market prices, where available. The Company obtains one price for each security primarily from a third-party pricing service (pricing service), which generally uses quoted or other observable inputs for the determination of fair value. The pricing service normally derives the security prices through recently reported trades for identical or similar securities, and, if necessary, makes adjustments through the reporting date based upon available observable market information. For securities not actively traded, the pricing service may use quoted market prices of comparable instruments or discounted cash flow analyses, incorporating inputs currently observable in the markets for similar securities. Inputs often used in the valuation methodologies include, but are not limited to, benchmark yields, credit spreads, default rates, prepayment speeds and nonbinding broker quotes. As the Company is responsible for the determination of fair value, it performs quarterly analyses on the prices received from the pricing service to determine whether the prices are reasonable estimates of fair value. Specifically, the Company compares the prices received from the pricing service to prices reported by a secondary pricing source, such as its custodian, its investment consultant and third-party investment advisors. Additionally, the Company compares changes in the reported market values and returns to relevant market indices to test the reasonableness of the reported prices. The Company’s internal price verification procedures and reviews of fair value methodology documentation provided by independent pricing services have not historically resulted in adjustment to the prices obtained from the pricing service.

Fair values of debt securities which do not trade on a regular basis in active markets but are priced using other observable inputs are classified as Level 2.

Fair value estimates for Level 1 and Level 2 equity securities are based on quoted market prices for actively traded equity securities and/or other market data for the same or comparable instruments and transactions in establishing the prices.

The fair values of Level 3 investments in corporate bonds, which are not a significant portion of our investments, are estimated using valuation techniques relying heavily on management assumptions and qualitative observations.

Throughout the procedures discussed above in relation to the Company’s processes for validating third-party pricing information, the Company validates the understanding of assumptions and inputs used in security pricing and determines the proper classification in the hierarchy based on such understanding.

Assets Under Management. Assets under management consists of debt securities and other investments held to fund costs associated with the AARP Program and are priced and classified using the same methodologies as the Company’s investments in debt and equity securities.

Long-Term Debt. The fair values of the Company’s long-term debt are estimated and classified using the same methodologies as the Company’s investments in debt securities.

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 Consolidated Balance Sheets:

(in millions)						Quoted Prices in Active Markets (Level 1)						Other Observable Inputs (Level 2)						Unobservable Inputs (Level 3)						Total Fair and Carrying Value
December 31, 2021
Cash and cash equivalents						$	21,359					$	16					$	—					$	21,375
Debt securities - available-for-sale:
U.S. government and agency obligations						3,017						181						—						3,198
State and municipal obligations						—						7,106						—						7,106
Corporate obligations						40						20,916						218						21,174
U.S. agency mortgage-backed securities						—						5,901						—						5,901
Non-U.S. agency mortgage-backed securities						—						2,838						—						2,838
Total debt securities - available-for-sale						3,057						36,942						218						40,217
Equity securities						2,090						23						64						2,177
Assets under management						1,972						2,376						101						4,449
Total assets at fair value						$	28,478					$	39,357					$	383					$	68,218
Percentage of total assets at fair value						42		%				57		%				1		%				100		%
December 31, 2020
Cash and cash equivalents						$	16,841					$	80					$	—					$	16,921
Debt securities - available-for-sale:
U.S. government and agency obligations						3,241						224						—						3,465
State and municipal obligations						—						7,328						—						7,328
Corporate obligations						25						19,424						288						19,737
U.S. agency mortgage-backed securities						—						7,091						—						7,091
Non-U.S. agency mortgage-backed securities						—						2,207						—						2,207
Total debt securities - available-for-sale						3,266						36,274						288						39,828
Equity securities						1,795						33						—						1,828
Assets under management						1,774						2,250						52						4,076
Total assets at fair value						$	23,676					$	38,637					$	340					$	62,653
Percentage of total assets at fair value						38		%				61		%				1		%				100		%

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 Consolidated Balance Sheets:

(in millions)						Quoted Prices in Active Markets (Level 1)						Other Observable Inputs (Level 2)						Unobservable Inputs (Level 3)						Total Fair Value						Total Carrying Value
December 31, 2021
Debt securities - held-to-maturity						$	534					$	102					$	7					$	643					$	641
Long-term debt and other financing obligations						$	—					$	52,583					$	—					$	52,583					$	46,003
December 31, 2020
Debt securities - held-to-maturity						$	466					$	108					$	73					$	647					$	638
Long-term debt and other financing obligations						$	—					$	51,254					$	—					$	51,254					$	42,171

The carrying amounts reported on the Consolidated Balance Sheets for other current financial assets and liabilities approximate fair value because of their short-term nature. These assets and liabilities are not listed in the table above.

5. Property, Equipment and Capitalized Software

A summary of property, equipment and capitalized software is as follows:

(in millions)						December 31, 2021						December 31, 2020
Land and improvements						$	502					$	533
Buildings and improvements						4,882						4,759
Computer equipment						1,851						1,767
Furniture and fixtures						2,014						1,787
Less accumulated depreciation						(3,857)						(3,364)
Property and equipment, net						5,392						5,482
Capitalized software						5,712						5,010
Less accumulated amortization						(2,135)						(1,866)
Capitalized software, net						3,577						3,144
Total property, equipment and capitalized software, net						$	8,969					$	8,626

Depreciation expense for property and equipment for the years ended December 31, 2021, 2020 and 2019 was $996 million, $997 million and $995 million, respectively. Amortization expense for capitalized software for the years ended December 31, 2021, 2020 and 2019 was $923 million, $814 million and $721 million, respectively.

6. Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill, by reportable segment, were as follows:

(in millions)						UnitedHealthcare						Optum Health						Optum Insight						Optum Rx						Consolidated
Balance at January 1, 2020						$	27,228					$	15,342					$	8,292					$	14,797					$	65,659
Acquisitions						1,180						4,500						—						699						6,379
Foreign currency effects and other adjustments, net						(623)						2						(119)						39						(701)
Balance at December 31, 2020						27,785						19,844						8,173						15,535						71,337
Acquisitions						60						4,648						96						—						4,804
Foreign currency effects and other adjustments, net						(456)						(268)						350						28						(346)
Balance at December 31, 2021						$	27,389					$	24,224					$	8,619					$	15,563					$	75,795

The gross carrying value, accumulated amortization and net carrying value of other intangible assets were as follows:

						December 31, 2021																		December 31, 2020
(in millions)						Gross Carrying Value						Accumulated Amortization						Net Carrying Value						Gross Carrying Value						Accumulated Amortization						Net Carrying Value
Customer-related						$	13,011					$	(4,697)					$	8,314					$	13,428					$	(4,575)					$	8,853
Trademarks and technology						1,630						(739)						891						1,597						(624)						973
Trademarks and other indefinite-lived						617						—						617						680						—						680
Other						422						(200)						222						606						(256)						350
Total						$	15,680					$	(5,636)					$	10,044					$	16,311					$	(5,455)					$	10,856

The acquisition date fair values and weighted-average useful lives assigned to finite-lived intangible assets acquired in business combinations consisted of the following by year of acquisition:

						2021												2020
(in millions, except years)						Fair Value						Weighted-Average Useful Life						Fair Value						Weighted-Average Useful Life
Customer-related						$	484					9 years						$	1,113					11 years
Trademarks and technology						147						5 years						514						10 years
Other						29						11 years						95						10 years
Total acquired finite-lived intangible assets						$	660					8 years						$	1,722					11 years

Estimated full year amortization expense relating to intangible assets for each of the next five years ending December 31 is as follows:

(in millions)
2022						$	1,098
2023						1,033
2024						972
2025						892
2026						757

Amortization expense relating to intangible assets for the years ended December 31, 2021, 2020 and 2019 was $1.2 billion, $1.1 billion and $1.0 billion, respectively.

7. Medical Costs Payable

The following table shows the components of the change in medical costs payable for the years ended December 31:

(in millions)						2021						2020						2019
Medical costs payable, beginning of period						$	21,872					$	21,690					$	19,891
Acquisitions						88						316						679
Reported medical costs:
Current year						188,631						160,276						157,020
Prior years						(1,720)						(880)						(580)
Total reported medical costs						186,911						159,396						156,440
Medical payments:
Payments for current year						(165,524)						(139,974)						(137,155)
Payments for prior years						(18,864)						(19,556)						(18,165)
Total medical payments						(184,388)						(159,530)						(155,320)
Medical costs payable, end of period						$	24,483					$	21,872					$	21,690

For the years ended December 31, 2021, 2020 and 2019 medical cost reserve development was primarily driven by lower than expected health system utilization levels. Additionally, medical cost reserve development in the year ended December 31, 2021 was driven by the uncertainty of care patterns due to the disruption of the health care system caused by COVID-19.

Medical costs payable included IBNR of $17.1 billion and $14.8 billion at December 31, 2021 and 2020, respectively. Substantially all of the IBNR balance as of December 31, 2021 relates to the current year. The following is information about incurred and paid medical cost development as of December 31, 2021:

						Net Incurred Medical Costs
(in millions)						For the Years Ended December 31,
Year						2020						2021
2020						$	160,276					$	159,140
2021												188,631
Total												$	347,771
						Net Cumulative Medical Payments
(in millions)						For the Years Ended December 31,
Year						2020						2021
2020						$	(139,974)					$	(158,182)
2021												(165,524)
Total												(323,706)
Net remaining outstanding liabilities prior to 2020												418
Total medical costs payable												$	24,483

8. Short-Term Borrowings and Long-Term Debt

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

						Carrying Value As of December 31,
(in millions, except percentages)						2021						2020
Commercial paper						$	—					$	1,296
$400 million 4.700% notes due February 2021						—						400
$750 million 2.125% notes due March 2021						—						750
$350 million Floating rate notes due June 2021						—						350
$400 million 3.150% notes due June 2021						—						400
$500 million 3.375% notes due November 2021						—						507
$750 million 2.875% notes due December 2021						—						762
$1,100 million 2.875% notes due March 2022						1,097						1,113
$1,000 million 3.350% notes due July 2022						999						999
$900 million 2.375% notes due October 2022						899						897
$15 million 0.000% notes due November 2022						14						14
$625 million 2.750% notes due February 2023						632						644
$750 million 2.875% notes due March 2023						768						789
$750 million 3.500% notes due June 2023						749						748
$750 million 3.500% notes due February 2024						748						747
$1,000 million 0.550% notes due May 2024						996						—
$750 million 2.375% notes due August 2024						748						747
$2,000 million 3.750% notes due July 2025						1,994						1,992
$300 million 3.700% notes due December 2025						299						298
$500 million 1.250% notes due January 2026						497						496
$1,000 million 3.100% notes due March 2026						997						997
$1,000 million 1.150% notes due May 2026						972						—
$750 million 3.450% notes due January 2027						747						747
$625 million 3.375% notes due April 2027						621						620
$950 million 2.950% notes due October 2027						942						940
$1,150 million 3.850% notes due June 2028						1,144						1,143
$850 million 3.875% notes due December 2028						844						844
$1,000 million 2.875% notes due August 2029						1,023						1,086
$1,250 million 2.000% notes due May 2030						1,235						1,234
$1,500 million 2.300% notes due May 2031						1,482						—
$1,000 million 4.625% notes due July 2035						993						992
$850 million 5.800% notes due March 2036						839						839
$500 million 6.500% notes due June 2037						492						492
$650 million 6.625% notes due November 2037						642						641
$1,100 million 6.875% notes due February 2038						1,078						1,077
$1,250 million 3.500% notes due August 2039						1,242						1,241
$1,000 million 2.750% notes due May 2040						966						964
$300 million 5.700% notes due October 2040						296						296
$350 million 5.950% notes due February 2041						346						346
$1,500 million 3.050% notes due May 2041						1,483						—
$600 million 4.625% notes due November 2041						589						589
$502 million 4.375% notes due March 2042						485						485
$625 million 3.950% notes due October 2042						608						608
$750 million 4.250% notes due March 2043						736						735
$2,000 million 4.750% notes due July 2045						1,974						1,974
$750 million 4.200% notes due January 2047						739						738
$725 million 4.250% notes due April 2047						718						717
$950 million 3.750% notes due October 2047						934						934
$1,350 million 4.250% notes due June 2048						1,330						1,330
$1,100 million 4.450% notes due December 2048						1,087						1,086
$1,250 million 3.700% notes due August 2049						1,236						1,235
$1,250 million 2.900% notes due May 2050						1,209						1,208
$2,000 million 3.250% notes due May 2051						1,970						—
$1,250 million 3.875% notes due August 2059						1,228						1,228
$1,000 million 3.125% notes due May 2060						965						965
Total short-term borrowings and long-term debt						$	44,632					$	42,280

The Company’s long-term debt obligations also included $1.4 billion and $1.2 billion of other financing obligations, of which $611 million and $354 million were current as of December 31, 2021 and 2020, respectively.

Maturities of short-term borrowings and long-term debt for the years ending December 31 are as follows:

(in millions)
2022						$	3,626
2023						2,277
2024						2,652
2025						2,452
2026						2,652
Thereafter						32,829

Short-Term Borrowings

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

The Company has $5.6 billion five-year, $5.6 billion three-year and $3.8 billion 364-day revolving bank credit facilities with 24 banks, which mature in December 2026, December 2024 and December 2022, respectively. These facilities provide full liquidity support for the Company’s commercial paper program and are available for general corporate purposes. As of December 31, 2021, no amounts had been drawn on any of the bank credit facilities. The annual interest rates, which are variable based on term, are calculated based on one-month Term Secured Overnight Financing Rate (SOFR) plus a SOFR Adjustment of 10 basis points 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 December 31, 2021, annual interest rates would have ranged from 0.8% to 0.9%.

Debt Covenants

The Company’s bank credit facilities contain various covenants, including requiring the Company to maintain a debt to debt-plus-shareholders’ equity ratio of not more than 60%. The Company was in compliance with its debt covenants as of December 31, 2021.

9. Income Taxes

The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported. The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year, excluding any deferred income tax assets and liabilities of acquired businesses. The components of the provision for income taxes for the years ended December 31 are as follows:

(in millions)						2021						2020						2019
Current Provision:
Federal						$	3,451					$	4,098					$	2,629
State and local						481						392						319
Foreign						516						491						564
Total current provision						4,448						4,981						3,512
Deferred provision (benefit)						130						(8)						230
Total provision for income taxes						$	4,578					$	4,973					$	3,742

The reconciliation of the tax provision at the U.S. federal statutory rate to the provision for income taxes and the effective tax rate for the years ended December 31 is as follows:

(in millions, except percentages)						2021												2020												2019
Tax provision at the U.S. federal statutory rate						$	4,685					21.0		%				$	4,356					21.0		%				$	3,776					21.0		%
State income taxes, net of federal benefit						419						1.9						315						1.5						271						1.5
Share-based awards - excess tax benefit						(100)						(0.4)						(130)						(0.6)						(132)						(0.7)
Non-deductible compensation						144						0.6						134						0.7						119						0.7
Health insurance tax						—						—						626						3.0						—						—
Foreign rate differential						(246)						(1.1)						(164)						(0.8)						(214)						(1.2)
Other, net						(324)						(1.5)						(164)						(0.8)						(78)						(0.5)
Provision for income taxes						$	4,578					20.5		%				$	4,973					24.0		%				$	3,742					20.8		%

Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting bases of assets and liabilities based on enacted tax rates and laws. The components of deferred income tax assets and liabilities as of December 31 are as follows:

(in millions)						2021						2020
Deferred income tax assets:
Accrued expenses and allowances						$	723					$	815
U.S. federal and state net operating loss carryforwards						287						276
Share-based compensation						117						98
Nondeductible liabilities						296						252
Non-U.S. tax loss carryforwards						435						340
Lease liability						1,284						1,200
Other-domestic						228						126
Other-non-U.S.						376						454
Subtotal						3,746						3,561
Less: valuation allowances						(198)						(170)
Total deferred income tax assets						3,548						3,391
Deferred income tax liabilities:
U.S. federal and state intangible assets						(2,658)						(2,588)
Non-U.S. goodwill and intangible assets						(512)						(606)
Capitalized software						(833)						(731)
Depreciation and amortization						(349)						(346)
Prepaid expenses						(256)						(216)
Outside basis in partnerships						(565)						(342)
Lease right-of-use asset						(1,267)						(1,179)
Net unrealized gains on investments						(125)						(400)
Other-non-U.S.						(248)						(350)
Total deferred income tax liabilities						(6,813)						(6,758)
Net deferred income tax liabilities						$	(3,265)					$	(3,367)

Valuation allowances are provided when it is considered more likely than not deferred tax assets will not be realized. The valuation allowances primarily relate to future tax benefits on certain federal, state and non-U.S. net operating loss carryforwards. Gross federal net operating loss carryforwards of $42 million expire beginning in 2023 through 2037 and $295 million have an indefinite carryforward period; state net operating loss carryforwards expire beginning in 2022 through 2041, with some having an indefinite carryforward period. Substantially all of the non-U.S. tax loss carryforwards have indefinite carryforward periods.

As of December 31, 2021, the Company’s undistributed earnings from non-U.S. subsidiaries are intended to be indefinitely reinvested in non-U.S. operations, and therefore no U.S. deferred taxes have been recorded. Taxes payable on the remittance of such earnings would be minimal.

A reconciliation of the beginning and ending amount of unrecognized tax benefits as of December 31 is as follows:

(in millions)						2021						2020						2019
Gross unrecognized tax benefits, beginning of period						$	1,829					$	1,423					$	1,056
Gross increases:
Current year tax positions						538						416						512
Prior year tax positions						10						120						2
Gross decreases:
Prior year tax positions						(47)						(130)						(96)
Settlements						—						—						(46)
Statute of limitations lapses						(20)						—						(5)
Gross unrecognized tax benefits, end of period						$	2,310					$	1,829					$	1,423

The Company believes it is reasonably possible its liability for unrecognized tax benefits will decrease in the next twelve months by $42 million as a result of audit settlements and the expiration of statutes of limitations.

The Company classifies net interest and penalties associated with uncertain income tax positions as income taxes within its Consolidated Statements of Operations. During the years ended December 31, 2021, 2020 and 2019, the Company recognized $66 million, $52 million and $19 million of net interest and penalties, respectively. The Company had $194 million and $128 million of accrued interest and penalties for uncertain tax positions as of December 31, 2021 and 2020, respectively. These amounts are not included in the reconciliation above. As of December 31, 2021, there were $1.2 billion of unrecognized tax benefits which, if recognized, would affect the effective tax rate.

The Company currently files income tax returns in the United States, various states and localities and non-U.S. jurisdictions. The U.S. Internal Revenue Service (IRS) has completed exams on the consolidated income tax returns for fiscal years 2016 and prior. The Company’s 2017 through 2020 tax years are under review by the IRS under its Compliance Assurance Program. With the exception of a few states, the Company is no longer subject to income tax examinations prior to the 2014 tax year. In general, the Company is subject to examination in non-U.S. jurisdictions for years 2015 and forward.

10. Shareholders' Equity

Regulatory Capital and Dividend Restrictions

The Company’s regulated insurance and health maintenance organization (HMO) subsidiaries are subject to regulations and standards in their respective jurisdictions. These standards, among other things, require these subsidiaries to maintain specified levels of statutory capital, as defined by each jurisdiction, and restrict the timing and amount of dividends and other distributions which may be paid to their parent companies. In the United States, most of these state regulations and standards are generally consistent with model regulations established by the National Association of Insurance Commissioners. These standards generally permit dividends to be paid from statutory unassigned surplus of the regulated subsidiary and are limited based on the regulated subsidiary’s level of statutory net income and statutory capital and surplus. These dividends are referred to as “ordinary dividends” and generally may be paid without prior regulatory approval. If the dividend, together with other dividends paid within the preceding twelve months, exceeds a specified statutory limit or is paid from sources other than earned surplus, it is generally considered an “extraordinary dividend” and must receive prior regulatory approval.

For the year ended December 31, 2021, the Company’s domestic insurance and HMO subsidiaries paid their parent companies dividends of $8.0 billion, including $4.7 billion of extraordinary dividends. For the year ended December 31, 2020, the Company’s domestic insurance and HMO subsidiaries paid their parent companies dividends of $8.3 billion, including $4.2 billion of extraordinary dividends.

The Company's global financially regulated subsidiaries had estimated aggregate statutory capital and surplus of $30.7 billion as of December 31, 2021. The estimated statutory capital and surplus necessary to satisfy regulatory requirements of the Company's global financially regulated subsidiaries was approximately $13.0 billion as of December 31, 2021.

Optum Bank must meet minimum capital requirements of the Federal Deposit Insurance Corporation (FDIC) under the capital adequacy rules to which it is subject. At December 31, 2021, the Company believes Optum Bank met the FDIC requirements to be considered “Well Capitalized.”

Share Repurchase Program

Under its Board of Directors’ authorization, the Company maintains a share repurchase program. The objectives of the share repurchase program are to optimize the Company’s capital structure and cost of capital, thereby improving returns to shareholders, as well as to offset the dilutive impact of share-based awards. Repurchases may be made from time to time in open market purchases or other types of transactions (including prepaid or structured share repurchase programs), subject to certain Board restrictions. In June 2018, the Board renewed the Company’s share repurchase program with an authorization to repurchase up to 100 million shares of its common stock.

A summary of common share repurchases for the years ended December 31, 2021 and 2020 is as follows:

												Years Ended December 31,
(in millions, except per share data)												2021						2020
Common share repurchases, shares												13						14
Common share repurchases, average price per share												$	389.92					$	300.58
Common share repurchases, aggregate cost												$	5,000					$	4,250
Board authorized shares remaining												45						58

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, which the Company had paid since June 2020. Declaration and payment of future quarterly dividends is at the discretion of the Board and may be adjusted as business needs or market conditions change.

The following table provides details of the Company’s 2021 dividend payments:

Payment Date						Amount per Share						Total Amount Paid
												(in millions)
March 23						$	1.25					$	1,181
June 29						1.45						1,367
September 21						1.45						1,367
December 14						1.45						1,365

11. Share-Based Compensation

The Company’s outstanding share-based awards consist mainly of non-qualified stock options and restricted shares. As of December 31, 2021, the Company had 64 million shares available for future grants of share-based awards under the 2020 Stock Incentive Plan. In June 2021, the Company’s shareholders approved 15 million additional shares under the ESPP. As of December 31, 2021, there were 18 million shares of common stock available for issuance under the ESPP.

Stock Options

Stock option activity for the year ended December 31, 2021 is summarized in the table below:

			Shares						Weighted- Average Exercise Price						Weighted- Average Remaining Contractual Life						Aggregate Intrinsic Value
			(in millions)												(in years)						(in millions)
Outstanding at beginning of period			28						$	211
Granted			5						329
Exercised			(7)						175
Forfeited			(1)						297
Outstanding at end of period			25						241						6.3						$	6,610
Exercisable at end of period			12						179						4.7						3,932
Vested and expected to vest, end of period			25						240						6.2						6,509

Restricted Shares

Restricted share activity for the year ended December 31, 2021 is summarized in the table below:

(shares in millions)						Shares						Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period						4						$	256
Granted						2						352
Vested						(2)						246
Nonvested at end of period						4						303

Other Share-Based Compensation Data

(in millions, except per share amounts)						For the Years Ended December 31,
			2021						2020						2019
Stock Options
Weighted-average grant date fair value of shares granted, per share						$	71					$	54					$	46
Total intrinsic value of stock options exercised						1,519						1,736						1,398
Restricted Shares
Weighted-average grant date fair value of shares granted, per share						352						303						259
Total fair value of restricted shares vested						$	560					$	574					$	545
Employee Stock Purchase Plan
Number of shares purchased						1						1						1
Share-Based Compensation Items
Share-based compensation expense, before tax						$	800					$	679					$	697
Share-based compensation expense, net of tax effects						719						619						641
Income tax benefit realized from share-based award exercises						173						208						201

(in millions, except years)						December 31, 2021
Unrecognized compensation expense related to share awards						$	905
Weighted-average years to recognize compensation expense						1.3

Share-Based Compensation Recognition and Estimates

The principal assumptions the Company used in calculating grant-date fair value for stock options were as follows:

						For the Years Ended December 31,
						2021						2020						2019
Risk-free interest rate						0.7% - 1.2%						0.2% - 1.4%						1.5% - 2.5%
Expected volatility						29.2% - 29.8%						22.2% - 29.5%						19.4% - 21.6%
Expected dividend yield						1.3% - 1.5%						1.4% - 1.7%						1.4% - 1.8%
Forfeiture rate						5.0%						5.0%						5.0%
Expected life in years						4.8						5.1						5.3

Risk-free interest rates are based on U.S. Treasury yields in effect at the time of grant. Expected volatilities are based on the historical volatility of the Company’s common stock and the implied volatility from exchange-traded options on the Company’s common stock. Expected dividend yields are based on the per share cash dividend paid by the Company. The Company uses historical data to estimate option exercises and forfeitures within the valuation model. The expected lives of options granted represents the period of time the awards granted are expected to be outstanding based on historical exercise patterns.

Other Employee Benefit Plans

The Company offers a 401(k) plan for its employees. Compensation expense related to this plan was not material for 2021, 2020 and 2019.

In addition, the Company maintains non-qualified, deferred compensation plans, which allow certain members of senior management and executives to defer portions of their salary or bonus. The deferrals are recorded within long-term investments with an approximately equal amount in other liabilities in the Consolidated Balance Sheets. The total deferrals are distributable based upon termination of employment or other periods, as elected under each plan and were $1.8 billion and $1.6 billion as of December 31, 2021 and 2020, respectively.

12. Commitments and Contingencies

Leases

Operating lease costs were $1.2 billion, $1.1 billion and $1.0 billion for the years ended December 31, 2021, 2020 and 2019, respectively, and included immaterial variable and short-term lease costs for the year ended December 31, 2021, 2020 and 2019. Cash payments made on the Company’s operating lease liabilities were $921 million, $865 million and $746 million for the years ended December 31, 2021, 2020 and 2019, respectively, which were classified within operating activities in the Consolidated Statements of Cash Flows. As of December 31, 2021, the Company’s weighted-average remaining lease term and weighted-average discount rate for its operating leases were 8.7 years and 2.9%, respectively.

As of December 31, 2021, future minimum annual lease payments under all non-cancelable operating leases were as follows:

(in millions)						Future Minimum Lease Payments
2022						$	870
2023						763
2024						616
2025						510
2026						407
Thereafter						1,716
Total future minimum lease payments						4,882
Less imputed interest						(609)
Total						$	4,273

Other Commitments

The Company provides guarantees related to its service level under certain contracts. If minimum standards are not met, the Company may be financially at risk up to a stated percentage of the contracted fee or a stated dollar amount. None of the amounts accrued, paid or charged to income for service level guarantees were material as of December 31, 2021, 2020 or 2019.

As of December 31, 2021, the Company had outstanding, undrawn letters of credit with financial institutions of $181 million and surety bonds outstanding with insurance companies of $1.3 billion, primarily to bond contractual performance.

Pending Acquisitions

In 2021, we entered into agreements to acquire multiple companies in the health care sector, most notably, Change Healthcare (NASDAQ: CHNG), subject to regulatory approval and other customary closing conditions. Additionally, in January 2022, we entered into agreements to acquire multiple companies in the health care sector, subject to regulatory approval and other customary closing conditions. The total anticipated capital required for these acquisitions, excluding the payoff of acquired indebtedness, is approximately $12 billion.

Legal Matters

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 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 CMS, state insurance and health and welfare departments, state attorneys general, the Office of the Inspector General, the Office of Personnel Management, the Office of

Civil Rights, the Government Accountability Office, the Federal Trade Commission, U.S. Congressional committees, the U.S. Department of Justice (DOJ), the SEC, the IRS, the U.S. Drug Enforcement Administration, the U.S. Department of Labor, the FDIC, 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. governmental authorities. Certain of the Company’s businesses have been reviewed or are currently under review, including 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 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 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 which may result from this matter given its procedural status.

13. Segment Financial Information

Factors used to determine the Company’s reportable segments include the nature of operating activities, economic characteristics, existence of separate senior management teams and the type of information used by the Company’s chief operating decision maker to evaluate its results of operations. Reportable segments with similar economic characteristics, products and services, customers, distribution methods and operational processes which operate in a similar regulatory environment are combined.

The following is a description of the types of products and services from which each of the Company’s four reportable segments derives its revenues:

*•*UnitedHealthcare includes the combined results of operations of UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State and UnitedHealthcare Global. The U.S. businesses share significant common assets, including a contracted network of physicians, health care professionals, hospitals and other facilities, information technology and consumer engagement infrastructure and other resources. UnitedHealthcare Employer & Individual offers an array of consumer-oriented health benefit plans and services for large national employers, public sector employers, mid-sized employers, small businesses, sole proprietorships and individuals nationwide. UnitedHealthcare Medicare & Retirement provides health care coverage and health and well-being services to individuals age 50 and older, addressing their unique needs for preventive and acute health care services as well as services dealing with chronic disease and other specialized issues for older individuals. UnitedHealthcare Community & State provides diversified health care benefits products and services to state programs caring for the economically disadvantaged, the medically underserved and those without the benefit of employer-funded health care coverage. UnitedHealthcare Community & State’s primary customers oversee Medicaid plans, the Children’s Health Insurance Program and other federal, state and community health care programs. UnitedHealthcare Global provides health and dental benefits and hospital and clinical services to employer groups and individuals in South America, and other diversified global health businesses.

*•*Optum Health focuses on care delivery, care management, wellness and consumer engagement, and health financial services. Optum Health is building a comprehensive, connected health care delivery and engagement platform by directly providing high-quality care, helping people manage chronic and complex health needs, and proactively engaging consumers in managing their health through in-person, in-home, virtual and digital clinical platforms. Optum Health offers access to networks of care provider specialists, health management services, care delivery, consumer engagement and financial services.

*•*Optum Insight brings together advanced analytics, technology and health care expertise to deliver integrated services and solutions. Hospital systems, physicians, health plans, governments, life sciences companies and other organizations comprising the health care industry depend on Optum Insight to help them improve performance, achieve efficiency, reduce costs, meet compliance mandates and modernize their core operating systems to meet the changing needs of the health system.

*•*Optum Rx offers pharmacy care services and programs, including retail network contracting, home delivery, specialty and community health pharmacy services, purchasing and clinical capabilities, and develops programs in areas such as step therapy, formulary management, drug adherence and disease/drug therapy management. Optum Rx integrates

pharmacy and medical care and is positioned to serve patients with complex clinical needs and consumers looking for a better digital pharmacy experience with transparent pricing.

The Company’s accounting policies for reportable segment operations are consistent with those described in the Summary of Significant Accounting Policies (see Note 2). Transactions between reportable segments principally consist of sales of pharmacy care products and services to UnitedHealthcare customers by Optum Rx, certain product offerings and care management and local and in-home care delivery services sold to UnitedHealthcare by Optum Health, and health information and technology solutions, consulting and other services sold to UnitedHealthcare by Optum Insight. These transactions are recorded at management’s estimate of fair value. Transactions with affiliated customers are eliminated in consolidation. Assets and liabilities jointly used are assigned to each reportable segment using estimates of pro-rata usage. Cash and investments are assigned so each reportable segment has working capital and/or at least minimum specified levels of regulatory capital.

As a percentage of the Company’s total consolidated revenues, premium revenues from CMS were 36%, 36% and 33% for 2021, 2020 and 2019, respectively, most of which were generated by UnitedHealthcare Medicare & Retirement and included in the UnitedHealthcare segment. U.S. customer revenue represented approximately 97%, 97% and 96% of consolidated total revenues for 2021, 2020 and 2019, respectively. Long-lived fixed assets located in the United States represented approximately 78% and 75% of the total long-lived fixed assets as of December 31, 2021 and 2020, respectively. The non-U.S. revenues and fixed assets are primarily related to UnitedHealthcare Global.

The following table presents the reportable segment financial information:

												Optum
(in millions)						UnitedHealthcare						Optum Health						Optum Insight						Optum Rx						Optum Eliminations						Optum						Corporate and Eliminations						Consolidated
2021
Revenues - unaffiliated customers:
Premiums						$	212,381					$	13,852					$	—					$	—					$	—					$	13,852					$	—					$	226,233
Products						—						32						159						34,246						—						34,437						—						34,437
Services						9,661						9,894						3,936						1,112						—						14,942						—						24,603
Total revenues - unaffiliated customers						222,042						23,778						4,095						35,358						—						63,231						—						285,273
Total revenues - affiliated customers						—						29,234						7,867						55,779						(2,013)						90,867						(90,867)						—
Investment and other income						857						1,053						237						177						—						1,467						—						2,324
Total revenues						$	222,899					$	54,065					$	12,199					$	91,314					$	(2,013)					$	155,565					$	(90,867)					$	287,597
Earnings from operations						$	11,975					$	4,462					$	3,398					$	4,135					$	—					$	11,995					$	—					$	23,970
Interest expense						—						—						—						—						—						—						(1,660)						(1,660)
Earnings before income taxes						$	11,975					$	4,462					$	3,398					$	4,135					$	—					$	11,995					$	(1,660)					$	22,310
Total assets						$	102,967					$	60,474					$	16,868					$	40,181					$	—					$	117,523					$	(8,284)					$	212,206
Purchases of property, equipment and capitalized software						795						791						567						301						—						1,659						—						2,454
Depreciation and amortization						1,004						818						684						597						—						2,099						—						3,103
2020
Revenues - unaffiliated customers:
Premiums						$	191,679					$	9,799					$	—					$	—					$	—					$	9,799					$	—					$	201,478
Products						—						33						135						33,977						—						34,145						—						34,145
Services						8,464						6,815						3,687						1,050						—						11,552						—						20,016
Total revenues - unaffiliated customers						200,143						16,647						3,822						35,027						—						55,496						—						255,639
Total revenues - affiliated customers						—						22,481						6,941						52,420						(1,800)						80,042						(80,042)						—
Investment and other income						732						680						39						51						—						770						—						1,502
Total revenues						$	200,875					$	39,808					$	10,802					$	87,498					$	(1,800)					$	136,308					$	(80,042)					$	257,141
Earnings from operations						$	12,359					$	3,434					$	2,725					$	3,887					$	—					$	10,046					$	—					$	22,405
Interest expense						—						—						—						—						—						—						(1,663)						(1,663)
Earnings before income taxes						$	12,359					$	3,434					$	2,725					$	3,887					$	—					$	10,046					$	(1,663)					$	20,742
Total assets						$	98,229					$	52,073					$	15,425					$	39,280					$	—					$	106,778					$	(7,718)					$	197,289
Purchases of property, equipment and capitalized software						687						715						461						188						—						1,364						—						2,051
Depreciation and amortization						920						703						670						598						—						1,971						—						2,891
2019
Revenues - unaffiliated customers:
Premiums						$	183,783					$	5,916					$	—					$	—					$	—					$	5,916					$	—					$	189,699
Products						—						31						116						31,450						—						31,597						—						31,597
Services						8,922						5,732						3,630						689						—						10,051						—						18,973
Total revenues - unaffiliated customers						192,705						11,679						3,746						32,139						—						47,564						—						240,269
Total revenues - affiliated customers						—						17,966						6,239						42,093						(1,661)						64,637						(64,637)						—
Investment and other income						1,137						672						21						56						—						749						—						1,886
Total revenues						$	193,842					$	30,317					$	10,006					$	74,288					$	(1,661)					$	112,950					$	(64,637)					$	242,155
Earnings from operations						$	10,326					$	2,963					$	2,494					$	3,902					$	—					$	9,359					$	—					$	19,685
Interest expense						—						—						—						—						—						—						(1,704)						(1,704)
Earnings before income taxes						$	10,326					$	2,963					$	2,494					$	3,902					$	—					$	9,359					$	(1,704)					$	17,981
Total assets						$	88,250					$	40,444					$	15,181					$	36,346					$	—					$	91,971					$	(6,332)					$	173,889
Purchases of property, equipment and capitalized software						841						573						495						162						—						1,230						—						2,071
Depreciation and amortization						926						565						672						557						—						1,794						—						2,720