Annual Statements Open main menu

UNITEDHEALTH GROUP INC - Quarter Report: 2019 June (Form 10-Q)

 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________________________ 
Form 10-Q
__________________________________________________________ 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2019
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO _______
Commission File Number: 1-10864
__________________________________________________________ 
    uhglogo1a01a01a24.jpg
UnitedHealth Group Incorporated
(Exact name of registrant as specified in its charter)
 __________________________________________________________ 
Delaware
 
41-1321939
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
UnitedHealth Group Center
 
55343
9900 Bren Road East
 
Minnetonka,
Minnesota
 
(Address of principal executive offices)
 
(Zip Code)
(952) 936-1300
(Registrant’s telephone number, including area code)
_________________________________________________________  
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act
Large Accelerated Filer
 
Accelerated filer
 
Non-accelerated filer
Smaller reporting company
 
 
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes No 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, $.01 par value
 
UNH
 
NYSE
As of July 31, 2019, there were 947,680,609 shares of the registrant’s Common Stock, $.01 par value per share, issued and outstanding.
 
 
 
 
 

UNITEDHEALTH GROUP
Table of Contents
 
 
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




PART I
ITEM 1.    FINANCIAL STATEMENTS
UnitedHealth Group
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions, except per share data)
 
June 30,
2019
 
December 31,
2018
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
13,745

 
$
10,866

Short-term investments
 
3,524

 
3,458

Accounts receivable, net
 
9,741

 
11,388

Other current receivables, net
 
8,434

 
6,862

Assets under management
 
2,943

 
3,032

Prepaid expenses and other current assets
 
3,651

 
3,086

Total current assets
 
42,038

 
38,692

Long-term investments
 
35,696

 
32,510

Property, equipment and capitalized software, net
 
8,681

 
8,458

Goodwill
 
62,000

 
58,910

Other intangible assets, net
 
9,999

 
9,325

Other assets
 
8,786

 
4,326

Total assets
 
$
167,200

 
$
152,221

Liabilities, redeemable noncontrolling interests and equity
 
 
 
 
Current liabilities:
 
 
 
 
Medical costs payable
 
$
20,907

 
$
19,891

Accounts payable and accrued liabilities
 
17,128

 
16,705

Commercial paper and current maturities of long-term debt
 
7,800

 
1,973

Unearned revenues
 
2,019

 
2,396

Other current liabilities
 
14,474

 
12,244

Total current liabilities
 
62,328

 
53,209

Long-term debt, less current maturities
 
34,473

 
34,581

Deferred income taxes
 
2,908

 
2,474

Other liabilities
 
9,435

 
5,730

Total liabilities
 
109,144

 
95,994

Commitments and contingencies (Note 7)
 


 


Redeemable noncontrolling interests
 
2,202

 
1,908

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; 948 and 960 issued and outstanding
 
9

 
10

Retained earnings
 
56,367

 
55,846

Accumulated other comprehensive loss
 
(3,273
)
 
(4,160
)
Nonredeemable noncontrolling interests
 
2,751

 
2,623

Total equity
 
55,854

 
54,319

Total liabilities, redeemable noncontrolling interests and equity
 
$
167,200

 
$
152,221


See Notes to the Condensed Consolidated Financial Statements

1

Table of Contents

UnitedHealth Group
Condensed Consolidated Statements of Operations
(Unaudited)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in millions, except per share data)
 
2019
 
2018
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
 
Premiums
 
$
47,164

 
$
44,458

 
$
94,677

 
$
88,542

Products
 
8,353

 
7,004

 
16,425

 
13,706

Services
 
4,496

 
4,269

 
8,814

 
8,373

Investment and other income
 
582

 
355

 
987

 
653

Total revenues
 
60,595

 
56,086

 
120,903

 
111,274

Operating costs:
 
 
 
 
 
 
 
 
Medical costs
 
39,184

 
36,427

 
78,123

 
72,290

Operating costs
 
8,415

 
8,386

 
16,932

 
16,892

Cost of products sold
 
7,598

 
6,471

 
14,979

 
12,655

Depreciation and amortization
 
654

 
598

 
1,293

 
1,180

Total operating costs
 
55,851

 
51,882

 
111,327

 
103,017

Earnings from operations
 
4,744

 
4,204

 
9,576

 
8,257

Interest expense
 
(418
)
 
(344
)
 
(818
)
 
(673
)
Earnings before income taxes
 
4,326

 
3,860

 
8,758

 
7,584

Provision for income taxes
 
(941
)
 
(850
)
 
(1,816
)
 
(1,650
)
Net earnings
 
3,385

 
3,010

 
6,942

 
5,934

Earnings attributable to noncontrolling interests
 
(92
)
 
(88
)
 
(182
)
 
(176
)
Net earnings attributable to UnitedHealth Group common shareholders
 
$
3,293

 
$
2,922

 
$
6,760

 
$
5,758

Earnings per share attributable to UnitedHealth Group common shareholders:
 
 
 
 
 
 
 
 
Basic
 
$
3.47

 
$
3.04

 
$
7.09

 
$
5.98

Diluted
 
$
3.42

 
$
2.98

 
$
6.97

 
$
5.85

Basic weighted-average number of common shares outstanding
 
950

 
961

 
954

 
963

Dilutive effect of common share equivalents
 
14

 
21

 
16

 
21

Diluted weighted-average number of common shares outstanding
 
964

 
982

 
970

 
984

Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents
 
11

 
6

 
9

 
7


See Notes to the Condensed Consolidated Financial Statements

2

Table of Contents

 
UnitedHealth Group
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in millions)
 
2019
 
2018
 
2019
 
2018
Net earnings
 
$
3,385

 
$
3,010

 
$
6,942

 
$
5,934

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
Gross unrealized gains (losses) on investment securities during the period
 
493

 
(43
)
 
1,013

 
(421
)
Income tax effect
 
(113
)
 
10

 
(232
)
 
96

Total unrealized gains (losses), net of tax
 
380

 
(33
)
 
781

 
(325
)
Gross reclassification adjustment for net realized gains included in net earnings
 
(5
)
 
(36
)
 
(1
)
 
(55
)
Income tax effect
 
1

 
9

 

 
13

Total reclassification adjustment, net of tax
 
(4
)
 
(27
)
 
(1
)
 
(42
)
Total foreign currency translation gains (losses)
 
109

 
(1,069
)
 
107

 
(1,070
)
Other comprehensive income (loss)
 
485

 
(1,129
)
 
887

 
(1,437
)
Comprehensive income
 
3,870

 
1,881

 
7,829

 
4,497

Comprehensive income attributable to noncontrolling interests
 
(92
)
 
(88
)
 
(182
)
 
(176
)
Comprehensive income attributable to UnitedHealth Group common shareholders
 
$
3,778

 
$
1,793

 
$
7,647

 
$
4,321


See Notes to the Condensed Consolidated Financial Statements

3

Table of Contents

UnitedHealth Group
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
 
 
Common Stock
 
Additional Paid-In Capital
 
Retained Earnings
 
Accumulated Other Comprehensive
Income (Loss)
 
Nonredeemable Noncontrolling Interests
 
Total
Equity
Three months ended June 30,
(in millions)
 
Shares
 
Amount
 
 
 
Net Unrealized Gains (Losses) on Investments
 
Foreign Currency Translation (Losses)
Gains
 
 
Balance at March 31, 2019
 
953

 
$
10

 
$

 
$
55,472

 
$
140

 
$
(3,898
)
 
$
2,727

 
$
54,451

Net earnings
 
 
 
 
 
 
 
3,293

 
 
 
 
 
54

 
3,347

Other comprehensive income
 
 
 
 
 
 
 
 
 
376

 
109

 
 
 
485

Issuances of common stock,
and related tax effects
 
1

 

 
105

 
 
 
 
 
 
 
 
 
105

Share-based compensation
 
 
 
 
 
152

 
 
 
 
 
 
 
 
 
152

Common share repurchases
 
(6
)
 
(1
)
 
(124
)
 
(1,374
)
 
 
 
 
 
 
 
(1,499
)
Cash dividends paid on common shares ($1.08 per share)
 
 
 
 
 
 
 
(1,024
)
 
 
 
 
 
 
 
(1,024
)
Redeemable noncontrolling interests fair value and other adjustments
 
 
 
 
 
(133
)
 
 
 
 
 
 
 
 
 
(133
)
Acquisition and other adjustments of nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
32

 
32

Distribution to nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
(62
)
 
(62
)
Balance at June 30, 2019
 
948

 
$
9

 
$

 
$
56,367

 
$
516

 
$
(3,789
)
 
$
2,751

 
$
55,854

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 31, 2018
 
962

 
$
10

 
$

 
$
50,494

 
$
(296
)
 
$
(2,655
)
 
$
2,483

 
$
50,036

Net earnings
 
 
 
 
 
 
 
2,922

 
 
 
 
 
59

 
2,981

Other comprehensive loss
 
 
 
 
 
 
 
 
 
(60
)
 
(1,069
)
 
 
 
(1,129
)
Issuances of common stock, and related tax effects
 
2

 

 
107

 
 
 
 
 
 
 
 
 
107

Share-based compensation
 
 
 
 
 
141

 
 
 
 
 
 
 
 
 
141

Common share repurchases
 
(2
)
 

 
(313
)
 
(187
)
 
 
 
 
 
 
 
(500
)
Cash dividends paid on common shares ($0.90 per share)
 
 
 
 
 
 
 
(866
)
 
 
 
 
 
 
 
(866
)
Redeemable noncontrolling interests fair value and other adjustments
 
 
 
 
 
65

 
 
 
 
 
 
 
 
 
65

Acquisition and other adjustments of nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
(7
)
 
(7
)
Distribution to nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
(45
)
 
(45
)
Balance at June 30, 2018
 
962

 
$
10

 
$

 
$
52,363

 
$
(356
)
 
$
(3,724
)
 
$
2,490

 
$
50,783


See Notes to the Condensed Consolidated Financial Statements

4

Table of Contents

UnitedHealth Group
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
 
 
Common Stock
 
Additional Paid-In Capital
 
Retained Earnings
 
Accumulated Other Comprehensive (Loss)
Income
 
Nonredeemable Noncontrolling Interests
 
Total
Equity
Six months ended June 30,
(in millions)
 
Shares
 
Amount
 
 
 
Net Unrealized (Losses) Gains on Investments
 
Foreign Currency Translation (Losses)
Gains
 
 
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
 
 
 
 
 
 
 
6,760

 
 
 
 
 
114

 
6,874

Other comprehensive income
 
 
 
 
 
 
 
 
 
780

 
107

 
 
 
887

Issuances of common stock,
and related tax effects
 
6

 

 
161

 
 
 
 
 
 
 
 
 
161

Share-based compensation
 
 
 
 
 
391

 
 
 
 
 
 
 
 
 
391

Common share repurchases
 
(18
)
 
(1
)
 
(158
)
 
(4,342
)
 
 
 
 
 
 
 
(4,501
)
Cash dividends paid on common shares ($1.98 per share)
 
 
 
 
 
 
 
(1,884
)
 
 
 
 
 
 
 
(1,884
)
Redeemable noncontrolling interests fair value and other adjustments
 
 
 
 
 
(285
)
 
 
 
 
 
 
 
 
 
(285
)
Acquisition and other adjustments of nonredeemable noncontrolling interests
 
 
 
 
 
(109
)
 
 
 
 
 
 
 
164

 
55

Distribution to nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
(145
)
 
(145
)
Balance at June 30, 2019
 
948

 
$
9

 
$

 
$
56,367

 
$
516

 
$
(3,789
)
 
$
2,751

 
$
55,854

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2018
 
969

 
$
10

 
$
1,703

 
$
48,730

 
$
(13
)
 
$
(2,654
)
 
$
2,057

 
$
49,833

Adjustment to adopt ASU 2016-01
 
 
 
 
 
 
 
(24
)
 
24

 
 
 
 
 

Net earnings
 
 
 
 
 
 
 
5,758

 
 
 
 
 
112

 
5,870

Other comprehensive loss
 
 
 
 
 
 
 
 
 
(367
)
 
(1,070
)
 
 
 
(1,437
)
Issuances of common stock, and related tax effects
 
7

 

 
522

 
 
 
 
 
 
 
 
 
522

Share-based compensation
 
 
 
 
 
347

 
 
 
 
 
 
 
 
 
347

Common share repurchases
 
(14
)
 

 
(2,637
)
 
(513
)
 
 
 
 
 
 
 
(3,150
)
Cash dividends paid on common shares ($1.65 per share)
 
 
 
 
 
 
 
(1,588
)
 
 
 
 
 
 
 
(1,588
)
Redeemable noncontrolling interests fair value and other adjustments
 
 
 
 
 
65

 
 
 
 
 
 
 
 
 
65

Acquisition and other adjustments of nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
416

 
416

Distribution to nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
(95
)
 
(95
)
Balance at June 30, 2018
 
962

 
$
10

 
$

 
$
52,363

 
$
(356
)
 
$
(3,724
)
 
$
2,490

 
$
50,783


See Notes to the Condensed Consolidated Financial Statements

5

Table of Contents

UnitedHealth Group
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
 
Six Months Ended June 30,
(in millions)
 
2019
 
2018
Operating activities
 
 
 
 
Net earnings
 
$
6,942

 
$
5,934

Noncash items:
 
 
 
 
Depreciation and amortization
 
1,293

 
1,180

Deferred income taxes
 
195

 
(158
)
Share-based compensation
 
398

 
358

Other, net
 
(127
)
 
10

Net change in other operating items, net of effects from acquisitions and changes in AARP balances:
 
 
 
 
Accounts receivable
 
2,196

 
(1,021
)
Other assets
 
(1,774
)
 
(2,369
)
Medical costs payable
 
447

 
1,263

Accounts payable and other liabilities
 
(33
)
 
2,233

Unearned revenues
 
(429
)
 
4,946

Cash flows from operating activities
 
9,108


12,376

Investing activities
 
 
 
 
Purchases of investments
 
(7,649
)
 
(8,182
)
Sales of investments
 
2,680

 
2,003

Maturities of investments
 
3,315

 
3,211

Cash paid for acquisitions, net of cash assumed
 
(4,751
)
 
(2,636
)
Purchases of property, equipment and capitalized software
 
(977
)
 
(960
)
Other, net
 
504

 
(134
)
Cash flows used for investing activities
 
(6,878
)
 
(6,698
)
Financing activities
 
 
 
 
Common share repurchases
 
(4,501
)
 
(3,150
)
Cash dividends paid
 
(1,884
)
 
(1,588
)
Proceeds from common stock issuances
 
448

 
478

Repayments of long-term debt
 
(1,250
)
 
(1,100
)
Proceeds from (repayments of) commercial paper, net
 
6,924

 
(181
)
Proceeds from issuance of long-term debt
 

 
3,964

Customer funds administered
 
1,435

 
3,082

Other, net
 
(529
)
 
(718
)
Cash flows from financing activities
 
643

 
787

Effect of exchange rate changes on cash and cash equivalents
 
6

 
(78
)
Increase in cash and cash equivalents
 
2,879

 
6,387

Cash and cash equivalents, beginning of period
 
10,866

 
11,981

Cash and cash equivalents, end of period
 
$
13,745

 
$
18,368

 
 
 
 
 

See Notes to the Condensed Consolidated Financial Statements

6

Table of Contents

UnitedHealth Group
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
1.    Basis of Presentation
UnitedHealth Group Incorporated (individually and together with its subsidiaries, “UnitedHealth Group” and the “Company”) is a diversified health care company dedicated to helping people live healthier lives and helping make the health system work better for everyone.
Through its diversified family of businesses, the Company leverages core competencies in data and health information; advanced technology; and clinical expertise. These core competencies are deployed within two distinct, but strategically aligned, business platforms: health benefits operating under UnitedHealthcare and health services operating under Optum.
The Company has prepared the Condensed Consolidated Financial Statements according to U.S. Generally Accepted Accounting Principles (GAAP) and has included the accounts of UnitedHealth Group and its subsidiaries. The year-end condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. In accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC), the Company has omitted certain footnote disclosures that would substantially duplicate the disclosures contained in its annual audited Consolidated Financial Statements. Therefore, these Condensed Consolidated Financial Statements should be read together with the Consolidated Financial Statements and the Notes included in Part II, Item 8, “Financial Statements and Supplementary Data” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the SEC (2018 10-K). The accompanying Condensed Consolidated Financial Statements include all normal recurring adjustments necessary to present the interim financial statements fairly.
Use of Estimates
These Condensed Consolidated Financial Statements include certain amounts based on the Company’s best estimates and judgments. The Company’s most significant estimates include medical costs payable and goodwill. Certain of these estimates require the application of complex assumptions and judgments, often because they involve matters that are inherently uncertain and will likely change in subsequent periods. The impact of any change in estimates is included in earnings in the period in which the estimate is adjusted.
Recently Adopted Accounting Standards
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2016-02, “Leases (Topic 842)” as modified by ASUs 2018-01, 2018-10, 2018-11, 2018-20 and 2019-01 (collectively, ASU 2016-02). Under ASU 2016-02, an entity is required to recognize assets and liabilities for the rights and obligations created by leases on the entity’s balance sheet for both finance and operating leases. The Company adopted ASU 2016-02 using a cumulative-effect upon adoption approach as of January 1, 2019. Upon adoption, the Company recognized $3.3 billion of lease right-of-use (ROU) assets and liabilities for operating leases on its Condensed Consolidated Balance Sheet, of which, $668 million were classified as current liabilities. The adoption of ASU 2016-02 was immaterial to the Company’s consolidated results of operations, equity and cash flows. The Company has included the disclosures required by ASU 2016-02 below and in Note 7, “Commitments and Contingencies.”
The Company leases facilities and equipment under long-term operating leases that are non-cancelable and expire on various dates. At the lease commencement date, lease 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 that closely matches 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 Condensed Consolidated Balance Sheet.
The Company has determined that there have been no other recently adopted or issued accounting standards that had, or will have, a material impact on its Condensed Consolidated Financial Statements.

7

Table of Contents

2.    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
June 30, 2019
 
 
 
 
 
 
 
 
Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
3,684

 
$
80

 
$
(5
)
 
$
3,759

State and municipal obligations
 
6,532

 
237

 
(1
)
 
6,768

Corporate obligations
 
16,597

 
265

 
(12
)
 
16,850

U.S. agency mortgage-backed securities
 
5,662

 
83

 
(15
)
 
5,730

Non-U.S. agency mortgage-backed securities
 
1,593

 
39

 
(1
)
 
1,631

Total debt securities - available-for-sale
 
34,068

 
704

 
(34
)
 
34,738

Debt securities - held-to-maturity:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
275

 
2

 

 
277

State and municipal obligations
 
31

 
1

 

 
32

Corporate obligations
 
435

 
1

 

 
436

Total debt securities - held-to-maturity
 
741

 
4

 

 
745

Total debt securities
 
$
34,809

 
$
708

 
$
(34
)
 
$
35,483

December 31, 2018
 
 
 
 
 
 
 
 
Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
3,434

 
$
13

 
$
(42
)
 
$
3,405

State and municipal obligations
 
7,117

 
61

 
(57
)
 
7,121

Corporate obligations
 
15,366

 
14

 
(218
)
 
15,162

U.S. agency mortgage-backed securities
 
4,947

 
11

 
(106
)
 
4,852

Non-U.S. agency mortgage-backed securities
 
1,376

 
2

 
(20
)
 
1,358

Total debt securities - available-for-sale
 
32,240

 
101

 
(443
)
 
31,898

Debt securities - held-to-maturity:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
255

 
1

 
(2
)
 
254

State and municipal obligations
 
11

 

 

 
11

Corporate obligations
 
355

 

 

 
355

Total debt securities - held-to-maturity
 
621

 
1

 
(2
)
 
620

Total debt securities
 
$
32,861

 
$
102

 
$
(445
)
 
$
32,518


The Company held $2.2 billion and $2.0 billion of equity securities as of June 30, 2019 and December 31, 2018, respectively. The Company’s investments in equity securities primarily consist of employee savings plan related investments, shares of Brazilian real denominated fixed-income funds and dividend paying stocks with readily determinable fair values. Additionally, the Company’s investments included $1.5 billion of equity method investments in operating businesses in the health care sector as of both June 30, 2019 and December 31, 2018.

8

Table of Contents

The amortized cost and fair value of debt securities as of June 30, 2019, 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
 
$
3,647

 
$
3,652

 
$
182

 
$
182

Due after one year through five years
 
12,150

 
12,298

 
283

 
285

Due after five years through ten years
 
8,084

 
8,394

 
136

 
136

Due after ten years
 
2,932

 
3,033

 
140

 
142

U.S. agency mortgage-backed securities
 
5,662

 
5,730

 

 

Non-U.S. agency mortgage-backed securities
 
1,593

 
1,631

 

 

Total debt securities
 
$
34,068

 
$
34,738

 
$
741

 
$
745


The fair value of available-for-sale debt securities with gross unrealized losses by 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
June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$

 
$

 
$
655

 
$
(5
)
 
$
655

 
$
(5
)
State and municipal obligations
 

 

 
366

 
(1
)
 
366

 
(1
)
Corporate obligations
 
703

 
(3
)
 
2,352

 
(9
)
 
3,055

 
(12
)
U.S. agency mortgage-backed securities
 

 

 
1,562

 
(15
)
 
1,562

 
(15
)
Non-U.S. agency mortgage-backed securities
 

 

 
128

 
(1
)
 
128

 
(1
)
Total debt securities - available-for-sale
 
$
703

 
$
(3
)
 
$
5,063

 
$
(31
)
 
$
5,766

 
$
(34
)
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
998

 
$
(7
)
 
$
1,425

 
$
(35
)
 
$
2,423

 
$
(42
)
State and municipal obligations
 
1,334

 
(11
)
 
2,491

 
(46
)
 
3,825

 
(57
)
Corporate obligations
 
8,105

 
(109
)
 
4,239

 
(109
)
 
12,344

 
(218
)
U.S. agency mortgage-backed securities
 
1,296

 
(22
)
 
2,388

 
(84
)
 
3,684

 
(106
)
Non-U.S. agency mortgage-backed securities
 
622

 
(7
)
 
459

 
(13
)
 
1,081

 
(20
)
Total debt securities - available-for-sale
 
$
12,355

 
$
(156
)
 
$
11,002

 
$
(287
)
 
$
23,357

 
$
(443
)

The Company’s unrealized losses from debt securities as of June 30, 2019 were generated from 5,000 positions out of a total of 31,000 positions. The Company believes that it will collect the principal and interest due on its debt securities that have an amortized cost in excess of fair value. The unrealized losses were primarily caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. At each reporting period, the Company evaluates securities for impairment when the fair value of the investment is less than its amortized cost. The Company evaluated the underlying credit quality and credit ratings of the issuers, noting no significant deterioration since purchase. As of June 30, 2019, 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.

9

Table of Contents

3.    Fair Value
Certain assets and liabilities are measured at fair value in the Condensed Consolidated Financial Statements or have fair values disclosed in the Notes to the Condensed Consolidated Financial Statements. These assets and liabilities are classified into one of three levels of a hierarchy defined by GAAP.
For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see Note 4 of Notes to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2018 10-K.
The following table presents a summary of fair value measurements by level and carrying values for items measured at fair value on a recurring basis in the Condensed Consolidated Balance Sheets:
(in millions)
 
Quoted Prices
in Active
Markets
(Level 1)
 
Other
Observable
Inputs
(Level 2)
 
Unobservable
Inputs
(Level 3)
 
Total
Fair and Carrying
Value
June 30, 2019
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
13,562

 
$
183

 
$

 
$
13,745

Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
3,474

 
285

 

 
3,759

State and municipal obligations
 

 
6,768

 

 
6,768

Corporate obligations
 
65

 
16,583

 
202

 
16,850

U.S. agency mortgage-backed securities
 

 
5,730

 

 
5,730

Non-U.S. agency mortgage-backed securities
 

 
1,631

 

 
1,631

Total debt securities - available-for-sale
 
3,539

 
30,997

 
202

 
34,738

Equity securities
 
2,035

 
15

 

 
2,050

Assets under management
 
1,011

 
1,911

 
21

 
2,943

Total assets at fair value

$
20,147

 
$
33,106

 
$
223

 
$
53,476

Percentage of total assets at fair value
 
38
%
 
62
%
 
%
 
100
%
December 31, 2018
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
10,757

 
$
109

 
$

 
$
10,866

Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
3,060

 
345

 

 
3,405

State and municipal obligations
 

 
7,121

 

 
7,121

Corporate obligations
 
39

 
14,950

 
173

 
15,162

U.S. agency mortgage-backed securities
 

 
4,852

 

 
4,852

Non-U.S. agency mortgage-backed securities
 

 
1,358

 

 
1,358

Total debt securities - available-for-sale
 
3,099

 
28,626

 
173

 
31,898

Equity securities
 
1,832

 
13

 

 
1,845

Assets under management
 
1,086

 
1,938

 
8

 
3,032

Total assets at fair value
 
$
16,774

 
$
30,686

 
$
181

 
$
47,641

Percentage of total assets at fair value
 
35
%
 
65
%
 
%
 
100
%

There were no transfers in or out of Level 3 financial assets or liabilities during the six months ended June 30, 2019 or 2018.

10

Table of Contents

The following table presents a summary of fair value measurements by level and carrying values for certain financial instruments not measured at fair value on a recurring basis in the Condensed Consolidated Balance Sheets:
(in millions)
 
Quoted Prices
in Active
Markets
(Level 1)
 
Other
Observable
Inputs
(Level 2)
 
Unobservable
Inputs
(Level 3)
 
Total
Fair
Value
 
Total Carrying Value
June 30, 2019
 
 
 
 
 
 
 
 
 
 
Debt securities - held-to-maturity
 
$
293

 
$
177

 
$
275

 
$
745

 
$
741

Long-term debt and other financing obligations
 
$

 
$
38,927

 
$

 
$
38,927

 
$
35,300

December 31, 2018
 
 
 
 
 
 
 
 
 
 
Debt securities - held-to-maturity
 
$
260

 
$
65

 
$
295

 
$
620

 
$
621

Long-term debt and other financing obligations
 
$

 
$
37,944

 
$

 
$
37,944

 
$
36,554


Nonfinancial assets and liabilities or financial assets and liabilities that are measured at fair value on a nonrecurring basis are subject to fair value adjustments only in certain circumstances, such as when the Company records an impairment. There were no significant fair value adjustments for these assets and liabilities recorded during either the six months ended June 30, 2019 or 2018.
4.    Medical Costs Payable
The following table shows the components of the change in medical costs payable for the six months ended June 30:
(in millions)
 
2019
 
2018
Medical costs payable, beginning of period
 
$
19,891

 
$
17,871

Acquisitions
 
522

 
261

Reported medical costs:
 
 
 
 
Current year
 
78,523

 
72,570

Prior years
 
(400
)
 
(280
)
Total reported medical costs
 
78,123

 
72,290

Medical payments:
 
 
 
 
Payments for current year
 
(60,707
)
 
(55,738
)
Payments for prior years
 
(16,922
)
 
(15,345
)
Total medical payments
 
(77,629
)
 
(71,083
)
Medical costs payable, end of period
 
$
20,907

 
$
19,339


For the six months ended June 30, 2019 and 2018, the medical cost reserve development included no individual factors that were significant. Medical costs payable included reserves for claims incurred by insured customers but not yet reported to the Company of $14.5 billion and $13.2 billion at June 30, 2019 and December 31, 2018, respectively.

11

Table of Contents

5.    Commercial Paper and Long-Term Debt
Commercial paper and senior unsecured long-term debt consisted of the following:
 
 
June 30, 2019
 
December 31, 2018
(in millions, except percentages)
 
Par
Value
 
Carrying
Value
 
Fair
Value
 
Par
Value
 
Carrying
Value
 
Fair
Value
Commercial paper
 
$
6,984

 
$
6,973

 
$
6,973

 
$

 
$

 
$

1.700% notes due February 2019
 

 

 

 
750

 
750

 
749

1.625% notes due March 2019
 

 

 

 
500

 
500

 
499

2.300% notes due December 2019
 
500

 
498

 
500

 
500

 
494

 
497

2.700% notes due July 2020
 
1,500

 
1,498

 
1,506

 
1,500

 
1,498

 
1,494

Floating rate notes due October 2020
 
300

 
299

 
300

 
300

 
299

 
298

3.875% notes due October 2020
 
450

 
449

 
457

 
450

 
443

 
456

1.950% notes due October 2020
 
900

 
898

 
896

 
900

 
897

 
884

4.700% notes due February 2021
 
400

 
404

 
413

 
400

 
398

 
412

2.125% notes due March 2021
 
750

 
748

 
749

 
750

 
747

 
734

Floating rate notes due June 2021
 
350

 
349

 
350

 
350

 
349

 
347

3.150% notes due June 2021
 
400

 
399

 
407

 
400

 
399

 
400

3.375% notes due November 2021
 
500

 
500

 
512

 
500

 
489

 
503

2.875% notes due December 2021
 
750

 
752

 
761

 
750

 
735

 
748

2.875% notes due March 2022
 
1,100

 
1,082

 
1,117

 
1,100

 
1,051

 
1,091

3.350% notes due July 2022
 
1,000

 
997

 
1,034

 
1,000

 
997

 
1,005

2.375% notes due October 2022
 
900

 
895

 
903

 
900

 
894

 
872

0.000% notes due November 2022
 
15

 
13

 
13

 
15

 
12

 
13

2.750% notes due February 2023
 
625

 
622

 
633

 
625

 
602

 
611

2.875% notes due March 2023
 
750

 
772

 
764

 
750

 
750

 
739

3.500% notes due June 2023
 
750

 
747

 
782

 
750

 
746

 
756

3.500% notes due February 2024
 
750

 
745

 
786

 
750

 
745

 
755

3.750% notes due July 2025
 
2,000

 
1,990

 
2,136

 
2,000

 
1,989

 
2,025

3.700% notes due December 2025
 
300

 
298

 
320

 
300

 
298

 
303

3.100% notes due March 2026
 
1,000

 
996

 
1,030

 
1,000

 
995

 
965

3.450% notes due January 2027
 
750

 
746

 
789

 
750

 
746

 
742

3.375% notes due April 2027
 
625

 
619

 
653

 
625

 
619

 
611

2.950% notes due October 2027
 
950

 
939

 
966

 
950

 
938

 
898

3.850% notes due June 2028
 
1,150

 
1,142

 
1,246

 
1,150

 
1,142

 
1,163

3.875% notes due December 2028
 
850

 
843

 
927

 
850

 
842

 
861

4.625% notes due July 2035
 
1,000

 
992

 
1,149

 
1,000

 
992

 
1,060

5.800% notes due March 2036
 
850

 
838

 
1,090

 
850

 
838

 
1,003

6.500% notes due June 2037
 
500

 
492

 
693

 
500

 
492

 
638

6.625% notes due November 2037
 
650

 
641

 
915

 
650

 
641

 
841

6.875% notes due February 2038
 
1,100

 
1,076

 
1,591

 
1,100

 
1,076

 
1,437

5.700% notes due October 2040
 
300

 
296

 
385

 
300

 
296

 
355

5.950% notes due February 2041
 
350

 
345

 
462

 
350

 
345

 
426

4.625% notes due November 2041
 
600

 
588

 
684

 
600

 
588

 
627

4.375% notes due March 2042
 
502

 
484

 
556

 
502

 
484

 
503

3.950% notes due October 2042
 
625

 
607

 
655

 
625

 
607

 
596

4.250% notes due March 2043
 
750

 
735

 
820

 
750

 
734

 
744

4.750% notes due July 2045
 
2,000

 
1,973

 
2,369

 
2,000

 
1,973

 
2,116

4.200% notes due January 2047
 
750

 
738

 
820

 
750

 
738

 
745

4.250% notes due April 2047
 
725

 
717

 
797

 
725

 
717

 
719

3.750% notes due October 2047
 
950

 
933

 
974

 
950

 
933

 
869

4.250% notes due June 2048
 
1,350

 
1,329

 
1,500

 
1,350

 
1,329

 
1,349

4.450% notes due December 2048
 
1,100

 
1,088

 
1,267

 
1,100

 
1,087

 
1,132

Total commercial paper and long-term debt
 
$
41,401

 
$
41,085

 
$
44,650

 
$
35,667

 
$
35,234

 
$
36,591



12

Table of Contents

The Company’s long-term debt obligations included $1.2 billion and $1.3 billion of other financing obligations, of which $329 million and $229 million were classified as current as of June 30, 2019 and December 31, 2018, respectively.
Long-term Debt
In July 2019, the Company issued $5.5 billion of senior unsecured notes consisting of the following:
(in millions, except percentages)
 
Par Value
2.375% notes due August 2024
 
$
750

2.875% notes due August 2029
 
1,000

3.500% notes due August 2039
 
1,250

3.700% notes due August 2049
 
1,250

3.875% notes due August 2059
 
1,250


Commercial Paper and Bank Credit Facilities
Commercial paper consists of short-duration, senior unsecured debt privately placed on a discount basis through broker-dealers. As of June 30, 2019, the Company’s outstanding commercial paper had a weighted average annual interest rate of 2.6%.
The Company has $3.5 billion five-year, $3.5 billion three-year and $3.0 billion 364-day revolving bank credit facilities with 26 banks, which mature in December 2023, December 2021 and December 2019, respectively. The Company additionally has a $2.5 billion 364-day revolving bank credit facility with 6 banks that matures in May 2020. These facilities provide liquidity support for the Company’s commercial paper program and are available for general corporate purposes. As of June 30, 2019, no amounts had been drawn on any of the bank credit facilities. The annual interest rates, which are variable based on term, are calculated based on the London Interbank Offered Rate (LIBOR) plus a credit spread based on the Company’s senior unsecured credit ratings. If amounts had been drawn on the bank credit facilities as of June 30, 2019, annual interest rates would have ranged from 2.9% to 3.1%.
Debt Covenants
The Company’s bank credit facilities contain various covenants, including covenants requiring the Company to maintain a defined debt to debt-plus-shareholders’ equity ratio of not more than 60%. The Company was in compliance with its debt covenants as of June 30, 2019.
6.    Dividends
In June 2019, the Company’s Board of Directors increased the Company’s annual dividend rate to shareholders to $4.32 compared to $3.60 per share, which the Company had paid since June 2018. 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 2019 dividend payments:
Payment Date
 
Amount per Share
 
Total Amount Paid
 
 
 
 
(in millions)
March 19
 
$
0.90

 
$
860

June 25
 
1.08

 
1,024


7.    Commitments and Contingencies
Leases
Operating lease costs were $247 million and $485 million for the three and six months ended June 30, 2019, respectively, and included immaterial variable and short-term lease costs. Cash payments made on the Company’s operating lease liabilities were $363 million for the six months ended June 30, 2019, which were classified within operating activities in the Condensed Consolidated Statements of Cash Flows. As of June 30, 2019, the Company’s weighted-average remaining lease term and weighted-average discount rate for its operating leases were 8.8 years and 4.0%, respectively.

13

Table of Contents

As of June 30, 2019, future minimum annual lease payments under all non-cancelable operating leases were as follows:
(in millions)
 
Future Operating Lease Payments
2019
 
$
396

2020
 
760

2021
 
666

2022
 
562

2023
 
463

Thereafter
 
1,977

Total future minimum lease payments
 
4,824

Less imputed interest
 
(806
)
Total
 
$
4,018


Legal Matters
Because of the nature of its businesses, the Company is frequently made party to a variety of legal actions and regulatory inquiries, including class actions and suits brought by members, care providers, consumer advocacy organizations, customers and regulators, relating to the Company’s businesses, including management and administration of health benefit plans and other services. These matters include medical malpractice, employment, intellectual property, antitrust, privacy and contract claims and claims related to health care benefits coverage and other business practices.
The Company records liabilities for its estimates of probable costs resulting from these matters where appropriate. Estimates of costs resulting from legal and regulatory matters involving the Company are inherently difficult to predict, particularly where the matters: involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or represent a shift in regulatory policy; involve a large number of claimants or regulatory bodies; are in the early stages of the proceedings; or could result in a change in business practices. Accordingly, the Company is often unable to estimate the losses or ranges of losses for those matters where there is a reasonable possibility or it is probable that a loss may be incurred.
Government Investigations, Audits and Reviews
The Company has been involved or is currently involved in various governmental investigations, audits and reviews. These include routine, regular and special investigations, audits and reviews by the Centers for Medicare and Medicaid Services (CMS), state insurance and health and welfare departments, the Brazilian national regulatory agency for private health insurance and plans (the Agência Nacional de Saúde Suplementar), state attorneys general, the Office of the Inspector General, the Office of Personnel Management, the Office of Civil Rights, the Government Accountability Office, the Federal Trade Commission, U.S. Congressional committees, the U.S. Department of Justice, the SEC, the Internal Revenue Service, the U.S. Drug Enforcement Administration, the Brazilian federal revenue service (the Secretaria da Receita Federal), the U.S. Department of Labor, the Federal Deposit Insurance Corporation, the Defense Contract Audit Agency and other 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 Department of Justice (DOJ) announced its decision to pursue certain claims within a lawsuit initially asserted against the Company and filed under seal by a whistleblower in 2011. The whistleblower’s complaint, which was unsealed on February 15, 2017, alleges that the Company made improper risk adjustment submissions and violated the False Claims Act. On February 12, 2018, the court granted in part and denied in part the Company’s motion to dismiss. In May 2018, DOJ moved to dismiss the Company’s counterclaims, which were filed in March 2018, and moved for partial summary judgment. In March 2019, the court denied the government’s motion for partial summary judgment and dismissed the Company’s counterclaims without prejudice. The Company cannot reasonably estimate the outcome that may result from this matter given its procedural status.

14

Table of Contents

8.    Segment Financial Information
The Company’s four reportable segments are UnitedHealthcare, OptumHealth, OptumInsight and OptumRx. For more information on the Company’s segments see Part I, Item I, “Business” and Note 13 of Notes to the Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data” in the 2018 10-K. Total assets at OptumHealth increased to $38.8 billion as of June 30, 2019 compared to $29.8 billion as of December 31, 2018, primarily due to goodwill and other intangibles assets from a second quarter 2019 acquisition and the recognition of ROU assets from ASU 2016-02.
The following tables present reportable segment financial information:
 
 
 
 
Optum
 
 
 
 
(in millions)
 
UnitedHealthcare
 
OptumHealth
 
OptumInsight
 
OptumRx
 
Optum Eliminations
 
Optum
 
Corporate and
Eliminations
 
Consolidated
Three Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues - unaffiliated customers:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
46,030

 
$
1,134

 
$

 
$

 
$

 
$
1,134

 
$

 
$
47,164

Products
 

 
9

 
22

 
8,322

 

 
8,353

 

 
8,353

Services
 
2,188

 
1,370

 
790

 
148

 

 
2,308

 

 
4,496

Total revenues - unaffiliated customers
 
48,218

 
2,513

 
812

 
8,470

 

 
11,795

 

 
60,013

Total revenues - affiliated customers
 

 
4,449

 
1,521

 
10,439

 
(381
)
 
16,028

 
(16,028
)
 

Investment and other income
 
376

 
186

 
6

 
14

 

 
206

 

 
582

Total revenues
 
$
48,594

 
$
7,148

 
$
2,339

 
$
18,923

 
$
(381
)
 
$
28,029

 
$
(16,028
)
 
$
60,595

Earnings from operations
 
$
2,642

 
$
688

 
$
525

 
$
889

 
$

 
$
2,102

 
$

 
$
4,744

Interest expense
 

 

 

 

 

 

 
(418
)
 
(418
)
Earnings before income taxes
 
$
2,642

 
$
688

 
$
525

 
$
889

 
$

 
$
2,102

 
$
(418
)
 
$
4,326

Three Months Ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues - unaffiliated customers:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
43,496

 
$
962

 
$

 
$

 
$

 
$
962

 
$

 
$
44,458

Products
 

 
12

 
20

 
6,972

 

 
7,004

 

 
7,004

Services
 
2,142

 
1,203

 
776

 
148

 

 
2,127

 

 
4,269

Total revenues - unaffiliated customers
 
45,638

 
2,177

 
796

 
7,120

 

 
10,093

 

 
55,731

Total revenues - affiliated customers
 

 
3,640

 
1,380

 
9,807

 
(341
)
 
14,486

 
(14,486
)
 

Investment and other income
 
208

 
124

 
9

 
14

 

 
147

 

 
355

Total revenues
 
$
45,846

 
$
5,941

 
$
2,185

 
$
16,941

 
$
(341
)
 
$
24,726

 
$
(14,486
)
 
$
56,086

Earnings from operations
 
$
2,357

 
$
570

 
$
453

 
$
824

 
$

 
$
1,847

 
$

 
$
4,204

Interest expense
 

 

 

 

 

 

 
(344
)
 
(344
)
Earnings before income taxes
 
$
2,357

 
$
570

 
$
453

 
$
824

 
$

 
$
1,847

 
$
(344
)
 
$
3,860


15

Table of Contents

 
 
 
 
Optum
 
 
 
 
(in millions)
 
UnitedHealthcare
 
OptumHealth
 
OptumInsight
 
OptumRx
 
Optum Eliminations
 
Optum
 
Corporate and
Eliminations
 
Consolidated
Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues - unaffiliated customers:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
92,531

 
$
2,146

 
$

 
$

 
$

 
$
2,146

 
$

 
$
94,677

Products
 

 
17

 
45

 
16,363

 

 
16,425

 

 
16,425

Services
 
4,329

 
2,644

 
1,544

 
297

 

 
4,485

 

 
8,814

Total revenues - unaffiliated customers
 
96,860

 
4,807

 
1,589

 
16,660

 

 
23,056

 

 
119,916

Total revenues - affiliated customers
 

 
8,736

 
2,928

 
20,052

 
(740
)
 
30,976

 
(30,976
)
 

Investment and other income
 
630

 
318

 
11

 
28

 

 
357

 

 
987

Total revenues
 
$
97,490

 
$
13,861

 
$
4,528

 
$
36,740

 
$
(740
)
 
$
54,389

 
$
(30,976
)
 
$
120,903

Earnings from operations
 
$
5,596

 
$
1,314

 
$
957

 
$
1,709