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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 MARCH 31, 2020
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
__________________________________________________________ 
    uhglogoa05.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)
_________________________________________________________  
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, $.01 par value
 
UNH
 
NYSE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act
Large accelerated filer
 
Accelerated filer
 
Non-accelerated filer
Smaller reporting company
 
 
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes No 
As of April 30, 2020, there were 948,379,502 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)
 
March 31,
2020
 
December 31,
2019
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
21,569

 
$
10,985

Short-term investments
 
2,876

 
3,260

Accounts receivable, net
 
14,613

 
11,822

Other current receivables, net
 
10,275

 
9,640

Assets under management
 
2,866

 
3,076

Prepaid expenses and other current assets
 
6,608

 
3,851

Total current assets
 
58,807

 
42,634

Long-term investments
 
36,578

 
37,209

Property, equipment and capitalized software, net
 
8,173

 
8,704

Goodwill
 
65,302

 
65,659

Other intangible assets, net
 
10,199

 
10,349

Other assets
 
10,008

 
9,334

Total assets
 
$
189,067

 
$
173,889

Liabilities, redeemable noncontrolling interests and equity
 
 
 
 
Current liabilities:
 
 
 
 
Medical costs payable
 
$
22,772

 
$
21,690

Accounts payable and accrued liabilities
 
22,845

 
19,005

Short-term borrowings and current maturities of long-term debt
 
15,828

 
3,870

Unearned revenues
 
2,509

 
2,622

Other current liabilities
 
14,652

 
14,595

Total current liabilities
 
78,606

 
61,782

Long-term debt, less current maturities
 
35,779

 
36,808

Deferred income taxes
 
3,030

 
2,993

Other liabilities
 
10,048

 
10,144

Total liabilities
 
127,463

 
111,727

Commitments and contingencies (Note 6)
 


 


Redeemable noncontrolling interests
 
1,741

 
1,726

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; 947 and 948 issued and outstanding
 
10

 
9

Additional paid-in capital
 

 
7

Retained earnings
 
62,327

 
61,178

Accumulated other comprehensive loss
 
(5,360
)
 
(3,578
)
Nonredeemable noncontrolling interests
 
2,886

 
2,820

Total equity
 
59,863

 
60,436

Total liabilities, redeemable noncontrolling interests and equity
 
$
189,067

 
$
173,889


See Notes to the Condensed Consolidated Financial Statements

1

Table of Contents

UnitedHealth Group
Condensed Consolidated Statements of Operations
(Unaudited)
 
 
Three Months Ended March 31,
(in millions, except per share data)
 
2020
 
2019
Revenues:
 
 
 
 
Premiums
 
$
50,640

 
$
47,513

Products
 
8,431

 
8,072

Services
 
4,985

 
4,318

Investment and other income
 
365

 
405

Total revenues
 
64,421

 
60,308

Operating costs:
 
 
 
 
Medical costs
 
41,000

 
38,939

Operating costs
 
10,015

 
8,517

Cost of products sold
 
7,687

 
7,381

Depreciation and amortization
 
723

 
639

Total operating costs
 
59,425

 
55,476

Earnings from operations
 
4,996

 
4,832

Interest expense
 
(437
)
 
(400
)
Earnings before income taxes
 
4,559

 
4,432

Provision for income taxes
 
(1,094
)
 
(875
)
Net earnings
 
3,465

 
3,557

Earnings attributable to noncontrolling interests
 
(83
)
 
(90
)
Net earnings attributable to UnitedHealth Group common shareholders
 
$
3,382

 
$
3,467

Earnings per share attributable to UnitedHealth Group common shareholders:
 
 
 
 
Basic
 
$
3.56

 
$
3.62

Diluted
 
$
3.52

 
$
3.56

Basic weighted-average number of common shares outstanding
 
949

 
958

Dilutive effect of common share equivalents
 
13

 
17

Diluted weighted-average number of common shares outstanding
 
962

 
975

Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents
 
10

 
8


See Notes to the Condensed Consolidated Financial Statements

2

Table of Contents

 
UnitedHealth Group
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)

 
 
Three Months Ended March 31,
(in millions)
 
2020
 
2019
Net earnings
 
$
3,465

 
$
3,557

Other comprehensive (loss) income:
 
 
 
 
Gross unrealized (losses) gains on investment securities during the period
 
(349
)
 
520

Income tax effect
 
80

 
(119
)
Total unrealized (losses) gains, net of tax
 
(269
)
 
401

Gross reclassification adjustment for net realized (gains) losses included in net earnings
 
(18
)
 
4

Income tax effect
 
4

 
(1
)
Total reclassification adjustment, net of tax
 
(14
)
 
3

Total foreign currency translation losses
 
(1,499
)
 
(2
)
Other comprehensive (loss) income
 
(1,782
)
 
402

Comprehensive income
 
1,683

 
3,959

Comprehensive income attributable to noncontrolling interests
 
(83
)
 
(90
)
Comprehensive income attributable to UnitedHealth Group common shareholders
 
$
1,600

 
$
3,869


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
 
 
Shares
 
Amount
 
 
 
Net Unrealized Gains (Losses) on Investments
 
Foreign Currency Translation Losses
 
 
Balance at January 1, 2020
 
948

 
$
9

 
$
7

 
$
61,178

 
$
589

 
$
(4,167
)
 
$
2,820

 
$
60,436

Adjustment to adopt ASU 2016-13
 
 
 
 
 
 
 
(28
)
 
 
 
 
 
 
 
(28
)
Net earnings
 
 
 
 
 
 
 
3,382

 
 
 
 
 
59

 
3,441

Other comprehensive (loss) income
 
 
 
 
 
 
 
 
 
(283
)
 
(1,499
)
 
 
 
(1,782
)
Issuances of common stock,
and related tax effects
 
5

 
1

 
320

 
 
 
 
 
 
 
 
 
321

Share-based compensation
 
 
 
 
 
234

 
 
 
 
 
 
 
 
 
234

Common share repurchases
 
(6
)
 

 
(510
)
 
(1,181
)
 
 
 
 
 
 
 
(1,691
)
Cash dividends paid on common shares ($1.08 per share)
 
 
 
 
 
 
 
(1,024
)
 
 
 
 
 
 
 
(1,024
)
Redeemable noncontrolling interests fair value and other adjustments
 
 
 
 
 
(51
)
 
 
 
 
 
 
 
 
 
(51
)
Acquisition and other adjustments of nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
50

 
50

Distribution to nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
(43
)
 
(43
)
Balance at March 31, 2020
 
947

 
$
10

 
$

 
$
62,327

 
$
306

 
$
(5,666
)
 
$
2,886

 
$
59,863

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
 
 
 
 
3,467

 
 
 
 
 
60

 
3,527

Other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
404

 
(2
)
 
 
 
402

Issuances of common stock, and related tax effects
 
5

 

 
56

 
 
 
 
 
 
 
 
 
56

Share-based compensation
 
 
 
 
 
239

 
 
 
 
 
 
 
 
 
239

Common share repurchases
 
(12
)
 

 
(34
)
 
(2,968
)
 
 
 
 
 
 
 
(3,002
)
Cash dividends paid on common shares ($0.90 per share)
 
 
 
 
 
 
 
(860
)
 
 
 
 
 
 
 
(860
)
Redeemable noncontrolling interests fair value and other adjustments
 
 
 
 
 
(152
)
 
 
 
 
 
 
 
 
 
(152
)
Acquisition and other adjustments of nonredeemable noncontrolling interests
 
 
 
 
 
(109
)
 
 
 
 
 
 
 
132

 
23

Distribution to nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
(83
)
 
(83
)
Balance at March 31, 2019
 
953

 
$
10

 
$

 
$
55,472

 
$
140

 
$
(3,898
)
 
$
2,727

 
$
54,451

See Notes to the Condensed Consolidated Financial Statements

4

Table of Contents

UnitedHealth Group
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
 
Three Months Ended March 31,
(in millions)
 
2020
 
2019
Operating activities
 
 
 
 
Net earnings
 
$
3,465

 
$
3,557

Noncash items:
 
 
 
 
Depreciation and amortization
 
723

 
639

Deferred income taxes
 
202

 
134

Share-based compensation
 
231

 
243

Other, net
 
45

 
42

Net change in other operating items, net of effects from acquisitions and changes in AARP balances:
 
 
 
 
Accounts receivable
 
(2,652
)
 
(1,421
)
Other assets
 
(4,249
)
 
(1,495
)
Medical costs payable
 
1,120

 
1,125

Accounts payable and other liabilities
 
4,137

 
318

Unearned revenues
 
(79
)
 
92

Cash flows from operating activities
 
2,943


3,234

Investing activities
 
 
 
 
Purchases of investments
 
(3,866
)
 
(3,540
)
Sales of investments
 
2,170

 
1,510

Maturities of investments
 
1,726

 
1,711

Cash paid for acquisitions, net of cash assumed
 
(929
)
 
(689
)
Purchases of property, equipment and capitalized software
 
(469
)
 
(562
)
Other, net
 
(165
)
 
154

Cash flows used for investing activities
 
(1,533
)
 
(1,416
)
Financing activities
 
 
 
 
Common share repurchases
 
(1,691
)
 
(3,002
)
Cash dividends paid
 
(1,024
)
 
(860
)
Proceeds from common stock issuances
 
557

 
323

Repayments of long-term debt
 

 
(1,250
)
Proceeds from short-term borrowings, net
 
10,797

 
3,101

Customer funds administered
 
1,062

 
1,784

Other, net
 
(398
)
 
(368
)
Cash flows from (used for) financing activities
 
9,303

 
(272
)
Effect of exchange rate changes on cash and cash equivalents
 
(129
)
 
(5
)
Increase in cash and cash equivalents
 
10,584

 
1,541

Cash and cash equivalents, beginning of period
 
10,985

 
10,866

Cash and cash equivalents, end of period
 
$
21,569

 
$
12,407

 
 
 
 
 

See Notes to the Condensed Consolidated Financial Statements

5

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, 2019 as filed with the SEC (2019 10-K). The accompanying Condensed Consolidated Financial Statements include all normal recurring adjustments necessary to present the interim financial statements fairly.
Use of Estimates
These Condensed Consolidated Financial Statements include certain amounts based on the Company’s best estimates and judgments. The Company’s most significant estimates include medical costs payable and goodwill. Certain of these estimates require the application of complex assumptions and judgments, often because they involve matters that are inherently uncertain and will likely change in subsequent periods. The impact of any change in estimates is included in earnings in the period in which the estimate is adjusted.
Revenue from Products
For the quarter ended March 31, 2020, the Company recognized revenue and cost of products sold for retail pharmacy co-payments related to its OptumRx business. Revenue recognized in prior periods related to retail pharmacy transactions excludes the member’s applicable co-payment. There was no impact on earnings from operations, net earnings, earnings per share or total equity.
Recently Adopted Accounting Standards
In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326)” (ASU 2016-13). ASU 2016-13 requires the use of the current expected credit loss impairment model to develop an estimate of expected credit losses for certain financial assets. ASU 2016-13 also requires expected credit losses on available-for-sale debt securities to be recognized through an allowance for credit losses and revises certain disclosure requirements. The Company adopted ASU 2016-13 on January 1, 2020 using a cumulative effect upon adoption approach. The adoption of ASU 2016-13 was immaterial to the Company’s consolidated balance sheet, results of operations, equity and cash flows.
Under the current expected credit loss impairment model, the Company evaluates an available-for-sale debt security for credit-related impairment by considering the present value of expected cash flows relative to a security’s amortized cost, the extent to which fair value is less than amortized cost, the financial condition and near-term prospects of the issuer and specific events or circumstances that may influence the operations of the issuer. Credit-related impairments are recorded as an allowance, with an offset to investment and other income. Non-credit related impairments are recorded through other comprehensive income. If the Company intends to sell an impaired security, or will likely be required to sell a security before recovery of the entire amortized cost, the entire impairment is included in net earnings.
The Company has determined that there have been no other recently adopted or issued accounting standards that had, or will have, a material impact on its Condensed Consolidated Financial Statements.

6

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
March 31, 2020
 
 
 
 
 
 
 
 
Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
3,146

 
$
183

 
$
(1
)
 
$
3,328

State and municipal obligations
 
5,724

 
214

 
(20
)
 
5,918

Corporate obligations
 
17,923

 
182

 
(411
)
 
17,694

U.S. agency mortgage-backed securities
 
6,508

 
260

 

 
6,768

Non-U.S. agency mortgage-backed securities
 
1,932

 
28

 
(36
)
 
1,924

Total debt securities - available-for-sale
 
35,233

 
867

 
(468
)
 
35,632

Debt securities - held-to-maturity:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
410

 
9

 

 
419

State and municipal obligations
 
31

 
2

 

 
33

Corporate obligations
 
284

 

 
(1
)
 
283

Total debt securities - held-to-maturity
 
725

 
11

 
(1
)
 
735

Total debt securities
 
$
35,958

 
$
878

 
$
(469
)
 
$
36,367

December 31, 2019
 
 
 
 
 
 
 
 
Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
3,502

 
$
55

 
$
(4
)
 
$
3,553

State and municipal obligations
 
5,680

 
251

 
(5
)
 
5,926

Corporate obligations
 
17,910

 
343

 
(11
)
 
18,242

U.S. agency mortgage-backed securities
 
6,425

 
109

 
(6
)
 
6,528

Non-U.S. agency mortgage-backed securities
 
1,811

 
37

 
(3
)
 
1,845

Total debt securities - available-for-sale
 
35,328

 
795

 
(29
)
 
36,094

Debt securities - held-to-maturity:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
402

 
2

 

 
404

State and municipal obligations
 
32

 
2

 

 
34

Corporate obligations
 
538

 

 
(1
)
 
537

Total debt securities - held-to-maturity
 
972

 
4

 
(1
)
 
975

Total debt securities
 
$
36,300

 
$
799

 
$
(30
)
 
$
37,069


The Company held $1.7 billion and $2.0 billion of equity securities as of March 31, 2020 and December 31, 2019, respectively. The Company’s investments in equity securities primarily consist of employee savings plan related investments and shares of Brazilian real denominated fixed-income funds with readily determinable fair values. Additionally, the Company’s investments included $1.4 billion of equity method investments in operating businesses in the health care sector as of March 31, 2020 and December 31, 2019. The allowance for credit losses on held-to-maturity securities at March 31, 2020 was not material.

7

Table of Contents

The amortized cost and fair value of debt securities as of March 31, 2020, 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
 
$
3,010

 
$
3,011

 
$
319

 
$
320

Due after one year through five years
 
11,565

 
11,604

 
352

 
359

Due after five years through ten years
 
8,563

 
8,669

 
28

 
28

Due after ten years
 
3,655

 
3,656

 
26

 
28

U.S. agency mortgage-backed securities
 
6,508

 
6,768

 

 

Non-U.S. agency mortgage-backed securities
 
1,932

 
1,924

 

 

Total debt securities
 
$
35,233

 
$
35,632

 
$
725

 
$
735


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
March 31, 2020
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
56

 
$
(1
)
 
$

 
$

 
$
56

 
$
(1
)
State and municipal obligations
 
810

 
(20
)
 

 

 
810

 
(20
)
Corporate obligations
 
9,294

 
(382
)
 
391

 
(29
)
 
9,685

 
(411
)
Non-U.S. agency mortgage-backed securities
 
841

 
(33
)
 
30

 
(3
)
 
871

 
(36
)
Total debt securities - available-for-sale
 
$
11,001

 
$
(436
)
 
$
421

 
$
(32
)
 
$
11,422

 
$
(468
)
December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
616

 
$
(4
)
 
$

 
$

 
$
616

 
$
(4
)
State and municipal obligations
 
440

 
(5
)
 

 

 
440

 
(5
)
Corporate obligations
 
1,903

 
(7
)
 
740

 
(4
)
 
2,643

 
(11
)
U.S. agency mortgage-backed securities
 
657

 
(3
)
 
333

 
(3
)
 
990

 
(6
)
Non-U.S. agency mortgage-backed securities
 
406

 
(3
)
 

 

 
406

 
(3
)
Total debt securities - available-for-sale
 
$
4,022

 
$
(22
)
 
$
1,073

 
$
(7
)
 
$
5,095

 
$
(29
)

The Company’s unrealized losses from debt securities as of March 31, 2020 were generated from approximately 10,000 positions out of a total of 32,000 positions. The Company believes that it will collect the timely principal and interest due on its debt securities that have an amortized cost in excess of fair value. The unrealized losses were primarily caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities that impacted our assessment on collectability of principal and interest. At each reporting period, the Company evaluates available-for-sale debt securities for any credit-related impairment when the fair value of the investment is less than its amortized cost. The Company evaluated the expected cash flows, the underlying credit quality and credit ratings of the issuers, and the potential economic impacts of COVID-19 on the issuers, noting no significant credit deterioration since purchase. As of March 31, 2020, the Company did not have the intent to sell any of the available-for-sale debt securities in an unrealized loss position. Therefore, the Company believes these losses to be temporary. The allowance for credit losses on available-for-sale debt securities at March 31, 2020 was not material.

8

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 2019 10-K.
The following table presents a summary of fair value measurements by level and carrying values for items measured at fair value on a recurring basis in the Condensed Consolidated Balance Sheets:
(in millions)
 
Quoted Prices
in Active
Markets
(Level 1)
 
Other
Observable
Inputs
(Level 2)
 
Unobservable
Inputs
(Level 3)
 
Total
Fair and Carrying
Value
March 31, 2020
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
21,450

 
$
119

 
$

 
$
21,569

Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
3,143

 
185

 

 
3,328

State and municipal obligations
 

 
5,918

 

 
5,918

Corporate obligations
 
59

 
17,385

 
250

 
17,694

U.S. agency mortgage-backed securities
 

 
6,768

 

 
6,768

Non-U.S. agency mortgage-backed securities
 

 
1,924

 

 
1,924

Total debt securities - available-for-sale
 
3,202

 
32,180

 
250

 
35,632

Equity securities
 
1,394

 
19

 

 
1,413

Assets under management
 
937

 
1,890

 
39

 
2,866

Total assets at fair value

$
26,983

 
$
34,208

 
$
289

 
$
61,480

Percentage of total assets at fair value
 
44
%
 
56
%
 
%
 
100
%
December 31, 2019
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
10,837

 
$
148

 
$

 
$
10,985

Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
3,369

 
184

 

 
3,553

State and municipal obligations
 

 
5,926

 

 
5,926

Corporate obligations
 
70

 
17,923

 
249

 
18,242

U.S. agency mortgage-backed securities
 

 
6,528

 

 
6,528

Non-U.S. agency mortgage-backed securities
 

 
1,845

 

 
1,845

Total debt securities - available-for-sale
 
3,439

 
32,406

 
249

 
36,094

Equity securities
 
1,734

 
22

 

 
1,756

Assets under management
 
1,123

 
1,918

 
35

 
3,076

Total assets at fair value
 
$
17,133

 
$
34,494

 
$
284

 
$
51,911

Percentage of total assets at fair value
 
33
%
 
66
%
 
1
%
 
100
%

There were no transfers in or out of Level 3 financial assets or liabilities during the three months ended March 31, 2020 or 2019.

9

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
March 31, 2020
 
 
 
 
 
 
 
 
 
 
Debt securities - held-to-maturity