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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 2021
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 0-26301
United Therapeutics Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware52-1984749
(State or Other Jurisdiction of(I.R.S. Employer
Incorporation or Organization)Identification No.)
1040 Spring Street, Silver Spring, MD
20910
(Address of Principal Executive Offices)(Zip Code)
(301) 608-9292
(Registrant’s Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report) 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of exchange on which registered
Common Stock, par value $0.01 per shareUTHRNasdaq Global Select Market
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, 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 filerAccelerated filer
Non-accelerated filerSmaller 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 ☒
The number of shares outstanding of the issuer’s common stock, par value $.01 per share, as of October 27, 2021 was 45,036,501.


TABLE OF CONTENTS
INDEX

2
United Therapeutics

PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets
(In millions, except share data)
 September 30, 2021December 31, 2020
 (Unaudited) 
Assets  
Current assets:  
Cash and cash equivalents$908.5 $738.7 
Marketable investments1,091.9 1,096.3 
Accounts receivable, no allowance for 2021 and 2020
212.8 157.4 
Inventories, net96.7 86.5 
Other current assets76.0 88.3 
Total current assets2,385.9 2,167.2 
Marketable investments1,508.7 1,149.6 
Goodwill and other intangible assets, net44.7 158.1 
Property, plant, and equipment, net726.7 731.6 
Deferred tax assets, net273.9 238.6 
Other non-current assets109.0 169.9 
Total assets$5,048.9 $4,615.0 
Liabilities and Stockholders’ Equity 
Current liabilities:  
Accounts payable and accrued expenses$210.5 $187.0 
Share tracking awards plan83.5 96.8 
Other current liabilities26.0 39.5 
Total current liabilities320.0 323.3 
Line of credit800.0 800.0 
Other non-current liabilities99.2 96.5 
Total liabilities1,219.2 1,219.8 
Commitments and contingencies  
Stockholders’ equity:  
Preferred stock, par value $.01, 10,000,000 shares authorized, no shares issued
  
Common stock, par value $.01, 245,000,000 shares authorized, 71,640,713 and
71,126,314 shares issued, and 45,021,497 and 44,507,098 shares outstanding
at September 30, 2021 and December 31, 2020, respectively
0.7 0.7 
Additional paid-in capital2,225.5 2,148.7 
Accumulated other comprehensive loss(20.1)(14.2)
Treasury stock, 26,619,216 shares at September 30, 2021 and December 31, 2020
(2,579.2)(2,579.2)
Retained earnings4,202.8 3,839.2 
Total stockholders’ equity3,829.7 3,395.2 
Total liabilities and stockholders’ equity$5,048.9 $4,615.0 

See accompanying notes to consolidated financial statements.
Quarterly Report
3

Part I. Financial Information
Consolidated Statements of Operations
(In millions, except per share data)
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2021202020212020
 (Unaudited)(Unaudited)
Revenues:    
Net product sales$444.7 $380.1 $1,270.3 $1,098.4 
Total revenues444.7 380.1 1,270.3 1,098.4 
Operating expenses:   
Cost of product sales27.7 24.0 87.9 73.3 
Research and development79.2 68.7 457.2 231.6 
Selling, general, and administrative109.1 66.3 339.1 265.2 
Total operating expenses216.0 159.0 884.2 570.1 
Operating income228.7 221.1 386.1 528.3 
Interest income3.8 6.4 12.5 23.6 
Interest expense(4.6)(4.9)(13.9)(18.7)
Other (expense) income, net(23.5)(0.1)71.0 0.4 
Impairments of investments in privately-held companies (3.5)(2.3)(9.1)
Total other (expense) income, net(24.3)(2.1)67.3 (3.8)
Income before income taxes204.4 219.0 453.4 524.5 
Income tax expense(41.7)(47.8)(89.8)(108.5)
Net income$162.7 $171.2 $363.6 $416.0 
Net income per common share:    
Basic$3.62 $3.86 $8.12 $9.43 
Diluted$3.42 $3.84 $7.72 $9.37 
Weighted average number of common shares outstanding:    
Basic44.9 44.4 44.8 44.1 
Diluted47.6 44.6 47.1 44.4 

See accompanying notes to consolidated financial statements.
4
United Therapeutics

Part I. Financial Information
Consolidated Statements of Comprehensive Income
(In millions)
                       Three Months Ended
September 30,
Nine Months Ended
September 30,
 2021202020212020
(Unaudited)(Unaudited)
Net income$162.7 $171.2 $363.6 $416.0 
Other comprehensive income:  
Defined benefit pension plan:
Actuarial gain arising during period, net of tax  0.2 0.2 
Amortization of prior service cost included in net periodic pension cost, net of tax0.1 0.3 0.4 0.9 
Total defined benefit pension plan, net of tax0.1 0.3 0.6 1.1 
Unrealized (loss) gain on available-for-sale securities, net of tax(1.6)(2.7)(6.5)8.6 
Other comprehensive (loss) income, net of tax(1.5)(2.4)(5.9)9.7 
Comprehensive income$161.2 $168.8 $357.7 $425.7 

See accompanying notes to consolidated financial statements.
Quarterly Report
5

Part I. Financial Information
Consolidated Statements of Stockholders’ Equity
(In millions)
Three Months Ended September 30, 2021
(Unaudited)
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Retained EarningsStockholders’ Equity
 SharesAmount
Balance, July 1, 202171.5 $0.7 $2,196.5 $(18.6)$(2,579.2)$4,040.1 $3,639.5 
Net income— — — — — 162.7 162.7 
Unrealized losses on available-for-sale securities— — — (1.6)— — (1.6)
Defined benefit pension plan— — — 0.1 — — 0.1 
Shares issued under employee stock
purchase plan
— — 2.8 — — — 2.8 
Restricted stock units (RSUs) withheld for taxes
— — (0.2)— — — (0.2)
Exercise of stock options0.1 — 14.0 — — — 14.0 
Share-based compensation— — 12.4 — — — 12.4 
Balance, September 30, 202171.6 $0.7 $2,225.5 $(20.1)$(2,579.2)$4,202.8 $3,829.7 
Three Months Ended September 30, 2020
(Unaudited)
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Retained EarningsStockholders’ Equity
 SharesAmount
Balance, July 1, 202071.0 $0.7 $2,105.1 $(2.1)$(2,579.2)$3,569.2 $3,093.7 
Net income— — — — — 171.2 171.2 
Unrealized losses on available-for-sale securities— — — (2.7)— — (2.7)
Defined benefit pension plan— — — 0.3 — — 0.3 
Shares issued under employee stock
purchase plan
0.1 — 2.2 — — — 2.2 
RSUs withheld for taxes— — (0.1)— — — (0.1)
Exercise of stock options— — 3.5 — — — 3.5 
Share-based compensation— — 15.0 — — — 15.0 
Balance, September 30, 202071.1 $0.7 $2,125.7 $(4.5)$(2,579.2)$3,740.4 $3,283.1 
6
United Therapeutics

Part I. Financial Information

Nine Months Ended September 30, 2021
(Unaudited)
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Retained EarningsStockholders’ Equity
 SharesAmount
Balance, January 1, 202171.1 $0.7 $2,148.7 $(14.2)$(2,579.2)$3,839.2 $3,395.2 
Net income— — — — — 363.6 363.6 
Unrealized losses on available-for-sale securities— — — (6.5)— — (6.5)
Defined benefit pension plan— — — 0.6 — — 0.6 
Shares issued under employee stock purchase plan0.1 — 5.6 — — — 5.6 
RSUs withheld for taxes— — (10.6)— — — (10.6)
Common stock issued for RSUs vested0.1 — — — — — — 
Exercise of stock options0.3 — 42.3 — — — 42.3 
Share-based compensation— — 39.5 — — — 39.5 
Balance, September 30, 202171.6 $0.7 $2,225.5 $(20.1)$(2,579.2)$4,202.8 $3,829.7 
Nine Months Ended September 30, 2020
(Unaudited)
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Retained EarningsStockholders’ Equity
 SharesAmount
Balance, January 1, 202070.5 $0.7 $2,047.9 $(14.2)$(2,579.2)$3,325.2 $2,780.4 
Net income— — — — — 416.0 416.0 
Unrealized gains on available-for-sale securities— — — 8.6 — — 8.6 
Defined benefit pension plan— — — 1.1 — — 1.1 
Shares issued under employee stock purchase plan0.1 — 4.7 — — — 4.7 
RSUs withheld for taxes— — (3.6)— — — (3.6)
Common stock issued for RSUs vested0.1 — — — — — — 
Exercise of stock options0.4 — 25.9 — — — 25.9 
Share-based compensation— — 50.8 — — — 50.8 
Cumulative effect of accounting change— — — — — (0.8)(0.8)
Balance, September 30, 202071.1 $0.7 $2,125.7 $(4.5)$(2,579.2)$3,740.4 $3,283.1 
See accompanying notes to consolidated financial statements.
Quarterly Report
7

Part I. Financial Information
Consolidated Statements of Cash Flows
(In millions)
 Nine Months Ended September 30,
 20212020
 (Unaudited)
Cash flows from operating activities:  
Net income$363.6 $416.0 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization37.3 36.8 
Share-based compensation expense93.8 70.1 
Impairments of investments in privately-held companies2.3 9.1 
Intangible asset impairment charges113.4  
Impairments of property, plant, and equipment18.2 5.4 
Realized gain on sale of equity securities(91.9)(3.4)
Other28.0 (6.9)
Changes in operating assets and liabilities:
Accounts receivable(55.4)(0.9)
Inventories(7.4)11.1 
Accounts payable and accrued expenses22.0 27.9 
Other assets and liabilities(100.3)64.3 
Net cash provided by operating activities423.6 629.5 
Cash flows from investing activities:  
Purchases of property, plant, and equipment(50.2)(47.0)
Proceeds from sale of property, plant, and equipment 2.4 
Purchases of available-for-sale investments(1,398.4)(1,698.8)
Maturities of available-for-sale investments1,003.5 964.9 
Sales of available-for-sale investments45.1 76.5 
Sales of investments in equity securities108.9 27.3 
Net cash used in investing activities(291.1)(674.7)
Cash flows from financing activities:  
Repayment of line of credit (50.0)
Proceeds from the exercise of stock options42.3 25.9 
Proceeds from the issuance of stock under employee stock purchase plan5.6 4.7 
Restricted stock units withheld for taxes(10.6)(3.6)
Net cash provided by (used in) financing activities37.3 (23.0)
Net increase (decrease) in cash and cash equivalents$169.8 $(68.2)
Cash and cash equivalents, beginning of period738.7 738.4 
Cash and cash equivalents, end of period$908.5 $670.2 
Supplemental cash flow information:  
Cash paid for interest$12.1 $16.6 
Cash paid for income taxes$130.1 $62.3 
Non-cash investing and financing activities:
Non-cash additions to property, plant, and equipment$4.0 $4.4 

See accompanying notes to consolidated financial statements.
8
United Therapeutics

Part I. Financial Information
Notes to Consolidated Financial Statements
September 30, 2021 (Unaudited) 
1. Organization and Business Description
United Therapeutics Corporation is a biotechnology company focused on the development and commercialization of innovative products to address the unmet medical needs of patients with chronic and life-threatening conditions. On September 30, 2021, we converted to a Delaware public benefit corporation, with the express public benefit purpose to provide a brighter future for patients through (a) the development of novel pharmaceutical therapies; and (b) technologies that expand the availability of transplantable organs.
We have approval from the U.S. Food and Drug Administration (FDA) to market the following therapies: Tyvaso® (treprostinil) Inhalation Solution (Tyvaso), Remodulin® (treprostinil) Injection (Remodulin), Orenitram® (treprostinil) Extended-Release Tablets (Orenitram), Unituxin® (dinutuximab) Injection (Unituxin), and Adcirca® (tadalafil) Tablets (Adcirca). We also derive revenues outside the United States from sales of Tyvaso, Remodulin, and Unituxin.
As used in these notes to our consolidated financial statements, unless the context otherwise requires, the terms “we”, “us”, “our”, and similar terms refer to United Therapeutics Corporation and its consolidated subsidiaries.
2. Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) for interim financial information. Accordingly, they do not include all of the information required by U.S. generally accepted accounting principles (GAAP) for complete financial statements. Certain prior year amounts have been reclassified to conform to the current year presentation. In the operating activities section of our consolidated statements of cash flows, we reclassified a portion of the prior period amount within other assets and liabilities to the line items realized gain on sale of equity securities and other to conform with the current period presentation. In the investing activities section of our consolidated statements of cash flows, we reclassified the prior period amount within sales/maturities of available-for-sale investments to the line items maturities of available-for-sale investments and sales of available-for-sale investments to conform with the current period presentation. These consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the accompanying notes to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 24, 2021.
In our management’s opinion, the accompanying consolidated financial statements contain all adjustments, including normal, recurring adjustments, necessary to fairly present our financial position as of September 30, 2021 and December 31, 2020, our statements of operations, comprehensive income, and stockholders’ equity for the three- and nine-month periods ended September 30, 2021 and 2020, and our statements of cash flows for the nine-month periods ended September 30, 2021 and 2020. Interim results are not necessarily indicative of results for an entire year.
Recently Issued Accounting Standards
Accounting Standards Adopted During the Period
In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, Income Taxes, and also improves consistency of application by clarifying and amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020. We adopted the new standard on January 1, 2021, with no material impact on our financial statements.
In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments–Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)–Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) (ASU 2020-01), which addresses the accounting for the transition into and out of the equity method and measuring certain purchased options and forward contracts to acquire investments. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020. We adopted the new standard on January 1, 2021, with no material impact on our financial statements.
Quarterly Report
9

Part I. Financial Information
Accounting Standards Not Yet Adopted
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04), which provides optional expedients and exceptions to lessen the burden of accounting for contract modifications and hedging relationships that reference LIBOR or other reference rates that could be discontinued due to reference rate reform. ASU 2020-04 became effective immediately and may be applied through December 31, 2022. We are currently evaluating the impact of the expedients and exceptions of this new standard on our accounting for our credit agreement, which references LIBOR.
3. Investments
Marketable Investments
Available-for-Sale Debt Securities
Available-for-sale debt securities are recorded at fair value, with the portion of the unrealized gains and losses that are not credit-related included as a component of accumulated other comprehensive loss in stockholders’ equity, until realized. Available-for-sale debt securities consisted of the following (in millions):
As of September 30, 2021Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
U.S. government and agency securities$2,177.0 $3.9 $(0.8)$2,180.1 
Corporate debt securities439.6 1.6 (0.3)440.9 
Total$2,616.6 $5.5 $(1.1)$2,621.0 
Reported under the following captions on our consolidated balance sheets:
Cash and cash equivalents$119.8 
Current marketable investments  992.5 
Non-current marketable investments  1,508.7 
Total  $2,621.0 
As of December 31, 2020Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
U.S. government and agency securities$1,902.4 $9.8 $(0.1)$1,912.1 
Corporate debt securities331.2 3.2  334.4 
Total$2,233.6 $13.0 $(0.1)$2,246.5 
Reported under the following captions on our consolidated balance sheets:
Cash and cash equivalents$79.0 
Current marketable investments  1,017.9 
Non-current marketable investments  1,149.6 
Total  $2,246.5 
10
United Therapeutics

Part I. Financial Information
The following table summarizes the contractual maturities of available-for-sale debt securities (in millions). Actual maturities may differ from contractual maturities because the issuers of certain of these debt securities have the right to call the securities or prepay their obligations under the securities with or without penalties.
 As of September 30, 2021
 Amortized CostFair Value
Due within one year$1,109.2 $1,112.3 
Due in one to three years1,507.4 1,508.7 
Total$2,616.6 $2,621.0 
Investments in Equity Securities with Readily Determinable Fair Values
We held investments in equity securities with readily determinable fair values of $99.4 million and $78.4 million as of September 30, 2021 and December 31, 2020, respectively, which are included in current marketable investments on our consolidated balance sheets. During the third quarter of 2021, one of the privately-held companies in which we invested became publicly-traded. As a result, our investment in the equity securities of this company is now recorded at fair value and included in current marketable investments on our consolidated balance sheets rather than measured as described below under “Investments in Privately-Held Companies.” Changes in the fair value of publicly-traded equity securities are recorded on our consolidated statements of operations within other (expense) income, net. Refer to Note 4—Fair Value Measurements.
During the first quarter of 2021, we sold our investment in a publicly-traded company. We received $108.9 million in cash from the sale of the investment and realized a gain of $91.9 million. The gain was recorded within other (expense) income, net on our consolidated statements of operations for the nine months ended September 30, 2021. During the nine months ended September 30, 2020, we received $27.3 million in cash from the sale of equity securities in publicly-traded companies.
Investments in Privately-Held Companies
As of September 30, 2021 and December 31, 2020, we maintained non-controlling equity investments in privately-held companies of $31.1 million and $84.8 million, respectively, in the aggregate. We measure these investments using the measurement alternative because the fair values of these investments are not readily determinable. Under this alternative, the investments are measured at cost, less any impairment, and adjusted for any observable price changes. We include our investments in privately-held companies within other non-current assets on our consolidated balance sheets. These investments are subject to a periodic impairment review and, if impaired, the investment is measured and recorded at fair value in accordance with ASC 820, Fair Value Measurements.
During the second quarter of 2021, we observed an indicator of impairment for our investments in two of these companies. We evaluated these investments for impairment and recognized impairment charges of $2.3 million in the aggregate. These impairment charges were recorded within impairments of investments in privately-held companies on our consolidated statements of operations for the nine months ended September 30, 2021.
During the first quarter of 2020, we observed an indicator of impairment for our investments in two of these companies. We evaluated these investments for impairment and recognized impairment charges of $5.6 million. During the third quarter of 2020, we observed an indicator of impairment for our investment in another privately-held company, and we recognized an impairment charge of $3.5 million. These impairment charges were recorded within impairments of investments in privately-held companies on our consolidated statements of operations.
During the first quarter and third quarter of 2020, two of the privately-held companies in which we invested raised additional capital by issuing equity securities similar to ours at an increased valuation, which resulted in an increase of $22.5 million and $2.3 million, respectively, in the values of our investments. These gains were recorded within other (expense) income, net on our consolidated statements of operations.
Quarterly Report
11

Part I. Financial Information
Variable Interest Entity
Unconsolidated Variable Interest Entity
In November 2019, we entered into a supply agreement with an affiliate of DEKA Research & Development Corporation (DEKA) to manufacture and supply the Remunity® Pump to us. Under the terms of the supply agreement, we reimburse all of the affiliate’s costs to manufacture and supply the Remunity Pump. We determined that the affiliate is a variable interest entity as we are currently the only customer of the affiliate and the affiliate currently relies on our reimbursement of its costs to sustain its operations. We have determined we are not the primary beneficiary of the affiliate as we do not have the power to direct or control its significant activities related to the manufacturing of medical devices. Accordingly, we have not consolidated the affiliate’s results of operations and financial position with ours. As of September 30, 2021 and December 31, 2020, our consolidated balance sheets included $14.6 million and $11.7 million of assets, respectively, related to the supply agreement. As of September 30, 2021 and December 31, 2020, our consolidated balance sheets included a $1.5 million and $24.0 million liability, respectively, for our obligation to reimburse costs related to the supply agreement. While the terms of the supply agreement expose us to various future risks of loss given our responsibility to reimburse all costs incurred by the affiliate to manufacture and supply the Remunity Pump, we believe that our maximum exposure to loss as of September 30, 2021 as a result of our involvement with the affiliate is $14.6 million, the amount of assets related to the supply agreement noted above.
4. Fair Value Measurements
We account for certain assets and liabilities at fair value and classify these assets and liabilities within the fair value hierarchy (Level 1, Level 2, or Level 3). Our other current assets and other current liabilities have fair values that approximate their carrying values.
Assets and liabilities subject to fair value measurements are as follows (in millions):
 As of September 30, 2021
 Level 1Level 2Level 3Balance
Assets    
Money market funds(1)
$337.5 $ $ $337.5 
Time deposits(1)
100.0   100.0 
U.S. government and agency securities(2)
 2,180.1  2,180.1 
Corporate debt securities(2)
 440.9  440.9 
Equity securities(3)
99.4   99.4 
Contingent consideration(4)
  2.5 2.5 
Total assets$536.9 $2,621.0 $2.5 $3,160.4 
Liabilities    
Contingent consideration(5)
  19.9 19.9 
Total liabilities$ $ $19.9 $19.9 
 As of December 31, 2020
 Level 1Level 2Level 3Balance
Assets    
Money market funds(1)
$323.1 $ $ $323.1 
U.S. government and agency securities(2)
 1,912.1  1,912.1 
Corporate debt securities(2)
 334.4  334.4 
Equity securities(3)
78.4   78.4 
Contingent consideration(4)
  4.1 4.1 
Total assets$401.5 $2,246.5 $4.1 $2,652.1 
Liabilities    
Contingent consideration(5)
  17.1 17.1 
Total liabilities$ $ $17.1 $17.1 
(1)Included in cash and cash equivalents on our consolidated balance sheets.
(2)Included in cash and cash equivalents and current and non-current marketable investments on our consolidated balance sheets. Refer to Note 3—InvestmentsMarketable InvestmentsAvailable-for-Sale Debt Securities for further information. The fair value of these securities is principally measured or corroborated by trade data for identical securities for which related trading activity is not sufficiently frequent to be considered a Level 1 input or comparable securities that are more actively traded.
12
United Therapeutics

Part I. Financial Information
(3)Included in current marketable investments on our consolidated balance sheets. The fair value of these securities is based on quoted market prices for identical instruments in active markets. During the three and nine months ended September 30, 2021, we recognized $18.3 million of net unrealized losses and $77.2 million of net unrealized and realized gains, respectively, on these securities. During the three and nine months ended September 30, 2020, we recognized $3.0 million and $18.0 million of net unrealized and realized losses, respectively, on these securities. We recorded these gains and losses on our consolidated statements of operations within other (expense) income, net. Refer to Note 3—Investments—Marketable Investments—Investments in Equity Securities with Readily Determinable Fair Values.
(4)Included in other current assets and other non-current assets on our consolidated balance sheets. We estimated the fair value of contingent consideration using a Monte Carlo simulation. The Monte Carlo simulation incorporates Level 3 inputs including price volatility of peer company stocks and the probability of completing certain milestones during a specified period of time. The fair value of our contingent consideration assets decreased by $1.6 million from December 31, 2020 to September 30, 2021. The loss was recorded within other (expense) income, net on our consolidated statements of operations.
(5)Included in other non-current liabilities on our consolidated balance sheets. The fair value of our contingent consideration obligations has been estimated using probability-weighted discounted cash flow models (DCFs). The DCFs incorporate Level 3 inputs including estimated discount rates that we believe market participants would consider relevant in pricing and the projected timing and amount of cash flows, which are estimated and developed, in part, based on the requirements specific to each acquisition agreement. The fair value of our contingent consideration liabilities increased by $2.8 million from December 31, 2020 to September 30, 2021. The loss was recorded within research and development on our consolidated statements of operations.
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value because of their short maturities. The fair values of our marketable investments and contingent consideration are reported above within the fair value hierarchy. Refer to Note 3—Investments. The carrying value of our debt is a reasonable estimate of the fair value of the outstanding debt based on the variable interest rate of the debt.
5. Inventories
Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value and consist of the following, net of reserves (in millions):
 September 30, 2021December 31, 2020
Raw materials$15.9 $18.4 
Work-in-progress31.3 29.5 
Finished goods49.5 38.6 
Total inventories$96.7 $86.5 
Quarterly Report
13

Part I. Financial Information
6. Goodwill and Other Intangible Assets
Goodwill and other intangible assets comprise the following (in millions):
 As of September 30, 2021As of December 31, 2020
 GrossAccumulated
Amortization
NetGrossAccumulated
Amortization
Net
Goodwill$28.0 $— $28.0 $28.0 $— $28.0 
Other intangible assets:     
Technology, patents, and trade names6.7 (5.5)1.2 6.7 (5.5)1.2 
In-process research and development(1) (2)
15.5 — 15.5 128.9 — 128.9 
Total$50.2 $(5.5)$44.7 $163.6 $(5.5)$158.1 
(1)In March 2021, we decided to discontinue the U.S. development of Trevyent®, due to written comments provided by the FDA in February 2021. The FDA provided these written comments following a meeting between us and the FDA to discuss our planned resubmission of our new drug application (NDA) for Trevyent in light of a complete response letter issued by the FDA in April 2020. We determined this to be a potential indicator of impairment of our in-