Cigna Group 10-Q for FY2025 Q3
Cigna Group (CI)
10-Q
2025-10-30
For: 2025-09-30
View Original
Added on
April 03, 2026
About this 10-Q
Cigna Group filed this 10-Q on October 30, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).
Headline figures
Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $69.75B
- up 9.5% from $63.69B a year earlier
- Net income
- $1.97B
- up 139.2% from net income of $825M a year earlier
- Diluted EPS
- $6.98
- up 165.4% from $2.63 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2025
OR
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number 001-38769
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) (Zip Code)
(860 ) 226-6000
(Registrant's telephone number, including area code)
Not Applicable
(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 class | Trading Symbol(s) | Name of each exchange on which registered | |||||||||
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 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 definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☒ | 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 October 24, 2025, 267,125,816 shares of the issuer's common stock were outstanding.
THE CIGNA GROUP
TABLE OF CONTENTS
| Page | ||||||||
| Item 1. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| Item 1. | ||||||||
| Item 1A. | ||||||||
| Item 2. | ||||||||
| Item 5. | ||||||||
| Item 6. | ||||||||
As used herein, the term "Company" refers to one or more of The Cigna Group and its consolidated subsidiaries.
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
The Cigna Group Consolidated Statements of Income | |||||||||||||||||||||||||||||
| Unaudited | Unaudited | ||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (In millions, except per share amounts) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||
| Pharmacy revenues | $ | $ | $ | $ | |||||||||||||||||||||||||
| Premiums | |||||||||||||||||||||||||||||
| Fees and other revenues | |||||||||||||||||||||||||||||
| Net investment income | |||||||||||||||||||||||||||||
| TOTAL REVENUES | |||||||||||||||||||||||||||||
| Benefits and expenses | |||||||||||||||||||||||||||||
| Pharmacy and other service costs | |||||||||||||||||||||||||||||
| Medical costs and other benefit expenses | |||||||||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | |||||||||||||||||||||||||||||
| TOTAL BENEFITS AND EXPENSES | |||||||||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||||||||
| Interest expense and other | ( | ( | ( | ( | |||||||||||||||||||||||||
Gain (loss) on sale of businesses | ( | ( | |||||||||||||||||||||||||||
Net investment gains (losses) | ( | ( | |||||||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||||||||
| TOTAL INCOME TAXES | |||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | |||||||||||||||||||||||||||||
| SHAREHOLDERS' NET INCOME | $ | $ | $ | $ | |||||||||||||||||||||||||
Shareholders' net income per share | |||||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||||||||
The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.
3
| The Cigna Group Consolidated Statements of Comprehensive Income | |||||||||||||||||
| Unaudited | Unaudited | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| (In millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||
| Other comprehensive income (loss), net of tax | |||||||||||||||||
Net unrealized (depreciation) appreciation on securities and derivatives | ( | ( | |||||||||||||||
| Net long-duration insurance and contractholder liabilities measurement adjustments | ( | ( | ( | ||||||||||||||
Net translation (losses) gains on foreign currencies | ( | ||||||||||||||||
| Postretirement benefits liability adjustment | |||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||
Total comprehensive income | |||||||||||||||||
| Less: Net income attributable to noncontrolling interests | |||||||||||||||||
SHAREHOLDERS' COMPREHENSIVE INCOME | $ | $ | $ | $ | |||||||||||||
The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.
4
| The Cigna Group Consolidated Balance Sheets | |||||||||||
| Unaudited | |||||||||||
| As of September 30, | As of December 31, | ||||||||||
| (In millions) | 2025 | 2024 | |||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Investments | |||||||||||
| Accounts receivable, net | |||||||||||
| Inventories | |||||||||||
| Other current assets | |||||||||||
| Assets of businesses held for sale | |||||||||||
| Total current assets | |||||||||||
| Long-term investments | |||||||||||
| Reinsurance recoverables | |||||||||||
| Property and equipment | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets | |||||||||||
| Other assets | |||||||||||
| Separate account assets | |||||||||||
| TOTAL ASSETS | $ | $ | |||||||||
| Liabilities | |||||||||||
| Current insurance and contractholder liabilities | $ | $ | |||||||||
| Pharmacy and other service costs payable | |||||||||||
| Accounts payable | |||||||||||
| Accrued expenses and other liabilities | |||||||||||
| Short-term debt | |||||||||||
| Liabilities of businesses held for sale | |||||||||||
| Total current liabilities | |||||||||||
| Non-current insurance and contractholder liabilities | |||||||||||
| Deferred tax liabilities, net | |||||||||||
| Other non-current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Separate account liabilities | |||||||||||
| TOTAL LIABILITIES | |||||||||||
Contingencies — Note 16 | |||||||||||
| Shareholders' equity | |||||||||||
Common stock (1) | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Retained earnings | |||||||||||
| Less: Treasury stock, at cost | ( | ( | |||||||||
| TOTAL SHAREHOLDERS' EQUITY | |||||||||||
| Noncontrolling interests | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
(1)Par value per share, $0.01 404 million as of September 30, 2025 and 403 million as of December 31, 2024; authorized shares, 600
The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.
5
| The Cigna Group | |||||||||||||||||||||||||||||
| Consolidated Statements of Changes in Total Equity | |||||||||||||||||||||||||||||
| Unaudited | |||||||||||||||||||||||||||||
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
| (In millions) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) | Retained Earnings | Treasury Stock | Shareholders' Equity | Noncontrolling Interests | Total Equity | Redeemable Noncontrolling Interests | ||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||
| Effects of issuing stock for employee benefit plans | ( | ||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||
Common dividends declared (per share: $ | ( | ( | ( | ||||||||||||||||||||||||||
| Repurchase of common stock | |||||||||||||||||||||||||||||
| Other transactions impacting noncontrolling interests | ( | ( | |||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||
Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||||
| (In millions) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) | Retained Earnings | Treasury Stock | Shareholders' Equity | Noncontrolling Interests | Total Equity | Redeemable Noncontrolling Interests | ||||||||||||||||||||
Balance at June 30, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||
| Effect of issuing stock for employee benefit plans | ( | ||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||
Common dividends declared (per share: $ | ( | ( | ( | ||||||||||||||||||||||||||
| Repurchase of common stock | |||||||||||||||||||||||||||||
| Other transactions impacting noncontrolling interests | ( | ( | |||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||
The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.
6
| The Cigna Group | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consolidated Statements of Changes in Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unaudited | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) | Retained Earnings | Treasury Stock | Shareholders' Equity | Other Non- controlling Interests | Total Equity | Redeemable Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Effect of issuing stock for employee benefit plans | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common dividends declared (per share: $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other transactions impacting noncontrolling interests | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) | Retained Earnings | Treasury Stock | Shareholders' Equity | Other Non- controlling Interests | Total Equity | Redeemable Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Effect of issuing stock for employee benefit plans | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common dividends declared (per share: $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other transactions impacting noncontrolling interests | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.
7
The Cigna Group
Consolidated Statements of Cash Flows
| Unaudited | ||||||||||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||||||||
| Cash Flows from Operating Activities | ||||||||||||||||||||
| Net income | $ | $ | ||||||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
Investment (gains) losses, net | ( | |||||||||||||||||||
Deferred income tax benefit | ( | ( | ||||||||||||||||||
(Gain) loss on sale of businesses | ( | |||||||||||||||||||
| Net changes in assets and liabilities, net of non-operating effects: | ||||||||||||||||||||
| Accounts receivable, net | ( | ( | ||||||||||||||||||
| Inventories | ||||||||||||||||||||
| Reinsurance recoverable and Other assets | ( | ( | ||||||||||||||||||
| Insurance liabilities | ( | |||||||||||||||||||
| Pharmacy and other service costs payable | ||||||||||||||||||||
| Accounts payable and Accrued expenses and other liabilities | ( | ( | ||||||||||||||||||
| Other, net | ||||||||||||||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||||||||||||||
| Cash Flows from Investing Activities | ||||||||||||||||||||
| Proceeds from investments sold: | ||||||||||||||||||||
| Debt securities and equity securities | ||||||||||||||||||||
| Investment maturities and repayments: | ||||||||||||||||||||
| Debt securities and equity securities | ||||||||||||||||||||
| Commercial mortgage loans | ||||||||||||||||||||
Other sales, maturities and repayments (primarily short-term and other long-term investments) | ||||||||||||||||||||
| Investments purchased or originated: | ||||||||||||||||||||
| Debt securities and equity securities | ( | ( | ||||||||||||||||||
| Commercial mortgage loans | ( | ( | ||||||||||||||||||
Other (primarily short-term and other long-term investments) | ( | ( | ||||||||||||||||||
| Property and equipment purchases, net | ( | ( | ||||||||||||||||||
| Acquisitions, net of cash acquired | ( | ( | ||||||||||||||||||
| Divestitures, net of cash sold | ||||||||||||||||||||
| Renewable energy tax credit equity investments | ( | ( | ||||||||||||||||||
| Other, net | ( | ( | ||||||||||||||||||
| NET CASH USED IN INVESTING ACTIVITIES | ( | ( | ||||||||||||||||||
| Cash Flows from Financing Activities | ||||||||||||||||||||
| Deposits and interest credited to contractholder deposit funds | ||||||||||||||||||||
| Withdrawals and benefit payments from contractholder deposit funds | ( | ( | ||||||||||||||||||
| Net change in short-term debt, excluding term loan | ( | |||||||||||||||||||
| Net proceeds on issuance of term loan | ||||||||||||||||||||
| Repayment of term loan | ( | |||||||||||||||||||
| Repayment of long-term debt | ( | ( | ||||||||||||||||||
| Net proceeds on issuance of long-term debt | ||||||||||||||||||||
| Repurchase of common stock | ( | ( | ||||||||||||||||||
| Issuance of common stock | ||||||||||||||||||||
| Common stock dividend paid | ( | ( | ||||||||||||||||||
| Other, net | ( | ( | ||||||||||||||||||
| NET CASH USED IN FINANCING ACTIVITIES | ( | ( | ||||||||||||||||||
| Effect of foreign currency rate changes on cash, cash equivalents and restricted cash | ||||||||||||||||||||
| Net decrease in cash, cash equivalents and restricted cash | ( | ( | ||||||||||||||||||
Cash, cash equivalents and restricted cash January 1, (1) | ||||||||||||||||||||
Cash, cash equivalents and restricted cash September 30, (1) | ||||||||||||||||||||
Cash and cash equivalents reclassified to assets of businesses held for sale | ( | |||||||||||||||||||
Cash, cash equivalents and restricted cash September 30, per Consolidated Balance Sheets (1) | $ | $ | ||||||||||||||||||
| Supplemental Disclosure of Cash Information: | ||||||||||||||||||||
| Income taxes paid, net of refunds | $ | $ | ||||||||||||||||||
| Interest paid | $ | $ | ||||||||||||||||||
(1)Restricted cash and cash equivalents were reported in other long-term investments and Other assets.
The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.
8
THE CIGNA GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
TABLE OF CONTENTS
| Note Number | Footnote | Page | ||||||
BUSINESS AND CAPITAL STRUCTURE | ||||||||
| 1 | ||||||||
| 2 | ||||||||
| 3 | ||||||||
| 4 | ||||||||
| 5 | ||||||||
| 6 | ||||||||
| 7 | ||||||||
| 8 | ||||||||
INSURANCE INFORMATION | ||||||||
| 9 | ||||||||
| 10 | ||||||||
INVESTMENTS | ||||||||
| 11 | ||||||||
| 12 | ||||||||
| 13 | ||||||||
WORKFORCE MANAGEMENT AND COMPENSATION | ||||||||
| 14 | ||||||||
COMPLIANCE, REGULATION AND CONTINGENCIES | ||||||||
| 15 | ||||||||
| 16 | ||||||||
RESULTS DETAILS | ||||||||
| 17 | ||||||||
9
Note 1 – Description of Business
The Cigna Group®, together with its subsidiaries (either individually or collectively referred to as the "Company," "we," "us" or "our"), is a global health company committed to creating a better future for every individual and every community. We relentlessly challenge ourselves to partner and innovate solutions for better health. Powered by our people and our brands, we advance our mission to improve the health and vitality of those we serve.
Our subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental, and related products and services. The majority of these products and services are offered through employers and other entities, such as governmental and nongovernmental organizations, unions and associations. Cigna Healthcare® also offers health and dental insurance products to individuals in the United States and select international markets. In addition to these operations, The Cigna Group also has certain run-off operations.
A full description of our segments follows:
The Evernorth® Health Services reportable segment includes the Pharmacy Benefit Services and the Specialty and Care Services operating segments, which provide independent and coordinated health solutions and capabilities to enable the health care system to work better and help people live healthier lives.
Pharmacy Benefit Services drives high-quality, cost-effective pharmacy care through various services, such as drug claim adjudication, retail pharmacy network administration, benefit design consultation, drug utilization review, drug formulary management and access to our home delivery pharmacy. Specialty and Care Services provides specialty drugs for the treatment of complex and rare diseases, specialty distribution of pharmaceuticals and medical supplies, as well as clinical programs to help our clients drive better whole-person health outcomes through care services.
The Cigna Healthcare reportable segment includes the U.S. Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers. U.S. Healthcare provides medical plans and other benefits and solutions for insured and self-insured clients as well as individual health plans. International Health provides health care solutions in our international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations. U.S. Healthcare also included the Medicare Advantage and related businesses until the divestiture of such businesses to Health Care Services Corporation ("HCSC") on March 19, 2025 (see Note 5 to the Consolidated Financial Statements for further information).
Other Operations comprises the remainder of our business operations, which includes certain continuing (corporate-owned life insurance ("COLI")), run-off and other non-strategic businesses. Our run-off businesses include the (i) variable annuity reinsurance business that was effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska ("Berkshire") in 2013, (ii) settlement annuity business, and (iii) individual life insurance and annuity and retirement benefits businesses, which were sold through reinsurance agreements.
Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate financing less net investment income on investments not supporting segment and other operations), certain litigation matters, expense associated with our frozen pension plans, charitable contributions, operating severance, certain overhead and enterprise-wide project costs, and eliminations for products and services sold between segments.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
The Consolidated Financial Statements include the accounts of The Cigna Group and its consolidated subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation. These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Certain amounts in the Consolidated Statements of Cash Flows have been reclassified to conform to current year presentation and did not have a significant impact on our Consolidated Financial Statements.
Amounts recorded in the Consolidated Financial Statements necessarily reflect management's estimates and assumptions about medical costs, investment, tax and receivable valuations, interest rates, and other factors. Significant estimates are discussed throughout these Notes; however, actual results could differ from those estimates. The impact of a change in estimate is generally included in earnings in the period of adjustment.
These interim Consolidated Financial Statements are unaudited but include all adjustments (including normal recurring adjustments) necessary, in the opinion of management, for a fair statement of financial position and results of operations for the periods reported.
10
The interim Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes included in the 2024 Annual Report on Form 10-K ("2024 Form 10-K"). The Company has not included certain footnote disclosures that would substantially duplicate the disclosures contained in its 2024 Form 10-K, unless the information in those disclosures materially changed or is required by GAAP. The preparation of interim Consolidated Financial Statements necessarily relies heavily on estimates. This and other factors, including the seasonal nature of portions of the health care and related benefits business, as well as competitive and other market conditions, call for caution in estimating full-year results based on interim results of operations.
Recent Accounting Pronouncements
The Company's 2024 Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted or may impact our financial statements in the future. There are no updates on significant accounting pronouncements recently adopted that have occurred since the Company filed its 2024 Form 10-K. There are no significant accounting pronouncements recently issued and not yet adopted that are expected to impact our operations or financial statements, with the exception of Accounting Standards Update 2025-06, Targeted Improvements to the Accounting for Internal-Use Software.
Note 3 – Accounts Receivable, Net
The following amounts were included within Accounts receivable, net:
| (In millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Noninsurance customer receivables | $ | $ | |||||||||
| Pharmaceutical manufacturers receivables | |||||||||||
| Insurance customer receivables | |||||||||||
| Other receivables | |||||||||||
| Total | $ | ||||||||||
Accounts receivable, net classified as assets of businesses held for sale | ( | ||||||||||
| Total | $ | $ | |||||||||
These accounts receivable are reported net of our allowances of $7.0 billion and $5.0 billion as of September 30, 2025 and December 31, 2024, respectively. These allowances include contractual allowances for certain rebates receivable with pharmaceutical manufacturers and certain accounts receivable from third-party payors, discounts and claims adjustments issued to customers in the form of client credits, an allowance for current expected credit losses, and other non-credit adjustments.
The Company's allowance for current expected credit losses was $160 million as of September 30, 2025 and $84 million as of December 31, 2024.
Accounts Receivable Factoring Facility
The Company maintains an uncommitted factoring facility (the "Facility") with a total capacity of $1.5 billion under which certain accounts receivable may be sold on a non-recourse basis to a financial institution. The Facility automatically renewed in July 2025 and is subject to automatic one-year renewal terms unless terminated by either party.
We sold manufacturer accounts receivable under the Facility of $1.3 4.0 billion and $4.5 billion for the nine months ended September 30, 2025 and 2024, respectively. For the three and nine months ended September 30, 2025 and 2024, factoring fees paid were not material. As of September 30, 2025, there were $0.8 billion of sold accounts receivable that have not been collected from manufacturers and have been removed from the Company's Consolidated Balance Sheets. As of December 31, 2024, all sold accounts receivable had been collected from manufacturers. As of September 30, 2025, all collections from manufacturers have been remitted to the financial institution. As of December 31, 2024, there were $1.0 billion of collections from manufacturers that have not been remitted to the financial institution. Such amounts are recorded within Accrued expenses and other liabilities in the Consolidated Balance Sheets.
11
Note 4 – Supplier Finance Program
The Company facilitates a voluntary supplier finance program (the "Program") that provides suppliers the opportunity to sell their accounts receivable due from us (i.e., our payment obligations to the suppliers) to a financial institution, on a non-recourse basis, in order to be paid earlier than our payment terms require.
As of both September 30, 2025 and December 31, 2024, $1.6
As of September 30, 2025, we have been informed by the financial institution that $606 million of the Company's outstanding payment obligations were voluntarily elected by suppliers to be sold to the financial institution under the Program.
Note 5 – Divestiture
On March 19, 2025, the Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies® businesses (the "Disposal Group" or the "HCSC transaction"). The purchase price increased from $3.3 billion to $4.9 billion, reflecting higher statutory surplus for the legal entities when conveyed to HCSC and post-closing contractual adjustments.
During the three and nine months ended September 30, 2025, the Company recognized a gain of $38 million pre-tax ($241 million after-tax) and $75 million pre-tax ($353 million after-tax), respectively, within in the Consolidated Statements of Income. See Note 15 to the Consolidated Financial Statements for discussion of tax matters resulting in an after-tax gain on sale of businesses.
The Company received approximately $4.2 billion cash proceeds at closing. We expect receipt of the remaining approximately $0.6 billion in the fourth quarter of 2025 upon HCSC's collection of amounts due from the Centers for Medicare and Medicaid Services ("CMS") and completion of post-closing contractual adjustments.
The Company determined that the Disposal Group met the criteria to be classified as held for sale and aggregated and classified the assets and liabilities as held for sale in our Consolidated Balance Sheets as of December 31, 2024. The assets and liabilities held for sale as of December 31, 2024 were as follows:
| (In millions) | December 31, 2024 | ||||||||||
| Cash and cash equivalents | $ | ||||||||||
| Investments | |||||||||||
| Accounts receivable, net | |||||||||||
Other assets, including Goodwill (1) | |||||||||||
| Total assets of businesses held for sale | |||||||||||
| Insurance and contractholder liabilities | |||||||||||
| All other liabilities | |||||||||||
| Total liabilities of businesses held for sale | $ | ||||||||||
(1) Includes Goodwill of $94 million.
Integration and Transaction-Related Costs
In 2025 and 2024, the Company incurred transaction-related costs associated with the HCSC transaction. These costs incurred consisted primarily of certain projects to separate the Company's systems, products and services; fees for legal, advisory and other professional services; and certain employment-related costs. These costs were $7 million pre-tax ($6 million after-tax) for the three months ended and $297 million pre-tax ($226 million after-tax) for the nine months ended September 30, 2025, compared with $77 million pre-tax ($59 million after-tax) for the three months ended and $177 million pre-tax ($135 million after-tax) for the nine months ended September 30, 2024.
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Note 6 – Earnings Per Share
Basic and diluted earnings per share were computed as follows:
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Shares in thousands, dollars in millions, except per share amounts) | Basic | Effect of Dilution | Diluted | Basic | Effect of Dilution | Diluted | |||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' net income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock equivalents | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings per share | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Shares in thousands, dollars in millions, except per share amounts) | Basic | Effect of Dilution | Diluted | Basic | Effect of Dilution | Diluted | |||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' net income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Shares: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock equivalents | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total shares | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings per share | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
The following outstanding employee stock options were not included in the computation of diluted earnings per share because their effect was anti-dilutive:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Anti-dilutive options | |||||||||||||||||||||||||||||
The Company held approximately 137.4 million shares of common stock in treasury as of September 30, 2025, 128.7 million shares as of December 31, 2024 and 122.5 million shares as of September 30, 2024.
13
Note 7 – Debt
Short-Term and Long-Term Debt. During the nine months ended September 30, 2025, the Company redeemed at par its $700 million 5.685 % senior notes that were due March 2026 and repaid $900 million 3.250 % senior notes that matured in April 2025. For more information regarding our short-term and long-term debt, see Note 7 of the Company's 2024 Form 10-K.
Debt Issuance. In September 2025, we issued $4.5 billion of new senior notes, as detailed in the table below. The proceeds from this debt issuance were used to repay the $2.0
| Principal | Maturity Date | Interest Rate | Net Proceeds | Redeemable Date(1) | "Make Whole" Premium (2) | |||||||||||||||||||||||||||
$ | September 15, 2030 | $ | August 15, 2030 | |||||||||||||||||||||||||||||
$ | September 15, 2032 | $ | July 15, 2032 | |||||||||||||||||||||||||||||
$ | January 15, 2036 | $ | October 15, 2035 | |||||||||||||||||||||||||||||
$ | January 15, 2056 | $ | July 15, 2055 | |||||||||||||||||||||||||||||
(1) Redeemable at any time prior to this date at a "make whole" premium, defined below. Redeemable at par on or after this date.
(2) "Make whole" premium calculated using a comparable U.S. Treasury rate plus the amount of basis points set forth in this column.
Term Loan. In August 2025, the Company entered into a new 364 -day term loan facility (the "Term Loan Facility") and borrowed $2.0
Revolving Credit Agreement. Our Credit Agreement (defined below) provides us with the ability to borrow amounts for general corporate purposes, including providing liquidity support if necessary under our commercial paper program discussed below. As of September 30, 2025, there was no outstanding balance under the Credit Agreement.
In April 2025, the Company replaced its previous revolving credit agreements and entered into a $6.5 billion, five-year revolving credit and letter of credit agreement that will mature in April 2030, with an option to extend the maturity date for additional one-year periods, subject to consent of the banks (the "Credit Agreement"). The Company can borrow up to $6.5 billion under the Credit Agreement for general corporate purposes, with up to $500 million available for issuance of letters of credit.
The Credit Agreement includes an option to increase commitments up to $1.5 billion for a maximum total commitment of $8.0 billion. The Credit Agreement allows for borrowings at either a base rate, term Secured Overnight Financing Rate ("SOFR") or daily simple SOFR plus, in each case, an applicable margin based on the Company's senior unsecured credit ratings.
The Credit Agreement also contains customary covenants and restrictions, including a financial covenant that the Company's leverage ratio, as defined in the Credit Agreement, may not exceed 60 %, subject to certain exceptions upon the consummation of an acquisition.
Commercial Paper. Under our commercial paper program, we may issue short-term, unsecured commercial paper notes privately placed on a discounted basis through certain broker-dealers at any time not to exceed an aggregate amount of $6.5 billion. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The net proceeds of issuances have been and are expected to be used for general corporate purposes. There was no commercial paper balance as of September 30, 2025.
Debt Covenants. The Company was in compliance with its debt covenants as of September 30, 2025.
Interest Expense. Interest expense on long-term and short-term debt was $363 million for the three months ended and $1.1 billion for the nine months ended September 30, 2025, compared with $380 million for the three months ended and $1.1 billion for the nine months ended September 30, 2024.
14
Note 8 – Common and Preferred Stock
Dividends
The following table provides details of the Company's dividend payments:
| Record Date | Payment Date | Amount per Share | Total Amount Paid (in millions) | ||||||||
| 2025 | |||||||||||
| March 5, 2025 | March 20, 2025 | $ | $ | ||||||||
| June 3, 2025 | June 18, 2025 | $ | $ | ||||||||
| September 4, 2025 | September 18, 2025 | $ | $ | ||||||||
| 2024 | |||||||||||
| March 6, 2024 | March 21, 2024 | $ | $ | ||||||||
| June 4, 2024 | June 20, 2024 | $ | $ | ||||||||
| September 4, 2024 | September 19, 2024 | $ | $ | ||||||||
On October 22, 2025, the Board of Directors of The Cigna Group (the "Board") declared the fourth quarter cash dividend of $1.51 per share of The Cigna Group common stock to be paid on December 18, 2025 to shareholders of record on December 4, 2025. The Company currently intends to pay regular quarterly dividends, with future declarations subject to approval by the Board and the Board's determination that the declaration of dividends remains in the best interests of The Cigna Group and its shareholders. The decision of whether to pay future dividends and the amount of any such dividends will be based on the Company's financial position, results of operations, cash flows, capital requirements, the requirements of applicable law and any other factors the Board may deem relevant.
Note 9 – Insurance and Contractholder Liabilities
A.Account Balances – Insurance and Contractholder Liabilities
The Company's insurance and contractholder liabilities were comprised of the following:
| September 30, 2025 | December 31, 2024 | September 30, 2024 | |||||||||||||||||||||||||||||||||||||||
| (In millions) | Current | Non-current | Total | Current | Non-current | Total | Total | ||||||||||||||||||||||||||||||||||
| Unpaid claims and claim expenses | |||||||||||||||||||||||||||||||||||||||||
Cigna Healthcare | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||||||||
| Future policy benefits | |||||||||||||||||||||||||||||||||||||||||
Cigna Healthcare | |||||||||||||||||||||||||||||||||||||||||
| Other Operations | |||||||||||||||||||||||||||||||||||||||||
| Contractholder deposit funds | |||||||||||||||||||||||||||||||||||||||||
Cigna Healthcare | |||||||||||||||||||||||||||||||||||||||||
| Other Operations | |||||||||||||||||||||||||||||||||||||||||
| Market risk benefits | |||||||||||||||||||||||||||||||||||||||||
| Unearned premiums | |||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||
Insurance and contractholder liabilities classified as liabilities of businesses held for sale (1) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
| Total insurance and contractholder liabilities | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
(1) Amounts classified as liabilities of businesses held for sale include $983 million of Unpaid claims, $408 million of Future policy benefits, $85 million of Unearned premiums and $103 million of Contractholder deposit funds as of December 31, 2024 and $937 million of Unpaid claims, $422 million of Future policy benefits, $98 million of Unearned premiums and $111 million of Contractholder deposit funds as of September 30, 2024.
Insurance and contractholder liabilities expected to be paid within one year are classified as current.
15
B.Unpaid Claims and Claim Expenses – Cigna Healthcare
The total of incurred but not reported liabilities plus expected development on reported claims and reported claims in process was $4.5 billion as of September 30, 2025 and $4.7 billion as of September 30, 2024. The decrease was driven by the HCSC transaction, partially offset by an increase in stop loss reserves primarily due to seasonality.
Activity, net of intercompany transactions, in the unpaid claims liability for the Cigna Healthcare segment was as follows:
| Nine Months Ended September 30, | ||||||||||||||||||||
| (In millions) | 2025 (1) | 2024 (1) | ||||||||||||||||||
| Beginning balance | $ | $ | ||||||||||||||||||
| Less: Reinsurance and other amounts recoverable | ||||||||||||||||||||
| Beginning balance, net | ||||||||||||||||||||
| Incurred costs related to: | ||||||||||||||||||||
| Current year | ||||||||||||||||||||
| Prior years | ( | ( | ||||||||||||||||||
| Total incurred | ||||||||||||||||||||
| Paid costs related to: | ||||||||||||||||||||
| Current year | ||||||||||||||||||||
| Prior years | ||||||||||||||||||||
| Total paid | ||||||||||||||||||||
| Less: Divestiture and other | ||||||||||||||||||||
| Ending balance, net | ||||||||||||||||||||
| Add: Reinsurance and other amounts recoverable | ||||||||||||||||||||
| Ending balance | $ | $ | ||||||||||||||||||
(1) Includes unpaid claims amounts classified as liabilities of businesses held for sale prior to the completion of the HCSC transaction. As of December 31, 2024, September 30, 2024 and December 31, 2023, includes $983 million, $937 million and $823 million, respectively, classified as liabilities of businesses held for sale.
Reinsurance and other amounts recoverable reflect amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims of certain business for which the Company administers the plan benefits without any right of offset. See Note 10 to the Consolidated Financial Statements for additional information on reinsurance.
Variances in incurred costs related to prior years' unpaid claims and claim expenses that resulted from the differences between actual experience and the Company's key assumptions were as follows:
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||
| (Dollars in millions) | $ | % (1) | $ | % (2) | |||||||||||||||||||||||||
Actual completion factors and other | $ | % | $ | % | |||||||||||||||||||||||||
| Medical cost trend | |||||||||||||||||||||||||||||
| Total favorable variance | $ | % | $ | % | |||||||||||||||||||||||||
(1)Percentage of current year incurred costs as reported for the year ended December 31, 2024.
(2)Percentage of current year incurred costs as reported for the year ended December 31, 2023.
Favorable prior year development in both years primarily reflects lower than expected utilization of medical services as compared to our assumptions.
16
C.Future Policy Benefits
Cigna Healthcare
Future policy benefits for the Cigna Healthcare segment were primarily related to the businesses divested to HCSC on March 19, 2025. Excluding the divestiture, changes in the future policy benefits for the nine months ended September 30, 2025 and September 30, 2024 were not material.
Other Operations
The weighted average interest rates applied and duration for future policy benefits in Other Operations, consisting of annuity and life insurance products, were as follows:
| As of | |||||||||||
| September 30, 2025 | September 30, 2024 | ||||||||||
| Interest accretion rate | % | % | |||||||||
| Current discount rate | % | % | |||||||||
| Weighted average duration | |||||||||||
Obligations for annuities represent discounted periodic benefits to be paid to an individual or groups of individuals over their remaining lives. Other Operations' traditional insurance contracts, which are in run-off, have no premium remaining to be collected; therefore, future policy benefit reserves represent the present value of expected future policy benefits, discounted using the current discount rate, and the remaining amortizable deferred profit liability.
Future policy benefits for Other Operations include deferred profit liability of $0.4 2.9 3.1 billion as of September 30, 2024, and $3.2 billion as of December 31, 2023. Undiscounted expected future policy benefits were $4.2 billion as of September 30, 2025 and $4.3 billion as of September 30, 2024. As of both September 30, 2025 and September 30, 2024, $0.9
D.Contractholder Deposit Funds
Contractholder deposit fund liabilities within Other Operations were $6.1 billion as of September 30, 2025, $6.3 6.3 billion as of September 30, 2024 and $6.5 billion as of December 31, 2023. Approximately 37 % of the balance is reinsured externally. Activity in these liabilities is presented net of reinsurance in the Consolidated Statements of Cash Flows. Changes in contractholder deposit fund liabilities generally relates to withdrawals and benefit payments, partially offset by deposits and interest credited.
As of September 30, 2025, the weighted average crediting rate, net amount at risk and cash surrender value for contractholder deposit fund liabilities not effectively exited through reinsurance were 3.26 %, $2.6 billion and $2.8 billion, respectively. The comparative amounts as of September 30, 2024 were 3.33 %, $2.9 billion and $2.8 billion, respectively. More than 99 3.9 billion liability as of September 30, 2025 and the $4.0 billion liability as of September 30, 2024 not reinsured externally is for contracts with guaranteed interest rates of 3 4 1.2 billion and $1.1 billion, respectively, represented contracts with policies at the guarantee. At these same period ends, $1.1 billion and $1.2 billion was 50 150 1.6 billion as of September 30, 2025 and $1.7 billion as of September 30, 2024 represented contracts above the guarantee that pay the policyholder based on the greater of a guaranteed minimum cash value or the actual cash value. As of both September 30, 2025 and September 30, 2024, more than 90
E.Market Risk Benefits
Liabilities for market risk benefits ("MRBs") consist of variable annuity reinsurance contracts in Other Operations. These liabilities arise under annuities and riders to annuities written by ceding companies that guarantee the benefit received at death and, for a subset of policies, also provide contractholders the option, within 30 days of a policy anniversary after the appropriate waiting period, to elect minimum income payments. The Company's capital market risk exposure on variable annuity reinsurance contracts arises when the reinsured guaranteed minimum benefit exceeds the contractholder's account value in the related underlying mutual funds at the time the insurance benefit is payable under the respective contract. The Company receives and pays premium periodically based on the terms of the reinsurance agreements.
17
Market risk benefits activity was as follows:
| Nine Months Ended September 30, | ||||||||
| (In millions) | 2025 | 2024 | ||||||
| Balance, beginning of year | $ | $ | ||||||
| Balance, beginning of year, before the effect of nonperformance risk (own credit risk) | ||||||||
| Changes due to expected run-off | ( | ( | ||||||
| Changes due to capital markets versus expected | ( | ( | ||||||
| Changes due to policyholder behavior versus expected | ( | ( | ||||||
| Assumption changes | ( | |||||||
| Balance, end of period, before the effect of changes in nonperformance risk (own credit risk) | ||||||||
| Nonperformance risk (own credit risk), end of period | ( | ( | ||||||
| Balance, end of period | $ | $ | ||||||
| Reinsured market risk benefit, end of period | $ | $ | ||||||
The following table presents the net amount at risk and the average attained age of contractholders (weighted by exposure) for contracts assumed by the Company. The net amount at risk is the amount the Company would have to pay to contractholders if all deaths or annuitizations occurred as of the earliest possible date in accordance with the insurance contract. The Company should be reimbursed in full for these payments unless the Berkshire reinsurance limit is exceeded, as discussed further in Note 10 to the Consolidated Financial Statements.
| (Dollars in millions, excludes impact of reinsurance ceded) | September 30, 2025 | September 30, 2024 | |||||||||
| Net amount at risk | $ | $ | |||||||||
| Average attained age of contractholders (weighted by exposure) | |||||||||||
Note 10 – Reinsurance
The Company's insurance subsidiaries enter into agreements with other insurance companies to limit losses from large exposures and to permit recovery of a portion of incurred losses. Reinsurance is ceded primarily in acquisition and disposition transactions when the underwriting company is not being acquired. Reinsurance does not relieve the originating insurer of liability. Therefore, reinsured liabilities must continue to be reported along with the related reinsurance recoverables. The Company regularly evaluates the financial condition of its reinsurers and monitors concentrations of its credit risk.
The majority of the Company's reinsurance recoverables resulted from acquisition and disposition transactions in which the underwriting company was not acquired. The Company bears the risk of loss if its reinsurers and retrocessionaires do not meet or are unable to meet their reinsurance obligations to the Company. The Company reviews its reinsurance arrangements and establishes reserves against the recoverables primarily for expected credit losses.
18
The Company's reinsurance recoverables as of September 30, 2025 are presented at amount due by range of external credit rating and collateral level in the following table, with reinsurance recoverables that are market risk benefits separately presented at fair value:
| (In millions) | Fair Value of Collateral Contractually Required to Meet or Exceed Carrying Value of Recoverable | Collateral Provisions Exist That May Mitigate Risk of Credit Loss (1) | No Collateral | Total | ||||||||||||||||||||||
| Ongoing operations | ||||||||||||||||||||||||||
A- equivalent and higher current ratings (2) | $ | $ | $ | $ | ||||||||||||||||||||||
BBB- to BBB+ equivalent current credit ratings (2) | ||||||||||||||||||||||||||
| Not rated | ||||||||||||||||||||||||||
| Acquisition, disposition or run-off activities | ||||||||||||||||||||||||||
BBB+ equivalent and higher current ratings (2)(3) | ||||||||||||||||||||||||||
| Not rated | ||||||||||||||||||||||||||
| Total reinsurance recoverables before market risk benefits | $ | $ | $ | $ | ||||||||||||||||||||||
| Allowance for uncollectible reinsurance | ( | |||||||||||||||||||||||||
| Market risk benefits | ||||||||||||||||||||||||||
Total reinsurance recoverables (4) | $ | |||||||||||||||||||||||||
(1)Includes collateral provisions requiring the reinsurer to fully collateralize its obligation if its external credit rating is downgraded to a specified level.
(2)Certified by a nationally recognized statistical ratings organization ("NRSRO").
(3)Comprised of six reinsurers, of which 75 % is held by two reinsurers, Lincoln National Life Insurance Company and Lincoln Life and Annuity Company of New York.
(4)Includes $139 million of current reinsurance recoverables that are reported in Other current assets.
Note 11 – Investments
The following table summarizes the Company's investments by category and current or long-term classification:
| September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| (In millions) | Current | Long-Term | Total | Current | Long-Term | Total | ||||||||||||||||||||||||||||||||
| Debt securities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Equity securities | ||||||||||||||||||||||||||||||||||||||
| Commercial mortgage loans | ||||||||||||||||||||||||||||||||||||||
| Policy loans | ||||||||||||||||||||||||||||||||||||||
| Other long-term investments | ||||||||||||||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Investments classified as assets of businesses held for sale (1) | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Investments per Consolidated Balance Sheets | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
(1) Investments related to the HCSC transaction that were held for sale as of December 31, 2024. These investments were primarily comprised of debt securities.
19
A.Investment Portfolio
Debt Securities
The amortized cost and fair value by contractual maturity periods for debt securities were as follows as of September 30, 2025:
| (In millions) | Amortized Cost | Fair Value | ||||||||||||
| Due in one year or less | $ | $ | ||||||||||||
| Due after one year through five years | ||||||||||||||
| Due after five years through ten years | ||||||||||||||
| Due after ten years | ||||||||||||||
| Mortgage and other asset-backed securities | ||||||||||||||
| Total | $ | $ | ||||||||||||
Actual maturities of these securities could differ from their contractual maturities used in the table above because issuers may have the right to call or prepay obligations, with or without penalties.
Gross unrealized appreciation (depreciation) on debt securities by type of issuer is shown below:
| (In millions) | Amortized Cost | Allowance for Credit Loss | Unrealized Appreciation | Unrealized Depreciation | Fair Value | |||||||||||||||||||||||||||
| September 30, 2025 | ||||||||||||||||||||||||||||||||
| Federal government and agency | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
| State and local government | ||||||||||||||||||||||||||||||||
| Foreign government | ( | |||||||||||||||||||||||||||||||
| Corporate | ( | ( | ||||||||||||||||||||||||||||||
| Mortgage and other asset-backed | ( | |||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| Federal government and agency | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
| State and local government | ( | |||||||||||||||||||||||||||||||
| Foreign government | ( | |||||||||||||||||||||||||||||||
| Corporate | ( | ( | ||||||||||||||||||||||||||||||
| Mortgage and other asset-backed | ( | |||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||
Review of Declines in Fair Value. Management reviews debt securities in an unrealized loss position to determine whether a credit loss allowance is needed based on criteria that include severity of decline; financial health and specific prospects of the issuer; and changes in the regulatory, economic or general market environment of the issuer's industry or geographic region.
The table below summarizes debt securities with a decline in fair value from amortized cost for which an allowance for credit losses has not been recorded (by investment grade and the length of time these securities have been in an unrealized loss position). Unrealized depreciation on these debt securities is primarily due to declines in fair value resulting from increasing interest rates since these securities were purchased.
| September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | Fair Value | Amortized Cost | Unrealized Depreciation | Number of Issues | Fair Value | Amortized Cost | Unrealized Depreciation | Number of Issues | ||||||||||||||||||||||||||||||||||||||||||
| One year or less | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Investment grade | $ | $ | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||
| Below investment grade | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| More than one year | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Investment grade | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Below investment grade | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||
20
Equity Securities
The following table provides the values of the Company's equity security investments:
| September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| (In millions) | Cost | Carrying Value | Cost | Carrying Value | ||||||||||||||||||||||
| Equity securities with readily determinable fair values | $ | $ | $ | $ | ||||||||||||||||||||||
| Equity securities with no readily determinable fair value | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
In the third quarter of 2025, the Company invested $3.5 billion in preferred stock of Shields and a compounding dividend is recorded in Fees and other revenues within the Consolidated Statements of Income. The investment is included in equity securities with no readily determinable fair value in the table above.
Commercial Mortgage Loans
Mortgage loans held by the Company are made exclusively to commercial borrowers and are diversified by property type, location and borrower. Loans are generally issued at fixed rates of interest and are secured by high-quality, primarily completed and substantially leased operating properties.
The Company regularly evaluates and monitors credit risk from the initial mortgage loan underwriting and throughout the investment holding period. The annual portfolio review performed in the second quarter of 2025 confirmed ongoing strong overall credit quality in line with the previous year's results. For more information on the Company's accounting policies and methodologies regarding these investments, see Note 11 in the Company's 2024 Form 10-K.
The following table summarizes the credit risk profile of the Company's commercial mortgage loan portfolio:
| (Dollars in millions) | September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||||
| Loan-to-Value Ratio | Carrying Value | Average Debt Service Coverage Ratio | Average Loan-to-Value Ratio | Carrying Value | Average Debt Service Coverage Ratio | Average Loan-to-Value Ratio | |||||||||||||||||||||||||||||||||||
| Below 60% | $ | $ | |||||||||||||||||||||||||||||||||||||||
| 60% to 79% | |||||||||||||||||||||||||||||||||||||||||
| 80% to 100% | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||
Other Long-Term Investments
Other long-term investments include investments in unconsolidated entities, including certain limited partnerships and limited liability companies holding real estate, securities or loans. These investments are carried at cost plus the Company's ownership percentage of reporting income or loss, based on the financial statements of the underlying investments that are generally reported at fair value. Income or loss from these investments is reported on a one-quarter lag due to the timing of when financial information is received from the general partner or manager of the investments.
| Carrying Value as of | ||||||||||||||
| (In millions) | September 30, 2025 | December 31, 2024 | ||||||||||||
| Real estate investments | $ | $ | ||||||||||||
| Securities partnerships | ||||||||||||||
| Other | ||||||||||||||
| Total | $ | $ | ||||||||||||
21
B.Derivative Financial Instruments
The Company uses derivative financial instruments to manage the characteristics of investment assets (such as duration, yield, currency and liquidity) to meet the varying demands of the related insurance and contractholder liabilities. The Company also uses derivative financial instruments to hedge the risk of changes in the net assets of certain of its foreign subsidiaries due to changes in foreign currency exchange rates and to hedge the interest rate risk of certain long-term debt. The Company also has derivative instruments associated with certain equity securities; see Note 12 to the Consolidated Financial Statements for further discussion.
As of September 30, 2025, the notional value of interest rate swap contracts increased to $2.8 billion compared with $2.7 billion as of December 31, 2024. There were no other material changes to the Company's individual derivative hedging strategies during the three and nine months ended September 30, 2025. Please refer to the Company's 2024 Form 10-K for further discussion of the types of derivative financial instruments and associated accounting policies. The effects of derivative financial instruments used in our individual hedging strategies were not material to the Consolidated Financial Statements as of September 30, 2025 and December 31, 2024. The gross fair values of our derivative financial instruments are presented in Note 12 to the Consolidated Financial Statements.
C.Investment Gains and Losses
Note 12 – Fair Value Measurements
For a description of the policies, methods and assumptions that are used to estimate fair value and determine the fair value hierarchy for each class of financial instruments, see Note 12 in the Company's 2024 Form 10-K.
A.Financial Assets and Financial Liabilities Carried at Fair Value
The following table provides information about the Company's investment and derivative financial assets and liabilities carried at fair value on a recurring basis. Further information regarding insurance assets and liabilities carried at fair value is provided in Note 9E to the Consolidated Financial Statements in the Company's 2024 Form 10-K. Separate account assets are also recorded at fair value on the Company's Consolidated Balance Sheets and are reported separately in the Separate Accounts section below as gains and losses related to these assets generally accrue directly to contractholders.
| (In millions) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2025 | December 31, 2024 | September 30, 2025 | December 31, 2024 | September 30, 2025 | December 31, 2024 | September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||
| Financial assets at fair value | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt securities | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Federal government and agency | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| State and local government | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign government | ||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage and other asset-backed | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total debt securities | ||||||||||||||||||||||||||||||||||||||||||||||||||
Equity securities (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-term investments | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial liabilities at fair value | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative liabilities | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
(1)Excludes certain equity securities that have no readily determinable fair value.
22
Level 3 Financial Assets and Financial Liabilities
Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Unobservable inputs reflect the Company's best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. Additionally, as discussed in Note 9E in the Company's 2024 Form 10-K, the Company classifies variable annuity assets and liabilities in Level 3 of the fair value hierarchy.
Information about Debt Securities
The following table summarizes the fair value and significant unobservable inputs that were developed directly by the Company and used in pricing these debt securities. The range and weighted average basis point amounts for liquidity reflect the Company's best estimates of the unobservable adjustments a market participant would make to calculate these fair values. An increase in liquidity spread adjustments would result in a lower fair value measurement, while a decrease would result in a higher fair value measurement.
| Fair Value as of | Unobservable Adjustment Range (Weighted Average by Quantity) as of | ||||||||||||||||||||||||||||||||||
| (Fair value in millions) | September 30, 2025 | December 31, 2024 | Unobservable Input September 30, 2025 | September 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||
| Debt securities | |||||||||||||||||||||||||||||||||||
| Corporate | $ | $ | Liquidity | bps | bps | ||||||||||||||||||||||||||||||
| Mortgage and other asset-backed securities | Liquidity | bps | bps | ||||||||||||||||||||||||||||||||
| Other debt securities | |||||||||||||||||||||||||||||||||||
| Total Level 3 debt securities | $ | $ | |||||||||||||||||||||||||||||||||
Information about Derivative Instruments
Derivative Instruments associated with certain equity securities are valued each reporting period using a Monte Carlo simulation and estimated business enterprise value and are recorded in Other assets and Other non-current liabilities in the Consolidated Balance Sheets. The significant unobservable Level 3 measurement inputs used are forecasted earnings measures and equity as well as adjustments to reflect estimated volatility and credit spreads. See Note 11A to the Consolidated Financial Statements for further information.
23
Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Value
The following table summarizes the changes in financial assets and financial liabilities classified in Level 3. Gains and losses reported in the table may include net changes in fair value that are attributable to both observable and unobservable inputs.
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
Losses included in Shareholders' net income | ( | ( | ( | ( | |||||||||||||||||||
Gains included in Other comprehensive income (loss) | |||||||||||||||||||||||
| Purchases, sales and settlements | |||||||||||||||||||||||
| Purchases | |||||||||||||||||||||||
| Sales | ( | ( | ( | ( | |||||||||||||||||||
| Settlements | ( | ( | ( | ( | |||||||||||||||||||
| Total purchases, sales and settlements | ( | ( | |||||||||||||||||||||
| Transfers into / (out of) Level 3 | |||||||||||||||||||||||
| Transfers into Level 3 | |||||||||||||||||||||||
| Transfers out of Level 3 | ( | ( | ( | ||||||||||||||||||||
| Total transfers into / (out of) Level 3 | |||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | |||||||||||||||||||
Total losses included in Shareholders' net income attributable to instruments held at the reporting date | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Change in unrealized gain or (loss) included in Other comprehensive income (loss) for assets held at the end of the reporting period | $ | $ | $ | $ | |||||||||||||||||||
Total gains and losses included in Shareholders' net income in the tables above are reflected in the Consolidated Statements of Income as Net investment gains (losses) and Net investment income. Gains and losses included in Other comprehensive income (loss), net of tax, in the tables above are reflected in Net unrealized (depreciation) appreciation on securities and derivatives in the Consolidated Statements of Comprehensive Income.
Separate Accounts
24
Fair values of Separate account assets were as follows:
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||||||||||
| (In millions) | September 30, 2025 | December 31, 2024 | September 30, 2025 | December 31, 2024 | September 30, 2025 | December 31, 2024 | September 30, 2025 | December 31, 2024 | ||||||||||||||||||
Guaranteed separate accounts (See Note 16) | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Non-guaranteed separate accounts (1) | ||||||||||||||||||||||||||
| Subtotal | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Non-guaranteed separate accounts priced at net asset value as a practical expedient (1) | ||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||
(1)Non-guaranteed separate accounts include $3.8 0.2
B.Assets and Liabilities Measured at Fair Value under Certain Conditions
Some financial assets and liabilities are not carried at fair value, such as commercial mortgage loans that are carried at unpaid principal, investment real estate that is carried at depreciated cost and equity securities with no readily determinable fair value when there are no observable market transactions. However, these financial assets and liabilities may be measured using fair value under certain conditions, such as when investments become impaired and are written down to their fair value, or when there are observable price changes from orderly market transactions of equity securities that otherwise had no readily determinable fair value.
For the nine months ended September 30, 2025, impairments recognized requiring the assets and liabilities described above to be measured at fair value were not material. For the nine months ended September 30, 2024, we determined our investment in VillageMD was fully impaired and recorded a $2.7 billion loss in Net investment gains (losses) in the Company's Consolidated Statements of Income. Observable price changes for equity securities with no readily determinable fair value were not material for the nine months ended September 30, 2025 or September 30, 2024.
C.Fair Value Disclosures for Financial Instruments Not Carried at Fair Value
The following table includes the Company's financial instruments not recorded at fair value but for which fair value disclosure is required. In addition to universal life products and finance leases, financial instruments that are carried in the Company's Consolidated Balance Sheets at amounts that approximate fair value are excluded from the following table.
| Classification in Fair Value Hierarchy | September 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||
| (In millions) | Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||||||||||||||||||
| Commercial mortgage loans | Level 3 | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Long-term debt, including current maturities, excluding finance leases | Level 2 | $ | $ | $ | $ | |||||||||||||||||||||||||||
25
Note 13 – Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) ("AOCI") includes net unrealized (depreciation) appreciation on securities and derivatives, change in discount rate and instrument-specific credit risk for certain long-duration insurance contractholder liabilities (see Note 9 to the Consolidated Financial Statements), foreign currency translation, and the net postretirement benefits liability adjustment. AOCI includes the Company's share from unconsolidated entities reported on the equity method. Generally, tax effects in AOCI are established at the currently enacted tax rate and reclassified to Shareholders' net income in the same period that the related pre-tax AOCI reclassifications are recognized.
Shareholders' other comprehensive loss, net of tax, for the three and nine months ended September 30, 2025 and September 30, 2024 is primarily attributable to the change in discount rates for certain long-duration liabilities and unrealized changes in the market values of securities and derivatives, including the impacts from unconsolidated entities reported on the equity method.
Changes in the components of AOCI were as follows:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Securities and derivatives | |||||||||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | |||||||||||||||||||||||||
Unrealized (depreciation) appreciation on securities and derivatives, before reclassification, net of tax benefit (expense) of $ | ( | ( | |||||||||||||||||||||||||||
Amounts reclassified to Shareholders' net income, net of tax (benefit) of $( | |||||||||||||||||||||||||||||
Other comprehensive (loss) income, net of tax | ( | ( | |||||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | |||||||||||||||||||||||||
| Net long-duration insurance and contractholder liabilities measurement adjustments | |||||||||||||||||||||||||||||
| Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
Net current period change in discount rate for certain long-duration liabilities, before reclassification, net of tax (expense) benefit of $( | ( | ( | ( | ||||||||||||||||||||||||||
Amounts reclassified to Shareholders' net income, net of tax expense of $ | ( | ||||||||||||||||||||||||||||
Net current period change in discount rate for certain long-duration liabilities, net of tax (expense) benefit of $( | ( | ( | ( | ||||||||||||||||||||||||||
Net current period change in instrument-specific credit risk for market risk benefits, net of tax benefit of $ | ( | ( | ( | ||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | ( | ||||||||||||||||||||||||||
| Ending balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Translation of foreign currencies | |||||||||||||||||||||||||||||
| Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
Net translation of foreign currencies, before reclassification, net of tax (expense) of $ | ( | ||||||||||||||||||||||||||||
| Ending balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Postretirement benefits liability | |||||||||||||||||||||||||||||
| Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
Amounts reclassified to Shareholders' net income, net of tax (benefit) of $( | |||||||||||||||||||||||||||||
Net change due to valuation update, before reclassification, net of tax benefit of $ | ( | ( | |||||||||||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||||||||
| Ending balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Total Accumulated other comprehensive loss | |||||||||||||||||||||||||||||
| Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
Shareholders' other comprehensive income (loss), net of tax (expense) benefit of $( | ( | ( | |||||||||||||||||||||||||||
| Ending balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
26
Note 14 – Strategic Optimization Program
In the first quarter of 2025, the Company commenced an enterprise-wide initiative to evolve our business and deliver a more efficient and improved experience for our patients, providers and customers. This program is expected to continue through December 2026 and includes severance and other employee costs, asset impairments and accelerated asset amortization, and the operating results of certain small non-strategic businesses that we plan to discontinue. As we continue to evaluate additional opportunities to improve the overall efficiency and effectiveness of our operations, we anticipate future charges.
During the three and nine months ended September 30, 2025, we reported total costs of $222 million pre-tax ($168 million after-tax) and $566 million pre-tax ($429 million after-tax), respectively, associated with this initiative. During the three and nine months ended September 30, 2025, the total costs included a charge in Selling, general and administrative ("SG&A") expenses of $181 million, pre-tax and $467 million, pre-tax, respectively, that was primarily associated with employee severance. The remainder for both periods reflects the operating results of certain non-strategic businesses. We expect substantially all of the accrued liability to be paid by the end of 2026. See Note 17 to the Consolidated Financial Statements for further details of the strategic optimization program impact by segment.
The following table summarizes a roll forward of the accrued liability recorded in Accrued expenses and other liabilities during the nine months ended September 30, 2025:
| (In millions) | |||||
Balance, December 31, 2024 | $ | ||||
2025 charges | |||||
2025 payments | ( | ||||
Balance, September 30, 2025 | $ | ||||
Note 15 – Income Taxes
Income Tax Expense
The effective tax rates of 14.0 % and 15.9 % for the three and nine months ended September 30, 2025, respectively, were lower than the effective tax rates of 30.8 % and 31.2 % for the three and nine months ended September 30, 2024, respectively. The decrease in the three and nine months comparative rates was primarily due to the absence of a valuation allowance related to the impairment of equity securities in 2024, partially offset by the absence of tax benefits recorded in 2024 related to the release of tax reserves following favorable state audit resolutions.
During the three months ended September 30, 2025, the reallocation of the HCSC transaction purchase price by legal entity resulted in an equal write-off of the deferred tax asset ("DTA") and valuation allowance associated with the tax-deductible capital loss on the sale, resulting in zero net impact on the Company's total tax provision. Additionally, the decrease in valuation allowance associated with the tax-deductible capital loss on the sale recorded in the three months ended September 30, 2025 generated a substantial portion of the after-tax gain on sale discussed in Note 5 to the Consolidated Financial Statements. This valuation allowance decrease was offset by an increase in valuation allowance associated with DTAs on the impairment of equity securities, as discussed below. As such, there was no material change to the realizability assessment of the Company's consolidated DTAs and no material net impact to the Company's consolidated tax expense. We continue to monitor and evaluate the need for any additional valuation allowance.
Note 16 – Contingencies and Other Matters
The Company, through its subsidiaries, is contingently liable for various guarantees provided in the ordinary course of business.
A.Financial Guarantees: Retiree and Life Insurance Benefits
The Company guarantees that separate account assets will be sufficient to pay certain life insurance or retiree benefits. For the majority of these benefits, the sponsoring employers are primarily responsible for ensuring that assets are sufficient to pay these benefits and are required to maintain assets that exceed a certain percentage of benefit obligations. If employers fail to do so, the Company or an affiliate of the buyer of the retirement benefits business has the right to redirect the management of the related assets
27
The Company does not expect that these financial guarantees will have a material effect on the Company's consolidated results of operations, liquidity or financial condition.
B.Certain Other Guarantees
C.Guaranty Fund Assessments
The Company operates in a regulatory environment that may require its participation in assessments under state insurance guaranty association laws. The Company's exposure to assessments for certain obligations of insolvent insurance companies to policyholders and claimants is based on its share of business written in the relevant jurisdictions. There were no material charges or credits resulting from existing or new guaranty fund assessments for the nine months ended September 30, 2025.
D.Legal and Regulatory Matters
The Company is routinely involved in numerous claims, lawsuits, regulatory inquiries and audits, government investigations, including under the federal False Claims Act and state false claims acts initiated by a government investigating body or by a qui tam relator's filing of a complaint under court seal, and other legal matters arising, for the most part, in the ordinary course of managing a global health services business. Additionally, the Company has received and is cooperating with subpoenas or similar processes from various governmental agencies requesting information, all arising in the normal course of its business. Disputed tax matters arising from audits by the Internal Revenue Service or other state and foreign jurisdictions, including those resulting in litigation, are accounted for under GAAP guidance for uncertain tax positions.
Note 17 – Segment Information
See Note 1 to the Consolidated Financial Statements for a description of our segments. A description of our basis for reporting segment operating results is outlined below. Intersegment revenues primarily reflect pharmacy and care services transactions between the Evernorth Health Services and Cigna Healthcare segments. The Chairman and Chief Executive Officer is the chief operating decision maker ("CODM") responsible for making decisions about resources to be allocated to the segment and assessing its performance.
The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management, including the CODM, believes these metrics reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability to enable resource allocation decisions. We define pre-tax adjusted income (loss) from operations as income (loss) before income taxes excluding pre-tax income (loss) attributable to noncontrolling interests, net investment gains/losses, amortization of acquired intangible assets and special items. The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management, including the CODM, believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results.
The Company defines adjusted revenues as total revenues excluding the following adjustments: special items and The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting. Special items are matters that management, including the CODM, believes are not representative of the underlying results
28
The Company does not report total assets by segment because this is not a metric used by the CODM to allocate resources or evaluate segment performance.
The following table presents the special items charges (benefits) recorded by the Company, as well as the respective financial statement line items impacted:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Strategic optimization program (primarily Selling, general and administrative expenses) | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Integration and transaction-related costs (Selling, general and administrative expenses) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Gain) loss on sale of businesses | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Benefits) associated with litigation matters (Selling, general and administrative expenses) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred tax expenses, net (Income taxes, less amount attributable to noncontrolling interests) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment of dividend receivable (Net investment income) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total impact from special items | $ | $ | ( | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
29
| (In millions) | Evernorth Health Services | Cigna Healthcare | Other Operations | Corporate and Eliminations | Total | ||||||||||||||||||||||||||||||
| Three months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Intersegment revenues | ( | ||||||||||||||||||||||||||||||||||
Net investment income | |||||||||||||||||||||||||||||||||||
| Total revenues | ( | ||||||||||||||||||||||||||||||||||
| Net investment results from certain equity method investments | ( | ( | |||||||||||||||||||||||||||||||||
| Adjusted revenues | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Pharmacy and other service costs | |||||||||||||||||||||||||||||||||||
| Medical costs | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses excluding special items | |||||||||||||||||||||||||||||||||||
Other segment items (1) | |||||||||||||||||||||||||||||||||||
| Interest (expense) and other | ( | ||||||||||||||||||||||||||||||||||
| Less: Income attributable to noncontrolling interests | |||||||||||||||||||||||||||||||||||
| Pre-tax adjusted income (loss) from operations | ( | ||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Pre-tax adjustments to reconcile to adjusted income from operations | |||||||||||||||||||||||||||||||||||
(Income) attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||||||||||||||
Net investment losses (gains) (2) | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | |||||||||||||||||||||||||||||||||||
| Special items | |||||||||||||||||||||||||||||||||||
| Strategic optimization program | |||||||||||||||||||||||||||||||||||
| Integration and transaction-related costs | |||||||||||||||||||||||||||||||||||
| (Gain) on sale of businesses | ( | ( | |||||||||||||||||||||||||||||||||
| (Benefits) associated with litigation matters | ( | ( | |||||||||||||||||||||||||||||||||
| Pre-tax adjusted income (loss) from operations | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Other segment information | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||||||||
(1) Other segment items represent the difference between segment adjusted revenues less significant segment expenses and pre-tax adjusted income (loss) from operations, and they do not represent significant segment items relative to the CODM's review and oversight.
(2) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
30
| (In millions) | Evernorth Health Services | Cigna Healthcare | Other Operations | Corporate and Eliminations | Total | ||||||||||||||||||||||||||||||
| Three months ended September 30, 2024 | |||||||||||||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Intersegment revenues | ( | ||||||||||||||||||||||||||||||||||
Net investment (loss) income | ( | ||||||||||||||||||||||||||||||||||
| Total revenues | ( | ||||||||||||||||||||||||||||||||||
| Net investment results from certain equity method investments | ( | ( | |||||||||||||||||||||||||||||||||
| Special item related to impairment of dividend receivable | |||||||||||||||||||||||||||||||||||
| Adjusted revenues | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Pharmacy and other service costs | |||||||||||||||||||||||||||||||||||
| Medical costs | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses excluding special items | |||||||||||||||||||||||||||||||||||
Other segment items (1) | |||||||||||||||||||||||||||||||||||
| Interest (expense) and other | |||||||||||||||||||||||||||||||||||
| Less: Income attributable to noncontrolling interests | |||||||||||||||||||||||||||||||||||
| Pre-tax adjusted income (loss) from operations | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Pre-tax adjustments to reconcile to adjusted income from operations | |||||||||||||||||||||||||||||||||||
(Income) attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||||||||||||||
Net investment losses (gains) (2) | ( | ||||||||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | |||||||||||||||||||||||||||||||||||
| Special items | |||||||||||||||||||||||||||||||||||
| Integration and transaction-related costs | |||||||||||||||||||||||||||||||||||
| Loss on sale of businesses | |||||||||||||||||||||||||||||||||||
| Impairment of dividend receivable | |||||||||||||||||||||||||||||||||||
| Pre-tax adjusted income (loss) from operations | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Other segment information | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
(1) Other segment items represent the difference between segment adjusted revenues less significant segment expenses and pre-tax adjusted income (loss) from operations, and they do not represent significant segment items relative to the CODM's review and oversight.
(2) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
31
| (In millions) | Evernorth Health Services | Cigna Healthcare | Other Operations | Corporate and Eliminations | Total | ||||||||||||||||||||||||||||||
| Nine months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Intersegment revenues | ( | ||||||||||||||||||||||||||||||||||
Net investment income | |||||||||||||||||||||||||||||||||||
| Total revenues | ( | ||||||||||||||||||||||||||||||||||
Net investment results from certain equity method investments | ( | ( | |||||||||||||||||||||||||||||||||
| Adjusted revenues | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Pharmacy and other service costs | |||||||||||||||||||||||||||||||||||
| Medical costs | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||||||||||||||
Other segment items (1) | |||||||||||||||||||||||||||||||||||
| Interest (expense) and other | ( | ||||||||||||||||||||||||||||||||||
| Less: Income attributable to noncontrolling interests | |||||||||||||||||||||||||||||||||||
| Pre-tax adjusted income (loss) from operations | ( | ||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Pre-tax adjustments to reconcile to adjusted income from operations | |||||||||||||||||||||||||||||||||||
(Income) attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||||||||||||||
Net investment (gains) losses (2) | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | |||||||||||||||||||||||||||||||||||
| Special items | |||||||||||||||||||||||||||||||||||
| Strategic optimization program | |||||||||||||||||||||||||||||||||||
| Integration and transaction-related costs | |||||||||||||||||||||||||||||||||||
| (Gain) on sale of businesses | ( | ( | ( | ||||||||||||||||||||||||||||||||
| (Benefits) associated with litigation matters | ( | ( | |||||||||||||||||||||||||||||||||
| Pre-tax adjusted income (loss) from operations | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Other segment information | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
(1)Other segment items represent the difference between segment adjusted revenues less significant segment expenses and pre-tax adjusted income (loss) from operations, and they do not represent significant segment items relative to the CODM's review and oversight.
(2)Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
32
| (In millions) | Evernorth Health Services | Cigna Healthcare | Other Operations | Corporate and Eliminations | Total | ||||||||||||||||||||||||||||||
| Nine months ended September 30, 2024 | |||||||||||||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Intersegment revenues | ( | ||||||||||||||||||||||||||||||||||
Net investment (loss) income | ( | ||||||||||||||||||||||||||||||||||
| Total revenues | ( | ||||||||||||||||||||||||||||||||||
| Net investment results from certain equity method investments | ( | ( | |||||||||||||||||||||||||||||||||
| Special item related to impairment of dividend receivable | |||||||||||||||||||||||||||||||||||
| Adjusted revenues | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Pharmacy and other service costs | |||||||||||||||||||||||||||||||||||
| Medical costs | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||||||||||||||
Other segment items (1) | |||||||||||||||||||||||||||||||||||
| Interest (expense) and other | ( | ||||||||||||||||||||||||||||||||||
| Less: Income attributable to noncontrolling interests | |||||||||||||||||||||||||||||||||||
| Pre-tax adjusted income (loss) from operations | ( | ( | |||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Pre-tax adjustments to reconcile to adjusted income from operations | |||||||||||||||||||||||||||||||||||
(Income) attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||||||||||||||
Net investment losses (2) | |||||||||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | |||||||||||||||||||||||||||||||||||
| Special items | |||||||||||||||||||||||||||||||||||
Integration and transaction-related costs | |||||||||||||||||||||||||||||||||||
Loss on sale of businesses | |||||||||||||||||||||||||||||||||||
Impairment of dividend receivable | |||||||||||||||||||||||||||||||||||
| Pre-tax adjusted income (loss) from operations | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Other segment information | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
(1)Other segment items represent the difference between segment adjusted revenues less significant segment expenses and pre-tax adjusted income (loss) from operations, and they do not represent significant segment items relative to the CODM's review and oversight.
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Revenue from external customers includes Pharmacy revenues, Premiums and Fees and other revenues. The following table presents these revenues by product, premium and service type:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Products (Pharmacy revenues) (ASC 606) | |||||||||||||||||||||||||||||
| Network revenues | $ | $ | $ | $ | |||||||||||||||||||||||||
| Home delivery and specialty revenues | |||||||||||||||||||||||||||||
| Other revenues | |||||||||||||||||||||||||||||
Total Evernorth Health Services | |||||||||||||||||||||||||||||
Other Operations | |||||||||||||||||||||||||||||
| Corporate and eliminations | ( | ( | ( | ( | |||||||||||||||||||||||||
Total Pharmacy revenues | |||||||||||||||||||||||||||||
| Insurance premiums (ASC 944) | |||||||||||||||||||||||||||||
Cigna Healthcare | |||||||||||||||||||||||||||||
U.S. Healthcare | |||||||||||||||||||||||||||||
| Employer insured | |||||||||||||||||||||||||||||
| Medicare Advantage | |||||||||||||||||||||||||||||
| Stop loss | |||||||||||||||||||||||||||||
| Individual and Family Plans | |||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
U.S. Healthcare | |||||||||||||||||||||||||||||
| International Health | |||||||||||||||||||||||||||||
| Total Cigna Healthcare | |||||||||||||||||||||||||||||
| Other Operations | |||||||||||||||||||||||||||||
| Corporate and eliminations | |||||||||||||||||||||||||||||
Total Premiums | |||||||||||||||||||||||||||||
Services (Fees) (ASC 606) and Other revenues (1) | |||||||||||||||||||||||||||||
Evernorth Health Services | |||||||||||||||||||||||||||||
Cigna Healthcare | |||||||||||||||||||||||||||||
Other Operations | |||||||||||||||||||||||||||||
| Corporate and eliminations | ( | ( | ( | ( | |||||||||||||||||||||||||
Total Fees and other revenues (1) | |||||||||||||||||||||||||||||
| Total revenues from external customers | $ | $ | $ | $ | |||||||||||||||||||||||||
Financial and performance guarantees. Evernorth Health Services may also provide certain financial and performance guarantees, including a minimum level of discounts a client may receive, generic utilization rates and various service levels. Clients may be entitled to receive compensation if we fail to meet the guarantees. Actual performance is compared to the contractual guarantee for each measure throughout the period, and the Company defers revenue for any estimated payouts within Accrued expenses and other liabilities (current). These estimates are adjusted and paid following the end of the annual guarantee period. Historically, adjustments to original estimates have not been material. This guarantee liability was $1.6 billion as of September 30, 2025 and $1.9 billion December 31, 2024.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide information to assist you in better understanding and evaluating our financial condition as of September 30, 2025 compared with December 31, 2024 and our results of operations for the three and nine months ended September 30, 2025 compared with the same periods last year, and is intended to help you understand the ongoing trends in our business. We encourage you to read this MD&A in conjunction with our Consolidated Financial Statements included in Part I, Item 1 in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"). In particular, we encourage you to refer to the "Risk Factors" contained in Part I, Item 1A of our 2024 Form 10-K.
Unless otherwise indicated, financial information in this MD&A is presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). See Note 2 to the Consolidated Financial Statements in our 2024 Form 10-K for
34
additional information regarding the Company's significant accounting policies and see Note 2 to the Consolidated Financial Statements in this Form 10-Q for updates to those policies resulting from adopting new accounting guidance, if any. The preparation of interim consolidated financial statements necessarily relies heavily on estimates. This and certain other factors call for caution in estimating full-year results based on interim results of operations. In some of our financial tables in this MD&A, we present either percentage changes or "N/M" when those changes are so large as to become not meaningful. Changes in percentages are expressed in basis points ("bps").
In this MD&A, our consolidated measures "adjusted income from operations," earnings per share on that same basis and "adjusted revenues" are not determined in accordance with GAAP and should not be viewed as substitutes for the most directly comparable GAAP measures of "shareholders' net income," "earnings per share" and "total revenues." We also use pre-tax adjusted income (loss) from operations and adjusted revenues to measure the results of our segments.
The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes these metrics reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability. We define adjusted income (loss) from operations as shareholders' net income (or income (loss) before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net investment gains/losses, amortization of acquired intangible assets and special items. The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results. Consolidated adjusted income (loss) from operations is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders' net income. See the below Financial Highlights section for a reconciliation of consolidated adjusted income from operations to shareholders' net income.
The Company defines adjusted revenues as total revenues excluding the following adjustments: special items and The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. We exclude these items from this measure because management believes they are not indicative of past or future underlying performance of the business. Adjusted revenues is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, total revenues. See the below Financial Highlights section for a reconciliation of consolidated adjusted revenues to total revenues.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on The Cigna Group's current expectations and projections about future trends, events and uncertainties. These statements are not historical facts. Forward-looking statements may include, among others, statements concerning future financial or operating performance, including our ability to improve the health and vitality of those we serve; future growth, business strategy, and strategic or operational initiatives; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas and the impact of developing inflationary and interest rate pressures; financing or capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; strategic transactions and their expected benefits; and other statements regarding The Cigna Group's future beliefs, expectations, plans, intentions, liquidity, cash flows, financial condition or performance. You may identify forward-looking statements by the use of words such as "believe," "expect," "project," "plan," "intend," "anticipate," "estimate," "predict," "potential," "may," "should," "will" or other words or expressions of similar meaning, although not all forward-looking statements contain such terms.
Forward-looking statements are subject to risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those expressed or implied in forward-looking statements. Such risks and uncertainties include, but are not limited to: our ability to achieve our strategic and operational initiatives; our ability to adapt to changes in an evolving and rapidly changing industry; our ability to compete effectively, differentiate our products and services from those of our competitors, and maintain or increase market share; price competition, inflation and other pressures that could compress our margins or result in premiums that are insufficient to cover the cost of services delivered to our customers; the potential for actual claims to exceed our estimates related to expected medical claims; our ability to develop and maintain satisfactory relationships with health care payors, physicians, hospitals, other health service providers and with producers and consultants; our ability to maintain relationships with one or more key pharmaceutical manufacturers or if payments made or discounts provided decline; changes in the pharmacy provider marketplace or pharmacy networks; changes in drug pricing or industry pricing benchmarks; our ability to invest in and properly maintain our information technology and other business systems; our ability to prevent or contain effects of a potential cyberattack or other privacy or data security incident; risks related to our use of artificial intelligence and machine learning; political, legal, operational, regulatory, economic and other risks that could affect our multinational operations, including currency exchange rates; risks related to strategic
35
transactions and realization of the expected benefits of such transactions, as well as integration or separation difficulties or underperformance relative to expectations, which could lead to an impairment charge; dependence on success of relationships with third parties; risk of significant disruption within our operations or among key suppliers or third parties; potential liability in connection with managing medical practices and operating pharmacies, onsite clinics and other types of medical facilities; the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws, regulations or government guidance; uncertainties surrounding participation in government-sponsored programs and providing services to payors who participate in government-sponsored programs; the outcome of litigation, regulatory audits and investigations; compliance with applicable privacy, security and data laws, regulations and standards; potential failure of our prevention, detection and control systems; unfavorable economic and market conditions, the risk of a recession or other economic downturn and resulting impact on employment metrics, stock market or changes in interest rates; risks related to a downgrade in financial strength ratings of our insurance subsidiaries; the impact of our significant indebtedness and the potential for further indebtedness in the future; credit risk related to our reinsurers; as well as more specific risks and uncertainties discussed in Part I, Item 1A - "Risk Factors" in our 2024 Form 10-K, discussed in Part II, Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Form 10-K, and as described from time to time in our future reports filed with the Securities and Exchange Commission.
You should not place undue reliance on forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance or results, and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. The Cigna Group undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law.
EXECUTIVE OVERVIEW
The Cigna Group, together with its subsidiaries (either individually or collectively referred to as the "Company," "we," "us" or "our"), is a global health company committed to creating a better future for every individual and every community. Our subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental, and related products and services. For further information on our business and strategy, see Part I, Item 1 - "Business" in our 2024 Form 10-K.
Financial Highlights
Consolidated Results of Operations (GAAP basis) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pharmacy revenues | $ | 56,054 | $ | 48,284 | 16 | % | $ | 158,336 | $ | 135,421 | 17 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Premiums | 9,081 | 11,436 | (21) | 30,973 | 34,493 | (10) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fees and other revenues | 4,380 | 3,889 | 13 | 12,412 | 10,862 | 14 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income | 233 | 85 | 174 | 707 | 696 | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | 69,748 | 63,694 | 10 | 202,428 | 181,472 | 12 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pharmacy and other service costs | 55,530 | 47,565 | 17 | 157,196 | 133,488 | 18 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Medical costs and other benefit expenses | 7,842 | 9,527 | (18) | 26,089 | 28,482 | (8) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 3,362 | 3,590 | (6) | 11,008 | 10,979 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | 436 | 436 | — | 1,280 | 1,279 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total benefits and expenses | 67,170 | 61,118 | 10 | 195,573 | 174,228 | 12 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income from operations | 2,578 | 2,576 | — | 6,855 | 7,244 | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense and other | (347) | (376) | (8) | (1,046) | (1,073) | (3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain (loss) on sale of businesses | 38 | (87) | N/M | 79 | (106) | N/M | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) | 26 | (921) | N/M | 76 | (2,805) | N/M | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 2,295 | 1,192 | 93 | 5,964 | 3,260 | 83 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total income taxes | 322 | 367 | (12) | 950 | 1,018 | (7) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 1,973 | 825 | 139 | 5,014 | 2,242 | 124 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | 105 | 86 | 22 | 291 | 232 | 25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' net income | $ | 1,868 | $ | 739 | 153 | % | $ | 4,723 | $ | 2,010 | 135 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consolidated effective tax rate | 14.0 | % | 30.8 | % | (1,680) | bps | 15.9 | % | 31.2 | % | (1,530) | bps | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Medical customers (in thousands) | 18,059 | 19,048 | (5) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | ||||||||||||||||||||||||||||||||||||||||||
Shareholders' net income | $ | 1,868 | $ | 739 | $ | 4,723 | $ | 2,010 | ||||||||||||||||||||||||||||||||||||||||||
| Adjustments to reconcile to adjusted income from operations | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses (1) | $ | (204) | (43) | $ | 744 | 740 | $ | (348) | (194) | $ | 2,567 | 2,547 | ||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | 436 | 332 | 436 | 333 | 1,280 | 998 | 1,279 | 972 | ||||||||||||||||||||||||||||||||||||||||||
| Special items | ||||||||||||||||||||||||||||||||||||||||||||||||||
Strategic optimization program | 222 | 168 | — | — | 566 | 429 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Integration and transaction-related costs | 7 | 6 | 77 | 59 | 297 | 226 | 177 | 135 | ||||||||||||||||||||||||||||||||||||||||||
(Gain) loss on sale of businesses | (38) | (241) | 87 | 62 | (79) | (356) | 106 | 19 | ||||||||||||||||||||||||||||||||||||||||||
(Benefits) associated with litigation matters | (17) | (13) | — | — | (17) | (13) | — | — | ||||||||||||||||||||||||||||||||||||||||||
Deferred tax expenses, net (2) | — | 19 | — | 41 | — | 53 | — | 75 | ||||||||||||||||||||||||||||||||||||||||||
Impairment of dividend receivable | — | — | 182 | 138 | — | — | 182 | 138 | ||||||||||||||||||||||||||||||||||||||||||
| Total special items | $ | 174 | (61) | $ | 346 | 300 | $ | 767 | 339 | $ | 465 | 367 | ||||||||||||||||||||||||||||||||||||||
Adjusted income from operations | $ | 2,096 | $ | 2,112 | $ | 5,866 | $ | 5,896 | ||||||||||||||||||||||||||||||||||||||||||
(1)Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
(2)Represents amortization of a foreign tax attribute. See Note 20 to the Consolidated Financial Statements in our 2024 Form 10-K for additional details.
Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| (Diluted earnings per share) | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | ||||||||||||||||||||||||||||||||||||||||||
Shareholders' net income | $ | 6.98 | $ | 2.63 | $ | 17.52 | $ | 7.05 | ||||||||||||||||||||||||||||||||||||||||||
| Adjustments to reconcile to adjusted income from operations | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses (1) | $ | (0.76) | (0.16) | $ | 2.64 | 2.63 | $ | (1.29) | (0.72) | $ | 9.00 | 8.93 | ||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | 1.63 | 1.24 | 1.55 | 1.18 | 4.74 | 3.70 | 4.49 | 3.41 | ||||||||||||||||||||||||||||||||||||||||||
| Special items | ||||||||||||||||||||||||||||||||||||||||||||||||||
Strategic optimization program | 0.82 | 0.63 | — | — | 2.10 | 1.59 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Integration and transaction-related costs | 0.03 | 0.02 | 0.27 | 0.21 | 1.10 | 0.84 | 0.62 | 0.48 | ||||||||||||||||||||||||||||||||||||||||||
(Gain) loss on sale of businesses | (0.14) | (0.90) | 0.31 | 0.22 | (0.29) | (1.32) | 0.37 | 0.07 | ||||||||||||||||||||||||||||||||||||||||||
(Benefits) associated with litigation matters | (0.06) | (0.05) | — | — | (0.06) | (0.05) | — | — | ||||||||||||||||||||||||||||||||||||||||||
Deferred tax expenses, net (2) | — | 0.07 | — | 0.15 | — | 0.20 | — | 0.26 | ||||||||||||||||||||||||||||||||||||||||||
Impairment of dividend receivable | — | — | 0.65 | 0.49 | — | — | 0.64 | 0.48 | ||||||||||||||||||||||||||||||||||||||||||
| Total special items | $ | 0.65 | (0.23) | $ | 1.23 | 1.07 | $ | 2.85 | 1.26 | $ | 1.63 | 1.29 | ||||||||||||||||||||||||||||||||||||||
Adjusted income from operations | $ | 7.83 | $ | 7.51 | $ | 21.76 | $ | 20.68 | ||||||||||||||||||||||||||||||||||||||||||
(1) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
(2) Represents amortization of a foreign tax attribute. See Note 20 to the Consolidated Financial Statements in our 2024 Form 10-K for additional details.
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| Financial highlights by segment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted revenues by segment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Evernorth Health Services | $ | 60,391 | $ | 52,637 | 15 | % | $ | 171,897 | $ | 148,411 | 16 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Cigna Healthcare | 10,755 | 13,163 | (18) | 35,991 | 39,583 | (9) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Operations | 162 | 234 | (31) | 521 | 627 | (17) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate, net of eliminations | (1,738) | (2,335) | (26) | (6,253) | (7,205) | (13) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted revenues | 69,570 | 63,699 | 9 | 202,156 | 181,416 | 11 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment results from certain equity method investments | 178 | 177 | 1 | 272 | 238 | 14 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Special item related to impairment of dividend receivable | — | (182) | N/M | — | (182) | N/M | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 69,748 | $ | 63,694 | 10 | % | $ | 202,428 | $ | 181,472 | 12 | % | ||||||||||||||||||||||||||||||||||||||||||||
Shareholders' net income | $ | 1,868 | $ | 739 | 153 | % | $ | 4,723 | $ | 2,010 | 135 | % | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted income from operations | $ | 2,096 | $ | 2,112 | (1) | % | $ | 5,866 | $ | 5,896 | (1) | % | ||||||||||||||||||||||||||||||||||||||||||||
| Earnings per share (diluted) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' net income | $ | 6.98 | $ | 2.63 | 165 | % | $ | 17.52 | $ | 7.05 | 149 | % | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted income from operations | $ | 7.83 | $ | 7.51 | 4 | % | $ | 21.76 | $ | 20.68 | 5 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Pre-tax adjusted income (loss) from operations by segment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Evernorth Health Services | $ | 1,903 | $ | 1,876 | 1 | % | $ | 5,033 | $ | 4,855 | 4 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Cigna Healthcare | 1,038 | 1,174 | (12) | 3,419 | 3,718 | (8) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Operations | 36 | (6) | N/M | 61 | (4) | N/M | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate, net of eliminations | (399) | (425) | (6) | (1,192) | (1,269) | (6) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated pre-tax adjusted income from operations | 2,578 | 2,619 | (2) | 7,321 | 7,300 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income attributable to noncontrolling interests | 123 | 99 | 24 | 342 | 271 | 26 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income (losses) (1) | 204 | (744) | N/M | 348 | (2,567) | N/M | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangible assets | (436) | (436) | — | (1,280) | (1,279) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Special items | (174) | (346) | (50) | (767) | (465) | 65 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 2,295 | $ | 1,192 | 93 | % | $ | 5,964 | $ | 3,260 | 83 | % | ||||||||||||||||||||||||||||||||||||||||||||
(1)Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
For further analysis and explanation of each segment's results, see the "Segment Reporting" section in this MD&A.
Commentary: Three and Nine Months Ended September 30, 2025 versus Three and Nine Months Ended September 30, 2024
The commentary presented below, and the segment commentaries that follow, compare results for the three and nine months ended September 30, 2025 with results for the three and nine months ended September 30, 2024. Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.
Shareholders' net income for the three and nine months ended increased 153% and 135%, primarily reflecting the absence of the impairment of VillageMD equity securities that was recorded in 2024.
Adjusted income from operations. See discussion of segment results in the "Segment Reporting" section.
Medical customers decreased 5%, primarily reflecting the closing of the HCSC transaction (defined below) in the three months ended March 31, 2025.
Pharmacy revenues increased 16% and 17%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.
Premiums decreased 21% and 10%, primarily driven by the impact of the HCSC transaction (-25% and -15%, respectively), partially offset by higher premium rates within our ongoing U.S. Healthcare businesses (+4% in both periods).
Fees and other revenues increased 13% and 14%, primarily reflecting growth in affordability services (defined in the "Segment Reporting" section) within our Pharmacy Benefit Services operating segment.
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Net investment income increased 174% and 2%, primarily due to the absence of the $182 million impairment of the dividend receivable in the third quarter of 2024 related to VillageMD accrued dividends. For the nine months ended, this impact was offset by lower average assets, due in part to the impact of the HCSC transaction.
Pharmacy and other service costs increased 17% and 18%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.
Medical costs and other benefit expenses decreased 18% and 8%, primarily driven by the impact of the HCSC transaction (-26% and -16%, respectively), partially offset by higher medical costs within our ongoing U.S. Healthcare businesses (+8% in both periods).
Selling, general and administrative ("SG&A") expenses decreased 6% for the three months ended and was flat for the nine months ended. Both periods were primarily impacted by the HCSC transaction (-16% and -8%, respectively), partially offset by the strategic optimization program (+5% and +4%, respectively) and supporting business growth (+3% and +4%, respectively). See Note 14 to the Consolidated Financial Statements for further discussion of the strategic optimization program.
Gain (loss) on sale of businesses primarily reflects the HCSC transaction for the three and nine months ended. See the "Divestiture of Medicare Advantage and Related Businesses" section below and Note 5 to the Consolidated Financial Statements for further discussion of the HCSC transaction.
Investment results for the three and nine months ended increased, reflecting the absence of the impairment of VillageMD equity securities that was recorded in the three and nine months periods in 2024.
The effective tax rate decreased for the three and nine months ended, primarily driven by the absence of a valuation allowance related to the impairment of equity securities recorded in 2024 (-18% in both periods), partially offset by the absence of state tax benefits recorded in 2024 (+3% and +5%, respectively). See Note 15 to the Consolidated Financial Statements for further discussion of these matters.
Developments
Divestiture of Medicare Advantage and Related Businesses
On March 19, 2025, the Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies businesses within the U.S. Healthcare operating segment to Health Care Service Corporation ("HCSC," and such transaction, the "HCSC transaction"). The purchase price increased from $3.3 billion to $4.9 billion, reflecting higher statutory surplus for the legal entities when conveyed to HCSC and post-closing contractual adjustments. The Company received approximately $4.2 billion cash proceeds at closing. We expect receipt of the remaining approximately $0.6 billion in the fourth quarter of 2025 upon HCSC's collection of amounts due from the Centers for Medicare and Medicaid Services ("CMS") and completion of post-closing contractual adjustments. See Note 5 to the Consolidated Financial Statements for further information.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
We maintain liquidity at two levels: the subsidiary level and the parent company level.
Subsidiary Level. Cash requirements at the subsidiary level generally consist of pharmacy, medical costs and other benefit payments; expense requirements, primarily for employee compensation and benefits, information technology, and facilities costs; income taxes; and debt service.
Our subsidiaries normally meet their liquidity requirements by maintaining appropriate levels of cash, cash equivalents and short-term investments; using cash flows from operating activities; matching durations of investments to estimated durations for the related insurance and contractholder liabilities; selling investments; and borrowing from affiliates, subject to applicable regulatory limits.
Parent Company Level. Cash requirements at the parent company level generally consist of debt service, payment of declared dividends to shareholders, lending to subsidiaries as needed and pension plan funding.
The parent company normally meets its liquidity requirements by maintaining appropriate levels of cash and various types of marketable investments; collecting dividends from its subsidiaries; using proceeds from issuing debt and common stock; and borrowing from its subsidiaries, subject to applicable regulatory limits.
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Regulatory Restrictions. Dividends from our insurance, Health Maintenance Organization ("HMO") and certain foreign subsidiaries are subject to regulatory restrictions. See Note 19 to the Consolidated Financial Statements in our 2024 Form 10-K for additional information regarding these restrictions. Most of the Evernorth Health Services segment operations are not subject to regulatory restrictions regarding dividends and therefore provide significant financial flexibility to The Cigna Group.
Investment Portfolio. We support the liquidity needs of our businesses by managing the duration of invested assets to be consistent with the duration of liabilities. We manage the portfolio to both optimize returns in the current economic environment and meet our liquidity needs.
Cash flows for the nine months ended September 30 were as follows:
| Nine Months Ended September 30, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||||||||
| Operating activities | $ | 3,452 | $ | 5,151 | ||||||||||||||||
| Investing activities | $ | (3,987) | $ | (1,911) | ||||||||||||||||
| Financing activities | $ | (2,355) | $ | (4,399) | ||||||||||||||||
The following discussion explains variances in the various categories of cash flows for the nine months ended September 30, 2025 compared with the same period in 2024.
Operating Activities. Cash flows from operating activities consist principally of cash receipts and disbursements for pharmacy revenues and costs, premiums and medical costs, fees, investment income, taxes, and other expenses.
Operating cash flows decreased for the nine months ended September 30, 2025 primarily due to the absence of the favorable net cash flow impacts from onboarding significant new clients in 2024 and the unfavorable impact of pharmacy and services costs payments, as well as timing of settlements related to the accounts receivable factoring facility. This decrease is partially offset by higher insurance liabilities and the favorable impact of accrued liabilities.
Investing Activities. The increase in cash used in investing activities reflects higher investment purchases, partially offset by the net proceeds on the HCSC transaction.
Financing Activities. The decrease in net cash used in financing activities in 2025 is primarily driven by lower share repurchases.
Capital Resources
Our capital resources consist primarily of cash, cash equivalents and investments maintained at regulated subsidiaries required to underwrite insurance risks, cash flows from operating activities, our commercial paper program, revolving credit facility, and the issuance of long-term debt and equity securities. Our businesses generate significant cash flows from operations, some of which is subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company. Dividends received from U.S.-regulated subsidiaries were $0.6 billion for the nine months ended September 30, 2025 and $1.7 billion for the nine months ended September 30, 2024. Non-regulated subsidiaries also generate significant cash flows from operating activities, which are typically available immediately to the parent company for general corporate purposes.
We prioritize our use of capital resources to (i) invest in capital expenditures (primarily related to technology to support innovative solutions for our clients and customers), provide the capital necessary to maintain or improve the financial strength ratings of subsidiaries, and to repay debt and fund pension obligations if necessary; (ii) pay dividends to shareholders; (iii) consider acquisitions and investments that are strategically and economically advantageous; and (iv) return capital to shareholders through share repurchases.
Funds Available
Commercial Paper Program. There was no commercial paper outstanding balance as of September 30, 2025.
Revolving Credit Agreement. Our revolving credit agreement provides us with the ability to borrow amounts for general corporate purposes, including for the purpose of providing liquidity support if necessary under our commercial paper program discussed above. In April 2025, the Company replaced its previous revolving credit agreements and entered into a $6.5 billion, five-year revolving credit and letter of credit agreement that will mature in April 2030. See Note 7 to the Consolidated Financial Statements for further information on our credit agreement and commercial paper program.
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As of September 30, 2025, we had $6.5 billion of undrawn committed capacity under our revolving credit agreement (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $6.5 billion of remaining capacity under our commercial paper program, and $6.3 billion in cash and short-term investments, approximately $0.8 billion of which was held by the parent company or certain non-regulated subsidiaries.
Our debt-to-capitalization ratio (calculated as Short-term debt and Long-term debt ("Total debt") as a percentage of Total shareholders' equity and Total debt ("Total capitalization")) was 44.9% and 43.3% as of September 30, 2025 and June 30, 2025, respectively.
We actively monitor our debt obligations and engage in issuance or redemption activities as needed in accordance with our capital management strategy.
Debt Issuance and Term Loan: In September 2025, we issued $4.5 billion of new senior notes. The proceeds from this debt were used to repay the $2.0 billion of loans outstanding under the Term Loan Facility, dated August 2025, the proceeds of which were used to fund an investment in Shields Health Solutions, a leading specialty pharmacy management company. We used the remainder for general corporate purposes, including investments and repayment of indebtedness. See Note 7 to the Consolidated Financial Statements for further information regarding our debt issuance and the Term Loan Facility.
Subsidiary Borrowings. In addition to the sources of liquidity discussed above, the parent company can borrow an additional $1.2 billion from its subsidiaries without further approvals as of September 30, 2025.
Use of Capital Resources
Short-Term and Long-Term Debt. During the three months ended March 31, 2025, the Company redeemed at par its $700 million 5.685% senior notes that were due March 2026. In April 2025, $900 million of 3.250% senior notes were repaid at maturity. The Company may, from time to time, repay or repurchase debt in advance of maturities when it deems appropriate.
Capital Expenditures. Capital expenditures for property, equipment and computer software were $0.9 billion in the nine months ended September 30, 2025 compared with $1.1 billion in the nine months ended September 30, 2024.
Dividends. The Company currently intends to pay regular quarterly dividends, with future declarations subject to approval by its Board of Directors and the Board's determination that the declaration of dividends remains in the best interests of The Cigna Group and its shareholders. See Note 8 to the Consolidated Financial Statements for further information regarding dividend payments and declarations.
Share Repurchases. The Company maintains a share repurchase program authorized by the Board of Directors, under which it may repurchase shares of its common stock from time to time. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital. The share repurchase program may be effected through open market purchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including through Rule 10b5-1 trading plans or privately negotiated transactions. The program may be suspended or discontinued at any time.
We repurchased 8.2 million shares for approximately $2.6 billion during the nine months ended September 30, 2025, compared with 14.7 million shares for approximately $5.0 billion during the nine months ended September 30, 2024.
Other Sources of Funds and Uses of Capital Resources
Divestiture. As discussed in the "Developments" section above, the HCSC transaction was completed on March 19, 2025. We used the proceeds in alignment with our capital deployment priorities, with the majority allocated to share repurchases.
Risks to Liquidity and Capital Resources
Risks to our liquidity and capital resources outlook include cash projections that may not be realized, and the demand for funds could exceed available cash if our ongoing businesses experience unexpected shortfalls in earnings or we experience material adverse effects from one or more risks or uncertainties described more fully in the "Risk Factors" section in our 2024 Form 10-K.
Guarantees and Contractual Obligations
We are contingently liable for various contractual obligations and financial and other guarantees entered into in the ordinary course of business. See Note 16 to the Consolidated Financial Statements for discussion of various guarantees.
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Due to the issuance, redemption and maturity of senior notes in the nine months ended September 30, 2025, our long-term debt obligations as of September 30, 2025 have been updated compared to those previously provided in our 2024 Form 10-K. See Note 7 to the Consolidated Financial Statements for further discussion. Except for the item listed below, there have been no material changes to other information presented in our guarantees and contractual obligations set forth in our 2024 Form 10-K.
Long-Term Debt. Total scheduled payments on long-term debt are $53.0 billion through January 2056 (of which $1.5 billion relate to the remainder of 2025), which include scheduled interest payments and maturities of long-term debt.
CRITICAL ACCOUNTING ESTIMATES
The preparation of Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures in the Consolidated Financial Statements. Management considers an accounting estimate to be critical if:
•it requires assumptions to be made that were uncertain at the time the estimate was made; and
•changes in the estimate or different estimates that could have been selected could have a material effect on our consolidated results of operations or financial condition.
Management has discussed how critical accounting estimates are developed and selected with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed the disclosures presented in our 2024 Form 10-K. We regularly evaluate items that may impact critical accounting estimates.
Our most critical accounting estimates, as well as the effect of hypothetical changes in material assumptions used to develop each estimate, are described in our 2024 Form 10-K. As of September 30, 2025, there were no significant changes to the critical accounting estimates from what was reported in our 2024 Form 10-K.
Goodwill and Other intangible assets
Our annual evaluations of goodwill and other intangible assets for impairments were completed during the third quarter of 2025. These evaluations were performed at the reporting unit level, based on discounted cash flow analyses or market data. The estimated fair value of each of our reporting units exceeded their carrying values by substantial margins.
Management believes the current assumptions used to estimate amounts reflected in our Consolidated Financial Statements are appropriate. However, if actual experience significantly differs from the assumptions used in estimating amounts reflected in our Consolidated Financial Statements, the resulting changes could have a material adverse effect on our consolidated results of operations and, in certain situations, could have a material adverse effect on liquidity and our financial condition.
SEGMENT REPORTING
The following section in this MD&A discusses the results of each of our segments. See Note 1 to the Consolidated Financial Statements for further description of our segments.
In segment discussions, we present "adjusted revenues" and "pre-tax adjusted income (loss) from operations," defined as income (loss) before income taxes excluding pre-tax income (loss) attributable to noncontrolling interests, net investment gains/losses, amortization of acquired intangible assets and special items. The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes these metrics reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability. The Cigna Group share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management, including the chief operating decision maker, believes are not representative of the underlying results of operations due to their nature or size. Ratios presented in this segment discussion exclude the same items as adjusted revenues and pre-tax adjusted income (loss) from operations. See Note 17 to the Consolidated Financial Statements for additional discussion of these metrics and a reconciliation of income (loss) before income taxes to pre-tax adjusted income (loss) from operations, as well as a reconciliation of Total revenues to adjusted revenues. Note 17 to the Consolidated Financial Statements also explains that segment revenues include both external revenues and sales between segments that are eliminated in Corporate.
In these segment discussions, we also present "pre-tax margin," calculated as pre-tax adjusted income (loss) from operations divided by adjusted revenues.
See the "Executive Overview" section in this MD&A for summarized financial results of each of our segments.
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Evernorth Health Services Segment
Evernorth Health Services includes a broad range of coordinated and point solution health services and capabilities within our Pharmacy Benefit Services and Specialty and Care Services operating segments. As described in the introduction to Segment Reporting, the performance of Evernorth Health Services is measured using adjusted revenues and pre-tax adjusted income (loss) from operations.
In 2025, the Company renewed or extended contracts with the business’s largest clients through the end of the decade. Additionally, to further deliver value for the benefit of those we serve and to build a more sustainable model for health care, the Company will incur investment and transition costs to support its recently announced transformational rebate-free model for pharmacy benefits, designed to lower medication costs, improve transparency and support local pharmacies. As a result, we expect these efforts to impact pre-tax adjusted income from operations for Evernorth Health Services over the short term.
Key Factors Affecting Segment Performance
The key factors that impact the segment's revenues and income from operations are claims utilization, claims composition and contract affordability services. Specialty and Care Services revenues are also impacted by customer and client growth. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements included in our 2024 Form 10-K for additional information on revenue and cost recognition policies for this segment.
Key factors that impact both Pharmacy Benefit Services and Specialty and Care Services:
•Pharmacy claim volume (also referred to as "utilization") relates to processing prescription claims filled by retail pharmacies in our network and dispensing prescription claims from our home delivery and specialty pharmacies, along with other claims. Pharmacy claim volume is impacted by new clients or organic customer growth through the expansion of existing clients or through the loss of customers and business.
•The composition of claims generally considers the types of drugs, including the mix of claims among branded and higher priced specialty drugs compared to generic or biosimilar alternatives. We manage pharmaceutical manufacturer increases in prices through programs designed to reduce drug spend, providing positive impacts on our clients, our customers and us. Changes to claims mix, including types of drugs, distribution methods, pharmaceutical manufacturer prices, and alternative uses of drugs within our formularies continue to be a significant driver of our revenues and income from operations in the current environment.
•Our client contract pricing is impacted by our ongoing ability to negotiate favorable contracts for pharmacy network, pharmaceutical and wholesaler purchasing, and manufacturer rebates (also referred to as "affordability improvements" or "affordability services"). Through these affordability improvements, we seek to improve the effectiveness of our combined and standalone solutions for our clients by continuously innovating, improving affordability and implementing drug purchasing contract initiatives. Our continued affordability improvements further reduce drug costs for our customers and clients, and we share in the value delivered, which generally results in a favorable impact on our income from operations.
Key factors that impact Specialty and Care Services:
•Customer and client growth, both organic and new business, and key relationships in our Specialty and Care Services business generally results in increased revenues and income from operations. This includes client movement in our specialty pharmacy, specialty distribution services, virtual care, physical primary care, benefits management and behavioral health services as we expand our businesses and build upon our cross-enterprise leverage.
Results of Operations
| Financial Summary | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted revenues (1) | $ | 60,391 | $ | 52,637 | 15 | % | $ | 171,897 | $ | 148,411 | 16 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-tax adjusted income from operations (1) | $ | 1,903 | $ | 1,876 | 1 | % | $ | 5,033 | $ | 4,855 | 4 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-tax margin (1)(2) | 3.2 | % | 3.6 | % | (40) | bps | 2.9 | % | 3.3 | % | (40) | bps | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SG&A expense ratio (3) | 1.7 | % | 1.7 | % | — | bps | 1.8 | % | 1.9 | % | (10) | bps | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)See Note 17 to the Consolidated Financial Statements for reconciliation of adjusted revenues and pre-tax adjusted income from operations to Total revenues and Income before income taxes, respectively.
(2)Pre-tax margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues.
(3)SG&A expense ratio is calculated as segment selling, general and administrative expenses divided by adjusted revenues. See Note 17 to the Consolidated Financial Statements for further details.
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In this selected financial information, we present adjusted revenues and pre-tax income from operations by our two operating segments, Pharmacy Benefit Services and Specialty and Care Services.
| Selected Financial Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars and adjusted scripts in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total adjusted revenues | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pharmacy Benefit Services | $ | 34,091 | $ | 28,812 | 18 | % | $ | 95,787 | $ | 81,549 | 17 | % | |||||||||||||||||||||||||||||||||||||||||
| Specialty and Care Services | 26,300 | 23,825 | 10 | 76,110 | 66,862 | 14 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total adjusted revenues | $ | 60,391 | $ | 52,637 | 15 | % | $ | 171,897 | $ | 148,411 | 16 | % | |||||||||||||||||||||||||||||||||||||||||
| Pre-tax adjusted income from operations | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pharmacy Benefit Services | $ | 975 | $ | 1,038 | (6) | % | $ | 2,352 | $ | 2,379 | (1) | % | |||||||||||||||||||||||||||||||||||||||||
| Specialty and Care Services | 928 | 838 | 11 | 2,681 | 2,476 | 8 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total pre-tax adjusted income from operations | $ | 1,903 | $ | 1,876 | 1 | % | $ | 5,033 | $ | 4,855 | 4 | % | |||||||||||||||||||||||||||||||||||||||||
Pharmacy claim volume (1) | 558 | 531 | 5 | % | 1,645 | 1,577 | 4 | % | |||||||||||||||||||||||||||||||||||||||||||||
(1)Non-specialty network prescriptions filled through 90-day programs and home delivery prescriptions are counted as three claims. All other network and specialty prescriptions are counted as one claim.
Three and Nine Months Ended September 30, 2025 versus Three and Nine Months Ended September 30, 2024
Commentary in parentheses regarding percentage changes (or bps) represents the driver's impact on the overall category.
Adjusted revenues increased 15% and 16% for the three and nine months ended, respectively, primarily reflecting higher utilization of prescription drugs from customer growth in Pharmacy Benefit Services (+7% and +6%, respectively) and Specialty and Care Services (+5% and +6%, respectively) and an increase due to claims composition in Pharmacy Benefit Services (+3% and +4%, respectively).
Pre-tax adjusted income from operations increased 1% and 4% for the three and nine months ended, respectively, primarily reflecting specialty pharmacy growth in Specialty and Care Services (+6% and +6%, respectively), and contract affordability improvements and customer growth in Pharmacy Benefit Services (+2% for the nine months ended), partially offset by strategic investments and initiatives to support business growth in Pharmacy and Benefit Services (-4% and -2%, respectively) and Specialty and Care Services (-1% and -2%, respectively).
The SG&A expense ratio was flat for the three months ended and decreased 10 bps for the nine months ended, primarily reflecting higher adjusted revenues as discussed above, offset by strategic investments and initiatives to support business growth.
Cigna Healthcare Segment
Cigna Healthcare includes the U.S. Healthcare and International Health businesses, which provide comprehensive medical and coordinated solutions to clients and customers. As described in the introduction to Segment Reporting, performance of the Cigna Healthcare segment is measured using adjusted revenues and pre-tax adjusted income from operations.
On March 19, 2025, the Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies businesses within the U.S. Healthcare operating segment. See "Developments" for further discussion.
Key Factors Affecting Segment Performance
The key factors that impact the segment's revenues and income from operations include revenue growth, customer growth, medical cost trend, percentage of Medicare Advantage customers in plans eligible for quality bonus payments, the medical care ratio ("MCR") and the SG&A expense ratio. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements included in our 2024 Form 10-K for additional information on revenue and cost recognition policies for this segment.
•Revenue growth includes increases to premium rates in consideration of anticipated medical cost increases, customer growth driven by new clients and customers, and increased fee revenue from the expansion of products and services to existing clients and customers, including solutions provided by Evernorth Health Services.
•Higher medical costs (also referred to as higher medical cost trend) are impacted by utilization (the quantity of medical services consumed by our customers), unit costs (the cost per medical service) and mix of services.
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•Prior to the divestiture of our Medicare Advantage and related businesses to HCSC, the percentage of Medicare Advantage customers in bonus-eligible plans impacted the amount of quality bonus payments we receive.
•MCR represents medical costs as a percentage of premiums for our segment's insured businesses, and it is impacted by medical cost trend and premium rates. Affordability initiatives that serve to mitigate medical cost inflation also impact the MCR.
•The SG&A expense ratio represents the segment's selling, general and administrative expenses divided by adjusted revenues.
Results of Operations
| Financial Summary | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted revenues (1) | $ | 10,755 | $ | 13,163 | (18) | % | $ | 35,991 | $ | 39,583 | (9) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-tax adjusted income from operations (1) | $ | 1,038 | $ | 1,174 | (12) | % | $ | 3,419 | $ | 3,718 | (8) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-tax margin (1)(2) | 9.7 | % | 8.9 | % | 80 | bps | 9.5 | % | 9.4 | % | 10 | bps | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Medical care ratio | 84.8 | % | 82.8 | % | 200 | bps | 83.3 | % | 81.7 | % | 160 | bps | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SG&A expense ratio (3) | 19.9 | % | 20.0 | % | (10) | bps | 19.8 | % | 20.2 | % | (40) | bps | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)See Note 17 to the Consolidated Financial Statements for reconciliation of adjusted revenues and pre-tax adjusted income from operations to Total revenues and Income before income taxes, respectively.
(2)Pre-tax margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues.
(3)SG&A expense ratio is calculated as segment selling, general and administrative expenses divided by adjusted revenues. See Note 17 to the Consolidated Financial Statements for further details.
Three and Nine Months Ended September 30, 2025 versus Three and Nine Months Ended September 30, 2024
Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.
Adjusted revenues decreased 18%, or $2,408 million, and 9%, or $3,592 million, primarily due to the impact of the HCSC transaction (-$2,998 million and -$5,524 million, respectively), partially offset by higher premiums within employer insured (+$323 million and +$952 million, respectively) and stop loss (+$219 million and +$633 million, respectively), primarily reflecting premium rate increases.
Pre-tax adjusted income from operations decreased 12%, or $136 million, and 8%, or $299 million, primarily due to a higher MCR.
The medical care ratio increased 200 bps for the three months ended, primarily due to relatively equal contributions from our Individual and Family Plans business and higher expected stop loss medical costs. The medical care ratio increased 160 bps for the nine months ended, primarily due to higher expected stop loss medical costs.
The SG&A expense ratio decreased 10 bps and 40 bps, primarily due to revenue growth outpacing volume-related expenses within the ongoing businesses (-60 bps and -50 bps, respectively), partially offset by the impact of the HCSC transaction (+60 bps and +20 bps, respectively).
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Medical Customers
Medical customers include individuals who meet any of the following criteria: (i) are covered under a medical insurance policy, managed care arrangement or administrative services agreement issued by Cigna Healthcare; (ii) have access to the Cigna Healthcare provider network for covered services under their medical plan; or (iii) have medical claims that are administered by Cigna Healthcare.
| Cigna Healthcare Medical Customers | |||||||||||||||||||||||||||||||||||||||||||||||
| As of September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Healthcare | 2,562 | 3,833 | (33) | % | |||||||||||||||||||||||||||||||||||||||||||
International Health (1) | 1,268 | 1,209 | 5 | ||||||||||||||||||||||||||||||||||||||||||||
| Insured | 3,830 | 5,042 | (24) | % | |||||||||||||||||||||||||||||||||||||||||||
U.S. Healthcare | 13,790 | 13,573 | 2 | % | |||||||||||||||||||||||||||||||||||||||||||
International Health (1) | 439 | 433 | 1 | ||||||||||||||||||||||||||||||||||||||||||||
| Administrative services only | 14,229 | 14,006 | 2 | % | |||||||||||||||||||||||||||||||||||||||||||
| Total | 18,059 | 19,048 | (5) | % | |||||||||||||||||||||||||||||||||||||||||||
(1)International Health excludes medical customers served by less than 100%-owned subsidiaries, as well as certain customers served by our third-party administrator.
Total medical customers decreased 5%, primarily due to the HCSC transaction.
Unpaid Claims and Claim Expenses
| As of September 30, | As of December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unpaid claims and claim expenses | $ | 4,676 | $ | 5,018 | (7) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Our unpaid claims and claim expenses liability decreased 7%, driven by the HCSC transaction (-$983 million), partially offset by an increase in stop loss reserves (+$620 million), primarily due to seasonality.
Other Operations
Other Operations includes corporate-owned life insurance ("COLI"), the Company's run-off operations and other non-strategic businesses. As described in the introduction of Segment Reporting, performance of Other Operations is measured using adjusted revenues and pre-tax adjusted income from operations.
Results of Operations
| Financial Summary | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted revenues | $ | 162 | $ | 234 | (31) | % | $ | 521 | $ | 627 | (17) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-tax adjusted income (loss) from operations | $ | 36 | $ | (6) | N/M | % | $ | 61 | $ | (4) | N/M | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Pre-tax margin | 22.2 | % | (2.6) | % | 2,480 | bps | 11.7 | % | (0.6) | % | 1,230 | bps | ||||||||||||||||||||||||||||||||||||||||||||||||||
Three and Nine Months Ended September 30, 2025 versus Three and Nine Months Ended September 30, 2024
Adjusted revenues primarily reflects premiums and net investment income associated with COLI and our run-off operations, as well as revenues from other non-strategic businesses.
Pre-tax adjusted income (loss) from operations increased for both periods, primarily driven by the decision to discontinue certain small non-strategic businesses.
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Corporate
Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate financing less net investment income on investments not supporting segment and other operations), certain litigation matters, expense associated with our frozen pension plans, charitable contributions, operating severance, certain overhead and enterprise-wide project costs, and eliminations for products and services sold between segments.
| Financial Summary | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-tax adjusted loss from operations | $ | (399) | $ | (425) | (6) | % | $ | (1,192) | $ | (1,269) | (6) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Three and Nine Months Ended September 30, 2025 versus Three and Nine Months Ended September 30, 2024
Pre-tax adjusted loss from operations decreased for both periods, primarily due to lower interest expense.
INVESTMENT ASSETS
Information regarding our investment assets is included in Notes 11, 12 and 13 to the Consolidated Financial Statements.
Investment Outlook
Future realized and unrealized investment results will be driven largely by market conditions, and these future conditions are not reasonably predictable. We believe that the vast majority of our investments will continue to perform under their contractual terms. We manage the portfolio for long-term economics; therefore, we expect to hold a significant portion of these assets for the long term. Although future declines in investment fair values remain possible due to interest rate movements and credit deterioration due to both investment-specific uncertainties and global economic uncertainties as discussed below, we do not expect these losses to have a material unfavorable effect on our financial condition or liquidity. The below discussion addresses the strategies and risks associated with our various classes of investment assets. See Part I, Item 1A - "Risk Factors" in our 2024 Form 10-K for additional information regarding risks associated with our investment portfolio.
Debt Securities
The carrying value of our debt securities portfolio decreased from $9.4 billion as of December 31, 2024 to $8.4 billion as of September 30, 2025, primarily reflecting the HCSC transaction. See Note 5 to the Consolidated Financial Statements for further information. Our portfolio remains in a net unrealized depreciation position due to generally increasing interest rates over the past few years.
As of September 30, 2025, $7.3 billion, or 87%, of the debt securities in our investment portfolio were investment grade (Baa and above, or equivalent) and the remaining $1.1 billion were below investment grade. The majority of the bonds that are below investment grade were rated at the higher end of the non-investment-grade spectrum. These quality characteristics have not materially changed since the prior year and remain consistent with our investment strategy.
Investments in debt securities are diversified by issuer, geography and industry. On an aggregate basis, the debt securities portfolio continues to perform according to original expectations, which includes a long-term economic investment strategy. Primary risks facing many of the issuers in our portfolio include ongoing geopolitical events and economic conditions. To date, most issuers have been successful in managing these issues without a meaningful change in credit quality. We continue to monitor the economic environment and its effect on our portfolio; we also continue to consider the impact of various factors in determining the allowance for credit losses on debt securities, which is discussed in Note 11 to the Consolidated Financial Statements.
Commercial Mortgage Loans
As of September 30, 2025, our $1.3 billion commercial mortgage loan portfolio consisted of approximately 40 fixed-rate loans, diversified by property type, location and borrower. These loans are carried in our Consolidated Balance Sheets at their unpaid principal balance, net of an allowance for expected credit losses. As a result of increasing market interest rates since the majority of these loans were made, the carrying value exceeds the market value of these loans as of September 30, 2025. Given the quality and diversity of the underlying real estate, positive debt service coverage, and significant borrower cash invested in the property generally ranging between 30% and 40%, we remain confident that the vast majority of borrowers will continue to perform as expected under
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their contract terms. For further discussion of the results and changes in key credit quality indicators, see Note 11 to the Consolidated Financial Statements.
Office sector fundamentals are weak but have begun to stabilize for higher-quality assets. Lower-quality assets will likely continue to experience value erosion due to weak tenant demand and low investor interest. Additionally, the current macroeconomic headwinds are impacting capital markets and reducing investor appetite for capital-intensive assets (e.g., offices and regional shopping malls). Our commercial mortgage loan portfolio has no exposure to regional shopping malls and less than 25% exposure to office properties. Although future losses remain possible due to further credit deterioration, we do not expect these losses to have a material unfavorable effect on our results of operations, financial condition or liquidity.
Other Long-Term Investments
Other long-term investments of $4.9 billion as of September 30, 2025 included investments in securities limited partnerships and real estate limited partnerships, direct investments in real estate joint ventures, and other deposit activity that is required to support various insurance and health services businesses. These limited partnership entities typically invest in mezzanine debt or equity of privately held companies and equity real estate. Given our subordinate position in the capital structure of these underlying entities, we assume a higher level of risk for higher expected returns. To mitigate risk, these investments are diversified by industry sector or property type and geographic region. No single partnership investment exceeded 3% of our securities and real estate limited partnership portfolio.
We expect continued volatility in private equity and real estate fund performance going forward as fair market valuations are adjusted to reflect market and portfolio transactions. Less than 4% of our other long-term investments are exposed to real estate in the office sector.
Unconsolidated Subsidiary Investments Portfolio
We participate in an insurance joint venture in China with a 50% ownership interest. We account for this joint venture under the equity method of accounting. Our 50% share of the investment portfolio supporting the joint venture's liabilities was approximately $17.4 billion as of September 30, 2025. These investments were comprised of approximately 70% debt securities, including government and corporate debt diversified by issuer, industry and geography; 20% equities, including mutual funds, equity securities and private equity partnerships; and 10% long-term deposits and policy loans. We continuously review the joint venture's investment strategy and its execution. There were no investments with a material unrealized loss as of September 30, 2025. See Note 14 to the Consolidated Financial Statements in our 2024 Form 10-K for additional information regarding unconsolidated subsidiaries.
MARKET RISK
Financial Instruments
Our assets and liabilities include financial instruments subject to the risk of potential losses from adverse changes in market rates and prices. Our primary market risk exposure is interest rate risk. We encourage you to read this in conjunction with "Market Risk – Financial Instruments" included in the MD&A section in our 2024 Form 10-K.
As of September 30, 2025, there was no material change in our risk exposure as reported in our 2024 Form 10-K.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information responsive to this item is contained under the caption "Market Risk" in Item 2 above, Management's Discussion and Analysis of Financial Condition and Results of Operations, and is incorporated herein by reference.
Item 4. CONTROLS AND PROCEDURES
Based on an evaluation of the effectiveness of The Cigna Group's disclosure controls and procedures conducted under the supervision and with the participation of The Cigna Group's management (including The Cigna Group's Chief Executive Officer and Chief Financial Officer), The Cigna Group's Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, The Cigna Group's disclosure controls and procedures are effective to ensure that information required to be disclosed by The Cigna Group in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and is accumulated and communicated to The Cigna Group's management (including The Cigna Group's Chief Executive Officer and Chief Financial Officer) as appropriate to allow timely decisions regarding required disclosure.
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Change in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, The Cigna Group's internal control over financial reporting.
Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The information contained under "Legal and Regulatory Matters" in Note 16 to the Consolidated Financial Statements is incorporated herein by reference.
Item 1A. RISK FACTORS
For information regarding factors that could affect the Company's results of operations, financial condition and liquidity, see the risk factors discussed in Part I, Item 1A - "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
The following table provides information about The Cigna Group share repurchase activity for the quarter ended September 30, 2025:
| Period | Total # of shares purchased (1) | Average price paid per share (1) (3) | Total # of shares purchased as part of publicly announced program (2) | Approximate dollar value of shares that may yet be purchased as part of publicly announced program (3) (in millions) | ||||||||||||||||||||||
| July 1 - 31, 2025 | 1,109 | $ | 304.07 | — | $ | 7,732 | ||||||||||||||||||||
| August 1 - 31, 2025 | 2,402 | $ | 299.23 | — | $ | 7,732 | ||||||||||||||||||||
| September 1 - 30, 2025 | 2,989 | $ | 290.74 | — | $ | 7,732 | ||||||||||||||||||||
| Total | 6,500 | $ | 296.15 | — | N/A | |||||||||||||||||||||
(1)Includes shares tendered by employees under the Company's equity compensation plans as follows: 1) payment of taxes on vesting of restricted stock (grants and units) and strategic performance shares and 2) payment of the exercise price and taxes for certain stock options exercised. Employees tendered 1,109 shares in July, 2,402 shares in August and 2,989 shares in September 2025.
(2)Additionally, the Company maintains a share repurchase program authorized by the Board. Under this program, the Company may repurchase shares from time to time, depending on market conditions and alternate uses of capital. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital. The share repurchase program may be effected through Rule 10b5-1 plans, open market purchases, each in compliance with Rule 10b-18 under the Exchange Act, or privately negotiated transactions. The program may be suspended or discontinued at any time and does not have an expiration date.
(3)The average price paid per share and approximate dollar value of shares exclude the impact of excise tax.
Item 5. OTHER INFORMATION
Rule 10b5-1 Plan Elections
During the three months ended September 30, 2025, no director or officer of the Company adopted terminated
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Item 6. EXHIBITS
INDEX TO EXHIBITS
| Number | Description | Method of Filing | |||||||||
| 3.1 | Filed by the registrant as Exhibit 3.1 to the Quarterly Report on Form 10-Q for the period ended June 30, 2023 and incorporated herein by reference. | ||||||||||
| 3.2 | Filed by the registrant as Exhibit 3.3 to the Current Report on Form 8-K on February 13, 2023 and incorporated herein by reference. | ||||||||||
| 4.1 | Filed by the registrant as Exhibit 4.1 to the Current Report on Form 8-K on September 4, 2025 and incorporated herein by reference. | ||||||||||
| 31.1 | Filed herewith. | ||||||||||
| 31.2 | Filed herewith. | ||||||||||
| 32.1 | Furnished herewith. | ||||||||||
| 32.2 | Furnished herewith. | ||||||||||
| 101 | The following materials from The Cigna Group's Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Total Equity; (v) the Consolidated Statements of Cash Flows; and (vi) the Notes to the Consolidated Financial Statements | Filed herewith. | |||||||||
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | Filed herewith. | |||||||||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: October 30, 2025
| THE CIGNA GROUP | ||||||||
| /s/ Ann M. Dennison | ||||||||
| Ann M. Dennison | ||||||||
| Executive Vice President and Chief Financial Officer | ||||||||
| (Principal Financial Officer and Authorized Signatory) | ||||||||
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Exhibit 31.1
CERTIFICATION
I, DAVID M. CORDANI, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of The Cigna Group;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 30, 2025 | /s/ David M. Cordani | ||||
| Chairman and Chief Executive Officer of The Cigna Group | |||||
Exhibit 31.2
CERTIFICATION
I, ANN M. DENNISON, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of The Cigna Group;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 30, 2025 | /s/ Ann M. Dennison | ||||
| Executive Vice President and Chief Financial Officer | |||||
Exhibit 32.1
Certification of Chief Executive Officer of
The Cigna Group pursuant to 18 U.S.C. Section 1350
I certify that, to the best of my knowledge and belief, the Quarterly Report on Form 10-Q of The Cigna Group for the fiscal period ending September 30, 2025 (the “Report”):
(1)complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of The Cigna Group.
| /s/ David M. Cordani | ||
| David M. Cordani | ||
| Chairman and Chief Executive Officer of The Cigna Group | ||
October 30, 2025 | ||
Exhibit 32.2
Certification of Chief Financial Officer of
The Cigna Group pursuant to 18 U.S.C. Section 1350
I certify that, to the best of my knowledge and belief, the Quarterly Report on Form 10-Q of The Cigna Group for the fiscal period ending September 30, 2025 (the “Report”):
(1)complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of The Cigna Group.
| /s/ Ann M. Dennison | ||
| Ann M. Dennison | ||
| Executive Vice President and Chief Financial Officer | ||
October 30, 2025 | ||