UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2019~~

2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

~~for~~

For the transition period from _____ to

_____

Commission ~~file number 1-08323~~

File Number 001-38769

The Cigna ~~Corporation~~

Group

(Exact name of registrant as specified in its charter)


Delaware		82-4991898
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
~~900 Cottage Grove Road Bloomfield, Connecticut~~	~~06002~~
~~(Address of principal executive offices)~~	~~(Zip Code)~~
~~(860) 226-6000~~
~~Registrant’s telephone number, including area code~~
~~(860) 226-6741 or (215) 761-5511~~
~~Registrant’s facsimile number, including area code~~
~~Not Applicable~~
~~(Former name, former address and former fiscal year, if changed since last report)~~

~~Indicate by check mark~~				~~YES~~	NO
·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.				þ	o
·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).				þ	o
·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.
~~Large accelerated filer~~ þ	~~Accelerated filer~~o	~~Non-accelerated filer~~o	~~Smaller Reporting Company~~o	~~Emerging growth company~~o
·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.o
·~~whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).~~				o	þ

900 Cottage Grove Road

Bloomfield,Connecticut06002

(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

Common Stock, Par Value $0.01

New York Stock Exchange, Inc.

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.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of April ~~15, 2019, 379,457,650~~30, 2024, 284,074,001 shares of the ~~issuer’s~~issuer's common stock were outstanding.

~~Table of Contents~~

~~Cigna Corporation~~

THE CIGNA GROUP

TABLE OF CONTENTS

As used herein, ~~“Cigna” or~~ the ~~“Company”~~term "Company" refers to one or more of The Cigna ~~Corporation~~Group and its consolidated subsidiaries.

~~Table of Contents~~

~~Part I.~~ ~~FINANCIAL INFORMATION~~

Part I. FINANCIAL INFORMATION

Item 1.FINANCIAL STATEMENTS

~~Cigna Corporation~~

~~Consolidated Statements of Income~~

Unaudited

Three Months Ended

March 31,

(In millions, except per share amounts)

2019

2018

Revenues

Pharmacy revenues

$
25,179

$
717

Premiums

9,971

8,999

Fees and other revenues

2,450

1,368

Net investment income

346

329

TOTAL REVENUES

37,946

11,413

Benefits and expenses

Pharmacy and other service costs

24,050

561

Medical costs and other benefit expenses

7,620

6,772

Selling, general and administrative expenses

3,303

2,745

Amortization of acquired intangible assets

743

27

TOTAL BENEFITS AND EXPENSES

35,716

10,105

Income from operations

2,230

1,308

Interest expense and other

(452)

(57)

Net realized investment gains (losses)

10

(33)

Income before income taxes

1,788

1,218

TOTAL INCOME TAXES

416

301

Net income

1,372

917

Less: net income attributable to noncontrolling interests

4

2

SHAREHOLDERS’ NET INCOME

$
1,368

$
915

Shareholders’ net income per share

Basic

$
3.61

$
3.78

Diluted

$
3.56

$
3.72

The Cigna Group
Consolidated Statements of Income
Unaudited
Three Months Ended March 31,
(In millions, except per share amounts) 2024 2023
Revenues
Pharmacy revenues $ 42,036 $ 32,144
Premiums 11,603 11,025
Fees and other revenues 3,326 3,071
Net investment income 290 277
TOTAL REVENUES 57,255 46,517
Benefits and expenses
Pharmacy and other service costs 41,431 31,459
Medical costs and other benefit expenses 9,440 9,046
Selling, general and administrative expenses 3,705 3,538
Amortization of acquired intangible assets 423 459
TOTAL BENEFITS AND EXPENSES 54,999 44,502
Income from operations 2,256 2,015
Interest expense and other (322) (358)
Loss on sale of businesses (19) —
Net realized investment losses (1,836) (56)
Income before income taxes 79 1,601
TOTAL INCOME TAXES 291 295
Net (loss) income (212) 1,306
Less: Net income attributable to noncontrolling interests 65 39
SHAREHOLDERS' NET (LOSS) INCOME $ (277) $ 1,267
Shareholders' net (loss) income per share
Basic $ (0.97) $ 4.28
Diluted $ (0.97) $ 4.24

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

~~Table of Contents~~

~~Cigna Corporation~~

~~Consolidated Statements of Comprehensive Income~~

Unaudited

Three Months Ended

March 31,

(In millions)

2019

2018

Shareholders’ net income

$
1,368

$
915

Shareholders’ other comprehensive income, net of tax

Net unrealized appreciation (depreciation), securities and derivatives

442

(284)

Net translation of foreign currencies

(24)

45

Postretirement benefits liability adjustment

11

13

Shareholders’ other comprehensive income (loss), net of tax

429

(226)

Shareholders’ comprehensive income

1,797

689

Comprehensive income (loss) attributable to noncontrolling interests

Net income attributable to redeemable noncontrolling interests

3

2

Net income attributable to other noncontrolling interests

1

-

Other comprehensive (loss) attributable to redeemable noncontrolling interests

(2)

(2)

Total comprehensive income attributable to noncontrolling interests

2

-

TOTAL COMPREHENSIVE INCOME

$
1,799

$
689

The Cigna Group
Consolidated Statements of Comprehensive Income
Unaudited
Three Months Ended March 31,
(In millions) 2024 2023
Net (loss) income $ (212) $ 1,306
Other comprehensive income (loss), net of tax
Net unrealized appreciation on securities and derivatives 121 194
Net long-duration insurance and contractholder liabilities measurement adjustments (560) (331)
Net translation (losses) gains on foreign currencies (26) 16
Postretirement benefits liability adjustment 5 10
Other comprehensive loss, net of tax (460) (111)
Total comprehensive (loss) income (672) 1,195
Comprehensive income (loss) attributable to noncontrolling interests
Net income attributable to redeemable noncontrolling interests — 34
Net income attributable to other noncontrolling interests 65 5
Total comprehensive income attributable to noncontrolling interests 65 39
SHAREHOLDERS' COMPREHENSIVE (LOSS) INCOME $ (737) $ 1,156

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

~~Cigna Corporation~~

~~Consolidated Balance Sheets~~

Unaudited

As of

As of

March 31,

December 31,

(In millions, except per share amounts)

2019

2018

Assets

Cash and cash equivalents

$
4,976

$
3,855

Investments

1,662

2,045

Accounts receivable, net

10,941

10,473

Inventories

2,382

2,821

Other current assets

1,175

1,236

Total current assets

21,136

20,430

Long-term investments

27,257

26,929

Reinsurance recoverables

5,385

5,507

Deferred policy acquisition costs

2,817

2,821

Property and equipment

4,523

4,562

Goodwill

44,537

44,505

Other intangible assets

38,338

39,003

Other assets

2,276

1,630

Separate account assets

8,079

7,839

TOTAL ASSETS

$
154,348

$
153,226

Liabilities

Current insurance and contractholder liabilities

$
7,060

$
6,801

Pharmacy and service costs payable

11,145

10,702

Accounts payable

4,488

4,366

Accrued expenses and other liabilities

7,361

7,071

Short-term debt

2,915

2,955

Total current liabilities

32,969

31,895

Non-current insurance and contractholder liabilities

20,043

19,974

Deferred tax liabilities, net

9,403

9,453

Other non-current liabilities

3,832

3,470

Long-term debt

37,571

39,523

Separate account liabilities

8,079

7,839

TOTAL LIABILITIES

111,897

112,154

Contingencies — Note 16

Redeemable noncontrolling interests

38

37

Shareholders’ equity

Common stock (1)

4

4

Additional paid-in capital

27,855

27,751

Accumulated other comprehensive loss

(1,282)

(1,711)

Retained earnings

16,426

15,088

Less: treasury stock, at cost

(595)

(104)

TOTAL SHAREHOLDERS’ EQUITY

42,408

41,028

Other noncontrolling interests

5

7

Total equity

42,413

41,035

Total liabilities and equity

$
154,348

$
153,226

SHAREHOLDERS’ EQUITY PER SHARE

$
111.52

$
107.71

The Cigna Group
Consolidated Balance Sheets
Unaudited
As of
March 31, As of
December 31,
(In millions) 2024 2023
Assets
Cash and cash equivalents $ 8,439 $ 7,822
Investments 1,108 925
Accounts receivable, net 20,563 17,722
Inventories 4,630 5,645
Other current assets 2,263 2,169
Assets of businesses held for sale 6,354 3,068
Total current assets 43,357 37,351
Long-term investments 16,025 17,985
Reinsurance recoverables 4,672 4,835
Property and equipment 3,607 3,695
Goodwill 44,258 44,259
Other intangible assets 30,491 30,863
Other assets 3,293 3,421
Separate account assets 7,416 7,430
Assets of businesses held for sale, non-current — 2,922
TOTAL ASSETS $ 153,119 $ 152,761
Liabilities
Current insurance and contractholder liabilities $ 5,788 $ 5,514
Pharmacy and other service costs payable 24,284 19,815
Accounts payable 8,118 8,553
Accrued expenses and other liabilities 8,857 9,955
Short-term debt 1,715 2,775
Liabilities of businesses held for sale 3,215 2,104
Total current liabilities 51,977 48,716
Non-current insurance and contractholder liabilities 10,641 10,904
Deferred tax liabilities, net 7,029 7,173
Other non-current liabilities 3,653 3,441
Long-term debt 31,053 28,155
Separate account liabilities 7,416 7,430
Liabilities of businesses held for sale, non-current — 591
TOTAL LIABILITIES 111,769 106,410
Contingencies — Note 16
Redeemable noncontrolling interests — 107
Shareholders' equity
Common stock (1)
4 4
Additional paid-in capital 30,292 30,669
Accumulated other comprehensive loss (2,324) (1,864)
Retained earnings 40,978 41,652
Less: Treasury stock, at cost (27,769) (24,238)
TOTAL SHAREHOLDERS' EQUITY 41,181 46,223
Other noncontrolling interests 169 21
Total equity 41,350 46,244
Total liabilities and equity $ 153,119 $ 152,761

(1)Par value per share, $0.01; shares issued, ~~384~~402 million as of March 31, ~~2019~~2024 and ~~381~~400 million as of December 31, ~~2018;~~2023; authorized ~~shares;~~shares, 600 million.

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

~~Cigna Corporation~~

~~Consolidated Statements of Changes in Total Equity~~

Unaudited
Three Months Ended March 31, 2019
(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
Non-
controlling
Interests

Balance at December 31, 2018

$
4

$
27,751

$
(1,711)

$
15,088

$
(104)

$
41,028

$
7

$
41,035

$
37

Cumulative effect of adopting new lease accounting guidance (ASU 2016-02) (1)

(15)

(15)

(15)

Effect of issuing stock for employee benefit plans

104

(29)

75

75

Other comprehensive income (loss)

429

429

429

(2)

Net income

1,368

1,368

1

1,369

3

Common dividends declared (per share: $0.04)

(15)

(15)

(15)

Repurchase of common stock

(462)

(462)

(462)

Other transactions impacting noncontrolling interests

-

(3)

(3)

-

Balance at March 31, 2019

$
4

$
27,855

$
(1,282)

$
16,426

$
(595)

$
42,408

$
5

$
42,413

$
38

Three Months Ended March 31, 2018
(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
Non-
controlling
Interests

Balance at December 31, 2017

$
74

$
2,940

$
(1,082)

$
15,800

$
(4,021)

$
13,711

$
-

$
13,711

$
49

Cumulative effect of accounting for financial instruments and hedging

(10)

68

58

58

Reclassification adjustment related to U.S. tax reform legislation

(229)

229

-

-

Effect of issuing stock for employee benefit plans

23

(69)

68

22

22

Other comprehensive (loss)

(226)

(226)

(226)

(2)

Net income

915

915

915

2

Common dividends declared (per share: $0.04)

(10)

(10)

(10)

Repurchase of common stock

(275)

(275)

(275)

Other transactions impacting noncontrolling interests

-

-

Balance at March 31, 2018

$
74

$
2,963

$
(1,547)

$
16,933

$
(4,228)

$
14,195

$
-

$
14,195

$
49

~~(1) See Note 2 for further information about the Company’s adoption of new leasing guidance (ASU 2016-02).~~

The Cigna Group
Consolidated Statements of Changes in Total Equity
Unaudited
Three Months Ended March 31, 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 $ 4 $ 30,669 $ (1,864) $ 41,652 $ (24,238) $ 46,223 $ 21 $ 46,244 $ 107
Effects of issuing stock for employee benefits plans 263 (114) 149 149
Other comprehensive loss (460) (460) (460) —
Net (loss) income (277) (277) 65 (212) —
Common dividends declared (per share: $1.40) (397) (397) (397)
Repurchase of common stock (640) (3,417) (4,057) (4,057)
Other transactions impacting noncontrolling interests — — 83 83 (107)
Balance at March 31, 2024 $ 4 $ 30,292 $ (2,324) $ 40,978 $ (27,769) $ 41,181 $ 169 $ 41,350 $ —
Three Months Ended March 31, 2023
(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, 2022 $ 4 $ 30,233 $ (1,658) $ 37,940 $ (21,844) $ 44,675 $ 13 $ 44,688 $ 66
Effect of issuing stock for employee benefit plans 99 (104) (5) (5)
Other comprehensive loss (111) (111) (111) —
Net income 1,267 1,267 5 1,272 34
Common dividends declared (per share: $1.23) (366) (366) (366)
Repurchase of common stock — (958) (958) (958)
Other transactions impacting noncontrolling interests — — (2) (2) (22)
Balance at March 31, 2023 $ 4 $ 30,332 $ (1,769) $ 38,841 $ (22,906) $ 44,502 $ 16 $ 44,518 $ 78

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

The Cigna ~~Corporation~~

Group

Consolidated Statements of Cash Flows

Unaudited

Three Months Ended March 31,

(In millions)

2019

2018

Cash Flows from Operating Activities

Net income

$
1,372

$
917

Adjustments to reconcile net income to net cash provided by operating activities:

       Depreciation and amortization

897

140

       Realized investment (gains) losses, net

(10)

33

       Deferred income tax (benefit) expense

(162)

9

     Net changes in assets and liabilities, net of non-operating effects:

       Accounts receivable

(396)

(53)

       Inventories

440

94

       Deferred policy acquisition costs

(51)

(76)

       Reinsurance recoverable and other assets

124

51

       Insurance liabilities

360

849

       Pharmacy and service costs payable

444

(124)

       Accounts payable and accrued expenses and other liabilities

91

193

       Other, net

83

(8)

NET CASH PROVIDED BY OPERATING ACTIVITIES

3,192

2,025

Cash Flows from Investing Activities

Proceeds from investments sold:

       Debt and equity securities

1,471

499

Investment maturities and repayments:

       Debt and equity securities

319

297

       Commercial mortgage loans

89

28

Other sales, maturities and repayments (primarily short-term and other long-term investments)

367

112

Investments purchased or originated:

       Debt and equity securities

(1,088)

(2,259)

       Commercial mortgage loans

(95)

(68)

       Other (primarily short-term and other long-term investments)

(388)

(206)

Property and equipment purchases, net

(194)

(103)

Acquisitions, net of cash acquired

(6)

-

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

475

(1,700)

Cash Flows from Financing Activities

Deposits and interest credited to contractholder deposit funds

247

292

Withdrawals and benefit payments from contractholder deposit funds

(251)

(306)

Net change in short-term debt

(1,048)

(3)

Repayment of long-term debt

(1,000)

(131)

Repurchase of common stock

(462)

(310)

Issuance of common stock

53

20

Other, net

(73)

(92)

NET CASH (USED IN) FINANCING ACTIVITIES

(2,534)

(530)

Effect of foreign currency rate changes on cash and cash equivalents

(12)

4

Net increase (decrease) in cash and cash equivalents

1,121

(201)

Cash and cash equivalents, January 1,

3,855

2,972

Cash and cash equivalents, March 31,

$
4,976

$
2,771

Supplemental Disclosure of Cash Information:

     Income taxes paid, net of refunds

$
29

$
31

     Interest paid

$
377

$
46

Unaudited
Three Months Ended March 31,
(In millions) 2024 2023
Cash Flows from Operating Activities
Net (loss) income $ (212) $ 1,306
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 741 749
Realized investment losses, net 1,836 56
Deferred income tax benefit (102) (108)
Loss on sale of businesses 19 —
Net changes in assets and liabilities, net of non-operating effects:
Accounts receivable, net (2,687) (479)
Inventories 1,015 566
Reinsurance recoverable and Other assets 68 72
Insurance liabilities 532 1,533
Pharmacy and other service costs payable 4,637 539
Accounts payable and Accrued expenses and other liabilities (1,068) 690
Other, net 61 104
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,840 5,028
Cash Flows from Investing Activities
Proceeds from investments sold:
Debt securities and equity securities 268 196
Investment maturities and repayments:
Debt securities and equity securities 179 257
Commercial mortgage loans 4 4
Other sales, maturities and repayments (primarily short-term and other long-term investments) 272 160
Investments purchased or originated:
Debt securities and equity securities (180) (2,794)
Commercial mortgage loans (32) —
Other (primarily short-term and other long-term investments) (594) (377)
Property and equipment purchases, net (300) (408)
Divestitures, net of cash sold — 22
Other, net (112) (43)
NET CASH USED IN INVESTING ACTIVITIES (495) (2,983)
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds 43 45
Withdrawals and benefit payments from contractholder deposit funds (65) (48)
Net change in short-term debt (364) (9)
Repayment of long-term debt (2,210) (80)
Net proceeds on issuance of long-term debt 4,462 1,491
Repurchase of common stock (4,022) (962)
Issuance of common stock 181 30
Common stock dividend paid (401) (368)
Other, net (153) (136)
NET CASH USED IN FINANCING ACTIVITIES (2,529) (37)
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash (9) 5
Net increase in cash, cash equivalents and restricted cash 1,807 2,013
Cash, cash equivalents and restricted cash January 1, 8,337 5,976
Cash, cash equivalents and restricted cash, March 31, (1)
10,144 7,989
Cash and cash equivalents reclassified to assets of businesses held for sale (1,660) —
Cash, cash equivalents and restricted cash March 31, per Consolidated Balance Sheets (1)
$ 8,484 $ 7,989
Supplemental Disclosure of Cash Information:
Income taxes paid, net of refunds $ 110 $ 77
Interest paid $ 336 $ 322

(1)Restricted cash and cash equivalents were reported in other long-term investments.

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these ~~statements.~~

statements.

THE CIGNA ~~CORPORATION~~

GROUP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

TABLE OF CONTENTS

Note
Number
Footnote
Page

BUSINESS AND CAPITAL STRUCTURE

1
Description of Business
7
2
Summary of Significant Accounting Policies
8
3
Accounts Receivable, Net
9
4
Mergers and Acquisitions
9
5
Earnings Per Share
10
6
Debt
11
INSURANCE INFORMATION

7
Insurance and Contractholder Liabilities
12
8
Reinsurance
15
INVESTMENTS

9
Investments
17
10
Fair Value Measurements
21
11
Variable Interest Entities
27
12
Accumulated Other Comprehensive Income (Loss)
28
WORKFORCE MANAGEMENT AND COMPENSATION

13
Pension and Other Postretirement Benefit Plans
28
PROPERTY, LEASES AND OTHER ASSET BALANCES

14
Leases
29
COMPLIANCE, REGULATION AND CONTINGENCIES

15
Income Taxes
31
16
Contingencies and Other Matters
31
17
Condensed Consolidating Financial Information
34
RESULTS DETAILS

18
Segment Information
41

Note Number Footnote Page
BUSINESS AND CAPITAL STRUCTURE
1
Description of Business
9
2
Summary of Significant Accounting Policies
9
3
Accounts Receivable, Net
10
4
Supplier Finance Program
10
5
Assets and Liabilities of Businesses Held for Sale
11
6
Earnings Per Share
11
7
Debt
12
8
Common and Preferred Stock
14
INSURANCE INFORMATION
9
Insurance and Contractholder Liabilities
15
10
Reinsurance
19
INVESTMENTS
11
Investments
20
12
Fair Value Measurements
23
13
Variable Interest Entities
27
14
Accumulated Other Comprehensive Income (Loss)
27
COMPLIANCE, REGULATION AND CONTINGENCIES
15
Income Taxes
28
16
Contingencies and Other Matters
29
RESULTS DETAILS
17
Segment Information
30

Note 1 — – Description of Business

The Cigna ~~Corporation,~~Group, together with its subsidiaries (either individually or collectively referred to as ~~“Cigna,”~~ the ~~“Company,” “we,” “our”~~"Company," "we," "us" or ~~“us”~~"our"), is a global health ~~service organization dedicated~~company committed to creating a better future built on the vitality of 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 ~~helping~~ those we ~~serve improve their health, well-being and peace of mind.~~ serve.

Our ~~evolved strategy in support of our mission is~~ ~~Go Deeper, Go Local, Go Beyond~~ ~~using~~subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental ~~disability, life and accident insurance~~ and related products and ~~services offered by our subsidiaries.~~

services. The majority of these products and services are offered through employers and other groups such as governmental and non-governmental organizations, unions and associations. Cigna Healthcare also offers ~~commercial~~ health and dental insurance and Medicare ~~and Medicaid~~ products ~~and health, life and accident insurance coverages~~ to individuals in the United States and selected international markets. In addition to these ~~ongoing~~ operations, The Cigna Group also has certain run-off operations.

~~As described more fully in Note 4, on December 20, 2018, Cigna completed the acquisition~~

A full description of ~~Express Scripts Holding Company (“Express Scripts”).~~ ~~As a result,~~ our segments ~~have changed as described below, effective in~~follows:

The Evernorth Health Services reportable segment now presents the ~~fourth quarter of 2018. Prior year financial data presented in this Form 10-Q has been restated to reflect this new segment presentation.~~

~~Health~~Pharmacy Benefit Services ~~includes pharmacy benefits management, pharmacy home delivery~~ and ~~certain medical management services. This segment includes Express Scripts’ business from~~ the ~~date of acquisition~~Specialty and Care Services operating segments, which partner with ~~the exception of Express Scripts’ Medicare Part D business that is reported in the Government operating segment.~~

~~Integrated Medical~~ ~~offers a variety of medical solutions to~~health plans, employers, ~~and individuals.~~

·	~~The~~ *~~Commercial~~* operating segment serves employers (also referred to as “clients”) and their employees (also referred to as “customers”) and other groups. This segment provides deeply integrated medical and specialty offerings including medical, pharmacy, dental, behavioral health and vision, health advocacy programs and other products and services to insured and self-insured clients.

·	~~The~~ *~~Government~~* operating segment offers Medicare Advantage, Medicare Supplement, and Medicare Part D plans to Medicare-eligible beneficiaries as well as Medicaid plans. This operating segment also offers health insurance coverage to individual customers both on and off public exchanges. This segment includes the acquired Express Scripts’ Medicare Part D business.

~~International Markets~~ ~~includes supplemental health, life and accident insurance products~~governmental organizations and health care ~~coverage~~providers to solve challenges in the areas of pharmacy benefits, home delivery pharmacy, specialty pharmacy, specialty distribution, and care delivery and management solutions.

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 Delivery and Management Solutions. The Company's reporting units remain aligned with its operating segments and goodwill was allocated on a relative fair value basis.

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 specialty benefits and solutions for insured and self-insured clients, Medicare Advantage, Medicare Supplement and Medicare Stand-Alone Prescription Drug Plans for seniors and individual health insurance plans. International Health provides health care solutions in our international markets, as well as health care benefits tofor globally mobile individuals and employees of multinational organizations.

~~The~~

In January 2024, the Company entered into a definitive agreement to sell the Medicare Advantage, Medicare 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") for approximately $3.3 billion cash, subject to applicable regulatory approvals and other customary closing conditions (the "HCSC transaction"). See Note 5 to the Consolidated Financial Statements for further information.

Other Operations comprises the remainder of our business operations, ~~are reported~~which includes our continuing business (corporate-owned life insurance ("COLI")) and our run-off and other non-strategic businesses. Our run-off businesses include (i) variable annuity reinsurance business that was effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska ("Berkshire") in ~~Group Disability~~2013, (ii) settlement annuity business, and ~~Other,~~ ~~consisting of the following:~~

·	*~~Group Disability and Life~~* ~~provides group long-term and short-term disability, group life, accident, voluntary and specialty insurance products and related services.~~

·	*~~Corporate-Owned Life Insurance (“COLI”)~~* ~~offers permanent insurance contracts sold to corporations to provide coverage on the lives of certain employees for the purpose of financing employer-paid future benefit obligations.~~

·	*~~Run-off businesses:~~*

	·	*~~Reinsurance:~~* predominantly comprised of guaranteed minimum death benefit (“GMDB”) and guaranteed minimum income benefit (“GMIB”) business effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire”) in 2013.

	·	*~~Settlement Annuity~~* ~~business in run-off.~~

	·	*~~Individual Life Insurance and Annuity and Retirement Benefits Businesses:~~* ~~deferred gains from the sales of these businesses.~~

	·	*~~Certain international run-off businesses~~*

(iii) individual life insurance and annuity and retirement benefits businesses which were sold through reinsurance agreements.

Corporatereflects 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, interest on uncertain tax positions,~~operations), certain litigation matters, expense associated with our frozen pension plans, charitable contributions, operating severance, certain overhead and enterprise-wide ~~projects~~project costs and ~~intersegment~~ eliminations for products and services sold between segments. ~~Prior to 2019, compensation cost for stock options was also included in Corporate. Beginning in the first quarter of 2019, this cost is recorded by the segments.~~

Note 2 — – Summary of Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements include the accounts of The Cigna ~~Corporation~~ 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”~~("GAAP"). The Company adopted Article 5 of Regulation S-X issued by the Securities and Exchange Commission (“SEC”) effective December 31, 2018 in conjunction with the acquisition of Express Scripts. As a result, the Company now presents current assets and liabilities on its balance sheet. The Company reclassified realized investment gains (losses) from revenue and now reports them below income from operations with interest expense in our Consolidated Statements of Income, in conformity with Article 5. Prior years’ information was reclassified to conform to this new presentation.

Amounts recorded in the Consolidated Financial Statements necessarily reflect ~~management’s~~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. The interim Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes included in the ~~2018~~2023 Annual Report on Form 10-K ~~(“2018~~("2023 Form ~~10-K”~~10-K"). The preparation of interim Consolidated Financial Statements necessarily relies heavily on estimates. This and ~~certain~~ 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 ~~2018~~Company's 2023 Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted or may impact our financial statements in the future. ~~The following information provides~~There are no updates on significant accounting pronouncements recently adopted or recently issued ~~accounting pronouncements~~and not yet adopted that have occurred since the Company filed its ~~2018~~2023 Form 10-K.

~~Recently Adopted Accounting Guidance~~

~~The Company adopted Accounting Standards Update (“ASU”) 2016-02,~~ ~~Leases¸~~ as of January 1, 2019 (the adoption date) on a modified retrospective basis for leases in effect as of and after the adoption date. This new guidance requires balance sheet recognition of assets and liabilities arising from leases, as well as additional disclosures regarding the amount, timing and uncertainty of cash flows from leases. The Company implemented a new lease system and corresponding internal controls to administer our leases and facilitate compliance with this new standard.

The Company elected the practical expedient package, allowing the Company to carry forward the assessment of 1) whether our contracts contain or are leases, 2) lease classification and 3) whether previously capitalized costs continue to qualify as initial direct costs. Upon adoption, the Company recognized new right-of-use assets and lease liabilities related to our operating leases, because finance (capital) leases were already reflected on the Company’s Consolidated Balance Sheets. The impact of adoption on the Company’s net assets and retained earnings was not material, nor was there a material impact on our Consolidated Statements of Income or Cash Flows. See Note 14 for additional disclosures about the Company’s leases.

~~Accounting Guidance Not Yet Adopted~~

~~Accounting Standard and~~
~~Effective Date~~

~~Requirements and Expected Effects of New Guidance Not Yet Adopted~~

~~Measurement of Credit Losses on Financial Instruments (ASU 2016-13)~~

~~Required as of January 1, 2020~~

~~Requires:~~

· A new approach using expected credit losses to estimate and recognize credit losses for certain financial instruments (such as mortgage loans, reinsurance recoverables and other receivables) when such instruments are first originated or acquired.

· ~~Changes in the criteria for impairment of available-for-sale debt securities~~

· ~~Adoption using a modified retrospective approach with a cumulative-effect adjustment recorded in retained earnings~~

~~Expected effects:~~

· ~~The Company is continuing to evaluate this new standard and its expected effects on our financial statements and disclosures. We will adopt the standard as of January 1, 2020.~~

· ~~An additional allowance for future expected credit losses for certain financial instruments will be required at adoption.~~

Note 3 — – Accounts Receivable, Net

The following amounts were included within Accounts receivable, net:


(In millions)	March 31, 2024		December 31, 2023
Noninsurance customer receivables	$	9,735	$	8,044
Pharmaceutical manufacturers receivables	9,512		8,169
Insurance customer receivables	2,045		2,359
Other receivables	230		272
Total	$	21,522	$	18,844
Accounts receivable, net classified as assets of businesses held for sale	(959)		(1,122)
Total	$	20,563	$	17,722

These accounts receivable are reported net of our allowances of $4.5 billion as of March 31, 2024 and $3.7 billion as of December 31, 2023. 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 ~~doubtful accounts, customer~~current expected credit ~~allowances~~losses and ~~contractual allowances that, in the aggregate, were $456~~other non-credit adjustments.

The Company's allowance for current expected credit losses was $91 million as of March 31, ~~2019~~2024 and ~~$217~~$90 million as of December 31, ~~2018:~~

(In millions)

March 31, 2019

December 31, 2018

Insurance customer receivables

$
2,261

$
1,888

Noninsurance customer receivables

4,635

4,988

Pharmaceutical manufacturers receivable(1)

3,682

3,321

Other receivables

363

276

Total accounts receivable, net

$
10,941

$
10,473

~~(1)~~ ~~Includes $624 million at March 31, 2019~~2023.

Accounts Receivable Factoring Facility

The Company maintains an uncommitted factoring facility (the "Facility") under which certain accounts receivable may be sold on a non-recourse basis to a financial institution. The Facility's total capacity is $1.0 billion and ~~$406 million at December 31, 2018~~began in July 2023 with an initial term of ~~receivables under noninsurance customer contracts.~~

two years, followed by automatic one year renewal terms unless terminated by either party. Further information regarding the accounting policy for the Facility can be found in Note 4 ~~— Mergers and Acquisitions~~

A. ~~Acquisition of Express Scripts~~

~~On December 20, 2018, Cigna acquired Express Scripts through a series of mergers (collectively,~~3 in the “Merger”). Cigna Holding Company (formerly named Cigna Corporation and referred to as “Old Cigna”) and Express Scripts each merged with and into a wholly-owned subsidiary of Cigna. As a result of these transactions, Cigna became the parent of the combined company. Our 2018Company's 2023 Form 10-K includes detailed disclosures of merger consideration, purchase price allocation and intangible assets identified in this transaction. The purchase price allocation was based on management’s preliminary estimates of their fair values and may change as additional information becomes available. 10-K.

For the three months ended March 31, ~~2019,~~2024, we sold $1.9 billion of accounts receivable under the Facility and factoring fees paid were not material. As of March 31, 2024, there were ~~no changes~~$93 million of sold accounts receivable that have not been collected from manufacturers and have been removed from the Company's Consolidated Balance Sheets. At December 31, 2023, all sold accounts receivable had been collected from manufacturers. As of March 31, 2024 and December 31, 2023, there were $722 million and $515 million, respectively, 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.

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. Further information regarding the Program's terms can be found in Note 4 in the Company's 2023 Form 10-K.

As of March 31, 2024 and December 31, 2023, $1.6 billion and $1.5 billion, respectively, of the Company's outstanding payment obligations were confirmed as valid within the Program by the financial institution and are reflected in Accounts payable in the Consolidated Balance Sheets. The amounts confirmed as valid for both periods are predominately associated with one supplier. As of March 31, 2024, we have been informed by the financial institution that $327 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 – Assets and Liabilities of Businesses Held for Sale

In January 2024, the Company entered into the HCSC transaction for a total purchase price ~~allocation.~~

B. of approximately $3.3 billion cash, subject to applicable regulatory approvals and other customary closing conditions. The transaction is expected to close in the first quarter of 2025.

The assets and liabilities of businesses held for sale were as follows:
(In millions) March 31, 2024 December 31, 2023
Cash and cash equivalents $ 1,660 $ 467
Investments 1,341 1,438
Accounts receivable, net 959 1,122
Other assets, including Goodwill (1)
2,394 2,963
Total assets of businesses held for sale 6,354 5,990
Insurance and contractholder liabilities 2,081 1,636
All other liabilities 1,134 1,059
Total liabilities of businesses held for sale $ 3,215 $ 2,695
(1) Includes Goodwill of $396 million as of March 31, 2024 and December 31, 2023.

Integration and Transaction-related Costs

~~The~~

In 2024, the Company incurred ~~integration and transaction~~ costs related to ~~Express Scripts,~~ the ~~terminated merger with Anthem, Inc. (“Anthem”~~HCSC transaction. In 2023, the Company incurred net costs mainly related to the sale of our international life, accident and supplemental benefits businesses ("Chubb transaction"). These costs consisted primarily of certain projects to separate or integrate the Company's systems, products and services, fees for legal, advisory and other ~~transactions of $136~~professional services and certain employment-related costs. These costs were $37 million pre-tax ($~~108~~29 million after-tax) for the three months ended March 31, ~~2019, compared with $60~~2024 and $1 million pre-tax ($501 million after-tax) for the three months ended March 31, ~~2018. These costs consisted~~

~~primarily of fees for legal, advisory and other professional services, certain employment-related costs and, in 2018, amortization of Bridge Facility fees.~~

2023.

Note 5 —6 – Earnings Per Share ~~(“EPS”)~~

Basic and diluted earnings per share were computed as follows:

Three Months Ended

March 31, 2019

March 31, 2018

(Shares in thousands, dollars in millions, except per
share amounts)

Basic

Effect of
Dilution

Diluted

Basic

Effect of
Dilution

Diluted

Shareholders’ net income

$
1,368

$
1,368

$
915

$
915

Shares:

Weighted average

379,387

379,387

242,179

242,179

Common stock equivalents

4,637

4,637

3,609

3,609

Total shares

379,387

4,637

384,024

242,179

3,609

245,788

EPS

$
3.61

$
(0.05)

$
3.56

$
3.78

$
(0.06)

$
3.72

~~The following~~


	Three Months Ended
	March 31, 2024						March 31, 2023


(Shares in thousands, dollars in millions, except per share amounts)	Basic		Effect of Dilution		Diluted		Basic		Effect of Dilution		Diluted
Shareholders' net (loss) income	$	(277)			$	(277)	$	1,267			$	1,267
Shares:
Weighted average	286,465				286,465		295,706				295,706
Common stock equivalents			—		—				3,293		3,293
Total shares	286,465		—		286,465		295,706		3,293		298,999
Earnings per share	$	(0.97)	$	—	$	(0.97)	$	4.28	$	(0.04)	$	4.24

Due to the Shareholders' net loss for the three months ended March 31, 2024, 8.2 million outstanding employee stock options, unvested restricted stock grants and units and strategic performance shares were ~~not included~~excluded in the computation of diluted earnings per share because their effect was anti-dilutive.

Three Months Ended
March 31,

(In millions)

2019

2018

Anti-dilutive options

2.8

0.9

For the three months ended March 31, 2023, 0.9 million outstanding employee stock options were excluded in the computation of diluted earnings per share because their effect was anti-dilutive.

The Company held approximately 117.8 million shares of common stock in treasury at March 31, 2024, 107.4 million shares as of December 31, 2023 and 102.7 million shares as of March 31, 2023.

The increase in Treasury stock as of March 31, 2024 and the reduction in weighted average shares outstanding for the three months ended March 31, 2024 was driven in part by 7.6 million shares of our common stock repurchased in February 2024 under the accelerated share repurchase agreements (the "ASR agreements"). Additionally, we expect final settlement of the ASR agreements to occur in the second quarter of 2024. See Note 6—8 for additional information.

Note 7 – Debt

The outstanding amounts of debt (net of issuance costs, discounts or premiums) and finance leases were as follows:

March 31,

December 31,

(In millions)

Issuer

2019

2018

Short-term debt

Current maturities: $1,000 million, 2.25% Senior Notes

Express Scripts

$
998

$
995

Current maturities: $337 million, 7.25% Senior Notes

ESI

340

343

Current maturities: $1,000 million, Floating Rate Notes due 2020

Cigna

998

-

Commercial paper

Old Cigna/Cigna

558

1,500

Other, including finance leases

Other

21

117

Total short-term debt

$
2,915

$
2,955

Long-term uncollateralized debt

Cigna debt (issued to finance acquisition)

$1,000 million, Floating Rate Notes due 2020

Cigna

$
-

$
997

$1,750 million, 3.2% Notes due 2020

Cigna

1,744

1,743

$1,000 million, Floating Rate Notes due 2021

Cigna

997

996

$1,250 million, 3.4% Notes due 2021

Cigna

1,246

1,245

$2,000 million, Floating Rate Term Loan due 2021

Cigna

1,998

2,997

$700 million, Floating Rate Notes due 2023

Cigna

697

697

$3,100 million, 3.75% Notes due 2023

Cigna

3,085

3,085

$2,200 million, 4.125% Notes due 2025

Cigna

2,187

2,187

$3,800 million, 4.375% Notes due 2028

Cigna

3,774

3,774

$2,200 million, 4.8% Notes due 2038

Cigna

2,178

2,178

$3,000 million, 4.9% Notes due 2048

Cigna

2,964

2,964

Express Scripts debt (assumed in acquisition)

$500 million, 4.125% Senior Notes due 2020

Medco

505

506

$500 million, 2.600% Senior Notes due 2020

Express Scripts

493

493

$400 million, Floating Rate Senior Notes due 2020

Express Scripts

400

399

$500 million, 3.300% Senior Notes due 2021

Express Scripts

499

499

$1,250 million, 4.750% Senior Notes due 2021

Express Scripts

1,282

1,285

$1,000 million, 3.900% Senior Notes due 2022

Express Scripts

998

998

$500 million, 3.050% Senior Notes due 2022

Express Scripts

482

481

$1,000 million, 3.000% Senior Notes due 2023

Express Scripts

961

959

$1,000 million, 3.500% Senior Notes due 2024

Express Scripts

968

966

$1,500 million, 4.500% Senior Notes due 2026

Express Scripts

1,507

1,508

$1,500 million, 3.400% Senior Notes due 2027

Express Scripts

1,390

1,386

$449 million, 6.125% Senior Notes due 2041

Express Scripts

493

493

$1,500 million, 4.800% Senior Notes due 2046

Express Scripts

1,465

1,465

Old Cigna debt (pre-acquisition)

$250 million, 4.375% Notes due 2020

Old Cigna

248

248

$300 million, 5.125% Notes due 2020

Old Cigna

298

298

$78 million, 6.37% Notes due 2021

CGC

78

78

$300 million, 4.5% Notes due 2021

Old Cigna

297

297

$750 million, 4% Notes due 2022

Old Cigna

746

746

$100 million, 7.65% Notes due 2023

Old Cigna

100

100

$17 million, 8.3% Notes due 2023

Old Cigna

17

17

$900 million, 3.25% Notes due 2025

Old Cigna

895

895

$600 million, 3.05% Notes due 2027

Old Cigna

595

595

$259 million, 7.875% Debentures due 2027

Old Cigna

259

259

$45 million, 8.3% Step Down Notes due 2033

Old Cigna

45

45

$191 million, 6.15% Notes due 2036

Old Cigna

190

190

$121 million, 5.875% Notes due 2041

Old Cigna

119

119

$317 million, 5.375% Notes due 2042

Old Cigna

315

315

$1,000 million, 3.875% Notes due 2047

Old Cigna

988

988

Other, including finance leases

Other

68

32

Total long-term debt

$
37,571

$
39,523

~~Notes issued to fund the Express Scripts acquisition.~~ ~~As presented~~


(In millions)	March 31, 2024		December 31, 2023
Short-term debt
Commercial paper	$	884	$	1,237





$500 million, 0.613% Notes due March 2024	—		500
$790 million, 3.500% Notes due June 2024 (1)	789		996
Other, including finance leases	42		42
Total short-term debt	$	1,715	$	2,775
Long-term debt







$900 million, 3.250% Notes due April 2025 (2)	881		882
$1,216 million, 4.125% Notes due November 2025 (1)	1,214		2,197
$1,284 million, 4.500% Notes due February 2026 (1)	1,285		1,502
$550 million, 1.250% Notes due March 2026 (1)	549		798
$700 million, 5.685% Notes due March 2026	698		698
$1,500 million, 3.400% Notes due March 2027	1,454		1,450
$259 million, 7.875% Debentures due May 2027	259		259
$600 million, 3.050% Notes due October 2027	598		597
$3,800 million, 4.375% Notes due October 2028	3,788		3,787
$1,000 million, 5.000% Notes due May 2029	994		—
$1,400 million, 2.400% Notes due March 2030 (1)	1,394		1,493
$1,500 million, 2.375% Notes due March 2031 (2)	1,382		1,397
$750 million, 5.125% Notes due May 2031	745		—
$45 million, 8.080% Step Down Notes due January 2033 (3)	45		45
$800 million, 5.400% Notes due March 2033	794		794
$1,250 million, 5.250% Notes due February 2034	1,242		—
$190 million, 6.150% Notes due November 2036	190		190
$2,200 million, 4.800% Notes due August 2038	2,193		2,193
$750 million, 3.200% Notes due March 2040	744		744
$121 million, 5.875% Notes due March 2041	119		119
$448 million, 6.125% Notes due November 2041	487		487
$317 million, 5.375% Notes due February 2042	315		315
$1,500 million, 4.800% Notes due July 2046	1,467		1,467
$1,000 million, 3.875% Notes due October 2047	989		989
$3,000 million, 4.900% Notes due December 2048	2,970		2,970
$1,250 million, 3.400% Notes due March 2050	1,237		1,237
$1,500 million, 3.400% Notes due March 2051	1,479		1,479
$1,500 million, 5.600% Notes due February 2054	1,482		—
Other, including finance leases	59		66
Total long-term debt	$	31,053	$	28,155

(1)Included in the ~~table above,~~February 2024 debt tender offers discussed below.

(2)The Company has entered into interest rate swap contracts hedging a portion of these fixed-rate debt instruments. See Note 11 to the ~~Company issued private placement Notes~~Consolidated Financial Statements for further information about the Company's interest rate risk management and these derivative instruments.

(3)Interest rate step down to 8.080% effective January 15, 2023.

Short-term and Credit Facilities Debt

Revolving Credit Agreements. Our revolving credit agreements provide us with ~~registration rights~~the ability to borrow amounts for general corporate purposes, including providing liquidity support if necessary under our commercial paper program discussed below. As of March 31, 2024, there were no outstanding balances under these revolving credit agreements.

In April 2024, The Cigna Group replaced our existing $4.0 billion five-year revolving credit and letter of credit agreement maturing in April 2028 and a $1.0 billion 364-day revolving credit agreement maturing in April 2024 by entering into the ~~third quarter~~following revolving credit agreements (the "Credit Agreements"):

•a $5.0 billion five-year revolving credit and letter of ~~2018~~credit agreement that will mature in April 2029 with an option to ~~finance~~extend the ~~Express Scripts acquisition. Total proceeds were approximately $20.0 billion. Interest on this debt is generally paid semi-annually except~~maturity date for ~~quarterly interest payments on the floating rate notes.~~

~~Term Loan Credit Agreement.~~ ~~Cigna borrowed $3.0 billion under its Term Loan Credit Agreement (the “Term Loan Credit Agreement”)~~additional one-year periods, subject to ~~finance the Merger and to pay fees and expenses~~consent of the ~~Merger.~~banks. The Term Loan Credit Agreement contains customary covenants and restrictions, including a financial covenant that Cigna’s leverage ratio may not exceed 60%. There is no remaining amount available for borrowing under this agreement. In the first quarter of 2019, the Company ~~repaid $1 billion principal of the term loan. The remaining $2 billion term loan principal is diversified among 23 banks.~~

~~Revolving Credit Agreement.~~ ~~Cigna has a Revolving Credit and Letter of Credit Agreement (the “Revolving Credit Agreement”) that matures on April 6, 2023 and is diversified among 23 banks.~~

~~Cigna~~ can borrow up to ~~$3.25~~$5.0 billion under the credit agreement for general corporate purposes, with up to $500 million available for issuance of letters of credit.

•a $1.5 billion 364-day revolving credit ~~decreased by $22 million of letters of credit~~agreement that will mature in April 2025. The Company can borrow up to $1.5 billion under the ~~Revolving~~credit agreement for general corporate purposes. This agreement includes the option to "term out" any revolving loans that are outstanding at maturity by converting them into a term loan maturing on the one-year anniversary of conversion.

The increase in the aggregate size of our revolving credit agreements from $5.0 billion to $6.5 billion will provide enhanced liquidity to support the continued growth of our business.

Each of the Credit ~~Agreement~~Agreements include an option to increase commitments in an aggregate amount of up to $1.5 billion across both facilities for a maximum total commitment of $8.0 billion. The Credit Agreements allow for borrowings at either a base rate or an adjusted term Secured Overnight Funding Rate ("SOFR") plus, in each case, an applicable margin based on the Company's senior unsecured credit ratings.

Each of the two facilities is diversified among 22 large commercial banks, all of which had an A- equivalent or higher rating by at least one Nationally Recognized Statistical Rating Organization ("NRSRO") as of March 31, ~~2019. The Revolving Credit Agreement~~2024. Each facility also ~~includes an option to increase the facility amount up to $500 million and an option to extend the termination date for additional one-year periods, subject to consent of the banks.~~

~~The Revolving Credit Agreement~~ contains customary covenants and restrictions, including a financial covenant that the ~~Company’s~~Company's leverage ratio, as defined in the Credit Agreements, may not exceed 60%.

~~Cigna is~~ subject to certain exceptions upon the ~~borrower under the Revolving Credit Agreement and the Term Loan Credit Agreement and certain subsidiaries~~consummation of ~~Cigna may be required to guarantee these obligations under certain circumstances.~~

an acquisition.

Commercial ~~Paper~~~~. The~~Paper. Under our commercial paper program, ~~had approximately $560 million outstanding~~we may issue short-term, unsecured commercial paper notes privately placed on a discounted basis through certain broker-dealers at ~~March 31, 2019 at~~any time not to exceed an aggregate amount of $5.0 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. The weighted average interest rate of ~~2.90%.~~

our commercial paper was 5.54% at March 31, 2024.

Long-term debt

Debt Issuance and Debt Tender Offers. In February 2024, we issued $4.5 billion of new senior notes, as detailed in the table below. The proceeds from this debt were used to pay the consideration for the cash tender offers as described below. We used the remaining net proceeds to fund the repayment of our senior notes which matured in March 2024 and for general corporate purposes, including repayment of indebtedness and repurchases of shares of our common stock. Interest on this debt is paid semi-annually.

Principal

Maturity Date

Interest Rate

Net Proceeds

$1,000 million (1)

May 15, 2029

5.000%

$995 million

$750 million (2)

May 15, 2031

5.125%

$746 million

$1,250 million (3)

February 15, 2034

5.250%

$1,244 million

$1,500 million (4)

February 15, 2054

5.600%

$1,485 million

(1) Redeemable at any time prior to April 15, 2029 at a "make whole" premium calculated using the most directly comparable U.S. Treasury rate plus 15 basis points. Redeemable at par on or after April 15, 2029.

(2) Redeemable at any time prior to March 15, 2031 at a "make whole" premium calculated using the most directly comparable U.S. Treasury rate plus 15basis points. Redeemable at par on or after March 15, 2031.

(3) Redeemable at any time prior to November 15, 2033 at a "make whole" premium calculated using the most directly comparable U.S. Treasury rate plus 20basis points. Redeemable at par on or after November 15, 2033.

(4) Redeemable at any time prior to August 15, 2053 at a "make whole" premium calculated using the most directly comparable U.S. Treasury rate plus 20basis points. Redeemable at par on or after August 15, 2053.

In the first quarter of 2024, the Company completed the repurchase of a total of $1.8 billion in aggregate principal amount of existing senior notes that were tendered to the Company pursuant to cash tender offers.

Interest Expense

Interest expense on long-term and short-term debt was $369 million for the three months ended March 31, 2024 and $345 million for the three months ended March 31, 2023.

Debt Covenants

The Company was in compliance with its debt covenants as of March 31, ~~2019.~~

2024.

Note 7—8 – Common and Preferred Stock

Dividends

In the first quarter of 2024, The Cigna Group declared quarterly cash dividends of $1.40 per share of the Company's common stock. In the first quarter of 2023, The Cigna Group declared quarterly cash dividends of $1.23 per share of the Company's common stock.

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

Record Date Payment Date Amount per Share
Total Amount Paid (in millions)
2024
March 6, 2024 March 21, 2024 $1.40 $401
2023
March 8, 2023 March 23, 2023 $1.23 $368

On April 24, 2024, the Board of Directors declared the second quarter cash dividend of $1.40 per share of The Cigna Group common stock to be paid on June 20, 2024 to shareholders of record on June 4, 2024. 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. 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.

Accelerated Share Repurchase Agreements

In February 2024, as part of our share repurchase program, we entered into separate accelerated share repurchase agreements with Deutsche Bank AG and Bank of America, N.A. (collectively, the "Counterparties") to repurchase $3.2 billion of common stock in aggregate. We remitted $3.2 billion to the Counterparties and received an initial delivery of approximately 7.6 million shares of our common stock on February 15, 2024, representing $2.6 billion of the total remitted. The final number of shares to be received under the ASR agreements will be determined based on the daily volume-weighted average share price ("VWAP") of our common stock over the term of the agreements, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreements.

We recorded the payment to the Counterparties as a reduction to Total shareholders' equity, consisting of a $2.6 billion increase in Treasury stock, which reflects the value of the initial 7.6 million shares received, and a $640 million decrease in Additional paid-in capital, which reflects the value of the stock hold-back by the Counterparties pending final settlement of the ASR agreements. The $640 million recorded in Additional paid-in capital will be reclassified to Treasury stock upon settlement of the ASR agreements in the second quarter of 2024. The initial delivery of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share.

Note 9 – Insurance and Contractholder Liabilities

A.Account Balances —– Insurance and Contractholder Liabilities

~~As of March 31, 2019, December 31, 2018 and March 31, 2018, the Company’s~~

The Company's insurance and contractholder liabilities were comprised of the following:

March 31, 2019

December 31, 2018

March 31, 2018

(In millions)

Current

Non-
current

Total

Current

Non-
current

Total

Total

Contractholder deposit funds

$
621

$
7,326

$
7,947

$
641

$
7,365

$
8,006

$
8,153

Future policy benefits

643

9,048

9,691

740

8,981

9,721

9,934

Unpaid claims and claim expenses

Integrated Medical

2,943

18

2,961

2,678

19

2,697

2,638

Other segments

2,421

3,304

5,725

2,394

3,230

5,624

5,502

Unearned premiums

432

347

779

348

379

727

1,291

Total insurance and contractholder liabilities

$
7,060

$
20,043

$
27,103

$
6,801

$
19,974

$
26,775

$
27,518


	March 31, 2024						December 31, 2023						March 31, 2023
(In millions)	Current		Non-current		Total		Current		Non-current		Total		Total
Unpaid claims and claim expenses
Cigna Healthcare	$	5,786	$	77	$	5,863	$	5,017	$	75	$	5,092	$	4,959
Other Operations	99		161		260		99		154		253		272
Future policy benefits
Cigna Healthcare	92		515		607		97		518		615		601
Other Operations	163		3,297		3,460		163		3,375		3,538		3,631
Contractholder deposit funds
Cigna Healthcare	11		130		141		12		133		145		163
Other Operations	365		6,087		6,452		362		6,178		6,540		6,670
Market risk benefits	26		865		891		37		966		1,003		1,220
Unearned premiums	815		21		836		846		22		868		1,440
Total	7,357		11,153		18,510		6,633		11,421		18,054
Insurance and contractholder liabilities classified as liabilities of businesses held for sale (1)	(1,569)		(512)		(2,081)		(1,119)		(517)		(1,636)
Total insurance and contractholder liabilities	$	5,788	$	10,641	$	16,429	$	5,514	$	10,904	$	16,418	$	18,956

(1) Amounts classified as liabilities of businesses held for sale include $1,378 million of Unpaid claims, $427 million of Future policy benefits, $161 million of Unearned premiums and $115 million of Contractholder deposit funds as of March 31, 2024 and $823 millionof Unpaid claims, $429 million of Future policy benefits, $261 million of Unearned premiums and $123 million of Contractholder deposit funds as of December 31, 2023.

Insurance and contractholder liabilities expected to be paid within one year are classified as current.

B.Unpaid Claims and Claim Expenses ~~— Integrated Medical~~

– Cigna Healthcare

This liability reflects estimates of the ultimate cost of claims that have been incurred but not reported, ~~including~~ expected development on reported claims, ~~those~~claims that have been reported but not yet paid (reported claims in process), and other medical care expenses and services payable that are primarily comprised of accruals for incentives and other amounts payable to health care professionals and facilities. This liability no longer includes amounts from the international health care business now reported in International Markets following our change in segment reporting in the fourth quarter of 2018. The prior year presentation has been updated to reflect this segment change.

The total of incurred but not reported liabilities plus expected development on reported claims ~~including~~and reported claims in process was ~~$2.7~~$5.4 billion at March 31, ~~2019~~2024 and ~~$2.5~~$4.6 billion at March 31, ~~2018.~~

2023. This increase was primarily due to claim submission and payment process disruptions related to a third-party cyber incident.

Activity, net of intercompany transactions, in the unpaid claims liability for the ~~Integrated Medical~~Cigna Healthcare segment was as follows:




	Three Months Ended March 31,
(In millions)	2024 (1)		2023
Beginning balance	$	5,092	$	4,176
Less: Reinsurance and other amounts recoverable	236		221
Beginning balance, net	4,856		3,955

Incurred costs related to:
Current year	9,452		9,041
Prior years	(226)		(144)
Total incurred	9,226		8,897
Paid costs related to:
Current year	5,072		5,316
Prior years	3,352		2,795
Total paid	8,424		8,111

Ending balance, net	5,658		4,741
Add: Reinsurance and other amounts recoverable	205		218
Ending balance	$	5,863	$	4,959

(1) Includes unpaid claims amounts classified as liabilities of businesses held for ~~the three months ended~~sale. As of March 31, ~~was~~2024and December 31, 2023, $1,378 million and $823 million classified as ~~follows:~~

Three Months Ended

March 31,

March 31,

(In millions)

2019

2018

Beginning balance

$
2,697

$
2,420

Less: Reinsurance and other amounts recoverable

264

262

Beginning balance, net

2,433

2,158

Incurred costs related to:

Current year

6,095

5,284

Prior years

(117)

(115)

Total incurred

5,978

5,169

Paid costs related to:

Current year

3,786

3,382

Prior years

1,908

1,540

Total paid

5,694

4,922

Ending balance, net

2,717

2,405

Add: Reinsurance and other amounts recoverable

244

233

Ending balance

$
2,961

$
2,638

liabilities of businesses held for sale, respectively.

Reinsurance and other amounts recoverable reflect amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims ~~for~~of certain business ~~where~~for which the Company administers the plan benefits ~~but the~~without any right of ~~offset does not exist.~~offset. See Note 810 to the Consolidated Financial Statements for additional information on reinsurance.

Variances in incurred costs related to prior ~~years’~~years' unpaid claims and ~~claims~~claim expenses that resulted from the differences between actual experience and the ~~Company’s~~Company's key assumptions were as ~~follows for the three months ended March 31:~~

Three Months Ended

(Dollars in millions)

March 31, 2019

March 31, 2018

$

%(1)

$

%(2)

Actual completion factors

$
55

0.2
  %
$
52

0.3
  %
Medical cost trend

62

0.3

54

0.3

Other

-

-

9

-

Total favorable variance

$
117

0.5
  %
$
115

0.6
  %

follows:

Three Months Ended March 31,
2024 2023
(Dollars in millions) $
% (1)
$
% (2)
Actual completion factors $ 76 0.2 % $ 1 — %
Medical cost trend 150 0.4 143 0.5
Total favorable variance $ 226 0.6 % $ 144 0.5 %

(1)Percentage of current year incurred costs as reported for the year ended December 31, ~~2018.~~

2023.

(2)Percentage of current year incurred costs as reported for the year ended December 31, ~~2017.~~

~~Incurred costs related to prior years in the table above, although adjusted through shareholders’ net income, do not directly correspond to an increase or~~ ~~decrease to shareholders’~~ ~~net income~~. ~~The primary~~ ~~reason for this difference~~ is that decreases to prior year incurred costs pertaining to the portion of the liability established for moderately adverse conditions are not considered as impacting shareholders’ net income if they are offset by increases in the current year provision for moderately adverse conditions.

~~Prior year development increased shareholders’ net income by $~~39 ~~million ($~~50 ~~million before tax) for the three months ended March 31, 2019, compared with $~~40 ~~million ($~~51 ~~million before tax) for the three months ended March 31, 2018. Favorable~~2022.

Favorable prior year development in both ~~periods~~years reflects lower than expected utilization of medical ~~services.~~

services as compared to our assumptions.

C.~~Unpaid Claims~~Future Policy Benefits

Cigna Healthcare

The weighted average interest rates applied and ~~Claim Expenses — International Markets~~duration for future policy benefits in the Cigna Healthcare segment, consisting primarily of supplemental health products including individual Medicare supplement, limited benefit health products and ~~Group Disability~~individual private medical insurance, were as follows:

As of
March 31, 2024 March 31, 2023
Interest accretion rate 2.56 % 2.59 %
Current discount rate 5.11 % 5.29 %
Weighted average duration 7.8 years 8.1 years

The net liability for future policy benefits for the segment's supplemental health products represents the present value of benefits expected to be paid to policyholders, net of the present value of expected net premiums, which is the portion of expected future gross premium expected to be collected from policyholders that is required to provide for all expected future benefits and ~~Other~~

~~This~~expenses. The present values of expected net premiums and expected future policy benefits for the Cigna Healthcare segment were as follows:




	Three Months Ended March 31,
(In millions)	2024 (1)		2023
Present value of expected net premiums
Beginning balance	$	9,233	$	8,557
Reversal of effect of beginning of period discount rate assumptions	1,154		1,537

Issuances and lapses	446		306
Net premiums collected	(350)		(326)
Interest and other (2)	73		56
Ending balance at original discount rate	10,556		10,130
Effect of end of period discount rate assumptions	(1,309)		(1,312)
Ending balance (3)	$	9,247	$	8,818

Present value of expected policy benefits
Beginning balance	$	9,633	$	8,945
Reversal of effect of discount rate assumptions	1,220		1,611

Issuances and lapses	457		307
Benefit payments	(362)		(326)
Interest and other (2)	71		58
Ending balance at original discount rate	11,019		10,595
Effect of discount rate assumptions	(1,381)		(1,378)
Ending balance (4)	$	9,638	$	9,217

Liability for future policy benefits	$	391	$	399
Other (5)	216		202
Total liability for future policy benefits (6)(7)	$	607	$	601

(1)Includes future policy benefits amounts classified as liabilities of businesses held for sale.

(2)Includes the foreign exchange rate impact of translating from transactional and functional currency to United States dollar and the impact of flooring the liability ~~now~~at zero. The flooring impact is calculated at the cohort level after discounting the reserves at the current discount rate.

(3)As of March 31, 2024 and March 31, 2023 undiscounted expected future gross premiums were $19.0 billion and $17.6 billion, respectively. As of March 31, 2024 and March 31, 2023 discounted expected future gross premiums were $13.3 billion and $12.5 billion, respectively.

(4)As of March 31, 2024 and March 31, 2023, undiscounted expected future policy benefits were $13.6 billion and $12.8 billion, respectively.

(5)The liability for future policyholder benefits includes ~~amounts from international health care following our~~immaterial businesses shown as reconciling items above, most of which are in run-off.

(6)$72 million and $154 million reported in Reinsurance recoverables in the Consolidated Balance Sheets as of March 31, 2024 and March 31, 2023, respectively, relate to the liability for future policy benefits. Additionally, $81 million of reinsurance recoverables are reported in assets of businesses held for sale in the Consolidated Balance Sheets as of March 31, 2024.

(7)Includes $427 million of future policy benefits classified as liabilities of businesses held for sale in the Consolidated Balance Sheets as of March 31, 2024.

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
	March 31, 2024		March 31, 2023
Interest accretion rate	5.64	%	5.64	%
Current discount rate	5.16	%	4.95	%
Weighted average duration	11.3 years		11.7 years

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 includes deferred profit liability of $379 million as of March 31, 2024 and $392 million as of March 31, 2023. Future policy benefits excluding deferred profit liability were $3.1 billion as of March 31, 2024 and $3.2 billion as

of each of December 31, 2023, March 31, 2023, and December 31, 2022. The change in ~~segment reporting~~future policy benefits reserves year-to-date was primarily driven by benefit payments, as well as changes in ~~2018~~the current discount rate. Undiscounted expected future policy benefits were $4.4 billion as ~~discussed~~of March 31, 2024 and $4.6 billion as of March 31, 2023. As of both March 31, 2024 and March 31, 2023, $1.0 billion of the future policy benefit reserve was recoverable through treaties with external reinsurers.

D.Contractholder Deposit Funds

Contractholder deposit fund liabilities within Other Operations were $6.5 billion as of March 31, 2024 and December 31, 2023 and $6.7 billion as of March 31, 2023 and December 31, 2022. Approximately 38% of the balance is reinsured externally. Activity in ~~Note 1. The prior year presentation has been updated to reflect this segment change.~~

~~Liability balance details.~~ ~~The liability details for unpaid claims and claim expenses are as follows:~~

(In millions)

March 31, 2019

March 31, 2018

Group Disability and Other

Group Disability and Life

$
4,786

$
4,549

Other Operations

194

175

Total Group Disability and Other

4,980

4,724

International Markets

745

778

Unpaid claims and claim expenses Group Disability and Other and International Markets

$
5,725

$
5,502

~~Interest~~these liabilities is ~~accreted and recognized in medical costs and other benefit expenses~~presented net of reinsurance in the Consolidated Statements of ~~Income.~~

~~Activity~~Cash Flows. The net year-to-date decrease in contractholder deposit fund liabilities generally relates to withdrawals and benefit payments from contractholder deposit funds, partially offset by deposits and interest credited to contractholder deposit funds.

As of March 31, 2024, the weighted average crediting rate, net amount at risk and cash surrender value for contractholder deposit fund liabilities not effectively exited through reinsurance were 3.33%, $3.0 billion and $2.8 billion, respectively. The comparative amounts as of March 31, 2023 were 3.25%, $3.2 billion and $2.8 billion, respectively. More than 99% of the $4.0 billion liability as of March 31, 2024 and the $4.1 billion liability as of March 31, 2023 not reinsured externally is for contracts with guaranteed interest rates of 3% - 4%, and approximately $1.2 billion represented contracts with policies at the guarantee. At both of these same period ends, $1.2 billion was 50-150 basis points ("bps") above the guarantee and the remaining $1.6 billion as of March 31, 2024 and $1.7 billion as of March 31, 2023 represented contracts above the guarantee that pay the policyholder based on the greater of a guaranteed minimum cash value or the actual cash value. More than 90% of these contracts have actual cash values of at least 110% of the guaranteed cash value.

E.Market Risk Benefits

Liabilities for market risk benefits 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 ~~Company’s liabilities~~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.

Market risk benefits activity was as follows:




	Three Months Ended March 31,
(Dollars in millions)	2024		2023
Balance, beginning of year	$	1,003	$	1,268
Balance, beginning of year, before the effect of nonperformance risk (own credit risk)	1,085		1,379
Changes due to expected run-off	(3)		(6)
Changes due to capital markets versus expected	(113)		(41)
Changes due to policyholder behavior versus expected	(14)		6
Assumption changes	—		(33)
Balance, end of period, before the effect of changes in nonperformance risk (own credit risk)	955		1,305
Nonperformance risk (own credit risk), end of period	(64)		(85)
Balance, end of period	$	891	$	1,220
Reinsured market risk benefit, end of period	$	951	$	1,301

The following table presents the net amount at risk and the average attained age of contractholders (weighted by exposure) for ~~unpaid claims and claim expenses, excluding Other Operations, are presented~~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 ~~following table.~~ ~~Liabilities associated with Other Operations are excluded because they pertain~~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 ~~obligations for long-duration insurance contracts or, if short-duration,~~ the ~~liabilities have been fully reinsured.~~

Three Months Ended

(In millions)

March 31, 2019

March 31, 2018

Beginning balance

$
5,432

$
5,274

Less: Reinsurance

156

140

Beginning balance, net

5,276

5,134

Incurred claims related to:

Current year

1,428

1,393

Prior years:

Interest accretion

38

38

All other incurred

(32)

(61)

Total incurred

1,434

1,370

Paid claims related to:

Current year

474

471

Prior years

856

853

Total paid

1,330

1,324

Foreign currency

(7)

2

Ending balance, net

5,373

5,182

Add: Reinsurance

158

145

Ending balance

$
5,531

$
5,327

Consolidated Financial Statements.


(Dollars in millions, excludes impact of reinsurance ceded)	March 31, 2024		March 31, 2023
Net amount at risk	$	1,441	$	2,183
Average attained age of contractholders (weighted by exposure)	77.7 years		75.4 years

Note 10 – Reinsurance ~~in the table above reflects amounts due from reinsurers related to unpaid claims liabilities.~~

The ~~Company’s~~Company's insurance subsidiaries enter into agreements with other insurance companies ~~primarily~~ to limit losses from large exposures and to permit recovery of a portion of incurred losses. ~~See Note 8 for additional information on reinsurance.~~

The majority of the liability for unpaid claims and claim expenses is related to disability claims with long-tailed payouts. Interest earned on assets backing these liabilities is an integral part of pricing and reserving. Therefore, interest accreted on prior year balances is shown as a separate component of prior year incurred claims. This interest is calculated by applying the average discount rate used in determining the liability balance to the average liability balance over the period. The remaining prior year incurred claims amount primarily reflects updates to the Company’s liability estimates and variances between actual experience during the period relative to the assumptions and expectations reflected in determining the liability. Assumptions reflect the Company’s expectations over the life of the book of business and will vary from actual experience in any period, both favorably and unfavorably, with variation in resolution rates being the most significant driver for the long-term disability business. Favorable prior year incurred claims for the three months ended March 31, 2019 primarily reflect favorable life loss ratio experience, partially offset by unfavorable long-term disability resolution rate experience. Favorable prior year incurred claims reported for the three months ended March 31, 2018 primarily reflected favorable life loss ratio experience.

~~Note 8~~ — ~~Reinsurance~~

~~The Company’s insurance subsidiaries enter into agreements with other insurance companies to assume~~ ~~and cede reinsurance.~~ Reinsurance is ceded primarily in acquisition and disposition transactions when the underwriting company is not being acquired. ~~Reinsurance is also used to limit losses from large exposures and to permit recovery of a portion of direct or assumed losses.~~ 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.

A.Reinsurance Recoverables

The majority of the ~~Company’s~~Company's reinsurance recoverables resulted from acquisition and disposition transactions in which the underwriting company was not acquired. Components of the Company’s reinsurance recoverables are presented in the following table. The table below includes $280 million as of March 31, 2019 and $297 million as of December 31, 2018 of current reinsurance recoverables that are reported in other current assets.

(Dollars in millions)
Line of Business

Reinsurer(s)

March 31,
2019

December 31,
2018

Collateral and Other Terms at March 31, 2019

Ongoing Operations

Integrated Medical, International Markets, Group Disability, COLI

Various

$
470

$
464

Balances range from less than $1 million up to $65 million. Over 70% of the balance is from companies rated as investment grade by Standard & Poor’s.

Total recoverables related to ongoing operations

470

464

Acquisition, disposition or runoff activities

Individual Life and Annuity (sold in 1998)

Lincoln National Life and Lincoln Life & Annuity of New York

3,254

3,312

Both companies’ ratings were well above the level that would trigger a contractual obligation to fully secure the outstanding balance.

GMDB (effectively exited in 2013)

Berkshire

844

893

100% secured by assets in a trust.

Retirement Benefits Business (sold in 2004)

Prudential Retirement Insurance and Annuity

761

787

100% secured by assets in a trust.

Supplemental Benefits Business (2012 acquisition)

Great American Life

254

261

100% secured by assets in a trust.

Other

Various

82

87

100% secured by assets in a trust or other deposits.

Total recoverables related to acquisition, disposition or runoff activities

5,195

5,340

Total reinsurance recoverables

$
5,665

$
5,804

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 ~~if recovery is not considered probable.~~

B. ~~Effects~~primarily for expected credit losses.

The Company's reinsurance recoverables as of ~~Reinsurance~~

~~The~~March 31, 2024 are presented at amount due by range of external credit rating and collateral level in the following table, ~~presents direct, assumed~~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)	$	—	$	—	$	85	$	85
BBB- to BBB+ equivalent current credit ratings (2)	—		—		60		60
Not rated	145		7		188		340
Total recoverables related to ongoing operations	145		7		333		485
Acquisition, disposition or run-off activities
BBB+ equivalent and higher current ratings (2)
Lincoln National Life and Lincoln Life & Annuity of New York	—		2,619		—		2,619
Empower Annuity Insurance Company	—		—		128		128
Prudential Insurance Company of America	351		—		—		351
Life Insurance Company of North America	—		334		—		334
Other	167		23		14		204

Not rated	—		6		4		10
Total recoverables related to acquisition, disposition or run-off activities	518		2,982		146		3,646
Total reinsurance recoverables before market risk benefits	$	663	$	2,989	$	479	$	4,131
Allowance for uncollectible reinsurance							(35)
Market risk benefits							951
Total reinsurance recoverables (3)							$	5,047

(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 an NRSRO.

(3)Includes $166 million of current reinsurance recoverables that are reported in Other current assets and ~~ceded premiums~~$209 million of reinsurance recoverables classified as assets of businesses held for ~~both short-duration~~sale.

Collateral levels are defined internally based on the fair value of the collateral relative to the carrying amount of the reinsurance recoverable, the frequency at which collateral is required to be replenished and ~~long-duration insurance contracts. It also presents reinsurance recoveries that have been netted against benefit expenses~~the potential for volatility in the ~~Company’s Consolidated Statements of Income.~~

Three Months Ended

(In millions)

March 31,
2019

March 31,
2018

Ceded Premiums

Individual life insurance and annuity business sold

$
34

$
37

Other

96

98

Total ceded premiums

130

135

Reinsurance recoveries

Individual life insurance and annuity business sold

55

57

Other

4

47

Total reinsurance recoveries

$
59

$
104

~~The effects of reinsurance on written premiums for short-duration contracts were not materially different from the recognized premium amounts shown in the table above.~~

C. collateral's fair value.

B.Effective Exit of ~~GMDB and GMIB~~Variable Annuity Reinsurance Business

The Company entered into an agreement with Berkshire to effectively exit the ~~GMDB and GMIB~~variable annuity reinsurance business via a reinsurance transaction in 2013. Variable annuity contracts are accounted for as assumed and ceded reinsurance and categorized as market risk benefits as discussed in Note 9 to the Consolidated Financial Statements. Berkshire reinsured 100% of the ~~Company’s~~Company's future ~~claim payments~~cash flows in this business, net of other reinsurance arrangements existing at that time. The reinsurance agreement is subject to an overall

limit with approximately ~~$3.3~~$3.1 billion remaining at March 31, ~~2019.~~

GMDB is accounted for as reinsurance and GMIB assets and liabilities are reported as derivatives at fair value as discussed below. GMIB assets are reported in other current assets and other assets, and GMIB liabilities are reported in accrued expenses and other liabilities and other non-current liabilities.

~~GMDB~~

The GMDB exposure arises under annuities written by ceding companies that guarantee the benefit received at death. The Company’s exposure arises when the guaranteed minimum death benefit exceeds the fair value2024. As a result of the ~~related mutual fund investments at~~reinsurance transaction, amounts payable are offset by a corresponding reinsurance recoverable, provided the ~~time~~increased recoverable remains within the overall Berkshire limit.


(In millions)
Reinsurer (1)	March 31, 2024		December 31, 2023		Collateral and Other Terms at March 31, 2024
Berkshire	$	777	$	873	100% were secured by assets in a trust.
Sun Life Assurance Company of Canada	79		92
Liberty Re (Bermuda) Ltd.	91		104		100% were secured by assets in a trust.
SCOR SE	27		31		75% were secured by a letter of credit.
Market risk benefits (2)	$	974	$	1,100

(1)All reinsurers are rated A- equivalent and higher by an NRSRO.

(2)Includes incurred but not reported ("IBNR") and outstanding claims of ~~a contractholder’s death.~~

The following table presents the account value, net amount at risk and the number of contractholders for guarantees assumed by the Company in the event of death. The net amount at risk is the amount that the Company would have to pay if all contractholders died$23 million as of ~~the specified date. Unless the Berkshire reinsurance limit is exceeded, the Company should be reimbursed in full for these payments.~~

(Dollars in millions, excludes impact of reinsurance ceded)

March 31, 2019

December 31, 2018

Account value

$
8,996

$
8,402

Net amount at risk

$
1,943

$
2,466

Number of contractholders (estimated)

215,000

220,000

~~GMIB~~

~~The Company reinsured contracts with issuers~~March 31, 2024 and $19 million as of ~~GMIB products. The Company’s exposure represents the excess~~December 31, 2023. These amounts are excluded from market risk benefits at of a contractually guaranteed amount over the level of variable annuity account values. Payment by the Company depends on the actual account value in the underlying mutual funds and the level of interest rates when the contractholders elect to receive minimum income payments that can only occur within 30 days of a policy anniversary after the appropriate waiting period. The Company has purchased retrocessional coverage (“GMIB assets”), including retrocessional coverage from Berkshire, for these contracts.

~~Assumptions used in fair value measurement.~~ GMIB assets and liabilities are established using capital market assumptions and assumptions related to future annuitant behavior (including mortality, lapse, and annuity election rates). The Company classifies GMIB assets and liabilities in Level 3 of the fair value hierarchy describedMarch 31, 2024 in Note ~~10 because assumptions related to future annuitant~~ ~~behavior~~ ~~are largely unobservable.~~

~~The only assumption expected to impact future shareholders’ net income is non-performance risk.~~ ~~The non-performance risk adjustment reflects a market participant’s view of nonpayment risk by adding an additional spread~~9 and Note 10A to the ~~discount rate in the calculation of both (a) the GMIB liabilities to be paid by the Company, and (b) the GMIB assets to be paid by the reinsurers, after considering collateral.~~ Consolidated Financial Statements.

The impact of ~~non-performance~~nonperformance risk (i.e., the risk that a counterparty might default) on the variable annuity reinsurance asset was immaterial for the three months ended March 31, ~~2019~~2024 and ~~2018.~~

~~GMIB liabilities totaling $700 million as of~~ March 31, 2019 and $706 million as of December 31, 2018 were reported in accrued expenses and other liabilities and other non-current liabilities. There were three reinsurers covering 100% of the GMIB exposures as of March 31, 2019 and December 31, 2018 as follows:

(In millions)
Line of Business

Reinsurer

March 31,
2019

December 31,
2018

Collateral and Other Terms at March 31, 2019

GMIB

Berkshire

  $
339

  $
341

100% were secured by assets in a trust.

Sun Life Assurance Company of Canada

206

208

Liberty Re (Bermuda) Ltd.

183

184

94% were secured by assets in a trust.

Total GMIB recoverables reported in other current assets and other assets

  $
728

  $
733

~~Amounts included in shareholders net income for GMIB assets and liabilities were not material for the three months ended March 31, 2019 or 2018.~~

2023.

Note 9 —11 – Investments

~~Cigna’s~~

The Cigna Group's investment portfolio consists of a broad range of investments including debt ~~and~~securities, equity securities, commercial mortgage loans, policy loans, other long-term investments, short-term investments and derivative financial instruments. The sections below provide more detail regarding our investment balances ~~net investment income~~ and realized investment gains and losses. See Note 1012 to the Consolidated Financial Statements for information about the valuation of the ~~Company’s~~Company's investment portfolio.

March 31, 2019

December 31, 2018

(In millions)

Current

Long-term

Total

Current

Long-term

Total

Debt securities

   $
1,363

   $
21,806

   $
23,169

   $
1,320

   $
21,608

   $
22,928

Equity securities

-

210

210

377

171

548

Commercial mortgage loans

32

1,832

1,864

32

1,826

1,858

Policy loans

-

1,403

1,403

-

1,423

1,423

Other long-term investments

-

2,006

2,006

-

1,901

1,901

Short-term investments

267

-

267

316

-

316

Total

   $
1,662

   $
27,257

   $
28,919

   $
2,045

   $
26,929

   $
28,974

Further information about our accounting policies for investment assets can be found in Note 12 in the Company's 2023 Form 10-K.

The following table summarizes the Company's investments by category and current or long-term classification:

March 31, 2024 December 31, 2023
(In millions) Current Long-term Total Current Long-term Total
Debt securities $ 604 $ 8,876 $ 9,480 $ 590 $ 9,265 $ 9,855
Equity securities 18 1,553 1,571 31 3,331 3,362
Commercial mortgage loans 197 1,365 1,562 182 1,351 1,533
Policy loans — 1,186 1,186 — 1,211 1,211
Other long-term investments — 4,301 4,301 — 4,181 4,181
Short-term investments 374 — 374 206 — 206
Total $ 1,193 $ 17,281 $ 18,474 $ 1,009 $ 19,339 $ 20,348
Investments classified as assets of businesses held for sale (1)
(85) (1,256) (1,341) (84) (1,354) (1,438)
Investments per Consolidated Balance Sheets $ 1,108 $ 16,025 $ 17,133 $ 925 $ 17,985 $ 18,910

(1) Investments related to the HCSC transaction that were held for sale as of March 31, 2024. These investments were primarily comprised of debt securities and commercial mortgage loans, and to a lesser extent, other long-term investments.

A.Investment Portfolio

Debt Securities

The amortized cost and fair value by contractual maturity periods for debt securities were as follows atas of March 31, ~~2019:~~

Amortized

Fair

(In millions)

Cost

Value

Due in one year or less

     $
1,366

     $
1,370

Due after one year through five years

6,516

6,684

Due after five years through ten years

9,529

9,682

Due after ten years

4,231

4,925

Mortgage and other asset-backed securities

494

508

Total

     $
22,136

     $
23,169

2024:



(In millions)	Amortized Cost		Fair Value
Due in one year or less	$	633	$	619
Due after one year through five years	3,768		3,587
Due after five years through ten years	3,144		2,921
Due after ten years	2,186		2,000
Mortgage and other asset-backed securities	389		353
Total	$	10,120	$	9,480

Actual maturities of these securities could differ from their contractual maturities used in the table ~~above. This could occur~~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.~~

Amortized

Unrealized

Unrealized

Fair

(In millions)

Cost

Appreciation

Depreciation

Value

March 31, 2019

Federal government and agency

$
513

$
221

$
(1)

$
733

State and local government

851

77

-

928

Foreign government

2,126

183

(4)

2,305

Corporate

18,152

676

(133)

18,695

Mortgage and other asset-backed

494

21

(7)

508

Total

$
22,136

$
1,178

$
(145)

$
23,169

Investments supporting liabilities of the Company’s run-off settlement annuity business (included in total above) (1)

$
2,269

$
555

$
(13)

$
2,811

December 31, 2018

Federal government and agency

$
507

$
204

$
(1)

$
710

State and local government

920

66

(1)

985

Foreign government

2,214

155

(7)

2,362

Corporate

18,403

411

(453)

18,361

Mortgage and other asset-backed

506

16

(12)

510

Total

$
22,550

$
852

$
(474)

$
22,928

Investments supporting liabilities of the Company’s run-off settlement annuity business (included in total above) (1)

$
2,264

$
479

$
(40)

$
2,703

~~(1) Net unrealized appreciation for these investments is excluded from accumulated other comprehensive income.~~

below:

(In millions) Amortized
Cost Allowance for Credit Loss Unrealized
Appreciation Unrealized
Depreciation Fair
Value
March 31, 2024
Federal government and agency $ 289 $ — $ 21 $ (10) $ 300
State and local government 37 — 2 (1) 38
Foreign government 354 — 8 (14) 348
Corporate 9,051 (50) 122 (682) 8,441
Mortgage and other asset-backed 389 — — (36) 353
Total $ 10,120 $ (50) $ 153 $ (743) $ 9,480
December 31, 2023
Federal government and agency $ 251 $ — $ 24 $ (8) $ 267
State and local government 37 — 2 (1) 38
Foreign government 355 — 10 (13) 352
Corporate 9,338 (33) 158 (630) 8,833
Mortgage and other asset-backed 398 — 1 (34) 365
Total $ 10,379 $ (33) $ 195 $ (686) $ 9,855

Review of declines in fair value. Management reviews debt securities ~~with~~in an unrealized loss position to determine whether a ~~decline in fair value from cost for impairment~~credit loss allowance is needed based on criteria that include:

·~~length of time and~~

•severity of decline;

•financial health and specific ~~near term~~ prospects of the issuer;

· and

•changes in the regulatory, economic or general market environment of the ~~issuer’s~~issuer's industry or geographic ~~region; and~~

·~~the Company’s intent to sell or the likelihood of a required sale prior to recovery.~~

~~Management believes the unrealized depreciation below to be temporary based on this review, and therefore has not impaired these amounts.~~ 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.

March 31, 2019

December 31, 2018

Fair

Amortized

Unrealized

Number

Fair

Amortized

Unrealized

Number
(Dollars in millions)

Value

Cost

Depreciation

of Issues

Value

Cost

Depreciation

of Issues
One year or less

Investment grade

     $
715

     $
734

     $
(19)

190

     $
7,127

     $
7,367

     $
(240)

1,324
Below investment grade

     $
324

     $
328

     $
(4)

393

     $
1,185

     $
1,240

     $
(55)

1,190
More than one year

Investment grade

     $
4,431

     $
4,532

     $
(101)

919

     $
3,023

     $
3,181

     $
(158)

784
Below investment grade

     $
455

     $
476

     $
(21)

355

     $
249

     $
270

     $
(21)

245

Unrealized depreciation on these debt securities is primarily due to declines in fair value resulting from increasing interest rates since these securities were purchased.

March 31, 2024 December 31, 2023
(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 $ 562 $ 576 $ (14) 232 $ 330 $ 338 $ (8) 142
Below investment grade 133 137 (4) 253 161 170 (9) 135
More than one year
Investment grade 5,284 5,946 (662) 1,561 5,441 6,036 (595) 1,590
Below investment grade 598 661 (63) 367 701 775 (74) 486
Total $ 6,577 $ 7,320 $ (743) 2,413 $ 6,633 $ 7,319 $ (686) 2,353

Equity Securities

The following table provides the values of the Company's equity security investments as of March 31, 2024 and December 31, 2023:

March 31, 2024 December 31, 2023
(In millions) Cost Carrying Value Cost Carrying Value
Equity securities with readily determinable fair values $ 647 $ 39 $ 656 $ 51
Equity securities with no readily determinable fair value 3,281 1,532 3,248 3,311
Total $ 3,928 $ 1,571 $ 3,904 $ 3,362

We are a minority owner in VillageMD, a provider of primary, multi-specialty and urgent care services that is majority-owned by Walgreens Boots Alliance, Inc. These securities are included in equity securities with no readily determinable fair value in the above table. As of March 31, 2024, we determined our investment in VillageMD was impaired and wrote down the carrying value to an estimated fair value of $0.9 billion, resulting in a $1.8 billion loss recorded in Net realized investment losses in the Company's Consolidated Statements of Income.

Consistent with our strategy to invest in targeted startup and growth-stage companies in the health care industry, approximately 90% of our investments in equity securities are in the health care sector.

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 a fixed ~~rate~~rates of interest and are secured by high quality, primarily completed and substantially leased operating properties. ~~Commercial mortgage loans are classified as either current or long-term investments based on their contractual maturities.~~

~~Credit quality~~.

The Company regularly evaluates and monitors credit risk ~~beginning with~~from the initial ~~underwriting of a~~ mortgage loan underwriting and ~~continuing~~ throughout the investment holding period. ~~Mortgage origination professionals employ an internal credit quality rating system designed to evaluate~~For more information on the ~~relative risk of~~Company's accounting policies and methodologies regarding these investments, see Note 12 in the transaction at origination that is then updated each year as part of the annual portfolio loan review. The Company evaluates and monitors credit quality on a consistent and ongoing basis, classifying each loan as a loan in good standing, potential problem loan or problem loan.

Quality ratings are based on our evaluation of a number of key inputs related to the loan, including real estate market-related factors such as rental rates and vacancies, and property-specific inputs such as growth rate assumptions and lease rollover statistics. However, the two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on debt, with a ratio below 1.0 indicating that there is not enough cash flow to cover the required loan payments. The loan-to-value ratio, commonly expressed as a percentage, compares the amount of the loan to the fair value of the underlying property collateralizing the loan.

Company's 2023 Form 10-K.

The following table summarizes the credit risk profile of the ~~Company’s~~Company's commercial mortgage loan ~~portfolio~~portfolio:


(Dollars in millions)	March 31, 2024					December 31, 2023
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%	$	810	2.12			$	802	2.13
60% to 79%	594		1.75			574		1.77
80% to 100%	158		0.63			157		0.65



Total	$	1,562	1.81	64	%	$	1,533	1.82	64	%

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 ~~loan-to-value and debt service coverage ratios as~~the financial statements of ~~March 31, 2019 and December 31, 2018:~~

(Dollars in millions)

March 31, 2019

December 31, 2018

Average Debt

Average Debt

Carrying

Service Coverage

Average Loan-

Carrying

Service Coverage

Average Loan-

Loan-to-Value Ratio

Value

Ratio

to-Value Ratio

Value

Ratio

to-Value Ratio

Below 60%

     $
1,167


2.12

     $
1,132

2.14

60% to 79%

621

1.92

650

1.93

80% to 100%

76

1.49

76

1.49

Total

     $
1,864


2.03

58%

     $
1,858

2.04

58%

~~The Company’s annual in-depth review of its commercial mortgage loan~~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 ~~primary mechanism for identifying emerging risks in the portfolio. The most recent review was completed by the Company’s investment professionals in the second quarter~~timing of ~~2018 and included an analysis of each underlying property’s most recent annual~~when financial statements, rent rolls, operating plans, budgets, a physical inspection of the property and other pertinent factors. Based on historical results, current leases, lease expirations and rental conditions in each market, the Company estimated the current year and future stabilized property income and fair value for each loan.

~~The Company re-evaluates a loan’s credit quality between annual reviews if new property~~ information is received from the general partner or ~~an event such as delinquency or a borrower’s request for restructure causes management~~manager of the investments.

Other long-term investments also include investment real estate carried at depreciated cost less any impairment write-downs to ~~believe~~fair value when cash flows indicate that the ~~Company’s estimate of financial performance,~~carrying value may not be recoverable. Additionally, statutory and other restricted deposits and foreign currency swaps carried at fair value orare reported in the ~~risk profile of the underlying property has been impacted.~~

~~Impaired commercial mortgage loans.~~ A commercial mortgage loan is considered impaired when it is probable that the Company will not collect all amounts due per the terms of the promissory note. Impaired loans are carried at the lower of the unpaid principal balance or fair value of the underlying collateral. Interest income on impaired mortgage loans is only recognized when a payment is received.

~~There were no impaired commercial mortgage loans as of March 31, 2019 or December 31, 2018~~.

~~Short-Term Investments and Cash Equivalents~~

~~Short-term investments and cash equivalents included the following types of issuers:~~

March 31,

December 31,
(In millions)

2019

2018
Corporate securities

    $
1,531

    $
581
Federal government securities

    $
127

    $
82
Foreign government securities

    $
162

    $
238
Money market funds

    $
855

    $
1,174

B.~~Realized Investment Gains and Losses~~

~~The following realized gains and losses on investments exclude amounts required to adjust future policy benefits for the run-off settlement annuity business,~~table below as ~~well as realized gains and losses attributed to the Company’s separate accounts because those gains and losses generally accrue directly to separate account policyholders.~~

Three Months Ended

March 31,
(In millions)

2019

2018
Net realized investment gains (losses), excluding investment asset write-downs

    $
11

    $
(16)
Write-downs on debt securities

(1)

(13)
Write-downs on other invested assets

-

(4)
Net realized investment (losses) gains, before income taxes

    $
10

    $
(33)

Net realized investment gains, excluding investment asset write-downs, for the three months ended March 31, 2019 represent primarily mark to market gains on equity securities. Net realized investment losses, excluding investment asset write-downs, for the three months ended March 31, 2018 represent primarily losses on sales of debt securities. Realized gains or losses on equity securities still held at March 31, 2019 and 2018 were not material.

Other. The following table ~~presents sales~~provides the carrying value information for ~~available-for-sale debt securities. Gross gains on sales and gross losses on sales exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.~~

Three Months Ended

March 31,
(In millions)

2019

2018
Proceeds from sales

    $
1,086

    $
499
Gross gains on sales

    $
14

    $
5
Gross losses on sales

    $
(10)

    $
(22)

C.these investments:

Carrying Value as of
(In millions) March 31, 2024 December 31, 2023
Real estate investments $ 1,696 $ 1,606
Securities partnerships 2,423 2,400
Other 182 175
Total $ 4,301 $ 4,181

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 ~~contract holder~~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.~~rates and to hedge the interest rate risk of certain long-term debt.

As of March 31, 2024, there have been no material changes to the Company's derivative financial instruments. Please refer to the Company's 2023 Form 10-K for further discussion of the types of derivative financial instruments and associated accounting policies. The Company has written and purchased GMIB reinsurance contracts in its run-off reinsurance business that are accounted for as freestanding derivatives as discussed in Note 8. Derivatives in the Company’s separate accounts are excluded from the following discussion because associated gains and losses generally accrue directly to separate account policyholders.

~~Derivative~~effects of derivative financial instruments used by the Company typically include foreign currency swap contracts and foreign currency forward contracts. Foreign currency swap contracts periodically exchange cash flows between two currencies for principal and interest. Foreign currency forward contracts require the Company to purchase a foreign currency in ~~exchange for the functional currency of its operating unit at a future date, generally within three months from the contracts’ trade dates.~~

The Company manages the credit risk of these derivative instruments by diversifying its portfolio among approved dealers of high credit quality, and through routine monitoring of credit risk exposures. Certain of the Company’s over-the-counter derivative instruments require either the Company or the counterparty to post collateral or demand immediate payment depending on the amount of the net liability position of the derivative instrument and predefined financial strength or credit rating thresholds. These collateral posting requirements vary by counterparty and amounts postedour individual hedging strategies were not ~~significant~~material to the Consolidated Financial Statements as of March 31, ~~2019 or~~2024 and December 31, ~~2018.~~

2023. The ~~Company’s derivative financial instruments are presented as follows:~~

·~~Fair value hedges of the foreign exchange-related changes in fair values of certain foreign-denominated bonds:~~ Swap fair values are reported in long-term investments or other non-current liabilities. Changes in fair values attributable to foreign exchange risk of the swap contracts and the hedged bonds are reported in other realized investment gains and losses. The portion of the swap contracts’ changes in fair value excluded from the assessment of hedge effectiveness is recorded in accumulated other comprehensive income and recognized in net investment income as swap coupon payments are accrued, offsetting the foreign-denominated coupons received on the designated bonds.

·~~Net investment hedges of certain foreign subsidiaries that conduct their business principally in Euros:~~ The fair values of the swap contracts are reported in other assets or other non-current liabilities. The changes in fair values of these instruments are reported in other comprehensive income, specifically in translation of foreign currencies. The portion of the change in swap fair values relating to foreign exchange spot rates will be recognized in earnings upon deconsolidation of the hedged foreign subsidiaries. The remaining changes in swap fair value are excluded from our effectiveness assessment and recognized in interest expense as swap coupon payments are accrued. The notional value of hedging instruments matches the hedged amount of subsidiary net assets.

·~~Economic hedges for derivatives not designated as accounting hedges:~~ Fair values of derivative instruments are reported in current investments or accrued expenses and other liabilities. The changes in fair values are reported in net realized investment gains and losses.

~~Gross~~gross fair values of our derivative financial instruments are presented in Note ~~10. As of March 31, 2019~~12 to the Consolidated Financial Statements.

C.Realized Investment Gains and ~~December 31, 2018, and~~Losses

Net realized investment losses, before income taxes were $1,836 million for the three months ended March 31, ~~2019~~2024 and ~~2018,~~$56 million for the effects of derivative instruments on the Consolidated Financial Statements were not material, including gains or losses reclassified from accumulated other comprehensive income into shareholders’ net income, as well as amounts excluded from the assessment of hedge effectiveness. The following table summarizes the types and notional quantity of derivative instruments heldthree months ended March 31, 2023. This increase was primarily driven by the ~~Company.~~

Notional Value as of

(In millions)

March 31,

December 31,

Type of Instrument

Purpose

2019

2018

Foreign currency swap contracts

Fair value hedge: To hedge the foreign exchange-related changes in fair values of certain foreign-denominated bonds. The notional value of these derivatives matches the amortized cost of the hedged bonds.

   $
593

   $
525

Foreign currency swap contracts

Net investment hedge: To reduce the risk of changes in net assets due to changes in foreign currency spot exchange rates for certain foreign subsidiaries that conduct their business principally in Euros. The notional value of hedging instruments matches the hedged amount of subsidiary net assets.

   $
439

   $
439

Foreign currency forward contracts

Economic hedge: To hedge the foreign exchange related changes in fair values of a U.S. dollar-denominated bond portfolio to reflect the local currency for the Company’s foreign subsidiary in South Korea. The notional value of hedging instruments generally aligns with the fair value of the hedged bond portfolio.

   $
309

   $
309

impairment of equity securities in 2024. These amounts exclude realized gains and losses attributed to the Company's separate accounts because those gains and losses generally accrue directly to separate account policyholders.

Note 10 —12 – Fair Value Measurements

The Company carries certain financial instruments at fair value in the financial statements including debt securities, certain equity securities, short-term investments and derivatives. Other financial instruments are measured at fair value only under certain conditions, such as when ~~impaired.~~

impaired or when there are observable price changes for equity securities with no readily determinable fair value.

Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date. A ~~liability’s~~liability's fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor.

The ~~Company’s~~Company's financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP.

The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An ~~asset’s~~asset's or a ~~liability’s~~liability's classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobservable inputs were significant to the ~~instrument’s~~instrument's fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3).

~~The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services~~

For a description of the policies, methods and assumptions that are ~~based on reported trade activity and quoted market prices when available, and other market information that a market participant may use~~used to estimate fair value. The internal pricing methods are performed by the Company’s investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models.

~~The Company is responsible for determining fair~~ value and ~~for assigning the appropriate level within~~determine the fair value hierarchy ~~based on~~for each class of financial instruments, see Note 13 in the significance of unobservable inputs. The Company reviews methodologies, processes and controls of third-party pricing services and compares prices on a test basis to those obtained from other external pricing sources or internal estimates. The Company performs ongoing analyses of both prices received from third-party pricing services and those developed internally to determine that they represent appropriate estimates of fair value. The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations. The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates. The minimal exceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations. We conduct an annual on-site visit of the most significant pricing service to review their processes, methodologies and controls. This on-site review includes a walk-through of inputs for a sample of securities held across various asset types to validate the documented pricing process.

Company's 2023 Form 10-K.

A.Financial Assets and Financial Liabilities Carried at Fair Value

The following table provides information ~~as of March 31, 2019 and December 31, 2018~~ about the ~~Company’s~~Company's financial assets and liabilities carried at fair value. Further information regarding insurance assets and liabilities carried at fair value is provided in Note 9E to the Consolidated Financial Statements. Separate account assets are also recorded at fair value on the ~~Company’s~~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 ~~policyholders.~~

Quoted Prices in Active
Markets for Identical
Assets
(Level 1)

Significant Other Observable
Inputs
(Level 2)

Significant Unobservable
Inputs
(Level 3)

Total

As of

As of

As of

As of

As of

As of

As of

As of

March 31,

December 31,

March 31,

December 31,

March 31,

December 31,

March 31,

December 31,

(In millions)

2019

2018

2019

2018

2019

2018

2019

2018

Financial assets at fair value

Debt securities

Federal government and agency

$
212

$
209

$
521

$
501

$
-

$
-

$
733

$
710

State and local government

-

-

928

985

-

-

928

985

Foreign government

-

-

2,277

2,356

28

6

2,305

2,362

Corporate

-

-

18,458

18,127

237

234

18,695

18,361

Mortgage and other asset-backed

-

-

369

372

139

138

508

510

Total debt securities

212

209

22,553

22,341

404

378

23,169

22,928

Equity securities (1)

8

384

49

43

32

32

89

459

Short-term investments

-

-

267

316

-

-

267

316

Derivative assets

-

-

58

53

-

-

58

53

Real estate funds priced at NAV as a practical expedient (2)

230

239

Financial liabilities at fair value

Derivative liabilities

$
-

$
-

$
14

$
10

$
-

$
-

$
14

$
10

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
March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023
Financial assets at fair value
Debt securities
Federal government and agency $ 165 $ 130 $ 135 $ 137 $ — $ — $ 300 $ 267
State and local government — — 38 38 — — 38 38
Foreign government — — 348 352 — — 348 352
Corporate — — 8,072 8,432 369 401 8,441 8,833
Mortgage and other asset-backed — — 300 319 53 46 353 365
Total debt securities 165 130 8,893 9,278 422 447 9,480 9,855
Equity securities (1)
2 4 37 47 — — 39 51
Short-term investments — — 374 206 — — 374 206
Derivative assets — — 147 131 — 1 147 132
Financial liabilities at fair value
Derivative liabilities $ — $ — $ 4 $ 4 $ — $ — $ 4 $ 4

(1)Excludes certain equity securities that have no readily determinable fair value.

(2) As a practical expedient, certain real estate funds are carried at fair value based on the Company’s ownership share of the equity of the investee (Net Asset Value (“NAV”)) including changes in the fair value of its underlying investments. The funds have a quarterly redemption frequency, 45-90 day redemption notice period and $58 million in unfunded commitments as of March 31, 2019.

~~Level 1 Financial Assets~~

Inputs for instruments classified in Level 1 include unadjusted quoted prices for identical assets in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets.

Assets in Level 1 include actively-traded U.S. government bonds and exchange-listed equity securities. A relatively small portion of the Company’s investment assets are classified in this category given the narrow definition of Level 1 and the Company’s investment asset strategy to maximize investment returns.

~~Level 2 Financial Assets and Financial Liabilities~~

Inputs for instruments classified in Level 2 include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active or other inputs that are market observable or can be corroborated by market data for the term of the instrument. Such other inputs include market interest rates and volatilities, spreads and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant.

~~Debt and equity securities.~~ Approximately 97% of the Company’s investments in debt and equity securities are classified in Level 2 including most public and private corporate debt and hybrid equity securities, federal agency and municipal bonds, non-government mortgage-backed securities and preferred stocks. Third-party pricing services and internal methods often use recent trades of securities with similar features and characteristics because many debt securities do not trade daily. Pricing models are used to determine these prices when recent trades are not available. These models calculate fair values by discounting future cash flows at estimated market interest rates. Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data and industry and economic events. For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating.

Nearly all of these instruments are valued using recent trades or pricing models. Less than 1% of the fair value of investments classified in Level 2 represents foreign bonds that are valued using a single, unadjusted market-observable input derived by averaging multiple broker-dealer quotes, consistent with local market practice.

~~Short-term investments~~ are carried at fair value that approximates cost. The Company compares market prices for these securities to recorded amounts on a regular basis to validate that current carrying amounts approximate exit prices. The short-term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2.

~~Derivative assets and liabilities~~ classified in Level 2 represent over-the-counter instruments such as foreign currency forward and swap contracts. Fair values for these instruments are determined using market observable inputs including forward currency and interest rate curves and widely published market observable indices. Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives. However, the Company is largely protected by collateral arrangements with counterparties and determined that no adjustment for credit risk was required as of March 31, 2019 or December 31, 2018. The nature and use of these derivative financial instruments are described in Note 9.

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~~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.

~~The~~ Additionally, as discussed in Note 9E to the Consolidated Financial Statements, the Company classifies ~~certain newly-issued, privately-placed, complex or illiquid securities~~variable annuity assets and liabilities in Level ~~3. Approximately 2%~~3 of ~~debt and equity securities are priced using significant unobservable inputs and classified in this category.~~

~~Fair values of mortgage and other asset-backed securities as well as corporate and government debt securities are primarily determined using pricing models that incorporate~~ the specific characteristics of each asset and related assumptions including the investment type and structure, credit quality, industry and maturity date in comparison to current market indices, spreads and liquidity of assets with similar characteristics. Inputs and assumptions for pricing may also include collateral attributes and prepayment speeds for mortgage and other asset-backed securities. Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research in its evaluation as well as the issuer’s financial statements.

fair value hierarchy.

Quantitative Information about Unobservable Inputs

The following table summarizes the fair value and significant unobservable inputs used in pricing the following debt securities that were developed directly by the Company as of March 31, 2019 and December 31, 2018. The range and weighted average basis point amounts (“bps”) for liquidity and credit spreads (adjustment to discount rates) reflect the Company’s best estimates of the unobservable adjustments a market participant would make to calculate these fair values.

~~Corporate and government debt securities.~~

The significant unobservable input used to value ~~the following~~our corporate and government debt securities and mortgage and other asset-backed securities is an adjustment for liquidity. AnThis adjustment is needed to reflect current market conditions and issuer circumstances when there is limited trading activity for the security.

~~Mortgage~~

The following table summarizes the fair value and ~~other asset-backed securities.~~ ~~The~~ significant unobservable inputs ~~used to value the following mortgage and other asset-backed securities are liquidity and weighting of credit spreads. An adjustment for liquidity is made as of the measurement date~~ that considers current market conditions, issuer circumstances and complexity of the security structure when there is limited trading activity for the security. An adjustment to weight credit spreads is needed to value a more complex bond structure with multiple underlying collateral and no standard market valuation technique. The weighting of credit spreads is primarily based on the underlying collateral’s characteristics and their proportional cash flows supporting the bond obligations.

Unobservable Adjustment

Fair Value as of

Unobservable Input

Range (Weighted Average) as of

(Fair value in millions)

March 31, 2019

December 31, 2018

March 31, 2019

March 31, 2019

December 31, 2018

Debt securities

Corporate and government debt securities

$
253

$
229

Liquidity

80 - 930 (230) bps

50 - 930 (230) bps

Mortgage and other asset-backed securities

139

138

Liquidity

60 - 360 (70) bps

60 - 340 (70) bps

Weighting of credit spreads

210 - 380 (280) bps

190 - 340 (260) bps

Securities not priced by the Company (1)

12

11

Total Level 3 debt securities

$
404

$
378

~~(1) The fair values for these securities use single, unadjusted non-binding broker quotes not~~were developed directly by the ~~Company.~~

~~Significant increases~~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.


	Fair Value as of					Unobservable Adjustment Range (Weighted Average by Quantity) as of
(Fair value in millions)	March 31, 2024		December 31, 2023		Unobservable Input March 31, 2024	March 31, 2024		December 31, 2023
Debt securities
Corporate	$	369	$	401	Liquidity	55 - 1230 (280)	bps	70 - 1235 (310)	bps
Mortgage and other asset-backed securities	53		46		Liquidity	110 - 605 (280)	bps	95 - 640 (310)	bps

Total Level 3 debt securities	$	422	$	447

An increase in liquidity ~~or credit spreads~~spread adjustments would result in a lower fair value ~~measurements~~measurement, while ~~decreases in these inputs~~a decrease would result in a higher fair value ~~measurements. The unobservable inputs are generally not interrelated and a change in the assumption used for one unobservable input is not accompanied by a change in the other unobservable input.~~

measurement.

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 for the three months ended March 31, 2019 and 2018.~~3. Gains and losses reported in ~~this~~the table may include net changes in fair value that are attributable to both observable and unobservable inputs.

Debt and Equity Securities
(In millions)

For the Three Months Ended
March 31,

2019

2018

Balance at January 1,

    $
410

    $
732

Total (losses) included in shareholders’ net income

(1)

(20)

Gains (losses) included in other comprehensive income

7

(5)

Gains (losses) required to adjust future policy benefits for settlement annuities (1)

2

(4)

Purchases, sales, settlements

Purchases

-

10

Sales

-

(11)

Settlements

(1)

(2)

Total purchases, sales and settlements

(1)

(3)

Transfers into/(out of) Level 3

��

Transfers into Level 3

20

20

Transfers out of Level 3 (2)

(1)

(124)

Total transfers into/(out of) Level 3

19

(104)

Balance at March 31,

    $
436

    $
596

Total (losses) included in shareholders’ net income attributable to instruments held at the reporting date

    $
(1)

    $
(7)

~~(1) Amounts do not accrue to shareholders.~~

(2) Beginning in 2018, certain private equity securities are no longer carried at fair value under the policy election of ASU 2016-01 (Recognition and Measurement of Financial Assets and Financial Liabilities). Private equity securities of $70 million as of December 31, 2017 are included in the 2018 Transfers out of Level 3 amount.



	Three Months Ended March 31,
(In millions)	2024		2023
Debt and Equity Securities
Beginning balance	$	447	$	447
(Losses) gains included in Shareholders' net (loss) income	(21)		1
(Losses) gains included in Other comprehensive loss	(3)		5

Purchases, sales and settlements
Purchases	—		4

Settlements	(14)		(9)
Total purchases, sales and settlements	(14)		(5)
Transfers into/(out of) Level 3
Transfers into Level 3	16		39
Transfers out of Level 3	(3)		(16)
Total transfers into/(out of) Level 3	13		23
Ending balance	$	422	$	471
Total (losses) gains included in Shareholders' net (loss) income attributable to instruments held at the reporting date	$	(21)	$	1
Change in unrealized gain or (loss) included in Other comprehensive loss for assets held at the end of the reporting period	$	(4)	$	5

Total gains and losses included in ~~shareholders’~~Shareholders' net (loss) income in the ~~table~~tables above are reflected in the Consolidated Statements of Income as Net realized investment ~~gains (losses)~~losses and ~~net~~Net investment income.

Gains and losses included in ~~other~~Other comprehensive ~~income~~loss, net of tax in the tables above are reflected in ~~net~~Net unrealized appreciation ~~(depreciation)~~ on securities and derivatives in the Consolidated Statements of Comprehensive Income.

Transfers into or out of the Level 3 category occur when unobservable inputs, such as the ~~Company’s~~Company's best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement. Market activity typically decreases during periods of economic uncertainty and this decrease in activity reduces the availability of market observable data. As a result, the level of unobservable judgment that must be applied to the pricing of certain instruments increases and is typically observed through the widening of liquidity spreads. Transfers between Level 2 and Level 3 during ~~2019~~2024 and ~~2018~~2023 primarily reflected changes in liquidity ~~and credit risk~~ estimates for certain private placement issuers across several sectors. ~~As noted~~See discussion under Quantitative Information about Unobservable Inputs above ~~transfers out of Level 3 during 2018 also include $70 million of private equity securities that are no longer carried at fair value.~~

for more information.

Separate Accounts

The investment income and fair value gains and losses of ~~separate~~Separate account assets generally accrue directly to the contractholders and, together with their deposits and withdrawals, are excluded from the ~~Company’s~~Company's Consolidated Statements of Income and Cash Flows. ~~See Note 10 to~~The separate account activity for the ~~Consolidated Financial Statements contained~~three months ended March 31, 2024 and 2023 was primarily driven by changes in the ~~2018 Form 10-K for additional policy information related to~~market values of the underlying separate ~~accounts.~~

account investments.

Fair values of ~~separate~~Separate account assets atwere 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)	March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Guaranteed separate accounts (See Note 16)	$	230	$	226	$	339	$	352	$	—	$	—	$	569	$	578
Non-guaranteed separate accounts (1)	158		158		5,794		5,797		229		217		6,181		6,172
Subtotal	$	388	$	384	$	6,133	$	6,149	$	229	$	217	6,750		6,750
Non-guaranteed separate accounts priced at net asset value ("NAV") as a practical expedient (1)													666		680
Total													$	7,416	$	7,430

(1)Non-guaranteed separate accounts include $4.0 billion as of both March 31, ~~2019~~2024 and December 31, ~~2018 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

March 31,

December 31,

March 31,

December 31,

March 31,

December 31,

March 31,

December 31,

(In millions)

2019

2018

2019

2018

2019

2018

2019

2018

Guaranteed separate accounts (See Note 16)

$
204

$
187

$
264

$
267

$
-

$
-

$
468

$
454

Non-guaranteed separate accounts (1)

1,328

1,204

5,346

5,216

244

233

6,918

6,653

Subtotal

$
1,532

$
1,391

$
5,610

$
5,483

$
244

$
233

7,386

7,107

Non-guaranteed separate accounts priced at NAV as a practical expedient (1)

693

732

Total separate account assets

$
8,079

$
7,839

~~(1) Non-guaranteed separate accounts included $3.9 billion as of March 31, 2019 and $3.8 billion as of December 31, 2018~~2023 in assets supporting the ~~Company’s~~Company's pension plans, including $0.2 billion classified in Level 3 as of both March 31, ~~2019~~2024 and December 31, ~~2018.~~

~~Separate account assets in Level 1 primarily include exchange-listed equity securities. Level 2 assets primarily include:~~

·	~~corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and~~

·	~~actively-traded institutional and retail mutual fund investments.~~

2023.

Separate account assets classified in Level 3 primarily support ~~Cigna’s~~the Company's pension plans and include ~~commercial mortgage loans as well as~~ certain newly-issued, privately-placed, complex or illiquid securities that are priced using methods discussed ~~above.~~above, as well as commercial mortgage loans. Activity, including transfers into and out of Level 3, was not material for the three months ended March 31, ~~2019 and 2018~~.

2024 or 2023.

Separate account investments in securities partnerships, real estate and hedge funds are generally valued based on the separate ~~account’s~~account's ownership share of the equity of the investee (NAV as a practical expedient), including changes in the fair values of its underlying investments. Substantially all of these assets support the ~~Cigna Pension Plans.~~Company's pension plans. The following table provides additional information on these ~~investments.~~

Unfunded

Fair Value as of

Commitments as of

March 31,

Redemption Frequency

Redemption Notice

(In millions)

March 31, 2019

December 31, 2018

2019

(if currently eligible)

Period

Securities partnerships
$

464

$
477

$
351

Not applicable

Not applicable

Real estate funds

216

237

-

Quarterly

30-90 days

Hedge funds

13

18

-

Up to annually, varying by fund

30-90 days

Total
$

693

$
732

$
351

investments:

Fair Value as of Unfunded Commitment as of March 31, 2024 Redemption Frequency
(if currently eligible) Redemption Notice
Period
(In millions) March 31, 2024 December 31, 2023
Securities partnerships $ 412 $ 419 $ 252 Not applicable Not applicable
Real estate funds 251 258 — Quarterly 30 - 90 days
Hedge funds 3 3 — Up to annually, varying by fund 30 - 90 days
Total $ 666 $ 680 $ 252

As of March 31, 2024, the Company does not have plans to sell any of these assets at less than fair value. These investments are structured to satisfy longer-term investment objectives. Securities partnerships are contractually non-redeemable and the underlying investment assets are expected to be liquidated by the fund managers within ten years after inception.

B.Assets and Liabilities Measured at Fair Value under Certain Conditions

Some financial assets and liabilities are not carried at fair value, ~~each reporting period, but may be measured using fair value only under certain conditions~~ such as ~~investments when they become impaired, including~~commercial mortgage loans that are carried at unpaid principal, investment real estate that is carried at depreciated cost and ~~commercial mortgage loans, and certain~~ equity securities with no readily determinable fair ~~value. There were~~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 ~~investments~~and are written down to their fair ~~values~~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 three months ended March 31, 2024, our equity investment in VillageMD was written down to an estimated fair value of $0.9 billion resulting in an investment loss of $1.8 billion recorded in Net realized investment losses in the Company's Consolidated Statements of Income. For the three months ended March 31, 2023, impairments recognized requiring these assets to be measured at fair value were not material. Observable price changes for other equity securities with no readily determinable fair value were not material for the three months ended March 31, 2019. Recorded values for these asset types representing less than 1% of total investments, were written down to their fair values, resulting in immaterial realized investment losses for the three months ended2024 and March 31, ~~2018.~~

2023.

C.Fair Value Disclosures for Financial Instruments Not Carried at Fair Value

The following table includes the ~~Company’s~~Company's financial instruments not recorded at fair value ~~that are subject to~~but for which fair value disclosure ~~requirements at March 31, 2019 and December 31, 2018.~~is required. In addition to universal life products and finance leases, financial instruments that are carried in the ~~Company’s~~Company's Consolidated ~~Financial Statements~~Balance Sheets at amounts that approximate fair value are excluded from the following ~~table.~~

Classification in

March 31, 2019

December 31, 2018

(In millions)

Fair Value
Hierarchy

Fair Value

Carrying
Value

Fair Value

Carrying
Value

Commercial mortgage loans

Level 3

$
1,875

$
1,864

$
1,832

$
1,858

Long-term debt, including current maturities, excluding finance leases

Level 2

$
41,027

$
39,840

$
40,819

$
40,829

~~Fair values of off-balance sheet financial instruments were not material as of March 31, 2019 and December 31, 2018.~~

table:

Classification in Fair Value Hierarchy March 31, 2024 December 31, 2023
(In millions) Fair Value Carrying Value Fair Value Carrying Value
Commercial mortgage loans Level 3 $ 1,451 $ 1,562 $ 1,430 $ 1,533
Long-term debt, including current maturities, excluding finance leases Level 2 $ 29,806 $ 31,783 $ 28,033 $ 29,585

Note 11 —13 – Variable Interest Entities

~~When the Company becomes involved~~

We perform ongoing qualitative analyses of our involvement with a variable interest ~~entity and when there is a change in the Company’s involvement with an entity, the Company must~~entities to determine if itconsolidation is ~~the primary beneficiary and must consolidate the entity.~~required. The Company ~~is considered the primary beneficiary if it has the power to direct the entity’s most significant economic activities or has the right to receive benefits or obligation to absorb losses~~determined that ~~could be significant to the entity. The Company evaluates the following criteria:~~

·	~~the structure and purpose of the entity;~~

·	~~the risks and rewards created by and shared through the entity; and~~

·	the Company’s ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers.

~~The Company determined~~ it was not a primary beneficiary in any material variable interest ~~entities~~entity as of March 31, ~~2019~~2024 or December 31, ~~2018.~~2023. The ~~Company’s~~Company's involvement inwith variable interest entities ~~where~~for which it is not the primary beneficiary ~~is described below.~~

~~Securities limited partnerships and real estate limited partnerships~~. The Company owns interests in securities limited partnerships and real estate limited partnerships that are defined as variable interest entities. These partnerships invest in the equity or mezzanine debthas not materially changed from December 31, 2023. For details of privately held companies and real estate properties. General partners unaffiliated with the Company control decisions that most significantly impact the partnership’s operations and the limited partners do not have substantive kick-out or participating rights. The Company’s maximum exposure to these entities of $3.3 billion across approximately 140 limited partnerships as of March 31, 2019 includes $1.5 billion reported in long-term investments and commitments to contribute an additional $1.8 billion. The Company’s noncontrolling interest in each of these limited partnerships is generally less than 10% of the partnership ownership interests.

~~Other asset-backed and corporate securities.~~ ~~In the normal course of its investing activities, the Company also makes passive investments in certain asset-backed and corporate securities that are issued by~~our accounting policy for variable interest entities ~~whose sponsors or issuers are unaffiliated with the Company. The Company receives fixed-rate cash flows from these investments~~ and the ~~maximum potential exposure to loss is limited to~~composition of variable interest entities with which the carrying amount of $0.6 billion as of March 31, 2019 that is reported in debt securities. The Company’s combined ownership interests are insignificant relative to the total principal amounts issued by these entities.

~~The~~ Company is ~~also~~ involved, refer to Note 14 in real estate joint ventures, independent physician associations and a joint venture in India that are variable interest entities. The carrying values and maximum exposures associated with these arrangements are immaterial.

the Company's 2023 Form 10-K. The Company has not provided, and does not intend to provide, financial support to any of ~~the above entities that it is not contractually required to provide. The Company performs ongoing qualitative analyses of its involvement with~~ these variable interest entities ~~to determine if consolidation is required.~~

in excess of its maximum exposure.

Note 12 —14 – Accumulated Other Comprehensive Income (Loss) ~~(“AOCI”~~

Accumulated Other Comprehensive Income (Loss) ("AOCI")

includes net unrealized appreciation on securities and derivatives, change in discount rate and instrument-specific credit risk for certain long-duration insurance contractholder liabilities (Note 9 to the Consolidated Financial Statements), foreign currency translation and the net postretirement benefits liability adjustment. AOCI includes the ~~Company’s~~Company's share from unconsolidated entities ~~accounted for using~~reported on the equity method. AOCI excludes amounts required to adjust future policy benefits for the run-off settlement annuity business and a portion of deferred acquisition costs associated with the corporate-owned life insurance business. Generally, tax effects in AOCI are established at the currently enacted tax rate and reclassified to Shareholders' net (loss) income in the same period that the related pre-tax AOCI reclassifications are recognized.

Shareholders' other comprehensive loss, net of tax, for the three months ended March 31, 2024 and March 31, 2023, is primarily attributable to the change in discount rates for certain long-duration liabilities (following the adoption of Targeted Improvements to the Accounting for Long-Duration Contracts in 2023) 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

March 31,
(In millions)

2019

2018

Securities and Derivatives

Beginning balance

$
18

$
328

Reclassification adjustment to retained earnings related to U.S. tax reform legislation(1)

-

65

Reclassification adjustment to retained earnings related to new financial instruments guidance(1)

-

(4)

Reclassification adjustment from retained earnings related to new hedging guidance

-

(6)

Adjusted beginning balance

18

383

Appreciation (depreciation) on securities and derivatives

565

(385)

Tax (expense) benefit

(122)

77

Net appreciation (depreciation) on securities and derivatives

443

(308)

Reclassification adjustment for (gains) losses included in shareholders’ net income (net realized investment gains)

(1)

30

Tax (expense)

-

(6)

Net (gains) losses reclassified from AOCI to net income

(1)

24

Other comprehensive income (loss), net of tax

442

(284)

Ending balance

$
460

$
99

Translation of foreign currencies

Beginning balance

$
(221)

$
(65)

Reclassification adjustment to retained earnings related to U.S. tax reform legislation(1)

-

(4)

Adjusted beginning balance

(221)

(69)

Translation of foreign currencies

(23)

46

Tax (expense)

(1)

(1)

Net translation of foreign currencies

(24)

45

Ending balance

$
(245)

$
(24)

Postretirement benefits liability

Beginning balance

$
(1,508)

$
(1,345)

Reclassification adjustment to retained earnings related to U.S. tax reform legislation(1)

(290)

Adjusted beginning balance

(1,508)

(1,635)

Reclassification adjustment for amortization of net losses from past experience and prior service costs (selling, general and administrative expenses)

15

17

Reclassification adjustment for settlement (selling, general and administrative expenses)

10

-

Tax (expense)

(14)

(4)

Other comprehensive income, net of tax

11

13

Ending balance

$
(1,497)

$
(1,622)

~~(1) See Note 2 in Cigna’s 2018 Form 10-K for further information about the Company’s adoption of new accounting standards in 2018.~~

~~Note 13~~ ~~— Pension and Other Postretirement Benefit Plans~~


	Three Months Ended March 31,
(In millions)		2024		2023
Securities and Derivatives


Beginning balance		$	171	$	(332)
Unrealized appreciation on securities and derivatives		143		252
Tax (expense)		(39)		(54)
Net unrealized appreciation on securities and derivatives		104		198

Reclassification adjustment for losses (gains) included in Shareholders' net (loss) income (Net realized investment losses)		22		(5)

Reclassification adjustment for tax (benefit) expense included in Shareholders' net (loss) income		(5)		1
Net losses (gains) reclassified from AOCI to Shareholders' net (loss) income		17		(4)
Other comprehensive income, net of tax		121		194
Ending balance		$	292	$	(138)

A.~~About our Plans~~

~~Pension plans~~. Future benefit accruals for the Company’s domestic defined benefit pension plans are frozen. The Company also has foreign pension and other postretirement benefit plans that are immaterial to our results of operations, liquidity and financial position.

~~Other postretirement benefit plans.~~ ~~The Company’s postretirement medical plan was frozen in 2013. The Company also offers certain postretirement life insurance benefits through various plans.~~

B.~~Cost of Our Plans~~

~~Net pension and other postretirement benefits cost was as follows for the three months ended March 31:~~

Pension Benefits

Other Postretirement Benefits

Three Months Ended

Three Months Ended

March 31,

March 31,
(In millions)

2019

2018

2019

2018
Service cost

   $
1

   $
1

   $
-

   $
-
Interest cost

49

42

2

2
Expected long-term return on plan assets

(56)

(64)

-

-
Amortization of:

Net loss from past experience

16

17

-

-
Prior service cost

-

-

(1)

-
Litigation settlement - plan amendment

142

-

-

-
Settlement loss

10

-

-

-
Net cost

   $
162

   $
(4)

   $
1

   $
2

As further discussed in Note 16, Old Cigna and the Cigna Pension Plan are defendants in a class action lawsuit related to the Plan’s conversion of certain employees from an annuity to a cash balance benefit in 1997. In the first quarter of 2019, the Plan was amended to reflect the additional benefits required by the Court Order. In addition, class participants were notified of their increased benefits and payment of benefits commenced. This activity resulted in a one-time expense of $142 million representing the present value of the additional pension benefits under the Court Order. An offsetting expense credit was also recorded to reduce the litigation reserve held.

Pension and other postretirement benefits expense is reported in “interest expense and other” in the Consolidated Statements of Income. The Company did not make any contributions to the domestic qualified pension plans for the three months ended March 31, 2019. Contributions to these plans are expected to be immaterial for the remainder of 2019.

~~Note 14~~ ~~— Leases~~

~~As discussed in Note 2, the Company adopted ASU 2016-02,~~ ~~Leases,~~ as of January 1, 2019. As permitted by the standard, the Company did not restate its Consolidated Financial Statements for periods prior to the adoption date and the required disclosures presented below are prospective only. The Company’s operating leases are primarily for office space and certain computer and other equipment, and have terms ranging from one month to 18 years.

~~Accounting policy.~~ The Company determines if an arrangement is a lease and its lease classification (operating or finance) at inception. Beginning in the first quarter of 2019, both operating and finance leases result in (1) a right-of-use (“ROU”) asset that represents our right to use the underlying asset for the lease term, and (2) a lease liability that represents our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are reflected in the following lines in the Company’s Consolidated Balance Sheet:

	~~ROU Asset~~	~~Current Lease Liability~~	~~Non-Current Lease Liability~~
~~Operating lease~~	~~Other Assets~~	~~Accrued expenses and other liabilities (current)~~	~~Other liabilities (non-current)~~
~~Finance lease~~	~~Property and equipment~~	~~Short-term debt~~	~~Long-term debt~~

These lease assets and liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. Most of the Company’s leases do not provide an implicit rate, so the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU asset also includes any lease pre-payments made and excludes lease incentives for operating leases. The Company’s lease terms may include options to extend or terminate a lease when it is reasonably certain that the Company will exercise that option.

The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. Variable lease payments are expensed as incurred and represent amounts that are not fixed in nature, such as maintenance and other services provided by the lessor, and are not tied to an index or rate.

~~The components of lease expense were as follows:~~

~~(In millions)~~	~~Three Months Ended~~ ~~March 31, 2019~~
~~Operating lease cost~~	$	47
~~Finance lease cost:~~
~~Amortization of ROU assets~~		8
~~Interest on lease liabilities~~		1
~~Total finance lease cost~~		9
~~Variable lease cost~~		12
~~Total lease cost~~	$	68

~~Supplemental cash flow information related to leases was as follows:~~

~~(In millions)~~	~~Three Months Ended~~ ~~March 31, 2019~~
~~Cash paid for amounts included in the measurement of lease liabilities:~~
~~Operating cash outflows from operating leases~~	$	42
~~Operating cash outflows from finance leases~~	$	1
~~Financing cash outflows from finance leases~~	$	6

~~ROU assets obtained in exchange for lease obligations:~~
~~Operating leases~~	$	26
~~Finance leases~~	$	45

~~Operating and finance lease ROU assets and lease liabilities were as follows at the balance sheet date:~~

~~(In millions)~~	~~March 31, 2019~~
~~Operating leases:~~
~~Operating lease ROU assets~~	$	~~602~~

~~Accrued expenses and other current liabilities~~		~~160~~
~~Other non-current liabilities~~		~~524~~
~~Total operating lease liabilities~~	$	~~684~~

~~Finance leases:~~
~~Property and equipment, gross~~	$	99
~~Accumulated depreciation~~		~~(8)~~
~~Property and equipment, net~~	$	91

~~Short-term debt~~	$	21
~~Long-term debt~~		68
~~Total finance lease liabilities~~	$	89

The weighted average remaining lease term was 5 years for operating leases and 6 years for finance leases. The weighted average discount rate for operating leases was 3.88% and 3.86% for finance leases.

~~Maturities of lease liabilities were as follows:~~

(In millions)

Operating Leases

Finance Leases

2019

    $
129

    $
18

2020

169

23

2021

140

14

2022

121

14

2023

81

9

Thereafter

124

22

Total lease payments

764

100

Less: imputed interest

80

11

Total

    $
684

    $
89

~~Disclosures regarding minimum lease payments under previous lease accounting guidance can be found in the Company’s 2018 Form 10-K.~~

Three Months Ended March 31,
(In millions) 2024 2023
Net long-duration insurance and contractholder liabilities measurement adjustments
Beginning balance $ (971) $ (256)
Current period change in discount rate for certain long-duration liabilities (732) (411)
Tax benefit 186 101
Net current period change in discount rate for certain long-duration liabilities (546) (310)
Current period change in instrument-specific credit risk for market risk benefits (18) (26)
Tax benefit 4 5
Net current period change in instrument-specific credit risk for market risk benefits (14) (21)
Other comprehensive (loss), net of tax (560) (331)
Ending balance $ (1,531) $ (587)

Three Months Ended March 31,
(In millions) 2024 2023
Translation of foreign currencies
Beginning balance $ (149) $ (154)
Translation of foreign currencies (24) 15
Tax (expense) benefit (2) 1
Other comprehensive (loss) income, net of tax (26) 16
Ending balance $ (175) $ (138)

Three Months Ended March 31,
(In millions) 2024 2023
Postretirement benefits liability
Beginning balance $ (915) $ (916)
Reclassification adjustment for amortization of net prior actuarial losses and prior service costs (Interest expense and other) 8 13
Reclassification adjustment for tax (benefit) included in Shareholders' net (loss) income (3) (3)
Other comprehensive income, net of tax 5 10
Ending balance $ (910) $ (906)

Three Months Ended March 31,
(In millions) 2024 2023
Total Accumulated other comprehensive loss
Beginning balance $ (1,864) $ (1,658)
Shareholders' other comprehensive (loss), net of tax (460) (111)
Ending balance $ (2,324) $ (1,769)

Note 15 — – Income Taxes

Income Tax Expense

The effective tax rate for the three months ended March 31, ~~2019 of 23.3% was lower than the 24.7% rate for the same period in 2018. The decline was~~2024 increased due to ~~suspension~~a valuation allowance related to the impairment of equity securities, partially offset by a decrease related to the ~~non-deductible health insurance industry tax.~~

businesses held for sale and a decrease related to the release of tax reserves following a favorable state audit resolution. The ~~Company continues to retain a significant portion of its foreign earnings overseas, where they are generally subject to a higher~~368.4% effective tax rate than that imposed in the United States. Additional deferred tax liabilities of $137 million for foreign withholding taxes would have been recorded if these earnings were intended to be remitted domestically. A portion of these withholding taxes may be eligible for credit against the Company’s U.S. tax liability.

B. ~~Uncertain Tax Positions and Other Tax Matters~~

~~Changes in uncertain tax positions~~ for the three months ended March 31, ~~2019 and 2018 were immaterial. There were no significant updates to~~2024 was higher than the 18.4% rate for the three months ended March 31, 2023.

As of March 31, 2024, we had approximately $664 million in deferred tax ~~return audits~~assets ("DTAs") associated with the impairment of equity securities, as well as unrealized investment losses that are partially recorded in Accumulated other comprehensive loss. A valuation allowance of $427 million, which drove the higher effective tax rate, was established in the ~~first quarter~~three months ended March 31, 2024, almost entirely related to the impairment of ~~2019.~~

equity securities. For the remainder of the DTAs, we have determined that a valuation allowance is not currently required based on the Company's ability to carry back losses and our ability and intent to hold certain securities until recovery. 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 ~~(Prudential Retirement Insurance and Annuity Company or “Prudential”)~~ has the right to redirect the management of the related assets to provide for benefit payments. As of March 31, ~~2019,~~2024, employers maintained assets that generally exceeded the benefit obligations under these arrangements of approximately ~~$455~~$410 million. ~~Approximately 11% of these are reinsured by Prudential. The remaining guarantees are provided by the Company with minimal reinsurance from third parties. The Company establishes an~~An additional liability is established if management believes that the Company will be required to make ~~payment~~payments under the guarantees; there were no additional liabilities required for these guarantees, net of reinsurance, as of March 31, ~~2019.~~2024. Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value ~~hierarchy (see~~ ~~Note 10~~).

hierarchy.

The Company does not expect that these financial guarantees will have a material effect on the ~~Company’s~~Company's consolidated results of operations, liquidity or financial condition.

B.Certain Other Guarantees

The Company had indemnification obligations as of March 31, ~~2019~~2024 in connection with acquisition and disposition transactions. These indemnification obligations are triggered by the breach of representations or covenants provided by the Company, such as representations for the presentation of financial statements, ~~the~~ filing of tax returns, compliance with ~~law~~laws or ~~the~~regulations or identification of

outstanding litigation. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential amount due is subject to contractual limitations based on a stated dollar amount or a percentage of the transaction purchase price, while in other cases limitations are not specified or applicable. The Company does not believe that it is possible to determine the maximum potential amount due under these obligations because not all amounts due under these indemnification obligations are subject to limitation. There were no recorded liabilities for these indemnification obligations as of March 31, ~~2019.~~

2024.

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~~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 ~~impacts related to~~charges or credits resulting from existing or new guaranty fund assessments for the three months ended March 31, ~~2019.~~

2024.

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~~ 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 ~~service~~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. ~~Further information on income tax matters can be found in Note 15.~~

Pending litigation and legal or regulatory matters that the Company has identified with a reasonably possible material loss and certain other material litigation matters are described below. ~~When litigation and regulatory~~For those matters ~~present loss contingencies~~ that ~~are both probable and estimable,~~ the Company ~~accrues the estimated~~has identified with a reasonably possible material loss, by a charge to shareholders’ net income. The estimated loss is the Company’s best estimate of the probable loss at the time or an amount within a range of estimated losses reflecting the most likely outcome or the minimum amount of the range (if no amount is better than any other estimated amount in the range). For material pending litigation and legal or regulatory matters discussed below, the Company provides disclosure in the aggregate of accruals and range of loss, or a statement that such information cannot be estimated. ~~In light of the uncertainties involved in these matters, there is no assurance that their ultimate resolution will not exceed the amounts currently accrued by the Company.~~ The ~~Company’s accruals~~Company's accrual for the ~~matters~~matter discussed below under ~~“Litigation Matters”, as well as litigation related to certain of the Company’s claim operating practices and disputes around reimbursement rates to providers, are immaterial.~~"Litigation Matters" is not material. Due to numerous uncertain factors presented in ~~these cases,~~this case, it is not possible to estimate an aggregate range of loss (if any) for ~~these matters~~this matter at this time. In light of the uncertainties involved in this matter, there is no assurance that its ultimate resolution will not exceed the amount currently accrued by the Company. An adverse outcome in ~~one or more of these matters~~this matter could be material to the ~~Company’s~~Company's results of operations, financial condition or liquidity for any particular period. The outcomes of lawsuits are inherently unpredictable and we may be unsuccessful in ~~these~~this ongoing litigation ~~matters~~matter or any future claims or litigation.

Litigation Matters

~~Amara cash balance pension plan litigation.~~ In December 2001, Janice Amara filed a class action lawsuit in the U.S. District Court for the District of Connecticut against Cigna Corporation (now Old Cigna) and the Cigna Pension Plan on behalf of herself and other similarly situated Plan participants affected by the 1998 conversion to a cash balance formula. The plaintiffs allege various violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), including that the Plan’s cash balance formula discriminates against older employees; that the conversion resulted in a wear-away period (when the pre-conversion accrued benefit exceeded the post-conversion benefit); and that the Plan communications contained inaccurate or inadequate disclosures about these conditions.

In 2008, the District Court (1) affirmed the Company’s right to convert to a cash balance plan prospectively beginning in 1998; (2) found for plaintiffs on the disclosure claim only; and (3) required the Company to pay pre-1998 benefits under the pre-conversion traditional annuity formula and post-1997 benefits under the post-conversion cash balance formula. From 2008 through 2015, this case has undergone a series of court proceedings that resulted in the original District Court Order being largely upheld. In 2015, the Company submitted to the District Court its proposed method for calculating the additional pension benefits due to class members and plaintiffs responded in August 2015.

Since then, there has been continued litigation regarding the calculation of benefits, attorneys’ fees, and the administration of the remedy payments. On November 29, 2018, the Court ordered the Pension Plan to pay attorneys’ and incentive fees of $32 million, and to pay any past due lump sums and back benefits within 90 days of the Order. The attorneys’ fees were paid as ordered in December 2018. In the first quarter of 2019, the Company amended the Plan, notified class participants of their increased benefits and

~~commenced remedy benefit payments out of the Plan, including the past due lump sums and back benefits. See Note 13 for additional information.~~

~~In April 2019, plaintiffs challenged certain aspects of the methodology used to calculate and pay benefits. The Company and the Plan are vigorously opposing plaintiffs’ motion.~~

~~Cigna Litigation with Anthem~~. In February 2017, the Company delivered a notice to Anthem terminating the 2015 merger agreement, and notifying Anthem that it must pay the Company the $1.85 billion reverse termination fee pursuant to the terms of the merger agreement. Also in February 2017, the Company filed suit against Anthem in the Delaware Court of Chancery (the “Chancery Court”) seeking declaratory judgments that the Company’s termination of the merger agreement was valid and that Anthem was not permitted to extend the termination date. The complaint also sought payment of the reverse termination fee and additional damages in an amount exceeding $13 billion, including the lost premium value to the Company’s shareholders caused by Anthem’s willful breaches of the merger agreement. Anthem has countersued, alleging its own claims for damages.

On February 15, 2017, the Chancery Court granted Anthem’s motion for a temporary restraining order and temporarily enjoined the Company from terminating the merger agreement. In May 2017, the Chancery Court denied Anthem’s motion for a preliminary injunction to enjoin Cigna from terminating the merger agreement but stayed its ruling pending Anthem’s determination as to whether to seek an appeal. Anthem subsequently notified Cigna and the Chancery Court that it did not intend to appeal the Chancery Court’s decision. As a result, the merger agreement was terminated.

The litigation between the parties remains pending. A trial was held during the first quarter of 2019. Oral arguments on post-trial briefs have been set for September 2019 and we expect the judge to issue a decision before the end of the year. We believe in the merits of our claims and dispute Anthem’s claims, and we intend to vigorously defend ourselves and pursue our claims.

Express Scripts Litigation with ~~Anthem.~~Elevance. In March 2016, ~~Anthem~~Elevance filed a lawsuit in the United States District Court for the Southern District of New York alleging various breach of contract claims against Express Scripts relating to the ~~parties’~~parties' rights and obligations under the periodic pricing review section of the pharmacy benefit management agreement between the parties including allegations that Express Scripts failed to negotiate new pricing concessions in good faith, as well as various alleged service issues. ~~Anthem~~Elevance also requested that the court enter declaratory judgment that Express Scripts is required to provide ~~Anthem~~Elevance competitive benchmark pricing, that ~~Anthem~~Elevance can terminate the agreement and that Express Scripts is required to provide ~~Anthem~~Elevance with post-termination services at competitive benchmark pricing for one year following any termination by ~~Anthem. Anthem claims~~Elevance. Elevance claimed it is entitled to ~~$13.0~~$13 billion in additional pricing concessions over the remaining term of the agreement, as well as $1.8 billion for one year following any contract termination by ~~Anthem~~Elevance and $150 million in damages for service issues ~~(“Anthem’s Allegations”~~("Elevance's Allegations"). On April 19, 2016, in response to ~~Anthem’s~~Elevance's complaint, Express Scripts filed its answer denying ~~Anthem’s~~Elevance's Allegations in their entirety and asserting affirmative defenses and counterclaims against ~~Anthem.~~Elevance. The court subsequently granted ~~Anthem’s~~Elevance's motion to dismiss two of six counts of Express ~~Scripts’~~Scripts' amended counterclaims. ~~The current scheduling order runs through~~Express Scripts filed its Motion for Summary Judgment on August 27, 2021. Elevance completed filing of its Response to Express Scripts' Motion for Summary Judgment on October 16, 2021. Express Scripts filed its Reply in Support of its Motion for Summary Judgment on November 19, 2021. On March 31, 2022, the ~~completion of~~court granted summary judgment ~~briefing~~ in ~~February 2020. There is no tentative trial date. We believe in the merits~~favor of ~~our~~Express Scripts on all of Elevance's pricing claims for damages totaling $14.8 billion and ~~dispute Anthem’s~~on most of Elevance's claims ~~and we intend~~relating to ~~vigorously defend ourselves and pursue our claims.~~

~~Regulatory Matters~~

~~Civil Investigative Demand.~~ The U.S. Department of Justice (“DOJ”) is conducting an industry review of Medicare Advantage organizations’ risk adjustment practices under Medicare Parts C and D including medical chart reviews and health exams. The Company is currently responding to information requests (civil investigative demands) received from the DOJ (U.S. Attorney’s Offices for the Eastern District of Pennsylvania and the Southern District of New York). We will continue to cooperate with the DOJ’s investigation.

~~Disability~~service issues. Elevance's only remaining service claims ~~regulatory matter.~~ The Company is subject to an agreement with the Departments of Insurance for Maine, Massachusetts, Pennsylvania, Connecticut and California (together, the “Lead States”), originally entered into in 2013, that relatesrelate to the ~~Company’s long-term disability claims handling practices.~~review or processing of prior authorizations, with alleged damages over $100 million. On November 1, 2023, the parties signed a settlement agreement pursuant to which Express Scripts agreed to resolve the service-related claims. The settlement agreement ~~provides for enhanced procedures related to documentation and disposition. Cigna has cooperated fully with the Lead States and we believe we have addressed the requirements~~is not an admission of ~~the agreement. The Lead States recently initiated a re-examination of our practices. Accordingly,~~liability or fault by Express Scripts, the Company ~~may be subject~~or its subsidiaries. Following the settlement, Elevance retains the right to ~~additional costs, penalties and requests to change its business practices~~appeal the pricing-related claims that ~~could negatively impact future earnings for this business.~~

~~Note 17~~ ~~— Condensed Consolidating Financial Information~~

~~Effective with~~were previously dismissed by the ~~Merger that closed on December 20, 2018 (see Note 4 for further information) the senior notes issued by Cigna, Old Cigna, ESI, Medco,~~court and Express Scripts ~~became jointly and severally and fully and unconditionally (subject~~retains the ability to ~~certain customary release provisions, including sale, exchange, transfer or liquidation~~reassert its own pricing-related claims in the event any appeal by Elevance is successful. Elevance filed its Notice of ~~the guarantor subsidiary) guaranteed by Cigna, Old Cigna, ESI, Medco and Express Scripts, as applicable. Details~~Appeal of ~~these debt obligations are presented in~~ its pricing-related claims on December 12, 2023. Elevance filed its opening appellate brief on April 24, 2024.

Note 6. The following condensed consolidating financial information has been prepared in accordance with the requirements as prescribed by the SEC in Regulation S-X. The condensed consolidating financial information presented below is not indicative of what the financial position, results of operations or cash flows would have been had each of the entities operated as an independent company during the periods for various reasons, including, but not limited to, intercompany transactions and integration of systems.

~~The condensed consolidating financial information is presented separately for:~~

~~(i)~~		~~Cigna (the Parent Company), guarantor, the issuer of additional guaranteed obligations;~~
~~(ii)~~		~~Old Cigna (former Parent Company), guarantor, the issuer of additional guaranteed obligations;~~
~~(iii)~~		~~Express Scripts, guarantor, the issuer of additional guaranteed obligations;~~
~~(iv)~~		~~ESI, guarantor, the issuer of additional guaranteed obligations;~~
~~(v)~~		~~Medco, guarantor, the issuer of additional guaranteed obligations;~~
~~(vi)~~		~~Non-guarantor subsidiaries, on a combined basis;~~
~~(vii)~~		Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among Cigna, Old Cigna, Express Scripts, ESI, Medco and the non-guarantor subsidiaries, (b) eliminate the investments in our subsidiaries and (c) record consolidating entries; and
~~(viii)~~		~~Cigna and subsidiaries on a consolidated basis.~~

~~Condensed Consolidating Statements of Income~~

For the three months ended March 31, 2019
(In millions)

Cigna

Old Cigna

Express
Scripts
Holding
Company

Express
Scripts,
Inc.

Medco Health
Solutions, Inc.

Non-
Guarantors

Eliminations
and
Consolidation
Adjustments

Consolidated
Revenues

Pharmacy revenues

$
-

$
-

$
-

$
17,622

$
3,763

$
14,142

$
(10,348)

$
25,179
Premiums

-

-

-

-

-

9,971

-

9,971
Fees and other revenues

-

-

-

190

84

3,101

(925)

2,450
Net investment income (loss)

(9)

-

15

3

2

335

-

346
Total revenues

(9)

-

15

17,815

3,849

27,549

(11,273)

37,946
Benefits and expenses

Pharmacy and other service costs

-

-

-

16,363

3,689

14,346

(10,348)

24,050
Medical costs and other benefit expenses

-

-

-

-

-

7,620

-

7,620
Selling, general and administrative expenses

(99)

73

13

835

87

3,319

(925)

3,303
Amortization of acquired intangible assets

-

-

-

577

83

83

-

743
Total benefits and expenses

(99)

73

13

17,775

3,859

25,368

(11,273)

35,716
Income (loss) from operations

90

(73)

2

40

(10)

2,181

-

2,230
Interest and other income (expense)

(237)

(87)

(124)

(4)

(9)

9

-

(452)
Intercompany interest income (expense)

(31)

(3)

124

(62)

(39)

11

-

-
Net realized investment gains

-

-

-

-

-

10

-

10
Income (loss) before income taxes

(178)

(163)

2

(26)

(58)

2,211

-

1,788
Total income tax (benefit) expense

(37)

(31)

1

(17)

(17)

517

-

416
Income (loss) before equity in earnings of subsidiaries

(141)

(132)

1

(9)

(41)

1,694

-

1,372
Equity in earnings of subsidiaries

1,509

1,152

488

432

84

-

(3,665)

-
Net income

1,368

1,020

489

423

43

1,694

(3,665)

1,372
Less: Net income attributable to noncontrolling interests

-

-

-

-

-

4

-

4
Shareholders’ net income

$
1,368

$
1,020

$
489

$
423

$
43

$
1,690

$
(3,665)

$
1,368
Other comprehensive income, net of tax

429

429

1

1

-

412

(843)

429
Shareholders’ comprehensive income

$
1,797

$
1,449

$
490

$
424

$
43

$
2,102

$
(4,508)

$
1,797

~~Condensed Consolidating Statements of Income~~

For the three months ended March 31, 2018
(In millions)

Cigna

Old Cigna

Express
Scripts
Holding
Company

Express
Scripts,
Inc.

Medco Health
Solutions, Inc.

Non-
Guarantors

Eliminations
and
Consolidation
Adjustments

Consolidated
Revenues

Premiums

$
-

$
-

$
-

$
-

$
-

$
8,999

$
-

$
8,999
Fees and other revenues

-

-

-

-

-

1,368

-

1,368
Pharmacy revenues

-

-

-

-

-

717

-

717
Net investment income

-

-

-

-

-

329

-

329
Total revenues

-

-

-

-

-

11,413

-

11,413
Benefits and expenses

Medical costs and other benefit expenses

-

-

-

-

-

6,772

-

6,772
Pharmacy and other service costs

-

-

-

-

-

561

-

561
Selling, general and administrative expenses

-

64

-

-

-

2,681

-

2,745
Amortization of acquired intangible assets

-

-

-

-

-

27

-

27
Total benefits and expenses

-

64

-

-

-

10,041

-

10,105
Income (loss) from operations

-

(64)

-

-

-

1,372

-

1,308
Interest and other (expense)

-

(85)

-

-

-

28

-

(57)
Intercompany interest income (expense)

-

(16)

-

-

-

16

-

-
Net realized investment (losses)

-

-

-

-

-

(33)

-

(33)
Income (loss) before income taxes

-

(165)

-

-

-

1,383

-

1,218
Total income tax (benefit) expense

-

(39)

-

-

-

340

-

301
Income (loss) before equity in earnings of subsidiaries

-

(126)

-

-

-

1,043

-

917
Equity in earnings of subsidiaries

915

1,041

-

-

-

-

(1,956)

-
Net income

915

915

-

-

-

1,043

(1,956)

917
Less: net income attributable to noncontrolling interests

-

-

-

-

-

2

-

2
Shareholders’ net income

$
915

$
915

$
-

$
-

$
-

$
1,041

$
(1,956)

$
915
Other comprehensive (loss), net of tax

(226)

(226)

-

-

-

(237)

463

(226)
Shareholders’ comprehensive income

$
689

$
689

$
-

$
-

$
-

$
804

$
(1,493)

$
689

~~Condensed Consolidating Balance Sheets~~

As of March 31, 2019
(In millions)

Cigna

Old Cigna

Express
Scripts
Holding
Company

Express
Scripts,
Inc.

Medco Health
Solutions, Inc.

Non-
Guarantors

Eliminations
and
Consolidation
Adjustments

Consolidated
Assets

Cash and cash equivalents

$
-

$
-

$
1,596

$
44

$
-

$
3,336

$
-

$
4,976
Investments

417

6

-

-

-

1,239

-

1,662
Accounts receivable, net

-

2

-

4,670

626

5,643

-

10,941
Inventories

-

-

-

-

-

2,382

-

2,382
Other current assets

-

131

-

282

3

1,042

(283)

1,175
Total current assets

417

139

1,596

4,996

629

13,642

(283)

21,136
Long-term investments

-

10

-

-

-

27,247

-

27,257
Reinsurance recoverables

-

-

-

-

-

5,385

-

5,385
Deferred policy acquisition costs

-

-

-

-

-

2,817

-

2,817
Property and equipment

-

-

-

2,386

-

2,137

-

4,523
Investments in subsidiaries

70,036

28,174

52,560

17,551

8,205

-

(176,526)

-
Intercompany receivables, net

-

3,054

-

8,371

2,222

26,839

(40,486)

-
Goodwill

-

-

31,049

-

-

13,488

-

44,537
Other intangible assets

-

-

8,400

18,489

6,958

4,491

-

38,338
Other assets

27

227

-

152

78

2,001

(209)

2,276
Separate account assets

-

-

-

-

-

8,079

-

8,079
TOTAL ASSETS

$
70,480

$
31,604

$
93,605

$
51,945

$
18,092

$
106,126

$
(217,504)

$
154,348
Liabilities

Current insurance and contractholder liabilities

$
-

$
-

$
-

$
-

$
-

$
7,060

$
-

$
7,060
Pharmacy and service costs payable

-

-

-

9,245

1,291

609

-

11,145
Accounts payable

22

-

2

833

4

3,627

-

4,488
Accrued expenses and other liabilities

719

288

92

1,522

276

4,747

(283)

7,361
Short-term debt

1,556

-

998

352

-

9

-

2,915
Total current liabilities

2,297

288

1,092

11,952

1,571

16,052

(283)

32,969
Non-current insurance and contractholder liabilities

-

-

-

-

-

20,043

-

20,043
Deferred tax liabilities, net

-

-

1,999

4,898

1,664

1,051

(209)

9,403
Other non-current liabilities

-

715

-

577

241

2,299

-

3,832
Intercompany payables, net

4,904

4,477

30,552

-

-

553

(40,486)

-
Long-term debt

20,871

5,112

10,938

41

505

104

-

37,571
Separate account liabilities

-

-

-

-

-

8,079

-

8,079
TOTAL LIABILITIES

28,072

10,592

44,581

17,468

3,981

48,181

(40,978)

111,897
Redeemable noncontrolling interests

-

-

-

-

-

38

-

38
TOTAL SHAREHOLDERS’ EQUITY

42,408

21,012

49,024

34,477

14,111

57,902

(176,526)

42,408
Noncontrolling interests

-

-

-

-

-

5

-

5
TOTAL EQUITY

42,408

21,012

49,024

34,477

14,111

57,907

(176,526)

42,413
TOTAL LIABILITIES AND EQUITY

$
70,480

$
31,604

$
93,605

$
51,945

$
18,092

$
106,126

$
(217,504)

$
154,348

~~Condensed Consolidating Balance Sheets~~

As of December 31, 2018

(In millions)

Cigna

Old Cigna

Express
Scripts
Holding
Company

Express
Scripts,
Inc.

Medco Health
Solutions, Inc.

Non-
Guarantors

Eliminations
and
Consolidation
Adjustments

Consolidated

Assets

Cash and cash equivalents

$
243

$
-

$
633

$
43

$
-

$
2,936

$
-

$
3,855

Investments

-

-

-

-

-

2,045

-

2,045

Accounts receivable, net

-

-

-

4,206

748

5,519

-

10,473

Inventories

-

-

-

-

-

2,821

-

2,821

Other current assets

14

59

-

310

-

1,063

(210)

1,236

Total current assets

257

59

633

4,559

748

14,384

(210)

20,430

Long-term investments

-

10

-

-

-

26,919

-

26,929

Reinsurance recoverables

-

-

-

-

-

5,507

-

5,507

Deferred policy acquisition costs

-

-

-

-

-

2,821

-

2,821

Property and equipment

-

-

-

2,432

-

2,130

-

4,562

Investments in subsidiaries

68,969

27,544

52,035

17,115

8,117

-

(173,780)

-

Intercompany receivables, net

-

4,505

-

7,425

2,335

24,882

(39,147)

-

Goodwill

-

-

31,049

-

-

13,456

-

44,505

Other intangible assets

-

-

8,400

18,962

7,040

4,601

-

39,003

Other assets

48

198

-

68

74

1,488

(246)

1,630

Separate account assets

-

-

-

-

-

7,839

-

7,839

TOTAL ASSETS

$
69,274

$
32,316

$
92,117

$
50,561

$
18,314

$
104,027

$
(213,383)

$
153,226

Liabilities

Current insurance and contractholder liabilities

$
-

$
-

$
-

$
-

$
-

$
6,801

$
-

$
6,801

Pharmacy and service costs payable

-

-

-

8,422

1,579

701

-

10,702

Accounts payable

22

-

-

834

4

3,506

-

4,366

Accrued expenses and other liabilities

396

182

129

1,387

189

4,998

(210)

7,071

Short-term debt

-

1,500

995

353

-

107

-

2,955

Total current liabilities

418

1,682

1,124

10,996

1,772

16,113

(210)

31,895

Non-current insurance and contractholder liabilities

-

-

-

-

-

19,974

-

19,974

Deferred tax liabilities, net

-

-

2,001

5,012

1,685

1,001

(246)

9,453

Other non-current liabilities

-

685

-

497

290

1,998

-

3,470

Intercompany payables, net

4,965

4,361

29,569

-

-

252

(39,147)

-

Long-term debt

22,863

5,110

10,932

24

506

88

-

39,523

Separate account liabilities

-

-

-

-

-

7,839

-

7,839

TOTAL LIABILITIES

28,246

11,838

43,626

16,529

4,253

47,265

(39,603)

112,154

Redeemable noncontrolling interests

-

-

-

-

-
��
37

-

37

TOTAL SHAREHOLDERS’ EQUITY

41,028

20,478

48,491

34,032

14,061

56,718

(173,780)

41,028

Noncontrolling interest

-

-

-

-

-

7

-

7

TOTAL EQUITY

41,028

20,478

48,491

34,032

14,061

56,725

(173,780)

41,035

TOTAL LIABILITIES AND EQUITY

$
69,274

$
32,316

$
92,117

$
50,561

$
18,314

$
104,027

$
(213,383)

$
153,226

~~Condensed Consolidating Cash Flow Statements~~

For the Three Months Ended March 31, 2019

(In millions)

Cigna

Old Cigna

Express
Scripts
Holding
Company

Express
Scripts,
Inc.

Medco Health
Solutions, Inc.

Non-
Guarantors

Eliminations
and
Consolidation
Adjustments

Consolidated

Net cash (used in) provided by operating activities

$
1,102

$
947

$
(6)

$
1,802

$
(110)

$
1,295

$
(1,838)

$
3,192

Cash Flows from Investing Activities

Net change in loans due to (from) affiliates

-

1,600

(1,700)

-

-

141

(41)

-

Proceeds from investments sold:

Debt securities and equity securities

-

-

-

-

-

1,471

-

1,471

Investment maturities and repayments:

Debt securities and equity securities

-

-

-

-

-

319

-

319

Commercial mortgage loans

-

-

-

-

-

89

-

89

Other sales, maturities and repayments (primarily short-term and other long-term investments)

-

-

-

-

-

367

-

367

Investments purchased or originated:

Debt securities and equity securities

-

-

-

-

-

(1,088)

-

(1,088)

Commercial mortgage loans

-

-

-

-

-

(95)

-

(95)

Other sales, maturities and repayments (primarily short-term and other long-term investments)

(417)

(6)

-

-

-

35

-

(388)

Property and equipment purchases, net

-

-

-

(55)

-

(139)

-

(194)

Acquisitions, net of cash acquired

-

-

-

-

-

(6)

-

(6)

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES

(417)

1,594

(1,700)

(55)

-

1,094

(41)

475

Cash Flows from Financing Activities

Net change in amounts due to (from) affiliates, net

-

(141)

2,669

(1,744)

110

(935)

41

-

Intercompany dividends paid

-

(900)

-

-

-

(922)

1,822

-

Deposits and interest credited to contractholder deposit funds

-

-

-

-

-

247

-

247

Withdrawals and benefit payments from contractholder deposit funds

-

-

-

-

-

(251)

-

(251)

Net change in short-term debt

558

(1,500)

-

-

-

(106)

-

(1,048)

Repayment of long-term debt

(1,000)

-

-

-

-

-

-

(1,000)

Repurchase of common stock

(462)

-

-

-

-

-

-

(462)

Issuance of common stock

53

-

-

-

-

-

-

53

Other, net

(77)

-

-

(2)

-

(10)

16

(73)

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

(928)

(2,541)

2,669

(1,746)

110

(1,977)

1,879

(2,534)

Effect of foreign currency rate changes on cash and cash equivalents

-

-

-

-

-

(12)

-

(12)

Net (decrease) increase in cash and cash equivalents

(243)

-

963

1

-

400

-

1,121

Cash and cash equivalents, January 1,

243

-

633

43

-

2,936

-

3,855

Cash and cash equivalents, March 31,

$
-

$
-

$
1,596

$
44

$
-

$
3,336

$
-

$
4,976

~~Condensed Consolidating Cash Flow Statements~~

For the Three Months Ended March 31, 2018

(In millions)

Cigna

Old Cigna

Express
Scripts
Holding
Company

Express
Scripts,
Inc.

Medco Health
Solutions, Inc.

Non-
Guarantors

Eliminations
and
Consolidation
Adjustments

Consolidated

Net cash provided by operating activities

$
-

$
641

$
-

$
-

$
-

$
1,833

$
(449)

$
2,025

Cash Flows from Investing Activities

Net change in loans due to affiliates

-

-

-

-

-

102

(102)

-

Proceeds from investments sold:

Debt securities and equity securities

-

-

-

-

-

499

-

499

Investment maturities and repayments:

Debt securities and equity securities

-

-

-

-

-

297

-

297

Commercial mortgage loans

-

-

-

-

-

28

-

28

Other sales, maturities and repayments (primarily short-term and other long-term investments)

-

-

-

-

-

112

-

112

Investments purchased or originated:

Debt securities and equity securities

-

-

-

-

-

(2,259)

-

(2,259)

Commercial mortgage loans

-

-

-

-

-

(68)

-

(68)

Other sales, maturities and repayments (primarily short-term and other long-term investments)

-

(2)

-

-

-

(204)

-

(206)

Property and equipment purchases, net

-

-

-

-

-

(103)

-

(103)

NET CASH (USED IN) INVESTING ACTIVITIES

-

(2)

-

-

-

(1,596)

(102)

(1,700)

Cash Flows from Financing Activities

Net change in amounts due (from) affiliates, net

-

(102)

-

-

-

-

102

-

Intercompany dividends paid

-

-

-

-

-

(449)

449

-

Deposits and interest credited to contractholder deposit funds

-

-

-

-

-

292

-

292

Withdrawals and benefit payments from contractholder deposit funds

-

-

-

-

-

(306)

-

(306)

Net change in short-term debt

-

-

-

-

-

(3)

-

(3)

Repayment of long-term debt

-

(131)

-

-

-

-

-

(131)

Repurchase of common stock

-

(310)

-

-

-

-

-

(310)

Issuance of common stock

-

20

-

-

-

-

-

20

Other, net

-

(125)

-

-

-

33

-

(92)

NET CASH (USED IN) FINANCING ACTIVITIES

-

(648)

-

-

-

(433)

551

(530)

Effect of foreign currency rate changes on cash and cash equivalents

-

-

-

-

-

4

-

4

Net (decrease) in cash and cash equivalents

-

(9)

-

-

-

(192)

-

(201)

Cash and cash equivalents, January 1,

-

9

-

-

-

2,963

-

2,972

Cash and cash equivalents, March 31,

$
-

$
-

$
-

$
-

$
-

$
2,771

$
-

$
2,771

~~Note 18~~ —17 – Segment Information

See Note 1 to the Consolidated Financial Statements for a description of our segments that changed effective with the fourth quarter of 2018 along with one of our principal financial measures of segment operating performance, which is now pre-tax adjusted income from operations. Prior year segment information reported in this Form 10-Q has been adjusted to reflect these changes. In addition, effective with the first quarter of 2019, the Company began allocating compensation cost for stock options to the segments. ~~Prior year segment information was not restated for this change.~~ A description of our basis for reporting segment operating results is outlined below. Intersegment ~~transactions~~revenues primarily reflect pharmacy ~~sales to insured customers of~~and care services transactions between the ~~Integrated Medical segment. These transactions are eliminated in consolidation.~~

Evernorth Health Services and Cigna Healthcare segments.

The Company uses ~~“pre-tax~~"pre-tax adjusted income (loss) from ~~operations”~~operations" and ~~“adjusted revenues”~~"adjusted revenues" as its principal financial measures of segment operating performance because management believes ~~they~~these metrics best reflect the underlying results of business operations and permit analysis of trends in underlying revenue, expenses and profitability. ~~Pre-tax~~We define pre-tax adjusted income (loss) from operations ~~is defined~~ as income (loss) before income taxes excluding pre-tax income (loss) attributable to noncontrolling interests, net realized investment results, amortization of acquired intangible assets, ~~results of transitioning clients Anthem Inc. and Coventry Health Care, Inc. (the “transitioning clients”)~~ and special items. ~~Adjusted revenues is defined as revenues excluding: 1) revenue contributions from transitioning clients; 2) the Company’s~~The Cigna Group's share of certain realized investment results of its joint ventures reported in the ~~International Markets~~Cigna Healthcare segment using the equity method of ~~accounting; and 3) special items, if any. Income or expense amounts that~~accounting are ~~excluded from adjusted income from operations because they are not indicative of underlying performance or the responsibility of operating segment management include:~~

·~~Realized investment gains (losses) including changes in market values of certain financial instruments between balance sheet dates, as well as gains and losses associated with invested asset sales~~

·~~Amortization of acquired intangible assets because these relate to costs incurred for acquisitions~~

·~~Results of transitioning clients because those results are not indicative of ongoing results~~

·also excluded. Special items ~~if any,~~are matters that management believes are not representative of the underlying results of operations due to ~~the~~their nature or ~~size~~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 ~~these matters. Further context about~~certain realized 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.

The Company does not report total assets by segment because this is ~~provided in the footnotes listed in the table below.~~

not a metric used to allocate resources or evaluate segment performance.

The following table presents the special items charges (benefits) recorded by the Company, ~~for~~as well as the ~~three months ended March 31, 2019 and 2018.~~

Three Months Ended
(In millions)

March 31, 2019

March 31, 2018
Description of Special Item Charges (Benefits) and Financial Statement Line Item(s)

After-tax

Before-tax

After-tax

Before-tax
Integration and transaction-related costs (selling, general and administrative expenses)

$
108

$
136

$
50

$
60

respective financial statement line items impacted:



	Three Months Ended March 31,
		2024	2023
(In millions)			Pre-tax		After-tax		Pre-tax		After-tax
Integration and transaction-related costs (Selling, general and administrative expenses)			$	37	$	29	$	1	$	1
Loss (gain) on sale of businesses			19		(43)		—		—
Deferred tax expenses, net (Income taxes, less amount attributable to noncontrolling interests)			—		17		—		—





Total impact from special items			$	56	$	3	$	1	$	1

Summarized segment financial information ~~for the three months ended March 31~~ was as follows:

(In millions)

Health
Services

Integrated
Medical

International
Markets

Group
Disability and
Other

Corporate and
Eliminations

Total
Three Months Ended March 31, 2019

Revenues from external customers (1)

$
26,197

$
8,910

$
1,384

$
1,109

$
-

$
37,600
Inter-segment revenues

737

162

-

7

(906)

-
Net investment income (loss)

15

123

38

180

(10)

346
Total revenues

26,949

9,195

1,422

1,296

(916)

37,946
Revenue contributions from transitioning clients

(4,489)

-

-

-

-

(4,489)
Net realized investment results from equity method subsidiaries (2)

-

-

(28)

-

-

(28)
Adjusted revenues

$
22,460

$
9,195

$
1,394

$
1,296

$
(916)

$
33,429
Income (loss) before taxes

$
942

$
1,157

$
222

$
93

$
(626)

$
1,788
Pre-tax adjustments to reconcile to adjusted income from operations

Adjustment for transitioning clients

(660)

-

-

-

-

(660)
(Income) attributable to noncontrolling interests

(1)

-

(4)

-

-

(5)
Net realized investment (gains) (2)

-

(5)

(23)

(10)

-

(38)
Amortization of acquired intangible assets

713

18

11

1

-

743
Special items

Integration and transaction-related costs

-

-

-

-

136

136
Pre-tax adjusted income (loss) from operations

$
994

$
1,170

$
206

$
84

$
(490)

$
1,964
(In millions)

Health Services

Integrated
Medical

International
Markets

Group
Disability and
Other

Corporate and
Eliminations

Total
Three Months Ended March 31, 2018

Revenues from external customers (1)

$
786

$
7,903

$
1,302

$
1,093

$
-

$
11,084
Inter-segment revenues

284

136

-

3

(423)

-
Net investment income

1

111

37

175

5

329
Total revenues

1,071

8,150

1,339

1,271

(418)

11,413
Net realized investment results from equity method subsidiaries (2)

-

-

2

-

-

2
Adjusted revenues

$
1,071

$
8,150

$
1,341

$
1,271

$
(418)

$
11,415
Income (loss) before taxes

$
83

$
972

$
213

$
103

$
(153)

$
1,218
Pre-tax adjustments to reconcile to adjusted income from operations

(Income) attributable to noncontrolling interests

-

-

(4)

-

-

(4)
Net realized investment losses (2)

-

18

4

12

1

35
Amortization of acquired intangible assets

-

22

4

1

-

27
Special items

Integration and transaction-related costs

-

-

-

-

60

60
Pre-tax adjusted income (loss) from operations

$
83

$
1,012

$
217

$
116

$
(92)

$
1,336

(In millions) Evernorth Health Services Cigna Healthcare Other Operations Corporate and Eliminations Total
Three months ended March 31, 2024
Revenues from external customers $ 44,886 $ 12,012 $ 66 $ 1 $ 56,965
Intersegment revenues 1,281 1,124 25 (2,430)
Net investment income 59 149 75 7 290
Total revenues 46,226 13,285 166 (2,422) 57,255
Net realized investment results from certain equity method investments
— (8) — — (8)
Adjusted revenues $ 46,226 $ 13,277 $ 166 $ (2,422) $ 57,247
(Loss) income before income taxes $ (436) $ 943 $ 18 $ (446) $ 79
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests (77) — — — (77)
Net realized investment losses (1)
1,456 372 — — 1,828
Amortization of acquired intangible assets 417 6 — — 423
Special items
Integration and transaction-related costs — — — 37 37
Loss on sale of businesses — 19 — — 19
Pre-tax adjusted income (loss) from operations $ 1,360 $ 1,340 $ 18 $ (409) $ 2,309
(In millions) Evernorth Health Services Cigna Healthcare Other Operations Corporate and Eliminations Total
Three months ended March 31, 2023
Revenues from external customers
$ 34,511 $ 11,650 $ 79 $ — $ 46,240
Intersegment revenues 1,618 963 — (2,581)
Net investment income 50 143 78 6 277
Total revenues 36,179 12,756 157 (2,575) 46,517
Net realized investment results from certain equity method investments — (38) — — (38)
Adjusted revenues $ 36,179 $ 12,718 $ 157 $ (2,575) $ 46,479
Income (loss) before income taxes $ 918 $ 1,077 $ 21 $ (415) $ 1,601
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests (42) (1) — — (43)
Net realized investment losses (gains) (1)
— 24 (6) — 18
Amortization of acquired intangible assets 444 15 — — 459
Special items
Integration and transaction-related costs — — — 1 1
Pre-tax adjusted income (loss) from operations $ 1,320 $ 1,115 $ 15 $ (414) $ 2,036

(1)Includes Net realized investment losses as presented in our Consolidated Statements of Income, as well as the ~~Company’s~~Company's share of ~~the earnings~~certain realized investment results of its joint ventures reported in the ~~International Markets~~Cigna Healthcare segment using the equity method of ~~accounting.~~

~~(2) Includes the Company’s share~~accounting, which are presented within Fees and other revenues in our Consolidated Statements of ~~certain realized investment gains (losses) of its joint ventures reported in the International Markets segment using the equity method of accounting.~~

Income.

Revenue from external customers includes ~~pharmacy~~Pharmacy revenues, ~~premiums,~~Premiums and ~~fees~~Fees and other revenues. The following table presents these revenues by product, premium and service type:


	Three Months Ended March 31,
(In millions)		2024		2023
Products (Pharmacy revenues) (ASC 606)
Network revenues		$	24,166	$	15,748
Home delivery and specialty revenues		16,458		16,025
Other revenues		2,546		1,867
Total Evernorth Health Services		43,170		33,640
Total Other Operations		17		—
Intercompany eliminations		(1,151)		(1,496)
Total Pharmacy revenues		42,036		32,144
Insurance premiums (ASC 944)
Cigna Healthcare (1)
U.S. Healthcare
Employer insured		4,393		4,080
Medicare Advantage		2,287		2,236
Stop loss		1,668		1,503
Individual and Family Plans		1,040		1,208
Other		1,258		1,117
U.S. Healthcare		10,646		10,144
International Health		885		786
Total Cigna Healthcare		11,531		10,930

Other		48		79
Intercompany eliminations		24		16
Total Premiums		11,603		11,025
Services (Fees) (ASC 606)
Evernorth Health Services		2,943		2,499
Cigna Healthcare		1,571		1,606
Other Operations		25		1
Other revenues		90		66
Intercompany eliminations		(1,303)		(1,101)
Total Fees and other revenues		3,326		3,071
Total revenues from external customers		$	56,965	$	46,240

(1)Cigna Healthcare includes the U.S. Healthcare and ~~product type~~International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers. During the fourth quarter of 2023, the U.S. Commercial and U.S. Government operating segments merged to form the U.S. Healthcare operating segment. Information presented for the three months ended March ~~31:~~

Three Months Ended

March 31,

(In millions)

2019

2018

Products (Pharmacy revenues) (ASC 606)

Home delivery and specialty revenues

$
11,784

$
717

Network revenues

12,273

-

Other

1,122

-

Total pharmacy revenues

25,179

717

Insurance premiums

Integrated Medical premiums (ASC 944)

Commercial Premiums

Risk

3,039

2,611

Stop loss

1,069

980

Other

278

258

Government

Medicare Advantage

1,607

1,498

Medicare Part D

525

228

Other

1,065

1,101

Total Integrated Medical premiums

7,583

6,676

International Markets premiums

1,304

1,260

Domestic disability, life and accident premiums

1,047

998

Other premiums

37

65

Total premiums

9,971

8,999

Services (ASC 606)

Fees

2,390

1,352

Other external revenues

60

16

Total services

2,450

1,368

Total revenues from external customers

$
37,600

$
11,084

~~The~~31, 2023 has been restated to conform to the new operating segment presentation.

Financial and performance guarantees. Evernorth Health Services ~~segment~~ may also provide certain financial and performance guarantees, ~~in its pharmacy benefit management contracts~~ including a minimum level of discounts a client may receive, generic utilization rates and various service levels. Clients may be entitled to receive ~~performance penalties~~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~~Accrued expenses and other

liabilities (current). These estimates are adjusted atand paid following the end of the annual guarantee period. Historically, adjustments to original estimates have not been material. ~~The balance~~This guarantee liability was ~~$1.0~~$1.9 billion as of March 31, ~~2019~~2024 and ~~$895 million~~$1.6 billion as of December 31, ~~2018.~~

~~The Company recognized~~2023.

Major customers. Revenues from a single pharmacy benefit client were approximately 15% of consolidated revenues ~~as follows from Anthem and the Department of Defense~~ for the three months endedMarch 31, ~~2019. The Company did not recognize revenue~~2024. These amounts were reported in the Evernorth Health Services segment.

Additionally, revenues from ~~these two customers~~U.S. Federal Government agencies, under a number of contracts, were approximately 13% of consolidated revenues for the three months endedMarch 31, ~~2018.~~2024. These ~~revenues~~amounts were reported in the Evernorth Health Services ~~segment.~~

		~~Three Months Ended~~
		~~March 31, 2019~~
~~Anthem~~		~~12%~~
~~Department of Defense~~		8%

and Cigna Healthcare segments. See Note 25 in the Company's 2023 Form 10-K for prior year revenue concentration information.

Item 2.~~MANAGEMENT’S~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Management’s~~

Management's Discussion and Analysis of Financial Condition and Results of Operations (“("MD~~&A”~~&A") is intended to provide information to assist you in better understanding and evaluating our financial condition as of March 31, ~~2019~~2024, compared with December 31, ~~2018~~2023 and our results of operations for the three months ended March 31, ~~2019~~2024, compared with the same period last ~~year.~~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 of this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, ~~2018 (“2018~~2023 ("2023 Form ~~10-K”~~10-K")~~, in~~. In particular, we encourage you to refer to the ~~“Risk Factors”~~"Risk Factors" contained in Part I, Item 1A of ~~that form.~~

our 2023 Form 10-K.

Unless otherwise indicated, financial information in ~~the~~this MD&A is presented in accordance with accounting principles generally accepted in the United States of America ~~(“GAAP”~~("GAAP"). See Note 2 to the Consolidated Financial Statements in our ~~2018~~2023 Form 10-K for additional information regarding the ~~Company’s~~Company's significant accounting policies and see Note 2 to ~~these~~the Consolidated Financial Statements in ~~the~~this Form 10-Q for updates to those ~~accounting~~ policies resulting from adopting new accounting ~~guidance.~~guidance, if any. The preparation of interim consolidated financial statements necessarily relies heavily on estimates. This and certain other factors ~~such as the seasonal nature of portions of the health care and related pharmacy and other benefits businesses, as well as competitive and other market conditions,~~ 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”~~"N/M" when those changes are so large as to become not meaningful. Changes in percentages are expressed in basis points ~~(“bps”~~("bps").

In this MD&A, our consolidated measures ~~“adjusted~~"adjusted income from operations,”" earnings per share on that same basis and ~~“adjusted revenues”~~"adjusted revenues" are not determined in accordance with GAAP and should not be viewed as substitutes for the most directly comparable GAAP measures ~~“shareholders’~~of "shareholders' net income~~” “earnings~~ (loss)," "earnings per ~~share”~~share" and ~~“total~~"total revenues.~~” As discussed in Note 18, we~~" We also use pre-tax adjusted income (loss) from operations and adjusted revenues to measure the results of our segments.

~~We use~~

The Company uses "pre-tax adjusted income (loss) from ~~operations~~operations" and "adjusted revenues" as ~~our~~its principal financial ~~measure~~measures of segment operating performance because management believes itthese metrics best ~~reflects~~reflect the underlying results of ~~our~~ business operations and ~~permits~~permit analysis of trends in underlying revenue, expenses and profitability. We define adjusted income from operations as ~~shareholders’~~shareholders' net income (loss) (or income (loss) before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net realized investment ~~gains and losses,~~results, amortization of acquired intangible assets, results of Anthem, Inc. and Coventry Health Care Inc. (“Coventry”) (collectively, the “transitioning clients”) (see the “Key Transactions and Developments” section of the MD&A for further discussion of transitioning clients) and special items. ~~Cigna’s~~The Cigna Group's share of certain realized investment results of its joint ventures reported in the ~~International Markets~~Cigna Healthcare segment using the equity method of accounting are also excluded. ~~Income or expense amounts excluded from adjusted income from operations because they are not indicative of underlying performance or the responsibility of operating segment management include:~~

·~~Amortization of acquired intangible assets because these relate to costs incurred for acquisitions.~~

·~~Results of transitioning clients because those results are not indicative of ongoing results~~.

·Special items ~~if any,~~are matters that management believes are not representative of the underlying results of operations due to ~~the~~their nature or ~~size~~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 (loss). See the below Financial Highlights section for a reconciliation of ~~these matters. See Note 18~~consolidated adjusted income from operations to ~~the Consolidated Financial Statements for descriptions of special items.~~

~~Adjusted~~shareholders' net income (loss).

The Company defines adjusted revenues ~~is defined~~ as total revenues excluding the following adjustments: ~~revenue contributions from transitioning clients,~~ special items and ~~Cigna’s~~The Cigna Group's share of certain realized investment results of its joint ventures reported in the ~~International Markets~~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 report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on ~~Cigna’s~~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 ~~deliver affordable, personalized~~improve the health and ~~innovative solutions for our customers and clients;~~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;~~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; ~~the merger (“Merger”) with Express Scripts Holding Company;~~strategic transactions; expectations related to our Medicare Advantage Capitation Rates; and other statements regarding ~~Cigna’s~~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,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “may,” “should,” “will”~~"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 ~~financial,~~ strategic and operational ~~plans or~~ initiatives; ~~our ability to predict and manage medical and pharmacy costs and price effectively;~~ our ability to adapt to changes ~~or trends~~ 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 ~~good~~satisfactory relationships with physicians, hospitals, other health ~~care~~service providers and with producers and consultants; our ability to maintain relationships with one or more key pharmaceutical ~~manufacturers;~~manufacturers or if payments made or discounts provided decline; changes in the pharmacy provider marketplace or pharmacy networks; changes in drug ~~pricing; the impact of modifications to our operations and processes;~~pricing or industry pricing benchmarks; our ability to ~~identify~~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 ~~acquisitions or~~ transactions and ~~realize~~realization of the expected benefits ~~(including anticipated synergies)~~ of such transactions, ~~in full or within the anticipated time frame, including with respect to the Merger,~~ as well as integration or separation difficulties or underperformance relative to expectations; dependence on success of relationships with third parties; risk of significant disruption within our ~~ability to integrate~~ operations ~~resources~~or among key suppliers or third parties; potential liability in connection with managing medical practices and ~~systems;~~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 or regulations; ~~the outcome of litigation, regulatory audits, investigations, actions and/or guaranty fund assessments;~~ uncertainties surrounding participation in government-sponsored programs such as Medicare; the ~~effectiveness~~outcome of litigation, regulatory audits and investigations; compliance with applicable privacy, security and data laws, regulations and standards; potential failure of our ~~information technology~~prevention, detection and control systems; unfavorable economic and market conditions, the risk of a recession or other ~~business systems;~~economic downturn and resulting impact on employment metrics, stock market or changes in interest rates and risks related to a downgrade in financial strength ratings of our insurance subsidiaries; the impact of our ~~debt service obligations on~~significant indebtedness and the ~~availability of funds~~potential for ~~other business purposes; unfavorable industry, economic or political conditions, including foreign currency movements; acts of war, terrorism, natural disasters or pandemics;~~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 ~~and~~in our 2023 Form 10-K, Part II, Item 7 – ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations ofin our ~~2018~~2023 Form 10-K, and as described from time to time in our future reports filed with the Securities and Exchange ~~Commission (the “SEC”).~~

Commission.

You should not place undue reliance on forward-looking statements, ~~that~~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 ~~Corporation,~~Group, together with its subsidiaries (either individually or collectively referred to as ~~“Cigna,”~~ the ~~“Company,” “we,” “our”~~"Company," "we," "us" or ~~“us”~~"our") is a global health ~~service organization dedicated to~~company with a mission of helping those we serve improve their health ~~well-being~~ and ~~peace of mind.~~vitality. Our ~~evolved strategy in support of our mission is~~ ~~Go Deeper, Go Local, Go Beyond~~ ~~using~~subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental ~~disability, life and accident insurance~~ and related products and ~~services offered by our subsidiaries.~~services. For further information on our business and strategy, see Part 1, Item 1, ~~“Business” in~~"Business" of our ~~2018~~2023 Form 10-K.

~~As described more fully in Note 4 to our Consolidated~~

Financial ~~Statements, on December 20, 2018, we completed the acquisition of Express Scripts Holding Company (“Express Scripts”) and changed our segments effective in the fourth quarter of 2018.~~ Highlights

See Note 1 to ~~our~~the Consolidated Financial Statements for a description of our segments. As described further in Note 2 to the Consolidated Financial Statements, we adopted Article 5 of Regulation S-X issued by the SEC effective December 31, 2018. Prior year information presented in this Form 10-Q has been restated to reflect these changes. In addition, as discussed in Note 18 to our Consolidated Financial Statements, effective in the first quarter of 2019, compensation cost for stock options is now recorded by our segments. Prior year segment information has not been restated for this change. Results for the three months ended March 31, 2019 included the results of Express Scripts’ business, whereas results for the three months ended March 31, 2018 reflected Cigna’s stand-alone historical results. Unless otherwise specified, the commentary provided below describes our results for the three months ended March 31, 2019 compared with the same period in 2018.

Summarized below are certain key measures of our performance by segment:


Financial highlights by segment
	Three Months Ended March 31,
(Dollars in millions, except per share amounts)		2024		2023		Change


Revenues
Adjusted revenues by segment
Evernorth Health Services		$	46,226	$	36,179	28	%
Cigna Healthcare		13,277		12,718		4
Other Operations		166		157		6
Corporate, net of eliminations		(2,422)		(2,575)		(6)
Adjusted revenues		57,247		46,479		23
Net realized investment results from certain equity method investments		8		38		(79)


Total revenues		$	57,255	$	46,517	23	%
Shareholders' net (loss) income		$	(277)	$	1,267	N/M	%
Adjusted income from operations		$	1,875	$	1,618	16	%
Earnings per share (diluted)
Shareholders' net (loss) income		$	(0.97)	$	4.24	N/M	%
Adjusted income from operations		$	6.47	$	5.41	20	%
Pre-tax adjusted income (loss) from operations by segment
Evernorth Health Services		$	1,360	$	1,320	3	%
Cigna Healthcare		1,340		1,115		20
Other Operations		18		15		20
Corporate, net of eliminations		(409)		(414)		(1)
Consolidated pre-tax adjusted income from operations		2,309		2,036		13
Income attributable to noncontrolling interests		77		43		79
Net realized investment (losses) (1)		(1,828)		(18)		N/M
Amortization of acquired intangible assets		(423)		(459)		(8)
Special items		(56)		(1)		N/M
Income before income taxes		$	79	$	1,601	(95)	%

(1)Includes Net realized investment losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain realized 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 of this MD&A.


Consolidated Results of Operations (GAAP basis)
	Three Months Ended March 31,
(Dollars in millions)		2024			2023				Change


Pharmacy revenues			$	42,036		$	32,144			31	%
Premiums			11,603			11,025				5
Fees and other revenues			3,326			3,071				8
Net investment income			290			277				5
Total revenues			57,255			46,517				23
Pharmacy and other service costs			41,431			31,459				32
Medical costs and other benefit expenses			9,440			9,046				4
Selling, general and administrative expenses			3,705			3,538				5
Amortization of acquired intangible assets			423			459				(8)
Total benefits and expenses			54,999			44,502				24
Income from operations			2,256			2,015				12
Interest expense and other			(322)			(358)				(10)


(Loss) on sale of businesses			(19)			—				N/M
Net realized investment losses			(1,836)			(56)				N/M
Income before income taxes			79			1,601				(95)
Total income taxes			291			295				(1)
Net (loss) income			(212)			1,306				N/M
Less: Net income attributable to noncontrolling interests			65			39				67
Shareholders' net (loss) income			$	(277)		$	1,267			N/M	%
Consolidated effective tax rate			368.4		%	18.4		%		N/M	bps
Medical customers (in thousands)			19,184			19,473				(1)	%


Reconciliation of Shareholders' Net Income (Loss) (GAAP) to Adjusted Income from Operations
	Three Months Ended March 31,

		2024			2023
(In millions)			Pre-tax		After-tax		Pre-tax		After-tax
Shareholders' net (loss) income					$	(277)			$	1,267
Adjustments to reconcile to adjusted income from operations
Net realized investment losses (1)			$	1,828	1,827		$	18	6
Amortization of acquired intangible assets			423		322		459		344
Special items
Integration and transaction-related costs			37		29		1		1
Loss (gain) on sale of businesses			19		(43)		—		—
Deferred tax expenses, net			—		17		—		—





Total special items			$	56	3		$	1	1
Adjusted income from operations					$	1,875			$	1,618


Reconciliation of Shareholders' Net Income (Loss) (GAAP) to Adjusted Income from Operations
	Three Months Ended March 31,

		2024			2023
(Diluted Earnings Per Share)			Pre-tax		After-tax		Pre-tax		After-tax
Shareholders' net (loss) income (1)					$	(0.97)			$	4.24
Adjustments to reconcile to adjusted income from operations
Net realized investment losses (2)			$	6.31	6.31		$	0.06	0.02
Amortization of acquired intangible assets			1.46		1.10		1.54		1.15
Special items
Integration and transaction-related costs			0.12		0.10		—		—
Loss (gain) on sale of businesses			0.07		(0.15)		—		—
Deferred tax expenses, net			—		0.06		—		—





Total special items			$	0.19	0.01		$	—	—
Adjusted income from operations (3)					$	6.47			$	5.41

(1)For the three months ended March 31, 2024, due to the anti-dilutive effect resulting from the Shareholders' net loss for the period, the impact of potentially dilutive securities has been excluded from the calculation of weighted average shares for the calculation of diluted Shareholders’ net loss per share. Weighted average common shares outstanding used to calculate diluted Shareholders’ net loss per share for the three months ended March 31, ~~2019~~2024 were 286,465 thousand.

(2)Includes Net realized investment losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and ~~2018:~~

~~Financial Highlights~~other revenues in our Consolidated Statements of Income.

(3)For the three months ended March 31, 2024, due to the adjusted income from operations, the number of weighted average shares used to calculate Adjusted income from operations per share reflects the dilution caused by ~~Segment~~

Three Months Ended
March 31,

(Dollars in millions, except per share amounts)

2019

2018

% Change

Revenues

Adjusted revenues by segment

Health Services

$
22,460

$
1,071

N/M

Integrated Medical

9,195

8,150

13
%
International Markets

1,394

1,341

4

Group Disability and Other

1,296

1,271

2

Corporate, including eliminations

(916)

(418)

(119)

Adjusted revenues

33,429

11,415

193

Revenue contributions from transitioning clients

4,489

-

N/M

Net realized investment gains (losses) from equity method subsidiaries

28

(2)

N/M

Total revenues

$
37,946

$
11,413

232
%
Shareholders’ net income

$
1,368

$
915

50
%
Adjusted income from operations

$
1,498

$
1,010

48
%
Earnings per share (diluted)

Shareholders’ net income

$
3.56

$
3.72

(4)
%
Adjusted income from operations

$
3.90

$
4.11

(5)
%
Pre-tax adjusted income from operations by segment

Health Services

$
994

$
83

N/M

Integrated Medical

1,170

1,012

16
%
International Markets

206

217

(5)

Group Disability and Other

84

116

(28)

Corporate

(490)

(92)

N/M

Consolidated pre-tax adjusted income (loss) from operations

1,964

1,336

47

Adjustment for transitioning clients

660

-

N/M

Income attributable to noncontrolling interests

5

4

25

Realized investment gains (losses)

38

(35)

209

Amortization of acquired intangible assets

(743)

(27)

N/M

Special items

(136)

(60)

(127)

Income before income taxes

$
1,788

$
1,218

47
%

~~For further analysis~~outstanding stock options, unvested restricted stock grants and ~~explanation of individual segment results, see~~units and strategic performance shares. Weighted average common shares outstanding used to calculate Adjusted income from operations per share for the ~~“Segment Reporting” section of this MD&A beginning on page 54.~~

~~Consolidated Results of Operations (GAAP basis)~~

Three Months Ended
March 31,

(Dollars in millions)

2019

2018

% Change

Pharmacy revenues

$
25,179

$
717

N/M

Premiums

9,971

8,999

11
%
Fees and other revenues

2,450

1,368

79

Net investment income

346

329

5

Total revenues

37,946

11,413

232

Pharmacy and other service costs

24,050

561

N/M

Medical costs and other benefit expenses

7,620

6,772

13

Selling, general and administrative expenses

3,303

2,745

20

Amortization of acquired intangible assets

743

27

N/M

Total benefits and expenses

35,716

10,105

253

Income from operations

2,230

1,308

70

Interest expense and other

(452)

(57)

N/M

Net realized investment gains (losses)

10

(33)

130

Income before income taxes

1,788

1,218

47

Income taxes

416

301

38

Net income

1,372

917

50

Less: net income attributable to noncontrolling interest

4

2

100

Shareholders’ net income

$
1,368

$
915

50
%
Consolidated effective tax rate

23.3
%
24.7
%

140
bps
Medical customers (in thousands)

Integrated Medical

15,421

15,214

1
%
International Markets

1,572

1,555

1

Total

16,993

16,769

1
%

~~Reconciliation of Shareholders’ Net Income to Adjusted Income from Operations~~

Diluted Earnings Per Share

Three Months Ended

Three Months Ended

March 31,

March 31,

(In millions, except per share amounts)

2019

2018

2019

2018

Shareholders’ net income

$
1,368

$
915

$
3.56

$
3.72

After-tax adjustments required to reconcile to adjusted income from operations

- Adjustment for transitioning clients

(504)

-

(1.31)

-

- Net realized investment (gains) losses

(38)

25

(0.10)

0.10

- Amortization of acquired intangible assets

564

20

1.47

0.08

Special items

- Integration and transaction-related costs

108

50

0.28

0.21

Adjusted income from operations

$
1,498

$
1,010

$
3.90

$
4.11

three months ended March 31, 2024 were 289,717 thousand.

Commentary: Three Months Ended March 31, ~~2019~~2024 versus Three Months Ended March 31, ~~2018~~

~~Earnings~~2023

The commentary presented below, and ~~Revenue~~

~~Shareholders’~~in the segment discussions that follow, compare results for the three months ended March 31, 2024 with results for the three months ended March 31, 2023.

Shareholders' net loss for the three months ended March 31, 2024was driven by the impairment of equity securities (see Note 11 to the Consolidated Financial Statements for further discussion), offset by adjusted income from operations.

Adjusted income from operationsincreased 16%, primarily driven by ~~the~~higher earnings ~~contribution from Express Scripts~~in our Cigna Healthcare and higher adjusted income from operations in the Integrated Medical segment, partially offset by interest expense on debt issued to finance the Express Scripts acquisition. The decline on a per-share basis also reflects the dilution caused by shares issued in connection with the Express Scripts acquisition.

~~Adjusted income from operations~~ ~~increased, reflecting earnings from Express Scripts’ pharmacy benefits and medical management businesses reported in the~~Evernorth Health Services ~~segment. Improved results~~segments.

Medical customers decreased 1%, primarily reflecting a decline in ~~Integrated Medical also contributed to the increase. These favorable results were partially offset by higher interest expense reported in Corporate from the debt issued to finance the acquisition~~fee-based and ~~the debt assumed from Express Scripts. On a per-share basis, the decrease also reflects the dilution caused by shares issued in connection with the Express Scripts acquisition.~~

~~Medical customers~~ ~~increased, primarily attributable to growth in the select market segment.~~Individual and Family Plans customers. See the ~~Integrated Medical segment section for additional discussion.~~

~~Revenue~~ ~~growth largely reflects the addition of Express Scripts and, to a lesser extent, business growth in the Integrated Medical segment. Detailed revenue items are discussed further below.~~

·~~Pharmacy revenues~~ ~~in 2019 reflect the Express Scripts pharmacy benefit management business. In 2018, Cigna’s home delivery business comprised the entire~~ ~~amount. See the Health Services~~"Segment Reporting - Cigna Healthcare Segment" section of this MD&A for further ~~discussion~~discussion.

Pharmacy revenues increased 31%, primarily reflecting the onboarding of ~~pharmacy revenues.~~

·Centene Corporation ("Centene") at the beginning of 2024. See the "Segment Reporting - Evernorth Health Services Segment" section of this MD&A for further discussion.

Premiums ~~were~~ increased 5% reflecting higher ~~primarily resulting from: 1) customer growth across all segments, predominantly Integrated Medical: 2) a contribution from Express Scripts’ Medicare Part D~~premium rates in Cigna Healthcare due to anticipated underlying medical costs and business ~~and 3) rate increases in Integrated Medical in line with medical cost trend.~~

·mix. See the "Segment Reporting - Cigna Healthcare Segment" section of this MD&A for further discussion.

Fees and other ~~revenues.~~ ~~The increase was~~revenues increased 8%, primarily ~~driven by contributions~~reflecting client growth from ~~Express Scripts’ medical management business reported in the~~our continued affordability services within Evernorth Health ~~Services segment. To a lesser extent, higher fees in our Integrated Medical segment contributed to the increase. The increases in Integrated Medical were~~Services.

Net investment income increased 5%, primarily due to growth in ~~our specialty businesses and an increased customer base~~average assets. See the "Investment Assets" section of this MD&A for ~~our administrative services only (“ASO”) business.~~

·~~Net investment income~~ ~~was higher reflecting growth in average assets.~~

~~Other Components of Consolidated Results of Operations~~

·further discussion.

Pharmacy and other service ~~costs.~~ ~~In 2019, this amount is largely comprised~~costs increased 32%, primarily reflecting the onboarding of ~~Express Scripts’ pharmacy benefits and medical management~~ ~~businesses~~ ~~reported in~~Centene at the ~~Health Services segment. In 2018, Cigna home delivery comprised the entire amount.~~

·beginning of 2024.

Medical costs and other benefit expensesincreased ~~largely~~ ~~attributable to the addition of Express Scripts’ Medicare Part D business along with customer growth and~~4%, primarily reflecting medical cost ~~inflation~~trend in ~~Integrated Medical.~~

·Cigna Healthcare.

Selling, general and administrative expensesincreased 5%, primarily ~~due~~driven by planned investments related to the ~~addition~~onboarding costs of ~~Express Scripts. To a lesser extent, volume-related expenses in Integrated Medical~~new clients and increased integration and transaction-related costs (reported as a special item) also contributed to the expense growth. These increases were partially offset by suspension of the health insurance industry tax in 2019.

·~~Amortization of acquired intangible assets~~ ~~in 2019 primarily reflects the impact of the Express Scripts acquisition. See Note 3 in the Consolidated Financial Statements~~continued advancement of our ~~2018 Form 10-K for additional~~ ~~information~~ ~~on the intangible assets identified~~digital capabilities and care solutions in ~~the Express Scripts acquisition.~~

·Evernorth Health Services.

Interest expense and other~~increased significantly~~ decreased 10%, primarily ~~due to interest incurred on debt issued in the third quarter of 2018 to finance the Express Scripts acquisition along with Express~~ ~~Scripts’~~ ~~debt assumed upon closing of the acquisition.~~

·reflecting lower pension costs.

Realized investment ~~gains (losses).~~ ~~We reported realized investment gains~~results for the three months ended March 31, ~~2019 compared with losses~~2024 primarily reflects the impairment of equity securities. See Note 11 to the Consolidated Financial Statements for further discussion.

The effective tax rate increased substantially driven by a valuation allowance related to the ~~same period last year. The~~ ~~improvement~~ ~~largely results from favorable market value adjustments on~~impairment of equity securities, ~~and higher gains on sales of fixed maturities.~~

·~~The consolidated effective tax rate~~ ~~declined, due to suspension of the~~ ~~nondeductible~~ ~~health insurance industry tax in 2019.~~

~~Key Transactions and Developments~~

~~Acquisition of Express Scripts~~

~~As discussed in more detail in our 2018 Form 10-K, Cigna acquired Express Scripts on December 20, 2018 in~~partially offset by a ~~cash and stock transaction valued at $52.8 billion. The “Liquidity” section of this MD&A provides further discussion of the impact of the acquisition on our liquidity and capital resources.~~

~~We continue to incur costs~~decrease related to ~~this transaction. These costs are being reported in “integration~~the businesses held for sale and ~~transaction-related costs” as~~ a ~~special item~~decrease related to the release of tax reserves following a favorable state audit resolution.

Developments

Sale of Medicare Advantage and ~~excluded from adjusted income from operations.~~Related Businesses

In January 2024, the Company entered into a definitive agreement to sell the Medicare Advantage, Medicare 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"), subject to applicable regulatory approvals and other customary closing conditions. The results of the Express Scripts’ business were included in Cigna’s consolidated financial information for the three months ended March 31, 2019, whereas the three months ended March 31, 2018 reflected Cigna’s stand-alone historical results.

On January 30, 2019, Anthem exercised its early termination right and terminated the pharmacy benefit management services agreement with us, effective March 1, 2019. There is a twelve-month transition period ending March 1, 2020. The transition of Anthem’s customerstransaction is expected to ~~occur at various dates, as informed by Anthem’s technology platform migration schedule. Over~~close in the ~~next twelve months, we will focus on an effective transition~~first quarter of ~~this relationship~~2025 and ~~related services over Anthem’s accelerated timeline. We exclude~~provide approximately $3.7 billion in transaction value, which consists primarily of cash. See Note 5 to the results of Express Scripts’ contract with Anthem (and also Coventry) from our non-GAAP reporting metrics “adjusted revenues” and “adjusted income from operations.” We refer to these clients as “transitioning clients.”

~~Industry Developments and Other Matters Affecting Our Health Services and Integrated Medical Segments~~

Our 2018 Form 10-K provides a detailed description of The Patient Protection and Affordable Care Act (“ACA”) provisions and other legislative initiatives that impact our health care and pharmacy services businesses, including regulations issued by theConsolidated Financial Statements for further information.

Medicare Advantage Rates

On April 1, 2024, Centers for Medicare &and Medicaid Services ~~(“CMS”~~("CMS") released the final Calendar Year 2025 Medicare Advantage Program and ~~the Departments of the Treasury and Health and Human Services (“HHS”~~Part D Payment Policies (the "2025 Final Notice"). The health care and pharmacy services businesses continue to operate in a dynamic environment, and the laws and regulations applicable to these businesses, including the ACA, continue to be subject to legislative, regulatory and judicial challenges. The table presented below provides an update on the impact of these items and other matters affecting our Integrated Medical and Health Services segments as of March 31, 2019.


~~Item~~			~~Description~~

~~Medicare Advantage~~			~~Medicare Star Quality Ratings (“Star Ratings”):~~ Medicare Advantage (“MA”) plans must have a Star Rating of four Stars or greater to qualify for bonus payments. Approximately 73% of our Medicare Advantage customers are in a four Star or greater plan for bonus payments to be received in 2019. We expect this percentage to increase to 77% for bonus payments to be received in 2020. ~~MA Rates:~~Final ~~MA reimbursement rates for 2020 were published by CMS in April 2019. We do not expect the new rates to have a material impact on our consolidated results of operations in 2020.~~
			~~Risk Adjustment Validation (“RADV”) Audits:~~ As discussed in the “Regulation” and “Risk Factors” sections of our 2018 Form 10-K, our MA business is subject to reviews, including RADV audits. In 2012, CMS released a payment methodology that provided for sample audit error rates to be extrapolated to the entire MA contract after comparing audit results to a similar audit of Medicare Fee for Service (the “FFS Adjuster”) and applying an FFS Adjuster to establish actuarial equivalency in payment rates as required by the Medicare statute. However, a methodology to calculate the FFS Adjuster was not finalized and CMS has, to date, not completed any RADV audits using extrapolation. In 2018, CMS issued a proposed rule that included, among other things, extrapolation of the error rate related to audit findings without applying the FFS Adjuster. This rule is discussed further in the Regulation section of our 2018 Form 10-K. If adopted in its current form, the rule could have a detrimental impact to all MA insurers and affect the ability of plans to deliver high quality health care for the population served. While it is uncertain that CMS will finalize the rule as proposed, if they did, it could have a material impact on the Company’s future results of operations.


~~Item~~			~~Description~~

~~Health Insurance Industry Tax~~			~~Health Insurance Industry Tax:~~ Federal legislation suspended the health insurance industry tax for 2019 and our premium rates for 2019 reflect this suspension. For the three months ended March 31, 2018 we recorded $97 million for the industry tax. Under current legislation, the tax is expected to return in 2020.
~~Public Health Exchanges~~			~~Market Participation:~~ For 2019, we expanded our individual coverage to Arizona while continuing to offer coverage on the public health insurance exchanges where we were represented in 2018: Colorado, Illinois, Missouri, North Carolina, Tennessee and Virginia. ~~Cost Sharing Reduction Subsidies:~~ The ACA provides for cost sharing reductions that offset the amount that qualifying customers pay for deductibles, copayments and coinsurance. The federal government stopped funding insurers for the cost sharing reduction subsidies in 2017. Certain insurers have sued the federal government for failure to pay cost sharing reduction subsidies and the matter remains unresolved. To date, judges in four of those actions have ruled in favor of the insurers. We will continue to monitor developments. Our premium rates for the 2019 plan year continue to reflect a lack of government funding for cost sharing reduction subsidies.
~~Prescription Drug Pricing~~			As discussed in the Regulation section of our 2018 Form 10-K, prescription drug pricing and the role of pharmacy benefit managers have been a focus of the current administration. In February 2019, HHS proposed changes to the federal anti-kickback safe harbor to exclude regulatory protection for rebates between drug manufacturers and Medicare Part D plans, Medicaid managed care organizations and pharmacy benefit managers in the context of these government programs. The proposed regulations in their current form apply solely to Medicare Part D and Medicaid programs that include our Government business in the Integrated Medical segment. The proposed regulations also seek to create new safe harbor protections for fixed fee services arrangements between drug manufacturers and pharmacy benefit managers, as well as protections for discounts offered at the point of sale. These proposed regulations, if adopted as written, could affect current industry practices. We do not expect them to have a material effect on our business or results of operations. This area continues to be the subject of legislative and regulatory activity.

~~Risk Mitigation Programs – Individual ACA Business~~

~~In April of 2019, CMS published the final~~ Notice of Benefit and Payment Parameters for the 2020 plan year that addressed the 2017 benefit year risk adjustment data validation program. CMS intends to publish 2017 benefit year data validation error rates in May and preliminary adjustments to risk adjustment transfers in August. Based on the information currently available, the Company is not able to reasonably estimate a potential adjustmentreflects no change from the ~~data validation program. The Company does~~January 31, 2024 advance notice. We do not expect the ~~adjustment~~final rates to have a material ~~adverse~~ impact ~~to the Company’s~~on our consolidated results of operations ~~financial condition or liquidity for any particular period.~~

~~See the MD&A~~ in our 2018 Form 10-K for background around legal actions related to the risk corridor and risk adjustment programs. During the first quarter of 2019, there have been no significant updates to these matters.

~~The following table presents our balances associated with the risk adjustment program as of March 31, 2019 and December 31, 2018.~~

Net Receivable (Payable) Balance

March 31,

December 31,
(In millions)

2019

2018
Risk Adjustment

Receivables (1)

$
43

$
32
Payables (2)

(239)

(187)
Total risk adjustment balance

$
(196)

$
(155)

~~(1) Receivables, net of allowances, are reported in accounts receivable in the Consolidated Balance Sheets.~~

~~(2) Payables are reported in accrued expenses and other liabilities (current) in the Consolidated Balance Sheets.~~

Charges for the risk adjustment program were $40 million pre-tax ($30 million after-tax) for the three months ended March 31, 2019 and $80 million pre-tax ($60 million after-tax) for the same period in 2018.

2025.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

We maintain liquidity at two levels: the subsidiary level and the parent company level.

~~Liquidity~~

Cash requirements at the subsidiary level generally consist of:

•pharmacy, medical costs ~~pharmacy~~ and other benefit payments;

•expense requirements, primarily for employee compensation and benefits, information technology and facilities costs;

•income taxes; and

·~~income taxes.~~

•debt service.

Our subsidiaries normally meet their ~~operating~~liquidity requirements by:

•maintaining appropriate levels of cash, cash equivalents and short-term investments;

•using cash flows from operating activities;

•matching investment durations to those estimated for the related insurance and contractholder liabilities;

•selling investments; and

•borrowing from affiliates, subject to applicable regulatory limits.

~~Liquidity~~

Cash requirements at the parent company level generally consist of:

•debt ~~service and dividend payments~~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 ~~issuance of~~issuing debt and common stock; and

•borrowing from its subsidiaries, subject to applicable regulatory limits.

Dividends from our insurance, Health Maintenance Organization ~~(“HMO”~~("HMO") and certain foreign subsidiaries are subject to regulatory restrictions. ~~Because most~~See Note 22 to the Consolidated Financial Statements in our 2023 Form 10-K for additional information regarding these

restrictions. Most of ~~Express Scripts’ subsidiaries~~the Evernorth Health Services segment operations are not subject to regulatory restrictions ~~on paying~~regarding dividends ~~Express Scripts’ operations~~and therefore provide ~~significantly increased~~significant financial flexibility to ~~Cigna.~~

The Cigna Group.

With respect to our investment portfolio, we support the liquidity needs of our businesses by managing the duration of 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 three months ended March 31 were as follows:

Three Months Ended March 31,
(In millions)

2019

2018

Operating activities

   $
3,192

$
2,025

Investing activities

   $
475

$
(1,700)

Financing activities

   $
(2,534)

$
(530)

Three Months Ended March 31,
(In millions) 2024 2023
Operating activities $ 4,840 $ 5,028
Investing activities $ (495) $ (2,983)
Financing activities $ (2,529) $ (37)

The following discussion explains variances in the various categories of cash flows for the three months ended March 31, ~~2019~~2024 compared with the same period in ~~2018.~~

2023.

Operating activities

Cash flows from operating activities consist principally of cash receipts and disbursements for pharmacy revenues and costs, premiums, fees, investment income, taxes, benefit costs and other expenses.

~~Cash~~

Operating cash flows ~~from operating activities increased, primarily driven by higher net income adjusted~~decreased for ~~depreciation and amortization,~~ the ~~timing of pharmacy and services costs payables and reduction in inventories. These increases were partially offset by~~three months ended March 31, 2024 due to the absence of an early ~~receipt~~CMS payment received in March 2023 and the timing of ~~April~~ payments ~~from CMS~~for accrued liabilities. This decrease is partially offset by the favorable net cash flow impacts of onboarding new clients.

Investing activities

The decrease in ~~2018 of approximately $730 million.~~

~~Investing and Financing activities~~

~~Cash flows from~~cash used in investing activities ~~increased, primarily~~during the three months ended March 31, 2024 was due to lower investments in equity securities.

Financing activities

The Company had higher ~~proceeds~~share repurchases including from ~~investment sales coupled with lower investment purchases.~~

~~Cash~~the ASR Agreements (described below), partially offset by net debt inflows. These factors resulted in an increase in cash used in financing activities ~~increased,~~in 2024.

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, credit agreements 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 three months ended March 31, 2024 and $0.3 billion for the three months ended March 31, 2023. Non-regulated subsidiaries also generate significant cash flows from operating activities, which is typically available immediately to the parent company for general corporate purposes.

We prioritize our use of capital resources to:

•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;

•pay dividends to shareholders;

•consider acquisitions and investments that are strategically and economically advantageous; and

•return capital to shareholders through share repurchases.

Funds Available

Commercial Paper Program. The Cigna Group maintains a commercial paper program and may issue short-term, unsecured commercial paper notes privately placed on a discount basis through certain broker-dealers at any time not to exceed an aggregate

amount of $5.0 billion. The net proceeds of issuances have been and are expected to be used for general corporate purposes. The commercial paper program had approximately $884 million outstanding at March 31, 2024.

Revolving Credit Agreements. Our revolving credit agreements provide 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.

As of March 31, 2024, The Cigna Group's revolving credit agreements include: a $4.0 billion five-year revolving credit and letter of credit agreement that expires in April 2028; and a $1.0 billion 364-day revolving credit agreement that expires in April 2024.

As of March 31, 2024, we had $5.0 billion of undrawn committed capacity under our revolving credit agreements (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $4.1 billion of remaining capacity under our commercial paper program and $8.8 billion in cash and short-term investments, approximately $1.4 billion of which was held by the parent company or certain non-regulated subsidiaries.

In April 2024, The Cigna Group replaced our existing revolving credit agreements, discussed above, and entered into the following revolving credit agreements: a $5.0 billion five-year revolving credit and letter of credit agreements that expire in April 2029; and a $1.5 billion 364-day revolving credit agreement that expires in April 2025. The increase in the aggregate size of our revolving credit agreements from $5.0 billion to $6.5 billion will provide enhanced liquidity to support the continued growth of our business.

See Note 7 to the Consolidated Financial Statements for further information on our credit agreements and commercial paper program.

Our debt-to-capitalization ratio was 44.3% at March 31, 2024 and 40.1% at December 31, 2023 primarily reflecting timing of debt issuance, in part due to the Accelerated Share Repurchase ("ASR") agreements.

We actively monitor our debt obligations and engage in issuance or redemption activities as needed in accordance with our capital management strategy.

Subsidiary Borrowings. In addition to the sources of liquidity discussed above, the parent company can borrow an additional $1.6 billion from its subsidiaries without further approvals as of March 31, 2024.

Use of Capital Resources

Debt Issuance and Debt Tender Offers. In February 2024, we issued $4.5 billion of new senior notes. The proceeds from this debt were used to complete the repurchase of a ~~partial~~total of $1.8 billion in aggregate principal amount of existing senior notes tendered to the Company pursuant to cash tender offers. We used the remaining net proceeds to fund the repayment of our senior notes which matured in March 2024 and for general corporate purposes, which may include repayment of indebtedness and repurchases of shares of our common stock.

Capital Expenditures. Capital expenditures for property, equipment and computer software were $0.3 billion in the ~~term loan, net commercial paper activity~~three months ended March 31, 2024 compared to $0.4 billion in the three months ended March 31, 2023. Anticipated capital expenditures will be funded primarily from operating cash flows.

Dividends. The Cigna Group declared and paid quarterly cash dividends of $1.40 per share of its common stock ~~repurchase.~~

during the first quarter of 2024, compared to quarterly cash dividends of $1.23 per share during the first quarter of 2023. See Note 8 to the Consolidated Financial Statements for further information on our dividend payments. On April 24, 2024, the Board of Directors declared the second quarter cash dividend of $1.40 per share of The Cigna Group common stock to be paid on June 20, 2024 to shareholders of record on June 4, 2024. The Cigna Group 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 Company 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.

Share Repurchases.We maintain a share repurchase program authorized by our Board of ~~Directors. Under this program,~~Directors, under which we may repurchase shares of our common stock from time to ~~time, depending on market conditions and alternate uses of capital.~~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 ~~or privately negotiated transactions~~ 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.~~plans or privately negotiated transactions. The program may be suspended or discontinued at any time.

~~For~~

We repurchased 10.1 million shares for approximately $3.4 billion during the three months ended March 31, ~~2019, we repurchased 2.5~~2024, compared to 3.2 million shares for approximately ~~$460 million. From April 1, 2019 through May 1, 2019 we repurchased 0.6~~$1.0 billion during the three months ended March 31, 2023. During the three months ended March 31, 2024, $640 million ~~shares for approximately $95 million. The remaining share~~was also paid related to the ASR stock hold-back which will settle in the second quarter of 2024. See further discussion of ASR below. We expect to repurchase ~~authority as of May 1, 2019 was $390 million.~~

~~Capital Resources~~

Our capital resources (primarily cash flows from operating activities and proceeds from the issuance of debt and equity securities) provide protection for policyholders, furnish the financial strength to underwrite insurance risks and facilitate continued business growth.

~~Our acquisition of Express Scripts increased our debt and shareholders’ equity in 2018 as follows:~~

·~~Stock.~~ ~~Express Scripts’ shareholders received 0.2434 of a share~~$5.0 billion of common stock in the first half of ~~Cigna for every one~~2024, which includes shares repurchased under the ASR.

In February 2024, as part of our share repurchase program, we entered into separate ASR agreements ("ASR agreements") with Deutsche Bank AG and Bank of ~~Express Scripts’~~America, N.A. (collectively, the "Counterparties") to repurchase $3.2 billion of common ~~stock. Cigna issued 137.6~~stock in aggregate. We remitted $3.2 billion to the Counterparties and received an initial delivery of approximately 7.6 million ~~additional~~ shares of our common stock on February 15, 2024, representing $2.6 billion of the total remitted. We expect final settlement under the ASR agreements to ~~Express Scripts’ shareholders.~~

·~~Debt.~~occur in the second quarter of 2024. See Note ~~6 to the Consolidated Financial Statements for further description of the debt issued to finance the acquisition.~~

·~~Assumption of Express Scripts’ Senior Notes.~~ ~~See Note 6 to the Consolidated Financial Statements for further description of the notes assumed in the acquisition of Express Scripts.~~

At March 31, 2019, our debt-to-capitalization ratio was 48.8%, a decline from 50.9% at December 31, 2018. We expect to deleverage to the upper 30s within 18 to 24 months of closing of the Express Scripts acquisition using cash flows from operating activities.

Cigna entered into a new Revolving Credit Agreement and Term Loan Credit Agreement in financing the Express Scripts acquisition. A select number of subsidiaries guarantee Cigna obligations under the Revolving Credit Agreement and the Term Loan Credit Agreement. See Note 68 to the Consolidated Financial Statements for further information on ~~these guarantees, as well as information on~~ our ~~Revolving Credit Agreement~~ASR agreements.

Other Sources of Funds and Uses of Capital Resources

Divestiture. In January 2024, we entered into a definitive agreement to sell the ~~Term Loan Credit Agreement. Cigna had $22 million~~Medicare Advantage, Medicare Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits and CareAllies businesses within the U.S. Healthcare operating segment to HCSC, subject to applicable regulatory approvals and other customary closing conditions. The transaction is expected to close in the first quarter of ~~letters~~2025 and provide approximately $3.7 billion in transaction value, which consists primarily of ~~credit outstanding under~~cash. Following the ~~Revolving Credit Agreement as~~completion of ~~March 31, 2019.~~

~~Management, guided by regulatory requirements and rating agency capital guidelines, determines~~ the ~~amount of capital resources that~~sale, we maintain. Management allocates resources to new long-term business commitments when returns, considering the risks, look promising and when the resources available to support existing business are adequate.

~~We prioritize our~~anticipate use of the proceeds in alignment with our capital ~~resources to:~~

·~~provide~~deployment priorities, with the ~~capital necessary~~majority allocated to ~~support growth and maintain or improve the financial strength ratings of subsidiaries and to fund pension obligations;~~

·~~consider acquisitions that are strategically and economically advantageous; and~~

·~~return capital to investors primarily through~~ share repurchases.

~~We continue~~

Risks to ~~maintain a capital management strategy~~Liquidity and Capital Resources

Risks to retain overseas a significant portion of the earnings from our foreign operations. These undistributed earnings are deployed outside of the United States predominantly in support of the liquidity and regulatory capital requirements of our foreign operations as well as to support growth initiatives overseas. This strategy does not materially limit our ability to meet our liquidity and capital ~~needs in the United States.~~

~~Liquidity and Capital Resources Outlook~~

~~At March 31, 2019, there was approximately $5.2 billion in~~resources outlook include cash and short-term investments, $2.4 billion of which was held by the parent company or subsidiaries with no regulatory or other restrictions on transferring cash to the parent via dividend or loan. In 2019, we expect to have $6.2 billion of capital available for deployment including $2.1 billion of dividendsprojections that our regulated insurance companies may pay without prior regulatory approval. The parent company’s cash obligations for the remainder of 2019 are expected to approximate $2.6 billion primarily for repayment of debt, interest and anticipated dividends and excluding commercial paper maturities that we expect to re-issue as needed to manage our parent company liquidity requirements.

We expect to have sufficient liquidity to meet the obligations discussed above, based on the cash currently available to the parent and current projections for subsidiary dividends and cash flows from the newly acquired Express Scripts operations. In addition, we actively monitor our debt obligations and engage in issuance or redemption activities as needed in accordance with our capital management strategy.

During the first quarter of 2019, our unfunded pension liability increased by approximately $140 million due to the settlement of the Amara litigation. Our required contributions for 2019 under the Pension Protection Act of 2006 remain unchanged and are still expected to be immaterial. See Note 13 to our Consolidated Financial Statements for additional information regarding our pension plans.

~~Our cash projections~~ 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~~"Risk Factors" section of our ~~2018~~2023 Form 10-K. In those cases, we expect to have the flexibility to satisfy liquidity needs through a variety of measures including intercompany borrowings. The parent company can borrow an additional $760 million from its insurance subsidiaries without additional state approval. We have additional liquidity available through short-term commercial paper borrowing capacity and the $3.25 billion revolving credit agreement discussed in Note 6 to the Consolidated Financial Statements.

Though we believe we have adequate sources of liquidity, significant disruption or volatility in the capital and credit markets could affect our ability to access those markets for additional borrowings or increase ~~costs associated with borrowing funds.~~

costs.

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.

Due to the issuance and repurchase of certain senior notes in the three months ended March 31, 2024, we have updated ~~the~~ long-term debt ~~and purchase~~ obligations as of March 31, 2024 compared to those previously provided in our ~~2018~~2023 Form 10-K.

Less than 1

1-3

4-5

After 5

(In millions, on an undiscounted basis)

Total

year(1)

years

years

years

On-Balance Sheet

Long-term debt

54,750

1,211

13,025

9,389

31,125

Off-Balance Sheet

Purchase obligations

2,708

938

1,281

392

97

~~(1) Amounts reflect cash~~ See Note 7 to the Consolidated Financial Statements for discussion of these debt activities. There have been no material changes to other information presented in our guarantees and contractual obligations set forth in our 2023 Form 10-K.

On balance sheet:

•Long-term debt

◦Total scheduled payments on long-term debt are $50.3 billion through February 2054, which include scheduled interest payments and maturities of long-term debt.

◦We expect $1.8 billion of long-term debt payments (including scheduled interest payments) to be paid for the remainder of ~~2019.~~

2024.

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 ~~2018~~2023 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 ~~the 2018~~our 2023 Form 10-K. As of March 31, ~~2019,~~2024, there were no significant changes to the critical accounting estimates from what was reported in our ~~2018~~2023 Form 10-K.

SEGMENT REPORTING

The following section of this MD&A discusses the results of each of our segments. As a result of the Express Scripts acquisition, during the fourth quarter of 2018, we changed our segment reporting to reflect the new management and business reporting structure of the combined company. Prior year segment information presented in this Form 10-Q has been restated to conform to the new segment presentation.

See Note 1 to ~~our~~the Consolidated Financial Statements for afurther description of our segments.

In segment discussions, we present ~~adjusted revenues~~"adjusted revenues" and ~~“pre-tax~~"pre-tax adjusted income (loss) from operations,”" defined as income (loss) before income taxes excluding pre-tax income (loss) attributable to noncontrolling interests, net realized investment ~~gains (losses),~~results, amortization of acquired intangible assets ~~results of transitioning clients~~ and special items. The Cigna Group's share of certain realized 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. Ratios presented in this segment discussion exclude the same items as adjusted revenues and pre-tax adjusted income (loss) from operations. See Note 1817 to ~~our~~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~~Total revenues to adjusted revenues. Note 1817 to ~~our~~the Consolidated Financial Statements also explains ~~two additional items~~ that ~~are important in understanding our segment results: 1)~~ segment revenues include both external revenues and sales between segments that are eliminated in Corporate; and 2) beginning in the first quarter of 2019, compensation cost for stock options is recorded by the segments. Prior year segment information has not been restated for the change in stock option reporting.

Corporate.

In these segment discussions, we also present ~~“pre-tax~~"pre-tax adjusted margin,”" defined as pre-tax adjusted income (loss) from operations ~~before taxes~~ divided by adjusted revenues.

~~See the MD&A Executive Overview beginning on page 46 for summarized financial results of each of our segments.~~

Evernorth Health Services Segment

~~The~~

Evernorth Health Services ~~segment~~ includes a broad range of coordinated and point solution health services and capabilities, as well as those from partners across the ~~pharmacy benefit management, pharmacy home delivery~~health care system, within our Pharmacy Benefit Services and ~~certain medical management services. This segment includes Express Scripts’ business from the December 20, 2018 date~~Specialty and Care Services operating segments. See Note 1 to our Consolidated Financial Statements for further discussion of ~~acquisition with the exception of Express Scripts’ Medicare Part D business~~ ~~that is reported in the Government~~these two operating ~~segment. This segment also includes Cigna’s legacy mail order pharmacy business.~~ Due to the timing of the acquisition, first quarter 2018 results of operations and select financial information did not include results from the Express Scripts’ business. The main driver of period over period increases in the financial information presented below is the inclusion of results from the Express Scripts’ business in first quarter of 2019.segments. As described in the introduction to Segment Reporting, ~~on page 54,~~Evernorth Health Services' performance ~~of the Health Services segment~~ is measured using adjusted revenues and pre-tax adjusted income (loss) from operations.

The key factors that impact Evernorth Health Services' Pharmacy Benefit Services and Specialty and Care Services revenues and ~~costs of revenues~~income from operations are volume, mix of claims, price, contract affordability services, specialty distribution customer growth and ~~price.~~client growth. These key factors are discussed further below. Certain of the key factors impact both operating segments as services are offered through an integrated client contract. See Note 2 to the Consolidated Financial Statements included in our ~~2018~~2023 Form 10-K for additional information on revenue and cost recognition policies for this segment.

Pharmacy Benefit Services and Specialty and Care Services key factors:

•Pharmacy claim volume relates to processing prescription claims filled by retail pharmacies in our network and from dispensing prescription claims from our home delivery and specialty pharmacies and other claims. As our ~~clients’~~clients' prescriptions claim volumes increase or decrease, our ~~resulting revenues and cost of revenues~~results correspondingly increase or decrease. ~~Our gross profit could also increase or decrease as a result of changes in purchasing discounts.~~

•The mix of claims generally considers the type of drug and distribution method used for dispensing and fulfilling. ~~As our~~In addition to the types of drugs, the mix of ~~drugs changes,~~generic claims also impacts our ~~resulting pharmacy revenues and cost of revenues correspondingly may increase or decrease. The primary driver of fluctuations within our~~results. Generally, a higher mix of ~~claims is the~~ generic ~~fill rate. Generally, higher generic fill rates reduce~~drugs reduces revenues, as generic drugs are typically priced lower than the branded drugs they replace. However, as ingredient cost paid to pharmacies on generic drugs is incrementally lower than the price charged to our clients, a higher mix of generic ~~fill rates~~drugs generally ~~have~~has a favorable impact on our gross profit. The home delivery generic fill rate is currently lower than the network generic fill rate as fewer generic substitutions are available among maintenance medications (such as therapies for chronic conditions) commonly dispensedincome from ~~home delivery pharmacies as compared to acute medications that are primarily dispensed by pharmacies in our retail networks.~~

·~~Our contract pricing is impacted by our ability to negotiate contracts for pharmacy network, pharmaceutical and wholesaler purchasing, and~~operations.

•Pharmaceutical manufacturer rebates. We are able to reduce the rate of drug price increases and, in some cases, lower our clients’ prescription drug spend through our integrated set of solutions, including sharing significant amounts of pharmaceutical manufacturer rebates with our clients. We refer to this as “management of the supply chain.” Inflationinflation also impacts our pricing because most of our contracts provide that we bill clients and pay pharmacies based on a generally recognized price index for pharmaceuticals. Therefore, the rate of inflation for prescription drugs and our efforts to manage this inflation for our clients ~~can affect~~continues to be a significant driver of our revenues and cost of ~~revenues.~~

revenues 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 on our clients' behalf. Through these affordability services, we seek to improve the effectiveness of our integrated solutions for the benefit of our clients by continuously innovating, improving affordability and implementing drug purchasing contract initiatives.

Specialty and Care Services key factors:

•Customer growth and higher volume in our specialty distribution services where we deliver pharmaceuticals and medical supplies directly to health care providers, clinics and hospitals, primarily to physicians who regularly order costly specialty

pharmaceuticals. This business provides competitive pricing on pharmaceuticals and medical supplies and leverages our distribution platform to improve our results.

•Client growth in our Care Delivery and Management Solutions, through our virtual care, in-home care, physical primary care, benefits management, and behavioral health services, as we expand our businesses and build upon our cross-enterprise leverage.

In this MD&A, we present revenues and gross profit, as well as adjusted revenues, adjusted gross profit and pre-tax adjusted income from operations, ~~“excluding transitioning clients”~~consistent with our segment reporting metrics, which exclude special items.

Results of Operations


Financial Summary
	Three Months Ended March 31,
(Dollars in millions)		2024			2023				Change


Total revenues			$	46,226		$	36,179			28	%

Adjusted revenues (1)			$	46,226		$	36,179			28	%
Pharmacy and other service costs			$	43,838		$	33,973			29	%
Gross profit (2)			$	2,388		$	2,206			8	%
Adjusted gross profit (1),(2)			$	2,388		$	2,206			8	%
Pre-tax adjusted income from operations			$	1,360		$	1,320			3	%
Pre-tax adjusted margin			2.9		%	3.6		%		(70)	bps
Adjusted expense ratio (3)			2.1		%	2.3		%		(20)	bps

(1)Total revenues and gross profit were equal to adjusted revenues and adjusted gross profit as there were no special items in ~~addition to those metrics including transitioning clients. See~~ the ~~“Key Transactions~~periods presented.

(2)Gross profit and ~~Developments” section on page 49~~adjusted gross profit are calculated as total revenues or adjusted revenues less pharmacy and other service costs.

(3)Adjusted expense ratio is calculated as selling, general and administrative expenses as a percentage of adjusted revenues.

In this ~~MD&A for further discussion of transitioning clients and why~~selected financial information, we present ~~this information.~~

~~Results of Operations~~

Financial Summary
Three Months Ended March 31,
(In millions)

2019

2018

Total revenues

$
26,949

$
1,071

Less: revenue contributions from transitioning clients

(4,489)

-

Adjusted revenues

$
22,460

$
1,071

Gross profit

$
2,114

$
103

Gross profit excluding transitioning clients

$
1,396

$
103

Pre-tax adjusted income from operations

$
994

$
83

Pre-tax adjusted margin

4.4
%

7.7
%

(Dollars and adjusted scripts in millions)

Three Months
Ended March 31,
2019

Selected Financial Information(1)

Pharmacy revenue by distribution channel

Network revenues

$
9,268

Home delivery and specialty revenues

11,041

Other revenues

1,122

Total pharmacy revenues

$
21,431

Pharmacy script volume

Adjusted network scripts(2)

222

Adjusted home delivery and specialty scripts(2)

70

Total adjusted scripts(2)

292

Generic fill rate

Network

87.8
%
Home delivery

84.4
%
Overall generic fill rate

87.4
%

~~(1)~~~~Amounts exclude contributions~~adjusted revenues and pre-tax income from ~~transitioning clients.~~

~~(2)~~operations by our two operating segments, Pharmacy Benefit Services and Specialty and Care Services.

Selected Financial Information
Three Months Ended
March 31, Change
(Dollars and adjusted scripts in millions) 2024 2023
Total adjusted revenues
Pharmacy Benefit Services $ 26,095 $ 18,209 43 %
Specialty and Care Services 20,072 17,920 12
Net investment income 59 50 18
Total adjusted revenues $ 46,226 $ 36,179 28 %
Pre-tax adjusted income from operations
Pharmacy Benefit Services $ 513 $ 512 — %
Specialty and Care Services 788 758 4
Net investment income 59 50 18
Total pre-tax adjusted income from operations $ 1,360 $ 1,320 3 %
Pharmacy claim volume (1)
513 381 35 %

(1)Non-specialty network ~~scripts~~prescriptions filled through 90-day programs and home delivery ~~scripts~~prescriptions are ~~multiplied by three.~~counted as three claims. All other network and specialty ~~scripts~~prescriptions are counted as one ~~script.~~

claim.

Three Months Ended March 31, ~~2019~~2024 versus Three Months Ended March 31, ~~2018~~

2023

Adjusted revenues increased 28%, reflecting higher claims volume, primarily due to our collaboration with Centene beginning January 1, 2024; inflation on branded drugs; and higher volume from Specialty and Care Services, primarily our Curascript Specialty Distribution business. This ~~segment includes Express Scripts’ business~~increase was partially offset by claims mix.

Gross profit increased 8%, reflecting continued affordability improvements and growth in Specialty and Care Services businesses.

Pre-tax adjusted income from operations increased 3%, reflecting growth in Specialty and Care Services businesses and continued affordability improvements. This increase was partially offset by planned investments related to the ~~date~~onboarding costs of ~~acquisition with~~new clients, including Centene, and continued advancement of our digital capabilities and care solutions.

Theadjusted expense ratio decreased 20 bps, reflecting higher revenues, partially offset by planned investments related to the ~~exception~~onboarding costs of ~~Express Scripts’ Medicare Part D business that is reported in the Government operating segment. The Company acquired Express Scripts on December 20, 2018. First quarter 2018 results~~new clients, including Centene, and continued advancement of ~~operations~~our digital capabilities and ~~select financial information reflect only Cigna’s legacy mail order pharmacy business.~~

The main driver of period over period increases in the financial information is the inclusion of results from the Express Scripts’ business in first quarter 2019. The Health Services segment reflects strong performance, including customer growth, adjusted pharmacy script volume and specialty pharmacy care.

~~Total pharmacy customers for the first quarter 2019 reflect strong new customer sales, retention and organic customer growth.~~

~~Integrated~~ ~~Medical~~care solutions.

Cigna Healthcare Segment

~~The Integrated Medical segment~~

Cigna Healthcare includes the U.S. Healthcare and International Health businesses, previously reported in “Global Health Care” except as follows: 1) international health care products are now reported in the International Markets segment; 2) mail order pharmacy business is now reported in the Health Services segment;which provide comprehensive medical and ~~3) Medicare supplement business previously reported in “Global Supplemental Benefits” is now reported in Integrated Medical.~~

~~The business section of our 2018 Form 10-K (see the “Integrated Medical” section beginning on page 3) describes the various products~~coordinated solutions to clients and ~~funding solutions offered by this segment, including the various revenue sources.~~customers. As described in the introduction to Segment Reporting, ~~on page 54,~~ performance of the ~~Integrated Medical~~Cigna Healthcare segment is measured using adjusted revenues and pre-tax adjusted income from operations. Key factors affecting ~~profitability~~results for this segment include:

•customer growth;

·~~revenues from integrated specialty products, including pharmacy services, sold to clients and customers across all funding solutions;~~

•revenue growth;

•percentage of Medicare Advantage customers in plans eligible for quality bonus payments;

·~~benefit expenses~~

•medical costs as a percentage of premiums (medical care ratio or ~~“MCR”~~"MCR") for our insured ~~commercial and government~~ businesses; and

•selling, general and administrative ~~expense~~expenses as a percentage of adjusted revenues ~~(expense~~(adjusted expense ratio).

In January 2024, we entered into a definitive agreement to sell the Medicare Advantage, Medicare 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, subject to applicable regulatory approvals and other customary closing conditions. See Note 5 to the Consolidated Financial Statements for further information.

Results of Operations

Financial Summary

Three Months Ended March 31,

Change
Favorable

(In millions)

2019

2018

(Unfavorable)

Adjusted revenues

  $
9,195

  $
8,150

13
%
Pre-tax adjusted income from operations

  $
1,170

  $
1,012

16
%
Adjusted pre-tax margin

12.7
%
12.4
%
30
bps
Medical care ratio

78.9
%
77.5
%
(140)
bps
Expense ratio

22.2
%
24.1
%
190
bps

As of

As of

(In millions)

March 31, 2019

December 31, 2018

% Change

Unpaid claims and claim expenses – Integrated Medical

  $
2,961

  $
2,697

10
%

As of March 31,

(In thousands)

2019

2018

% Change

Integrated Medical Customers

Commercial risk

1,991

1,844

8
%
Government

1,405

1,389

1
%
Total risk

3,396

3,233

5
%
Service

12,025

11,981

-
%
Total

15,421

15,214

1
%

Financial Summary
Three Months Ended
March 31, Change
(Dollars in millions) 2024 2023
Adjusted revenues $ 13,277 $ 12,718 4 %
Pre-tax adjusted income from operations $ 1,340 $ 1,115 20 %
Pre-tax adjusted margin 10.1 % 8.8 % 130 bps
Medical care ratio 79.9 % 81.3 % (140) bps
Adjusted expense ratio 20.5 % 21.4 % (90) bps

Three Months Ended March 31, ~~2019~~2024 versus Three Months Ended March 31, ~~2018~~

2023

Adjusted revenuesincreased 4%, primarily reflecting ~~higher revenues in both our Commercial and Government operating segments. The increase in the Commercial segment reflected customer growth in our risk businesses as well as~~ higher premium rates due to expected increases in underlying medical ~~cost trend. The increase in the Government segment reflected the addition of Express Scripts’ Medicare Part D business.~~

costs and business mix.

Pre-tax adjusted income from operations increased ~~reflecting strong ongoing performance in our Commercial segment including increased contributions from our commercial risk business and specialty products.~~

~~Medical care ratio.~~ ~~As expected, the~~20%, primarily due to a lower medical care ratio ~~increased for the three months ended March 31, 2019 compared with the same period in 2018,~~and a lower adjusted expense ratio.

The medical care ratio decreased 140 bps, primarily due to a lower U.S. Healthcare medical care ratio, reflecting ~~the addition of Express Scripts’ Medicare Part D business with a seasonally higher loss ratio~~effective pricing execution and affordability initiatives, as well as business mix within the ~~pricing impact of suspension of the health insurance industry tax in 2019.~~

~~Expense ratio.~~Individual and Family Plans business.

Theadjusted expense ratio decreased ~~for the three months ended March 31, 2019 compared to the same period in 2018, primarily reflecting higher risk revenues and suspension of the health insurance industry tax in 2019.~~

~~Other Items Affecting Integrated Medical Results~~

~~Unpaid Claims and Claim Expenses~~

~~Unpaid claims and claim expenses were higher as of March 31, 2019 compared with December 31, 2018,~~90 bps, primarily due to ~~seasonality in our stop loss products.~~

revenue growth outpacing volume-related expenses as well as efficiencies from disciplined expense management.

Medical Customers

~~Our~~ ~~medical customer base was higher at March 31, 2019 compared with the same period in 2018, primarily reflecting growth in our Select market segment.~~

A medical customer is defined as a person meeting any one of the following criteria:

•is covered under a medical insurance policy, managed care arrangement or ~~service~~administrative services agreement issued by us;

•has access to our provider network for covered services under their medical plan; or

•has medical claims that are administered by us.

Cigna Healthcare Medical Customers
As of March 31,
(In thousands) 2024 2023 Change
U.S. Healthcare 3,947 4,055 (3)
International Health (1)
1,189 1,150 3
Insured 5,136 5,205 (1) %
U.S. Healthcare 13,615 13,814 (1)
International Health (1)
433 454 (5)
Administrative services only 14,048 14,268 (2)
Total 19,184 19,473 (1) %

(1)International ~~Markets Segment~~

~~As described~~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 1%, primarily driven by a decrease in National Accounts, Individual and Family Plans and Middle Market segment customers, partially offset by customer growth within the ~~business section~~Select market segment.

See Part I, Item 1 of our ~~2018~~2023 Form 10-K ~~the International Markets segment includes supplemental health, life and accident business previously reported in the “Global Supplemental Benefits” segment, except~~ for Medicare Supplement business that is now reported in the Integrated Medical segment and certain international businesses in run-off that are now reported in Group Disability and Other. International Markets also includes health care products previously reported in the former “Global Health Care” segment.

~~As described in the introduction to Segment Reporting on page 54, performance~~definitions of ~~the International Markets segment is measured using pre-tax adjusted income from operations. Key factors affecting pre-tax adjusted income from operations for this segment are:~~

·~~premium growth, including new business and customer retention;~~

·~~benefit expenses as a percentage of premiums (loss ratio);~~

·~~selling, general and administrative expense and acquisition expense as a percentage of revenues (expense ratio and acquisition cost ratio); and~~

·~~the impact of foreign currency movements.~~

~~Results of Operations~~

Financial Summary
Three Months Ended March 31,

Change
Favorable

(In millions)

2019

2018

(Unfavorable)

Adjusted revenues

  $
1,394

  $
1,341

4
%
Pre-tax adjusted income from operations

  $
206

  $
217

(5)
%
Pre-tax adjusted margin

14.8
%
16.2
%

(140)
bps
Loss ratio

57.2
%
56.3
%

(90)
bps
Acquisition cost ratio

12.3
%
12.9
%

60
bps
Expense ratio (excluding acquisition costs)

19.1
%
17.7
%

(140)
bps

~~Three Months Ended March 31, 2019 versus Three Months Ended March 31, 2018~~

~~Adjusted revenues~~ ~~increased mainly due to the acquisition of OnePath Life in New Zealand in~~Cigna Healthcare's market segments. During the fourth quarter of ~~2018~~2023, the U.S. Commercial and ~~business growth in South Korea,~~U.S. Government operating segments merged to form the ~~Middle East~~U.S. Healthcare operating segment. Medical Customer information presented as of March 31, 2023 has been restated to conform to the new operating segment presentation.

Unpaid Claims and ~~China. These increases are~~Claim Expenses


	As of March 31,		As of December 31,
(In millions)	2024		2023		Change


Unpaid claims and claim expenses – Cigna Healthcare	$	5,863	$	5,092	15	%

Our unpaid claims and claim expenses liability increased 15%, driven by claim submission and payment process disruptions related to a third-party cyber incident and stop loss seasonality, partially offset by ~~unfavorable foreign currency movements.~~

~~Pre-tax adjusted income from operations~~ ~~decreased primarily driven by higher operating expense~~a decrease in Individual and ~~loss ratios and unfavorable foreign currency movements, partially offset by the acquisition of OnePath Life and business growth largely in China and South Korea.~~

~~The segment’s~~ ~~loss ratio~~ ~~was less favorable, largely resulting from higher benefit expense in Europe and South Korea.~~

~~The~~ ~~acquisition cost~~ ~~ratio~~ ~~was lower due to lower spending in certain markets and the acquisition of OnePath Life.~~

~~The increase in the~~ ~~expense ratio~~ ~~(excluding acquisition costs) was driven by strategic investments for long-term growth and integration of OnePath Life.~~

Family Plans customers.

Other ~~Items Affecting International Markets Results~~

South Korea is the single largest geographic market for our International Markets segment. South Korea generated 38% of the segment’s revenues and 58% of the segment’s first quarter 2019 pre-tax adjusted income from operations. For the three months ended March 31, 2019, our International Markets segment operations in South Korea represented 2% of our consolidated revenues and 6% of consolidated pre-tax adjusted income from operations.

~~Group Disability and Other~~

~~Group Disability and~~ Operations

Other Operations includes ~~the results of the business previously reported in the “Group Disability and Life” segment and “Other Operations” comprising the corporate-owned~~corporate owned life insurance ~~(“COLI”~~("COLI") ~~business along with~~, the Company's run-off ofoperations and other non-strategic businesses. See Note 1 to the following businesses: 1) reinsurance; 2) settlement annuity; and 3) the sold individual life insurance and annuity and retirement benefits businesses. In addition, certain international run-off business previously reported in the “Global Supplemental Benefits” segment is now reported in Group Disability and Other.

Consolidated Financial Statements for additional information regarding these operations. As described in the introduction of Segment Reporting, ~~on page 54,~~ performance of ~~Group Disability and~~ Other Operations is measured using adjusted revenues and pre-tax adjusted income from operations. ~~Key factors affecting pre-tax adjusted income from operations are:~~

·~~premium growth, including new business and customer retention;~~

·~~net investment income;~~

·~~benefit expenses as a percentage of premiums (loss ratio); and~~

·~~selling, general and administrative expense as a percentage of revenues excluding net investment income (expense ratio).~~

Results of Operations

Financial Summary

Three Months Ended
March 31,

Change
Favorable

(In millions)

2019

2018

(Unfavorable)

Adjusted revenues

  $
1,296

  $
1,271

2
%
Pre-tax adjusted income from operations

  $
84

  $
116

(28)
%
Pre-tax adjusted margin

6.5
%
9.1
%

(260)
bps

~~Three Months Ended March 31, 2019 versus Three Months Ended March 31, 2018~~

~~Adjusted revenues~~ ~~increased, due to business growth in the group disability, life and voluntary businesses, partially offset by the continued run-off of international business.~~

~~Pre-tax adjusted income from operations and margin~~ ~~decreased, reflecting unfavorable disability claims experience, partially offset by favorable life claims experience.~~

Financial Summary Three Months Ended
March 31, Change
(Dollars in millions) 2024 2023
Adjusted revenues $ 166 $ 157 6 %
Pre-tax adjusted income from operations $ 18 $ 15 20 %
Pre-tax adjusted margin 10.8 % 9.6 % 120 bps

Corporate

Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate ~~debt~~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 ~~intersegment~~ eliminations for products and services sold between segments. ~~As discussed in the introduction to Segment Reporting on page~~ ~~54, beginning in the first quarter of 2019, compensation cost for stock options is now recorded by the segments. Prior year results for Corporate were not restated to reflect this change.~~

Financial Summary

Three Months Ended
March 31,

Change
Favorable

(In millions)

2019

2018

(Unfavorable)

Pre-tax adjusted loss from operations

$
(490)

$
(92)

(433)
%

Financial Summary Three Months Ended
March 31, Change
(In millions) 2024 2023
Pre-tax adjusted loss from operations $ (409) $ (414) (1) %

Three Months Ended March 31, ~~2019~~2024 versus Three Months Ended March 31, ~~2018~~

2023

Pre-tax adjusted loss from operations~~was higher, reflecting interest expense on debt issued in the third quarter of 2018~~ decreased primarily due to ~~finance the Express Scripts acquisition and debt assumed from Express Scripts.~~

lower pension costs.

INVESTMENT ASSETS

The following table presents our investment asset portfolio excluding separate account ~~assets as of March 31, 2019 and December 31, 2018.~~assets. Additional information regarding our investment assets is included in Notes ~~9, 10,~~ 11, 12, 13 and 1214 to ~~our~~the Consolidated Financial Statements.

March 31,

December 31,

(In millions)

2019

2018

Debt securities

$
23,169

$
22,928

Equity securities

210

548

Commercial mortgage loans

1,864

1,858

Policy loans

1,403

1,423

Other long-term investments

2,006

1,901

Short-term investments

267

316

Total

$
28,919

$
28,974

(In millions) March 31,
2024 December 31,
2023
Debt securities $ 9,480 $ 9,855
Equity securities 1,571 3,362
Commercial mortgage loans 1,562 1,533
Policy loans 1,186 1,211
Other long-term investments 4,301 4,181
Short-term investments 374 206
Total $ 18,474 $ 20,348
Investments classified as assets of businesses held for sale (1)
(1,341) (1,438)
Investments per Consolidated Balance Sheets $ 17,133 $ 18,910

(1) Investments related to the HCSC transaction that were held for sale as of March 31, 2024 and December 31, 2023. These investments were primarily comprised of debt securities and commercial mortgage loans, and to a lesser extent, other long-term investments.

Investment Outlook

Although portfolio impact has been limited to date, we continue to actively monitor geopolitical events and economic conditions and their potential impact on the investment portfolio, including expectations for a longer period of higher inflation and interest rates, the potential for a recession, and ongoing conflict in Europe and the Middle East. 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 and therefore we expect to hold a significant portion of these assets for the long term. The following discussion addresses the strategies and risks associated with our various classes of investment assets. 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.

Debt Securities

Investments in debt securities include publicly traded and privately placed bonds, mortgage and other asset-backed securities and preferred stocks redeemable by the investor. These investments are classified as available for sale and are carried at fair value onin our ~~balance sheet.~~Consolidated Balance Sheets. Additional information regarding valuation methodologies, key inputs and controls is included in Note 1012 to ~~our~~the Consolidated Financial Statements. ~~More detailed information about debt securities by type of issuer and maturity dates is included in Note 9 to our Consolidated Financial Statements.~~

The following table reflects our portfolio of debt securities by type of ~~issuer as~~issuer:


(In millions)	March 31, 2024		December 31, 2023
Federal government and agency	$	300	$	267
State and local government	38		38
Foreign government	348		352
Corporate	8,441		8,833
Mortgage and other asset-backed	353		365
Total	$	9,480	$	9,855

The carrying value of ~~March 31, 2019 and December 31, 2018.~~

March 31,

December 31,

(In millions)

2019

2018

Federal government and agency

$
733

$
710

State and local government

928

985

Foreign government

2,305

2,362

Corporate

18,695

18,361

Mortgage and other asset-backed

508

510

Total

$
23,169

$
22,928

~~Our~~our debt securities portfolio ~~increased~~decreased during the ~~first quarter of 2019~~ three months ended March 31, 2024, reflecting ~~increased valuations~~net sales activity and a valuation decrease due to ~~decreases~~rising market interest rates. Our portfolio remains in ~~market yields, partially offset~~a net unrealized depreciation position due to generally increasing interest rates over the last several quarters. More detailed information about debt securities by type of issuer, maturity dates and net ~~sales and maturities.~~ unrealized position is included in Note 11 to the Consolidated Financial Statements.

As of March 31, ~~2019, $20.7~~2024, $8.1 billion, or ~~89%~~85%, of the debt securities in our investment portfolio were investment grade (Baa and above, or equivalent) and the remaining ~~$2.5~~$1.4 billion were below investment grade. The majority of the bonds that are below investment grade ~~are~~were rated at the higher end of the non-investment grade spectrum. These quality characteristics have not materially changed ~~from~~since the prior year and ~~are~~remain consistent with our investment strategy. ~~Investments in debt securities are diversified by issuer, geography and industry as appropriate.~~

Foreign government obligations are concentrated in Asia, primarily South Korea, consistent with our risk management practice and local regulatory requirements of our international business operations. Corporate debt

Debt securities include private placement assets of ~~$7.0~~$3.9 billion. These investments are generally less marketable than ~~publicly-traded~~publicly traded bonds; however, yields on these investments tend to be higher than yields on ~~publicly-traded~~publicly traded bonds with comparable credit risk. We perform a credit analysis of each issuer and require financial and other covenants that allow us to monitor issuers for deteriorating financial strength and pursue remedial actions, if warranted.

~~In addition to amounts classified~~

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 on-going geopolitical events and economic conditions, including expectations for a longer period of higher inflation and interest rates. 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 and 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 Balance Sheets, we participate in an insurance joint venture in China with a 50% ownership interest. We account for this joint venture on the equity basis of accounting and report it in other assets. This entity had an investment portfolio of approximately $6.7 billion supporting its business that is primarily invested in Chinese corporate and government debt securities. There were no investments with a material unrealized loss asFinancial Statements.

Commercial Mortgage Loans

As of March 31, ~~2019.~~

~~Commercial Mortgage Loans~~

~~Our~~2024, our $1.6 billion commercial mortgage ~~loans are fixed rate~~loan portfolio consisted of approximately 50 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 March 31, 2024. See Note 12 to the Consolidated Financial Statements for further details. 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 their contract terms. For further discussion of the results and changes in key loan metrics, see Note 11 to the Consolidated Financial Statements.

Loans are secured by high quality commercial properties, located in strong institutional markets and are generally made at ~~less than 70%~~approximately 60% of the ~~property’s~~property's value at origination of the loan. Property value, debt service coverage, quality, building tenancy and stability of cash flows are all important financial underwriting considerations. We hold no direct residential mortgage loans and do not originate or service securitized mortgage loans.

~~Commercial real estate capital markets remain very active for well-leased,~~

We assess the credit quality ~~commercial real estate located in strong institutional investment markets. The vast majority~~ of ~~properties securing the mortgages in~~ our ~~mortgage loan portfolio possess these characteristics.~~

~~As of March 31, 2019, the $1.9 billion~~ commercial mortgage loan portfolio ~~consisted of approximately 65 loans that are~~annually, generally in ~~good standing. Given~~ the second quarter by reviewing each holding's most recent financial statements, rent rolls, budgets and relevant market reports. The review performed in the second quarter of 2023 confirmed ongoing strong overall credit quality ~~and diversity of~~in line with the ~~underlying real estate, positive debt service coverage~~previous year's results. See Note 11 to the Consolidated Financial Statements for further information regarding our key credit quality indicators for commercial mortgage loans.

Office sector fundamentals have been and ~~significant borrower cash investment generally ranging between 30 and 40%, we remain confident that borrowers will~~ continue to ~~perform as expected under their contract terms.~~

be weak and values are experiencing stress due to multiple headwinds: expanded work from home flexibility, shorter term leases, elevated tenant improvement allowances and corporate migration to lower cost states. 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 30% 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 financial condition or liquidity.

Other Long-term Investments

Other long-term investments of ~~$2.0~~$4.3 billion as of March 31, 2024 included investments in securities limited partnerships and real estate limited partnerships, ~~as well as~~ direct investments in real estate joint ~~ventures.~~ventures and other deposit activity that is required to support various insurance and health services businesses. Accounting policies for these investments are discussed in Note 11 to the Consolidated Financial Statements. These limited partnership entities typically invest in mezzanine debt or equity of ~~privately held~~privately-held companies ~~(securities partnerships)~~ 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 across approximately ~~140~~200 separate partnerships and ~~approximately 70~~100 general partners who manage one or more of these partnerships. Also, the underlying investments are diversified by industry sector or property type and geographic region. No single partnership investment exceeded 4% of our securities and real estate limited partnership portfolio.

~~Problem and Potential Problem Investments~~

~~“Problem” bonds and commercial mortgage loans are either delinquent by 60 days~~

Income from our limited partnership investments is generally reported on a one quarter lag due to the timing of when financial information is received from the general partner or more or have been restructured as to terms, including concessions by us for modification of interest rate, principal payment or maturity date. “Potential problem” bonds and commercial mortgage loans are considered current (no payment is more than 59 days past due), but management believes they have certain characteristics that increase the likelihood that they may become problems.

~~The amounts of problem or potential problem investments as of March 31, 2019 and December 31, 2018 were not material.~~

~~Investment Outlook~~

~~Public equity markets rebounded in the first quarter of 2019, reflecting the continued strength~~manager of the U.S. economy. However, concerns related to trade and tariffs continue to contribute to financial market volatility. We continue to closely monitor global macroeconomic conditions and trends, including uncertainty caused by the United Kingdom’s process of exiting the European Union, and their potential impact on our investment portfolio.investments. We expect continued volatility in ~~certain sectors, such~~private equity and real estate fund performance going forward as ~~retail, energy~~fair market valuations are adjusted to reflect market and natural gas. Future realized and unrealized investment results will be driven largely by market conditions that exist when a transaction occurs or at the reporting date. These future conditions are not reasonably predictable; however, we believe that the vast majorityportfolio transactions. Less than 4% of our other long-term investments ~~will continue~~are exposed to ~~perform~~real estate in the office sector.

We participate in an insurance joint venture in China with a 50% ownership interest. We account for this joint venture under ~~their contractual terms. Based on our strategy to match~~ the ~~duration~~equity method of ~~invested assets~~accounting. Following the adoption of Targeted Improvements to the ~~duration~~Accounting for Long-Duration Contracts in 2023, changes in discount rates have resulted in accumulated other comprehensive losses and a corresponding decline in the investment reported in our Consolidated Balance Sheets. Our 50% share of ~~insurance~~the investment portfolio supporting the joint venture's liabilities is approximately $12.7 billion as of March 31, 2024. These investments were comprised of approximately 75% debt securities, including government and ~~contractholder liabilities, we expect to hold a significant portion of these assets for~~corporate debt diversified by issuer, industry and geography; 15% equities, including mutual funds, equity securities and private equity partnerships; and 10% long-term deposits and policy loans. We continuously review the ~~long term. Although future impairment losses resulting from interest rate movements~~joint venture's investment strategy and ~~credit deterioration due to both investment-specific and the global economic uncertainties discussed above remain possible, we do not expect these losses to have~~its execution. There were no investments with a material ~~adverse effect on our financial condition or liquidity.~~

unrealized loss as of March 31, 2024.

MARKET RISK

Financial Instruments

Our assets and liabilities include ~~certain~~ financial instruments subject to the risk of potential losses from adverse changes in market rates and prices. Our primary market risk exposures are interest rate risk and ~~foreign currency exchange rate~~equity price risk. We encourage you to read this in conjunction with ~~“Market~~"Market Risk – Financial ~~Instruments”~~Instruments" included in the MD&A section of our ~~2018~~2023 Form 10-K.

As of March 31, ~~2019,~~2024, there ~~were no material changes~~was an increase in our interest rate risk ~~exposures from that reported~~due to an increase in the fair value of our long-term debt since December 31, 2023. In the event of a 100 basis point increase in interest rates, the fair value of the Company's long-term debt would decrease approximately $2.0 billion at March 31, 2024 compared to approximately $1.8 billion at December 31, 2023.

As of March 31, 2024, there was a decline in our ~~2018 Form 10-K.~~

equity price risk exposure due to the impairment of equity securities. If the market price for all equity securities declined by 10%, the fair value of the Company's equity securities would decrease by approximately $0.2 billion as of March 31, 2024, compared to approximately $0.3 billion at December 31, 2023. See Note 11 to the Consolidated Financial Statements for more information regarding the impairment in equity securities.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information responsive to this item is contained under the caption ~~“Market Risk”~~"Market Risk" in Item 2 above, ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of ~~Operations.~~

Operations and is incorporated herein by reference.

Item 4. CONTROLS AND PROCEDURES

Based on an evaluation of the effectiveness of ~~Cigna’s~~The Cigna Group's disclosure controls and procedures conducted under the supervision and with the participation of ~~Cigna’s~~The Cigna Group's management ~~Cigna’s~~(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, ~~Cigna’s~~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~~Commission's rules and forms and is accumulated and

communicated to ~~Cigna’s~~The Cigna Group's management ~~including Cigna’s~~(including The Cigna Group's Chief Executive Officer and Chief Financial ~~Officer,~~Officer) as appropriate to allow timely decisions regarding required disclosure.

~~On December 20, 2018, Cigna acquired Express Scripts (see Note 4 to the accompanying Consolidated~~

Change in Internal Control over Financial Statements for additional information). As of March 31, 2019, management is in the process of evaluating and integrating the internal controls of the acquired Express Scripts business into the Company’s existing operations. Other than the controls enhanced or implemented to integrate the Express Scripts business, thereReporting

There have been no changes in ~~Cigna’s~~our internal ~~controls~~control over financial reporting during the ~~period covered by this report~~quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, ~~Cigna’s~~The Cigna Group's internal ~~controls~~control over financial reporting.

Part II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The information contained under ~~“Litigation Matters”~~"Legal and ~~“Regulatory Matters”~~Regulatory Matters" in Note 16 to the Consolidated Financial Statements is incorporated herein by reference.

Item 1A.RISK FACTORS

~~Cigna’s~~

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, ~~2018~~ ~~includes a detailed description of its risk factors.~~

~~ITEM~~2023.

Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~(c)~~

Issuer Purchases of Equity Securities ~~by the Issuer and Affiliated Purchasers~~

The following table provides information about ~~Cigna’s~~The Cigna Group's share repurchase activity for the quarter ended March 31, ~~2019:~~

Period
Total # of
shares
purchased (1)

Average price
paid per
share

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)

January 1-31, 2019
1,112,800

$     192.92

1,081,686

$                         737,655,827

February 1-28, 2019
1,092,282

$     187.16

777,100

$                         590,002,891

March 1-31, 2019
827,489

$     167.46

639,570

$                         484,835,777

Total
3,032,571

$     183.90

2,498,356

N/A

2024:
Period
Total # of shares purchased (1)
Average price paid per share (1)
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)
January 1-31, 2024 253,716 $ 303.91 253,748 $ 11,229
February 1-29, 2024 9,832,165 (1) 9,828,122 $ 7,284
March 1-31, 2024 336,493 $ 336.19 — $ 7,284
Total 10,422,374 (1) 10,081,870 N/A

(1) ~~Represents~~Includes shares tendered by employees under the ~~Company’s~~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 ~~31,114~~(32) shares in January, ~~315,182~~4,043 shares in February and ~~187,919~~336,493 shares in March ~~2019.~~

2024. Amount purchased in February 2024 also reflects the initial delivery of 7.6 million shares pursuant to the ASR agreements discussed in the Liquidity and Capital Resources section of Management's Discussion and Analysis of Financial Condition and Results of Operations in Part 1, Item 2. Such repurchase was made pursuant to the Company's share repurchase program described in note (2) below. Average price paid per share for the period February 1-29, 2024 for shares not purchased pursuant to the accelerated share repurchase agreements ("ASR agreements") was $331.54.

(2)Additionally, the Company maintains a share repurchase program authorized by the ~~Board of Directors.~~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, ~~or privately negotiated transactions,~~ each in compliance with Rule 10b-18 under the ~~Securities~~ Exchange Act, ~~of 1934, as amended.~~or privately negotiated transactions. The program may be suspended or discontinued at any ~~time. From April 1, 2019 through May 1, 2019, the Company repurchased 0.6~~time and does not have an expiration date. In February 2024, as part of our share repurchase program, we entered into ASR agreements to repurchase $3.2 billion of common stock in aggregate. In February 2024, we received an initial delivery of approximately 7.6 million shares ~~for approximately $95 million, leaving~~of our common stock representing $2.6 billion of the ~~remaining~~total $3.2 billion remitted. Remaining share repurchase authority ~~at $390 million~~was $7.3 billion as of May 1, ~~2019.~~

2024. See Note 8 to the Consolidated Financial Statements for further information on our ASR agreements.

(3)Approximate dollar value of shares is as of the last date of the applicable ~~month.~~

~~ITEM~~month and excludes the impact of excise tax.

Item 5. OTHER INFORMATION

Rule 10b5-1 Plan Elections

During the quarter ended March 31, 2024, the following 10b5-1 director and officer trading plan arrangement changes occurred:

1.On February 9, 2024, Noelle Eder, Executive Vice President, Global Chief Information Officer of The Cigna Group, adopted a 10b5-1 plan. Ms. Eder's plan provides for the sale of up to 8,179 shares of The Cigna Group common stock and the exercise of vested stock options and the associated sale of up to 6,408 shares of The Cigna Group common stock through February 28, 2025.

2.On February 15, 2024, Brian Evanko, Executive Vice President, Chief Financial Officer of The Cigna Group and President and Chief Executive Officer, Cigna Healthcare, adopted a 10b5-1 plan. Mr. Evanko's plan provides for the exercise of vested stock options and the associated sale of up to 17,924 shares of The Cigna Group common stock through February 10, 2025.

3.On February 16, 2024, Eric Palmer, Executive Vice President, Enterprise Strategy of The Cigna Group and President and Chief Executive Officer, Evernorth Health Services, adopted a 10b5-1 plan. Mr. Palmer's plan provides for the sale of up to 4,993 shares of The Cigna Group common stock and the exercise of vested stock options and the associated sale of up to 17,530 shares of The Cigna Group common stock through February 10, 2025.

4.On March 13, 2024, Elder Granger, Director, adopted a 10b5-1 plan. Mr. Granger's plan provides for the exercise of vested stock options and the associated sale of up to 1,547 shares of The Cigna Group common stock through September 16, 2024.
These trading plans were entered into during an open insider trading window and are intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Securities Exchange Act of 1934 and the Company's policies regarding insider transactions.
51

Item 6.EXHIBITS

INDEX TO EXHIBITS


Number	Description	~~Description~~		Method of Filing
10.1* 3.1	Restated Certificate of Incorporation of The Cigna Group	Filed by the registrant as Exhibit 3.1 to the Quarterly Report on Form ~~of Cigna Long-Term Incentive Plan: Strategic Performance Share Grant Agreement~~		~~Filed herewith.~~ 10-Q for the period ended June 30, 2023 and incorporated herein by reference.
10.2* 3.2	Amended and Restated By-laws of The Cigna Group	Filed by the registrant as Exhibit 3.3 to the Current Report on Form ~~of Cigna Long-Term Incentive Plan: Nonqualified Stock Option Grant Agreement~~		~~Filed herewith.~~ 8-K on February 13, 2023 and incorporated herein by reference.
10.3* 4.1	Supplemental Indenture No. 7, dated as of February 13, 2024,between The Cigna Group and U.S. Bank Trust Company, National Association, as trustee	Filed by the registrant as Exhibit 4.1 to the Current Report on Form ~~of Cigna Long-Term Incentive Plan: Restricted Stock Grant Agreement~~		~~Filed herewith.~~ 8-K on February 13, 2024 and incorporated herein by reference.
10.4* 10.1	Offer Letter for Eric P. Palmer dated January 16, 2024	Filed by the registrant as Exhibit 10.23 to the Annual Report on Form ~~of Cigna Long-Term Incentive Plan: Restricted Stock Unit Grant Agreement~~		~~Filed herewith.~~ 10-K for the period ended December 31, 2023 and incorporated herein by reference.
~~31.1~~ 10.2	Offer letter for Brian Evanko dated January 16, 2024	Filed by the registrant as Exhibit 10.26 to the Annual Report on Form 10-K for the period ended December 31, 2023 and incorporated herein by reference.
31.1	Certification of Chief Executive Officer of The Cigna ~~Corporation~~Group pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934		Filed herewith.
31.2		Certification of Chief Financial Officer of The Cigna ~~Corporation~~Group pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934		Filed herewith.
32.1		Certification of Chief Executive Officer of The Cigna ~~Corporation~~Group pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350		Furnished herewith.
32.2		Certification of Chief Financial Officer of The Cigna ~~Corporation~~Group pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350		Furnished herewith.
101		~~Financial statements~~ The following materials from ~~the quarterly report~~The Cigna Group's Quarterly Report on Form 10-Q ~~of Cigna Corporation~~ for the quarter ended March 31, ~~2019~~2024, 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 ~~Flow;~~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.

* Management contracts and compensatory plans or arrangements.

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: May 2, 2024

~~CIGNA CORPORATION~~
THE CIGNA GROUP
~~Date:~~		~~May 2, 2019~~
~~By:~~
		/s/ ~~Eric P. Palmer~~ Brian C. Evanko
		Brian C. Evanko
		~~Eric P. Palmer~~
	Executive Vice President, ~~and~~ Chief Financial Officer, The Cigna Group, and President and Chief Executive Officer, Cigna Healthcare
		(Principal Financial ~~Officer)~~ Officer and Authorized Signatory)


				Page
PART I			FINANCIAL INFORMATION
~~PART I~~			~~FINANCIAL INFORMATION~~	~~Page~~

Item 1.	Financial Statements (Unaudited)	3
			Consolidated Statements of Income	1 3
			Consolidated Statements of Comprehensive Income	2 4
			Consolidated Balance Sheets	3 5
			Consolidated Statements of Changes in Total Equity	4 6
			Consolidated Statements of Cash Flows	5 7
			Notes to the Consolidated Financial Statements	6 8

			Item 2. Management	~~Management’s~~'s Discussion and Analysis of Financial Condition and Results of Operations	44 33

			Item 3.	Quantitative and Qualitative Disclosures About Market Risk	63 48

			Item 4.	Controls and Procedures	63 48

PART II			OTHER INFORMATION
~~PART II~~			~~OTHER INFORMATION~~

~~Item 1.~~	~~Legal Proceedings~~	63
Item 1. A.Legal Proceedings	50

			Item 1A. Risk Factors	63 50

			Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63 50

			Item 5. Other Information	50

			Item 6. Exhibits	~~Exhibits~~52		64
SIGNATURE				65 53

	Unaudited
	Three Months Ended
	March 31,
(In millions, except per share amounts)	2019		2018
Revenues
Pharmacy revenues	$	25,179	$	717
Premiums	9,971		8,999
Fees and other revenues	2,450		1,368
Net investment income	346		329
TOTAL REVENUES	37,946		11,413
Benefits and expenses
Pharmacy and other service costs	24,050		561
Medical costs and other benefit expenses	7,620		6,772
Selling, general and administrative expenses	3,303		2,745
Amortization of acquired intangible assets	743		27
TOTAL BENEFITS AND EXPENSES	35,716		10,105
Income from operations	2,230		1,308
Interest expense and other	(452)		(57)
Net realized investment gains (losses)	10		(33)
Income before income taxes	1,788		1,218
TOTAL INCOME TAXES	416		301
Net income	1,372		917
Less: net income attributable to noncontrolling interests	4		2
SHAREHOLDERS’ NET INCOME	$	1,368	$	915
Shareholders’ net income per share
Basic	$	3.61	$	3.78
Diluted	$	3.56	$	3.72


The Cigna Group Consolidated Statements of Income
	Unaudited
	Three Months Ended March 31,
(In millions, except per share amounts)		2024		2023
Revenues
Pharmacy revenues		$	42,036	$	32,144
Premiums		11,603		11,025
Fees and other revenues		3,326		3,071
Net investment income		290		277
TOTAL REVENUES		57,255		46,517
Benefits and expenses
Pharmacy and other service costs		41,431		31,459
Medical costs and other benefit expenses		9,440		9,046
Selling, general and administrative expenses		3,705		3,538
Amortization of acquired intangible assets		423		459
TOTAL BENEFITS AND EXPENSES		54,999		44,502
Income from operations		2,256		2,015
Interest expense and other		(322)		(358)

Loss on sale of businesses		(19)		—
Net realized investment losses		(1,836)		(56)
Income before income taxes		79		1,601
TOTAL INCOME TAXES		291		295
Net (loss) income		(212)		1,306
Less: Net income attributable to noncontrolling interests		65		39
SHAREHOLDERS' NET (LOSS) INCOME		$	(277)	$	1,267
Shareholders' net (loss) income per share
Basic		$	(0.97)	$	4.28
Diluted		$	(0.97)	$	4.24

	Unaudited
	As of			As of
	March 31,			December 31,
(In millions, except per share amounts)	2019			2018
Assets
Cash and cash equivalents	$	4,976		$		3,855
Investments	1,662			2,045
Accounts receivable, net	10,941			10,473
Inventories	2,382			2,821
Other current assets	1,175			1,236
Total current assets	21,136			20,430
Long-term investments	27,257			26,929
Reinsurance recoverables	5,385			5,507
Deferred policy acquisition costs	2,817			2,821
Property and equipment	4,523			4,562
Goodwill	44,537			44,505
Other intangible assets	38,338			39,003
Other assets	2,276			1,630
Separate account assets	8,079			7,839
TOTAL ASSETS	$		154,348	$	153,226
Liabilities
Current insurance and contractholder liabilities	$		7,060	$	6,801
Pharmacy and service costs payable	11,145			10,702
Accounts payable	4,488			4,366
Accrued expenses and other liabilities	7,361			7,071
Short-term debt	2,915			2,955
Total current liabilities	32,969			31,895
Non-current insurance and contractholder liabilities	20,043			19,974
Deferred tax liabilities, net	9,403			9,453
Other non-current liabilities	3,832			3,470
Long-term debt	37,571			39,523
Separate account liabilities	8,079			7,839
TOTAL LIABILITIES	111,897			112,154
Contingencies — Note 16
Redeemable noncontrolling interests	38			37
Shareholders’ equity
Common stock (1)	4			4
Additional paid-in capital	27,855			27,751
Accumulated other comprehensive loss	(1,282)			(1,711)
Retained earnings	16,426			15,088
Less: treasury stock, at cost	(595)			(104)
TOTAL SHAREHOLDERS’ EQUITY	42,408			41,028
Other noncontrolling interests	5			7
Total equity	42,413			41,035
Total liabilities and equity	$	154,348		$		153,226
SHAREHOLDERS’ EQUITY PER SHARE	$	111.52		$		107.71

Unaudited Three Months Ended March 31, 2019 (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 Non- controlling Interests

Balance at December 31, 2018	$	4	$	27,751	$	(1,711)	$	15,088	$	(104)	$	41,028	$	7	$	41,035	$	37
Cumulative effect of adopting new lease accounting guidance (ASU 2016-02) (1)							(15)				(15)				(15)
Effect of issuing stock for employee benefit plans			104						(29)		75				75
Other comprehensive income (loss)					429						429				429		(2)
Net income							1,368				1,368		1		1,369		3
Common dividends declared (per share: $0.04)							(15)				(15)				(15)
Repurchase of common stock									(462)		(462)				(462)
Other transactions impacting noncontrolling interests											-		(3)		(3)		-
Balance at March 31, 2019	$	4	$	27,855	$	(1,282)	$	16,426	$	(595)	$	42,408	$	5	$	42,413	$	38

Three Months Ended March 31, 2018 (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 Non- controlling Interests

Balance at December 31, 2017	$	74	$	2,940	$	(1,082)	$	15,800	$	(4,021)	$	13,711	$	-	$	13,711	$	49
Cumulative effect of accounting for financial instruments and hedging					(10)		68				58				58
Reclassification adjustment related to U.S. tax reform legislation					(229)		229				-				-
Effect of issuing stock for employee benefit plans			23				(69)		68		22				22
Other comprehensive (loss)					(226)						(226)				(226)		(2)
Net income							915				915				915		2
Common dividends declared (per share: $0.04)							(10)				(10)				(10)
Repurchase of common stock									(275)		(275)				(275)
Other transactions impacting noncontrolling interests											-				-
Balance at March 31, 2018	$	74	$	2,963	$	(1,547)	$	16,933	$	(4,228)	$	14,195	$	-	$	14,195	$	49

	Unaudited
	Three Months Ended March 31,
(In millions)	2019		2018
Cash Flows from Operating Activities
Net income	$	1,372	$	917
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	897		140
Realized investment (gains) losses, net	(10)		33
Deferred income tax (benefit) expense	(162)		9
Net changes in assets and liabilities, net of non-operating effects:
Accounts receivable	(396)		(53)
Inventories	440		94
Deferred policy acquisition costs	(51)		(76)
Reinsurance recoverable and other assets	124		51
Insurance liabilities	360		849
Pharmacy and service costs payable	444		(124)
Accounts payable and accrued expenses and other liabilities	91		193
Other, net	83		(8)
NET CASH PROVIDED BY OPERATING ACTIVITIES	3,192		2,025
Cash Flows from Investing Activities
Proceeds from investments sold:
Debt and equity securities	1,471		499
Investment maturities and repayments:
Debt and equity securities	319		297
Commercial mortgage loans	89		28
Other sales, maturities and repayments (primarily short-term and other long-term investments)	367		112
Investments purchased or originated:
Debt and equity securities	(1,088)		(2,259)
Commercial mortgage loans	(95)		(68)
Other (primarily short-term and other long-term investments)	(388)		(206)
Property and equipment purchases, net	(194)		(103)
Acquisitions, net of cash acquired	(6)		-
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	475		(1,700)
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds	247		292
Withdrawals and benefit payments from contractholder deposit funds	(251)		(306)
Net change in short-term debt	(1,048)		(3)
Repayment of long-term debt	(1,000)		(131)
Repurchase of common stock	(462)		(310)
Issuance of common stock	53		20
Other, net	(73)		(92)
NET CASH (USED IN) FINANCING ACTIVITIES	(2,534)		(530)
Effect of foreign currency rate changes on cash and cash equivalents	(12)		4
Net increase (decrease) in cash and cash equivalents	1,121		(201)
Cash and cash equivalents, January 1,	3,855		2,972
Cash and cash equivalents, March 31,	$	4,976	$	2,771
Supplemental Disclosure of Cash Information:
Income taxes paid, net of refunds	$	29	$	31
Interest paid	$	377	$	46

Note Number	Footnote	Page

BUSINESS AND CAPITAL STRUCTURE
1	Description of Business	7
2	Summary of Significant Accounting Policies	8
3	Accounts Receivable, Net	9
4	Mergers and Acquisitions	9
5	Earnings Per Share	10
6	Debt	11
INSURANCE INFORMATION
7	Insurance and Contractholder Liabilities	12
8	Reinsurance	15
INVESTMENTS
9	Investments	17
10	Fair Value Measurements	21
11	Variable Interest Entities	27
12	Accumulated Other Comprehensive Income (Loss)	28
WORKFORCE MANAGEMENT AND COMPENSATION
13	Pension and Other Postretirement Benefit Plans	28
PROPERTY, LEASES AND OTHER ASSET BALANCES
14	Leases	29
COMPLIANCE, REGULATION AND CONTINGENCIES
15	Income Taxes	31
16	Contingencies and Other Matters	31
17	Condensed Consolidating Financial Information	34
RESULTS DETAILS
18	Segment Information	41



Note Number	Footnote	Page

BUSINESS AND CAPITAL STRUCTURE
1	Description of Business	9
2	Summary of Significant Accounting Policies	9
3	Accounts Receivable, Net	10
4	Supplier Finance Program	10

5	Assets and Liabilities of Businesses Held for Sale	11
6	Earnings Per Share	11
7	Debt	12
8	Common and Preferred Stock	14
INSURANCE INFORMATION
9	Insurance and Contractholder Liabilities	15
10	Reinsurance	19
INVESTMENTS
11	Investments	20
12	Fair Value Measurements	23
13	Variable Interest Entities	27
14	Accumulated Other Comprehensive Income (Loss)	27


COMPLIANCE, REGULATION AND CONTINGENCIES
15	Income Taxes	28
16	Contingencies and Other Matters	29
RESULTS DETAILS
17	Segment Information	30

(In millions)	March 31, 2019		December 31, 2018
Insurance customer receivables	$	2,261	$	1,888
Noninsurance customer receivables	4,635		4,988
Pharmaceutical manufacturers receivable(1)	3,682		3,321
Other receivables	363		276
Total accounts receivable, net	$	10,941	$	10,473

	Three Months Ended
	March 31, 2019						March 31, 2018
(Shares in thousands, dollars in millions, except per share amounts)	Basic		Effect of Dilution		Diluted		Basic		Effect of Dilution		Diluted
Shareholders’ net income	$	1,368			$	1,368	$	915			$	915
Shares:
Weighted average	379,387				379,387		242,179				242,179
Common stock equivalents			4,637		4,637				3,609		3,609
Total shares	379,387		4,637		384,024		242,179		3,609		245,788
EPS	$	3.61	$	(0.05)	$	3.56	$	3.78	$	(0.06)	$	3.72


Record Date	Payment Date	Amount per Share	Total Amount Paid (in millions)
2024
March 6, 2024	March 21, 2024	$1.40	$401



2023
March 8, 2023	March 23, 2023	$1.23	$368

	Three Months Ended
(Dollars in millions)	March 31, 2019				March 31, 2018
	$		%(1)		$		%(2)
Actual completion factors	$	55	0.2	%	$	52	0.3	%
Medical cost trend	62		0.3		54		0.3
Other	-		-		9		-
Total favorable variance	$	117	0.5	%	$	115	0.6	%

(Dollars in millions) Line of Business	Reinsurer(s)	March 31, 2019		December 31, 2018		Collateral and Other Terms at March 31, 2019
Ongoing Operations
Integrated Medical, International Markets, Group Disability, COLI	Various	$	470	$	464	Balances range from less than $1 million up to $65 million. Over 70% of the balance is from companies rated as investment grade by Standard & Poor’s.
Total recoverables related to ongoing operations		470		464
Acquisition, disposition or runoff activities
Individual Life and Annuity (sold in 1998)	Lincoln National Life and Lincoln Life & Annuity of New York	3,254		3,312		Both companies’ ratings were well above the level that would trigger a contractual obligation to fully secure the outstanding balance.
GMDB (effectively exited in 2013)	Berkshire	844		893		100% secured by assets in a trust.
Retirement Benefits Business (sold in 2004)	Prudential Retirement Insurance and Annuity	761		787		100% secured by assets in a trust.
Supplemental Benefits Business (2012 acquisition)	Great American Life	254		261		100% secured by assets in a trust.
Other	Various	82		87		100% secured by assets in a trust or other deposits.
Total recoverables related to acquisition, disposition or runoff activities		5,195		5,340
Total reinsurance recoverables		$	5,665	$	5,804

	Amortized		Fair
(In millions)	Cost		Value
Due in one year or less	$	1,366	$	1,370
Due after one year through five years	6,516		6,684
Due after five years through ten years	9,529		9,682
Due after ten years	4,231		4,925
Mortgage and other asset-backed securities	494		508
Total	$	22,136	$	23,169

	Amortized		Unrealized		Unrealized		Fair
(In millions)	Cost		Appreciation		Depreciation		Value
March 31, 2019
Federal government and agency	$	513	$	221	$	(1)	$	733
State and local government	851		77		-		928
Foreign government	2,126		183		(4)		2,305
Corporate	18,152		676		(133)		18,695
Mortgage and other asset-backed	494		21		(7)		508
Total	$	22,136	$	1,178	$	(145)	$	23,169
Investments supporting liabilities of the Company’s run-off settlement annuity business (included in total above) (1)	$	2,269	$	555	$	(13)	$	2,811
December 31, 2018
Federal government and agency	$	507	$	204	$	(1)	$	710
State and local government	920		66		(1)		985
Foreign government	2,214		155		(7)		2,362
Corporate	18,403		411		(453)		18,361
Mortgage and other asset-backed	506		16		(12)		510
Total	$	22,550	$	852	$	(474)	$	22,928
Investments supporting liabilities of the Company’s run-off settlement annuity business (included in total above) (1)	$	2,264	$	479	$	(40)	$	2,703


(In millions)	Amortized Cost		Allowance for Credit Loss		Unrealized Appreciation		Unrealized Depreciation		Fair Value
March 31, 2024
Federal government and agency	$	289	$	—	$	21	$	(10)	$	300
State and local government	37		—		2		(1)		38
Foreign government	354		—		8		(14)		348
Corporate	9,051		(50)		122		(682)		8,441
Mortgage and other asset-backed	389		—		—		(36)		353
Total	$	10,120	$	(50)	$	153	$	(743)	$	9,480


December 31, 2023
Federal government and agency	$	251	$	—	$	24	$	(8)	$	267
State and local government	37		—		2		(1)		38
Foreign government	355		—		10		(13)		352
Corporate	9,338		(33)		158		(630)		8,833
Mortgage and other asset-backed	398		—		1		(34)		365
Total	$	10,379	$	(33)	$	195	$	(686)	$	9,855


	Carrying Value as of
(In millions)	March 31, 2024		December 31, 2023
Real estate investments	$	1,696	$	1,606
Securities partnerships	2,423		2,400
Other	182		175
Total	$	4,301	$	4,181

		Notional Value as of
(In millions)		March 31,		December 31,
Type of Instrument	Purpose	2019		2018
Foreign currency swap contracts	Fair value hedge: To hedge the foreign exchange-related changes in fair values of certain foreign-denominated bonds. The notional value of these derivatives matches the amortized cost of the hedged bonds.	$	593	$	525
Foreign currency swap contracts	Net investment hedge: To reduce the risk of changes in net assets due to changes in foreign currency spot exchange rates for certain foreign subsidiaries that conduct their business principally in Euros. The notional value of hedging instruments matches the hedged amount of subsidiary net assets.	$	439	$	439
Foreign currency forward contracts	Economic hedge: To hedge the foreign exchange related changes in fair values of a U.S. dollar-denominated bond portfolio to reflect the local currency for the Company’s foreign subsidiary in South Korea. The notional value of hedging instruments generally aligns with the fair value of the hedged bond portfolio.	$	309	$	309

	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
	As of		As of		As of		As of		As of		As of		As of		As of
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
(In millions)	2019		2018		2019		2018		2019		2018		2019		2018
Financial assets at fair value
Debt securities
Federal government and agency	$	212	$	209	$	521	$	501	$	-	$	-	$	733	$	710
State and local government	-		-		928		985		-		-		928		985
Foreign government	-		-		2,277		2,356		28		6		2,305		2,362
Corporate	-		-		18,458		18,127		237		234		18,695		18,361
Mortgage and other asset-backed	-		-		369		372		139		138		508		510
Total debt securities	212		209		22,553		22,341		404		378		23,169		22,928
Equity securities (1)	8		384		49		43		32		32		89		459
Short-term investments	-		-		267		316		-		-		267		316
Derivative assets	-		-		58		53		-		-		58		53
Real estate funds priced at NAV as a practical expedient (2)													230		239
Financial liabilities at fair value
Derivative liabilities	$	-	$	-	$	14	$	10	$	-	$	-	$	14	$	10

Debt and Equity Securities (In millions)	For the Three Months Ended March 31,
Debt and Equity Securities (In millions)	2019		2018
Balance at January 1,	$	410	$	732
Total (losses) included in shareholders’ net income	(1)		(20)
Gains (losses) included in other comprehensive income	7		(5)
Gains (losses) required to adjust future policy benefits for settlement annuities (1)	2		(4)
Purchases, sales, settlements
Purchases	-		10
Sales	-		(11)
Settlements	(1)		(2)
Total purchases, sales and settlements	(1)		(3)
Transfers into/(out of) Level 3			��
Transfers into Level 3	20		20
Transfers out of Level 3 (2)	(1)		(124)
Total transfers into/(out of) Level 3	19		(104)
Balance at March 31,	$	436	$	596
Total (losses) included in shareholders’ net income attributable to instruments held at the reporting date	$	(1)	$	(7)

	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
(In millions)	2019		2018		2019		2018		2019		2018		2019		2018
Guaranteed separate accounts (See Note 16)	$	204	$	187	$	264	$	267	$	-	$	-	$	468	$	454
Non-guaranteed separate accounts (1)	1,328		1,204		5,346		5,216		244		233		6,918		6,653
Subtotal	$	1,532	$	1,391	$	5,610	$	5,483	$	244	$	233	7,386		7,107
Non-guaranteed separate accounts priced at NAV as a practical expedient (1)													693		732
Total separate account assets													$	8,079	$	7,839


	Fair Value as of				Unfunded Commitment as of March 31, 2024		Redemption Frequency (if currently eligible)	Redemption Notice Period
(In millions)	March 31, 2024		December 31, 2023
Securities partnerships	$	412	$	419	$	252	Not applicable	Not applicable
Real estate funds	251		258		—		Quarterly	30 - 90 days
Hedge funds	3		3		—		Up to annually, varying by fund	30 - 90 days
Total	$	666	$	680	$	252

	Classification in	March 31, 2019				December 31, 2018
(In millions)	Fair Value Hierarchy	Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	1,875	$	1,864	$	1,832	$	1,858
Long-term debt, including current maturities, excluding finance leases	Level 2	$	41,027	$	39,840	$	40,819	$	40,829


	Classification in Fair Value Hierarchy	March 31, 2024				December 31, 2023
(In millions)		Fair Value		Carrying Value		Fair Value		Carrying Value
Commercial mortgage loans	Level 3	$	1,451	$	1,562	$	1,430	$	1,533
Long-term debt, including current maturities, excluding finance leases	Level 2	$	29,806	$	31,783	$	28,033	$	29,585

	Pension Benefits				Other Postretirement Benefits
	Three Months Ended				Three Months Ended
	March 31,				March 31,
(In millions)	2019		2018		2019		2018
Service cost	$	1	$	1	$	-	$	-
Interest cost	49		42		2		2
Expected long-term return on plan assets	(56)		(64)		-		-
Amortization of:
Net loss from past experience	16		17		-		-
Prior service cost	-		-		(1)		-
Litigation settlement - plan amendment	142		-		-		-
Settlement loss	10		-		-		-
Net cost	$	162	$	(4)	$	1	$	2

(In millions)	Operating Leases		Finance Leases
2019	$	129	$	18
2020	169		23
2021	140		14
2022	121		14
2023	81		9
Thereafter	124		22
Total lease payments	764		100
Less: imputed interest	80		11
Total	$	684	$	89

	For the three months ended March 31, 2019
(In millions)	Cigna		Old Cigna		Express Scripts Holding Company		Express Scripts, Inc.		Medco Health Solutions, Inc.		Non- Guarantors		Eliminations and Consolidation Adjustments		Consolidated
Revenues
Pharmacy revenues	$	-	$	-	$	-	$	17,622	$	3,763	$	14,142	$	(10,348)	$	25,179
Premiums	-		-		-		-		-		9,971		-		9,971
Fees and other revenues	-		-		-		190		84		3,101		(925)		2,450
Net investment income (loss)	(9)		-		15		3		2		335		-		346
Total revenues	(9)		-		15		17,815		3,849		27,549		(11,273)		37,946
Benefits and expenses
Pharmacy and other service costs	-		-		-		16,363		3,689		14,346		(10,348)		24,050
Medical costs and other benefit expenses	-		-		-		-		-		7,620		-		7,620
Selling, general and administrative expenses	(99)		73		13		835		87		3,319		(925)		3,303
Amortization of acquired intangible assets	-		-		-		577		83		83		-		743
Total benefits and expenses	(99)		73		13		17,775		3,859		25,368		(11,273)		35,716
Income (loss) from operations	90		(73)		2		40		(10)		2,181		-		2,230
Interest and other income (expense)	(237)		(87)		(124)		(4)		(9)		9		-		(452)
Intercompany interest income (expense)	(31)		(3)		124		(62)		(39)		11		-		-
Net realized investment gains	-		-		-		-		-		10		-		10
Income (loss) before income taxes	(178)		(163)		2		(26)		(58)		2,211		-		1,788
Total income tax (benefit) expense	(37)		(31)		1		(17)		(17)		517		-		416
Income (loss) before equity in earnings of subsidiaries	(141)		(132)		1		(9)		(41)		1,694		-		1,372
Equity in earnings of subsidiaries	1,509		1,152		488		432		84		-		(3,665)		-
Net income	1,368		1,020		489		423		43		1,694		(3,665)		1,372
Less: Net income attributable to noncontrolling interests	-		-		-		-		-		4		-		4
Shareholders’ net income	$	1,368	$	1,020	$	489	$	423	$	43	$	1,690	$	(3,665)	$	1,368
Other comprehensive income, net of tax	429		429		1		1		-		412		(843)		429
Shareholders’ comprehensive income	$	1,797	$	1,449	$	490	$	424	$	43	$	2,102	$	(4,508)	$	1,797

	As of March 31, 2019
(In millions)	Cigna		Old Cigna		Express Scripts Holding Company		Express Scripts, Inc.		Medco Health Solutions, Inc.		Non- Guarantors		Eliminations and Consolidation Adjustments		Consolidated
Assets
Cash and cash equivalents	$	-	$	-	$	1,596	$	44	$	-	$	3,336	$	-	$	4,976
Investments	417		6		-		-		-		1,239		-		1,662
Accounts receivable, net	-		2		-		4,670		626		5,643		-		10,941
Inventories	-		-		-		-		-		2,382		-		2,382
Other current assets	-		131		-		282		3		1,042		(283)		1,175
Total current assets	417		139		1,596		4,996		629		13,642		(283)		21,136
Long-term investments	-		10		-		-		-		27,247		-		27,257
Reinsurance recoverables	-		-		-		-		-		5,385		-		5,385
Deferred policy acquisition costs	-		-		-		-		-		2,817		-		2,817
Property and equipment	-		-		-		2,386		-		2,137		-		4,523
Investments in subsidiaries	70,036		28,174		52,560		17,551		8,205		-		(176,526)		-
Intercompany receivables, net	-		3,054		-		8,371		2,222		26,839		(40,486)		-
Goodwill	-		-		31,049		-		-		13,488		-		44,537
Other intangible assets	-		-		8,400		18,489		6,958		4,491		-		38,338
Other assets	27		227		-		152		78		2,001		(209)		2,276
Separate account assets	-		-		-		-		-		8,079		-		8,079
TOTAL ASSETS	$	70,480	$	31,604	$	93,605	$	51,945	$	18,092	$	106,126	$	(217,504)	$	154,348
Liabilities
Current insurance and contractholder liabilities	$	-	$	-	$	-	$	-	$	-	$	7,060	$	-	$	7,060
Pharmacy and service costs payable	-		-		-		9,245		1,291		609		-		11,145
Accounts payable	22		-		2		833		4		3,627		-		4,488
Accrued expenses and other liabilities	719		288		92		1,522		276		4,747		(283)		7,361
Short-term debt	1,556		-		998		352		-		9		-		2,915
Total current liabilities	2,297		288		1,092		11,952		1,571		16,052		(283)		32,969
Non-current insurance and contractholder liabilities	-		-		-		-		-		20,043		-		20,043
Deferred tax liabilities, net	-		-		1,999		4,898		1,664		1,051		(209)		9,403
Other non-current liabilities	-		715		-		577		241		2,299		-		3,832
Intercompany payables, net	4,904		4,477		30,552		-		-		553		(40,486)		-
Long-term debt	20,871		5,112		10,938		41		505		104		-		37,571
Separate account liabilities	-		-		-		-		-		8,079		-		8,079
TOTAL LIABILITIES	28,072		10,592		44,581		17,468		3,981		48,181		(40,978)		111,897
Redeemable noncontrolling interests	-		-		-		-		-		38		-		38
TOTAL SHAREHOLDERS’ EQUITY	42,408		21,012		49,024		34,477		14,111		57,902		(176,526)		42,408
Noncontrolling interests	-		-		-		-		-		5		-		5
TOTAL EQUITY	42,408		21,012		49,024		34,477		14,111		57,907		(176,526)		42,413
TOTAL LIABILITIES AND EQUITY	$	70,480	$	31,604	$	93,605	$	51,945	$	18,092	$	106,126	$	(217,504)	$	154,348

	As of December 31, 2018
(In millions)	Cigna		Old Cigna		Express Scripts Holding Company		Express Scripts, Inc.		Medco Health Solutions, Inc.			Non- Guarantors		Eliminations and Consolidation Adjustments		Consolidated
Assets
Cash and cash equivalents	$	243	$	-	$	633	$	43	$	-		$	2,936	$	-	$	3,855
Investments	-		-		-		-		-			2,045		-		2,045
Accounts receivable, net	-		-		-		4,206		748			5,519		-		10,473
Inventories	-		-		-		-		-			2,821		-		2,821
Other current assets	14		59		-		310		-			1,063		(210)		1,236
Total current assets	257		59		633		4,559		748			14,384		(210)		20,430
Long-term investments	-		10		-		-		-			26,919		-		26,929
Reinsurance recoverables	-		-		-		-		-			5,507		-		5,507
Deferred policy acquisition costs	-		-		-		-		-			2,821		-		2,821
Property and equipment	-		-		-		2,432		-			2,130		-		4,562
Investments in subsidiaries	68,969		27,544		52,035		17,115		8,117			-		(173,780)		-
Intercompany receivables, net	-		4,505		-		7,425		2,335			24,882		(39,147)		-
Goodwill	-		-		31,049		-		-			13,456		-		44,505
Other intangible assets	-		-		8,400		18,962		7,040			4,601		-		39,003
Other assets	48		198		-		68		74			1,488		(246)		1,630
Separate account assets	-		-		-		-		-			7,839		-		7,839
TOTAL ASSETS	$	69,274	$	32,316	$	92,117	$	50,561	$	18,314		$	104,027	$	(213,383)	$	153,226
Liabilities
Current insurance and contractholder liabilities	$	-	$	-	$	-	$	-	$	-		$	6,801	$	-	$	6,801
Pharmacy and service costs payable	-		-		-		8,422		1,579			701		-		10,702
Accounts payable	22		-		-		834		4			3,506		-		4,366
Accrued expenses and other liabilities	396		182		129		1,387		189			4,998		(210)		7,071
Short-term debt	-		1,500		995		353		-			107		-		2,955
Total current liabilities	418		1,682		1,124		10,996		1,772			16,113		(210)		31,895
Non-current insurance and contractholder liabilities	-		-		-		-		-			19,974		-		19,974
Deferred tax liabilities, net	-		-		2,001		5,012		1,685			1,001		(246)		9,453
Other non-current liabilities	-		685		-		497		290			1,998		-		3,470
Intercompany payables, net	4,965		4,361		29,569		-		-			252		(39,147)		-
Long-term debt	22,863		5,110		10,932		24		506			88		-		39,523
Separate account liabilities	-		-		-		-		-			7,839		-		7,839
TOTAL LIABILITIES	28,246		11,838		43,626		16,529		4,253			47,265		(39,603)		112,154
Redeemable noncontrolling interests	-		-		-		-		-		��	37		-		37
TOTAL SHAREHOLDERS’ EQUITY	41,028		20,478		48,491		34,032		14,061			56,718		(173,780)		41,028
Noncontrolling interest	-		-		-		-		-			7		-		7
TOTAL EQUITY	41,028		20,478		48,491		34,032		14,061			56,725		(173,780)		41,035
TOTAL LIABILITIES AND EQUITY	$	69,274	$	32,316	$	92,117	$	50,561	$	18,314		$	104,027	$	(213,383)	$	153,226

(In millions)	Health Services		Integrated Medical		International Markets		Group Disability and Other		Corporate and Eliminations		Total
Three Months Ended March 31, 2019
Revenues from external customers (1)	$	26,197	$	8,910	$	1,384	$	1,109	$	-	$	37,600
Inter-segment revenues	737		162		-		7		(906)		-
Net investment income (loss)	15		123		38		180		(10)		346
Total revenues	26,949		9,195		1,422		1,296		(916)		37,946
Revenue contributions from transitioning clients	(4,489)		-		-		-		-		(4,489)
Net realized investment results from equity method subsidiaries (2)	-		-		(28)		-		-		(28)
Adjusted revenues	$	22,460	$	9,195	$	1,394	$	1,296	$	(916)	$	33,429
Income (loss) before taxes	$	942	$	1,157	$	222	$	93	$	(626)	$	1,788
Pre-tax adjustments to reconcile to adjusted income from operations
Adjustment for transitioning clients	(660)		-		-		-		-		(660)
(Income) attributable to noncontrolling interests	(1)		-		(4)		-		-		(5)
Net realized investment (gains) (2)	-		(5)		(23)		(10)		-		(38)
Amortization of acquired intangible assets	713		18		11		1		-		743
Special items
Integration and transaction-related costs	-		-		-		-		136		136
Pre-tax adjusted income (loss) from operations	$	994	$	1,170	$	206	$	84	$	(490)	$	1,964

(In millions)	Health Services		Integrated Medical		International Markets		Group Disability and Other		Corporate and Eliminations		Total
Three Months Ended March 31, 2018
Revenues from external customers (1)	$	786	$	7,903	$	1,302	$	1,093	$	-	$	11,084
Inter-segment revenues	284		136		-		3		(423)		-
Net investment income	1		111		37		175		5		329
Total revenues	1,071		8,150		1,339		1,271		(418)		11,413
Net realized investment results from equity method subsidiaries (2)	-		-		2		-		-		2
Adjusted revenues	$	1,071	$	8,150	$	1,341	$	1,271	$	(418)	$	11,415
Income (loss) before taxes	$	83	$	972	$	213	$	103	$	(153)	$	1,218
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests	-		-		(4)		-		-		(4)
Net realized investment losses (2)	-		18		4		12		1		35
Amortization of acquired intangible assets	-		22		4		1		-		27
Special items
Integration and transaction-related costs	-		-		-		-		60		60
Pre-tax adjusted income (loss) from operations	$	83	$	1,012	$	217	$	116	$	(92)	$	1,336