UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 20212022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file numberFile Number 1-38769001-38769
Cigna Corporation
(Exact name of registrant as specified in its charter)
Delaware82-4991898
(State or other jurisdiction(I.R.S. Employer
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)226-6000code)

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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Par Value $0.01CINew 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 x☒ 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 x☒ 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"large accelerated filer,” “accelerated" "accelerated filer,” “smaller" "smaller reporting company,”" and “emerging"emerging growth company”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. ☐
Yes _
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 July 30, 2021, 340,107,53929, 2022, 305,116,202 shares of the issuer’s common stock were outstanding.


Cigna Corporation
TABLE OF CONTENTS
Page
FINANCIAL INFORMATION
3
Consolidated Statements of Income
3
Consolidated Statements of Comprehensive Income
4
Consolidated Balance Sheets
5
Consolidated Statements of Changes in Total Equity
6
Consolidated Statements of Cash Flows
8
Notes to the Consolidated Financial Statements
109
3837
5655
5655
OTHER INFORMATION
5655
5655
5756
5857
5958
As used herein, “Cigna”"Cigna" or the “Company”"Company" refers to one or more of Cigna Corporation and its consolidated
subsidiaries.


Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Cigna Corporation
Consolidated Statements of Income
UnauditedUnaudited
Three Months Ended June 30,Six Months Ended June 30,
(In millions, except per share amounts)2021202020212020
Revenues
Pharmacy revenues$30,047 $26,564 $58,072 $51,662 
Premiums10,323 10,406 20,537 21,246 
Fees and other revenues2,451 2,072 4,792 4,250 
Net investment income310 223 701 576 
TOTAL REVENUES43,131 39,265 84,102 77,734 
Benefits and expenses
Pharmacy and other service costs29,001 25,611 56,236 49,801 
Medical costs and other benefit expenses8,484 7,112 16,489 15,434 
Selling, general and administrative expenses2,996 3,407 6,275 6,805 
Amortization of acquired intangible assets503 496 998 994 
TOTAL BENEFITS AND EXPENSES40,984 36,626 79,998 73,034 
Income from operations2,147 2,639 4,104 4,700 
Interest expense and other(298)(374)(612)(765)
Debt extinguishment costs(10)(14)(141)(199)
Net realized investment gains (losses)59 38 60 (50)
Income before income taxes1,898 2,289 3,411 3,686 
TOTAL INCOME TAXES422 529 764 737 
Net income1,476 1,760 2,647 2,949 
Less: Net income attributable to noncontrolling interests9 6 19 14 
SHAREHOLDERS' NET INCOME$1,467 $1,754 $2,628 $2,935 
Shareholders’ net income per share
Basic$4.30 $4.77 $7.62 $7.96 
Diluted$4.25 $4.73 $7.54 $7.88 
a
Cigna Corporation
Consolidated Statements of Income
UnauditedUnaudited
Three Months Ended June 30,Six Months Ended June 30,
(In millions, except per share amounts)2022202120222021
Revenues
Pharmacy revenues$31,972 $30,047 $62,669 $58,072 
Premiums10,426 10,323 20,782 20,537 
Fees and other revenues2,757 2,451 5,295 4,792 
Net investment income325 310 739 701 
TOTAL REVENUES45,480 43,131 89,485 84,102 
Benefits and expenses
Pharmacy and other service costs31,150 29,001 60,963 56,236 
Medical costs and other benefit expenses8,192 8,484 16,460 16,489 
Selling, general and administrative expenses3,256 2,996 6,555 6,275 
Amortization of acquired intangible assets501 503 959 998 
TOTAL BENEFITS AND EXPENSES43,099 40,984 84,937 79,998 
Income from operations2,381 2,147 4,548 4,104 
Interest expense and other(301)(298)(600)(612)
Debt extinguishment costs— (10)— (141)
Net realized investment gains (losses)(95)59 (414)60 
Income before income taxes1,985 1,898 3,534 3,411 
TOTAL INCOME TAXES413 422 764 764 
Net income1,572 1,476 2,770 2,647 
Less: Net income attributable to noncontrolling interests13 9 28 19 
SHAREHOLDERS' NET INCOME$1,559 $1,467 $2,742 $2,628 
Shareholders' net income per share
Basic$4.95 $4.30 $8.66 $7.62 
Diluted$4.90 $4.25 $8.57 $7.54 
The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.
3

Cigna Corporation
Consolidated Statements of Comprehensive Income
Cigna Corporation
Consolidated Statements of Comprehensive Income
Cigna Corporation
Consolidated Statements of Comprehensive Income
UnauditedUnauditedUnauditedUnaudited
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
(In millions)(In millions)2021202020212020(In millions)2022202120222021
Net incomeNet income$1,476 $1,760 $2,647 $2,949 Net income$1,572 $1,476 $2,770 $2,647 
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax
Net unrealized appreciation (depreciation) on securities and derivativesNet unrealized appreciation (depreciation) on securities and derivatives122 709 (151)281 Net unrealized appreciation (depreciation) on securities and derivatives(410)122 (970)(151)
Net translation gains (losses) on foreign currenciesNet translation gains (losses) on foreign currencies16 70 (103)(105)Net translation gains (losses) on foreign currencies(206)16 (269)(103)
Postretirement benefits liability adjustmentPostretirement benefits liability adjustment15 (42)33 (29)Postretirement benefits liability adjustment27 15 40 33 
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax153 737 (221)147 Other comprehensive income (loss), net of tax(589)153 (1,199)(221)
Total comprehensive incomeTotal comprehensive income1,629 2,497 2,426 3,096 Total comprehensive income983 1,629 1,571 2,426 
Comprehensive income (loss) attributable to noncontrolling interestsComprehensive income (loss) attributable to noncontrolling interestsComprehensive income (loss) attributable to noncontrolling interests
Net income attributable to redeemable noncontrolling interest3 4 8 8 
Net income attributable to redeemable noncontrolling interestsNet income attributable to redeemable noncontrolling interests2 3 5 8 
Net income attributable to other noncontrolling interestsNet income attributable to other noncontrolling interests6 2 11 6 Net income attributable to other noncontrolling interests11 6 23 11 
Other comprehensive (loss) attributable to redeemable noncontrolling interest(1)(2)(5)(6)
Other comprehensive loss attributable to redeemable noncontrolling interestsOther comprehensive loss attributable to redeemable noncontrolling interests(1)(1)(3)(5)
Total comprehensive income attributable to noncontrolling interestsTotal comprehensive income attributable to noncontrolling interests8 4 14 8 Total comprehensive income attributable to noncontrolling interests12 8 25 14 
SHAREHOLDERS' COMPREHENSIVE INCOMESHAREHOLDERS' COMPREHENSIVE INCOME$1,621 $2,493 $2,412 $3,088 SHAREHOLDERS' COMPREHENSIVE INCOME$971 $1,621 $1,546 $2,412 
The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.
4

Cigna Corporation
Consolidated Balance Sheets
Cigna Corporation
Consolidated Balance Sheets
Cigna Corporation
Consolidated Balance Sheets
UnauditedUnaudited
As of
June 30,		As of December 31,As of
June 30,		As of
December 31,
(In millions)(In millions)20212020(In millions)20222021
AssetsAssetsAssets
Cash and cash equivalentsCash and cash equivalents$3,821 $10,182 Cash and cash equivalents$4,421 $5,081 
InvestmentsInvestments1,305 1,331 Investments754 920 
Accounts receivable, netAccounts receivable, net15,462 12,191 Accounts receivable, net18,290 15,071 
InventoriesInventories3,042 3,165 Inventories3,781 3,722 
Other current assetsOther current assets1,381 930 Other current assets1,124 1,283 
Assets of businesses held for saleAssets of businesses held for sale9,052 10,057 
Total current assetsTotal current assets25,011 27,799 Total current assets37,422 36,134 
Long-term investmentsLong-term investments23,622 23,262 Long-term investments16,724 18,438 
Reinsurance recoverablesReinsurance recoverables5,114 5,200 Reinsurance recoverables4,874 4,970 
Deferred policy acquisition costsDeferred policy acquisition costs3,397 3,385 Deferred policy acquisition costs742 677 
Property and equipmentProperty and equipment4,078 4,205 Property and equipment3,659 3,692 
GoodwillGoodwill46,063 44,648 Goodwill45,810 45,811 
Other intangible assetsOther intangible assets35,007 35,179 Other intangible assets33,276 34,102 
Other assetsOther assets2,654 2,687 Other assets2,628 2,728 
Separate account assetsSeparate account assets9,261 9,086 Separate account assets7,495 8,337 
TOTAL ASSETSTOTAL ASSETS$154,207 $155,451 TOTAL ASSETS$152,630 $154,889 
LiabilitiesLiabilitiesLiabilities
Current insurance and contractholder liabilitiesCurrent insurance and contractholder liabilities$5,850 $5,308 Current insurance and contractholder liabilities$5,654 $5,318 
Pharmacy and other service costs payablePharmacy and other service costs payable14,470 13,347 Pharmacy and other service costs payable16,432 15,309 
Accounts payableAccounts payable5,647 5,478 Accounts payable7,142 6,655 
Accrued expenses and other liabilitiesAccrued expenses and other liabilities7,212 8,515 Accrued expenses and other liabilities7,742 7,322 
Short-term debtShort-term debt1,532 3,374 Short-term debt2,397 2,545 
Liabilities of businesses held for saleLiabilities of businesses held for sale5,851 6,423 
Total current liabilitiesTotal current liabilities34,711 36,022 Total current liabilities45,218 43,572 
Non-current insurance and contractholder liabilitiesNon-current insurance and contractholder liabilities16,665 16,844 Non-current insurance and contractholder liabilities11,777 12,563 
Deferred tax liabilities, netDeferred tax liabilities, net8,867 8,939 Deferred tax liabilities, net8,014 8,346 
Other non-current liabilitiesOther non-current liabilities4,330 4,629 Other non-current liabilities3,175 3,762 
Long-term debtLong-term debt31,606 29,545 Long-term debt30,984 31,125 
Separate account liabilitiesSeparate account liabilities9,261 9,086 Separate account liabilities7,495 8,337 
TOTAL LIABILITIESTOTAL LIABILITIES105,440 105,065 TOTAL LIABILITIES106,663 107,705 
Contingencies — Note 1500
Contingencies — Note 18Contingencies — Note 1800
Redeemable noncontrolling interestsRedeemable noncontrolling interests51 58 Redeemable noncontrolling interests45 54 
Shareholders’ equity
Shareholders' equityShareholders' equity
Common stock (1)
Common stock (1)
4 4 
Common stock (1)
4 4 
Additional paid-in capitalAdditional paid-in capital29,403 28,975 Additional paid-in capital29,930 29,574 
Accumulated other comprehensive lossAccumulated other comprehensive loss(1,077)(861)Accumulated other comprehensive loss(2,080)(884)
Retained earningsRetained earnings30,513 28,575 Retained earnings34,626 32,593 
Less: Treasury stock, at costLess: Treasury stock, at cost(10,134)(6,372)Less: Treasury stock, at cost(16,588)(14,175)
TOTAL SHAREHOLDERS’ EQUITY48,709 50,321 
TOTAL SHAREHOLDERS' EQUITYTOTAL SHAREHOLDERS' EQUITY45,892 47,112 
Other noncontrolling interestsOther noncontrolling interests7 7 Other noncontrolling interests30 18 
Total equityTotal equity48,716 50,328 Total equity45,922 47,130 
Total liabilities and equityTotal liabilities and equity$154,207 $155,451 Total liabilities and equity$152,630 $154,889 
(1)Par value per share, $0.01; shares issued, 394397 million as of June 30, 20212022 and 390394 million as of December 31, 2020;2021; authorized shares, 600 million.
The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.
5

Cigna CorporationCigna CorporationCigna Corporation
Consolidated Statements of Changes in Total EquityConsolidated Statements of Changes in Total EquityConsolidated Statements of Changes in Total Equity
UnauditedUnauditedUnaudited
Three Months Ended June 30, 2022Three Months Ended June 30, 2022
(In millions)(In millions)Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive (Loss)Retained EarningsTreasury StockShareholders’ EquityOther Non- controlling InterestsTotal EquityRedeemable Noncontrolling Interests
Balance at March 31, 2022Balance at March 31, 2022$4 $29,736 $(1,492)$33,420 $(15,581)$46,087 $22 $46,109 $55 
Effects of issuing stock for employee benefits plansEffects of issuing stock for employee benefits plans194 (1)193 193 
Other comprehensive lossOther comprehensive loss(588)(588)(588)(1)
Net incomeNet income1,559 1,559 11 1,570 2 
Common dividends declared (per share: $1.12)Common dividends declared (per share: $1.12)(353)(353)(353)
Repurchase of common stockRepurchase of common stock— (1,006)(1,006)(1,006)
Other transactions impacting noncontrolling interestsOther transactions impacting noncontrolling interests— — (3)(3)(11)
Balance at June 30, 2022Balance at June 30, 2022$4 $29,930 $(2,080)$34,626 $(16,588)$45,892 $30 $45,922 $45 
Three Months Ended June 30, 2021Three Months Ended June 30, 2021Three Months Ended June 30, 2021
(In millions)(In millions)Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive (Loss)Retained EarningsTreasury StockShareholders’ EquityOther Non- controlling InterestsTotal EquityRedeemable Noncontrolling Interests(In millions)Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive (Loss)Retained EarningsTreasury StockShareholders’ EquityOther Non- controlling InterestsTotal EquityRedeemable Noncontrolling Interests
Balance at March 31, 2021Balance at March 31, 2021$4 $29,254 $(1,231)$29,389 $(9,267)$48,149 $6 $48,155 $59 Balance at March 31, 2021$4 $29,254 $(1,231)$29,389 $(9,267)$48,149 $6 $48,155 $59 
Effects of issuing stock for employee benefits plans152 (2)150 150 
Effect of issuing stock for employee benefit plansEffect of issuing stock for employee benefit plans152 (2)150 150 
Other comprehensive income (loss)Other comprehensive income (loss)154 154 154 (1)Other comprehensive income (loss)154 154 154 (1)
Net incomeNet income1,467 1,467 6 1,473 3 Net income1,467 1,467 6 1,473 3 
Common dividends declared (per share: $1.00)Common dividends declared (per share: $1.00)(343)(343)(343)Common dividends declared (per share: $1.00)(343)(343)(343)
Repurchase of common stockRepurchase of common stock(865)(865)(865)Repurchase of common stock— (865)(865)(865)
Other transactions impacting noncontrolling interestsOther transactions impacting noncontrolling interests(3)(3)(5)(8)(10)Other transactions impacting noncontrolling interests(3)(3)(5)(8)(10)
Balance at June 30, 2021Balance at June 30, 2021$4 $29,403 $(1,077)$30,513 $(10,134)$48,709 $7 $48,716 $51 Balance at June 30, 2021$4 $29,403 $(1,077)$30,513 $(10,134)$48,709 $7 $48,716 $51 
Three Months Ended June 30, 2020
(In millions)Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive (Loss)Retained EarningsTreasury StockShareholders’ EquityOther Non- controlling InterestsTotal
Equity		Redeemable Noncontrolling Interests
Balance at March 31, 2020$4 $28,554 $(1,527)$21,298 $(3,250)$45,079 $7 $45,086 $35 
Effect of issuing stock for employee benefit plans145 (6)139 139 
Other comprehensive income (loss)739 739 739 (2)
Net income1,754 1,754 2 1,756 4 
Repurchase of common stock(345)(345)(345)
Other transactions impacting noncontrolling interests(4)(4)(3)
Balance at June 30, 2020$4 $28,699 $(788)$23,052 $(3,601)$47,366 $5 $47,371 $34 
The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.
6

Cigna Corporation
Consolidated Statements of Changes in Total Equity
Unaudited
Six Months Ended June 30, 2021
(In millions)Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive (Loss)Retained EarningsTreasury StockShareholders’ EquityOther Non- controlling InterestsTotal
Equity		Redeemable Noncontrolling Interests
Balance at December 31, 2020$4 $28,975 $(861)$28,575 $(6,372)$50,321 $7 $50,328 $58 
Effect of issuing stock for employee benefit plans431 (89)342 342 
Other comprehensive loss(216)(216)(216)(5)
Net income2,628 2,628 11 2,639 8 
Common dividends declared (per share: $2.00)(690)(690)(690)
Repurchase of common stock(3,673)(3,673)(3,673)
Other transactions impacting noncontrolling interests(3)(3)(11)(14)(10)
Balance at June 30, 2021$4 $29,403 $(1,077)$30,513 $(10,134)$48,709 $7 $48,716 $51 
Six Months Ended June 30, 2020
(In millions)Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive (Loss)Retained EarningsTreasury StockShareholders’ EquityOther Non- controlling InterestsTotal
Equity		Redeemable Noncontrolling Interests
Balance at December 31, 2019$4 $28,306 $(941)$20,162 $(2,193)$45,338 $6 $45,344 $35 
Cumulative effect of adopting new credit loss guidance (ASU 2016-13)
(30)(30)(30)
Effect of issuing stock for employee benefit plans393 (84)309 309 
Other comprehensive income (loss)153 153 153 (6)
Net income2,935 2,935 6 2,941 8 
Common dividends declared (per share: $0.04)(15)(15)(15)
Repurchase of common stock(1,324)(1,324)(1,324)
Other transactions impacting noncontrolling interests(7)(7)(3)
Balance at June 30, 2020$4 $28,699 $(788)$23,052 $(3,601)$47,366 $5 $47,371 $34 

Cigna Corporation
Consolidated Statements of Changes in Total Equity
Unaudited
Six Months Ended June 30, 2022
(In millions)Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive (Loss)Retained EarningsTreasury StockShareholders’ EquityOther Non- controlling InterestsTotal EquityRedeemable Noncontrolling Interests
Balance at December 31, 2021$4 $29,574 $(884)$32,593 $(14,175)$47,112 $18 $47,130 $54 
Effect of issuing stock for employee benefit plans356 (73)283 283 
Other comprehensive loss(1,196)(1,196)(1,196)(3)
Net income2,742 2,742 23 2,765 5 
Common dividends declared (per share: $2.24)(709)(709)(709)
Repurchase of common stock— (2,340)(2,340)(2,340)
Other transactions impacting noncontrolling interests— — (11)(11)(11)
Balance at June 30, 2022$4 $29,930 $(2,080)$34,626 $(16,588)$45,892 $30 $45,922 $45 
Six Months Ended June 30, 2021
(In millions)Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive (Loss)Retained EarningsTreasury StockShareholders’ EquityOther Non- controlling InterestsTotal EquityRedeemable Noncontrolling Interests
Balance at December 31, 2020$4 $28,975 $(861)$28,575 $(6,372)$50,321 $7 $50,328 $58 
Effect of issuing stock for employee benefit plans431 (89)342 342 
Other comprehensive loss(216)(216)(216)(5)
Net income2,628 2,628 11 2,639 8 
Common dividends declared (per share: $2.00)(690)(690)(690)
Repurchase of common stock— (3,673)(3,673)(3,673)
Other transactions impacting noncontrolling interests(3)(3)(11)(14)(10)
Balance at June 30, 2021$4 $29,403 $(1,077)$30,513 $(10,134)$48,709 $7 $48,716 $51 
The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.
7

Cigna Corporation
Consolidated Statements of Cash Flows
Unaudited
UnauditedSix Months Ended June 30,
Six Months Ended June 30,
(In millions)(In millions)20212020(In millions)20222021
Cash Flows from Operating ActivitiesCash Flows from Operating ActivitiesCash Flows from Operating Activities
Net incomeNet income$2,647 $2,949 Net income$2,770 $2,647 
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortizationDepreciation and amortization1,446 1,387 Depreciation and amortization1,476 1,446 
Realized investment (gains) losses, netRealized investment (gains) losses, net(60)50 Realized investment (gains) losses, net414 (60)
Deferred income tax (benefit)Deferred income tax (benefit)(80)(259)Deferred income tax (benefit)(167)(80)
Debt extinguishment costsDebt extinguishment costs141 199 Debt extinguishment costs— 141 
Net changes in assets and liabilities, net of non-operating effects:Net changes in assets and liabilities, net of non-operating effects:Net changes in assets and liabilities, net of non-operating effects:
Accounts receivableAccounts receivable(3,233)(2,121)Accounts receivable(2,769)(3,233)
InventoriesInventories124 (50)Inventories(59)124 
Deferred policy acquisition costsDeferred policy acquisition costs(117)(177)Deferred policy acquisition costs(105)(117)
Reinsurance recoverable and Other assetsReinsurance recoverable and Other assets(416)28 Reinsurance recoverable and Other assets265 (416)
Insurance liabilitiesInsurance liabilities677 483 Insurance liabilities474 677 
Pharmacy and other service costs payablePharmacy and other service costs payable1,123 1,655 Pharmacy and other service costs payable1,124 1,123 
Accounts payable and Accrued expenses and other liabilitiesAccounts payable and Accrued expenses and other liabilities(1,643)630 Accounts payable and Accrued expenses and other liabilities(134)(1,643)
Other, netOther, net188 387 Other, net(15)188 
NET CASH PROVIDED BY OPERATING ACTIVITIESNET CASH PROVIDED BY OPERATING ACTIVITIES797 5,161 NET CASH PROVIDED BY OPERATING ACTIVITIES3,274 797 
Cash Flows from Investing ActivitiesCash Flows from Investing ActivitiesCash Flows from Investing Activities
Proceeds from investments sold:Proceeds from investments sold:Proceeds from investments sold:
Debt securities and equity securitiesDebt securities and equity securities852 1,638 Debt securities and equity securities1,239 852 
Investment maturities and repayments:Investment maturities and repayments:Investment maturities and repayments:
Debt securities and equity securitiesDebt securities and equity securities672 765 Debt securities and equity securities863 672 
Commercial mortgage loansCommercial mortgage loans96 10 Commercial mortgage loans69 96 
Other sales, maturities and repayments (primarily short-term and other long-term investments)Other sales, maturities and repayments (primarily short-term and other long-term investments)897 664 Other sales, maturities and repayments (primarily short-term and other long-term investments)745 897 
Investments purchased or originated:Investments purchased or originated:Investments purchased or originated:
Debt securities and equity securitiesDebt securities and equity securities(1,999)(2,150)Debt securities and equity securities(2,024)(1,999)
Commercial mortgage loansCommercial mortgage loans(129)(13)Commercial mortgage loans(84)(129)
Other (primarily short-term and other long-term investments)Other (primarily short-term and other long-term investments)(1,136)(934)Other (primarily short-term and other long-term investments)(849)(1,136)
Property and equipment purchases, netProperty and equipment purchases, net(500)(523)Property and equipment purchases, net(612)(500)
Acquisitions, net of cash acquiredAcquisitions, net of cash acquired(1,836)0 Acquisitions, net of cash acquired— (1,836)
Divestiture, net of cash soldDivestiture, net of cash sold(57)— 
Other, netOther, net59 37 Other, net(22)59 
NET CASH (USED IN) INVESTING ACTIVITIESNET CASH (USED IN) INVESTING ACTIVITIES(3,024)(506)NET CASH (USED IN) INVESTING ACTIVITIES(732)(3,024)
Cash Flows from Financing ActivitiesCash Flows from Financing ActivitiesCash Flows from Financing Activities
Deposits and interest credited to contractholder deposit fundsDeposits and interest credited to contractholder deposit funds96 529 Deposits and interest credited to contractholder deposit funds84 96 
Withdrawals and benefit payments from contractholder deposit fundsWithdrawals and benefit payments from contractholder deposit funds(96)(483)Withdrawals and benefit payments from contractholder deposit funds(94)(96)
Net change in short-term debtNet change in short-term debt472 445 Net change in short-term debt(244)472 
Payments for debt extinguishmentPayments for debt extinguishment(136)(212)Payments for debt extinguishment— (136)
Repayment of long-term debtRepayment of long-term debt(4,578)(4,798)Repayment of long-term debt— (4,578)
Net proceeds on issuance of long-term debtNet proceeds on issuance of long-term debt4,260 3,465 Net proceeds on issuance of long-term debt— 4,260 
Repurchase of common stockRepurchase of common stock(3,710)(1,324)Repurchase of common stock(2,374)(3,710)
Issuance of common stockIssuance of common stock290 229 Issuance of common stock217 290 
Common stock dividend paidCommon stock dividend paid(687)(15)Common stock dividend paid(709)(687)
Other, netOther, net(24)34 Other, net33 (24)
NET CASH (USED IN) FINANCING ACTIVITIESNET CASH (USED IN) FINANCING ACTIVITIES(4,113)(2,130)NET CASH (USED IN) FINANCING ACTIVITIES(3,087)(4,113)
Effect of foreign currency rate changes on cash, cash equivalents and restricted cashEffect of foreign currency rate changes on cash, cash equivalents and restricted cash(27)(15)Effect of foreign currency rate changes on cash, cash equivalents and restricted cash(80)(27)
Net (decrease) increase in cash, cash equivalents and restricted cash(6,367)2,510 
Net (decrease) in cash, cash equivalents and restricted cashNet (decrease) in cash, cash equivalents and restricted cash(625)(6,367)
Cash, cash equivalents and restricted cash January 1, (1)
Cash, cash equivalents and restricted cash January 1, (1)
10,245 5,411 
Cash, cash equivalents and restricted cash January 1, (1)
5,548 10,245 
Cash, cash equivalents and restricted cash, June 30,Cash, cash equivalents and restricted cash, June 30,3,878 7,921 Cash, cash equivalents and restricted cash, June 30,4,923 3,878 
Cash reclassified to assets of business held for sale0 (418)
Cash and cash equivalents reclassified to Assets of businesses held for saleCash and cash equivalents reclassified to Assets of businesses held for sale(455)— 
Cash, cash equivalents and restricted cash June 30, per Consolidated Balance Sheets (2)
Cash, cash equivalents and restricted cash June 30, per Consolidated Balance Sheets (2)
$3,878 $7,503 
Cash, cash equivalents and restricted cash June 30, per Consolidated Balance Sheets (2)
$4,468 $3,878 
Supplemental Disclosure of Cash Information:Supplemental Disclosure of Cash Information:Supplemental Disclosure of Cash Information:
Income taxes paid, net of refundsIncome taxes paid, net of refunds$1,473 $190 Income taxes paid, net of refunds$911 $1,473 
Interest paidInterest paid$639 $743 Interest paid$615 $639 
(1)Includes $743$425 million reported in Assets of businessbusinesses held for sale as of January 1, 2020. See table below for Cash, cash equivalents and restricted cash reconciliation.2022.
(2)See table below for Cash, Restricted cash and cash equivalents and restricted cash reconciliationwere reported in Other long-term investments as of June 30, 20212022 and 2020.
8

The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents reported within the Consolidated Balance Sheets to the totals above:
Unaudited
As of June 30,
(In millions)20212020
Cash and cash equivalents$3,821 $7,185 
Restricted cash and cash equivalents, included in other long-term investments57 318 
Total cash, cash equivalents and restricted cash and cash equivalents$3,878 $7,503 

June 30, 2021.
The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.
98

CIGNA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
TABLE OF CONTENTS
Note NumberNote NumberFootnotePageNote NumberFootnotePage
BUSINESS AND CAPITAL STRUCTURE
BUSINESS AND CAPITAL STRUCTURE
BUSINESS AND CAPITAL STRUCTURE
11
10
12
11
12
11
Mergers, Acquisitions and Divestitures
13
12
14
12
15
13
INSURANCE INFORMATION
17
14
19
15
INVESTMENTS
INSURANCE INFORMATION
INSURANCE INFORMATION
21
16
26
19
INVESTMENTS
INVESTMENTS
30
20
31
24
28
29
PROPERTY, LEASES AND OTHER ASSET BALANCES
PROPERTY, LEASES AND OTHER ASSET BALANCES
PROPERTY, LEASES AND OTHER ASSET BALANCES
32
29
30
COMPLIANCE, REGULATION AND CONTINGENCIES
COMPLIANCE, REGULATION AND CONTINGENCIES
COMPLIANCE, REGULATION AND CONTINGENCIES
32
Contingencies and Other Matters
32
30
Contingencies and Other Matters
30
RESULTS DETAILS
RESULTS DETAILS
RESULTS DETAILS
34
Segment Information
32

109

Note 1 – Description of Business
Cigna Corporation, together with its subsidiaries (either individually or collectively referred to as “Cigna,”"Cigna," the “Company,” “we,” “our”"Company," "we," "our" or “us”"us") is a global health services organization with a mission of helping those we serve improve their health, well-being and peace of mind by making health care simple, affordable, predictable and predictable.simple. Our subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental and relatedsupplemental products and services.
The majority of these products are offered through employers and other groups such as governmental and non-governmental organizations, unions and associations. Cigna 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, Cigna also has certain run-off operations.
The Company provides detailsDetails of itsthe Company's reporting segments and recent changes are provided below:
InOn July 1, 2022, the Company completed the sale of its life, accident and supplemental benefits businesses in six countries (Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand) to Chubb INA Holdings, Inc. ("Chubb") for approximately $5.4 billion in cash (the "Chubb Transaction"); as previously agreed, we excluded our interest in a joint venture in Türkiye from the Chubb Transaction. The Company aggregated and classified the assets and liabilities of these businesses as held for sale in our Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 (see Note 5). During the fourth quarter of 2021, in connection with the sale ofChubb Transaction, we revised our business reporting structure and adjusted our segment reporting accordingly. Segment results for the U.S. Group Disabilitythree and Life business on December 31, 2020,six months ended June 30, 2021 have been restated to conform to the remaindernew segment presentation (see Note 19).

A full description of our operations previously referred to as "Group Disability and Other" in our 2020 Form 10-K is now referred to as "Other Operations". There were no changes to the underlying business included in this category. Our business that offers group voluntary products and services was not sold to New York Life Insurance Company ("New York Life") and results of this business are reported in the U.S. Medical segment.
In connection with the launch of Evernorth in the third quarter of 2020, 2 reporting segments were renamed. Health Services was renamed as Evernorth and Integrated Medical was renamed U.S. Medical. In addition, 2 of our operating segments were renamed: Commercial and Government were renamed U.S. Commercial and U.S. Government respectively. There were no changes to the underlying businesses reported in the segments.follows:
Evernorth includes a broad range of coordinated and point solution health services and capabilities, as well as those from partners across the health care system, in pharmacy solutions, benefits management solutions,services, specialty pharmacy and care solutions and intelligence solutions,services, which are provided to health plans, employers, government organizations, and health care providers.
U.S. MedicalCigna Healthcare includes U.S. Commercial, and U.S. Government businessesand International Health operating segments that provide comprehensive medical and coordinated solutions to clients and customers. U.S. Commercial products and services include medical, pharmacy, behavioral health, dental, vision, health advocacy programs and other products and services for insured and administrative services only ("ASO") clients.self-insured customers. U.S. Government solutions include Medicare Advantage, Medicare Supplement and Medicare Part D plans for seniors Medicaid plans and individual health insurance plans both on and off the public exchanges.
International Markets includes supplemental health, life and accident insurance products andHealth solutions include health care coverage in our international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations.
TheOther Operations contains the remainder of our business operations, are reported in Other Operations, consisting of the following:
•Group Disability and Life. Prior to the sale of the U.S. Group Disability and Life business on December 31, 2020, this segment provided group long-term and short-term disability, group life, accident, voluntary and specialty insurance products and related services.Ongoing business:
•Corporate-Owned Life Insurance (“COLI”("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.
•Our interest in a joint venture in Türkiye.
•Exiting businesses:
•International Life, Accident and Supplemental Benefits Businesses in six countries sold on July 1, 2022 pursuant to the Chubb Transaction.
•Run-off businesses:
•Reinsurance: predominantly comprised of guaranteed minimum death benefit (“GMDB”("GMDB") and guaranteed minimum income benefit (“GMIB”("GMIB") business effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire”("Berkshire") in 2013.
•Settlement Annuity businessand other businesses in run-off.
•Individual Life Insurance and Annuity and Retirement Benefits businesses: deferred gains from the sales of these businesses.

Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment and other operations), certain litigation matters, expense associated with our frozen pension plans, charitable contributions, severance, certain overhead and enterprise-wide project costs and intersegment eliminations for products and services sold between segments.
1110

Note 2 – Summary of Significant Accounting Policies    
Basis of Presentation
The Consolidated Financial Statements include the accounts of Cigna Corporation 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").
Amounts recorded in the Consolidated Financial Statements necessarily reflect management’smanagement's estimates and assumptions about medical costs, investment 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 20202021 Annual Report on Form 10-K (“2020("2021 Form 10-K”10-K"). The preparation of interim Consolidated Financial Statements necessarily relies heavily on estimates. This and other factors, including the seasonal nature of portions of the health care and related benefits business, competitive and other market conditions, as well as COVID-19 related impacts, call for caution in estimating full-year results based on interim results of operations.

Recent Accounting Pronouncements
The Company's 2020 Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted our financial statements or may impact them in the future. There have been no updates to accounting guidance not yet adopted or recently issued accounting pronouncements that have occurred since the Company filed its 2020 Form 10-K. There were no new accounting standards adopted as of June 30, 20212022 that had a material impact toon our financial statements. There are no accounting pronouncements not yet adopted, with the exception of Accounting Standards Update 2018-12, Targeted Improvements to the Accounting for Long-Duration Insurance Contracts ("LDTI") that are expected to impact Cigna's operations or our financial statements. Refer to the Company's 2021 Form 10-K for discussion of the LDTI standard and related expected effects to Cigna. We continue to make progress on our LDTI implementation plan and are on track for the January 1, 2023 adoption date.

In July 2022, the Financial Accounting Standards Board ("FASB") issued a proposed standard for comment that would simplify the retrospective adoption of LDTI. The proposal would permit companies to make an accounting policy election to exclude contracts that are sold and removed from the balance sheet prior to the effective date of the standard from the retrospective adoption of LDTI. If the FASB approves the proposed standard, Cigna expects to make this policy election for the contracts sold in the Chubb Transaction.


Note 3 – Accounts Receivable, Net

The following amounts were included within Accounts receivable, net:
(In millions)(In millions)June 30, 2021December 31, 2020(In millions)June 30, 2022December 31, 2021
Noninsurance customer receivablesNoninsurance customer receivables$6,620 $5,534 Noninsurance customer receivables$7,578 $6,274 
Pharmaceutical manufacturers receivable6,123 4,676 
Pharmaceutical manufacturers receivablesPharmaceutical manufacturers receivables7,006 5,463 
Insurance customer receivablesInsurance customer receivables2,429 1,789 Insurance customer receivables2,790 2,932 
Other receivablesOther receivables290 192 Other receivables952 456 
TotalTotal$15,462 $12,191 Total18,326 15,125 
Accounts receivable, net classified as Assets of businesses held for saleAccounts receivable, net classified as Assets of businesses held for sale(36)(54)
Accounts receivable, net per Consolidated Balance SheetsAccounts receivable, net per Consolidated Balance Sheets$18,290 $15,071 

These receivables are reported net of our allowances of $1.5$1.9 billion as of June 30, 20212022 and $1.2$1.4 billion as of December 31, 2020.2021. These allowances include contractual allowances for certain rebates receivable with pharmaceutical manufacturers and certain receivables from third-party payors, discounts and claims adjustments issued to customers in the form of client credits, an allowance for current expected credit losses and other non-credit adjustments.

The Company's allowance for current expected credit losses was $57$75 million as of June 30, 20212022 and $65$60 million as of December 31, 2020.2021.
1211

Note 4 – Mergers, Acquisitions and Divestitures

A.Acquisition of MDLIVE

On April 19, 2021, Cigna acquired 97% of MDLIVE, Inc. ("MDLIVE"), a 24/7 virtual care platform. Combined with Cigna's previouspreviously held equity investment, Cigna now owns 100% of MDLIVE. As a resultThe Company's 2021 Form 10-K includes detailed disclosures of the acquisition, Cigna recorded a realized gain on its existing equity investment. The acquisition of MDLIVE will enable Cigna's Evernorth segment to continue expanding access to virtual care and delivering a more affordable, convenient and connected care experience for consumers.

Themerger consideration, purchase price of $2.0 billion consisted of cash consideration.allocation and intangible assets identified in this transaction. In accordance with GAAP, the total consideration transferred has been allocated to the tangible and intangible net assets acquired based on management's preliminary estimates of their fair values and may change as additional information becomes available over the next several months. The estimated fair values of assets acquired and liabilities assumedwas finalized as of March 31, 2022 with immaterial changes to the closing date were as follows:
(In millions)
Goodwill$1,437
Acquired intangible assets627
Tangible assets acquired net of liabilities assumed19
Total consideration transferred2,083
Less: Fair value to Cigna's previously held equity interest(55)
Total purchase price$2,028
purchase price allocation.

Most of the goodwill is assigned to the Evernorth segment ($1.3 billion), with the remainder assigned to the U.S. Medical segment. Goodwill is not deductible for federal income tax purposes. The acquired intangible assets primarily consist of customer relationships ($577 million) as well as internal-use software, provider networks and a trade name. The fair value of the customer relationships and the amortization period were determined using an income approach that relies heavily on projected future net cash flows including key assumptions for customer attrition, margins and discount rates. The customer relationship intangible asset is amortized over a period of 17 years on an accelerated basis, reflecting the pattern in which Cigna expects to receive the benefits of the related cash flows.

The results of MDLIVE have been included in the Company's Consolidated Financial Statements from the date of the acquisition. Revenues from MDLIVE and their results of operations were not material to Cigna's consolidated results of operations for the three orand six months ended June 30, 2021. The pro forma effects of this acquisition for current and prior periods were not material to our consolidated results of operations.

B.Divestiture of U.S. Group Disability and Life business
On December 31, 2020, Cigna completed the sale of its U.S. Group Disability and Life business to New York Life Insurance Company for cash proceeds of $6.2 billion. The Company recognized a gain of $4.2 billion pre-tax ($3.2 billion after-tax), which included recognition of previously unrealized capital gains on investments sold.
C.Integration and Transaction-related Costs
In the first six months of 2022 and 2021, the Company incurred costs related to the acquisition of MDLIVE, the terminated merger with Anthem, Inc. (“Anthem”) and the sale of the U.S. Group Disability and Life business.business and the terminated merger with Elevance Health, Inc. ("Elevance"), formerly known as Anthem, Inc. In the first six months of 2020,2022, the Company also incurred costs related to the acquisition and integration of Express Scripts Holding Company ("Express Scripts"), the terminated merger with Anthem, the sale of the U.S. Group Disability and Life insurance business and other transactions.Chubb Transaction (see Note 5 for further information). These costs were $36 million pre-tax ($26 million after-tax) for the three months ended and $88 million pre-tax ($63 million after-tax) for the six months ended June 30, 2022, compared with $16 million pre-tax ($14 million after-tax) for the three months ended and $45 million pre-tax ($36 million after-tax) for the six months ended June 30, 2021, compared with $130 million pre-tax ($99 million after-tax) for the three months and $227 million pre-tax ($173 million after-tax) for the six months ended June 30, 2020.2021. These costs consisted primarily of certain projects to separate or integrate or separate the Company’sCompany's systems, products and services, fees for legal, advisory and other professional services and certain employment-related costs.
Note 5 – Assets and Liabilities of Businesses Held for Sale

On July 1, 2022, the Company completed the sale of its life, accident and supplemental benefits businesses in six countries (Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand) to Chubb for approximately $5.4 billion in cash. The Company aggregated and classified the assets and liabilities of these businesses as held for sale in our Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021. The assets and liabilities of our interest in a joint venture in Türkiye were classified as held for sale in our Consolidated Balance Sheet as of December 31, 2021; however, we subsequently agreed to exclude this business from the Chubb Transaction and the assets and liabilities are no longer classified as held for sale.
The assets and liabilities of businesses held for sale were as follows:
(In millions)June 30, 2022December 31, 2021
Cash and cash equivalents$455 $406 
Investments4,518 5,109 
Deferred policy acquisition costs2,598 2,755 
Separate account assets648 878 
Goodwill, other intangible assets and all other assets833 909 
Total assets of businesses held for sale9,052 10,057 
Insurance and contractholder liabilities4,427 4,644 
Accounts payable, accrued expenses and other liabilities420 452 
Deferred tax liabilities, net356 449 
Separate account liabilities648 878 
Total liabilities of businesses held for sale$5,851 $6,423 
The held for sale businesses reported Gross unrealized appreciation (depreciation) on securities and derivatives of $(208) million and $137 million and Gross cumulative translation losses on foreign currencies of $366 million and $209 million in our Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021, respectively.
13
12

Note 56 – Earnings Per Share (“EPS”("EPS")

Basic and diluted earnings per share were computed as follows:
Three Months Ended
June 30, 2021June 30, 2020
(Shares in thousands, dollars in millions, except per share amounts)BasicEffect of
Dilution		DilutedBasicEffect of
Dilution		Diluted
Shareholders’ net income$1,467 $1,467 $1,754 $1,754 
Shares:
Weighted average341,479 341,479 367,396 367,396 
Common stock equivalents3,450 3,450 3,301 3,301 
Total shares341,479 3,450 344,929 367,396 3,301 370,697 
EPS$4.30 $(0.05)$4.25 $4.77 $(0.04)$4.73 
Six Months EndedThree Months Ended
June 30, 2021June 30, 2020June 30, 2022June 30, 2021
(Shares in thousands, dollars in millions, except per share amounts)(Shares in thousands, dollars in millions, except per share amounts)BasicEffect of
Dilution		DilutedBasicEffect of
Dilution		Diluted(Shares in thousands, dollars in millions, except per share amounts)BasicEffect of
Dilution		DilutedBasicEffect of
Dilution		Diluted
Shareholders’ net income$2,628 $2,628 $2,935 $2,935 
Shareholders' net incomeShareholders' net income$1,559 $1,559 $1,467 $1,467 
Shares:Shares:Shares:
Weighted averageWeighted average344,845 344,845 368,918 368,918 Weighted average315,122 315,122 341,479 341,479 
Common stock equivalentsCommon stock equivalents3,589 3,589 3,750 3,750 Common stock equivalents3,182 3,182 3,450 3,450 
Total sharesTotal shares344,845 3,589 348,434 368,918 3,750 372,668 Total shares315,122 3,182 318,304 341,479 3,450 344,929 
EPSEPS$7.62 $(0.08)$7.54 $7.96 $(0.08)$7.88 EPS$4.95 $(0.05)$4.90 $4.30 $(0.05)$4.25 

Six Months Ended
June 30, 2022June 30, 2021
(Shares in thousands, dollars in millions, except per share amounts)BasicEffect of
Dilution		DilutedBasicEffect of
Dilution		Diluted
Shareholders' net income$2,742 $2,742 $2,628 $2,628 
Shares:
Weighted average316,795 316,795 344,845 344,845 
Common stock equivalents2,989 2,989 3,589 3,589 
Total shares316,795 2,989 319,784 344,845 3,589 348,434 
EPS$8.66 $(0.09)$8.57 $7.62 $(0.08)$7.54 

The following outstanding employee stock options were not included in the computation of diluted earnings per share because their effect was anti-dilutive:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
(In millions)(In millions)2021202020212020(In millions)2022202120222021
Anti-dilutive optionsAnti-dilutive options1.5 4.0 1.5 4.0 Anti-dilutive options1.3 1.5 2.0 1.5 

The Company held approximately 52.281.3 million shares of common stock in treasury at June 30, 2021, 35.52022, 71.2 million shares as of December 31, 20202021 and 20.852.2 million shares as of June 30, 2020.2021.
1413

Note 67 – Debt
The outstanding amounts of debt and finance leases were as follows:
(In millions)(In millions)June 30, 2021December 31, 2020(In millions)June 30, 2022December 31, 2021
Short-term debtShort-term debtShort-term debt
$78 million, 6.37% Notes due 6/2021$0 $78 
$1,000 million, Floating Rate Notes due 9/20210 999 
$1,250 million, 3.4% Notes due 9/20210 1,249 
Commercial paperCommercial paper$1,797 $2,027 
$500 million, 3.05% Notes due 11/2022$500 million, 3.05% Notes due 11/2022497 495 
$17 million, 8.3% Notes due 1/2023$17 million, 8.3% Notes due 1/202317 — 
$63 million, 7.65% Notes due 3/2023$63 million, 7.65% Notes due 3/202363 — 
Other, including finance leasesOther, including finance leases23 23 
Commercial paper1,512 1,030 
Other, including finance leases20 18 
Total short-term debtTotal short-term debt$1,532 $3,374 Total short-term debt$2,397 $2,545 
Long-term debtLong-term debtLong-term debt
$277 million, 4% Notes due 2022$0 $276 
$973 million, 3.9% Notes due 20220 972 
$500 million, 3.05% Notes due 2022493 490 
$17 million, 8.3% Notes due 2023$17 million, 8.3% Notes due 202317 17 $17 million, 8.3% Notes due 2023$— $17 
$63 million, 7.65% Notes due 2023$63 million, 7.65% Notes due 202363 63 $63 million, 7.65% Notes due 2023— 63 
$700 million, Floating Rate Notes due 2023$700 million, Floating Rate Notes due 2023699 698 $700 million, Floating Rate Notes due 2023699 699 
$1,000 million, 3% Notes due 2023$1,000 million, 3% Notes due 2023980 975 $1,000 million, 3% Notes due 2023989 985 
$1,187 million, 3.75% Notes due 2023$1,187 million, 3.75% Notes due 20231,184 2,181 $1,187 million, 3.75% Notes due 20231,186 1,185 
$500 million, 0.613% Notes due 2024$500 million, 0.613% Notes due 2024498 0 $500 million, 0.613% Notes due 2024499 498 
$1,000 million, 3.5% Notes due 2024$1,000 million, 3.5% Notes due 2024980 977 $1,000 million, 3.5% Notes due 2024987 983 
$900 million, 3.25% Notes due 2025896 896 
$900 million, 3.25% Notes due 2025 (1)
$900 million, 3.25% Notes due 2025 (1)
895 897 
$2,200 million, 4.125% Notes due 2025$2,200 million, 4.125% Notes due 20252,192 2,191 $2,200 million, 4.125% Notes due 20252,194 2,193 
$1,500 million, 4.5% Notes due 2026$1,500 million, 4.5% Notes due 20261,504 1,505 $1,500 million, 4.5% Notes due 20261,503 1,504 
$800 million, 1.25% Notes due 2026$800 million, 1.25% Notes due 2026796 0 $800 million, 1.25% Notes due 2026797 796 
$1,500 million, 3.4% Notes due 2027$1,500 million, 3.4% Notes due 20271,416 1,410 $1,500 million, 3.4% Notes due 20271,429 1,423 
$259 million, 7.875% Debentures due 2027$259 million, 7.875% Debentures due 2027259 259 $259 million, 7.875% Debentures due 2027259 259 
$600 million, 3.05% Notes due 2027$600 million, 3.05% Notes due 2027596 595 $600 million, 3.05% Notes due 2027596 596 
$3,800 million, 4.375% Notes due 2028$3,800 million, 4.375% Notes due 20283,781 3,780 $3,800 million, 4.375% Notes due 20283,783 3,782 
$1,500 million, 2.4% Notes due 2030$1,500 million, 2.4% Notes due 20301,490 1,489 $1,500 million, 2.4% Notes due 20301,491 1,490 
$1,500 million, 2.375% Notes due 2031 (1)
$1,500 million, 2.375% Notes due 2031 (1)
1,507 0 
$1,500 million, 2.375% Notes due 2031 (1)
1,414 1,500 
$45 million, 8.3% Step Down Notes due 2033$45 million, 8.3% Step Down Notes due 203345 45 $45 million, 8.3% Step Down Notes due 203345 45 
$190 million, 6.15% Notes due 2036$190 million, 6.15% Notes due 2036190 190 $190 million, 6.15% Notes due 2036190 190 
$2,200 million, 4.8% Notes due 2038 (1)
2,191 2,180 
$2,200 million, 4.8% Notes due 2038$2,200 million, 4.8% Notes due 20382,192 2,192 
$750 million, 3.2% Notes due 2040$750 million, 3.2% Notes due 2040743 742 $750 million, 3.2% Notes due 2040743 743 
$121 million, 5.875% Notes due 2041$121 million, 5.875% Notes due 2041119 119 $121 million, 5.875% Notes due 2041119 119 
$448 million, 6.125% Notes due 2041$448 million, 6.125% Notes due 2041490 490 $448 million, 6.125% Notes due 2041489 490 
$317 million, 5.375% Notes due 2042$317 million, 5.375% Notes due 2042315 315 $317 million, 5.375% Notes due 2042315 315 
$1,500 million, 4.8% Notes due 2046$1,500 million, 4.8% Notes due 20461,465 1,465 $1,500 million, 4.8% Notes due 20461,466 1,465 
$1,000 million, 3.875% Notes due 2047$1,000 million, 3.875% Notes due 2047988 988 $1,000 million, 3.875% Notes due 2047989 988 
$3,000 million, 4.9% Notes due 2048$3,000 million, 4.9% Notes due 20482,967 2,966 $3,000 million, 4.9% Notes due 20482,968 2,967 
$1,250 million, 3.4% Notes due 2050$1,250 million, 3.4% Notes due 20501,235 1,235 $1,250 million, 3.4% Notes due 20501,236 1,236 
$1,500 million , 3.4% Notes due 20511,476 0 
$1,500 million, 3.4% Notes due 2051$1,500 million, 3.4% Notes due 20511,476 1,477 
Other, including finance leasesOther, including finance leases31 36 Other, including finance leases35 28 
Total long-term debtTotal long-term debt$31,606 $29,545 Total long-term debt$30,984 $31,125 
(1)The Company has entered into interest rate swap contracts hedging a portion of these fixed-rate debt instruments. See Note 911 for further information about the Company's interest rate risk management and these derivative instruments.
15

Debt Issuance and Redemption. In order to decrease future interest expense, mitigate future refinancing risk and raise proceeds for general corporate purposes, the Company entered into the following transactions during the six months ended June 30, 2021:
•Debt issuance: On March 3, 2021, the Company issued $4.3 billion of new senior notes. The proceeds of this issuance were mainly used to redeem outstanding debt securities. The remaining proceeds are available for general corporate purposes. Interest on this debt is paid semi-annually.
•
PrincipalMaturity DateInterest RateNet Proceeds
$500 millionMarch 15, 20240.613%$499 million
$800 millionMarch 15, 20261.250%$797 million
$1,500 millionMarch 15, 20312.375%$1,492 million
$1,500 millionMarch 15, 20513.400%$1,479 million
•Debt redemption: During the first six months of 2021, the Company completed the redemption of a total of $4.5 billion in aggregate principal amount of certain of its outstanding debt securities. The Company recorded a pre-tax loss of $141 million ($110 million after-tax), consisting primarily of premium payments.
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 below. As of June 30, 2021,2022, there were 0no outstanding balances under these revolving credit agreements.
In April 2021,2022, Cigna entered into the following revolving credit agreements (the "Credit Agreements"):
•a $3.0 billion five-year revolving credit and letter of credit agreement that matures in April 2026 and a $1.0 billion three-year revolving credit agreement that matures in April 2024, which are diversified among 23 banks and replaced the five-year revolving credit and letter of credit agreement that was scheduled towill mature in April 2023. Under2027 with an option to extend the current agreements,maturity date for additional one-year periods, subject to consent of the banks. Cigna can borrow up to $3.0 billion and $1.0 billion, respectively,under the credit agreement for general corporate purposes, with up to $500 million available under the five-year facility for issuance of letters of credit. The
•a $1.0 billion three-year revolving credit agreements also includeagreement that will mature in April 2025 with an option to extend the terminationmaturity date for an additional one-year period,periods, subject to consent of the banks. Cigna can borrow up to $1.0 billion under the credit agreement for general corporate purposes.
Additionally, in April 2021, Cigna entered into
14

•a $1.0 billion 364-day revolving credit agreement that will mature in April 2022 and is diversified among 23 banks. This agreement replaced the prior $1.0 billion 364-day revolving credit agreement that was scheduled to expire in October 2021. Pursuant to this revolving credit agreement,2023. Cigna can borrow up to $1.0 billion under the credit agreement for general corporate purposes. TheThis agreement includes the option to “term out”"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.
Each of the five-year facility, the three-year facility and the 364-day facilityCredit Agreements include an option to increase commitments in an aggregate amount of up to $1.5 billion across all three facilities. facilities for a maximum total commitment of $6.5 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 Cigna's senior unsecured credit ratings.

Each of the three facilities is diversified among 22 banks. Each facility also containcontains customary covenants and restrictions, including a financial covenant that the Company’sCompany's leverage ratio, as defined in the Credit Agreements, may not exceed 60%, subject to certain exceptions upon the consummation of an acquisition.

The Credit Agreements replaced a prior $3.0 billion five-year revolving credit and letter of credit agreement maturing on April 2026; a $1.0 billion three-year revolving credit agreement maturing on April 2024; and a $1.0 billion 364-day revolving credit agreement maturing in April 2022.

Commercial Paper. Under our commercial paper program we may issue short-term, unsecured commercial paper notes privately placed on a discounted basis through certain broker dealersbroker-dealers at any time not to exceed an aggregate amount of $4.25 billion as of June 30, 2021.$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. In July 2021, ourThe commercial paper program sizeaverage interest rate was increased to $5.0 billion.1.60% at June 30, 2022.
The Company was in compliance with its debt covenants as of June 30, 2022.

Interest expense on long-term and short-term debt was $316 million for the three months ended and $630 million for the six months ended June 30, 2022, compared with $311 million for the three months ended and $636 million for the six months ended June 30, 2021.
Note 8 – Common and Preferred Stock

Dividends
In the first and second quarters of 2022, Cigna declared quarterly cash dividends of $1.12 per share of Cigna common stock. In 2021, Cigna initiated and declared quarterly cash dividends of $1.00 per share of Cigna common stock.
The following table provides details of Cigna's dividend payments for the six months ended June 30:
Record DatePayment DateAmount per Share
Total Amount Paid (in millions)
2022
March 9, 2022March 24, 2022$1.12$357
June 8, 2022June 23, 2022$1.12$352
2021
March 10, 2021March 25, 2021$1.00$345
June 8, 2021June 23, 2021$1.00$342
On July 27, 2022, the Board of Directors declared the third quarter cash dividend of $1.12 per share of Cigna common stock to be paid on September 22, 2022 to shareholders of record on September 7, 2022. Cigna 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 Cigna 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 of Directors may deem relevant.
Accelerated Share Repurchase Agreements
On June 15, 2022, as part of our existing share repurchase program, we entered into separate accelerated share repurchase agreements ("ASR agreements") with Mizuho Markets Americas LLC and Morgan Stanley & Co. LLC (collectively, the "Counterparties") to repurchase $3.5 billion of common stock in aggregate. The ASR agreements provided that if the public announcement of the first closing of the Chubb Transaction did not occur on or before July 1, 2022, the ASR Agreements would be cancelled in whole.

1615

In July 2022, in accordance with the ASR agreements, we remitted $3.5 billion to the Counterparties and received an initial delivery of 10.4 million shares of our common stock. The final number of shares to be received under the ASR agreements will be determined based on the daily volume-weighted average share price 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 expect final settlement under the ASR agreements to occur in the fourth quarter of 2022. At final settlement, we may be entitled to receive additional shares of our common stock from the Counterparties or we may be required to make a payment. If we are obligated to make a payment, we may elect to satisfy such obligation in cash or shares of our common stock.
Note 79 – Insurance and Contractholder Liabilities
A.Account Balances – Insurance and Contractholder Liabilities
The Company’sCompany's insurance and contractholder liabilities were comprised of the following:
June 30, 2021December 31, 2020June 30, 2020June 30, 2022December 31, 2021June 30, 2021
(In millions)(In millions)CurrentNon-currentTotalCurrentNon-currentTotalTotal(In millions)CurrentNon-currentTotalCurrentNon-currentTotalTotal
Contractholder deposit fundsContractholder deposit funds$357 $6,765 $7,122 $350 $6,823 $7,173 $7,689 Contractholder deposit funds$371 $6,606 $6,977 $352 $6,702 $7,054 $7,122 
Future policy benefitsFuture policy benefits314 9,217 9,531 327 9,317 9,644 9,945 Future policy benefits246 8,454 8,700 312 9,194 9,506 9,531 
Unearned premiumsUnearned premiums511 401 912 485 394 879 930 Unearned premiums575 415 990 558 418 976 912 
Unpaid claims and claim expensesUnpaid claims and claim expensesUnpaid claims and claim expenses
U.S. Medical3,726 19 3,745 3,166 18 3,184 2,959 
Other segments942 263 1,205 980 292 1,272 6,150 
Cigna HealthcareCigna Healthcare4,432 58 4,490 4,159 102 4,261 4,228 
Other OperationsOther Operations506 195 701 548 180 728 722 
TotalTotal27,673 Total6,130 15,728 21,858 5,929 16,596 22,525 
Insurance and contractholder liabilities classified as Liabilities of business held for sale (1)
(6,549)
Insurance and contractholder liabilities classified as Liabilities of businesses held for sale (1)
Insurance and contractholder liabilities classified as Liabilities of businesses held for sale (1)
(476)(3,951)(4,427)(611)(4,033)(4,644)
Total insurance and contractholder liabilitiesTotal insurance and contractholder liabilities$5,850 $16,665 $22,515 $5,308 $16,844 $22,152 $21,124 Total insurance and contractholder liabilities$5,654 $11,777 $17,431 $5,318 $12,563 $17,881 $22,515 
(1)Amounts classified as Liabilities of businessbusinesses held for sale primarily include $5.1$3.6 billion of unpaidFuture policy benefits, $0.4 billion of Unpaid claims $758 millionand $0.4 billion of contractholder deposit funds and $644 million of future policy benefitsUnearned premiums as of June 30, 2020.2022 and $3.8 billion of Future policy benefits, $0.4 billion of Unpaid claims and $0.4 billion of Unearned premiums as of December 31, 2021.
Insurance and contractholder liabilities expected to be paid within one year are classified as current.

B.Unpaid Claims and Claim Expenses – U.S. MedicalCigna 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 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 includes amounts from the International Health businesses now reported in Cigna Healthcare following our change in segment reporting in 2021. The prior year roll forward has been updated to reflect this segment change.
The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $3.4$4.1 billion at June 30, 20212022 and $2.7$3.9 billion at June 30, 2020.2021.
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Activity, net of intercompany transactions, in the unpaid claims liability for the U.S. MedicalCigna Healthcare segment for the six months ended June 30 was as follows:
Six Months Ended Six Months Ended
(In millions)(In millions)June 30, 2021June 30, 2020(In millions)June 30, 2022June 30, 2021
Beginning balanceBeginning balance$3,184 $2,892 Beginning balance$4,261 $3,695 
Less: Reinsurance and other amounts recoverableLess: Reinsurance and other amounts recoverable224 303 Less: Reinsurance and other amounts recoverable261 237 
Beginning balance, netBeginning balance, net2,960 2,589 Beginning balance, net4,000 3,458 
Incurred costs related to:Incurred costs related to:Incurred costs related to:
Current yearCurrent year14,796 12,212 Current year15,751 15,716 
Prior yearsPrior years(181)(130)Prior years(268)(228)
Total incurredTotal incurred14,615 12,082 Total incurred15,483 15,488 
Paid costs related to:Paid costs related to:Paid costs related to:
Current yearCurrent year11,451 9,585 Current year11,900 12,065 
Prior yearsPrior years2,572 2,284 Prior years3,290 2,858 
Total paidTotal paid14,023 11,869 Total paid15,190 14,923 
Ending balance, netEnding balance, net3,552 2,802 Ending balance, net4,293 4,023 
Add: Reinsurance and other amounts recoverableAdd: Reinsurance and other amounts recoverable193 157 Add: Reinsurance and other amounts recoverable197 205 
Ending balanceEnding balance$3,745 $2,959 Ending balance$4,490 $4,228 
Reinsurance and other amounts recoverable reflect amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims of certain business for which the Company administers the plan benefits without any right of offset. See Note 810 for additional information on reinsurance.
17

Variances in incurred costs related to prior years’years' unpaid claims and claim expenses that resulted from the differences between actual experience and the Company’sCompany's key assumptions for the six months ended June 30 were as follows:
Six Months EndedSix Months Ended
(Dollars in millions)(Dollars in millions)June 30, 2021June 30, 2020(Dollars in millions)June 30, 2022June 30, 2021
$
%(1)
$
%(2)
$
% (1)
$
% (2)
Actual completion factorsActual completion factors$55 0.2 %$50 0.2 %Actual completion factors$84 0.2 %$92 0.3 %
Medical cost trendMedical cost trend126 0.5 80 0.3 Medical cost trend184 0.6 136 0.5 
Total favorable varianceTotal favorable variance$181 0.7 %$130 0.5 %Total favorable variance$268 0.8 %$228 0.8 %
(1) Percentage of current year incurred costs as reported for the year ended December 31, 2021.
(2)Percentage of current year incurred costs as reported for the year ended December 31, 2020.
(2)Percentage of current year incurred costs as reported for the year ended December 31, 2019.
Favorable prior year development in both years reflects lower than expected utilization of medical services that is lower thanas compared to our estimates used to establish prior year reserves.assumptions.
C.Unpaid Claims and Claim Expenses – International Markets and Other Operations
Liability balance details. The liability details for unpaid claims and claim expenses are as follows:follows. The liability balance no longer includes the International Health businesses now reported in Cigna Healthcare following our change in segment reporting. The prior year roll forward has been updated to reflect the segment change.
(In millions)June 30, 2021June 30, 2020
Other Operations
Group Disability and Life$0 $5,165 
Other Operations284 160 
Total Other Operations284 5,325 
International Markets921 825 
Unpaid claims and claim expenses Other Operations and International Markets$1,205 $6,150 
(In millions)June 30, 2022June 30, 2021
Other Operations
International businesses held for sale and our interest in a joint venture in Türkiye$412 $438 
Other Operations289 284 
Unpaid claims and claim expenses - Other Operations$701 $722 
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Activity in the Company’s liabilities for unpaid claims and claim expenses for International Marketsinternational businesses held for sale and prior to the sale, Group Disability and Life (see Note 4 for further information),our interest in a joint venture in Türkiye is presented in the following table. Prior to the sale, the majority of the liability related to disability claims with long tailed payouts. See Note 9C to the Consolidated Financial Statements included in our 2020 Form 10-K for additional discussion of these disability reserves that are now sold. Liabilities associated with Other Operations are excluded because they pertain to obligations for long-duration insurance contracts or, if short-duration, the liabilities have been fullylargely reinsured.
Six Months EndedSix Months Ended
(In millions)(In millions)June 30, 2021
June 30, 2020 (1)
(In millions)
June 30, 2022 (1)
June 30, 2021
Beginning balanceBeginning balance$963 $5,816 Beginning balance$447 $452 
Less: ReinsuranceLess: Reinsurance59 184 Less: Reinsurance46 45 
Beginning balance, netBeginning balance, net904 5,632 Beginning balance, net401 407 
Incurred claims related to:Incurred claims related to:Incurred claims related to:
Current yearCurrent year1,421 2,829 Current year490 501 
Prior years:
Interest accretion0 81 
All other incurred(51)(8)
Prior yearsPrior years4 (4)
Total incurredTotal incurred1,370 2,902 Total incurred494 497 
Paid claims related to:Paid claims related to:Paid claims related to:
Current yearCurrent year922 1,357 Current year306 314 
Prior yearsPrior years467 1,353 Prior years187 181 
Total paidTotal paid1,389 2,710 Total paid493 495 
Foreign currencyForeign currency(21)(14)Foreign currency(28)(16)
Ending balance, netEnding balance, net864 5,810 Ending balance, net374 393 
Add: ReinsuranceAdd: Reinsurance57 180 Add: Reinsurance38 45 
Ending balanceEnding balance$921 $5,990 
Ending balance
$412 $438 
(1)Includes unpaid claims amounts classified as Liabilities of businessbusinesses held for sale.
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Reinsurance in the table above reflects amounts due from reinsurers related to unpaid claims liabilities. See Note 10 for additional information on reinsurance.
18

Note 10 – Reinsurance
The Company’sCompany'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.
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’sCompany's reinsurance recoverables resulted from acquisition and disposition transactions in which the underwriting company was not acquired. Included inThe Company bears the table belowrisk of loss if its reinsurers and retrocessionaires do not meet or are $227 million of currentunable to meet their reinsurance recoverables that are reported in Other current assets as of June 30, 2021; as of December 31, 2020 there was $217 million of currentobligations to the Company. The Company reviews its reinsurance recoverables reported in Other current assets.arrangements and establishes reserves against the recoverables. The Company’sCompany's reinsurance recoverables as of June 30, 20212022 are presented in the following table by range of external credit rating and collateral level.level:
(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(3)
No collateralTotal
(In millions)(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 (3)
No collateralTotal
Ongoing OperationsOngoing OperationsOngoing Operations
Upper-medium grade and higher (1)
$0 $0 $182 $182 
Lower-medium grade (2)
0 0 64 64 
A- equivalent and higher current ratings (1)
A- equivalent and higher current ratings (1)
$— $— $173 $173 
BBB- to BBB+ equivalent current credit ratings (1)
BBB- to BBB+ equivalent current credit ratings (1)
— — 61 61 
Not ratedNot rated93 0 44 137 Not rated125 4 43 172 
Total recoverables related to ongoing operations(2)Total recoverables related to ongoing operations(2)93 0 290 383 Total recoverables related to ongoing operations(2)125 4 277 406 
Acquisition, disposition or runoff activities
Upper-medium grade and higher (1)
Acquisition, disposition or run-off activitiesAcquisition, disposition or run-off activities
A- equivalent and higher current ratings (1)
A- equivalent and higher current ratings (1)
Lincoln National Life and Lincoln Life & Annuity of New YorkLincoln National Life and Lincoln Life & Annuity of New York0 2,987 0 2,987 Lincoln National Life and Lincoln Life & Annuity of New York— 2,870 — 2,870 
Berkshire292 382 0 674 
Prudential Retirement Insurance and Annuity594 0 0 594 
Berkshire Hathaway Life Insurance Company of NebraskaBerkshire Hathaway Life Insurance Company of Nebraska260 428 — 688 
Prudential Retirement Insurance and Annuity (marketed under Empower brand)Prudential Retirement Insurance and Annuity (marketed under Empower brand)140 — — 140 
Prudential Insurance Company of AmericaPrudential Insurance Company of America394 — — 394 
Life Insurance Company of North AmericaLife Insurance Company of North America0 457 0 457 Life Insurance Company of North America— 401 — 401 
OtherOther226 17 18 261 Other208 19 16 243 
Not ratedNot rated0 13 3 16 Not rated— 13 3 16 
Total recoverables related to acquisition, disposition or runoff activities1,112 3,856 21 4,989 
Total recoverables related to acquisition, disposition or run-off activitiesTotal recoverables related to acquisition, disposition or run-off activities1,002 3,731 19 4,752 
TotalTotal$1,205 $3,856 $311 $5,372 Total$1,127 $3,735 $296 $5,158 
Allowance for uncollectible reinsuranceAllowance for uncollectible reinsurance(31)Allowance for uncollectible reinsurance(30)
Total reinsurance recoverables$5,341 
Total reinsurance recoverables (2)
Total reinsurance recoverables (2)
$5,128 
(1)Includes A- equivalent and higher current ratings certified Certified by a nationally recognized statistical rating organizationNationally Recognized Statistical Rating Organization ("NRSRO").
(2)Includes BBB- to BBB+ equivalent$164 million of current credit ratings certified by an NRSROreinsurance recoverables that are reported in Other current assets and $90 million of recoverables classified as Assets of businesses held for sale as of June 30, 2022.
(3)Includes collateral provisions requiring the reinsurer to fully collateralize its obligation if its external credit rating is downgraded to a specified levellevel.
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 the potential for volatility in the collateral’scollateral's fair value.
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.

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B.Effects of Reinsurance
In the Company’s Consolidated Statements of Income, Premiums were reported net of amounts ceded to reinsurers and Medical costs and other benefit expenses were reported net of reinsurance recoveries in the following amounts:
Three Months Ended June 30,Six Months Ended June 30,
(In millions)2021202020212020
Total ceded premiums$134 $117 $284 $245 
Total reinsurance recoveries$133 $102 $281 $280 

C.B.Effective Exit of GMDB and GMIB Business
The Company entered into an agreement with Berkshire to effectively exit the GMDB and GMIB business via a reinsurance transaction in 2013. Berkshire reinsured 100% of the Company’sCompany's future claim payments in this business, net of other reinsurance arrangements existing at that time. The reinsurance agreement is subject to an overall limit with approximately $3.2$3.1 billion remaining at June 30, 2021.2022.
GMDB is accounted for as assumed and ceded 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
19

expenses and other liabilities and Other non-current liabilities. Assumptions used in fair value measurement for these assets and liabilities are discussed in Note 10 of the Company's 20202021 Form 10-K.
GMDB
The GMDB exposure arises under annuities written by ceding companies that guarantee the benefit received at death. The Company’sCompany's exposure arises when the guaranteed minimum death benefit exceeds the fair value of the related mutual fund investments at the time of a contractholder’scontractholder'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 as of the specified date. The Company should be reimbursed in full for these payments unless the Berkshire reinsurance limit is exceeded.
(Dollars in millions, excludes impact of reinsurance ceded)(Dollars in millions, excludes impact of reinsurance ceded)June 30, 2021December 31, 2020(Dollars in millions, excludes impact of reinsurance ceded)June 30, 2022December 31, 2021
Account valueAccount value$9,835 $9,523 Account value$7,626 $9,795 
Net amount at riskNet amount at risk$1,450 $1,570 Net amount at risk$2,264 $1,392 
Number of contractholders (estimated)Number of contractholders (estimated)175,000 185,000 Number of contractholders (estimated)160,000 170,000 

GMIB
The Company reinsured contracts with issuers of GMIB products. The Company’sCompany's exposure represents the excess 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 related 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”assets") for these contracts including retrocessional coverage from Berkshire.
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GMIB liabilities totaling $604$463 million as of June 30, 20212022 and $729$572 million as of December 31, 20202021 are classified as Level 3 because fair value inputs are largely unobservable. The GMIB liabilities reflect the Company's credit risk, while the reinsurance recoverable reflects the credit risk of the reinsurers. There were 3 reinsurers covering 100% of the GMIB exposures as of June 30, 20212022 and December 31, 20202021 as follows:
(In millions)(In millions)(In millions)
Line of BusinessLine of BusinessReinsurerJune 30, 2021December 31, 2020Collateral and Other Terms at June 30, 2021Line of BusinessReinsurerJune 30, 2022December 31, 2021Collateral and Other Terms at June 30, 2022
GMIBGMIBBerkshire$295 $353 100% were secured by assets in a trust.GMIBBerkshire$230 $283 100% were secured by assets in a trust.
Sun Life Assurance Company of Canada177 215 Sun Life Assurance Company of Canada136 167 
Liberty Re (Bermuda) Ltd.159 190 100% were secured by assets in a trust.Liberty Re (Bermuda) Ltd.123 151 100% were secured by assets in a trust.
Total GMIB recoverables reported in Other current assets and Other assetsTotal GMIB recoverables reported in Other current assets and Other assets$631 $758 Total GMIB recoverables reported in Other current assets and Other assets$489 $601 
All reinsurers are rated A- equivalent and higher by an NRSRO.
Amounts included in shareholders’ net income for GMIB assets and liabilities were not material for the three and six months ended June 30, 2021 or June 30, 2020.
Note 911 – Investments
Cigna’sCigna's investment portfolio consists of a broad range of investments including debt 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 and realized investment gains and losses. See Note 1012 for information about the valuation of the Company’sCompany's investment portfolio. Further information about our accounting policies for investment assets can be found in Note 11 of the Company's 20202021 Form 10-K.

20

The following table summarizes the Company's investments by category and current or long-term classification:
June 30, 2021December 31, 2020June 30, 2022December 31, 2021
(In millions)(In millions)CurrentLong-termTotalCurrentLong-termTotal(In millions)CurrentLong-termTotalCurrentLong-termTotal
Debt securitiesDebt securities$904 $17,258 $18,162 $959 $17,172 $18,131 Debt securities$784 $13,166 $13,950 $796 $16,162 $16,958 
Equity securitiesEquity securities0 530 530 0 501 501 Equity securities69 767 836 — 603 603 
Commercial mortgage loansCommercial mortgage loans52 1,399 1,451 13 1,406 1,419 Commercial mortgage loans13 1,566 1,579 40 1,526 1,566 
Policy loansPolicy loans0 1,341 1,341 0 1,351 1,351 Policy loans— 1,325 1,325 — 1,338 1,338 
Other long-term investmentsOther long-term investments0 3,094 3,094 0 2,832 2,832 Other long-term investments— 4,107 4,107 — 3,574 3,574 
Short-term investmentsShort-term investments349 0 349 359 0 359 Short-term investments199 — 199 428 — 428 
TotalTotal$1,305 $23,622 $24,927 $1,331 $23,262 $24,593 Total1,065 20,931 21,996 1,264 23,203 24,467 
Investments classified as assets of businesses held for sale (1)
Investments classified as assets of businesses held for sale (1)
(311)(4,207)(4,518)(344)(4,765)(5,109)
Investments per Consolidated Balance SheetsInvestments per Consolidated Balance Sheets$754 $16,724 $17,478 $920 $18,438 $19,358 
(1) Investments related to the international life, accident and supplemental benefits businesses that are held for sale. These investments are primarily comprised of debt securities and other long-term investments, and to a lesser extent, equity securities and short-term investments. See Note 5 to the Consolidated Financial Statements for additional information.

A.Investment Portfolio

Debt Securities

The amortized cost and fair value by contractual maturity periods for debt securities were as follows at June 30, 2021:2022:
(In millions)(In millions)Amortized
Cost		Fair
Value		(In millions)Amortized
Cost		Fair
Value
Due in one year or lessDue in one year or less$939 $945 Due in one year or less$820 $813 
Due after one year through five yearsDue after one year through five years5,431 5,682 Due after one year through five years4,655 4,454 
Due after five years through ten yearsDue after five years through ten years5,873 6,297 Due after five years through ten years4,844 4,407 
Due after ten yearsDue after ten years3,947 4,761 Due after ten years4,206 3,909 
Mortgage and other asset-backed securitiesMortgage and other asset-backed securities472 477 Mortgage and other asset-backed securities399 367 
TotalTotal$16,662 $18,162 Total$14,924 $13,950 
Actual maturities of these securities could differ from their contractual maturities used in the table above because issuers may have the right to call or prepay obligations, with or without penalties.
21

Gross unrealized appreciation (depreciation) on debt securities by type of issuer is shown below:
(In millions)(In millions)Amortized
Cost		Allowance for Credit LossUnrealized
Appreciation		Unrealized
Depreciation		Fair
Value		(In millions)Amortized
Cost		Allowance for Credit LossUnrealized
Appreciation		Unrealized
Depreciation		Fair
Value
June 30, 2021
June 30, 2022June 30, 2022
Federal government and agencyFederal government and agency$288 $0 $107 $0 $395 Federal government and agency$303 $— $56 $(6)$353 
State and local governmentState and local government149 0 18 0 167 State and local government157 — — (12)145 
Foreign governmentForeign government2,284 0 238 (22)2,500 Foreign government2,471 — 63 (203)2,331 
CorporateCorporate13,469 (24)1,234 (56)14,623 Corporate11,594 (45)151 (946)10,754 
Mortgage and other asset-backedMortgage and other asset-backed472 (12)21 (4)477 Mortgage and other asset-backed399 — 2 (34)367 
TotalTotal$16,662 $(36)$1,618 $(82)$18,162 Total$14,924 $(45)$272 $(1,201)$13,950 
Investments supporting liabilities of the Company’s run-off settlement annuity business (included in total above) (1)
$2,307 $(4)$727 $(7)$3,023 
December 31, 2020
Investments supporting liabilities of the Company's run-off settlement annuity business (included in total above) (1)
Investments supporting liabilities of the Company's run-off settlement annuity business (included in total above) (1)
$2,266 $(5)$220 $(185)$2,296 
December 31, 2021December 31, 2021
Federal government and agencyFederal government and agency$334 $0 $122 $0 $456 Federal government and agency$287 $— $101 $(1)$387 
State and local governmentState and local government150 0 17 0 167 State and local government154 — 17 — 171 
Foreign governmentForeign government2,201 0 318 (8)2,511 Foreign government2,468 — 194 (46)2,616 
CorporateCorporate13,108 (19)1,506 (33)14,562 Corporate12,361 (23)1,008 (80)13,266 
Mortgage and other asset-backedMortgage and other asset-backed427 (7)27 (12)435 Mortgage and other asset-backed505 — 17 (4)518 
TotalTotal$16,220 $(26)$1,990 $(53)$18,131 Total$15,775 $(23)$1,337 $(131)$16,958 
Investments supporting liabilities of the Company’s run-off settlement annuity business (included in total above) (1)
$2,282 $(5)$838 $(3)$3,112 
Investments supporting liabilities of the Company's run-off settlement annuity business (included in total above) (1)
Investments supporting liabilities of the Company's run-off settlement annuity business (included in total above) (1)
$2,262 $(5)$720 $(10)$2,967 
(1)Net unrealized appreciation for these investments is excluded from accumulatedAccumulated other comprehensive income.loss.

21

Review of declines in fair value. Management reviews impaired debt securities to determine whether a credit loss allowance is needed based on criteria that include:
•severity of decline;
•financial health and specific prospects of the issuer; and
•changes in the regulatory, economic or general market environment of the issuer’sissuer's industry or geographic region.
The table below summarizes debt securities with a decline in fair value from amortized cost for which an allowance for credit losses has not been recorded, by investment grade and the length of time these securities have been in an unrealized loss position. These debt securities are primarily corporate securities with a decline in fair value that reflects an increase in market yields since purchase. Our allowance for credit losses on debt securities was not material as of June 30, 20212022 and December 31, 2020.2021.
June 30, 2021December 31, 2020June 30, 2022December 31, 2021
(Dollars in millions)(Dollars in millions)Fair
Value		Amortized
Cost		Unrealized
Depreciation		Number
of Issues		Fair
Value		Amortized
Cost		Unrealized
Depreciation		Number
of Issues		(Dollars in millions)Fair
Value		Amortized
Cost		Unrealized
Depreciation		Number
of Issues		Fair
Value		Amortized
Cost		Unrealized
Depreciation		Number
of Issues
One year or lessOne year or lessOne year or less
Investment gradeInvestment grade$2,178 $2,239 $(61)680$1,026 $1,045 $(19)300 Investment grade$8,378 $9,258 $(880)2,695$2,785 $2,861 $(76)909 
Below investment gradeBelow investment grade$439 $451 $(12)512$381 $405 $(24)232 Below investment grade1,124 1,252 (128)1,405561 578 (17)781 
More than one yearMore than one yearMore than one year
Investment gradeInvestment grade$53 $55 $(2)12$18 $18 $0 6 Investment grade750 916 (166)355382 412 (30)143 
Below investment gradeBelow investment grade$147 $154 $(7)32$90 $100 $(10)33 Below investment grade191 218 (27)134162 170 (8)53 
TotalTotal$2,817 $2,899 $(82)1,236 $1,515 $1,568 $(53)571 Total$10,443 $11,644 $(1,201)4,589 $3,890 $4,021 $(131)1,886 

22

Equity Securities
The following table provides the values of the Company's equity security investments as of June 30, 20212022 and December 31, 2020. The amount2021:
June 30, 2022December 31, 2021
(In millions) CostCarrying Value CostCarrying Value
Equity securities with readily determinable fair values$831 $426 $257 $207 
Equity securities with no readily determinable fair value283 410 270 396 
Total$1,114 $836 $527 $603 
Approximately 65% of impairments or value changes resulting from observable price changes onour investments in equity securities still held was not materialare in the health care sector, consistent with our strategy to invest in targeted startup and growth-stage companies in the financial statements as of June 30, 2021 or December 31, 2020.
June 30, 2021December 31, 2020
(In millions) CostCarrying Value CostCarrying Value
Equity securities with readily determinable fair values$203 $208 $180 $202 
Equity securities with no readily determinable fair value$232 $283 $225 $255 
Hybrid equity securities$58 $39 $58 $44 
Total$493 $530 $463 $501 
health care industry.

Commercial Mortgage Loans

Mortgage loans held by the Company are made exclusively to commercial borrowers and are diversified by property type, location and borrower. Loans are generally issued at fixed rates of interest and are secured by high quality, primarily completed and substantially leased operating properties. Commercial mortgage loans are classified as either current or long-term investments based on their contractual maturities.

The Company regularly evaluates and monitors credit risk from the initial mortgage loan underwriting and throughout the investment holding period. For more information on the Company's accounting policies and methodologies regarding these investments, see Note 11 to the Company's Annual Report on2021 Form 10-K for the year ended December 31, 2020.2021.

22
Loan-to-value and debt service coverage ratio are the two most significant contributors to the credit quality ratings that the Company uses to evaluate and monitor credit risk in its commercial mortgage loan portfolio.

The following table summarizes the credit risk profile of the Company’sCompany's commercial mortgage loan portfolio as of June 30, 20212022 and December 31, 2020:2021:
(Dollars in millions)June 30, 2021December 31, 2020
Loan-to-Value RatioCarrying ValueAverage Debt Service Coverage RatioAverage Loan-to-Value RatioCarrying ValueAverage Debt Service Coverage RatioAverage Loan-to-Value Ratio
Below 60%$592 2.18$533 2.28
60% to 79%735 1.80751 2.08
80% to 100%130 1.47141 1.33
Allowance for credit losses(6)(6)
Total$1,451 1.9360 %$1,419 2.0861 %
All commercial mortgage loans in the Company's portfolio are current as of June 30, 2021 and December 31, 2020.
(Dollars in millions)June 30, 2022December 31, 2021
Loan-to-Value RatioCarrying ValueAverage Debt Service Coverage RatioAverage Loan-to-Value RatioCarrying ValueAverage Debt Service Coverage RatioAverage Loan-to-Value Ratio
Below 60%$850 2.21$560 2.18
60% to 79%567 1.49883 1.89
80% to 100%108 1.21129 1.47
Greater than 100%63 1.04— — 
Allowance for credit losses(9)(6)
Total$1,579 1.8459 %$1,566 1.9661 %

Other Long-Term Investments
Other long-term investments include investments in unconsolidated entities, including certain limited partnerships and limited liability companies holding real estate, securities or loans. These investments are carried at cost plus the Company's ownership percentage of reporting income or loss, based on the financial statements of the underlying investments that are generally reported at fair value. Income or loss from these investments is reported on a one quarter lag due to the timing of when financial information is received from the general partner or manager of the investments.
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Other long-term investments also include investment real estate carried at depreciated cost less any impairment write-downs to fair value when cash flows indicate that the carrying value may not be recoverable. Additionally, statutory and other restricted deposits and foreign currency swaps carried at fair value are reported in the table below as Other. The following table provides the carrying value information for these investments:
Carrying value as ofCarrying value as of
(In millions)(In millions)June 30, 2021December 31, 2020(In millions)June 30, 2022December 31, 2021
Real estate investmentsReal estate investments$1,078 $951 Real estate investments$1,356 $1,152 
Securities partnershipsSecurities partnerships1,853 1,737 Securities partnerships2,499 2,272 
OtherOther163 144 Other252 150 
TotalTotal$3,094 $2,832 Total$4,107 $3,574 

B.Derivative Financial Instruments
The Company uses derivative financial instruments to manage the characteristics of investment assets (such as duration, yield, currency and liquidity) to meet the varying demands of the related insurance and contractholder liabilities. The Company also uses derivative financial instruments to hedge the risk of changes in the net assets of certain of its foreign subsidiaries due to changes in foreign currency exchange rates and to hedge the interest rate risk of itscertain long-term debt. 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 8.10. Derivatives in the Company’sCompany's separate accounts are excluded from the following discussion because associated gains and losses generally accrue directly to separate account policyholders.
Derivative instruments used by the Company typically include foreign currency and interest rate swap contracts and foreign currency forward contracts. Swap contracts periodically exchange cash flows between fixed and variable interest rates or 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.

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. While certain centrally-cleared derivative instruments require the posting of cash as an upfront margin, 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. The Company may incur a loss if dealers failed to perform under derivative contracts; however, collateral has been posted by dealers to cover substantially all of the net fair values owed at June 30, 2021 and December 31, 2020. The fair value of margin and collateral posted by the Company was not significant as of June 30, 2021 or December 31, 2020.

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The gross fair values of our derivative financial instruments are presented in Note 10. The following table summarizes the types and notional quantity of derivative instruments held by the Company.12. As of June 30, 20212022 and December 31, 2020,2021, the effects of derivative financial instruments used in these individual hedging strategies were not material to the Consolidated Financial Statements, including gains or losses reclassified from Accumulated other comprehensive incomeloss into Shareholders' net income, as well as amounts excluded from the assessment of hedge effectiveness.
Notional Value as of
(In millions)June 30, 2021December 31, 2020
PurposeType of Instrument
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.
Foreign currency swap contracts$1,040 $925 
Fair value hedge: To convert a portion of the interest rate exposure on the Company's long-term debt from fixed to variable rates. This more closely aligns the Company's interest expense with the interest income received on its cash equivalent and short-term investment balances. The variable rates are benchmarked to SOFR.
Interest rate swap contracts$750 $0 
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, Korean Won and Taiwan Dollar. The notional value of hedging instruments matches the hedged amount of subsidiary net assets.
Foreign currency swap contracts$526 $526 
Foreign currency forward contracts$686 $636 
Economic hedge: To hedge the foreign exchange-related changes in fair value of U.S. dollar-denominated investment assets 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 investments.
Foreign currency forward contracts$643 $538 
Economic hedge: To hedge against the foreign exchange depreciation of certain foreign subsidiary earnings denominated in South Korean Won. The notional value of hedging instruments aligns with the U.S. dollar equivalent of hedged foreign-denominated earnings.
Average rate option contracts$269 $0 
The Company implemented two new hedging strategies during the second quartereffectiveness and fair values of 2021 that are described in the above table and are accounted forassets posted or held as follows:
• Fair value hedges of the interest rate exposure on the Company’s long-term debt: Using fair value hedge accounting,collateral supporting the fair values of these derivative financial instruments. The following table summarizes the swap contracts are reported in Other assets, or Other liabilities. The critical termstypes and notional quantity of these swaps match those of the long-term debt being hedged. As a result, the carrying value of the hedged debt is adjusted to reflect changes in its fair value drivenderivative instruments held by the Secured Overnight Financing Rate ("SOFR"). The effects of those adjustments on interest expenseCompany:
Notional Value as of
(In millions)June 30, 2022December 31, 2021
PurposeType of Instrument
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. A majority of these instruments are denominated in Euros, with the remaining instruments denominated in British Pounds Sterling and Australian Dollars.
Foreign currency swap contracts$1,073 $1,081 
Fair value hedge: To convert a portion of the interest rate exposure on the Company's long-term debt from fixed to variable rates. This more closely aligns the Company's interest expense with the interest income received on its cash equivalent and short-term investment balances. The variable rates are benchmarked to SOFR.
Interest rate swap contracts$1,500 $750 
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 currencies other than the U.S. Dollar. The notional value of hedging instruments matches the hedged amount of subsidiary net assets. Foreign currency swap contracts are denominated in Euros, while foreign currency forward contracts are primarily denominated in Korean Won, with the remaining instruments denominated in New Zealand Dollars and Taiwan Dollars. As of June 30, 2022 there were no forward contracts denominated in the Taiwan Dollar.
Foreign currency swap contracts$526 $526 
Foreign currency forward contracts (1)
$720 $1,380 
Economic hedge: To hedge the foreign exchange-related changes in fair value of U.S. dollar-denominated investment assets 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 investments.
Foreign currency forward contracts (1)
$730 $720 
(1) These instruments are offset byassociated with the effects of corresponding changesinternational life, accident and supplemental benefits businesses that are held for sale and will be unwound, terminated, or otherwise disposed in conjunction with the swaps' fair value. The net impact from the hedge reported in Interest expense and other reflects interest expense on the hedged debt at the variable interest rate. Cash flows relating to these contracts are reported in Operating activities.Chubb Transaction.

• Economic hedge against the depreciation of foreign subsidiary earnings due to changes in the quarterly average exchange rate: Fair values of average rate option contracts are reported in Other assets. Because hedge accounting is not applied, changes in fair value are reported currently in earnings in Fees and other revenues. Cash flows relating to these contracts are reported in Operating activities.

As there have been no other changes to the types of derivative financial instruments the Company uses, refer to the Company’s 2020Company's 2021 Form 10-K for further discussion on our accounting policy.
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C.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 (consistent with accounting for a premium deficiency), as well as realized gains and losses attributed to the Company’sCompany's separate accounts because those gains and losses generally accrue directly to separate account policyholders:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
(In millions)(In millions)2021202020212020(In millions)2022202120222021
Net realized investment gains (losses), excluding credit loss expense and asset write-downsNet realized investment gains (losses), excluding credit loss expense and asset write-downs$60 $33 $70 $9 Net realized investment gains (losses), excluding credit loss expense and asset write-downs$(71)$60 $(390)$70 
Credit loss (expense) recoveriesCredit loss (expense) recoveries(1)6 (10)(49)Credit loss (expense) recoveries(24)(1)(24)(10)
Other investment asset write-downs0 (1)0 (10)
Net realized investment gains (losses), before income taxesNet realized investment gains (losses), before income taxes$59 $38 $60 $(50)Net realized investment gains (losses), before income taxes$(95)$59 $(414)$60 
Net realized investment gains, excluding credit loss expense and asset write-downslosses for the six months ended June 30, 2021 was2022 were primarily driven by mark-to-market gains on equity securities and gains on the sales of real estate partnerships, partially offset bydue to mark-to-market losses on derivatives. This activity for the six months ended June 30, 2020 primarily represent gains on sales of debt securities, partially offset by mark-to-market losses on derivatives and equity securities. Credit loss (expense) recoveries on invested assetsreflect credit losses incurred on debt securities primarily relating to issuers in certain industries that have been impacted by the global COVID-19 pandemic. Realized gains and losses ona strategic health care equity securities still held at June 30, 2021 and 2020 were not material.investment.

Note 1012 – 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 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’sliability'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.
24

The Company’sCompany'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’sasset's or a liability’sliability'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’sinstrument's fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3).

For a description of the policies, methods and assumptions that are used to estimate fair value and determine the fair value hierarchy for each class of financial instruments, see Note 12 "Fair Value Measurements" to the Company's 20202021 Form 10-K.

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A.Financial Assets and Financial Liabilities Carried at Fair Value
The following table provides information as of June 30, 20212022 and December 31, 20202021 about the Company’sCompany's financial assets and liabilities carried at fair value. Separate account assets are also recorded at fair value on the Company’sCompany'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.
(In millions)(In millions)Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Total(In millions)Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Total
As of June 30, 2021As of December 31, 2020As of June 30, 2021As of December 31, 2020As of June 30, 2021As of December 31, 2020As of June 30, 2021As of December 31, 2020As of June 30, 2022As of December 31, 2021As of June 30, 2022As of December 31, 2021As of June 30, 2022As of December 31, 2021As of June 30, 2022As of December 31, 2021
Financial assets at fair valueFinancial assets at fair valueFinancial assets at fair value
Debt securitiesDebt securitiesDebt securities
Federal government and agencyFederal government and agency$155 $207 $240 $249 $0 $0 $395 $456 Federal government and agency$148 $147 $205 $240 $— $— $353 $387 
State and local governmentState and local government0 0 167 167 0 0 167 167 State and local government— — 145 171 — — 145 171 
Foreign governmentForeign government0 0 2,487 2,498 13 13 2,500 2,511 Foreign government— — 2,331 2,611 — 5 2,331 2,616 
CorporateCorporate0 0 13,956 13,878 667 684 14,623 14,562 Corporate— — 10,327 12,606 427 660 10,754 13,266 
Mortgage and other asset-backedMortgage and other asset-backed0 0 334 309 143 126 477 435 Mortgage and other asset-backed— — 282 418 85 100 367 518 
Total debt securitiesTotal debt securities155 207 17,184 17,101 823 823 18,162 18,131 Total debt securities148 147 13,290 16,046 512 765 13,950 16,958 
Equity securities (1)
Equity securities (1)
50 50 166 165 31 31 247 246 
Equity securities (1)
9 16 417 160 — 31 426 207 
Short-term investmentsShort-term investments0 0 348 325 0 0 348 325 Short-term investments— — 199 428 — — 199 428 
Derivative assets (2)
Derivative assets (2)
0 0 72 72 0 0 72 72 
Derivative assets (2)
— — 258 143 — — 258 143 
Financial liabilities at fair valueFinancial liabilities at fair valueFinancial liabilities at fair value
Derivative liabilitiesDerivative liabilities$0 $0 $45 $108 $0 $0 $45 $108 Derivative liabilities$— $— $54 $33 $— $— $54 $33 
(1)Excludes certain equity securities that have no readily determinable fair value.
(2)Derivative assets above include $1 million that are presented in the Short-term investments category disclosed in Note 9. See Note 9 for more information on our Derivative Financial Instruments.

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’sCompany's best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.

25

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

The following table summarizes the fair value and significant unobservable inputs that were developed directly by the Company and used in pricing these debt securities as of June 30, 20212022 and December 31, 2020.2021. The range and weighted average basis point (“bps”("bps") amounts for liquidity reflect the Company’sCompany's best estimates of the unobservable adjustments a market participant would make to calculate these fair values.
Fair Value as ofUnobservable Adjustment Range (Weighted Average by Quantity) as ofFair Value as ofUnobservable Adjustment Range (Weighted Average by Quantity) as of
(Fair value in millions )(Fair value in millions )June 30, 2021December 31, 2020Unobservable input June 30, 2021June 30, 2021December 31, 2020(Fair value in millions )June 30, 2022December 31, 2021Unobservable input June 30, 2022June 30, 2022December 31, 2021
Debt securitiesDebt securitiesDebt securities
Corporate and government debt securitiesCorporate and government debt securities$680 $696 Liquidity60 - 1720 (510)bps60 - 1370 (470)bpsCorporate and government debt securities$426 $664 Liquidity60 - 1200 (320)bps60 - 1060 (410)bps
Mortgage and other asset-backed securitiesMortgage and other asset-backed securities143 126 Liquidity60 - 390 (90)bps60 - 380 (80)bpsMortgage and other asset-backed securities85 100 Liquidity60 - 500 (180)bps60 - 390 (100)bps
Securities not priced by the Company (1)
0 1 
Other debt securitiesOther debt securities1 1 
Total Level 3 debt securitiesTotal Level 3 debt securities$823 $823 Total Level 3 debt securities$512 $765 
(1)The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company.
27

A significant increase in liquidity spread adjustments would result in a lower fair value measurement, while a decrease would result in a higher fair value 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 and six months ended June 30, 20212022 and 2020.2021. Gains and losses reported in the table may include net changes in fair value that are attributable to both observable and unobservable inputs.
For the Three Months Ended
June 30,		For the Six Months Ended
June 30,		For the Three Months Ended
June 30,		For the Six Months Ended
June 30,
(In millions)(In millions)2021202020212020(In millions)2022202120222021
Debt and Equity SecuritiesDebt and Equity SecuritiesDebt and Equity Securities
Beginning balanceBeginning balance$903 $766 $854 $555 Beginning balance$686 $903 $796 $854 
Total gains (losses) included in shareholders’ net income(1)17 (11)5 
Total gains (losses) included in shareholders' net incomeTotal gains (losses) included in shareholders' net income(2)(1)10 (11)
Gains (losses) included in other comprehensive incomeGains (losses) included in other comprehensive income7 12 (9)(59)Gains (losses) included in other comprehensive income(13)7 (28)(9)
Gains (losses) required to adjust future policy benefits for settlement annuities (1)
Gains (losses) required to adjust future policy benefits for settlement annuities (1)
1 7 (7)(3)
Gains (losses) required to adjust future policy benefits for settlement annuities (1)
(11)1 (23)(7)
Purchases, sales and settlementsPurchases, sales and settlementsPurchases, sales and settlements
PurchasesPurchases42 2 71 64 Purchases27 42 76 71 
Sales0 0 0 (12)
SettlementsSettlements(9)(5)(25)(7)Settlements(71)(9)(152)(25)
Total purchases, sales and settlementsTotal purchases, sales and settlements33 (3)46 45 Total purchases, sales and settlements(44)33 (76)46 
Transfers into/(out of) Level 3Transfers into/(out of) Level 3Transfers into/(out of) Level 3
Transfers into Level 3Transfers into Level 337 179 123 527 Transfers into Level 317 37 118 123 
Transfers out of Level 3Transfers out of Level 3(126)(118)(142)(210)Transfers out of Level 3(121)(126)(285)(142)
Total transfers into/(out of) Level 3Total transfers into/(out of) Level 3(89)61 (19)317 Total transfers into/(out of) Level 3(104)(89)(167)(19)
Ending balanceEnding balance$854 $860 $854 $860 Ending balance$512 $854 $512 $854 
Total gains (losses) included in Shareholders’ net income attributable to instruments held at the reporting date$(1)$16 $(12)$(1)
Change in unrealized gains or losses included in Other comprehensive income for assets held at the end of the reporting period$7 $12 $(9)$(54)
Total gains (losses) included in Shareholders' net income attributable to instruments held at the reporting dateTotal gains (losses) included in Shareholders' net income attributable to instruments held at the reporting date$(3)$(1)$(2)$(12)
Change in unrealized gains or losses included in Other comprehensive income (loss), net of tax for assets held at the end of the reporting periodChange in unrealized gains or losses included in Other comprehensive income (loss), net of tax for assets held at the end of the reporting period$(11)$7 $(25)$(9)
(1)Amounts do not accrue to shareholders.

Total gains and losses included in Shareholders’Shareholders' net income in the tables above are reflected in the Consolidated Statements of Income as Net realized investment gains (losses) and Net investment income.
Gains and losses included in Other comprehensive income (loss), net of tax in the tables above are reflected in Net unrealized appreciation (depreciation) on securities and derivatives in the Consolidated Statements of Comprehensive Income.
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Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company’sCompany'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 20212022 and 20202021 primarily reflected changes in liquidity estimates for certain private placement issuers across several sectors. Transfers into and out of Level 3 were higher in 2020 due to significant fluctuations in unobservable inputs experienced as a result of the uncertainty over the economic impacts related to COVID-19. See discussion under Quantitative Information about Unobservable Inputs above for more information.

Separate Accounts
The investment income and fair value gains and losses of Separateseparate account assets generally accrue directly to the contractholders and, together with their deposits and withdrawals, are excluded from the Company’sCompany's Consolidated Statements of Income and Cash Flows.

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Fair values of Separate account assets at June 30, 20212022 and December 31, 20202021 were as follows:
(In millions)(In millions)Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Total(In millions)Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Total
June 30, 2021December 31, 2020June 30, 2021December 31, 2020June 30, 2021December 31, 2020June 30, 2021December 31, 2020June 30, 2022December 31, 2021June 30, 2022December 31, 2021June 30, 2022December 31, 2021June 30, 2022December 31, 2021
Guaranteed separate accounts (See Note 15)$231 $226 $287 $297 $0 $0 $518 $523 
Guaranteed separate accounts (See Note 18)Guaranteed separate accounts (See Note 18)$208 $227 $228 $276 $— $— $436 $503 
Non-guaranteed separate accounts (1)
Non-guaranteed separate accounts (1)
2,013 1,925 5,592 5,600 373 355 7,978 7,880 
Non-guaranteed separate accounts (1)
212 1,130 6,326 6,406 249 334 6,787 7,870 
SubtotalSubtotal$2,244 $2,151 $5,879 $5,897 $373 $355 8,496 8,403 Subtotal$420 $1,357 $6,554 $6,682 $249 $334 7,223 8,373 
Non-guaranteed separate accounts priced at NAV as a practical expedient (1)
765 683 
Non-guaranteed separate accounts priced at net asset value ("NAV") as a practical expedient (1)
Non-guaranteed separate accounts priced at net asset value ("NAV") as a practical expedient (1)
920 842 
TotalTotal8,143 9,215 
Separate account assets of businesses classified as held for sale (2)
Separate account assets of businesses classified as held for sale (2)
(648)(878)
Separate account assets per Consolidated Balance SheetsSeparate account assets per Consolidated Balance Sheets$9,261 $9,086 Separate account assets per Consolidated Balance Sheets$7,495 $8,337 
(1)Non-guaranteed separate accounts included $4.4include $4.2 billion as of June 30, 20212022 and $4.2$4.5 billion as of December 31, 20202021 in assets supporting the Company’sCompany's pension plans, including $0.3$0.2 billion classified in Level 3 as of June 30, 20212022 and $0.3 billion as of December 31, 2020.2021.

(2)Investments related to the international life, accident and supplemental benefits businesses that are held for sale. See Note 5 to the Consolidated Financial Statements for additional information.
.
Separate account assets classified in Level 3 primarily support Cigna’sCigna's pension plans and include certain newly-issued, privately-placed, complex or illiquid securities that are priced using methods discussed above, as well as commercial mortgage loans. Activity, including transfers into and out of Level 3, was not material for the three and six months ended June 30, 20212022 or 2020.2021.
Separate account investments in securities partnerships, real estate and hedge funds are generally valued based on the separate account’saccount'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.pension plans. The following table provides additional information on these investments:
Fair Value as ofUnfunded Commitment as of June 30, 2021Redemption Frequency
(if currently eligible)		Redemption Notice
Period		Fair Value as ofUnfunded Commitment as of June 30, 2022Redemption Frequency
(if currently eligible)		Redemption Notice
Period
(In millions)(In millions)June 30, 2021December 31, 2020(In millions)June 30, 2022December 31, 2021
Securities partnershipsSecurities partnerships$483 $463 $270 Not applicableNot applicableSecurities partnerships$540 $513 $252 Not applicableNot applicable
Real estate fundsReal estate funds278 215 23 Quarterly30 - 90 daysReal estate funds376 325 — Quarterly30 - 90 days
Hedge fundsHedge funds4 5 0 Up to annually, varying by fund30 - 90 daysHedge funds4 4 — Up to annually, varying by fund30 - 90 days
TotalTotal$765 $683 $293 Total$920 $842 $252 
As of June 30, 2021,2022, 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.

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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, butsuch as commercial mortgage loans that are carried at unpaid principal, investment real estate that is carried at depreciated cost and equity securities with no readily determinable fair value when there are no observable market transactions. However, these financial assets and liabilities may be measured using fair value only under certain conditions, such as when investments become impaired including investment real estate and commercial mortgage loans and certain equity securities with no readily determinable fair value. For the six months ended June 30, 2021 and 2020, there were no such impairments. Equity securities with no readily determinableare written down to their fair value, are also measured at fair valueor when there are observable price changes from orderly market transactions withof equity securities that otherwise had no readily determinable fair value.

For the same issuer.six months ended June 30, 2022 and 2021, no impairments were recognized requiring these assets to be measured at fair value. Realized investment gains and losses from these observable price changes for the three and six months ended June 30, 20212022 and June 30, 20202021 were not material. Carrying values represented less than 1% of total investments as of both June 30, 2021 and June 30, 2020.

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C.Fair Value Disclosures for Financial Instruments Not Carried at Fair Value
The following table includes the Company’sCompany's financial instruments not recorded at fair value, that are subject tohowever fair value disclosure requirementsis required at June 30, 20212022 and December 31, 2020.2021. In addition to universal life products and finance leases, financial instruments that are carried in the Company’sCompany's Consolidated Financial Statements at amounts that approximate fair value are excluded from the following table:
Classification in Fair Value HierarchyJune 30, 2021December 31, 2020Classification in Fair Value HierarchyJune 30, 2022December 31, 2021
(In millions)(In millions)Fair ValueCarrying ValueFair ValueCarrying Value(In millions)Fair ValueCarrying ValueFair ValueCarrying Value
Commercial mortgage loansCommercial mortgage loansLevel 3$1,494 $1,451 $1,456 $1,419 Commercial mortgage loansLevel 3$1,499 $1,579 $1,598 $1,566 
Long-term debt, including current maturities, excluding finance leasesLong-term debt, including current maturities, excluding finance leasesLevel 2$36,076 $31,575 $37,676 $31,835 Long-term debt, including current maturities, excluding finance leasesLevel 2$30,062 $31,526 $35,621 $31,593 

Note 1113 – Variable Interest Entities

We perform ongoing qualitative analyses of our involvement with variable interest entities to determine if consolidation is required. The Company determined that it was not a primary beneficiary in any material variable interest entity as of June 30, 20212022 or December 31, 2020.2021. The Company’s involvement with variable interest entities for which it is not the primary beneficiary has not changed materially from December 31, 2020.2021. For details of our accounting policy for variable interest entities and the composition of variable interest entities with which the Company is involved, refer to Note 13 in the Company's 20202021 Form 10-K. The Company has not provided, and does not intend to provide, financial support to any of these variable interest entities in excess of its maximum exposure.

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Note 1214 – Accumulated Other Comprehensive Income (Loss) (“AOCI”("AOCI")
AOCI includes net unrealized appreciation (depreciation) on securities and derivatives (excluding appreciation on investments supporting future policy benefit liabilities of the run-off settlement annuity business) (See(see Note 9)11), foreign currency translation and the net postretirement benefits liability adjustment. AOCI includes the Company’sCompany's share from unconsolidated entities reported on the equity method. Generally, tax effects in AOCI are established at the currently enacted tax rate and reclassified to Shareholders' net income in the same period that the related pre-tax AOCI reclassifications are recognized. Changes in the components of AOCI were as follows:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
(In millions)(In millions)2021202020212020(In millions)2022202120222021
Securities and DerivativesSecurities and DerivativesSecurities and Derivatives
Beginning balanceBeginning balance$627 $547 $900 $975 Beginning balance$125 $627 $685 $900 
Appreciation (depreciation) on securities and derivativesAppreciation (depreciation) on securities and derivatives170 920 (172)340 Appreciation (depreciation) on securities and derivatives(541)170 (1,246)(172)
Tax (expense) benefitTax (expense) benefit(40)(196)25 (69)Tax (expense) benefit101 (40)255 25 
Net appreciation (depreciation) on securities and derivatives130 724 (147)271 
Net Appreciation (depreciation) on securities and derivativesNet Appreciation (depreciation) on securities and derivatives(440)130 (991)(147)
Reclassification adjustment for (gains) losses included in Shareholders' net income (Net realized investment (gains) losses)Reclassification adjustment for (gains) losses included in Shareholders' net income (Net realized investment (gains) losses)(11)(19)(6)13 Reclassification adjustment for (gains) losses included in Shareholders' net income (Net realized investment (gains) losses)38 (11)27 (6)
Reclassification adjustment for tax expense (benefit) included in Shareholders’ net income3 4 2 (3)
Reclassification adjustment for tax expense (benefit) included in Shareholders' net incomeReclassification adjustment for tax expense (benefit) included in Shareholders' net income(8)3 (6)2 
Net (gains) losses reclassified from AOCI to Shareholders' net incomeNet (gains) losses reclassified from AOCI to Shareholders' net income(8)(15)(4)10 Net (gains) losses reclassified from AOCI to Shareholders' net income30 (8)21 (4)
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax122 709 (151)281 Other comprehensive income (loss), net of tax(410)122 (970)(151)
Ending balanceEnding balance$749 $1,256 $749 $1,256 Ending balance$(285)$749 $(285)$749 
Translation of foreign currenciesTranslation of foreign currenciesTranslation of foreign currencies
Beginning balanceBeginning balance$(130)$(446)$(15)$(275)Beginning balance$(294)$(130)$(233)$(15)
Translation of foreign currencies16 65 (98)(95)
Tax (expense) benefit0 5 (5)(10)
Translation of foreign currenciesTranslation of foreign currencies(180)16 (240)(98)
Tax (expense)Tax (expense)(26)— (29)(5)
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax16 70 (103)(105)Other comprehensive income (loss), net of tax(206)16 (269)(103)
Less: Net translation gain (loss) on foreign currencies attributable to noncontrolling interestsLess: Net translation gain (loss) on foreign currencies attributable to noncontrolling interests(1)(2)(5)(6)Less: Net translation gain (loss) on foreign currencies attributable to noncontrolling interests(1)(1)(3)(5)
Shareholders' other comprehensive income (loss), net of taxShareholders' other comprehensive income (loss), net of tax17 72 (98)(99)Shareholders' other comprehensive income (loss), net of tax(205)17 (266)(98)
Ending balanceEnding balance$(113)$(374)$(113)$(374)Ending balance$(499)$(113)$(499)$(113)
Postretirement benefits liabilityPostretirement benefits liabilityPostretirement benefits liability
Beginning balanceBeginning balance$(1,728)$(1,628)$(1,746)$(1,641)Beginning balance$(1,323)$(1,728)$(1,336)$(1,746)
Reclassification adjustment for amortization of net prior actuarial losses and prior service costs (Interest expense and other)Reclassification adjustment for amortization of net prior actuarial losses and prior service costs (Interest expense and other)19 18 39 36 Reclassification adjustment for amortization of net prior actuarial losses and prior service costs (Interest expense and other)17 19 33 39 
Reclassification adjustment for settlement (Interest expense and other)Reclassification adjustment for settlement (Interest expense and other)1 0 4 0 Reclassification adjustment for settlement (Interest expense and other)— 1 — 4 
Reclassification adjustment for tax expense (benefit) included in Shareholders’ net income(5)(4)(10)(9)
Reclassification adjustment for tax (benefit) included in Shareholders' net incomeReclassification adjustment for tax (benefit) included in Shareholders' net income(4)(5)(7)(10)
Net adjustments reclassified from AOCI to Shareholders' net incomeNet adjustments reclassified from AOCI to Shareholders' net income15 14 33 27 Net adjustments reclassified from AOCI to Shareholders' net income13 15 26 33 
Valuation updateValuation update0 (73)0 (73)Valuation update18 — 18 — 
Tax (expense) benefit0 17 0 17 
Tax (expense)Tax (expense)(4)— (4)— 
Net change due to valuation updateNet change due to valuation update0 (56)0 (56)Net change due to valuation update14 — 14 — 
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax15 (42)33 (29)Other comprehensive income (loss), net of tax27 15 40 33 
Ending balanceEnding balance$(1,713)$(1,670)$(1,713)$(1,670)Ending balance$(1,296)$(1,713)$(1,296)$(1,713)

Note 15 –Organizational Efficiency Plan
During the fourth quarter of 2021, the Company approved a strategic plan to further leverage its ongoing growth to drive operational efficiency through enhancements to organizational structure and increased use of automation and shared services. As a result, during the fourth quarter of 2021, we recognized a charge in Selling, general and administrative expenses of $168 million, pre-tax ($119 million, after-tax) that included $59 million of one-time expenses related to abandonment of leased assets and impairment of property and equipment as well as $109 million of accrued expenses primarily for severance costs related to headcount reductions.
As previously anticipated, during the second quarter of 2022, the Company updated our strategic plan and recognized an additional charge in Selling, general and administrative expenses of $22 million, pre-tax ($17 million, after-tax) related to accrued expenses primarily for severance costs.
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The following table summarizes a roll forward of the accrued liability recorded in Accrued expenses and other liabilities:
(In millions)
Balance, December 31, 2021$103
2022 payments(37)
Second quarter 2022 charge22
Balance, June 30, 2022$88

We expect most of the accrued liability to be paid by the end of 2023.
Note 1316 – Leases
Operating and finance lease Right-of-Use (“ROU”right-of-use ("ROU") assets and lease liabilities were as follows:
(In millions)(In millions)June 30, 2021December 31, 2020(In millions)June 30, 2022December 31, 2021
Operating leases:(1)Operating leases:(1)Operating leases:(1)
Operating lease ROU assets$508 $552 
Operating lease ROU assets in Other assets
Operating lease ROU assets in Other assets
$445 $478 
Accrued expenses and other liabilitiesAccrued expenses and other liabilities$149 $152 Accrued expenses and other liabilities$151 $159 
Other non-current liabilitiesOther non-current liabilities449 491 Other non-current liabilities391 436 
Total operating lease liabilitiesTotal operating lease liabilities$598 $643 Total operating lease liabilities$542 $595 
Finance leases:Finance leases:Finance leases:
Property and equipment, grossProperty and equipment, gross$89 $98 Property and equipment, gross$118 $101 
Accumulated depreciationAccumulated depreciation(40)(46)Accumulated depreciation(63)(51)
Property and equipment, netProperty and equipment, net$49 $52 Property and equipment, net$55 $50 
Short-term debtShort-term debt$20 $18 Short-term debt$23 $23 
Long-term debtLong-term debt31 36 Long-term debt35 28 
Total finance lease liabilitiesTotal finance lease liabilities$51 $54 Total finance lease liabilities$58 $51 
(1) Operating leases include $28 million as of June 30, 2022 and $27 million as of December 31, 2021 classified as Assets of businesses held for sale and $22 million as of June 30, 2022, and $28 million as of December 31, 2021 classified as Liabilities of businesses held for sale.
Note 1417 – Income Taxes
Income Tax Expense
The 22.4%20.8% effective tax rate for the three months ended June 30, 2022 and the 21.6% effective tax rate for the six months ended June 30, 2021 was higher2022 were lower than the 20.0%22.2% rate for the same period in 2020. This increase isthree months ended June 30, 2021 and the 22.4% rate for the six months ended June 30, 2021. These decreases are primarily attributable to favorable results relative to our foreign operations and for the absencesix months ended June 30, 2022 the favorable impact of favorable items which reduced the rate in 2020, including settlements of uncertain tax positions and the remeasurement of deferred state income taxes, due to changes in statutory rates and adjustments in apportionment factors; partially offset by the eliminationabsence of the nondeductible health insurer taxfavorable impact of non-recurring items recorded in 2021.
Note 1518 – Contingencies and Other Matters
The Company, through its subsidiaries, is contingently liable for various guarantees provided in the ordinary course of business.
A.Financial Guarantees: Retiree and Life Insurance Benefits
The Company guarantees that separate account assets will be sufficient to pay certain life insurance or retiree benefits. For the majority of these benefits, the sponsoring employers are primarily responsible for ensuring that assets are sufficient to pay these benefits and are required to maintain assets that exceed a certain percentage of benefit obligations. If employers fail to do so, the Company or an affiliate of the buyer of the retirement benefits business has the right to redirect the management of the related assets to provide for benefit payments. As of June 30, 2021,2022, employers maintained assets that generally exceeded the benefit obligations under these arrangements of approximately $450$430 million. An additional liability is established if management believes that the Company will be required to make payments under the guarantees; there were 0no additional liabilities required for these guarantees,
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net of reinsurance, as of June 30, 2021.2022. Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy.
The Company does not expect that these financial guarantees will have a material effect on the Company’sCompany's consolidated results of operations, liquidity or financial condition.
B.Certain Other Guarantees
The Company had indemnification obligations as of June 30, 20212022 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, filing of tax returns, compliance with law 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 percentage of
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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 0no liabilities for these indemnification obligations as of June 30, 2021.2022.
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’sCompany's exposure to assessments for certain obligations of insolvent insurance companies to policyholders and claimants is based on its share of business written in the relevant jurisdictions.
There were no material charges or credits resulting from existing or new guaranty fund assessments for the six months ended June 30, 2021.2022.
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 serviceservices 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.
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. For those matters that the Company has identified with a reasonably possible material loss, the Company provides disclosure in the aggregate of accruals and range of loss, or a statement that such information cannot be estimated. The Company’sCompany's accruals for the matters discussed below under “Litigation Matters”"Litigation Matters" and “Regulatory Matters”"Regulatory Matters" are not material. Due to numerous uncertain factors presented in these cases, it is not possible to estimate an aggregate range of loss (if any) for these matters at this time. 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. An adverse outcome in one or more of these matters could be material to the Company’sCompany'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 ongoing litigation matters or any future claims or litigation.
Litigation Matters
Risk Corridors and CSR Litigation with the Federal Government. As a result of a Supreme Court decision in April 2020, the Company filed suit in early May 2020 against the United States in the U.S. Court of Federal Claims seeking to recover two types of payments the Federal Government owes Cigna under the risk corridors and cost-sharing reduction (“CSR”) programs of The Patient Protection and Affordable Care Act. In aggregate, the complaint sought to recover more than $315 million: $120 million in risk corridors payments and more than $195 million in CSR payments. We received $120 million in payments in September 2020, which resolved our risk corridors claim. Our claim seeking recovery for CSR payments remains pending.
Cigna Litigation with Anthem. In February 2017, the Company filed suit against Anthem, Inc. in the Delaware Court of Chancery (the “Chancery Court”) seeking, among other relief, payment of the $1.85 billion reverse termination fee under the parties’ 2015 merger agreement and damages. Anthem countersued, alleging its own claims for damages. A trial was held during the first quarter of 2019. In August 2020, the Chancery Court issued an opinion finding that, although Cigna breached its contractual obligation to use reasonable best efforts to support the Anthem/Cigna merger, its actions did not cause the merger to fail. The Court denied claims by both parties for damages and further denied Cigna’s claim for the reverse termination fee. The Company filed a Notice of Appeal with the Delaware Supreme Court on October 30, 2020, and sought reversal of the portion of the Chancery Court’s decision denying Cigna the reverse termination fee. Briefing on the appeal was completed on January 29, 2021 and oral arguments were held on April 14, 2021. On May 3, 2021, the Delaware Supreme Court issued an order affirming the decision of the Chancery Court.
Express Scripts Litigation with AnthemElevance. In March 2016, AnthemElevance 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. AnthemElevance also requested that the court enter declaratory judgment that Express Scripts is required to provide AnthemElevance competitive benchmark pricing, that AnthemElevance can terminate the agreement and that Express Scripts is required to provide AnthemElevance with post-termination services at
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competitive benchmark pricing for one year following any termination by Anthem. AnthemElevance. Elevance claims it is entitled to $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 AnthemElevance and $150 million damages for service issues (“Anthem’s Allegations”("Elevance's Allegations"). On April 19, 2016, in response to Anthem’sElevance's complaint, Express Scripts filed its answer denying Anthem’sElevance's Allegations in their entirety and asserting
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affirmative defenses and counterclaims against Anthem.Elevance. The court subsequently granted Anthem’sElevance's motion to dismiss 2 of 6 counts of Express Scripts’Scripts' amended counterclaims. The current scheduling order runs throughExpress 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 ofcourt granted summary judgment briefing in November 2021. There is no tentative trial date.
Regulatory Matters
Civil Investigative Demand. The U.S. Departmentfavor of Justice (“DOJ”) is conducting industry-wide investigationsExpress Scripts on all of Medicare Advantage organizations’ risk adjustment practices under Medicare Parts CElevance's pricing claims for damages totaling $14.8 billion and D including medical chart reviews and health exams. For certain Medicare Advantage organizations, those investigations have resulted in litigation. The Company has received information requests (civil investigative demands) from the DOJ (U.S. Attorney’s Offices for the Eastern Districton most of Pennsylvania and the Southern District of New York ("SDNY")). We are continuingElevance's claims relating to cooperate with the DOJ and have responded and continue to respond to its requests. Additionally, in relationservice issues. Elevance's only remaining service claims relate to the SDNY’s investigation,review or processing of prior authorizations. On June 10, 2022, Express Scripts filed a Motion for Partial Summary Judgment seeking to limit Elevance’s remaining prior authorization claims and a Motion to Exclude certain opinions offered by its experts. Elevance filed its opposition to both motions, and a cross-motion to submit a supplemental expert report, on July 9, 2022. Express Scripts’ pending Motions were fully briefed by the end of July 2022.

Medicare Advantage. A qui tam action that was filed by a relatorprivate individual on behalf of the government in the United States District Court for the Southern District of New York in 2017 was unsealed on August 6, 2020. The action asserts claims related to risk adjustment practices arising from certain health exams conducted as part of Cigna’sthe Company's Medicare Advantage business. In September 2021, the qui tam action was transferred to the United States District Court for the Middle District of Tennessee. On January 11, 2022, the U.S. Department of Justice ("DOJ") (U.S. Attorney's Offices for the Southern District of New York and the Middle District of Tennessee) filed a motion to partially intervene, which is pending before the court. The Company has opposed the DOJ's motion to intervene and the government filed its reply brief on February 1, 2022. The motion has been fully briefed and is under the court's review.
Regulatory Matters
Civil Investigative Demand. The DOJ is conducting industry-wide investigations of Medicare Advantage organizations' risk adjustment practices. For certain Medicare Advantage organizations, including Cigna, those investigations have resulted in litigation (see "Litigation Matters—Medicare Advantage" above). The Company is currently responding to information requests (civil investigative demands) from the DOJ (U.S. Attorney's Office for the Eastern District of Pennsylvania). The Company is cooperating with the DOJ and has not intervened in the case at this time.responded and continues to respond to its requests.
Note 1619 – Segment Information
See Note 1 for a description of our segments. Asegments, including the segment change effective in the fourth quarter of 2021. Prior year segment information has been adjusted to reflect the segment change and a description of our basis forof reporting segment operating results is outlined below. Intersegment revenues primarily reflect pharmacy relatedpharmacy-related transactions between the Evernorth and U.S. MedicalCigna Healthcare segments.
The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes theythese metrics best reflect the underlying results of business operations and permit analysis of trends in underlying revenue, expenses and profitability. We define pre-tax adjusted income from operations as income before income taxes excluding pre-tax income/loss attributable to noncontrolling interests, net realized investment results, amortization of acquired intangible assets, and special items. Cigna’sCigna's share of certain realized investment results of its joint ventures reported in the International MarketsCigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results.
The Company does not report total assets by segment because this is not a metric used to allocate resources or evaluate segment performance.
The Company defines adjusted revenues as total revenues excluding the following adjustments: special items and Cigna's share of certain realized investment results of its joint ventures reported in the International MarketsCigna 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.
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The Company does not report total assets by segment because this is not a metric used to allocate resources or evaluate segment performance.

The following tables present the special items recorded by the Company for the three and six months ended June 30, 20212022 and 2020:2021:
Three Months EndedSix Months EndedThree Months EndedSix Months Ended
(In millions)(In millions)June 30, 2021June 30, 2020June 30, 2021June 30, 2020(In millions)June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Description of Special Item Charges (Benefits) and Financial Statement Line Item(s)Description of Special Item Charges (Benefits) and Financial Statement Line Item(s)After-taxBefore-taxAfter-taxBefore-taxAfter-taxBefore-taxAfter-taxBefore-taxDescription of Special Item Charges (Benefits) and Financial Statement Line Item(s)After-taxBefore-taxAfter-taxBefore-taxAfter-taxBefore-taxAfter-taxBefore-tax
Integration and transaction-related costs
(Selling, general and administrative expenses)		Integration and transaction-related costs
(Selling, general and administrative expenses)		$26 $36 $14 $16 $63 $88 $36 $45 
Charge for organizational efficiency plan
(Selling, general and administrative expenses)		Charge for organizational efficiency plan
(Selling, general and administrative expenses)		17 22 — — 17 22 — — 
Charges (benefits) associated with litigation matters
(Selling, general and administrative expenses)		Charges (benefits) associated with litigation matters
(Selling, general and administrative expenses)		(20)(28)— — (20)(28)(21)(27)
Debt extinguishment costsDebt extinguishment costs$9 $10 $11 $14 $110 $141 $151 $199 Debt extinguishment costs— — 9 10 — — 110 141 
Integration and transaction-related costs
(Selling, general and administrative expenses)		14 16 99 130 36 45 173 227 
Charges associated with litigation matters
(Selling, general and administrative expenses)		0 0 0 0 (21)(27)19 25 
Charge for organizational efficiency plan
(Selling, general and administrative expenses)		0 0 0 0 0 0 24 31 
Contractual adjustment for a former client
(Pharmacy revenues)		0 0 0 0 0 0 (66)(87)
Total impact from special itemsTotal impact from special items$23 $26 $110 $144 $125 $159 $301 $395 Total impact from special items$23 $30 $23 $26 $60 $82 $125 $159 

3433

Summarized segment financial information was as follows:
(In millions)EvernorthU.S. MedicalInternational MarketsOther OperationsCorporate and EliminationsTotal
Three months ended June 30, 2021
Revenues from external customers$31,553 $9,689 $1,527 $52 $0 $42,821 
Inter-segment revenues1,034 595 0 0 (1,629)
Net investment income5 172 55 77 1 310 
Total revenues32,592 10,456 1,582 129 (1,628)43,131 
Net realized investment results from certain equity method investments0 0 (24)0 0 (24)
Adjusted revenues$32,592 $10,456 $1,558 $129 $(1,628)$43,107 
Income (loss) before taxes$929 $1,060 $260 $19 $(370)$1,898 
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests(6)0 (5)0 0 (11)
Net realized investment (gains) losses2 (49)(30)(6)0 (83)
Amortization of acquired intangible assets488 6 9 0 0 503 
Special items
Debt extinguishment costs0 0 0 0 10 10 
Integration and transaction-related costs0 0 0 0 16 16 
Pre-tax adjusted income (loss) from operations$1,413 $1,017 $234 $13 $(344)$2,333 
(In millions)EvernorthU.S. MedicalInternational MarketsOther OperationsCorporate and EliminationsTotal
Three months ended June 30, 2020
Revenues from external customers$27,714 $8,684 $1,466 $1,178 $0 $39,042 
Inter-segment revenues885 504 0 6 (1,395)
Net investment income3 49 26 144 1 223 
Total revenues28,602 9,237 1,492 1,328 (1,394)39,265 
Net realized investment results from certain equity method investments0 0 (60)0 0 (60)
Adjusted revenues$28,602 $9,237 $1,432 $1,328 $(1,394)$39,205 
Income (loss) before taxes$771 $1,543 $390 $129 $(544)$2,289 
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests(3)0 (5)0 0 (8)
Net realized investment (gains) losses0 (26)(73)1 0 (98)
Amortization of acquired intangible assets481 6 7 2 0 496 
Special items
Debt extinguishment costs0 0 0 0 14 14 
Integration and transaction-related costs0 0 0 0 130 130 
Pre-tax adjusted income (loss) from operations$1,249 $1,523 $319 $132 $(400)$2,823 

35

(In millions)(In millions)EvernorthU.S. MedicalInternational MarketsOther OperationsCorporate and EliminationsTotal(In millions)EvernorthCigna HealthcareOther OperationsCorporate and EliminationsTotal
Six Months Ended June 30, 2021
Three months ended June 30, 2022Three months ended June 30, 2022
Revenues from external customersRevenues from external customers$60,972 $19,291 $3,026 $112 $0 $83,401 Revenues from external customers$33,716 $10,622 $817 $— $45,155 
Inter-segment revenues2,232 1,105 0 0 (3,337)
Intersegment revenuesIntersegment revenues1,131 586 — (1,717)
Net investment incomeNet investment income8 422 114 156 1 701 Net investment income16 178 131 — 325 
Total revenuesTotal revenues63,212 20,818 3,140 268 (3,336)84,102 Total revenues34,863 11,386 948 (1,717)45,480 
Net realized investment results from certain equity method investments
Net realized investment results from certain equity method investments
0 0 (10)0 0 (10)Net realized investment results from certain equity method investments— (49)— — (49)
Adjusted revenuesAdjusted revenues$63,212 $20,818 $3,130 $268 $(3,336)$84,092 Adjusted revenues$34,863 $11,337 $948 $(1,717)$45,431 
Income (loss) before income taxesIncome (loss) before income taxes$1,044 $1,205 $167 $(431)$1,985 
Pre-tax adjustments to reconcile to adjusted income from operationsPre-tax adjustments to reconcile to adjusted income from operations
Income (loss) before taxes$1,678 $2,069 $486 $35 $(857)$3,411 
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests(Income) attributable to noncontrolling interests(11)0 (12)0 0 (23)(Income) attributable to noncontrolling interests(13)— (2)— (15)
Net realized investment (gains) losses (1)
Net realized investment (gains) losses (1)
4 (79)3 2 0 (70)
Net realized investment (gains) losses (1)
— (22)68 — 46 
Amortization of acquired intangible assetsAmortization of acquired intangible assets965 14 19 0 0 998 Amortization of acquired intangible assets444 57 — — 501 
Special itemsSpecial itemsSpecial items
Debt extinguishment costs0 0 0 0 141 141 
Integration and transaction-related costsIntegration and transaction-related costs0 0 0 0 45 45 Integration and transaction-related costs— — — 36 36 
Charges associated with litigation matters0 0 0 0 (27)(27)
Charge for organizational efficiency planCharge for organizational efficiency plan— — — 22 22 
Charges (benefits) associated with litigation mattersCharges (benefits) associated with litigation matters— — — (28)(28)
Pre-tax adjusted income (loss) from operationsPre-tax adjusted income (loss) from operations$2,636 $2,004 $496 $37 $(698)$4,475 Pre-tax adjusted income (loss) from operations$1,475 $1,240 $233 $(401)$2,547 
(In millions)(In millions)EvernorthU.S. MedicalInternational MarketsOther OperationsCorporate and EliminationsTotal(In millions)EvernorthCigna HealthcareOther OperationsCorporate and EliminationsTotal
Six Months Ended June 30, 2020
Three months ended June 30, 2021Three months ended June 30, 2021
Revenues from external customers
Revenues from external customers
$53,970 $17,952 $2,886 $2,350 $0 $77,158 Revenues from external customers$31,553 $10,403 $865 $— $42,821 
Inter-segment revenues1,859 970 0 11 (2,840)
Intersegment revenuesIntersegment revenues1,034 590 — (1,624)
Net investment incomeNet investment income28 175 66 306 1 576 Net investment income5 180 125 — 310 
Total revenuesTotal revenues55,857 19,097 2,952 2,667 (2,839)77,734 Total revenues32,592 11,173 990 (1,624)43,131 
Net realized investment results from certain equity method investmentsNet realized investment results from certain equity method investments— (24)— — (24)
Net realized investment results from certain equity method investments0 0 (50)0 0 (50)
Special item related to contractual adjustment for a former client(87)0 0 0 0 (87)
Adjusted revenuesAdjusted revenues$55,770 $19,097 $2,902 $2,667 $(2,839)$77,597 Adjusted revenues$32,592 $11,149 $990 $(1,624)$43,107 
Income (loss) before taxes$1,465 $2,683 $624 $201 $(1,287)$3,686 
Income (loss) before income taxesIncome (loss) before income taxes$929 $1,111 $228 $(370)$1,898 
Pre-tax adjustments to reconcile to adjusted income from operationsPre-tax adjustments to reconcile to adjusted income from operationsPre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests(Income) attributable to noncontrolling interests(7)0 (10)0 0 (17)(Income) attributable to noncontrolling interests(6)— (5)— (11)
Net realized investment (gains) losses (1)
Net realized investment (gains) losses (1)
0 22 (27)5 0 0 
Net realized investment (gains) losses (1)
2 (74)(11)— (83)
Amortization of acquired intangible assetsAmortization of acquired intangible assets960 17 14 3 0 994 Amortization of acquired intangible assets488 12 3 — 503 
Special itemsSpecial itemsSpecial items
Integration and transaction-related costsIntegration and transaction-related costs— — — 16 16 
Debt extinguishment costsDebt extinguishment costs0 0 0 0 199 199 Debt extinguishment costs— — — 10 10 
Integration and transaction-related costs0 0 0 0 227 227 
Charges associated with litigation matters0 0 0 0 25 25 
Charge for organizational efficiency plan0 0 0 0 31 31 
Contractual adjustment for a former client(87)0 0 0 0 (87)
Pre-tax adjusted income (loss) from operationsPre-tax adjusted income (loss) from operations$2,331 $2,722 $601 $209 $(805)$5,058 Pre-tax adjusted income (loss) from operations$1,413 $1,049 $215 $(344)$2,333 
(1)Includes the Company's share of certain realized investment results of its joint ventures reported in the International MarketsCigna Healthcare segment using the equity method of accounting.
3634

(In millions)EvernorthCigna HealthcareOther OperationsCorporate and EliminationsTotal
Six months ended June 30, 2022
Revenues from external customers$66,005 $21,083 $1,658 $— $88,746 
Intersegment revenues2,418 1,148 — (3,566)
Net investment income26 444 269 — 739 
Total revenues68,449 22,675 1,927 (3,566)89,485 
Net realized investment results from certain equity method investments
— 54 — — 54 
Adjusted revenues$68,449 $22,729 $1,927 $(3,566)$89,539 
Income (loss) before income taxes$1,914 $2,064 $382 $(826)$3,534 
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests(24)(1)(7)— (32)
Net realized investment (gains) losses (1)
— 384 84 — 468 
Amortization of acquired intangible assets887 72 — — 959 
Special items
Integration and transaction-related costs— — — 88 88 
Charge for organizational efficiency plan— — — 22 22 
Charges (benefits) associated with litigation matters— — — (28)(28)
Pre-tax adjusted income (loss) from operations$2,777 $2,519 $459 $(744)$5,011 
(In millions)EvernorthCigna HealthcareOther OperationsCorporate and EliminationsTotal
Six months ended June 30, 2021
Revenues from external customers
$60,972 $20,688 $1,741 $— $83,401 
Intersegment revenues2,232 1,099 — (3,331)
Net investment income8 439 254 — 701 
Total revenues63,212 22,226 1,995 (3,331)84,102 
Net realized investment results from certain equity method investments— (10)— — (10)
Adjusted revenues$63,212 $22,216 $1,995 $(3,331)$84,092 
Income (loss) before income taxes$1,678 $2,156 $434 $(857)$3,411 
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests(11)(1)(11)— (23)
Net realized investment (gains) losses (1)
4 (90)16 — (70)
Amortization of acquired intangible assets965 26 7 — 998 
Special items
Integration and transaction-related costs— — — 45 45 
Charges (benefits) associated with litigation matters— — — (27)(27)
Debt extinguishment costs— — — 141 141 
Pre-tax adjusted income (loss) from operations$2,636 $2,091 $446 $(698)$4,475 
(1) Includes 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.
35

Revenue from external customers includes Pharmacy revenues, Premiums and Fees and other revenues. The following table presents these revenues by product, premium and service type for the three and six months ended June 30:30, 2022 and 2021:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
(In millions)(In millions)2021202020212020(In millions)2022202120222021
Products (Pharmacy revenues) (ASC 606)Products (Pharmacy revenues) (ASC 606)Products (Pharmacy revenues) (ASC 606)
Network revenuesNetwork revenues$15,414 $13,090 $29,593 $25,232 Network revenues$16,107 $16,166 $31,638 $31,304 
Home delivery and specialty revenuesHome delivery and specialty revenues13,014 12,183 25,472 23,897 Home delivery and specialty revenues15,268 13,341 29,967 26,115 
Other1,619 1,291 3,007 2,533 
Other revenuesOther revenues1,667 1,619 3,379 3,007 
Intercompany eliminationsIntercompany eliminations(1,070)(1,079)(2,315)(2,354)
Total pharmacy revenuesTotal pharmacy revenues$30,047 $26,564 $58,072 $51,662 Total pharmacy revenues31,972 30,047 62,669 58,072 
Insurance premiums (ASC 944)Insurance premiums (ASC 944)Insurance premiums (ASC 944)
U.S. Medical premiums
Cigna HealthcareCigna Healthcare
U.S. CommercialU.S. CommercialU.S. Commercial
Health Insurance3,578 3,090 7,101 6,551 
InsuredInsured3,771 3,578 7,491 7,101 
Stop lossStop loss1,194 1,152 2,388 2,313 Stop loss1,344 1,194 2,669 2,388 
OtherOther308 283 618 572 Other352 308 712 618 
U.S. GovernmentU.S. GovernmentU.S. Government
Medicare AdvantageMedicare Advantage2,116 1,904 4,208 3,785 Medicare Advantage2,053 2,116 4,131 4,208 
Medicare Part DMedicare Part D410 420 860 882 Medicare Part D345 410 746 860 
OtherOther1,227 1,063 2,365 2,129 Other1,038 1,227 1,978 2,365 
Total U.S. Medical premiums8,833 7,912 17,540 16,232 
International Markets premiums1,442 1,344 2,892 2,719 
Domestic disability, life and accident premiums0 1,124 0 2,240 
Other premiums48 26 105 55 
International HealthInternational Health712 633 1,414 1,274 
Total Cigna HealthcareTotal Cigna Healthcare9,615 9,466 19,141 18,814 
International businesses held for saleInternational businesses held for sale737 809 1,500 1,618 
OtherOther74 50 143 108 
Intercompany eliminationsIntercompany eliminations— (2)(2)(3)
Total premiumsTotal premiums10,323 10,406 20,537 21,246 Total premiums10,426 10,323 20,782 20,537 
Services (ASC 606)
Fees2,345 1,979 4,672 4,133 
Other external revenues106 93 120 117 
Total services2,451 2,072 4,792 4,250 
Services (Fees) (ASC 606)Services (Fees) (ASC 606)
EvernorthEvernorth1,790 1,456 3,414 2,770 
Cigna HealthcareCigna Healthcare1,478 1,425 2,974 2,859 
Other OperationsOther Operations4 5 9 10 
Other revenuesOther revenues132 108 147 127 
Intercompany eliminationsIntercompany eliminations(647)(543)(1,249)(974)
Total fees and other revenuesTotal fees and other revenues2,757 2,451 5,295 4,792 
Total revenues from external customersTotal revenues from external customers$42,821 $39,042 $83,401 $77,158 Total revenues from external customers$45,155 $42,821 $88,746 $83,401 

Evernorth may also provide certain financial and performance guarantees, including a minimum level of discounts a client may receive, generic utilization rates and various service levels. Clients may be entitled to receive compensation if we fail to meet the guarantees. Actual performance is compared to the contractual guarantee for each measure throughout the period and the Company defers revenue for any estimated payouts within Accrued expenses and other liabilities (current). These estimates are adjusted atand paid following the end of the annual guarantee period. Historically, adjustments to original estimates have not been material. The performanceThis guarantee liability was $1.0 billion as of June 30, 20212022 and $1.1 billion as of December 31, 2020.2021.
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Item 2. MANAGEMENT’SMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PAGE
PAGE
3938
4544
47
4947
Evernorth
4947
U.S. MedicalCigna Healthcare
51
International Markets
5249
Other Operations
5352
Corporate
5352
5453

Management’sManagement'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 June 30, 20212022, compared with December 31, 20202021 and our results of operations for the three and six months ended June 30, 2021,2022, compared with the same periods last year and is intended to help you understand the ongoing trends in our business. We encourage you to read this MD&A in conjunction with our Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 20202021 ("2021 Form 10-K"). In particular, we encourage you to refer to the “Risk Factors”"Risk Factors" contained in Part I, Item 1A of the 20202021 Form 10-K.

Unless otherwise indicated, financial information in this MD&A is presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”("GAAP"). See Note 2 to the Consolidated Financial Statements in our 20202021 Form 10-K for additional information regarding the Company's significant accounting policies and see Note 2 to the Consolidated Financial Statements in this Form 10-Q for updates to those policies resulting from adopting new accounting guidance, if any. The preparation of interim consolidated financial statements necessarily relies heavily on estimates. This and certain other factors call for caution in estimating full-year results based on interim results of operations. In some of our financial tables in this MD&A, we present either percentage changes or “N/M”"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 of “shareholders’"shareholders' net income,” “earnings" "earnings per share”share" and “total"total revenues.”" We also use pre-tax adjusted income (loss) from operations and adjusted revenues to measure the results of our segments.
The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes theythese metrics best reflect the underlying results of business operations and permit analysis of trends in underlying revenue, expenses and profitability. We define adjusted income from operations as shareholders’shareholders' net income (or income before income taxes less pre-tax income/loss attributable to noncontrolling interests for the segment metric) excluding net realized investment results, amortization of acquired intangible assets, and special items. Cigna’sCigna's share of certain realized investment results of its joint ventures reported in the International MarketsCigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results. Consolidated adjusted income (loss) from operations is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders’shareholders' net income. See the below Financial Highlights section for a reconciliation of consolidated adjusted income from operations to shareholders’shareholders' net income.
The Company defines adjusted revenues as total revenues excluding the following adjustments: special items and Cigna's share of certain realized investment results of its joint ventures reported in the International MarketsCigna 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
38

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.
37

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’sCigna'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, personalizedpredictable and innovativesimple solutions for our customers and clients, including in light of the challenges presented by the COVID-19 pandemic; 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 pressures; the ongoing Russia-Ukraine conflict; financing or capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; strategic transactions;transactions, including the sale of our international life, accident and supplemental benefits businesses; and other statements regarding Cigna’sCigna'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 strategic and operational initiatives; our ability to adapt to changes in an evolving and rapidly changing industry; the scale, scope and duration of the COVID-19 pandemic and its potential impact on our business, operating results, cash flows or financial condition, our ability to compete effectively, differentiate our products and services from those of our competitors and maintain or increase market share; price competition, inflation and other pressures that could compress our margins or result in premiums that are insufficient to cover the cost of services delivered to our customers; the potential for actual claims to exceed our estimates related to expected medical claims; our ability to develop and maintain satisfactory relationships with physicians, hospitals, other health service providers and with producers and consultants; our ability to maintain relationships with one or more key pharmaceutical manufacturers or if payments made or discounts provided decline; changes in the pharmacy provider marketplace or pharmacy networks; changes in drug pricing or industry pricing benchmarks; political, legal, operational, regulatory, economic and other risks that could affect our multinational operations; the scale, scope and duration of the COVID-19 pandemic and its potential impact on our business, operating results, cash flows or financial condition; risks related to strategic transactions and realization of the expected benefits of such transactions, including with respect to the sale of our international life, accident and supplemental benefits businesses, 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 operations or among key suppliers or third parties; our ability to invest in and properly maintain our information technology and other business systems; our ability to prevent or contain effects of a potential cyberattack or other privacy or data security incident; potential liability in connection with managing medical practices and operating pharmacies, onsite clinics and other types of medical facilities; the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws or regulations; uncertainties surrounding participation in government-sponsored programs such as Medicare; the outcome of litigation, regulatory audits and investigations; compliance with applicable privacy, security and data laws, regulations and standards; potential failure of our prevention, detection and control systems; unfavorable economic and market conditions, including the risk of a recession or other economic downturn and resulting impact on employment metrics, stock market or interest rate declines and risks related to a downgrade in financial strength ratings of our insurance subsidiaries; the impact of our significant indebtedness and the potential for further indebtedness in the future; unfavorable industry, economic or political conditions; credit risk related to our reinsurers; as well as more specific risks and uncertainties discussed in Part I, Item 1A – Risk Factors of our 20202021 Form 10-K, Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 20202021 Form 10-K, this MD&A 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, 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. Cigna 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
Cigna Corporation, together with its subsidiaries (either individually or collectively referred to as “Cigna,”"Cigna," the “Company,” “we,” “our”"Company," "we," "our" or “us”"us") is a global health services organization with a mission of helping those we serve improve their health, well-being and peace of mind by making health care simple, affordable, predictable and predictable.simple. Our subsidiaries offer a differentiated set of pharmacy, medical, dental and related products and services. For further information on our business and strategy, see Item 1, "Business" in our 20202021 Form 10-K.

39
38

Financial Highlights
See Note 1 to the Consolidated Financial Statements for a description of our segments. The commentary provided below describes our results for the three and six months ended June 30, 20212022 compared with the same periods in 2020.2021. Unless specified otherwise, commentary applies to both the three and six month periods.

Summarized below are certain key measures of our performance by segment for the three and six months ended June 30, 20212022 and 2020:2021:
Financial highlights by segmentFinancial highlights by segmentFinancial highlights by segment
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended June 30,Six Months Ended June 30,
(Dollars in millions, except per share amounts)(Dollars in millions, except per share amounts)20212020% Change20212020% Change(Dollars in millions, except per share amounts)20222021% Change20222021% Change
RevenuesRevenuesRevenues
Adjusted revenues by segmentAdjusted revenues by segmentAdjusted revenues by segment
EvernorthEvernorth$32,592 $28,602 14 %$63,212 $55,770 13 %Evernorth$34,863 $32,592 7 %$68,449 $63,212 8 %
U.S. Medical10,456 9,237 13 20,818 19,097 9 
International Markets1,558 1,432 9 3,130 2,902 8 
Cigna HealthcareCigna Healthcare11,337 11,149 2 22,729 22,216 2 
Other OperationsOther Operations129 1,328 (90)268 2,667 (90)Other Operations948 990 (4)1,927 1,995 (3)
Corporate, net of eliminationsCorporate, net of eliminations(1,628)(1,394)(17)(3,336)(2,839)(18)Corporate, net of eliminations(1,717)(1,624)(6)(3,566)(3,331)(7)
Adjusted revenuesAdjusted revenues43,107 39,205 10 84,092 77,597 8 Adjusted revenues45,431 43,107 5 89,539 84,092 6 
Net realized investment results from certain equity method investmentsNet realized investment results from certain equity method investments24 60 (60)10 50 (80)Net realized investment results from certain equity method investments49 24 104 (54)10 N/M
Special items— — N/M— 87 N/M
Total revenuesTotal revenues$43,131 $39,265 10 %$84,102 $77,734 8 %Total revenues$45,480 $43,131 5 %$89,485 $84,102 6 %
Shareholders’ net income$1,467 $1,754 (16)%$2,628 $2,935 (10)%
Shareholders' net incomeShareholders' net income$1,559 $1,467 6 %$2,742 $2,628 4 %
Adjusted income from operationsAdjusted income from operations$1,808 $2,152 (16)%$3,472 $3,910 (11)%Adjusted income from operations$1,981 $1,808 10 %$3,912 $3,472 13 %
Earnings per share (diluted)Earnings per share (diluted)Earnings per share (diluted)
Shareholders’ net income$4.25 $4.73 (10)%$7.54 $7.88 (4)%
Shareholders' net incomeShareholders' net income$4.90 $4.25 15 %$8.57 $7.54 14 %
Adjusted income from operationsAdjusted income from operations$5.24 $5.81 (10)%$9.96 $10.49 (5)%Adjusted income from operations$6.22 $5.24 19 %$12.23 $9.96 23 %
Pre-tax adjusted income (loss) from operations by segmentPre-tax adjusted income (loss) from operations by segmentPre-tax adjusted income (loss) from operations by segment
EvernorthEvernorth$1,413 $1,249 13 %$2,636 $2,331 13 %Evernorth$1,475 $1,413 4 %$2,777 $2,636 5 %
U.S. Medical1,017 1,523 (33)2,004 2,722 (26)
International Markets234 319 (27)496 601 (17)
Cigna HealthcareCigna Healthcare1,240 1,049 18 2,519 2,091 20 
Other OperationsOther Operations13 132 (90)37 209 (82)Other Operations233 215 8 459 446 3 
Corporate, net of eliminationsCorporate, net of eliminations(344)(400)14 (698)(805)13 Corporate, net of eliminations(401)(344)(17)(744)(698)(7)
Consolidated pre-tax adjusted income from operationsConsolidated pre-tax adjusted income from operations2,333 2,823 (17)4,475 5,058 (12)Consolidated pre-tax adjusted income from operations2,547 2,333 9 5,011 4,475 12 
Income attributable to noncontrolling interestsIncome attributable to noncontrolling interests11 8 38 23 17 35 Income attributable to noncontrolling interests15 11 36 32 23 39 
Net realized investment gains (losses) (1)
Net realized investment gains (losses) (1)
83 98 (15)70 — N/M
Net realized investment gains (losses) (1)
(46)83 N/M(468)70 N/M
Amortization of acquired intangible assetsAmortization of acquired intangible assets(503)(496)(1)(998)(994)— Amortization of acquired intangible assets(501)(503)— (959)(998)4 
Special itemsSpecial items(26)(144)82 (159)(395)60 Special items(30)(26)(15)(82)(159)48 
Income before income taxesIncome before income taxes$1,898 $2,289 (17)%$3,411 $3,686 (7)%Income before income taxes$1,985 $1,898 5 %$3,534 $3,411 4 %
(1)Includes the Company's share of certain realized investment results of its joint ventures reported in the International MarketsCigna Healthcare segment using the equity method of accounting.

For further analysis and explanation of each segment’ssegment's results, see the “Segment Reporting”"Segment Reporting" section of this MD&A.
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Consolidated Results of Operations (GAAP basis)Consolidated Results of Operations (GAAP basis)Consolidated Results of Operations (GAAP basis)
Three Months Ended
June 30,		Six Months Ended
June 30,		Three Months Ended
June 30,		Six Months Ended
June 30,
(Dollars in millions)(Dollars in millions)20212020% Change20212020% Change(Dollars in millions)20222021% Change20222021% Change
Pharmacy revenuesPharmacy revenues$30,047 $26,564 13 %$58,072 $51,662 12 %Pharmacy revenues$31,972 $30,047 6 %$62,669 $58,072 8 %
PremiumsPremiums10,323 10,406 (1)20,537 21,246 (3)Premiums10,426 10,323 1 20,782 20,537 1 
Fees and other revenuesFees and other revenues2,451 2,072 18 4,792 4,250 13 Fees and other revenues2,757 2,451 12 5,295 4,792 10 
Net investment incomeNet investment income310 223 39 701 576 22 Net investment income325 310 5 739 701 5 
Total revenuesTotal revenues43,131 39,265 10 84,102 77,734 8 Total revenues45,480 43,131 5 89,485 84,102 6 
Pharmacy and other service costsPharmacy and other service costs29,001 25,611 13 56,236 49,801 13 Pharmacy and other service costs31,150 29,001 7 60,963 56,236 8 
Medical costs and other benefit expensesMedical costs and other benefit expenses8,484 7,112 19 16,489 15,434 7 Medical costs and other benefit expenses8,192 8,484 (3)16,460 16,489 — 
Selling, general and administrative expensesSelling, general and administrative expenses2,996 3,407 (12)6,275 6,805 (8)Selling, general and administrative expenses3,256 2,996 9 6,555 6,275 4 
Amortization of acquired intangible assetsAmortization of acquired intangible assets503 496 1 998 994 — Amortization of acquired intangible assets501 503 — 959 998 (4)
Total benefits and expensesTotal benefits and expenses40,984 36,626 12 79,998 73,034 10 Total benefits and expenses43,099 40,984 5 84,937 79,998 6 
Income from operationsIncome from operations2,147 2,639 (19)4,104 4,700 (13)Income from operations2,381 2,147 11 4,548 4,104 11 
Interest expense and otherInterest expense and other(298)(374)20 (612)(765)20 Interest expense and other(301)(298)(1)(600)(612)2 
Debt extinguishment costsDebt extinguishment costs(10)(14)29 (141)(199)29 Debt extinguishment costs— (10)N/M— (141)N/M
Net realized investment gains (losses)Net realized investment gains (losses)59 38 55 60 (50)N/MNet realized investment gains (losses)(95)59 N/M(414)60 N/M
Income before income taxesIncome before income taxes1,898 2,289 (17)3,411 3,686 (7)Income before income taxes1,985 1,898 5 3,534 3,411 4 
Total income taxesTotal income taxes422 529 (20)764 737 4 Total income taxes413 422 (2)764 764 — 
Net incomeNet income1,476 1,760 (16)2,647 2,949 (10)Net income1,572 1,476 7 2,770 2,647 5 
Less: Net income attributable to noncontrolling interestsLess: Net income attributable to noncontrolling interests9 6 50 19 14 36 Less: Net income attributable to noncontrolling interests13 9 44 28 19 47 
Shareholders' net incomeShareholders' net income$1,467 $1,754 (16)%$2,628 $2,935 (10)%Shareholders' net income$1,559 $1,467 6 %$2,742 $2,628 4 %
Consolidated effective tax rateConsolidated effective tax rate22.2 %23.1 %(90)bps22.4 %20.0 %240 bpsConsolidated effective tax rate20.8 %22.2 %(140)bps21.6 %22.4 %(80)bps
Medical customers (in thousands)Medical customers (in thousands)Medical customers (in thousands)17,806 16,921 5 %
U.S. Medical15,244 15,415 (1)%
International Markets1,708 1,668 2 
Total16,952 17,083 (1)%
Reconciliation of Shareholders’ Net Income (GAAP) to Adjusted Income from Operations
Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from OperationsReconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations
Dollars in MillionsDiluted Earnings Per ShareDollars in MillionsDiluted Earnings Per Share
Three Months Ended
June 30,		Six Months Ended
June 30,		Three Months Ended
June 30,		Six Months Ended
June 30,		Three Months Ended
June 30,		Six Months Ended
June 30,		Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020202120202021202020222021202220212022202120222021
Shareholders’ net income$1,467 $1,754 $2,628 $2,935 $4.25 $4.73 $7.54 $7.88 
Shareholders' net incomeShareholders' net income$1,559 $1,467 $2,742 $2,628 $4.90 $4.25 $8.57 $7.54 
After-tax adjustments required to reconcile to adjusted income from operationsAfter-tax adjustments required to reconcile to adjusted income from operationsAfter-tax adjustments required to reconcile to adjusted income from operations
Net realized investment (gains) losses (1)
Net realized investment (gains) losses (1)
(70)(88)(57)(11)(0.20)(0.24)(0.16)(0.03)
Net realized investment (gains) losses (1)
16 (70)371 (57)0.05 (0.20)1.16 (0.16)
Amortization of acquired intangible assetsAmortization of acquired intangible assets388 376 776 685 1.12 1.02 2.22 1.84 Amortization of acquired intangible assets383 388 739 776 1.20 1.12 2.31 2.22 
Special itemsSpecial itemsSpecial items
Integration and transaction-related costsIntegration and transaction-related costs26 14 63 36 0.08 0.04 0.20 0.10 
Charge for organizational efficiency planCharge for organizational efficiency plan17 — 17 — 0.05 — 0.05 — 
Charges (benefits) associated with litigation mattersCharges (benefits) associated with litigation matters(20)— (20)(21)(0.06)— (0.06)(0.06)
Debt extinguishment costsDebt extinguishment costs9 11 110 151 0.03 0.03 0.32 0.41 Debt extinguishment costs— 9 — 110 — 0.03 — 0.32 
Integration and transaction-related costs14 99 36 173 0.04 0.27 0.10 0.46 
Charges associated with litigation matters— — (21)19 — — (0.06)0.05 
Charge for organizational efficiency plan— — — 24 — — — 0.06 
Contractual adjustment for a former client— — — (66)— — — (0.18)
Total special itemsTotal special items23 110 125 301 0.07 0.30 0.36 0.80 Total special items23 23 60 125 0.07 0.07 0.19 0.36 
Adjusted income from operationsAdjusted income from operations$1,808 $2,152 $3,472 $3,910 $5.24 $5.81 $9.96 $10.49 Adjusted income from operations$1,981 $1,808 $3,912 $3,472 $6.22 $5.24 $12.23 $9.96 
(1)Includes the Company's share of certain realized investment results of its joint ventures reported in the International MarketsCigna Healthcare segment using the equity method of accounting.
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COVID-19 UpdateRecent Events
Cigna
Inflation
The United States economy continues to closely monitorbe impacted by rising inflation. We have not experienced material impacts from inflation on our results of operations or cash flows for the evolving dynamics of the COVID-19 pandemic including the evolving variants,three and remains focused on the safety and service of our customers, clients, employees and partners.six months ended June 30, 2022. We continue to take steps to increase vaccinations by enabling, educatingmonitor our operations, including vendor costs, health care provider costs and encouraging vaccine acceptance. We launched the Community of Immunity initiative to engage communities where we livedrug pricing for any inflationary impacts, and work. We are offering onsite vaccinations for clients that have Employer Worksite Health Centers. To help enable the vaccination of seniors age 65+ in America’s most at-risk, underserved communities,believe we are participating in the industry Vaccine Community Connectors (VCC) initiative.
These efforts are part of Cigna’s broad range of initiativesprepared to encourage and expand accessrespond to COVID-19 vaccines, including transportation to vaccine appointments at no cost for most Medicare Advantage customers, paid time off for Cigna employees to get vaccinated and an incentive award for employees enrolledinflationary pressures. For further information regarding risks we encounter in our medical plan who are fully vaccinated.business due to economic conditions including inflationary pressures, see "Risk Factors" contained in Part I, Item 1A of our 2021 Form 10-K.

To help meet growing mental
Russian Invasion of Ukraine
The war in Ukraine has significantly affected individuals, economic activity and financial markets on a global scale. Cigna does not have operations or employees in Ukraine or Russia and serves a limited number of customers and clients in these countries. We have not experienced significant impacts to date on our investment portfolio, financial position, or results of operations. For a more complete discussion of the risks we encounter in our business, see "Risk Factors" contained in Part I, Item 1A of our 2021 Form 10-K.
COVID-19
Cigna's commitment to the health, needs exacerbated bywell-being and peace of mind of our employees and the people we serve remains our focus as the pandemic Cigna continuesenvironment evolves. We continue to expand the innovative behavioral health services availableleverage our resources, expertise, data and actionable intelligence to its customers. Beginning in April 2021, Cigna's behavioral health customers with commercial health care plans have access to in-network, on-demand behavioral health coaching, therapy and psychiatry services. Cigna also continues to provide supportive resources for allassist customers, clients and communities for managing anxiety, fear, stress and improving resiliency during COVID-19.
The COVID-19 pandemic has pervasively impacted the economy, financial markets and the global health care delivery systems. For the second quarter of 2021, COVID-19 impacts are most notable in our U.S. Medical segment with net unfavorable COVID-19 related impacts as compared with the same period in 2020 when we experienced the most significant reduction to consumption of medical care, a portion of which was deferred care. The unfavorable COVID-19 related impacts include the resumption of medical care to near pre-COVID-19 levels during the second quarter of 2021, increased direct costs of COVID-19 testing, treatment and vaccines in 2021, lower risk adjusted revenues in our Medicare Advantage business and increased disenrollment resulting from the economic effects of the pandemic. These impacts were partially offset by the absence of the premium relief programs for clients implemented in the second quarter of 2020 in response to significantly lower than historical utilization as individuals deferred care due to the COVID-19 pandemic. As compared with the three months ended March 31, 2021 the net unfavorable impacts of COVID-19 increased reflecting less deferral of care, partially offset by lower direct costs for testing and treatment.
We continue to execute our business continuity plans over our operations such as optimizing purchasing volume across the pharmaceutical supply chain in order to mitigate risk associated with prescription drug supply.providers throughout this time.
The situation surrounding COVID-19 remains fluid with continued uncertainty and a wide range of potential outcomes. We continue to actively manage our response and assess impacts to our financial position and operating results, as well as mitigate adverse developments in our business. There continues to be elevated uncertainty surrounding the pace, duration and extent of the COVID-19 pandemic and its related impacts — including the vaccination efforts and new COVID-19 variants — on our results for the remainder of 2021 and beyond. We believe that such financial results may continue to be impacted by, among other things, vaccine related costs, higher medical costs to treat those affected by the virus, lower customer volumes due to elevated unemployment, lower risk adjustment revenue due to disrupted care impeding appropriate documentation of customer risk profiles in our Medicare Advantage business, the pace at which costs return as well as the severity of costs for those who had previously deferred care, the potential for future deferral of care, or volatility in the economic markets.
Cigna has taken actions to enhance our liquidity that, combined with our other sources of liquidity described in the "Liquidity and Capital Resources Outlook" section below, and our current projections for operating cash flows, we believe are sufficient to support our operations and meet our obligations.
Segment results are discussed further in the "Segment Reporting" section of this MD&A and discussion of the impact of COVID-19 on our investment portfolio and related considerations regarding our investment outlook can be found in Note 9 to the Consolidated Financial Statements and in the "Investment Assets" discussion of this MD&A.
For further information regarding the potential impact of COVID-19 on the Company, see “Risk Factors”"Risk Factors" contained in Part I, Item 1A of our 20202021 Form 10-K.
Commentary: Three and Six Months Ended June 30, 20212022 versus Three and Six Months Ended June 30, 20202021
The commentary presented below, and in the segment discussions that follow, compare results for the three and six months ended June 30, 20212022 with results for the three and six months ended June 30, 2020. Unless otherwise specified, commentary applies to both the three and six month periods.
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2021.
Shareholders’Shareholders' net income decreased, driven by lowerincreased, reflecting strong growth in adjusted income from operations (see(as discussed below) and, for the six months ended June 30,month period, the absence in 2022 of certaindebt extinguishment costs incurred in 2021. These favorable tax benefits reportedeffects were partially offset by higher realized investment losses primarily due to unfavorable mark-to-market adjustments on investments in the first quarter of 2020.2022.
Adjusted income from operationsdecreased, increased, primarily resulting from lower earnings in U.S. Medical due to net unfavorable COVID-19 related impacts. See the "U.S. Medical segment" section of this MD&A for further information. The absence of earnings due to the sale of the Group Disabilityimproved results in Cigna Healthcare, primarily reflecting lower medical care ratios and Life business also contributed to the decrease. These declines were partially offset by increased earnings specialty contributions, and in the Evernorth, segment primarily attributable to effective management of supply chainreflecting continued contract affordability improvements and business growth.
Medical customers declined slightly,increased, reflecting a lower customer base in our National Accounts and Middle Markets segments including disenrollment resulting from the economic impacts of the COVID-19 pandemic; partially offset by growth in our Middle Market, Select Individual and Medicare Advantage businesses.International Health market segments. See "Cigna Healthcare segment" section of this MD&A for discussion of an update to the definitions of U.S. Commercial's market segments.
Pharmacy revenues increased, reflecting strong business and customer growth.higher specialty claims volume due in part to Evernorth's collaboration with Prime Therapeutics, as well as increased prices, primarily due to inflation on branded drugs. See the "Evernorth segment" section of this MD&A for further discussion of Pharmacy revenues.discussion.
Premiums were lower,higher, reflecting the effect of the sale of the Group Disability and Life business. This effect was partially offset by an increase in U.S. Medical premiums resulting from the absence of premium relief programs implemented in the second quarter of 2020 in response to deferred care due to the COVID-19 pandemic, increased customers in our insured businessesspecialty contributions and higher premium rates due to anticipated underlying medical cost trend.trend, partially offset by the disposition of the Medicaid business. See "Cigna Healthcare segment" section of this MD&A for further discussion.
Fees and other revenues increased, primarily driven byreflecting customer growth in Evernorth's pharmacy services business.from our Pharmacy Rebate Program services. See "Evernorth segment" section of this MD&A for further discussion.
Net investment income increased primarily due to strong returns on our partnership investments, partially offset by lower average assets due to the sale of the Group Disability and Life business.investments. See the "Investment Assets" section of this MD&A for further discussion.
41

Pharmacy and other service costs increased, reflecting strong business and customer growth.higher specialty claims volume due in part to Evernorth's collaboration with Prime Therapeutics, as well as increased prices, primarily due to inflation on branded drugs.
Medical costs and other benefit expenses increased, primarilydecreased for the three and six months ended June 30, 2022, reflecting the absence of deferred care as well as higher costs of COVID-19 treatment, testing and vaccines and customer growthreduced customers in our insured businesses. These unfavorable effects wereU.S. Government business, primarily resulting from the disposition of the Medicaid business. Decreases also reflect lower direct COVID-19 costs and are partially offset by the salemedical cost trend. See "Cigna Healthcare segment" section of the Group Disability and Life business.this MD&A for further discussion.
Selling, general and administrative expenses decreased, primarily resulting from the sale of the Group Disability and Life business, lower integration and transaction-related costs, the elimination of the health insurance industry tax and the impact of favorable litigation developments.
Interest expense and other decreased due to lower levels of average outstanding debt resulting from debt repayments.
Debt extinguishment costs were lower because the debt repaid in 2021 had lower interest rates than the debt repaid in 2020.
Realized investment results significantly improved for the six months ended June 30, 2021 compared with the same period last year due to favorable market value adjustments on equity securities in 2021 compared with 2020 and lower credit loss reserves on debt securities.
Effective tax rate. The decreaseincreased for the three months ended June 30, 20212022, compared with the same period last year, primarily reflectsdue to the repealabsence of favorable litigation developments recorded in the nondeductible health insurance industry taxsecond quarter of 2021 and, to a lesser extent, an increase in 2021.expenses associated with business growth. For the six months ended June 30, 2021,2022, the increase was primarily driven by expenses associated with business growth.
Interest expense and other was essentially flat.
Debt extinguishment costs declined as no debt was retired early in the first six months of 2022.
Realized investment results were lower, primarily due to unfavorable mark-to-market adjustments on investments in 2022. See Note 11 to the Consolidated Financial Statements for further discussion.
The effective tax rate was higher than the same period last year, decreased, driven by recognitionfavorable results relative to our foreign operations and for the six months ended June 30, 2022 the favorable impact of certain incremental federal and state tax benefits in the first quarterremeasurement of 2020,deferred taxes, partially offset by the repealabsence of the nondeductible health insurance industry taxfavorable impact of non-recurring items recorded in 2021.
Developments

Kaiser Permanente
In April 2022, we entered into a five-year agreement with Kaiser Permanente aimed at delivering increased convenience, affordability and expanded access to high-quality care for Kaiser Permanente members. Initially, the agreement will focus on providing Kaiser Permanente and its members access to:

•Cigna's Preferred Provider Organization ("PPO") provider network for Kaiser Permanente members who need urgent or emergency care and are traveling outside of Kaiser Permanente's service areas, and
•specialty pharmacy services through Evernorth's Accredo specialty pharmacy and Evernorth's CuraScript SD.

The agreement has the potential to extend in additional areas.

Organizational Efficiency Plan
As discussed in Note 15 to the Consolidated Financial Statements, during the fourth quarter of 2021, the Company approved a strategic plan to drive operational efficiencies. We believe this plan, coupled with the divestiture of the international life, accident and supplemental health benefits businesses (described below), will further leverage the Company's ongoing growth to drive operational efficiency through enhancements to organizational structure and increased use of automation and shared services. In connection with these plans, Cigna updated its reporting segments to align with the new business reporting structure and recognized a charge in the fourth quarter of 2021 in the amount of $168 million, pre-tax ($119 million, after-tax).

As previously anticipated, during the second quarter of 2022, the Company updated its strategic plan, primarily for severance costs, and recognized a charge in the amount of $22 million, pre-tax ($17 million, after-tax).

As a result of our Organizational Efficiency Plan, we expect to realize annualized after-tax savings of $184 million. A substantial amount of the savings is expected to be realized in 2022. See Note 15 to the Consolidated Financial Statements for further information regarding our organizational efficiency charge.

Sale of International Life, Accident and Supplemental Benefits Businesses in Six Countries
On July 1, 2022, we completed the sale of our life, accident and supplemental benefits businesses in six countries (Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand) to Chubb INA Holdings, Inc. ("Chubb") for approximately $5.4 billion in cash (the "Chubb Transaction"); as previously agreed, we excluded our interest in a joint venture in Türkiye from the Chubb Transaction. We aggregated and classified the assets and liabilities of these businesses as held for sale in our Consolidated Balance
43
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DevelopmentsSheets as of June 30, 2022 and December 31, 2021. See Note 5 to the Consolidated Financial Statements for further information on the classification of these businesses as held for sale. The "Liquidity and Capital Resources" section of this MD&A provides further information on the impact of this transaction to liquidity. See "Other Operations" section of this MD&A for further information on the results of these businesses.

Purchase of MDLIVE
As discussed in Note 4 to the Consolidated Financial Statements, on April 19, 2021, Cigna's Evernorth segment completed the acquisition of MDLIVE, Inc. ("MDLIVE"), a 24/7 virtual care platform.platform (the "MDLIVE Acquisition") for $2.0 billion cash consideration. The acquisition of MDLIVE will enableenables Evernorth to continue expanding access to virtual care and delivering a more affordable, convenient and connected care experience for consumers. The “Liquidity and Capital Resources” section of this MD&A provides discussion of the impact of this transaction to liquidity.

Sale of Group Disability and Life Business
As discussed in Note 4 to the Consolidated Financial Statements, Cigna sold its U.S. Group Disability and Life business to New York Life Insurance Company for $6.2 billion on December 31, 2020. The “Liquidity and Capital Resources” section of this MD&A provides discussion of the use of proceeds from this divestiture.

RegulationMedicare Star Quality Ratings ("Star Ratings")
The "Business - Regulation" section of our 2020 Form 10-K provides a detailed description of The Patient Protection and Affordable Care Act (“ACA”) provisions and other legislative initiatives that impact our businesses, including regulations issued by the Centers for Medicare & Medicaid Services (“CMS”("CMS") uses a Star Rating system to measure how well Medicare Advantage ("MA") plans perform, scoring how well plans perform in several categories, including quality of care and customer service. Star Ratings range from one to five stars. CMS recognizes plans with Star Ratings of four stars or greater with quality bonus payments and the Departmentsability to offer enhanced benefits. Approximately 87% of the Treasuryour MA customers were in four star or greater plans for bonus payments received in 2021 and Health and Human Services. Our businesses continue to operateapproximately 89% were in a dynamic environment, and the laws and regulations applicable to us, including the ACA, continuefour star or greater plans for bonus payments to be subjectreceived in 2022; we expect this percentage to legislative, regulatorydecrease to 85% for bonus payments to be received in 2023 based upon the mix of new and judicial challenges.
The Patient Protection and Affordable Care Act (ACA)existing MA plans.
ACA Litigation:
 As described in
Medicare Advantage Rates
On April 4, 2022, CMS released the “Business - Regulation” section of our 2020 Form 10-K, a federal district court ruled thatfinal Calendar Year 2023 Medicare Advantage Capitation Rates and Part C and Part D Payment Policies (the "2023 Final Notice"). While the “individual mandate” in2023 Final Notice rates are modestly higher than the ACA is unconstitutional and thatadvance notice rates (previously released on February 2, 2022), we do not expect the entire law must be struck down. On appeal, the Court of Appeals for the Fifth Circuit agreed that the “individual mandate” is unconstitutional but ordered the district courtfinal rates to reexamine whether the other provisions of the ACA can remain in effect, thereby leaving in doubt whether the entire ACA is unconstitutional until there is a final judicial determination on appeal. The California-led states and the U.S. House of Representatives filed petitions seeking to appeal the Fifth Circuit's ruling to the U.S. Supreme Court. The case was argued before the Supreme Court on November 10, 2020. On June 17, 2021, the Supreme Court issued its decision, upholding the ACA in its entirety. There are no changes to our business as a result of the decision.
Cost-Sharing Reduction Subsidies: The ACA provides for cost-sharing reductions that offset the amount that qualifying customers pay for deductibles, copays and coinsurance. The federal government stopped funding insurers for the cost-sharing reduction ("CSR”) subsidies in 2017. Certain insurers have sued the federal government for failure to pay cost-sharing reduction subsidies. In the first set of consolidated appeals, the Court of Appeals for the Federal Circuit issued a decision on August 14, 2020, finding that (i) the CSR reimbursement provision of the ACA imposes an obligation on the government to pay, but (ii) the insurers' damages must be reduced by the amount of additional premium tax credit payments that each insurer received as a result of the government’s termination of CSR payments. On February 19, 2021 two insurers filed a petition seeking Supreme Court review. On June 21, 2021, the Supreme Court declined the insurers’ petitions, which means the decision from the Court of Appeals for the Federal Circuit stands and will not be modified further. As described in Note 15 to the Consolidated Financial Statements, we filed a lawsuit in May 2020 against the federal government seeking payment of these subsidies. Our case remains pending. Our premium rates for the 2018, 2019, 2020 and 2021 plan years reflected a lack of government funding for cost-sharing reduction subsidies.
Corporate Tax Reform. Recent proposals related to corporate tax reform propose raising corporate tax rates, among other things. While it is unclear whether recent proposals will be enacted in their current form, the proposed increases in corporate tax rates could have a material impact on our futureconsolidated results of operations and, in the period of enactment, both our results of operations and financial condition. We will continue to monitor developments.
Medicare Part D Rebate Rule. As disclosed in the “Regulation” section of our 2020 Form 10-K, the United States Department of Health and Human Services (“HHS”) and the HHS Office of Inspector General (“HHS-OIG”) released a final rule in November 2020 which eliminated an anti-kickback regulatory safe harbor protection for price concessions, including rebates, that are offered by pharmaceutical manufacturers to plan sponsors or pharmacy benefit managers under the Medicare Part D program and created two new safe harbors. The two new safe harbors cover (i) price reductions by manufacturers to plan sponsors under Medicare Part D and Medicaid managed care organizations that are reflected at the time of dispense and (ii) fixed-fee service arrangements between manufacturers and pharmacy benefit managers. HHS previously delayed the elimination of the aforementioned regulatory safe harbor to January 1, 2023 and, in March 2021, HHS-OIG delayed the effective date for the two new safe harbors to January 1, 2023.
4443

LIQUIDITY AND CAPITAL RESOURCES
Liquidity
We maintain liquidity at two levels: the subsidiary level and the parent company level.
Cash requirements at the subsidiary level generally consist of:
•pharmacy, medical costs and other benefit payments;
•expense requirements, primarily for employee compensation and benefits, information technology and facilities costs;
•income taxes; and
•debt service.
Our subsidiaries normally meet their liquidity requirements by:
•maintaining appropriate levels of cash, cash equivalents and short-term investments;
•using cash flows from operating activities;
•matching investment durations to those estimated for the related insurance and contractholder liabilities;
•selling investments; and
•borrowing from affiliates, subject to applicable regulatory limits.
Cash requirements at the parent company level generally consist of:
•debt service;
•payment of declared dividends to shareholders;
•lending to subsidiaries as needed; and
•pension plan funding.
The parent company normally meets its liquidity requirements by:
•maintaining appropriate levels of cash and various types of marketable investments;
•collecting dividends from its subsidiaries;
•using proceeds from issuing debt and common stock; and
•borrowing from its subsidiaries, subject to applicable regulatory limits.
Dividends from our insurance, Health Maintenance Organization (“HMO”("HMO") and certain foreign subsidiaries are subject to regulatory restrictions. See Note 1920 to the Consolidated Financial Statements in our 20202021 Form 10-K for additional information regarding these restrictions. Most of Evernorth's subsidiariesthe Evernorth segment operations are not subject to regulatory restrictions regarding dividends and therefore provide significant financial flexibility to Cigna.

Cash flows for the six months ended June 30 were as follows:
Six Months Ended June 30,Six Months Ended June 30,
(In millions)(In millions)20212020(In millions)20222021
Operating activitiesOperating activities$797 $5,161 Operating activities$3,274 $797 
Investing activitiesInvesting activities$(3,024)$(506)Investing activities$(732)$(3,024)
Financing activitiesFinancing activities$(4,113)$(2,130)Financing activities$(3,087)$(4,113)

The following discussion explains variances in the various categories of cash flows for the six months ended June 30, 20212022 compared with the same period in 2020.2021.
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 flows from operating activities decreased, primarily driven by higherAs a result of the receipt of the delayed 2021 CMS Part D settlement, lower income tax payments including approximately $800M related to the gain on saleand timing of the Group Disability and Life business, timing ofpayments in accounts payable and accrued liabilities and increases in accounts receivable2022 compared to 2021, cash provided by operating activities increased.
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due to higher pharmacy claim volume and business growth. 2020 operating cash flow reflected the deferral of approximately $900M of income and payroll tax payments as permitted under the CARES Act and COVID-19 related Regulatory actions.
Investing and Financing activities
Cash flowsThe Company acquired MDLIVE and had higher net purchases of investments in 2021. These activities resulted in lower cash used in investing activities increased, primarily due to acquisition of MDLIVEin 2022.
The Company repurchased less stock and lower investment sale activity.
Cashrepaid less debt, which resulted in a reduction in cash used in financing activities increased, primarily due to higher stock repurchases and an increase in dividends paid. Cash used in financing activities also includes proceeds from debt issuances offset by the repayment of long-term debt and commercial paper borrowings.
We maintain a share repurchase program authorized by our Board of Directors, under which we may repurchase shares of our common stock from time to time. The timing and actual number of shares repurchased will depend on a variety of factors including price, general business and market conditions and alternate uses of capital. The share repurchase program may be effected through open market purchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, including through Rule 10b5-1 trading plans or privately negotiated transactions. The program may be suspended or discontinued at any time.
For the six months ended June 30, 2021, we repurchased 16.3 million shares for approximately $3.7 billion. From July 1, 2021 through August 4, 2021, we repurchased 1.7 million shares for approximately $400 million. Share repurchase authority was $3.8 billion as of August 4, 2021.2022.
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 flow from operations, some of which is subject to regulatory restrictions relative to the amount and timing of dividend payments to parent.the parent company. Dividends from U.S. regulated subsidiaries were $1.3 billion and $1.1$1.0 billion for the six months ended June 30, 20212022 and 2020, respectively. Nonregulated$1.3 billion for the six months ended June 30, 2021. Non-regulated subsidiaries also generate significant cash flow from operating activities, which is typically available immediately to the parent company for general corporate purposes.
We prioritize our use of capital resources to:
•Investinvest in capital expenditures, primarily related to technology to support innovative solutions for our 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 that are strategically and economically advantageous; and
•return capital to shareholders through share repurchases.

At June 30, 2021, our debt-to-capitalization ratio was 40.5%, an increase from 39.5% at December 31, 2020.
MDLIVE Acquisition. In April 2021, Cigna completed its acquisition of MDLIVE, Inc. We funded this acquisition with cash on hand and commercial paper borrowings.
Group Disability and Life Sale. In connection with the sale of this business that closed on December 31, 2020, we deployed approximately $3.0 billion to debt repayment by: (i) repaying in full our $1.4 billion 364-Day Term Loan Credit Agreement entered into on April 1, 2020, on December 31, 2020; (ii) redeeming in full the $1.0 billion aggregate principal amount of Cigna’s Senior Floating Rate Notes due 2021 on January 15, 2021 at a redemption price calculated in accordance with the terms and conditions of the indenture governing the Notes; and (iii) repaying certain balances of our outstanding commercial paper in January 2021.Funds Available
Commercial Paper Program. Cigna also maintains a commercial paper program and may issue short-term, unsecured commercial paper notes privately placed on a discount basis through certain broker dealersbroker-dealers at any time not to exceed an aggregate amount of $4.25 billion as of June 30, 2021.$5.0 billion. The net proceeds of issuances have been and are expected to be used for general corporate purposes. In July 2021, our commercial paper program size was increased to $5.0 billion.
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.
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As of June 30, 2022, Cigna's revolving credit agreements includeinclude: a $3.0 billion five-year revolving credit and letter of credit agreement that expires in April 2026;2027; a $1.0 billion three-year revolving credit agreement that expires in April 2024;2025; and a $1.0 billion 364-day revolving credit agreement that will expireexpires in April 2022.2023.
See Note 6 to the Consolidated Financial Statements for further information on our credit agreements and commercial paper program.
Our capital management strategy to support the liquidity and regulatory capital requirements of our foreign operations and certain international growth initiatives is to retain overseas a significant portion of the earnings generated by our foreign operations. This strategy does not materially limit our ability to meet our liquidity and capital needs in the United States.
Liquidity and Capital Resources Outlook
We maintain sufficient liquidity to meet our cash needs through our cash and cash equivalents balances, cash flows from operations, commercial paper program, credit agreements and the issuance of long-term debt and equity securities. As of June 30, 2021,2022, 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), $2.7$3.2 billion of remaining capacity under our commercial paper program and $4.2$4.6 billion in cash and short-term investments, approximately $700 million$0.7 billion of which was held by the parent company or certain nonregulatednon-regulated subsidiaries.
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 42.1% at June 30, 2022 and 41.7% at December 31, 2021.
We actively monitor our debt obligations and engage in issuance or redemption activities as needed in accordance with our capital management strategy. A description of our outstanding debt can be found in Note 6
Subsidiary Borrowings. In addition to the Consolidated Financial Statements.sources of liquidity discussed above, the parent company can borrow an additional $2.5 billion from its subsidiaries without further approvals as of June 30, 2022.
InUse of Capital Resources
Capital Expenditures. Capital expenditures for property, equipment and computer software were $612 million in the six months ended June 30, 2022 compared to $500 million in the six months ended June 30, 2021. We expect to continue to invest in technology that we believe will drive future growth. Anticipated capital expenditures will be funded primarily from operating cash flow.
Dividends. During the first and second quartersix months of 20212022, Cigna declared and paid quarterly cash dividends of $1.00$1.12 per share of Cigna common stock. See Note 8 to the Consolidated Financial Statements for further information on our dividend payments. On July 28, 202127, 2022, the
45

Board of Directors declared a quarterlythe third quarter cash dividend of $1.00$1.12 per share of Cigna common stock to be paid on September 23, 202122, 2022 to shareholders of record on September 8, 2021.7, 2022. Cigna 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 Cigna 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 of Directors may deem relevant.
Share repurchases. We maintain a share repurchase program authorized by our Board of Directors, under which we may repurchase shares of our common stock from time to time. The timing and actual number of shares repurchased will depend on a variety of factors including price, general business and market conditions and alternate uses of capital. The share repurchase program may be effected through open market purchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including through Rule 10b5-1 trading plans or privately negotiated transactions. The program may be suspended or discontinued at any time. In February 2022, the Board increased repurchase authority by an additional $6.0 billion.
We repurchased 9.7 million shares for approximately $2.3 billion during the six months ended June 30, 2022, compared to 16.3 million shares for approximately $3.7 billion during the six months ended June 30, 2021. From July 1, 2022 through August 3, 2022, we repurchased 10.4 million shares through the initial delivery under the accelerated share repurchase agreements ("ASR agreements") discussed below. Share repurchase authority was $5.3 billion as of August 3, 2022.
On June 15, 2022, as part of our existing share repurchase program, we entered into separate ASR agreements with Mizuho Markets Americas LLC and Morgan Stanley & Co. LLC (collectively, the "Counterparties") to repurchase $3.5 billion of common stock in aggregate. In July 2022, in accordance with the ASR agreements we remitted $3.5 billion to the Counterparties and received an initial delivery of 10.4 million shares of our common stock. We expect final settlement under the ASR agreements to occur in the fourth quarter of 2022. See Note 8 to the Consolidated Financial Statements for further information on our ASR agreements.

Strategic investments. In 2022, we committed an additional $450 million (which in aggregate represents a $700 million commitment) to Cigna Ventures, our strategic corporate venture fund. Cigna Ventures will use this funding to drive continuous health care transformation, innovation and growth.
Sale of international life, accident and supplemental benefits businesses in six countries. On July 1, 2022, we completed the sale of our life, accident and supplemental benefits businesses in six countries (Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand) to Chubb for approximately $5.4 billion in cash. Cigna estimates it will receive approximately $5.1 billion of net after-tax proceeds from this transaction and expects to utilize the after-tax proceeds primarily for share repurchases, with $3.5 billion used to fund the purchases of our common stock pursuant to the ASR agreements (as described above).

Risks to our liquidity and capital resources outlook include cash projections that may not be realized and the demand for funds could exceed available cash if our ongoing businesses experience unexpected shortfalls in earnings or we experience material adverse effects from one or more risks or uncertainties described more fully in the "Risk Factors" section of our 20202021 Form 10-K. 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. In addition
Supply Chain Financing Program
We facilitate a voluntary supply chain finance program (the "program") that provides suppliers the opportunity to sell their receivables due from us (i.e., our payment obligations to the sourcessuppliers) to a financial institution, on a non-recourse basis in order to be paid earlier than our payment terms provide. Cigna is not a party to the program and agrees to commercial terms with its suppliers independently of liquidity discussed above,their participation in the parent company can borrow an additional $1.2 billion from itsprogram. A supplier's participation in the program has no impact on our payment terms and Cigna has no economic interest in a supplier’s decision to participate in the program. The suppliers, at their sole discretion, determine which invoices, if any, to sell to the financial institution. No guarantees are provided by Cigna or any of our subsidiaries without further approvalsunder the program. We have been informed by the financial institution that $133 million as of June 30, 2021.2022 and $331 million as of December 31, 2021 of our outstanding payment obligations were voluntarily elected by suppliers to be sold to the financial institution under the program. These amounts are reflected in Accounts payable in Cigna's Consolidated Balance Sheets.
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 1518 to the Consolidated Financial Statements for discussion of various guarantees.
We have updated long-term debt obligations and purchase obligations as of During the six months ended June 30, 2021 which were previously provided2022, there was no material change to the contractual obligations reported in our 20202021 Form 10-K. Investment commitments are described in Note 9 to the Consolidated Financial Statements. There have been no material changes to other information presented in our table of guarantees and contractual obligations set forth in our 2020 Form 10-K.
(In millions, on an undiscounted basis)Total20212022 to 20232024 to 2025Thereafter
On-Balance Sheet
Long-term debt (1)
$48,805 $625 $5,876 $6,735 $35,569 
Off-Balance Sheet
Purchase Obligations$3,607 $1,230 $1,555 $545 $277 
(1)Amounts include scheduled interest payments, current maturities of long-term debt and finance leases.

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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
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•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 the 2020our 2021 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 20202021 Form 10-K. As of June 30, 2021,2022, there were no significant changes to the critical accounting estimates from what was reported in our 20202021 Form 10-K.
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SEGMENT REPORTING
The following section of this MD&A discusses the results of each of our segments.
On July 1, 2022, we completed the sale of our life, accident and supplemental benefits businesses in six countries (Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand) to Chubb for approximately $5.4 billion in cash. During the fourth quarter of 2021, in connection with the Chubb Transaction, we revised our business reporting structure and adjusted our segment reporting accordingly. Segment results for the three and six months ended June 30, 2021 have been restated to conform to the new segment presentation.
See Note 1 to 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 and special items. Cigna'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 1619 to the Consolidated Financial Statements for additional discussion of these metrics and a reconciliation of incomeIncome before income taxes to pre-tax adjusted income from operations, as well as a reconciliation of total revenuesTotal Revenues to adjusted revenues. Note 1619 to the Consolidated Financial Statements also explains that segment revenues include both external revenues and sales between segments that are eliminated in Corporate.
In these segment discussions, we also present “pre-tax"pre-tax adjusted margin,”" defined as pre-tax adjusted income (loss) from operations divided by adjusted revenues.

Evernorth Segment
Evernorth includes a broad range of coordinated and point solution health services includingand capabilities, as well as those from partners across the health care system, in pharmacy solutions, benefits management solutions,services, specialty pharmacy and care solutions and intelligence solutions.services. As described in the introduction to Segment Reporting, EvernorthEvernorth's performance is measured using the below metrics:
•Adjusted gross profitadjusted revenues and pre-tax adjusted income (loss) from operations, which excludeoperations.
The key factors that impact Evernorth's Pharmacy revenues and Pharmacy and other service costs are volume, mix of claims and price. These key factors are discussed further below. See Note 2 to the impactConsolidated Financial Statements included in our 2021 Form 10-K for additional information on revenue and cost recognition policies for this segment.
•As our clients' claim volumes increase or decrease, our resulting revenues and cost of special items.revenues correspondingly increase or decrease. Our gross profit, defined as Total Revenues less Pharmacy and other service costs, could also increase or decrease as a result of changes in purchasing discounts.
•AdjustedThe mix of claims generally considers the type of drug and distribution method used for dispensing and fulfilling. Types of drugs can have an impact on our pharmacy script volume is calculated by multiplyingrevenues, pharmacy and other service costs and gross profit, including amounts
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payable under certain financial and performance guarantees with our clients. In addition to the total non-specialty network scripts filled through 90-day programs and home delivery scripts by three and counting all other network and specialty scripts as one script.
•Generic fill rate is defined astypes of drugs, the total numbermix of generic scripts divided by the total overall scripts filled.claims (i.e., generic fill rate) also impacts our gross profit. Generally, higher generic fill rates reduce 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, higher generic fill rates generally have 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 dispensed from home delivery pharmacies as compared to acute medications that are primarily dispensed by pharmacies in our retail networks.
The key factors that impact Evernorth revenues and costs of revenues are volume, mix of claims and price. These key factors are discussed further below. See Note 3 to the Consolidated Financial Statements included in our 2020 Form 10-K for additional information on revenue and cost recognition policies for this segment.
•As our clients’ claim volumes increase or decrease, our resulting revenues and cost of revenues 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. Types of drugs can have an impact on our pharmacy revenues, pharmacy and other service costs and gross profit, including amounts payable under certain financial and performance guarantees with our clients. In addition to the types of drugs, the mix of generic claims (i.e., generic fill rate) also impacts our gross profit. Furthermore, our gross profit differs among network, home delivery and specialty distribution methods and can impact our profitability.
•Our client contract pricing is impacted by our ongoing ability to negotiate supply chainfavorable contracts for pharmacy network, pharmaceutical and wholesaler purchasing and manufacturer rebates. As we seek to improve the effectiveness of our integrated solutions for the benefit of our clients, we are continuously innovating and optimizing the supply chain.improving affordability. Our gross profit could also increase or decrease as a result of supply chaindrug purchasing contract initiatives implemented. Inflation 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 affectcontinues to be a significant driver of our revenues and cost of revenues.revenues in the current environment.
In this MD&A, we present revenues and gross profit, as well as adjusted revenues and adjusted gross profit, consistent with our segment reporting metrics, which exclude special items.
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Results of Operations
Financial SummaryFinancial SummaryThree Months Ended
June 30,		Change Favorable
(Unfavorable)		Six Months Ended June 30,Change Favorable
(Unfavorable)		Financial SummaryThree Months Ended
June 30,		Change Favorable
(Unfavorable)		Six Months Ended
June 30,		Change Favorable
(Unfavorable)
(Dollars in millions)(Dollars in millions)2021202020212020(Dollars in millions)2022202120222021
Total revenuesTotal revenues$32,592 $28,602 14%$63,212 $55,857 13 %Total revenues$34,863 $32,592 7%$68,449 $63,212 8 %
Less: Contractual adjustment for a former client— — N/M— (87)N/M
Adjusted revenues(1)
Adjusted revenues(1)
$32,592 $28,602 14$63,212 $55,770 13 
Adjusted revenues (1)
$34,863 $32,592 7%$68,449 $63,212 8 %
Gross profitGross profit$2,075 $1,781 17$3,918 $3,482 13 Gross profit$2,151 $2,075 4%$4,162 $3,918 6 %
Adjusted gross profit(1)
Adjusted gross profit(1)
$2,075 $1,781 17$3,918 $3,395 15 
Adjusted gross profit (1)
$2,151 $2,075 4%$4,162 $3,918 6 %
Pre-tax adjusted income from operationsPre-tax adjusted income from operations$1,413 $1,249 13%$2,636 $2,331 13 %Pre-tax adjusted income from operations$1,475 $1,413 4%$2,777 $2,636 5 %
Pre-tax adjusted marginPre-tax adjusted margin4.3 %4.4 %(10)bps4.2 %4.2 %— bpsPre-tax adjusted margin4.2 %4.3 %(10)bps4.1 %4.2 %(10)bps
Adjusted expense ratio (2)
Adjusted expense ratio (2)
1.9 %2.0 %(10)bps2.0 %2.0 %— bps
Three Months Ended June 30,Change Favorable
(Unfavorable)		Six Months Ended June 30,Change Favorable
(Unfavorable)
(Dollars and adjusted scripts in millions)2021202020212020
Selected Financial Information(1)
Pharmacy revenue by distribution channel
Adjusted network revenues$16,166 $13,866 17 %$31,304 $26,657 17 %
Adjusted home delivery and specialty revenues13,341 12,407 8 26,115 24,412 7 
Other revenues1,619 1,292 25 3,007 2,534 19 
Total adjusted pharmacy revenues$31,126 $27,565 13 %$60,426 $53,603 13 %
Pharmacy script volume
Adjusted network scripts(2)
339 293 16 %662 581 14 %
Adjusted home delivery and specialty scripts(2)
71 71 — 141 143 (1)
Total adjusted scripts(2)
410 364 13 %803 724 11 %
Generic fill rate
Network85.3 %88.4 %(310)bps86.3 %88.3 %(200)bps
Home delivery85.7 %85.1 %60 bps85.8 %85.0 %80 bps
Overall generic fill rate85.4 %88.0 %(260)bps86.2 %87.9 %(170)bps
Three Months Ended
June 30,		Change Favorable
(Unfavorable)		Six Months Ended
June 30,		Change Favorable
(Unfavorable)
(Dollars and adjusted scripts in millions)2022202120222021
Selected Financial Information
Pharmacy revenue by distribution channel
Adjusted network revenues (1)
$16,107 $16,166 — %$31,638 $31,304 1 %
Adjusted home delivery and specialty revenues (1)
15,268 13,341 14 29,967 26,115 15 
Other pharmacy revenues1,667 1,619 3 3,379 3,007 12 
Total adjusted pharmacy revenues (1)
$33,042 $31,126 6 %$64,984 $60,426 8 %
Adjusted fees and other revenues (1)
1,805 1,461 24 3,439 2,778 24 
Net investment income16 5 220 26 8 225 
Adjusted revenues (1)
$34,863 $32,592 7 %$68,449 $63,212 8 %
Pharmacy script volume (3)
Adjusted network scripts323 339 (5)%638 662 (4)%
Adjusted home delivery and specialty scripts69 71 (3)139 141 (1)
Total adjusted scripts392 410 (4)%777 803 (3)%
Generic fill rate (4)
Network87.6 %85.3 %230 bps87.4 %86.3 %110 bps
Home delivery85.8 %85.7 %10 bps85.6 %85.8 %(20)bps
Overall generic fill rate87.5 %85.4 %210 bps87.2 %86.2 %100 bps
(1)Amounts excludeTotal revenues and gross profit were equal to adjusted revenues and adjusted gross profit as there were no special items.items in the periods presented.
(2)Adjusted expense ratio is calculated as selling, general and administrative expenses as a percentage of adjusted revenues.
(3)Non-specialty network scripts filled through 90-day programs and home delivery scripts are multiplied by three. All other network and specialty scripts are counted as one script.
(4)Generic fill rate is defined as the total number of generic scripts divided by the total overall scripts filled.
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Three and Six Months Ended June 30, 20212022 versus Three and Six Months Ended June 30, 20202021
Adjusted network revenues.revenues The increase reflected higher claims volume, primarily due to our collaboration with Prime Therapeutics, andincreased for the six months ended June 30, 2022, reflecting increased prices due to inflation on branded drugs,drugs; partially offset by lower claims mix. Thevolume and a slight change in claims mix due to an increase in the generic fill raterate. Adjusted network revenues decreased for the three months ended, reflecting lower claims volume and a slight change in claims mix due to an increase in the generic fill rate; partially offset by increased when excluding the impact of COVID-19 vaccines.prices due to inflation on branded drugs.

Adjusted home delivery and specialty revenues.revenues The increase reflected higher prices, primarily due to inflation on branded drugs, as well asincreased, reflecting higher specialty claims volume due in part to our collaboration with Prime Therapeutics. This increase wasTherapeutics, as well as increased prices, primarily due to inflation on branded drugs. These increases were partially offset by slightly lower home delivery claims volume, primarily due to client mix and increased script volume in the first quarter of 2020 due to customers requesting advance prescriptions related to COVID-19 supply concerns and claims mix due to an increase in the generic fill rate.volume.

Other revenues.pharmacy revenues The increase reflectedincreased, reflecting higher volume from our CuraScript Specialty DistributionSD business.

Adjusted fees and other revenues increased, reflecting customer growth from our Pharmacy Rebate Program services and the acquisition and subsequent growth of the MDLIVE business.

Adjusted gross profit.profit and The increase reflected benefits from the effective management of supply chain, strong performance in specialty pharmacy services, customer growth and higher adjusted pharmacy script volumes, primarily due to our collaboration with Prime Therapeutics.
Pre-taxpre-tax adjusted income from operations.operations The increase reflected benefits from the effective management of supply chain, strong performance in specialty pharmacy services, customer growthincreased, reflecting continued contract affordability improvements and higher adjusted pharmacy script volumes, primarily due to our collaboration with Prime Therapeutics. Thisbusiness growth. The increase was partially offset by technology investments.strategic investments in expanding our services portfolio and digital capabilities as well as lower volume in our network and home delivery businesses. Pre-tax adjusted income from operations also increased due to expense favorability.
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The adjustedexpense ratio was flat, reflecting higher revenues as well as increased strategic investments in expanding our services portfolio and digital capabilities.
U.S. Medical
Cigna Healthcare Segment
U.S. MedicalCigna Healthcare includes Cigna’sCigna's U.S. Commercial, and U.S. Government and International Health businesses, thatwhich provide comprehensive medical and coordinated solutions to clients and customers to support whole-person health needs. U.S. Commercial products and services include medical, pharmacy, behavioral health, dental, vision, health advocacy programs and other products and services for insured and administrative services only ("ASO") clients.self-insured customers. U.S. Government solutions include Medicare Advantage, Medicare Supplement and Medicare Part D plans for seniors Medicaid plans and individual health insurance plans both on and off the public exchanges. International Health solutions include health care coverage in our international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations. As described in the introduction to Segment Reporting, performance of the U.S. MedicalCigna Healthcare segment is measured using adjusted revenues and pre-tax adjusted income from operations. Key factors affecting profitabilityresults 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 expensesmedical costs as a percentage of premiums (medical care ratio or “MCR”"MCR") for our insured commercial and government businesses; and
•selling, general and administrative expenseexpenses as a percentage of adjusted revenues (expense(adjusted expense ratio).
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Results of Operations
Financial SummaryThree Months Ended June 30,Change Favorable
(Unfavorable)		Six Months Ended June 30,Change Favorable
(Unfavorable)
(Dollars in millions)2021202020212020
Adjusted revenues$10,456 $9,237 13%$20,818 $19,097 9 %
Pre-tax adjusted income from operations$1,017 $1,523 (33)%$2,004 $2,722 (26)%
Pre-tax adjusted margin9.7 %16.5 %(680)bps9.6 %14.3 %(470)bps
Medical care ratio85.4 %70.5 %(1490)bps83.6 %74.5 %(910)bps
Expense ratio18.1 %23.1 %500 bps19.9 %22.4 %250 bps

Financial SummaryThree Months Ended June 30,Change Favorable
(Unfavorable)		Six Months Ended June 30,Change Favorable
(Unfavorable)
(Dollars in millions)2022202120222021
Adjusted revenues$11,337 $11,149 2%$22,729 $22,216 2 %
Pre-tax adjusted income from operations$1,240 $1,049 18 %$2,519 $2,091 20 %
Pre-tax adjusted margin10.9 %9.4 %150 bps11.1 %9.4 %170 bps
Medical care ratio80.7 %84.4 %370 bps81.1 %82.7 %160 bps
Adjusted expense ratio20.6 %18.9 %(170)bps20.6 %20.6 %— bps
Three and Six Months Ended June 30, 20212022 versus Three and Six Months Ended June 30, 20202021
Adjusted revenues increased for the three months and six months ended June 30, 2021 compared with the same periods2022, reflecting increases in 2020 reflecting customer growthU.S. Commercial partially offset by decreases in our Medicare Advantage and Individual businesses,U.S. Government. The increases in U.S. Commercial adjusted revenues reflects increased specialty contributions, higher premium rates due to anticipated underlying medical cost trend as well as customer growth. The decreases in U.S. Government adjusted revenues reflects the absencedisposition of the premium relief programs for clients implemented in the second quarter of 2020 and higher net investment income.Medicaid business.
Pre-tax adjusted incomeincome from operations decreased for the three months and six months ended June 30, 2021 compared with the same periods in 2020. The decreases are due to net unfavorable COVID-19 related impacts; partially offset by higher net investment income, the net effect of non-recurring items and the repeal of the health insurance industry tax. The unfavorable COVID-19 related impacts include the resumption of medical care to near pre-COVID-19 levels during the second quarter of 2021, increased direct costs of COVID-19 testing, treatment and vaccines in 2021, lower risk adjusted revenues in our Medicare Advantage business and increased disenrollment resulting from the economic effects of the pandemic. These impacts were partially offset by the absence of the premium relief programs for clients implemented in the second quarter of 2020 in response to significantly lower than historical utilization as individuals deferred care due to the COVID-19 pandemic. COVID-19 impacts for the remainder of 2021 may vary as discussed in the "COVID-19 Update" section of this MD&A.
The medical care ratio increased for the three months and six months ended June 30, 2021 compared with2022, reflecting increased contributions from U.S. Commercial, U.S. Government and International Health. These increases were primarily due to lower medical care ratios and increased specialty contributions in U.S. Commercial; partially offset by the same periodabsence of favorable non-recurring items recorded in 2020, reflecting COVID-19 related impacts and the repeal of the health insurance industry tax. In 2020, COVID-19 driven deferred utilization significantly outpaced incremental COVID-19 testing and treatment costs. In 2021, COVID-19 testing and treatment costs are outpacing deferral of care.2021.
The expensemedical care ratio decreased for the three months and six months ended June 30, 2022, primarily due to medical costs that have moderated since 2021, compared withincluding lower direct COVID-19 costs and effective execution in pricing and affordability initiatives, in U.S. Commercial as well as improved Medicare Advantage risk adjustment revenues. The decrease for the same periodssix months ended June 30, 2022 was partially offset by U.S. Government risk adjustment updates related to prior years that were recognized in 2020,the first quarter of 2022.
The adjusted expense ratio increased for the three months ended June 30, 2022, primarily reflecting the repeal of the health insurance industry tax, increased revenue and the impactabsence of favorable litigation developments.developments recorded in 2021. The adjusted expense ratio was flat for the six months ended June 30, 2022.
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Medical Customers
As of June 30,
(In thousands)20212020% Change
U.S. Commercial2,128 2,123 — %
U.S. Government1,484 1,415 5 %
Insured3,612 3,538 2 %
Service11,632 11,877 (2)%
Total15,244 15,415 (1)%

Our medical customer base decreased at June 30, 2021 compared with the same period in 2020, reflecting a lower customer base in our National Accounts and Middle Markets segments including disenrollment resulting from the economic impacts of the COVID-19 pandemic; partially offset by growth in our Select segment as well as our Individual and Medicare Advantage businesses.
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 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.

Effective in the second quarter of 2022, the Company updated its U.S. Commercial market segments as follows: the National segment comprises employers with 3,000 or more eligible employees, and the Middle Market segment comprises employers with 500 to 2,999 eligible employees, Taft-Hartley plans, and other groups. Previously, the National segment comprised multi-state employers with 5,000 or more eligible employees and the Middle Market segment comprised employers with 500 to 4,999 eligible employees, single-site employers with more than 5,000 employees, Taft-Hartley plans and other groups. There have been no updates to the Select (employers generally with 51 to 499 eligible employees) or Small Group (employers generally with 2 to 50 eligible employees) market segments.
As of June 30,
(In thousands)20222021% Change
Cigna Healthcare Medical Customers
Insured4,705 4,664 1 %
U.S. Commercial2,187 2,128 3 %
U.S. Government1,374 1,484 (7)%
International Health (1)
1,144 1,052 9 %
Services only13,101 12,257 7 %
U.S. Commercial12,465 11,632 7 %
U.S. Government5 — N/M%
International Health (1)
631 625 1 %
Total17,806 16,921 5 %
(1)International Health excludes medical customers served by less than 100% owned subsidiaries and customers that are part of the businesses sold pursuant to the Chubb Transaction.

Our medical customer base increased at June 30, 2022, reflecting growth in our Middle Market, Select and International Health market segments; partially offset by the disposition of the Medicaid business.

Unpaid Claims and Claim Expenses
(In millions)As of June 30, 2021As of December 31, 2020% Change
Unpaid claims and claim expenses – U.S. Medical$3,745 $3,184 18 %

(In millions)As of June 30, 2022As of December 31, 2021% Change
Unpaid claims and claim expenses – Cigna Healthcare$4,490 $4,261 5 %
Our unpaid claims and claim expenses liability was higher as of June 30, 2021 compared with December 31, 2020,2022, primarily due to stop loss seasonalityseasonality; partially offset by Medicare Part D invoice cycle timing and increases in our U.S. Government segment reflecting customer growth in our Medicare Advantage and Individual businesses.the disposition of the Medicaid business.

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International Markets Segment
As described in the introduction to Segment Reporting, performance 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 as a percentage of revenues (expense ratio and acquisition cost ratio); and
•the impact of foreign currency movements.
Results of Operations
Financial SummaryThree Months Ended June 30,Change
Favorable
(Unfavorable)		Six Months Ended June 30,Change
Favorable
(Unfavorable)
(Dollars in millions)2021202020212020
Adjusted revenues$1,558 $1,432 9%$3,130 $2,902 8 %
Pre-tax adjusted income from operations$234 $319 (27)%$496 $601 (17)%
Pre-tax adjusted margin15.0 %22.3 %(730)bps15.8 %20.7 %(490) bps
Loss ratio60.0 %49.9 %(1010)bps59.5 %53.9 %(560) bps
Acquisition cost ratio11.0 %11.7 %70 bps11.0 %10.4 %(60) bps
Expense ratio (excluding acquisition costs)18.3 %19.1 %80 bps18.0 %18.2 %20  bps

Three and Six Months Ended June 30, 2021 versus Three and Six Months Ended June 30, 2020
Adjusted revenues increased primarily due to favorable foreign currency movements, business growth and higher net investment income.
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Pre-tax adjusted income from operations decreased reflecting higher loss ratios, partially offset by higher net investment income and favorable foreign currency movements.
The segment’s loss ratio increased reflecting higher claims largely due to the impact of the COVID-19 pandemic, including the absence of the favorable impact of lower medical utilization in 2020 and the direct costs of COVID-19 testing and treatment.
The acquisition costratio decreased reflecting lower amortization expenses in Asia for the three months ended June 30, 2021. For the six months ended June 30, 2021, the acquisition cost ratio increased reflecting the absence of the favorable impact from a refinement to the accounting for acquisition costs in the first quarter of 2020, largely offset by lower amortization expenses in Asia.
The expense ratio (excluding acquisition costs) decreased mainly driven by lower spend across markets for the three months ended June 30, 2021. For the six months ended June 30, 2021, the expense ratio was essentially flat.
Other Items Related to International Markets Results
South Korea is the single largest geographic market for our International Markets segment. For the six months ended June 30, 2021, South Korea generated 39% of the segment’s adjusted revenues and 63% of the segment’s pre-tax adjusted income from operations.
Operations
Other Operations
Prior includes the International businesses sold to the sale of the Group Disability and Life businessChubb on December 31, 2020, Other Operations included Cigna’s Group Disability and Life business which offered group long-term and short-term disability and group life, accident, voluntary and specialty insurance products and services. Additionally, for 2021 and 2020, this segment includesJuly 1, 2022, Corporate Owned Life Insurance (“COLI”("COLI"), our interest in a joint venture in Türkiye and the Company’sCompany's run-off operations. As described in the introduction of Segment Reporting, performance of Other Operations is measured using adjusted revenues and pre-tax adjusted income from operations. Key factors affecting pre-tax adjusted income from operations are:
•premiums;
•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 SummaryThree Months Ended June 30,Change
Favorable
(Unfavorable)		Six Months Ended June 30,Change
Favorable
(Unfavorable)
(Dollars in millions)2021202020212020
Adjusted revenues$129 $1,328 (90)%$268 $2,667 (90)%
Pre-tax adjusted income from operations$13 $132 (90)%$37 $209 (82)%
Pre-tax adjusted margin10.1 %9.9 %20 bps13.8 %7.8 %600 bps

Financial SummaryThree Months Ended June 30,Change
Favorable
(Unfavorable)		Six Months Ended
June 30,		Change
Favorable
(Unfavorable)
(Dollars in millions)2022202120222021
Adjusted revenues$948 $990 (4)%$1,927 $1,995 (3)%
Pre-tax adjusted income from operations$233 $215 8 %$459 $446 3 %
Pre-tax adjusted margin24.6 %21.7 %290 bps23.8 %22.4 %140 bps
Three and Six Months Ended June 30, 20212022 versus Three and Six Months Ended June 30, 20202021
Adjusted revenues decreased primarily due to unfavorable foreign currency movements, largely offset by business growth and higher net investment income in the International businesses.
Pre-tax adjusted income from operations increased primarily due to higher earnings in the Run-off businesses and COLI.
Other Items Related to International Businesses Sold to Chubb
For the three months ended June 30, 2022, 84% of Other Operations' adjusted revenues and 85% of its pre-tax adjusted income from operations was associated with International businesses sold to Chubb on July 1, 2022. For the six months ended June 30, 2022, 84% of Other Operations' adjusted revenues and 88% of its pre-tax adjusted income from operations was associated with sold International businesses; as a result of the sale, Other Operations' adjusted revenues and pre-tax adjusted income from operations decreased due to the sale of the Group Disability and Life business on December 31, 2020. Because this business constituted the vast majority of the segment, we expect a substantial decline will decrease in adjusted revenues and adjusted income from operations in this segment in 2021 as compared to 2020.future periods.
Corporate
Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment and other operations), certain litigation matters, expense associated with our frozen pension plans, charitable contributions, severance, certain overhead and enterprise-wide project costs and intersegment eliminations
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for products and services sold between segments.
Financial SummaryFinancial SummaryThree Months Ended
June 30,		Change Favorable (Unfavorable)Six Months Ended June 30,Change Favorable (Unfavorable)Financial SummaryThree Months Ended
June 30,		Change Favorable (Unfavorable)Six Months Ended June 30,Change Favorable (Unfavorable)
(In millions)(In millions)2021202020212020(In millions)2022202120222021
Pre-tax adjusted (loss) from operations$(344)$(400)14 %$(698)$(805)13 %
Pre-tax adjusted loss from operationsPre-tax adjusted loss from operations$(401)$(344)(17)%$(744)$(698)(7)%

Three and Six Months Ended June 30, 20212022 versus Three and Six Months Ended June 30, 20202021
Pre-tax adjusted loss from operations was lower,increased, reflecting lower interest expense.an increase in operating expenses for enterprise-wide initiatives.

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INVESTMENT ASSETS
The following table presents our investment asset portfolio excluding separate account assets as of June 30, 20212022 and December 31, 2020.2021. Additional information regarding our investment assets is included in Notes 9, 10, 11, 12, 13 and 1214 to the Consolidated Financial Statements.
(In millions)(In millions)June 30,
2021		December 31, 2020(In millions)June 30,
2022		December 31, 2021
Debt securitiesDebt securities$18,162 $18,131 Debt securities$13,950 $16,958 
Equity securitiesEquity securities530 501 Equity securities836 603 
Commercial mortgage loansCommercial mortgage loans1,451 1,419 Commercial mortgage loans1,579 1,566 
Policy loansPolicy loans1,341 1,351 Policy loans1,325 1,338 
Other long-term investmentsOther long-term investments3,094 2,832 Other long-term investments4,107 3,574 
Short-term investmentsShort-term investments349 359 Short-term investments199 428 
TotalTotal$24,927 $24,593 Total21,996 24,467 
Investments classified as assets of businesses held for sale (1)
Investments classified as assets of businesses held for sale (1)
(4,518)(5,109)
Investments per Consolidated Balance SheetsInvestments per Consolidated Balance Sheets$17,478 $19,358 

(1) Investments related to the international life, accident and supplemental benefits businesses that are held for sale. See Note 5 to the Consolidated Financial Statements for additional information.
Investment Outlook
We continue to actively monitor current economic conditions driven by the pace of the pandemic recovery, recent geopolitical events and fiscal and monetary policy responses (including the resulting supply chain and labor market dynamics), and the portfolio impact of recent higher levels of both interest rates and inflation. 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. Based on our strategy to match the duration of invested assets to the duration of insurance and contractholder liabilities, we expect to hold a significant portion of these assets for the long-term. The below discussion addresses the strategies and risks associated with our various classes of investment assets. Although future declines in investment fair values resulting from interest rate movements and credit deterioration due to both investment-specific and the global economic uncertainties in the following discussion remain possible, we do not expect these losses to have a material adverse 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 on our balance sheet. Additional information regarding valuation methodologies, key inputs and controls is included in Note 1012 to the Consolidated Financial Statements. More detailed information about debt securities by type of issuer and maturity dates is included in Note 911 to the Consolidated Financial Statements.
The following table reflects our portfolio of debt securities by type of issuer as of June 30, 20212022 and December 31, 2020:2021:
(In millions)(In millions)June 30,
2021		December 31,
2020		(In millions)June 30,
2022		December 31,
2021
Federal government and agencyFederal government and agency$395 $456 Federal government and agency$353 $387 
State and local governmentState and local government167 167 State and local government145 171 
Foreign governmentForeign government2,500 2,511 Foreign government2,331 2,616 
CorporateCorporate14,623 14,562 Corporate10,754 13,266 
Mortgage and other asset-backedMortgage and other asset-backed477 435 Mortgage and other asset-backed367 518 
TotalTotal$18,162 $18,131 Total$13,950 $16,958 

Our debt securities portfolio increased slightlydecreased during the first six months of 2021ended June 30, 2022, reflecting net purchase activity, offset by a decrease in valuations due to increasing yields.driven by a significant rise in treasury rates and credit spreads, and net sales activity.
As of June 30, 2021, $15.62022, $12.0 billion, or 86% of the debt securities in our investment portfolio were investment grade (Baa and above, or equivalent) and the remaining $2.6$1.9 billion were below investment grade. The majority of the bonds that are below investment grade are rated at the higher end of the non-investment grade spectrum. These quality characteristics have not materially changed since the prior year and remain consistent with our investment strategy.
Investments in debt securities are diversified by issuer, geography and industry. On an aggregate basis, the debt securities portfolio continues to perform according to original investment expectations. However, due to the economic impacts of the COVID-19 pandemic, there are certain issuers, particularly within the aviation, energy and hospitality sectors, that are showing signs of distress, primarily in the form of requests for temporary covenant relief. There were no material unrealized losses in any of these sectors as of the reporting date. We continue to monitor the economic environment and its effect on our portfolio and consider the impact of various
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factors in determining the allowance for credit losses on debt securities, which is discussed in Note 9 to the Consolidated Financial Statements.
Foreign government obligations are concentrated in Asia, primarily South Korea and Taiwan, consistent with our risk management practice and local regulatory requirements of our international business operations. Debt securities include private placement assets of $6.0$4.3 billion. These investments are generally less marketable than publicly-traded bonds; however, yields on these investments tend to be higher than yields on 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.
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 investment expectations. Elevated global inflation rates experienced during 2022, as well as continuing supply chain disruptions have displaced the ongoing impacts of the COVID-19 pandemic as the primary risks that many of the issuers in our portfolio are facing. To date, most issuers have been successful in managing the cost escalation and product shortages without undue margin pressure. 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 Financial Statements.

Foreign government obligations are concentrated in Asia, primarily South Korea and Taiwan, consistent with our risk management practice and local regulatory requirements of our international business operations. We expect the amount of these foreign government obligations to decrease significantly upon the close of our sale of certain international businesses during the third quarter of 2022 as discussed in Note 5 to the Consolidated Financial Statements.

Commercial Mortgage Loans
As of June 30, 2021,2022, the $1.5$1.6 billion commercial mortgage loan portfolio consisted of approximately 45 loans that are in good standing. Our commercial mortgage loans are50 fixed rate loans, diversified by property type, location and borrower. 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 911 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 65% of the property’sproperty'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.
Our annual in-depth reviewWe assess the credit quality of our commercial mortgage loan investments is the primary mechanism for monitoring the overall quality rating of the mortgage portfolio. We completed the annual in-depthportfolio annually by reviewing each holding’s most recent financial statements, rent rolls, budgets, and relevant market reports. The review performed in the second quarter of 2021 that included an analysis of each underlying property’s most recent annual financial statements, rent rolls, operating plans, a physical inspection of the property and a review of applicable market reports. The results of this annual review2022 confirmed that theongoing strong overall credit quality of our portfolio remains strong and was generally in line with the previous year’s results.

COVID-19 has negatively impacted commercial real estate fundamentals and capital market activity with concentrated weakness in hotels and regional malls. Our mortgage loan portfolio is well diversified by property type and geography with no material exposure to hotels and no exposure to regional shopping malls. We continue to monitor the long-term impacts of COVID-19 on the office sector fundamentals due to growing headwinds:multiple headwinds that may impact future valuations: expanded remote workingwork 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., office and regional shopping malls). Our commercial mortgage loans secured byloan portfolio has no exposure to regional shopping malls and less than 30% exposure to office properties are in good standing.properties.

Other Long-term Investments
Other long-term investments of $3.1$4.1 billion as of June 30, 20212022 included investments in securities limited partnerships and real estate limited partnerships, direct investments in real estate joint ventures and other deposit activity that is required to support various insurance and health services businesses. The increase in other long-term investments of $0.5 billion since December 31, 2021 is primarily driven by net additional funding activity.activity and value creation in the underlying investments. These limited partnership entities typically invest in mezzanine debt or equity of privately-held companies and equity real estate. Given our subordinate position in the capital structure of these underlying entities, we assume a higher level of risk for higher expected returns. To mitigate risk, these investments are diversified across approximately 190200 separate partnerships and approximately 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%3% of our securities and real estate limited partnership portfolio.
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 manager of the investments. OurAccordingly, our net investment income increased significantly versus the first six months of 2020 driven by the performance of assets underlying our limited partnership investments. The broad recovery has resulted in strong corporate earnings and higher public and private asset valuations through the second quarter largely reflects the underlying financial information from the first quarter of 2021.2022. We expect continued volatility in private equity and real estate fund performance going forward as fair market valuations are adjusted to reflect market and portfolio transactions.

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We participate in an insurance joint venture in China with a 50% ownership interest. We account for this joint venture onunder the equity method of accounting and report our share of the net assets of $0.9$1.0 billion in Other assets. Our 50% share of the investment portfolio supporting the joint venture's businessliabilities is approximately $6.9$9.0 billion primarily invested in Chineseas of June 30, 2022. These investments were comprised of approximately 75% debt securities, including government and corporate and government debt securities diversified by issuer, industry and geography, as appropriate. To a lesser extent and consistent with its investment strategy, the joint venture is invested in Chinese equity investments comprised of approximately 50% equitygeography; 15% equities, including mutual funds, with the remainder
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invested in equity securities and private equity partnerships. partnerships; and 10% long-term deposits and policy loans. Approximately 1% of the joint venture's investment assets are exposed to private real estate property developers in the China market.We participate in the approval of the joint venture's investment strategy and continuously review its execution. There were no investments with a material unrealized loss as of June 30, 2021.
Investment Outlook
The general optimism globally fueled by business re-opening combined with unprecedented monetary and fiscal support from the U.S. government continue to support expectations for improved economic growth. U.S. treasury rates have increased from their historic lows during 2020, but they remain well below long-term historical averages. In addition, the wider market credit spreads experienced during 2020 have narrowed meaningfully, resulting in yields for investment grade assets that also remain well below historical averages. While this continues to pressure the income we earn on our fixed income investments, it has been more than offset by our security partnership results, which are reflecting improved growth prospects. We continue to actively monitor the economic impact of the pandemic, including slowing vaccinations and more transmissible variant COVID-19 cases spreading through the unvaccinated population, as well as fiscal and monetary responses, and their potential impact on the portfolio. We expect net investment income over the remainder of 2021 will reflect both the improved optimism within public and private markets for economic recovery, along with the potential for additional market volatility and portfolio impacts. 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 majority of our investments will continue to perform under their contractual terms. Based on our strategy to match the duration of invested assets to the duration of insurance and contractholder liabilities, we expect to hold a significant portion of these assets for the long-term. Although future declines in investment fair values resulting from interest rate movements 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 a material adverse effect on our financial condition or liquidity.2022.
MARKET RISK
Financial Instruments
Our assets and liabilities include financial instruments subject to the risk of potential losses from adverse changes in market rates and prices. Our primary market risk exposures are interest rate risk and foreign currency exchange rate risk. We encourage you to read this in conjunction with “Market"Market Risk – Financial Instruments”Instruments" included in the MD&A section of our 20202021 Form 10-K. AsDue primarily to decreases in the fair value of our debt securities and long-term debt since December 31, 2021, the effect of hypothetical changes in market rates or prices on the fair value of certain financial instruments has changed. In the event of a hypothetical 100 basis point increase in interest rates, the fair value of certain non-insurance financial instruments would decrease approximately $1.1 billion at June 30, 2021 there were no material changes2022 compared to $1.4 billion at December 31, 2021. Further, under the same hypothetical 100 basis point increase in interest rates scenario, the fair value of the Company's long-term debt would decrease approximately $2.0 billion at June 30, 2022 compared to approximately $2.9 billion at December 31, 2021. Changes in the fair value of our long-term debt do not impact our financial position or operating results.

After the Chubb Transaction we expect reductions in our risk exposures from those reportedto interest rates and foreign currency exchange rates. The impact of a hypothetical 100 basis point increase in our 2020 Form 10-K.interest rates on the fair value of certain non-insurance financial instruments of a $1.1 billion decrease cited above would decline to a $0.8 billion decrease excluding the businesses held for sale as of June 30, 2022. The impact of a hypothetical 10% strengthening in the U.S. dollar to foreign currencies excluding the businesses held for sale would be an insignificant amount as of June 30, 2022 as compared to a decrease of approximately $0.3 billion as of December 31, 2021.
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 Discussion and Analysis of Financial Condition and Results of Operations and is incorporated herein by reference.
Item 4. CONTROLS AND PROCEDURES
Based on an evaluation of the effectiveness of Cigna’sCigna's disclosure controls and procedures conducted under the supervision and with the participation of Cigna’sCigna's management (including Cigna’sCigna's Chief Executive Officer and Chief Financial Officer), Cigna's Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, Cigna’sCigna's disclosure controls and procedures are effective to ensure that information required to be disclosed by Cigna 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’sCommission's rules and forms and is accumulated and communicated to Cigna’sCigna's management, including Cigna’sCigna's Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Change in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended June 30, 20212022 that have materially affected, or are reasonably likely to materially affect, Cigna's internal 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 1518 to the Consolidated Financial Statements is incorporated herein by reference.
Item 1A. RISK FACTORS
For information regarding factors that could affect the Company's results of operations, financial condition and liquidity, see the risk factors discussed in Part I, Item 1A. “Risk Factors”"Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2020.2021.
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Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
The following table provides information about Cigna’sCigna's share repurchase activity for the quarter ended June 30, 2021:2022:
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)
April 1-30, 20211,638,971 $244.17 1,637,631 $2,665,792,351 
May 1-31, 2021589,053 $262.05 585,400 $2,512,374,692 
June 1-30, 20211,298,494 $240.66 1,298,100 $2,199,974,813 
Total3,526,518 $245.86 3,521,131 N/A
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)
April 1-30, 20221,519,764 $253.80 1,517,385 $9,444,290,632 
May 1-31, 20221,605,175 $260.50 1,604,582 $9,026,293,505 
June 1-30, 2022793,253 $256.02 792,733 $8,823,335,866 
Total3,918,192 $256.99 3,914,700 N/A
(1)Includes shares tendered by employees under the Company’sCompany's equity compensation plans as follows: 1) payment of taxes on vesting of restricted stock (grants and units) and strategic performance shares and 2) payment of the exercise price and taxes for certain stock options exercised. Employees tendered 1,3402,379 shares in April, 3,653593 shares in May and 394520 shares in June 2021.2022.
(2)Additionally, the Company maintains a share repurchase program authorized by the Board of Directors. Under this program, the Company may repurchase shares from time to time, depending on market conditions and alternate uses of capital. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions and alternate uses of capital. The share repurchase program may be effected through Rule 10b5-1 plans, open market purchases, each in compliance with Rule 10b-18 under the Exchange Act, or privately negotiated transactions. The program may be suspended or discontinued at any time and does not have an expiration date. In July 2021, the Board increased repurchase authority by an additional $2 billion. From July 1, 20212022 through August 4, 2021, the Company3, 2022, we repurchased 1.710.4 million shares for approximately $400 million, leavingthrough the initial delivery under 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 I, Item 2. Such repurchases were made pursuant to the Company's share repurchase program described above. Share repurchase authority at $3.8was $5.3 billion as of August 4, 2021.3, 2022.
(3)Approximate dollar value of shares is as of the last date of the applicable month.
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ITEMItem 6. EXHIBITS
INDEX TO EXHIBITS
NumberDescriptionMethod of Filing
10.1
Revolving Credit and Letter of Credit Agreement, dated as of April 29, 2021,28, 2022, with the banks named therein, JPMorgan Chase Bank, N.A.,as administrative agent, BofA Securities, Inc., Citibank, N.A., Morgan Stanley Senior Funding, Inc., MUFG Bank, LTD and Wells FargoSecurities,Fargo Securities, LLC, as joint lead arrangers and joint bookrunners
Filed by the registrant as Exhibit 10.1 to the Current Report on Form 8-K on April 30, 202129, 2022 and incorporated herein by reference.
10.2*Filed by registrant as Exhibit 10.1 to the Current Report on Form 8-K filed on May 3, 2021 and incorporated herein by reference.
10.3*Filed herewith.
31.1Filed herewith.
31.2Filed herewith.
32.1Furnished herewith.
32.2Furnished herewith.
101
The following materials from Cigna Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021,2022, formatted in inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Total Equity; (v) the Consolidated Statements of Cash Flows; and (vi) the Notes to the Consolidated Financial Statements
Filed herewith.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)Filed herewith.
* Management contracts and compensatory plans or arrangements.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: August 5, 20214, 2022
CIGNA CORPORATION
/s/ Brian C. Evanko
Brian C. Evanko
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and Authorized Signatory)

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