Cigna Group
For the period ended Mar 31, 2025. Filed May 2, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 2, 2025
CI$293.59-2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0001739940-24-000033
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsExecutive OverviewLiquidity and Capital ResourcesCritical Accounting EstimatesSegment ReportingEvernorth Health ServicesCigna HealthcareOther OperationsCorporateInvestment AssetsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0001739940-25-000021
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 214 previous paragraphs and 162 current paragraphs.
46 unchanged; 80 reworded; 34 added; 67 removed; 21 previous and 2 current paragraphs rearranged.
Tables are not compared: 15 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (34)
Current report
(1)Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
Current report
(1) For the three months ended March 31, 2024, due to the anti-dilutive effect resulting from the Shareholders' net loss for the period, the impact of potentially dilutive securities has been excluded from the calculation of weighted average shares for the calculation of diluted Shareholders’ net loss per share. Weighted average common shares outstanding used to calculate diluted Shareholders’ net loss per share for the three months ended March 31, 2024 were 286,465 thousand.
Current report
(2) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
Current report
(4) For the three months ended March 31, 2024, due to the adjusted income from operations, the number of weighted average shares used to calculate Adjusted income from operations per share reflects the dilution caused by outstanding stock options, unvested restricted stock grants and units, and strategic performance shares. Weighted average common shares outstanding used to calculate Adjusted income from operations per share for the three months ended March 31, 2024 were 289,717 thousand.
Current report
(1)Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
Current report
Shareholders' net income (loss)increased $1,600 million, primarily reflecting the absence of net investment losses recorded in 2024 ($1,875 million, after tax) driven by the impairment of equity securities.
Current report
Adjusted income from operations decreased 2%, primarily reflecting the absence of state tax benefits recorded in 2024 (-2%) and lower earnings in Cigna Healthcare (-3%), partially offset by higher earnings in Evernorth Health Services (+4%).
Current report
Medical customers decreased 6%, primarily reflecting the HCSC transaction (defined below).
Current report
Net investment income decreased 18%, primarily due to lower average assets.
Current report
Selling, general and administrative ("SG&A") expenses increased 14%, primarily reflecting costs associated with the Strategic Optimization Program (+5%) and the HCSC transaction costs (+5%).
Current report
Gain (loss) on sale of businesses primarily reflects the HCSC transaction. See the "Divestiture of Medicare Advantage and Related Businesses" section below and Note 5 to the Consolidated Financial Statements for further discussion of the HCSC transaction.
Current report
Investment results primarily reflect the absence of the impairment of VillageMD equity securities that was recorded in 2024.
Current report
Divestiture of Medicare Advantage and Related Businesses
Current report
On March 19, 2025, the Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies businesses within the U.S. Healthcare operating segment to Health Care Service Corporation ("HCSC," and such transaction, the "HCSC transaction"). The purchase price increased from $3.3 billion to $4.8 billion, subject to post-closing contractual adjustments, reflecting higher statutory surplus for the legal entities when conveyed to HCSC. The Company received $4.2 billion cash proceeds at closing. We expect receipt of the remaining $0.6 billion in the fourth quarter of 2025 upon HCSC's collection of amounts due from the Centers for Medicare and Medicaid Services ("CMS"). See Note 5 to the Consolidated Financial Statements for further information.
Current report
Investing Activities. The increase in cash provided by investing activities reflects the net proceeds on the HCSC transaction, partially offset by higher investment purchases.
Current report
Financing Activities. The increase in cash used in financing activities in 2025 is driven by the absence of debt issuances that occurred in 2024, partially offset by lower share repurchases and lower debt repayments.
Current report
Commercial Paper Program. There was no commercial paper outstanding balance as of March 31, 2025.
Current report
Short-Term and Long-Term Debt. During the three months ended March 31, 2025, the Company redeemed at par its $700 million 5.685% senior notes that were due March 2026. In April 2025, $900 million of 3.250% senior notes due April 2025 were repaid at maturity.
Current report
See the "Executive Overview" section in this MD&A for summarized financial results of each of our segments.
Current report
Pharmacy claim volume (utilization) is impacted by new clients or organic customer growth through the expansion of existing clients or through the loss of customers and business.
Current report
(2)Pre-tax margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues.
Current report
(3)SG&A expense ratio is calculated as segment selling, general and administrative expenses divided by adjusted revenues. See Note 17 to the Consolidated Financial Statements for further details.
Current report
On March 19, 2025, the Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies businesses within the U.S. Healthcare operating segment. See "Developments" for further discussion.
Current report
•Prior to the divestiture of our Medicare Advantage and related businesses to HCSC, the percentage of Medicare Advantage customers in bonus-eligible plans impacted the amount of quality bonus payments we receive.
Current report
•The SG&A expense ratio represents the segment's selling, general and administrative expenses divided by adjusted revenues.
Current report
(2)Pre-tax margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues.
Current report
(3)SG&A expense ratio is calculated as segment selling, general and administrative expenses divided by adjusted revenues. See Note 17 to the Consolidated Financial Statements for further details.
Current report
Pre-tax adjusted income from operations decreased 4%, or $53 million, primarily due to a higher MCR (-$285 million), partially offset by a lower SG&A expense ratio (+$160 million).
Current report
Themedical care ratio increased 230 bps, primarily due to higher medical costs, driven primarily by stop loss.
Current report
Total medical customers decreased 6%, primarily due to the HCSC transaction.
Current report
Our unpaid claims and claim expenses liability decreased 10%, driven by the HCSC transaction (-$983 million), partially offset by the change in stop loss reserves (+$570 million), primarily due to seasonality.
Current report
Pre-tax adjusted loss from operations was consistent with prior year.
Current report
Unconsolidated Subsidiary Investments Portfolio
Current report
As of March 31, 2025, there was no material change in our risk exposure as reported in our 2024 Form 10-K.
Removed paragraphs (67)
Previous report
See Note 1 to the Consolidated Financial Statements for a description of our segments.
Previous report
Summarized below are certain key measures of our performance by segment:
Previous report
(1)Includes Net realized investment losses/gains as presented in our Consolidated Statements of Income, as well as the Company's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
Previous report
(1)Includes Net realized investment losses/gains as presented in our Consolidated Statements of Income, as well as the Company's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
Previous report
(1)Includes Net realized investment losses/gains as presented in our Consolidated Statements of Income, as well as the Company's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
Previous report
Shareholders' net income decreased 48% and 51%, as higher earnings in Evernorth Health Services in both periods, as well as higher earnings in Cigna Healthcare for the nine months ended were more than offset by the impairment of VillageMD equity securities. See Note 11 to the Consolidated Financial Statements for further discussion of the impairment of VillageMD equity securities.
Previous report
Adjusted income from operations increased 5% and 8%, reflecting higher earnings in Evernorth Health Services in both periods, as well as higher earnings in Cigna Healthcare for the nine months ended.
Previous report
Medical customers decreased 3%, primarily reflecting a decrease in Individual and Family Plans customers.
Previous report
Net investment income decreased 74% and 21%, primarily due to establishing a $182 million impairment of dividend receivable in the third quarter of 2024 related to VillageMD accrued dividends.
Previous report
Selling, general and administrative expenses decreased 5% for the three months ended September 30, 2024, primarily driven by the absence of litigation settlements that occurred during the three months ended September 30, 2023 and increased 2% for the nine months ended September 30, 2024, primarily driven by strategic investments to support both business growth and continued advancement of our digital capabilities and solutions.
Previous report
Realized investment results for the three months and nine months ended September 30, 2024 primarily reflect the impairment of VillageMD equity securities. See Note 11 to the Consolidated Financial Statements for further discussion of the impairment of VillageMD equity securities.
Previous report
In January 2024, the Company entered into a definitive agreement to sell the Medicare Advantage, Medicare Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits and CareAllies businesses within the U.S. Healthcare operating segment to Health Care Service Corporation ("HCSC"), subject to applicable regulatory approvals and other customary closing conditions. The transaction is expected to close in the first quarter of 2025 and provide approximately $3.7 billion in transaction value, which consists primarily of the purchase price cash subject to adjustments to align with the final balance sheet of the divested businesses. See Note 5 to the Consolidated Financial Statements for further information.
Previous report
The Centers for Medicare and Medicaid Services ("CMS") uses a Star Rating system to measure how well Medicare Advantage ("MA") plans perform. Categories of measurement include 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 ability to offer enhanced benefits. On October 10, 2024, CMS announced Medicare Star Ratings for bonus payments to be received in 2026. We estimate 69% of our MA customers to be in four star or greater plans for bonus payments to be received in 2025 and 2026. See Part I, Item I. "Business - Regulation" section of our 2023 Form 10-K for further discussion of Star Ratings.
Previous report
On April 1, 2024, CMS released the final Calendar Year 2025 Medicare Advantage Program and Part D Payment Policies (the "2025 Final Notice"). The Final Notice reflects no change from the January 31, 2024 advance notice. We do not expect the final rates to have a material impact on our consolidated results of operations in 2025.
Previous report
•collecting dividends from its subsidiaries;
Previous report
The decrease in cash used in investing activities during the nine months ended September 30, 2024 was due to lower purchases of equity securities.
Previous report
The Company had higher share repurchases, including the completed ASR Agreements (described below), partially offset by net cash provided by debt financing activities in 2024.
Previous report
Commercial Paper Program. The Cigna Group maintains a commercial paper program and may issue short-term, unsecured commercial paper notes privately placed on a discount basis through certain broker-dealers at any time not to exceed an aggregate amount of $6.5 billion. The net proceeds of issuances have been and are expected to be used for general corporate purposes. The commercial paper program had approximately $1.6 billion outstanding at September 30, 2024.
Previous report
As of September 30, 2024, The Cigna Group's revolving credit agreements include: a $5.0 billion five-year revolving credit and letter of credit agreement that expires in April 2029; and a $1.5 billion 364-day revolving credit agreement that expires in April 2025.
Previous report
Debt Issuance and Debt Tender Offers. In February 2024, we issued $4.5 billion of new senior notes. The proceeds from this debt were used to complete the repurchase of a total of $1.8 billion in aggregate principal amount of existing senior notes tendered to the Company pursuant to cash tender offers. We used the remaining net proceeds to fund the repayment of our senior notes which matured in March 2024 and for general corporate purposes, which includes repayment of indebtedness and repurchases of shares of our common stock.
Previous report
In February 2024, as part of our share repurchase program, we entered into separate Accelerated Share Repurchase ("ASR") agreements to repurchase $3.2 billion of common stock in aggregate. The total number of shares of our common stock repurchased under the agreements was approximately 9.3 million. See Note 8 to the Consolidated Financial Statements for further information on our ASR agreements.
Previous report
◦We expect $0.3 billion of long-term debt payments (including scheduled interest payments) to be paid for the remainder of 2024.
Previous report
Our annual evaluations of goodwill and other intangible assets for impairments were completed during the third quarter of 2024. These evaluations were performed at the reporting unit level, based on discounted cash flow analyses or market data. The estimated fair value of each of our reporting units exceeded their carrying values by substantial margins.
Previous report
Management believes the current assumptions used to estimate amounts reflected in our Consolidated Financial Statements are appropriate. However, if actual experience significantly differs from the assumptions used in estimating amounts reflected in our Consolidated Financial Statements, the resulting changes could have a material adverse effect on our consolidated results of operations and in certain situations, could have a material adverse effect on liquidity and our financial condition.
Previous report
•Customer growth generally results in increased revenues and income from operations. This generally includes both organic customer growth through the expansion of existing business and new business, as well as higher volume in our specialty distribution services where we deliver pharmaceuticals and medical supplies directly to health care providers, clinics and hospitals, primarily to physicians who regularly order costly specialty pharmaceuticals. This business provides competitive pricing on pharmaceuticals and medical supplies and leverages our distribution platform to improve our results.
Previous report
In this MD&A, we present our segment performance measures adjusted revenues and pre-tax adjusted income from operations. We also present adjusted gross profit, which is calculated as adjusted revenues less Pharmacy and other service costs (which is inclusive of all costs of revenue). We utilize adjusted revenues in this calculation, consistent with our reporting measure that excludes special items, as this reflects the underlying results of business operations.
Showing the first 40 of 67 passages. Open the source sections for the rest.
Reworded paragraphs (80)
Previous wording
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide information to assist you in better understanding and evaluating our financial condition as of September 30, 2024, compared with December 31, 2023 and our results of operations for the three and nine months ended September 30, 2024, 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, 2023 ("2023 Form 10-K"). In particular, we encourage you to refer to the "Risk Factors" contained in Part I, Item 1A of our 2023 Form 10-K.
Current wording
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide information to assist you in better understanding and evaluating our financial condition as of March 31, 2025, compared with December 31, 2024 and our results of operations for the three months ended March 31, 2025, compared with the same period last year and is intended to help you understand the ongoing trends in our business. We encourage you to read this MD&A in conjunction with our Consolidated Financial Statements included in Part I, Item 1 in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"). In particular, we encourage you to refer to the "Risk Factors" contained in Part I, Item 1A of our 2024 Form 10-K.
Previous wording
Unless otherwise indicated, financial information in this MD&A is presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). See Note 2 to the Consolidated Financial Statements in our 2023 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" when those changes are so large as to become not meaningful. Changes in percentages are expressed in basis points ("bps").
Current wording
Statements in this Form 10-Q for updates to those policies resulting from adopting new accounting guidance, if any. The preparation of interim consolidated financial statements necessarily relies heavily on estimates. This and certain other factors call for caution in estimating full-year results based on interim results of operations. In some of our financial tables in this MD&A, we present either percentage changes or "N/M" when those changes are so large as to become not meaningful. Changes in percentages are expressed in basis points ("bps").
Previous wording
In this MD&A, our consolidated measures "adjusted income from operations," earnings per share on that same basis and "adjusted revenues" are not determined in accordance with GAAP and should not be viewed as substitutes for the most directly comparable GAAP measures of "shareholders' net income," "earnings per share" and "total revenues." We also use pre-tax adjusted income (loss) from operations and adjusted revenues to measure the results of our segments.
Current wording
In this MD&A, our consolidated measures "adjusted income from operations," earnings per share on that same basis and "adjusted revenues" are not determined in accordance with GAAP and should not be viewed as substitutes for the most directly comparable GAAP measures of "shareholders' net income (loss)," "earnings per share" and "total revenues." We also use pre-tax adjusted income (loss) from operations and adjusted revenues to measure the results of our segments.
Previous wording
The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes these metrics reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability. We define adjusted income (loss) from operations as shareholders' net income (or income (loss) before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net realized investment results, amortization of acquired intangible assets and special items. The Cigna Group's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results. Consolidated adjusted income (loss) from operations is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders' net income. See the below Financial Highlights section for a reconciliation of consolidated adjusted income from operations to shareholders' net income.
Current wording
The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes these metrics reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability. We define adjusted income (loss) from operations as shareholders' net income (loss) (or income (loss) before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net investment gains/losses, amortization of acquired intangible assets and special items. The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results. Consolidated adjusted income (loss) from operations is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders' net income (loss). See the below Financial Highlights section for a reconciliation of consolidated adjusted income from operations to shareholders' net income (loss).
Previous wording
The Company defines adjusted revenues as total revenues excluding the following adjustments: special items and The Cigna Group's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. We exclude these items from this measure because management believes they are not indicative of past or future underlying performance of the business. Adjusted revenues is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, total revenues. See the below Financial Highlights section for a reconciliation of consolidated adjusted revenues to total revenues.
Current wording
The Company defines adjusted revenues as total revenues excluding the following adjustments: special items and The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. We exclude these items from this measure because management believes they are not indicative of past or future underlying performance of the business. Adjusted revenues is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, total revenues. See the below Financial Highlights section for a reconciliation of consolidated adjusted revenues to total revenues.
Previous wording
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on The Cigna Group's current expectations and projections about future trends, events and uncertainties. These statements are not historical facts. Forward-looking statements may include, among others, statements concerning future financial or operating performance, including our ability to improve the health and vitality of those we serve; future growth, business strategy, and strategic or operational initiatives; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas and the impact of developing inflationary and interest rate pressures; capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; strategic transactions; expectations related to our Medicare Advantage Capitation Rates; and other statements regarding The Cigna Group's future beliefs, expectations, plans, intentions, liquidity, cash flows, financial condition or performance. You may identify forward-looking statements by the use of words such as "believe," "expect," "project," "plan," "intend," "anticipate," "estimate," "predict," "potential," "may," "should," "will" or other words or expressions of similar meaning, although not all forward-looking statements contain such terms.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on The Cigna Group's current expectations and projections about future trends, events and uncertainties. These statements are not historical facts. Forward-looking statements may include, among others, statements concerning future financial or operating performance, including our ability to improve the health and vitality of those we serve; future growth, business strategy, and strategic or operational initiatives; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas and the impact of developing inflationary and interest rate pressures; financing or capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; strategic transactions and their expected benefits; and other statements regarding The Cigna Group's future beliefs, expectations, plans, intentions, liquidity, cash flows, financial condition or performance. You may identify forward-looking statements by the use of words such as "believe," "expect," "project," "plan," "intend," "anticipate," "estimate," "predict," "potential," "may," "should," "will" or other words or expressions of similar meaning, although not all forward-looking statements contain such terms.
Previous wording
Forward-looking statements are subject to risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those expressed or implied in forward-looking statements. Such risks and uncertainties include, but are not limited to: our ability to achieve our strategic and operational initiatives; our ability to adapt to changes in an evolving and rapidly changing industry; our ability to compete effectively, differentiate our products and services from those of our competitors and maintain or increase market share; price competition, inflation and other pressures that could compress our margins or result in premiums that are insufficient to cover the cost of services delivered to our customers; the potential for actual claims to exceed our estimates related to expected medical claims; our ability to develop and maintain satisfactory relationships with physicians, hospitals, other health service providers and with producers and consultants; our ability to maintain relationships with one or more key pharmaceutical manufacturers or if payments made or discounts provided decline; changes in the pharmacy provider marketplace or pharmacy networks; changes in drug pricing or industry pricing benchmarks; our ability to invest in and properly maintain our information technology and other business systems; our ability to prevent or contain effects of a potential cyberattack or other privacy or data security incidents; risks related to our use of artificial intelligence and machine learning; political, legal, operational, regulatory, economic and other risks that could affect our multinational operations, including currency exchange rates; risks related to an impairment of goodwill, intangible assets and/or investments (including as a result of the failure to realize the expected benefits of strategic transactions, as well as integration or separation difficulties or underperformance of such transactions 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; 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, the risk of a recession or other economic downturn and resulting impact on employment metrics, stock market or changes in interest rates and risks related to a downgrade in financial strength r…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Forward-looking statements are subject to risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those expressed or implied in forward-looking statements. Such risks and uncertainties include, but are not limited to: our ability to achieve our strategic and operational initiatives; our ability to adapt to changes in an evolving and rapidly changing industry; our ability to compete effectively, differentiate our products and services from those of our competitors, and maintain or increase market share; price competition, inflation and other pressures that could compress our margins or result in premiums that are insufficient to cover the cost of services delivered to our customers; the potential for actual claims to exceed our estimates related to expected medical claims; our ability to develop and maintain satisfactory relationships with health care payors, physicians, hospitals, other health service providers and with producers and consultants; our ability to maintain relationships with one or more key pharmaceutical manufacturers or if payments made or discounts provided decline; changes in the pharmacy provider marketplace or pharmacy networks; changes in drug pricing or industry pricing benchmarks; our ability to invest in and properly maintain our information technology and other business systems; our ability to prevent or contain effects of a potential cyberattack or other privacy or data security incident; risks related to our use of artificial intelligence and machine learning; political, legal, operational, regulatory, economic and other risks that could affect our multinational operations, including currency exchange rates; risks related to strategic transactions and realization of the expected benefits of such transactions, as well as integration or separation difficulties or underperformance relative to expectations, which could lead to an impairment charge; dependence on success of relationships with third parties; risk of significant disruption within our operations or among key suppliers or third parties; potential liability in connection with managing medical practices and operating pharmacies, onsite clinics and other types of medical facilities; the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws or regulations; uncertainties surrounding participation in government-sponsored programs and providing services to payors who participate in government-sponsored programs; the outcome of litigation, regulatory audits and investigations; compliance with applicable privacy, security and data laws, regulations and standards; potential failure of our prevention, detection and control systems; unfavorable economic and market conditions, the risk of a recession or other economic downturn and resulting impact on employment metrics, stock market or changes in interest rates; risks related to a downgra…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
The Cigna Group, together with its subsidiaries (either individually or collectively referred to as the "Company," "we," "us" or "our") is a global health company with a mission of helping those we serve improve their health and vitality. Our subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental and related products and services. For further information on our business and strategy, see Part 1, Item 1. "Business" of our 2023 Form 10-K.
Current wording
The Cigna Group, together with its subsidiaries (either individually or collectively referred to as the "Company," "we," "us" or "our"), is a global health company committed to creating a better future for every individual and every community. Our subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental, and related products and services. For further information on our business and strategy, see Part I, Item 1 - "Business" in our 2024 Form 10-K.
Previous wording
(2)Represents amortization of a foreign tax attribute. See Note 23 to the Consolidated Financial Statements in our 2023 Form 10-K for additional details.
Current wording
(3) Represents amortization of a foreign tax attribute. See Note 20 to the Consolidated Financial Statements in our 2024 Form 10-K for additional details.
Previous wording
For further analysis and explanation of each segment's results, see the "Segment Reporting" section of this MD&A.
Current wording
For further analysis and explanation of each segment's results, see the "Segment Reporting" section in this MD&A.
Previous wording
Commentary: Three and Nine Months Ended September 30, 2024 versus Three and Nine Months Ended September 30, 2023
Current wording
Commentary: Three Months Ended March 31, 2025 versus Three Months Ended March 31, 2024
Previous wording
The commentary presented below, and the segment discussions that follow, compare results for the three and nine months ended September 30, 2024 with results for the three and nine months ended September 30, 2023. Unless specified otherwise, commentary applies to both the three and nine month periods. In addition to the below, see the "Segment Reporting" section of this MD&A for further commentary.
Current wording
The commentary presented below, and the segment commentaries that follow, compare results for the three months ended March 31, 2025 with results for the three months ended March 31, 2024. Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.
Previous wording
Pharmacy revenues increased 40% and 35%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.
Current wording
Pharmacy revenues increased 16%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.
Previous wording
Premiums increased 4% in both periods, primarily reflecting higher premiums in our U.S. Healthcare operating segment to cover expected increases in underlying medical costs.
Current wording
Premiums increased 10%, primarily reflecting higher premium rates in our U.S. Healthcare operating segment.
Previous wording
Fees and other revenues increased 22% and 13%, primarily reflecting growth in affordability services within our Pharmacy Benefit Services operating segment.
Current wording
Fees and other revenues increased 17%, primarily reflecting growth in affordability services within our Pharmacy Benefit Services operating segment.
Previous wording
Pharmacy and other service costs increased 41% and 35%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.
Current wording
Pharmacy and other service costs increased 17%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.
Previous wording
Medical costs and other benefit expenses increased 7% and 5%, primarily reflecting higher medical costs in our U.S. Healthcare operating segment.
Current wording
Medical costs and other benefit expenses increased 11%, primarily reflecting higher medical costs in our U.S. Healthcare operating segment.
Previous wording
The effective tax rate increased for the three and nine months ended September 30, 2024, primarily driven by a valuation allowance related to the impairment of VillageMD equity securities.
Current wording
The effective tax rate decreased, primarily driven by the absence of a valuation allowance related to the impairment of equity securities recorded in 2024 (-540%), partially offset by the absence of state tax benefits recorded in 2024 (+88%) and the impact related to the HCSC transaction (+69%). See Note 15 to the Consolidated Financial Statements for further discussion of these matters.
Previous wording
Cash requirements at the subsidiary level generally consist of:
Current wording
Subsidiary Level. Cash requirements at the subsidiary level generally consist of pharmacy, medical costs and other benefit payments; expense requirements, primarily for employee compensation and benefits, information technology and facilities costs; income taxes; and debt service.
Previous wording
Our subsidiaries normally meet their liquidity requirements by:
Current wording
Our subsidiaries normally meet their liquidity requirements by maintaining appropriate levels of cash, cash equivalents and short-term investments; using cash flows from operating activities; matching durations of investments to estimated durations for the related insurance and contractholder liabilities; selling investments; and borrowing from affiliates, subject to applicable regulatory limits.
Previous wording
Cash requirements at the parent company level generally consist of:
Current wording
Parent Level. Cash requirements at the parent company level generally consist of debt service; payment of declared dividends to shareholders; lending to subsidiaries as needed; and pension plan funding.
Previous wording
The parent company normally meets its liquidity requirements by:
Current wording
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.
Previous wording
Dividends from our insurance, Health Maintenance Organization ("HMO") and certain foreign subsidiaries are subject to regulatory restrictions. See Note 22 to the Consolidated Financial Statements in our 2023 Form 10-K for additional information regarding these restrictions. Most of the Evernorth Health Services segment operations are not subject to regulatory restrictions regarding dividends and therefore provide significant financial flexibility to The Cigna Group.
Current wording
Regulatory Restrictions. Dividends from our insurance, Health Maintenance Organization ("HMO") and certain foreign subsidiaries are subject to regulatory restrictions. See Note 19 to the Consolidated Financial Statements in our 2024 Form 10-K for additional information regarding these restrictions. Most of the Evernorth Health Services segment operations are not subject to regulatory restrictions regarding dividends and therefore provide significant financial flexibility to The Cigna Group.
Previous wording
With respect to our investment portfolio, we support the liquidity needs of our businesses by managing the duration of assets to be consistent with the duration of liabilities. We manage the portfolio to both optimize returns in the current economic environment and meet our liquidity needs.
Current wording
Investment Portfolio. We support the liquidity needs of our businesses by managing the duration of invested assets to be consistent with the duration of liabilities. We manage the portfolio to both optimize returns in the current economic environment and meet our liquidity needs.
Previous wording
Cash flows for the nine months ended September 30 were as follows:
Current wording
Cash flows for the three months ended March 31 were as follows:
Previous wording
The following discussion explains variances in the various categories of cash flows for the nine months ended September 30, 2024 compared with the same period in 2023.
Current wording
The following discussion explains variances in the various categories of cash flows for the three months ended March 31, 2025 compared with the same period in 2024.
Previous wording
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.
Current wording
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.
Previous wording
Operating cash flows decreased for the nine months ended September 30, 2024 due to higher accounts receivable as a result of timing and organic business growth, higher insurance claims and related payments, as well as the absence of an early CMS payment received in September 2023. This decrease is partially offset by the favorable net cash flow impacts of new clients in Evernorth Health Services.
Current wording
Operating cash flows decreased for the three months ended March 31, 2025 primarily driven by the timing of settlements related to the accounts receivable facility as well as the absence of favorable net cash flow impacts from onboarding significant new clients in 2024.
Previous wording
Our capital resources consist primarily of cash, cash equivalents and investments maintained at regulated subsidiaries required to underwrite insurance risks, cash flows from operating activities, our commercial paper program, credit agreements and the issuance of long-term debt and equity securities. Our businesses generate significant cash flows from operations, some of which is subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company. Dividends received from U.S. regulated subsidiaries were $1.7 billion for the nine months ended September 30, 2024 and $0.8 billion for the nine months ended
Current wording
Our capital resources consist primarily of cash, cash equivalents and investments maintained at regulated subsidiaries required to underwrite insurance risks, cash flows from operating activities, our commercial paper program, revolving credit facility, and the issuance of long-term debt and equity securities. Our businesses generate significant cash flows from operations, some of which is subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company. Dividends received from U.S.-regulated subsidiaries were $0.5 billion for the three months ended March 31, 2025 and $0.6 billion for the three months ended March 31, 2024. Non-regulated subsidiaries also generate significant cash flows from operating activities, which is typically available immediately to the parent company for general corporate purposes.
Previous wording
•invest in capital expenditures, primarily related to technology to support innovative solutions for our clients and customers, provide the capital necessary to maintain or improve the financial strength ratings of subsidiaries and to repay debt and fund pension obligations if necessary;
Current wording
We prioritize our use of capital resources to (i) invest in capital expenditures (primarily related to technology to support innovative solutions for our clients and customers), provide the capital necessary to maintain or improve the financial strength ratings of subsidiaries, and to repay debt and fund pension obligations if necessary; (ii) pay dividends to shareholders; (iii) consider acquisitions and investments that are strategically and economically advantageous; and (iv) return capital to shareholders through share repurchases.
Previous wording
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.
Current wording
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. In April 2025, the Company replaced its previous revolving credit agreements and entered into a $6.5 billion, five-year revolving credit and letter of credit agreement that will mature in April 2030. See Note 7 to the Consolidated Financial Statements for further information on our credit agreements and commercial paper program.
Previous wording
As of September 30, 2024, we had $6.5 billion of undrawn committed capacity under our revolving credit agreements (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $4.9 billion of remaining capacity under our commercial paper program and $6.0 billion in cash and short-term investments, approximately $0.5 billion of which was held by the parent company or certain non-regulated subsidiaries.
Current wording
As of March 31, 2025, we had $6.5 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), $6.5 billion of remaining capacity under our commercial paper program, and $8.5 billion in cash and short-term investments, approximately $0.8 billion of which was held by the parent company or certain nonregulated subsidiaries.
Previous wording
Our debt-to-capitalization ratio was 43.8% at September 30, 2024 and 43.6% at June 30, 2024.
Current wording
Our debt-to-capitalization ratio (calculated as Short-term debt and Long-term debt ("Total debt") as a percentage of Total shareholders' equity and Total debt ("Total capitalization")) was 43.1% and 43.8% at March 31, 2025 and December 31, 2024, respectively. We actively monitor our debt obligations and engage in issuance or redemption activities as needed in accordance with our capital management strategy.
Previous wording
Subsidiary Borrowings. In addition to the sources of liquidity discussed above, the parent company can borrow an additional $1.4 billion from its subsidiaries without further approvals as of September 30, 2024.
Current wording
Subsidiary Borrowings. In addition to the sources of liquidity discussed above, the parent company can borrow an additional $3.6 billion from its subsidiaries without further approvals as of March 31, 2025.
Previous wording
Capital Expenditures. Capital expenditures for property, equipment and computer software were $1.1 billion in the nine months ended September 30, 2024 compared to $1.2 billion in the nine months ended September 30, 2023. Anticipated capital expenditures will be funded primarily from operating cash flows.
Current wording
Capital Expenditures. Capital expenditures for property, equipment and computer software were $0.3 billion in the three months ended March 31, 2025 compared to $0.3 billion in the three months ended March 31, 2024.
Previous wording
Dividends. The Cigna Group declared and paid quarterly cash dividends of $1.40 per share of its common stock during the first nine months of 2024, compared to quarterly cash dividends of $1.23 per share during the first nine months of 2023. See Note 8 to the Consolidated Financial Statements for further information on our dividend payments. On October 23, 2024, the Board of Directors declared the fourth quarter cash dividend of $1.40 per share of The Cigna Group common stock to be paid on December 19, 2024 to shareholders of record on December 4, 2024. The Cigna Group currently intends to pay regular quarterly dividends, with future declarations subject to approval by its Board of Directors and the Board's determination that the declaration of dividends remains in the best interests of the Company and its shareholders. The decision of whether to pay future dividends and the amount of any such dividends will be based on the Company's financial position, results of operations, cash flows, capital requirements, the requirements of applicable law and any other factors the Board may deem relevant.
Current wording
Dividends. The Company currently intends to pay regular quarterly dividends, with future declarations subject to approval by its Board of Directors and the Board's determination that the declaration of dividends remains in the best interests of The Cigna Group and its shareholders. See Note 8 to the Consolidated Financial Statements for further information regarding dividend payments and declarations.
Previous wording
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.
Current wording
Share Repurchases. The Company maintains a share repurchase program authorized by the Board of Directors, under which it may repurchase shares of its common stock from time to time. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital. The share repurchase program may be effected through open market purchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including through Rule 10b5-1 trading plans or privately negotiated transactions. The program may be suspended or discontinued at any time.
Previous wording
Including the ASR agreements, we repurchased 14.7 million shares for approximately $5.0 billion during the nine months ended September 30, 2024, compared to 6.1 million shares for approximately $1.8 billion during the nine months ended September 30, 2023. From October 1, 2024 through October 30, 2024, we repurchased 2.2 million shares for approximately $715 million. Share repurchase authority was $5.6 billion as of October 30, 2024.
Current wording
We repurchased 5.0 million shares for approximately $1.5 billion during the three months ended March 31, 2025, compared to 10.1 million shares for approximately $3.4 billion during the three months ended March 31, 2024. From April 1, 2025 through May 1, 2025, we repurchased 3.2 million shares for approximately $1.1 billion. Share repurchase authority was $7.7 billion as of May 1, 2025.
Previous wording
Divestiture. In January 2024, we entered into a definitive agreement to sell the Medicare Advantage, Medicare Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits and CareAllies businesses within the U.S. Healthcare operating segment to HCSC, subject to applicable regulatory approvals and other customary closing conditions. The transaction is expected to close in the first quarter of 2025 and provide approximately $3.7 billion in transaction value, which consists primarily of the purchase price cash subject to adjustments to align with the final balance sheet of the divested businesses. Following the completion of the sale, we anticipate use of the proceeds in alignment with our capital deployment priorities, with the majority allocated to share repurchases.
Current wording
Divestiture. As discussed in the "Developments" section above, the HCSC transaction was completed on March 19, 2025. We anticipate using the proceeds in alignment with our capital deployment priorities, with the majority allocated to share repurchases.
Previous wording
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 2023 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.
Current wording
Risks to our liquidity and capital resources outlook include cash projections that may not be realized, and the demand for funds could exceed available cash if our ongoing businesses experience unexpected shortfalls in earnings or we experience material adverse effects from one or more risks or uncertainties described more fully in the "Risk Factors" section in our 2024 Form 10-K.
Showing the first 40 of 80 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report — wording carried from elsewhere
Unless otherwise indicated, financial information in this MD&A is presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). See Note 2 to the Consolidated Financial Statements in our 2024 Form 10-K for additional information regarding the Company's significant accounting policies and see Note 2 to the Consolidated Financial
Rearranged previous paragraphs (21)
Previous report — wording carried elsewhere
•pharmacy, medical costs and other benefit payments;
Previous report — wording carried elsewhere
•expense requirements, primarily for employee compensation and benefits, information technology and facilities costs;
Previous report — wording carried elsewhere
•maintaining appropriate levels of cash, cash equivalents and short-term investments;
Previous report — wording carried elsewhere
•using cash flows from operating activities;
Previous report — wording carried elsewhere
•matching investment durations to those estimated for the related insurance and contractholder liabilities;
Previous report — wording carried elsewhere
•borrowing from affiliates, subject to applicable regulatory limits.
Previous report — wording carried elsewhere
•payment of declared dividends to shareholders;
Previous report — wording carried elsewhere
•lending to subsidiaries as needed; and
Previous report — wording carried elsewhere
•maintaining appropriate levels of cash and various types of marketable investments;
Previous report — wording carried elsewhere
•using proceeds from issuing debt and common stock; and
Previous report — wording carried elsewhere
•borrowing from its subsidiaries, subject to applicable regulatory limits.
Previous report — wording carried elsewhere
September 30, 2023. Non-regulated subsidiaries also generate significant cash flows from operating activities, which is typically available immediately to the parent company for general corporate purposes.
Previous report — wording carried elsewhere
We prioritize our use of capital resources to:
Previous report — wording carried elsewhere
•consider acquisitions and investments that are strategically and economically advantageous; and
Previous report — wording carried elsewhere
•return capital to shareholders through share repurchases.
Previous report — wording carried elsewhere
See Note 7 to the Consolidated Financial Statements for further information on our credit agreements and commercial paper program.
Previous report — wording carried elsewhere
We actively monitor our debt obligations and engage in issuance or redemption activities as needed in accordance with our capital management strategy.
Previous report — wording carried elsewhere
See Note 1 to the Consolidated Financial Statements for further description of our segments.
Previous report — wording carried elsewhere
Consolidated Financial Statements included in our 2023 Form 10-K for additional information on revenue and cost recognition policies for this segment.
Previous report — wording carried elsewhere
•has access to our provider network for covered services under their medical plan; or
Previous report — wording carried elsewhere
•has medical claims that are administered by us.