Cigna Group

Note 5 – Divestiture

Accounting Policy. The Company classifies assets and liabilities as held for sale ("disposal group") when management commits to a plan to sell the disposal group, the sale is probable within one year and the disposal group is available for immediate sale in its present condition. The Company considers various factors, particularly whether actions required to complete the plan indicate it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. Assets held for sale are measured at the lower of carrying value or fair value less costs to sell. Any loss resulting from the measurement is recognized in the period the held for sale criteria are met. Conversely, gains are not recognized until the date of the sale. When the disposal group is classified as held for sale, depreciation and amortization for most long-lived assets ceases, and the Company tests the assets for impairment. Deferred policy acquisition costs continue to be amortized.

The Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies® businesses (the "Disposal Group") on March 19, 2025 (the "HCSC transaction"). The final purchase price and total cash proceeds collected in 2025 were $4.9 billion, representing an increase from the initial $3.3 billion purchase price, driven by higher statutory surplus for the legal entities when conveyed to HCSC and post-closing contractual adjustments.

The Company recognized within Net gain (loss) on sale of businesses in the Consolidated Statements of Income a gain of $9 million pre-tax ($401 million after-tax) for the year ended December 31, 2025, a loss of $472 million ($363 million after-tax) for the year ended December 31, 2024, and a loss of $1.5 billion ($1.4 billion after-tax) for the year ended December 31, 2023. See Note 21 to the Consolidated Financial Statements for discussion of tax matters for the year ended December 31, 2025 resulting in an after-tax gain on sale of businesses. The estimated loss on sale for both the years ended December 31, 2024 and December 31, 2023 primarily represented goodwill impairments of $302 million pre-tax in 2024 and $1.2 billion pre-tax in 2023.

The Company determined that the Disposal Group met the criteria to be classified as held for sale and aggregated and classified the assets and liabilities as held for sale in our Consolidated Balance Sheets as of December 31, 2024. The assets and liabilities held for sale as of December 31, 2024 were as follows:

(1) Included Goodwill of $94 million.

Integration and Transaction-Related Costs

In 2025, 2024 and 2023, the Company incurred transaction-related costs associated with the HCSC transaction. These costs incurred consisted primarily of certain projects to separate the Company's systems, products and services; fees for legal, advisory and other professional services; and certain employment-related costs. These costs were $327 million pre-tax ($247 million after-tax) for the year ended December 31, 2025, compared with $275 million pre-tax ($211 million after-tax) for the year ended December 31, 2024, and $45 million pre-tax ($35 million after-tax) for the year ended December 31, 2023.