Cigna Group

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, 2025 compared with December 31, 2024 and our results of operations for the three and nine months ended September 30, 2025 compared with the same periods last year, and is intended to help you understand the ongoing trends in our business. We encourage you to read this MD&A in conjunction with our Consolidated Financial Statements included in Part I, Item 1 in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"). In particular, we encourage you to refer to the "Risk Factors" contained in Part I, Item 1A of our 2024 Form 10-K.

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, 2026 compared with December 31, 2025 and our results of operations for the three months ended March 31, 2026 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, 2025 ("2025 Form 10-K"). In particular, we encourage you to refer to the "Risk Factors" contained in Part I, Item 1A in our 2025 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 2024 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

The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes these metrics reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability. We define adjusted income (loss) from operations as shareholders' net income (or income (loss) before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net investment gains/losses, amortization of acquired intangible assets and special items. The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results. Consolidated adjusted income (loss) from operations is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders' net income. See the below Financial Highlights section for a reconciliation of consolidated adjusted income from operations to shareholders' net income.

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 (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 normal, recurring 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.

Previous 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.

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 normal, recurring 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

In segment discussions, we present "adjusted revenues" and "pre-tax adjusted income (loss) from operations," defined as income (loss) before income taxes excluding pre-tax income (loss) attributable to noncontrolling interests, net investment gains/losses, amortization of acquired intangible assets and special items. The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes these metrics reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability. The Cigna Group share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management, including the chief operating decision maker, believes are not representative of the underlying results of operations due to their nature or size. Ratios presented in this segment discussion exclude the same items as adjusted revenues and pre-tax adjusted income (loss) from operations. See Note 17 to the Consolidated Financial Statements for additional discussion of these metrics and a reconciliation of income (loss) before income taxes to pre-tax adjusted income (loss) from operations, as well as a reconciliation of Total revenues to adjusted revenues. Note 17 to the Consolidated Financial Statements also explains that segment revenues include both external revenues and sales between segments that are eliminated in Corporate.

Current wording

See Note 15 to the Consolidated Financial Statements for additional discussion of these metrics and a reconciliation of income (loss) before income taxes to pre-tax adjusted income (loss) from operations, as well as a reconciliation of Total revenues to adjusted revenues. Note 15 to the Consolidated Financial Statements also explains that segment revenues include both external revenues and sales between segments that are eliminated in Corporate. Ratios presented in the segment discussion exclude the same items as adjusted revenues and pre-tax adjusted income (loss) from operations.

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 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, regulations or government guidance; uncertainties surrounding participation in government-sponsored programs and providing services to payors who participate in government-sponsored programs; the outcome of litigation, regulatory audits and investigations; compliance with applicable privacy, security and data laws, regulations and standards; potential failure of our prevention, detection and control systems; unfavorable economic and market conditions, the risk of a recession or other economic downturn and resulting impact on employment metrics, stock market or changes in interest rates; risks…

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 manage health care costs and respond to 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; our ability to compete effectively, differentiate our products and services from those of our competitors and adapt to changes in an evolving and rapidly changing industry; our ability to develop and effectively implement products and services to improve the accessibility, affordability and transparency of health care; changes in drug pricing or industry pricing benchmarks; 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; 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; potential liability in connection with managing medical practices and operating pharmacies, onsite clinics and other types of medical facilities; uncertainties surrounding participation in government-sponsored programs and providing services to payors who participate in government-sponsored programs; 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; compliance with applicable privacy, security and data laws, regulations and standards; the outcome of litigation, regulatory audits and investigations; compliance costs and potential failure of our prevention, detection and control systems; 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; dependence on success of relationships with third parties; risk of significant disruption within our operations or among key suppliers or third parties; 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; our ability to achieve our strategic and operational initiatives; unfavorable economic and market cond…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Commentary: Three and Nine Months Ended September 30, 2025 versus Three and Nine Months Ended September 30, 2024

Current wording

Commentary: Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

Previous wording

The commentary presented below, and the segment commentaries that follow, compare results for the three and nine months ended September 30, 2025 with results for the three and nine months ended September 30, 2024. Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.

Current wording

The commentary presented below, and the segment commentaries that follow, compare results for the three months ended March 31, 2026 with results for the three months ended March 31, 2025. Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.

Previous wording

Premiums decreased 21% and 10%, primarily driven by the impact of the HCSC transaction (-25% and -15%, respectively), partially offset by higher premium rates within our ongoing U.S. Healthcare businesses (+4% in both periods).

Current wording

Premiums decreased 23%, primarily driven by the impact of the HCSC transaction (defined in the "Segment Reporting" section) (-30%), offset primarily by higher premium rates within our ongoing U.S. Healthcare businesses.

Previous wording

Fees and other revenues increased 13% and 14%, primarily reflecting growth in affordability services (defined in the "Segment Reporting" section) within our Pharmacy Benefit Services operating segment.

Current wording

Fees and other revenues increased 14%, primarily reflecting growth in fee-based services within our Pharmacy Benefit Services operating segment.

Previous wording

Medical costs and other benefit expenses decreased 18% and 8%, primarily driven by the impact of the HCSC transaction (-26% and -16%, respectively), partially offset by higher medical costs within our ongoing U.S. Healthcare businesses (+8% in both periods).

Current wording

Medical costs and other benefit expenses decreased 25%, primarily driven by the impact of the HCSC transaction (-32%), offset primarily by higher medical costs within our ongoing U.S. Healthcare businesses.

Previous wording

Selling, general and administrative ("SG&A") expenses decreased 6% for the three months ended and was flat for the nine months ended. Both periods were primarily impacted by the HCSC transaction (-16% and -8%, respectively), partially offset by the strategic optimization program (+5% and +4%, respectively) and supporting business growth (+3% and +4%, respectively). See Note 14 to the Consolidated Financial Statements for further discussion of the strategic optimization program.

Current wording

Selling, general and administrative ("SG&A") expenses decreased 12%, primarily impacted by the HCSC transaction.

Previous wording

Evernorth Health Services includes a broad range of coordinated and point solution health services and capabilities within our Pharmacy Benefit Services and Specialty and Care Services operating segments. As described in the introduction to Segment Reporting, the performance of Evernorth Health Services is measured using adjusted revenues and pre-tax adjusted income (loss) from operations.

Current wording

Evernorth Health Services includes our Pharmacy Benefit Services and Specialty and Care Services operating segments, which provide independent and coordinated health solutions and capabilities to enable the health care system to work better and help people live healthier lives. As described in the MD&A introduction, the performance of Evernorth Health Services is measured using adjusted revenues and pre-tax adjusted income (loss) from operations.

Previous wording

The key factors that impact the segment's revenues and income from operations are claims utilization, claims composition and contract affordability services. Specialty and Care Services revenues are also impacted by customer and client growth. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements included in our 2024 Form 10-K for additional information on revenue and cost recognition policies for this segment.

Current wording

The key factors that impact the segment's revenues and income from operations are claims volume, claims composition and client- and customer-focused initiatives. Specialty and Care Services revenues are also impacted by customer and client growth. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements in our 2025 Form 10-K for additional information on revenue and cost recognition policies for this segment.

Previous wording

•The composition of claims generally considers the types of drugs, including the mix of claims among branded and higher priced specialty drugs compared to generic or biosimilar alternatives. We manage pharmaceutical manufacturer increases in prices through programs designed to reduce drug spend, providing positive impacts on our clients, our customers and us. Changes to claims mix, including types of drugs, distribution methods, pharmaceutical manufacturer prices, and alternative uses of drugs within our formularies continue to be a significant driver of our revenues and income from operations in the current environment.

Current wording

•The composition of claims generally considers the types of drugs, including the mix of claims among branded and higher priced specialty drugs compared to generic or biosimilar alternatives. We manage pharmaceutical manufacturer increases in prices through programs designed to reduce drug spend, providing positive impacts on our clients, our customers and us. Changes to claims mix, including types of drugs, distribution methods, pharmaceutical manufacturer prices (including government programs) and alternative uses of drugs within our formularies continue to be a significant driver of our revenues and income from operations in the current environment.

Previous wording

•Customer and client growth, both organic and new business, and key relationships in our Specialty and Care Services business generally results in increased revenues and income from operations. This includes client movement in our specialty pharmacy, specialty distribution services, virtual care, physical primary care, benefits management and behavioral health services as we expand our businesses and build upon our cross-enterprise leverage.

Current wording

•Customer and client growth, both organic and new business, and key strategic relationships in our Specialty and Care Services business generally results in increased revenues and income from operations (also referred to as growth). This includes client movement in our specialty pharmacy, specialty distribution services, virtual care, benefits management and behavioral health services as we expand our businesses.

Previous wording

Adjusted revenues increased 15% and 16% for the three and nine months ended, respectively, primarily reflecting higher utilization of prescription drugs from customer growth in Pharmacy Benefit Services (+7% and +6%, respectively) and Specialty and Care Services (+5% and +6%, respectively) and an increase due to claims composition in Pharmacy Benefit Services (+3% and +4%, respectively).

Current wording

Adjusted revenues increased 9%, primarily reflecting an increase due to claims composition in Pharmacy Benefit Services (+7%) and higher claims volume from customer growth in Specialty and Care Services (+2%).

Previous wording

The SG&A expense ratio was flat for the three months ended and decreased 10 bps for the nine months ended, primarily reflecting higher adjusted revenues as discussed above, offset by strategic investments and initiatives to support business growth.

Current wording

The SG&A expense ratio decreased 10 bps, primarily reflecting higher adjusted revenues as discussed above.

Previous wording

Cigna Healthcare includes the U.S. Healthcare and International Health businesses, which provide comprehensive medical and coordinated solutions to clients and customers. As described in the introduction to Segment Reporting, performance of the Cigna Healthcare segment is measured using adjusted revenues and pre-tax adjusted income from operations.

Current wording

Cigna Healthcare includes our U.S. Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers. As described in the MD&A introduction, performance of the Cigna Healthcare segment is measured using adjusted revenues and pre-tax adjusted income from operations.

Previous wording

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 wording

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 (the "HCSC transaction").

Previous wording

The key factors that impact the segment's revenues and income from operations include revenue growth, customer growth, medical cost trend, percentage of Medicare Advantage customers in plans eligible for quality bonus payments, the medical care ratio ("MCR") and the SG&A expense ratio. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements included in our 2024 Form 10-K for additional information on revenue and cost recognition policies for this segment.

Current wording

The key factors that impact the segment's revenues and income from operations include revenue growth, customer growth, medical cost trend, the medical care ratio ("MCR") and the SG&A expense ratio. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements in our 2025 Form 10-K for additional information on revenue and cost recognition policies for this segment.

Previous wording

Adjusted revenues decreased 18%, or $2,408 million, and 9%, or $3,592 million, primarily due to the impact of the HCSC transaction (-$2,998 million and -$5,524 million, respectively), partially offset by higher premiums within employer insured (+$323 million and +$952 million, respectively) and stop loss (+$219 million and +$633 million, respectively), primarily reflecting premium rate increases.

Current wording

Adjusted revenues decreased 21%, or $3,005 million, primarily due to the impact of the HCSC transaction (-$3,850 million), partially offset by higher premiums within employer insured (+$308 million) and stop loss (+$248 million), primarily reflecting premium rate increases.

Previous wording

The SG&A expense ratio decreased 10 bps and 40 bps, primarily due to revenue growth outpacing volume-related expenses within the ongoing businesses (-60 bps and -50 bps, respectively), partially offset by the impact of the HCSC transaction (+60 bps and +20 bps, respectively).

Current wording

The SG&A expense ratio increased 60 bps, primarily due to the impact of the HCSC transaction (+170 bps), partially offset by expense management efficiencies (-70 bps) and revenue growth outpacing volume-related expenses within the ongoing businesses (-60 bps).

Previous wording

Other Operations includes corporate-owned life insurance ("COLI"), the Company's run-off operations and other non-strategic businesses. As described in the introduction of Segment Reporting, performance of Other Operations is measured using adjusted revenues and pre-tax adjusted income from operations.

Current wording

Other Operations includes corporate-owned life insurance ("COLI"), the Company's run-off operations and other non-strategic businesses. As described in the MD&A introduction, performance of Other Operations is measured using adjusted revenues and pre-tax adjusted income from operations.

Previous wording

Pre-tax adjusted income (loss) from operations increased for both periods, primarily driven by the decision to discontinue certain small non-strategic businesses.

Current wording

Adjusted revenues decreased and Pre-tax adjusted income from operations increased, primarily driven by the discontinuation of certain small non-strategic businesses.

Previous wording

Pre-tax adjusted loss from operations decreased for both periods, primarily due to lower interest expense.

Current wording

Pre-tax adjusted loss from operations decreased, primarily due to lower interest expense.

Previous 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.

Current wording

The Company's cash requirements generally consist of pharmacy, medical and other benefit costs; operating and capital expenditures primarily for employee compensation and benefits, information technology, and facilities costs; purchases of investment securities; income taxes; debt service; and payment of declared dividends.

Previous 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.

Current wording

Liquidity requirements are generally met 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 liabilities; selling investments; and using proceeds from issuing debt and common stock.

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, 2025 compared with the same period in 2024.

Current wording

The following discussion explains variances in the various categories of cash flows for the three months ended March 31, 2026 compared with the same period in 2025.

Previous wording

Operating cash flows decreased for the nine months ended September 30, 2025 primarily due to the absence of the favorable net cash flow impacts from onboarding significant new clients in 2024 and the unfavorable impact of pharmacy and services costs payments, as well as timing of settlements related to the accounts receivable factoring facility. This decrease is partially offset by higher insurance liabilities and the favorable impact of accrued liabilities.

Current wording

Operating cash flows decreased for the three months ended March 31, 2026, primarily due to the unfavorable net cash flow impact related to the Inflation Reduction Act, lower insurance liabilities, and the timing of pharmaceutical manufacturer receivables. These decreases are partially offset by the favorable timing of noninsurance customer receivables and accounts receivable factoring settlements.

Previous wording

Investing Activities. The increase in cash used in investing activities reflects higher investment purchases, partially offset by the net proceeds on the HCSC transaction.

Current wording

Investing Activities. The increase in cash used in investing activities reflects the absence of the net proceeds from the HCSC transaction.

Previous wording

Financing Activities. The decrease in net cash used in financing activities in 2025 is primarily driven by lower share repurchases.

Current wording

Financing Activities. The decrease in net cash used in financing activities in 2026 is primarily driven by the absence of share repurchases as well as lower debt repayments.

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, revolving credit facility, and the issuance of long-term debt and equity securities. Our businesses generate significant cash flows from operations, some of which is subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company. Dividends received from U.S.-regulated subsidiaries were $0.6 billion for the nine months ended September 30, 2025 and $1.7 billion for the nine months ended September 30, 2024. Non-regulated subsidiaries also generate significant cash flows from operating activities, which are typically available immediately to the parent company for general corporate purposes.

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, 2026 and 2025. Non-regulated subsidiaries also generate significant cash flows from operating activities, which are typically available immediately to the parent company for general corporate purposes.

Previous wording

Revolving Credit Agreement. Our revolving credit agreement provides us with the ability to borrow amounts for general corporate purposes, including for the purpose of providing liquidity support if necessary under our commercial paper program discussed above. In April 2025, the Company replaced its previous revolving credit agreements and entered into a $6.5 billion, five-year revolving credit and letter of credit agreement that will mature in April 2030. See Note 7 to the Consolidated Financial Statements for further information on our credit agreement and commercial paper program.

Current wording

Revolving Credit Agreement. Our revolving credit agreement provides us with the ability to borrow amounts for general corporate purposes, including for the purpose of providing liquidity support if necessary under our commercial paper program discussed above. See Note 6 to the Consolidated Financial Statements for further information on our credit agreement and commercial paper program.

Previous wording

As of September 30, 2025, we had $6.5 billion of undrawn committed capacity under our revolving credit agreement (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $6.5 billion of remaining capacity under our commercial paper program, and $6.3 billion in cash and short-term investments, approximately $0.8 billion of which was held by the parent company or certain non-regulated subsidiaries.

Current wording

As of March 31, 2026, we had $6.5 billion of undrawn committed capacity under our revolving credit agreement (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $6.5 billion of remaining capacity under our commercial paper program, and $7.3 billion in cash and short-term investments, approximately $1.1 billion of which was held by the parent company or certain non-regulated subsidiaries.

Previous 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 44.9% and 43.3% as of September 30, 2025 and June 30, 2025, respectively.

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 42.3% and 43.0% as of March 31, 2026 and December 31, 2025, respectively.

Previous wording

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

Current wording

We actively monitor our debt obligations and engage in issuance and repayment 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 $1.2 billion from its subsidiaries without further approvals as of September 30, 2025.

Current 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 March 31, 2026.

Previous 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.

Current wording

Our capital resources are directed towards several areas, including (i) investing in capital expenditures (primarily related to technology to support innovative solutions for our clients and customers), providing the capital necessary to maintain or improve the financial strength ratings of subsidiaries, and repaying debt and funding pension obligations if necessary; (ii) paying dividends to shareholders; (iii) considering acquisitions and investments that are strategically and economically advantageous; and (iv) returning capital to shareholders through share repurchases.