What changed in this filing

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Item 1. Financial Statements

2021-11-04 compared with 2021-08-05 · 168 added, 182 removed, 1030 unchanged (25% of the section changed)

3 unchanged sentences

Unaudited Unaudited

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions, except per share amounts) 2021 2020 2021 2020

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Unaudited Unaudited

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2021 2020 2021 2020

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Consolidated Balance Sheets

June 30, As of December 31,

September 30, As of

(In millions) 2021 2020

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(1) Par value per share, $ 0.01 ;

shares issued, 394 million as of June 30, 2021 and 390 million as of December 31, 2020;

shares issued, 394 million as of September 30, 2021 and 390 million as of December 31, 2020;

authorized shares, 600 million.

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Consolidated Statements of Changes in Total Equity

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

(In millions) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Retained Earnings Treasury Stock Shareholders’ Equity Other Non- controlling Interests Total Equity Redeemable Noncontrolling Interests

Balance at March 31, 2021 $ 4 $ 29,254 $ ( 1,231 ) $ 29,389 $ ( 9,267 ) $ 48,149 $ 6 $ 48,155 $ 59

Balance at June 30, 2021 $ 4 $ 29,403 $ ( 1,077 ) $ 30,513 $ ( 10,134 ) $ 48,709 $ 7 $ 48,716 $ 51

Effects of issuing stock for employee benefits plans 76 ( 1 ) 75 75

Other comprehensive income (loss) 154 154 154 ( 1 )

Other comprehensive (loss) ( 76 ) ( 76 ) ( 76 ) ( 1 )

Net income 1,621 1,621 10 1,631 4

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Other transactions impacting noncontrolling interests ( 2 ) ( 2 ) ( 5 ) ( 7 ) 2

Balance at June 30, 2021 $ 4 $ 29,403 $ ( 1,077 ) $ 30,513 $ ( 10,134 ) $ 48,709 $ 7 $ 48,716 $ 51

Three Months Ended June 30, 2020

Balance at September 30, 2021 $ 4 $ 29,077 $ ( 1,153 ) $ 31,803 $ ( 12,316 ) $ 47,415 $ 12 $ 47,427 $ 56

Three Months Ended September 30, 2020

(In millions) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Retained Earnings Treasury Stock Shareholders’ Equity Other Non- controlling Interests Total

Equity Redeemable Noncontrolling Interests

Balance at March 31, 2020 $ 4 $ 28,554 $ ( 1,527 ) $ 21,298 $ ( 3,250 ) $ 45,079 $ 7 $ 45,086 $ 35

Balance at June 30, 2020 $ 4 $ 28,699 $ ( 788 ) $ 23,052 $ ( 3,601 ) $ 47,366 $ 5 $ 47,371 $ 34

Effect of issuing stock for employee benefit plans 78 ( 2 ) 76 76

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Other transactions impacting noncontrolling interests ( 4 ) ( 4 ) 25

Balance at June 30, 2020 $ 4 $ 28,699 $ ( 788 ) $ 23,052 $ ( 3,601 ) $ 47,366 $ 5 $ 47,371 $ 34

Balance at September 30, 2020 $ 4 $ 28,777 $ ( 541 ) $ 24,440 $ ( 4,648 ) $ 48,032 $ 7 $ 48,039 $ 59

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

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Consolidated Statements of Changes in Total Equity

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

(In millions) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Retained Earnings Treasury Stock Shareholders’ Equity Other Non- controlling Interests Total

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Other transactions impacting noncontrolling interests ( 5 ) ( 5 ) ( 16 ) ( 21 ) ( 8 )

Balance at June 30, 2021 $ 4 $ 29,403 $ ( 1,077 ) $ 30,513 $ ( 10,134 ) $ 48,709 $ 7 $ 48,716 $ 51

Six Months Ended June 30, 2020

Balance at September 30, 2021 $ 4 $ 29,077 $ ( 1,153 ) $ 31,803 $ ( 12,316 ) $ 47,415 $ 12 $ 47,427 $ 56

Nine Months Ended September 30, 2020

(In millions) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Retained Earnings Treasury Stock Shareholders’ Equity Other Non- controlling Interests Total

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Other transactions impacting noncontrolling interests ( 11 ) ( 11 ) 22

Balance at June 30, 2020 $ 4 $ 28,699 $ ( 788 ) $ 23,052 $ ( 3,601 ) $ 47,366 $ 5 $ 47,371 $ 34

Balance at September 30, 2020 $ 4 $ 28,777 $ ( 541 ) $ 24,440 $ ( 4,648 ) $ 48,032 $ 7 $ 48,039 $ 59

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

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Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30, 2021

(In millions) 2021 2020

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Acquisitions, net of cash acquired ( 1,836 ) ( 135 )

Divestiture, net of cash sold ( 61 ) —

Other, net 51 37

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Net change in short-term debt 1,633 592

Net proceeds on issuance of term loan — 1,398

Payments for debt extinguishment ( 136 ) ( 212 )

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Cash, cash equivalents and restricted cash January 1, (1)

Cash, cash equivalents and restricted cash, June 30,

Cash, cash equivalents and restricted cash, September 30,

Cash reclassified to assets of business held for sale — ( 798 )

Cash, cash equivalents and restricted cash June 30, per Consolidated Balance Sheets (2)

Cash, cash equivalents and restricted cash September 30, per Consolidated Balance Sheets (2)

$ 3,540 $ 5,406

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(1) Includes $ 743 million reported in Assets of business held for sale as of January 1, 2020.

See table below for Cash, cash equivalents and restricted cash reconciliation.

(2) See table below for Cash, cash equivalents and restricted cash reconciliation as of June 30, 2021 and 2020.

The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents reported within the Consolidated Balance Sheets to the totals above:

As of June 30,

(In millions) 2021 2020

Cash and cash equivalents $ 3,821 $ 7,185

Restricted cash and cash equivalents, included in other long-term investments 57 318

Total cash, cash equivalents and restricted cash and cash equivalents $ 3,878 $ 7,503

(2) Restricted cash and cash equivalents were reported in other long-term investments as of September 30, 2021, December 31, 2020 and September 30, 2020.

Restricted cash and cash equivalents were reported in other long-term investments and other assets as of December 31, 2019.

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

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Medical segment.

In connection with the launch of Evernorth in the third quarter of 2020, two reporting segments were renamed.

Health Services was renamed as Evernorth and Integrated Medical was renamed U.S.

In addition, two of our operating segments were renamed:

Commercial and Government were renamed U.S.

Commercial and U.S.

Government respectively.

There were no changes to the underlying businesses reported in the segments.

Evernorth includes a broad range of coordinated and point solution health services capabilities, as well as those from partners across the health care system, in pharmacy solutions, benefits management solutions, care solutions and intelligence solutions, which are provided to health plans, employers, government organizations and health care providers.

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International Markets includes supplemental health, life and accident insurance products and health care coverage in our international markets, as well as health care benefits for globally mobile employees of multinational organizations.

Cigna entered into a definitive agreement in October 2021 to sell its life, accident and supplemental benefits businesses in seven countries to Chubb INA Holdings, Inc.

("Chubb") for $ 5.75 billion cash.

Subject to applicable regulatory approvals and customary closing conditions, we expect to complete the sale of our life, accident and supplemental benefits businesses in Hong Kong, Indonesia, New Zealand, South Korea, Taiwan, Thailand and our interest in a joint venture in Turkey in 2022.

The remainder of our business operations are reported in Other Operations, consisting of the following:

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deferred gains from the sales of these businesses.

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

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

Note 2 – Summary of Significant Accounting Policies

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The Company's 2020 Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted our financial statements or may impact them in the future.

There have been no updates to accounting guidance not yet adopted or recently issued accounting pronouncements that have occurred since the Company filed its 2020 Form 10-K.

There were no new accounting standards adopted as of June 30, 2021 that had a material impact to our financial statements.

There have been no updates to accounting guidance not yet adopted or recently issued accounting pronouncements that have occurred since the Company filed its 2020 Form 10-K that would have a material impact to our financial statements.

There were no new accounting standards adopted as of September 30, 2021 that had a material impact to our financial statements.

Note 3 – Accounts Receivable, Net

The following amounts were included within Accounts receivable, net:

(In millions) June 30, 2021 December 31, 2020

(In millions) September 30, 2021 December 31, 2020

Noninsurance customer receivables $ 6,797 $ 5,534

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Total $ 16,250 $ 12,191

These receivables are reported net of our allowances of $ 1.5 billion as of June 30, 2021 and $ 1.2 billion as of December 31, 2020.

These receivables are reported net of our allowances of $ 1.5 billion as of September 30, 2021 and $ 1.2 billion as of December 31, 2020.

These allowances include contractual allowances for certain rebates receivable with pharmaceutical manufacturers and certain receivables from third-party payors, discounts and claims adjustments issued to customers in the form of client credits, an allowance for current expected credit losses and other non-credit adjustments.

The Company's allowance for current expected credit losses was $ 57 million as of June 30, 2021 and $ 65 million as of December 31, 2020.

The Company's allowance for current expected credit losses was $ 57 million as of September 30, 2021 and $ 65 million as of December 31, 2020.

Note 4 – Mergers, Acquisitions and Divestitures

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("MDLIVE"), a 24/7 virtual care platform.

Combined with Cigna's previous held equity investment, Cigna now owns 100 % of MDLIVE.

As a result of the acquisition, Cigna recorded a realized gain on its existing equity investment.

Combined with Cigna's previously held equity investment, Cigna now owns 100 % of MDLIVE.

The acquisition of MDLIVE will enable Cigna's Evernorth segment to continue expanding access to virtual care and delivering a more affordable, convenient and connected care experience for consumers.

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In accordance with GAAP, the total consideration transferred has been allocated to the tangible and intangible net assets acquired based on management's preliminary estimates of their fair values and may change as additional information becomes available over the next several months.

During the three months ended September 30, 2021, the Company made immaterial measurement period adjustments to the purchase price allocation.

The estimated fair values of assets acquired and liabilities assumed as of the closing date were as follows:

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Total purchase price $ 2,027

Most of the goodwill is assigned to the Evernorth segment ($ 1.3 billion), with the remainder assigned to the U.S.

Medical segment.

Most of the goodwill is assigned to the Evernorth segment ($ 1.3 billion).

Goodwill is not deductible for federal income tax purposes.

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The fair value of the customer relationships and the amortization period were determined using an income approach that relies heavily on projected future net cash flows including key assumptions for customer attrition, margins and discount rates.

The customer relationship intangible asset is amortized over a period of 17 years on an accelerated basis, reflecting the pattern in which Cigna expects to receive the benefits of the related cash flows.

The customer relationship intangible asset is amortized over a period of 17 years in a pattern that reflects when Cigna expects to receive the benefits of the related cash flows.

The results of MDLIVE have been included in the Company's Consolidated Financial Statements from the date of the acquisition.

Revenues from MDLIVE and their results of operations were not material to Cigna's consolidated results of operations for the three or six months ended June 30, 2021.

Revenues from MDLIVE and their results of operations were not material to Cigna's consolidated results of operations for the three or nine months ended September 30, 2021.

The pro forma effects of this acquisition for current and prior periods were not material to our consolidated results of operations.

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Integration and Transaction-related Costs

In the first six months of 2021, the Company incurred costs related to the acquisition of MDLIVE, the terminated merger with Anthem, Inc.

In the first nine months of 2021, the Company incurred costs related to the acquisition of MDLIVE, the terminated merger with Anthem, Inc.

(“Anthem”) and the sale of the U.S.

Group Disability and Life business.

In the first six months of 2020, the Company incurred costs related to the acquisition and integration of Express Scripts Holding Company ("Express Scripts"), the terminated merger with Anthem, the sale of the U.S.

In the first nine months of 2020, the Company incurred costs related to the acquisition and integration of Express Scripts Holding Company ("Express Scripts"), the terminated merger with Anthem, the sale of the U.S.

Group Disability and Life insurance business and other transactions.

These costs were $ 16 million pre-tax ($ 14 million after-tax) for the three months and $ 45 million pre-tax ($ 36 million after-tax) for the six months ended June 30, 2021, compared with $ 130 million pre-tax ($ 99 million after-tax) for the three months and $ 227 million pre-tax ($ 173 million after-tax) for the six months ended June 30, 2020.

These costs were $ 13 million pre-tax ($( 35 ) million after-tax) for the three months and $ 58 million pre-tax ($ 1 million after-tax) for the nine months ended September 30, 2021, compared with $ 112 million pre-tax ($ 83 million after-tax) for the three months and $ 339 million pre-tax ($ 256 million after-tax) for the nine months ended September 30, 2020.

These costs consisted primarily of certain projects to integrate or separate the Company’s systems, products and services, fees for legal, advisory and other professional services and certain employment-related costs.

After-tax costs for the three and nine months ended September 30, 2021 included a tax benefit from the resolution of a tax matter related to the sold Group Disability and Life business.

Note 5 – Earnings Per Share (“EPS”)

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Three Months Ended

June 30, 2021 June 30, 2020

September 30, 2021 September 30, 2020

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

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EPS $ 4.84 $ ( 0.04 ) $ 4.80 $ 3.81 $ ( 0.03 ) $ 3.78

Six Months Ended

June 30, 2021 June 30, 2020

Nine Months Ended

September 30, 2021 September 30, 2020

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

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The following outstanding employee stock options were not included in the computation of diluted earnings per share because their effect was anti-dilutive:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2021 2020 2021 2020

Anti-dilutive options 1.5 4.6 1.5 4.2

The Company held approximately 52.2 million shares of common stock in treasury at June 30, 2021, 35.5 million shares as of December 31, 2020 and 20.8 million shares as of June 30, 2020.

The Company held approximately 62.6 million shares of common stock in treasury at September 30, 2021, 35.5 million shares as of December 31, 2020 and 26.7 million shares as of September 30, 2020.

On August 23, 2021, as part of our existing share repurchase program, we entered into separate accelerated share repurchase agreements (“ASR agreements”) with Morgan Stanley & Co.

LLC and JP Morgan Chase Bank, N.A.

(collectively, the “Counterparties”) to repurchase $ 2.0 billion of common stock in aggregate.

On August 24, 2021, in accordance with the ASR agreements we remitted $ 2.0 billion to the Counterparties and received an initial delivery of 7.7 million shares of our common stock.

The final number of shares to be received under the ASR agreements will be determined based on the daily volume-weighted average share price of our common stock over the term of the agreements, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreements.

We expect final settlement under the ASR agreements to occur in the fourth quarter of 2021.

At final settlement, we may be entitled to receive additional shares of our common stock from the Counterparties or we may be required to make a payment.

If we are obligated to make a payment, we may elect to satisfy such obligation in cash or shares of our common stock.

We recorded the payments to the Counterparties as a reduction to stockholders’ equity, consisting of a $ 1.6 billion increase in treasury stock, which reflects the value of the initial 7.7 million shares received upon initial settlement, and a $ 400 million decrease in capital in excess of par value or Additional paid-in capital, which reflects the value of the stock held back by the Counterparties pending final settlement of the agreements.

The $ 400 million recorded in Additional paid-in capital will be reclassified to treasury stock upon settlement of the ASR agreements.

The initial delivery of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share on the effective date of the ASR agreements.

Note 6 – Debt

The outstanding amounts of debt and finance leases were as follows:

(In millions) June 30, 2021 December 31, 2020

(In millions) September 30, 2021 December 31, 2020

Short-term debt

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Debt Issuance and Redemption.

In order to decrease future interest expense, mitigate future refinancing risk and raise proceeds for general corporate purposes, the Company entered into the following transactions during the six months ended June 30, 2021:

• Debt issuance:

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• Debt redemption:

During the first six months of 2021, the Company completed the redemption of a total of $ 4.5 billion in aggregate principal amount of certain of its outstanding debt securities.

During the first nine months of 2021, the Company completed the redemption of a total of $ 4.5 billion in aggregate principal amount of certain of its outstanding debt securities.

The Company recorded a pre-tax loss of $ 141 million ($ 110 million after-tax), consisting primarily of premium payments.

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Our revolving credit agreements provide us with the ability to borrow amounts for general corporate purposes, including for the purpose of providing liquidity support if necessary under our commercial paper program discussed below.

As of June 30, 2021, there were no outstanding balances under these revolving credit agreements.

As of September 30, 2021, there were no outstanding balances under these revolving credit agreements.

In April 2021, Cigna entered into a $ 3.0 billion five-year revolving credit and letter of credit agreement that matures in April 2026 and a $ 1.0 billion three-year revolving credit agreement that matures in April 2024, which are diversified among 23 banks and replaced the five-year revolving credit and letter of credit agreement that was scheduled to mature in April 2023.

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Commercial Paper.

Under our commercial paper program we may issue short-term, unsecured commercial paper notes privately placed on a discounted basis through certain broker dealers at any time not to exceed an aggregate amount of $ 4.25 billion as of June 30, 2021.

Amounts available under the program may be borrowed, repaid and re-borrowed from time to time.

The net proceeds of issuances have been and are expected to be used for general corporate purposes.

In July 2021, our commercial paper program size was increased to $ 5.0 billion.

The Company was in compliance with its debt covenants as of June 30, 2021.

The Company was in compliance with its debt covenants as of September 30, 2021.

Note 7 – Insurance and Contractholder Liabilities

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

June 30, 2021 December 31, 2020 June 30, 2020

September 30, 2021 December 31, 2020 September 30, 2020

(In millions) Current Non-current Total Current Non-current Total Total

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Total insurance and contractholder liabilities $ 5,917 $ 16,576 $ 22,493 $ 5,308 $ 16,844 $ 22,152 $ 21,436

(1) Amounts classified as Liabilities of business held for sale primarily include $ 5.1 billion of unpaid claims, $ 758 million of contractholder deposit funds and $ 644 million of future policy benefits as of June 30, 2020.

(1) Amounts classified as Liabilities of business held for sale primarily include $ 5.2 billion of unpaid claims, $ 759 million of contractholder deposit funds and $ 646 million of future policy benefits as of September 30, 2020.

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

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This liability reflects estimates of the ultimate cost of claims that have been incurred but not reported, including expected development on reported claims, those that have been reported but not yet paid (reported claims in process) and other medical care expenses and services payable that are primarily comprised of accruals for incentives and other amounts payable to health care professionals and facilities.

The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $ 3.4 billion at June 30, 2021 and $ 2.7 billion at June 30, 2020.

The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $ 3.6 billion at September 30, 2021 and $ 3.0 billion at September 30, 2020.

Activity, net of intercompany transactions, in the unpaid claims liability for the U.S.

Medical segment for the six months ended June 30 was as follows:

Six Months Ended

(In millions) June 30, 2021 June 30, 2020

Medical segment for the nine months ended September 30 was as follows:

Nine Months Ended

(In millions) September 30, 2021 September 30, 2020

Beginning balance $ 3,184 $ 2,892

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See Note 8 for additional information on reinsurance .

Variances in incurred costs related to prior years’ unpaid claims and claim expenses that resulted from the differences between actual experience and the Company’s key assumptions for the six months ended June 30 were as follows:

Six Months Ended

(Dollars in millions) June 30, 2021 June 30, 2020

Nine Months Ended

(Dollars in millions) September 30, 2021 September 30, 2020

Actual completion factors $ 56 0.2 % $ 47 0.2 %

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The liability details for unpaid claims and claim expenses are as follows:

(In millions) June 30, 2021 June 30, 2020

(In millions) September 30, 2021 September 30, 2020

Other Operations

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$ 1,176 $ 6,235

Activity in the Company’s liabilities for unpaid claims and claim expenses for International Markets and, prior to the sale, Group Disability and Life (see Note 4 for further information), is presented in the following table.

Activity, net of intercompany transactions, in the unpaid claims and claim expenses for International Markets and, prior to the sale, Group Disability and Life (see Note 4 for further information) is presented in the following table.

Prior to the sale, the majority of the liability related to disability claims with long tailed payouts.

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Liabilities associated with Other Operations are excluded because they pertain to obligations for long-duration insurance contracts or, if short-duration, the liabilities have been fully reinsured.

Six Months Ended

(In millions) June 30, 2021

June 30, 2020 (1)

Nine Months Ended

(In millions) September 30, 2021

September 30, 2020 (1)

Beginning balance $ 963 $ 5,816

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The majority of the Company’s reinsurance recoverables resulted from acquisition and disposition transactions in which the underwriting company was not acquired.

Included in the table below are $ 227 million of current reinsurance recoverables that are reported in Other current assets as of June 30, 2021;

Included in the table below are $ 214 million of current reinsurance recoverables that are reported in Other current assets as of September 30, 2021;

as of December 31, 2020 there was $ 217 million of current reinsurance recoverables reported in Other current assets.

The Company’s reinsurance recoverables as of June 30, 2021 are presented in the following table by range of external credit rating and collateral level.

The Company’s reinsurance recoverables as of September 30, 2021 are presented in the following table by range of external credit rating and collateral level:

(in millions) Fair value of collateral contractually required to meet or exceed carrying value of recoverable

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Lincoln National Life and Lincoln Life & Annuity of New York — 2,942 — 2,942

Berkshire 292 382 — 674

Berkshire Hathaway Life Insurance Company of Nebraska 284 384 — 668

Prudential Retirement Insurance and Annuity 583 — — 583

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In the Company’s Consolidated Statements of Income, Premiums were reported net of amounts ceded to reinsurers and Medical costs and other benefit expenses were reported net of reinsurance recoveries in the following amounts:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2021 2020 2021 2020

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Berkshire reinsured 100 % of the Company’s future claim payments in this business, net of other reinsurance arrangements existing at that time.

The reinsurance agreement is subject to an overall limit with approximately $ 3.2 billion remaining at June 30, 2021.

The reinsurance agreement is subject to an overall limit with approximately $ 3.2 billion remaining at September 30, 2021.

GMDB is accounted for as assumed and ceded reinsurance and GMIB assets and liabilities are reported as derivatives at fair value as discussed below.

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The Company should be reimbursed in full for these payments unless the Berkshire reinsurance limit is exceeded.

(Dollars in millions, excludes impact of reinsurance ceded) June 30, 2021 December 31, 2020

(Dollars in millions, excludes impact of reinsurance ceded) September 30, 2021 December 31, 2020

Account value $ 9,552 $ 9,523

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The Company has purchased retrocessional coverage (“GMIB assets”) for these contracts including retrocessional coverage from Berkshire.

GMIB liabilities totaling $ 604 million as of June 30, 2021 and $ 729 million as of December 31, 2020 are classified as Level 3 because fair value inputs are largely unobservable.

There were three reinsurers covering 100 % of the GMIB exposures as of June 30, 2021 and December 31, 2020 as follows:

GMIB liabilities totaling $ 610 million as of September 30, 2021 and $ 729 million as of December 31, 2020 are classified as Level 3 because fair value inputs are largely unobservable.

There were three reinsurers covering 100 % of the GMIB exposures as of September 30, 2021 and December 31, 2020 as follows:

(In millions)

Line of Business Reinsurer June 30, 2021 December 31, 2020 Collateral and Other Terms at June 30, 2021

Line of Business Reinsurer September 30, 2021 December 31, 2020 Collateral and Other Terms at September 30, 2021

GMIB Berkshire $ 298 $ 353 100 % were secured by assets in a trust.

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

Amounts included in shareholders’ net income for GMIB assets and liabilities were not material for the three and six months ended June 30, 2021 or June 30, 2020.

Note 9 – Investments

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

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(In millions) Current Long-term Total Current Long-term Total

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Debt Securities

The amortized cost and fair value by contractual maturity periods for debt securities were as follows at June 30, 2021:

The amortized cost and fair value by contractual maturity periods for debt securities were as follows at September 30, 2021:

(In millions) Amortized

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Depreciation Fair

June 30, 2021

September 30, 2021

Federal government and agency $ 277 $ — $ 105 $ — $ 382

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These debt securities are primarily corporate securities with a decline in fair value that reflects an increase in market yields since purchase.

Our allowance for credit losses on debt securities was not material as of June 30, 2021 and December 31, 2020.

June 30, 2021 December 31, 2020

Our allowance for credit losses on debt securities was not material as of September 30, 2021 and December 31, 2020.

September 30, 2021 December 31, 2020

(Dollars in millions) Fair

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Equity Securities

The following table provides the values of the Company's equity security investments as of June 30, 2021 and December 31, 2020.

The amount of impairments or value changes resulting from observable price changes on equity securities still held was not material to the financial statements as of June 30, 2021 or December 31, 2020.

June 30, 2021 December 31, 2020

The following table provides the values of the Company's equity security investments as of September 30, 2021 and December 31, 2020.

The amount of impairments or value changes resulting from observable price changes on equity securities still held was not material to the financial statements as of September 30, 2021 or December 31, 2020.

September 30, 2021 December 31, 2020

(In millions) Cost Carrying Value Cost Carrying Value

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

The following table summarizes the credit risk profile of the Company’s commercial mortgage loan portfolio as of June 30, 2021 and December 31, 2020:

(Dollars in millions) June 30, 2021 December 31, 2020

The following table summarizes the credit risk profile of the Company’s commercial mortgage loan portfolio as of September 30, 2021 and December 31, 2020:

(Dollars in millions) September 30, 2021 December 31, 2020

Loan-to-Value Ratio Carrying Value Average Debt Service Coverage Ratio Average Loan-to-Value Ratio Carrying Value Average Debt Service Coverage Ratio Average Loan-to-Value Ratio

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Total $ 1,525 1.93 61 % $ 1,419 2.08 61 %

All commercial mortgage loans in the Company's portfolio are current as of June 30, 2021 and December 31, 2020.

All commercial mortgage loans in the Company's portfolio are current as of September 30, 2021 and December 31, 2020.

Other Long-Term Investments

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Carrying value as of

(In millions) June 30, 2021 December 31, 2020

(In millions) September 30, 2021 December 31, 2020

Real estate investments $ 1,161 $ 951

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Derivatives in the Company’s separate accounts are excluded from the following discussion because associated gains and losses generally accrue directly to separate account policyholders.

Derivative instruments used by the Company typically include foreign currency and interest rate swap contracts and foreign currency forward contracts.

Swap contracts periodically exchange cash flows between fixed and variable interest rates or between two currencies for principal and interest.

Foreign currency forward contracts require the Company to purchase a foreign currency in exchange for the functional currency of its operating unit at a future date.

The Company manages the credit risk of these derivative instruments by diversifying its portfolio among approved dealers of high credit quality and through routine monitoring of credit risk exposures.

While certain centrally-cleared derivative instruments require the posting of cash as an upfront margin, certain of the Company’s over-the-counter derivative instruments require either the Company or the counterparty to post collateral or demand immediate payment depending on the amount of the net liability position of the derivative instrument and predefined financial strength or credit rating thresholds.

These collateral posting requirements vary by counterparty.

The Company may incur a loss if dealers failed to perform under derivative contracts;

however, collateral has been posted by dealers to cover substantially all of the net fair values owed at June 30, 2021 and December 31, 2020.

The fair value of margin and collateral posted by the Company was not significant as of June 30, 2021 or December 31, 2020.

The gross fair values of our derivative financial instruments are presented in Note 10.

As of September 30, 2021 and December 31, 2020, the effects of derivative financial instruments used in these individual hedging strategies were not material to the Consolidated Financial Statements, including gains or losses reclassified from Accumulated other comprehensive income into Shareholders' net income, amounts excluded from the assessment of hedge effectiveness and fair values of assets posted or held as collateral supporting these fair values.

The following table summarizes the types and notional quantity of derivative instruments held by the Company:

As of June 30, 2021 and December 31, 2020, the effects of these individual hedging strategies were not material to the Consolidated Financial Statements, including gains or losses reclassified from Accumulated other comprehensive income into Shareholders' net income, as well as amounts excluded from the assessment of hedge effectiveness.

Notional Value as of

(In millions) June 30, 2021 December 31, 2020

(In millions) September 30, 2021 December 31, 2020

Purpose Type of Instrument

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The effects of those adjustments on interest expense are offset by the effects of corresponding changes in the swaps' fair value.

The net impact from the hedge reported in Interest expense and other reflects interest expense on the hedged debt at the variable interest rate.

The net impact from the hedge reported in Interest

expense and other reflects interest expense on the hedged debt at the variable interest rate.

Cash flows relating to these contracts are reported in Operating activities.

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The following realized gains and losses on investments exclude amounts required to adjust future policy benefits for the run-off settlement annuity business (consistent with accounting for a premium deficiency), as well as realized gains and losses attributed to the Company’s separate accounts because those gains and losses generally accrue directly to separate account policyholders:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2021 2020 2021 2020

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Net realized investment gains (losses), before income taxes $ 68 $ 32 $ 128 $ ( 18 )

Net realized investment gains, excluding credit loss expense and asset write-downs for the six months ended June 30, 2021 was primarily driven by mark-to-market gains on equity securities and gains on the sales of real estate partnerships, partially offset by mark-to-market losses on derivatives.

This activity for the six months ended June 30, 2020 primarily represent gains on sales of debt securities, partially offset by mark-to-market losses on derivatives and equity securities.

Net realized investment gains, excluding credit loss expense and asset write-downs for the nine months ended September 30, 2021 was primarily driven by mark-to-market gains on equity securities and gains on the sales of real estate partnerships, partially offset by mark-to-market losses on derivatives.

This activity for the nine months ended September 30, 2020 primarily represent gains on sales of debt securities, partially offset by mark-to-market losses on equity securities and derivatives.

Credit loss (expense) recoveries on invested assets reflect credit losses incurred on debt securities primarily relating to issuers in certain industries that have been impacted by the global COVID-19 pandemic.

Realized gains and losses on equity securities still held at June 30, 2021 and 2020 were not material.

Realized gains and losses on equity securities still held at September 30, 2021 and 2020 were not material.

Note 10 – Fair Value Measurements

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Financial Assets and Financial Liabilities Carried at Fair Value

The following table provides information as of June 30, 2021 and December 31, 2020 about the Company’s financial assets and liabilities carried at fair value.

The following table provides information as of September 30, 2021 and December 31, 2020 about the Company’s financial assets and liabilities carried at fair value.

Separate account assets are also recorded at fair value on the Company’s Consolidated Balance Sheets and are reported separately in the Separate Accounts section below as gains and losses related to these assets generally accrue directly to policyholders.

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(Level 3) Total

As of June 30, 2021 As of December 31, 2020 As of June 30, 2021 As of December 31, 2020 As of June 30, 2021 As of December 31, 2020 As of June 30, 2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020 As of September 30, 2021 As of December 31, 2020 As of September 30, 2021 As of December 31, 2020 As of September 30, 2021 As of December 31, 2020

Financial assets at fair value

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

(2) Derivative assets above include $ 1 million that are presented in the Short-term investments category disclosed in Note 9.

(2) Derivative assets above include an immaterial amount as of September 30, 2021 and $ 34 million as of December 31, 2020 that are presented in the Short-term investments category disclosed in Note 9.

See Note 9 for more information on our Derivative Financial Instruments.

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This adjustment is needed to reflect current market conditions and issuer circumstances when there is limited trading activity for the security.

The following table summarizes the fair value and significant unobservable inputs that were developed directly by the Company and used in pricing these debt securities as of June 30, 2021 and December 31, 2020.

The following table summarizes the fair value and significant unobservable inputs that were developed directly by the Company and used in pricing these debt securities as of September 30, 2021 and December 31, 2020.

The range and weighted average basis point (“bps”) amounts for liquidity reflect the Company’s best estimates of the unobservable adjustments a market participant would make to calculate these fair values.

Fair Value as of Unobservable Adjustment Range (Weighted Average by Quantity) as of

(Fair value in millions ) June 30, 2021 December 31, 2020 Unobservable input June 30, 2021 June 30, 2021 December 31, 2020

(Fair value in millions ) September 30, 2021 December 31, 2020 Unobservable input September 30, 2021 September 30, 2021 December 31, 2020

Debt securities

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Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Value

The following table summarizes the changes in financial assets and financial liabilities classified in Level 3 for the three and six months ended June 30, 2021 and 2020.

The following table summarizes the changes in financial assets and financial liabilities classified in Level 3 for the three and nine months ended September 30, 2021 and 2020.

Gains and losses reported in the table may include net changes in fair value that are attributable to both observable and unobservable inputs.

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

(In millions) 2021 2020 2021 2020

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

1 7 ( 7 ) ( 3 )

Purchases, sales and settlements

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

Fair values of Separate account assets at June 30, 2021 and December 31, 2020 were as follows:

Fair values of Separate account assets at September 30, 2021 and December 31, 2020 were as follows:

(In millions) Quoted Prices in Active Markets for Identical Assets

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(Level 3) Total

June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020

Guaranteed separate accounts (See Note 15)

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Separate account assets per Consolidated Balance Sheets $ 9,150 $ 9,086

(1) Non-guaranteed separate accounts included $ 4.4 billion as of June 30, 2021 and $ 4.2 billion as of December 31, 2020 in assets supporting the Company’s pension plans, including $ 0.3 billion classified in Level 3 as of June 30, 2021 and December 31, 2020.

(1) Non-guaranteed separate accounts included $ 4.4 billion as of September 30, 2021 and $ 4.2 billion as of December 31, 2020 in assets supporting the Company’s pension plans, including $ 0.3 billion classified in Level 3 as of September 30, 2021 and December 31, 2020.

Separate account assets classified in Level 3 primarily support Cigna’s pension plans and include certain newly-issued, privately-placed, complex or illiquid securities that are priced using methods discussed above, as well as commercial mortgage loans.

Activity, including transfers into and out of Level 3, was not material for the three and six months ended June 30, 2021 or 2020.

Activity, including transfers into and out of Level 3, was not material for the three and nine months ended September 30, 2021 or 2020.

Separate account investments in securities partnerships, real estate and hedge funds are generally valued based on the separate account’s ownership share of the equity of the investee (NAV as a practical expedient) including changes in the fair values of its underlying investments .

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The following table provides additional information on these investments:

Fair Value as of Unfunded Commitment as of June 30, 2021 Redemption Frequency

Fair Value as of Unfunded Commitment as of September 30, 2021 Redemption Frequency

(if currently eligible) Redemption Notice

(In millions) June 30, 2021 December 31, 2020

(In millions) September 30, 2021 December 31, 2020

Securities partnerships $ 534 $ 463 $ 253 Not applicable Not applicable

2 unchanged sentences

Total $ 847 $ 683 $ 253

As of June 30, 2021, the Company does not have plans to sell any of these assets at less than fair value.

As of September 30, 2021, the Company does not have plans to sell any of these assets at less than fair value.

These investments are structured to satisfy longer-term investment objectives.

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Assets and Liabilities Measured at Fair Value under Certain Conditions

Some financial assets and liabilities are not carried at fair value each reporting period, but may be measured using fair value only under certain conditions such as when investments become impaired, including investment real estate and commercial mortgage loans and certain equity securities with no readily determinable fair value.

For the six months ended June 30, 2021 and 2020, there were no such impairments.

Equity securities with no readily determinable fair value are also measured at fair value when there are observable price changes from orderly transactions with the same issuer.

Realized investment gains and losses from these observable price changes for the six months ended June 30, 2021 and June 30, 2020 were not material.

Carrying values represented less than 1 % of total investments as of both June 30, 2021 and June 30, 2020.

Some financial assets and liabilities are not carried at fair value, such as commercial mortgage loans that are carried at unpaid principal, investment real estate that is carried at depreciated cost and equity securities with no readily determinable fair value when there are no observable market transactions.

However, these financial assets and liabilities may be measured using fair value under certain conditions, such as when investments become impaired and are written down to their fair value, or when there are observable price changes from orderly market transactions of equity securities that otherwise had no readily determinable fair value.

For the nine months ended September 30, 2021 and 2020, no impairments were recognized requiring these assets to be measured at fair value.

Realized investment gains and losses from these observable price changes for the nine months ended September 30, 2021 and September 30, 2020 were not material.

Fair Value Disclosures for Financial Instruments Not Carried at Fair Value

The following table includes the Company’s financial instruments not recorded at fair value that are subject to fair value disclosure requirements at June 30, 2021 and December 31, 2020.

The following table includes the Company’s financial instruments not recorded at fair value that are subject to fair value disclosure requirements at September 30, 2021 and December 31, 2020.

In addition to universal life products and finance leases, financial instruments that are carried in the Company’s Consolidated Financial Statements at amounts that approximate fair value are excluded from the following table:

Classification in Fair Value Hierarchy June 30, 2021 December 31, 2020

Classification in Fair Value Hierarchy September 30, 2021 December 31, 2020

(In millions) Fair Value Carrying Value Fair Value Carrying Value

3 unchanged sentences

We perform ongoing qualitative analyses of our involvement with variable interest entities to determine if consolidation is required.

The Company determined it was not a primary beneficiary in any material variable interest entity as of June 30, 2021 or December 31, 2020.

The Company determined it was not a primary beneficiary in any material variable interest entity as of September 30, 2021 or December 31, 2020.

The Company’s involvement with variable interest entities for which it is not the primary beneficiary has not changed materially from December 31, 2020.

6 unchanged sentences

Changes in the components of AOCI were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2021 2020 2021 2020

5 unchanged sentences

Reclassification adjustment for (gains) losses included in Shareholders' net income (Net realized investment (gains) losses) ( 14 ) ( 16 ) ( 20 ) ( 3 )

Reclassification adjustment for tax expense (benefit) included in Shareholders’ net income 3 4 2 ( 3 )

Reclassification adjustment for tax expense included in Shareholders’ net income 3 4 5 1

Net (gains) losses reclassified from AOCI to Shareholders' net income ( 11 ) ( 12 ) ( 15 ) ( 2 )

13 unchanged sentences

Reclassification adjustment for settlement (Interest expense and other) — — 4 —

Reclassification adjustment for tax expense (benefit) included in Shareholders’ net income ( 5 ) ( 4 ) ( 10 ) ( 9 )

Reclassification adjustment for tax (benefit) included in Shareholders’ net income ( 5 ) ( 4 ) ( 15 ) ( 13 )

Net adjustments reclassified from AOCI to Shareholders' net income 16 14 49 41

Valuation update — — — ( 73 )

Tax (expense) benefit — 17 — 17

Tax benefit — — — 17

Net change due to valuation update — — — ( 56 )

3 unchanged sentences

Operating and finance lease Right-of-Use (“ROU”) assets and lease liabilities were as follows:

(In millions) June 30, 2021 December 31, 2020

(In millions) September 30, 2021 December 31, 2020

Operating leases:

12 unchanged sentences

Income Tax Expense

The 22.4 % effective tax rate for the six months ended June 30, 2021 was higher than the 20.0 % rate for the same period in 2020.

This increase is primarily attributable to the absence of favorable items which reduced the rate in 2020, including settlements of uncertain tax positions and the remeasurement of deferred state income taxes due to changes in statutory rates and adjustments in apportionment factors;

partially offset by the elimination of the nondeductible health insurer tax in 2021 .

The 21.7 % effective tax rate for the nine months ended September 30, 2021 was higher than the 20.8 % rate for the same period in 2020.

Note 15 – Contingencies and Other Matters

5 unchanged sentences

If employers fail to do so, the Company or an affiliate of the buyer of the retirement benefits business has the right to redirect the management of the related assets to provide for benefit payments.

As of June 30, 2021, employers maintained assets that generally exceeded the benefit obligations under these arrangements of approximately $ 450 million.

As of September 30, 2021, employers maintained assets that generally exceeded the benefit obligations under these arrangements of approximately $ 440 million.

An additional liability is established if management believes that the Company will be required to make payments under the guarantees;

there were no additional liabilities required for these guarantees, net of reinsurance, as of June 30, 2021.

there were no additional liabilities required for these guarantees, net of reinsurance, as of September 30, 2021.

Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy.

1 unchanged sentence

Certain Other Guarantees

The Company had indemnification obligations as of June 30, 2021 in connection with acquisition and disposition transactions.

The Company had indemnification obligations as of September 30, 2021 in connection with acquisition and disposition transactions.

These indemnification obligations are triggered by the breach of representations or covenants provided by the Company, such as representations for the presentation of financial statements, filing of tax returns, compliance with law or identification of outstanding litigation.

3 unchanged sentences

The Company does not believe that it is possible to determine the maximum potential amount due under these obligations because not all amounts due under these indemnification obligations are subject to limitation.

There were no liabilities for these indemnification obligations as of June 30, 2021.

There were no liabilities for these indemnification obligations as of September 30, 2021.

Guaranty Fund Assessments

1 unchanged sentence

The Company’s exposure to assessments for certain obligations of insolvent insurance companies to policyholders and claimants is based on its share of business written in the relevant jurisdictions.

There were no material charges or credits resulting from existing or new guaranty fund assessments for the six months ended June 30, 2021.

There were no material charges or credits resulting from existing or new guaranty fund assessments for the nine months ended September 30, 2021.

Legal and Regulatory Matters

17 unchanged sentences

Our claim seeking recovery for CSR payments remains pending.

Cigna Litigation with Anthem .

In February 2017, the Company filed suit against Anthem, Inc.

in the Delaware Court of Chancery (the “Chancery Court”) seeking, among other relief, payment of the $ 1.85 billion reverse termination fee under the parties’ 2015 merger agreement and damages.

Anthem countersued, alleging its own claims for damages.

A trial was held during the first quarter of 2019.

In August 2020, the Chancery Court issued an opinion finding that, although Cigna breached its contractual obligation to use reasonable best efforts to support the Anthem/Cigna merger, its actions did not cause the merger to fail.

The Court denied claims by both parties for damages and further denied Cigna’s claim for the reverse termination fee.

The Company filed a Notice of Appeal with the Delaware Supreme Court on October 30, 2020, and sought reversal of the portion of the Chancery Court’s decision denying Cigna the reverse termination fee.

Briefing on the appeal was completed on January 29, 2021 and oral arguments were held on April 14, 2021.

On May 3, 2021, the Delaware Supreme Court issued an order affirming the decision of the Chancery Court.

Express Scripts Litigation with Anthem .

In March 2016, Anthem filed a lawsuit in the United States District Court for the Southern District of New York alleging various breach of contract claims against Express Scripts relating to the parties’ rights and obligations under the periodic pricing review section of the pharmacy benefit management agreement between the parties including allegations that Express Scripts failed to negotiate new pricing concessions in good faith, as well as various alleged service issues.

Anthem also requested that the court enter declaratory judgment that Express Scripts is required to provide Anthem competitive benchmark pricing, that Anthem can terminate the agreement and that Express Scripts is required to provide Anthem with post-termination services at

competitive benchmark pricing for one year following any termination by Anthem.

Anthem claims it is entitled to $ 13 billion in additional pricing concessions over the remaining term of the agreement, as well as $ 1.8 billion for one year following any contract termination by Anthem and $ 150 million damages for service issues (“Anthem’s Allegations”).

1 unchanged sentence

The court subsequently granted Anthem’s motion to dismiss two of six counts of Express Scripts’ amended counterclaims.

The current scheduling order runs through the completion of summary judgment briefing in November 2021.

Express Scripts filed its Motion for Summary Judgment on August 27, 2021.

Anthem’s completed filing of its Response to Express Scripts’ Motion for Summary Judgment on October 16, 2021.

Express Scripts’ Reply in Support of its Motion for Summary Judgment is due November 19, 2021.

There is no tentative trial date.

9 unchanged sentences

The DOJ has not intervened in the case at this time.

On September 29, 2021, the qui tam action was transferred to the United States District Court for the Middle District of Tennessee.

Note 16 – Segment Information

13 unchanged sentences

We exclude these items from this measure because management believes they are not indicative of past or future underlying performance of the business.

The following tables present the special items recorded by the Company for the three and six months ended June 30, 2021 and 2020:

Three Months Ended Six Months Ended

(In millions) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020

The following tables present the special items recorded by the Company for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended Nine Months Ended

(In millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020

Description of Special Item Charges (Benefits) and Financial Statement Line Item(s) After-tax Before-tax After-tax Before-tax After-tax Before-tax After-tax Before-tax

Debt extinguishment costs $ — $ — $ — $ — $ 110 $ 141 $ 151 $ 199

Integration and transaction-related costs

Integration and transaction-related (benefits) costs

(Selling, general and administrative expenses) ( 35 ) 13 83 112 1 58 256 339

Charges associated with litigation matters

(Benefits) charges associated with litigation matters

(Selling, general and administrative expenses) — — — — ( 21 ) ( 27 ) 19 25

1 unchanged sentence

(Selling, general and administrative expenses) — — — — — — 24 31

Risk corridors recovery

(Selling, general and administrative expenses) — — ( 76 ) ( 101 ) — — ( 76 ) ( 101 )

Contractual adjustment for a former client

6 unchanged sentences

Corporate and Eliminations

Three months ended June 30, 2021

Three months ended September 30, 2021

Revenues from external customers $ 32,668 $ 9,588 $ 1,500 $ 63 $ 1 $ 43,820

10 unchanged sentences

Special items

Debt extinguishment costs — — — — 10 10

Integration and transaction-related costs — — — — 16 16

Integration and transaction-related (benefits) costs — — — — 13 13

Pre-tax adjusted income (loss) from operations $ 1,548 $ 988 $ 250 $ 33 $ ( 308 ) $ 2,511

3 unchanged sentences

Corporate and Eliminations

Three months ended June 30, 2020

Three months ended September 30, 2020

Revenues from external customers $ 29,016 $ 9,047 $ 1,439 $ 1,156 $ — $ 40,658

3 unchanged sentences

Net realized investment results from certain equity method investments — — ( 37 ) — — ( 37 )

Special item related to contractual adjustment for a former client ( 117 ) — — — — ( 117 )

Adjusted revenues $ 29,827 $ 9,629 $ 1,440 $ 1,314 $ ( 1,409 ) $ 40,801

5 unchanged sentences

Special items

Debt extinguishment costs — — — — 14 14

Integration and transaction-related costs — — — — 130 130

Integration and transaction-related (benefits) costs — — — — 112 112

Risk corridors recovery — ( 101 ) — — — ( 101 )

Contractual adjustment for a former client ( 117 ) — — — — ( 117 )

Pre-tax adjusted income (loss) from operations $ 1,443 $ 757 $ 208 $ 70 $ ( 366 ) $ 2,112

3 unchanged sentences

Corporate and Eliminations

Six Months Ended June 30, 2021

Nine months ended September 30, 2021

Revenues from external customers $ 93,640 $ 28,879 $ 4,526 $ 175 $ 1 $ 127,221

13 unchanged sentences

Debt extinguishment costs — — — — 141 141

Integration and transaction-related costs — — — — 45 45

Charges associated with litigation matters — — — — ( 27 ) ( 27 )

Integration and transaction-related (benefits) costs — — — — 58 58

(Benefits) charges associated with litigation matters — — — — ( 27 ) ( 27 )

Pre-tax adjusted income (loss) from operations $ 4,184 $ 2,992 $ 746 $ 70 $ ( 1,006 ) $ 6,986

3 unchanged sentences

Corporate and Eliminations

Six Months Ended June 30, 2020

Nine months ended September 30, 2020

Revenues from external customers

14 unchanged sentences

Debt extinguishment costs — — — — 199 199

Integration and transaction-related costs — — — — 227 227

Charges associated with litigation matters — — — — 25 25

Integration and transaction-related (benefits) costs — — — — 339 339

(Benefits) charges associated with litigation matters — — — — 25 25

Charge for organizational efficiency plan — — — — 31 31

Risk corridors recovery — ( 101 ) — — — ( 101 )

Contractual adjustment for a former client ( 204 ) — — — — ( 204 )

2 unchanged sentences

Revenue from external customers includes Pharmacy revenues, Premiums and Fees and other revenues.

The following table presents these revenues by product, premium and service type for the three and six months ended June 30:

Three Months Ended June 30, Six Months Ended June 30,

The following table presents these revenues by product, premium and service type for the three and nine months ended September 30:

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2021 2020 2021 2020

28 unchanged sentences

These estimates are adjusted at the end of the guarantee period.

Historically, adjustments to original estimates have not been material.

The performance guarantee liability was $ 1.0 billion as of June 30, 2021 and $ 1.1 billion as of December 31, 2020.

The performance guarantee liability was $ 1.0 billion as of September 30, 2021 and $ 1.1 billion as of December 31, 2020.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements