What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-06 · 284 added, 174 removed, 910 unchanged (33% of the section changed)

2 unchanged sentences

Consolidated Statements of Income

Three Months Ended March 31,

Unaudited Unaudited

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

(In millions, except per share amounts) 2022 2021 2022 2021

25 unchanged sentences

Consolidated Statements of Comprehensive Income

Three Months Ended March 31,

Unaudited Unaudited

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

(In millions) 2022 2021 2022 2021

1 unchanged sentence

Other comprehensive income (loss), net of tax

Net unrealized (depreciation) appreciation on securities and derivatives ( 560 ) ( 273 )

Net unrealized appreciation (depreciation) on securities and derivatives ( 410 ) 122 ( 970 ) ( 151 )

Net translation gains (losses) on foreign currencies ( 206 ) 16 ( 269 ) ( 103 )

Postretirement benefits liability adjustment 27 15 40 33

Other comprehensive (loss), net of tax ( 610 ) ( 374 )

Other comprehensive income (loss), net of tax ( 589 ) 153 ( 1,199 ) ( 221 )

Total comprehensive income 983 1,629 1,571 2,426

8 unchanged sentences

Consolidated Balance Sheets

March 31, As of

June 30, As of

(In millions) 2022 2021

41 unchanged sentences

(1) Par value per share, $ 0.01 ;

shares issued, 396 million as of March 31, 2022 and 394 million as of December 31, 2021;

shares issued, 397 million as of June 30, 2022 and 394 million as of December 31, 2021;

authorized shares, 600 million.

2 unchanged sentences

Consolidated Statements of Changes in Total Equity

Three Months Ended March 31, 2022

(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

Three Months Ended June 30, 2022

(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, 2022 $ 4 $ 29,736 $ ( 1,492 ) $ 33,420 $ ( 15,581 ) $ 46,087 $ 22 $ 46,109 $ 55

Effects of issuing stock for employee benefits plans 194 ( 1 ) 193 193

Other comprehensive loss ( 588 ) ( 588 ) ( 588 ) ( 1 )

Net income 1,559 1,559 11 1,570 2

Common dividends declared (per share:

( 353 ) ( 353 ) ( 353 )

Repurchase of common stock — ( 1,006 ) ( 1,006 ) ( 1,006 )

Other transactions impacting noncontrolling interests — — ( 3 ) ( 3 ) ( 11 )

Balance at June 30, 2022 $ 4 $ 29,930 $ ( 2,080 ) $ 34,626 $ ( 16,588 ) $ 45,892 $ 30 $ 45,922 $ 45

Three Months Ended June 30, 2021

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

Effect of issuing stock for employee benefit plans 152 ( 2 ) 150 150

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

Net income 1,467 1,467 6 1,473 3

Common dividends declared (per share:

( 343 ) ( 343 ) ( 343 )

Repurchase of common stock — ( 865 ) ( 865 ) ( 865 )

Other transactions impacting noncontrolling interests ( 3 ) ( 3 ) ( 5 ) ( 8 ) ( 10 )

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

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

Cigna Corporation

Consolidated Statements of Changes in Total Equity

Six Months Ended June 30, 2022

Balance at December 31, 2021 $ 4 $ 29,574 $ ( 884 ) $ 32,593 $ ( 14,175 ) $ 47,112 $ 18 $ 47,130 $ 54

6 unchanged sentences

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

Balance at March 31, 2022 $ 4 $ 29,736 $ ( 1,492 ) $ 33,420 $ ( 15,581 ) $ 46,087 $ 22 $ 46,109 $ 55

Three Months Ended March 31, 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 June 30, 2022 $ 4 $ 29,930 $ ( 2,080 ) $ 34,626 $ ( 16,588 ) $ 45,892 $ 30 $ 45,922 $ 45

Six Months Ended June 30, 2021

Balance at December 31, 2020 $ 4 $ 28,975 $ ( 861 ) $ 28,575 $ ( 6,372 ) $ 50,321 $ 7 $ 50,328 $ 58

6 unchanged sentences

Other transactions impacting noncontrolling interests ( 3 ) ( 3 ) ( 11 ) ( 14 ) ( 10 )

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

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

1 unchanged sentence

Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

(In millions) 2022 2021

28 unchanged sentences

Property and equipment purchases, net ( 612 ) ( 500 )

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

Divestiture, net of cash sold ( 57 ) —

16 unchanged sentences

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

Cash, cash equivalents and restricted cash, March 31,

Cash, cash equivalents and restricted cash, June 30,

Cash and cash equivalents reclassified to Assets of businesses held for sale

Cash, cash equivalents and restricted cash March 31, per Consolidated Balance Sheets (2)

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

$ 4,468 $ 3,878

3 unchanged sentences

(1) Includes $ 425 million reported in Assets of businesses held for sale as of January 1, 2022.

(2) Restricted cash and cash equivalents were reported in Other long-term investments as of March 31, 2022 and March 31, 2021.

(2) Restricted cash and cash equivalents were reported in Other long-term investments as of June 30, 2022 and June 30, 2021.

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

6 unchanged sentences

Accounts Receivable, Net

Mergers , Acqui sitions and Divestitures

Mergers, Acquisitions and Divestitures

Assets and Liabilities of Businesses Held for Sale

Earnings Per Share

C ommon and Preferred S tock

Common and Preferred Stock

I NSURANCE I NFORMATION

4 unchanged sentences

P ROPERTY , L EASES AND O THER A SSET B ALANCES

O rganizational Efficiency P lan

Organizational Efficiency Plan

C OMPLIANCE , R EGULATION AND C ONTINGENCIES

9 unchanged sentences

Details of the Company's reporting segments and recent changes are provided below:

We entered into a definitive agreement in October 2021 to sell our life, accident and supplemental benefits businesses in several countries to Chubb INA Holdings, Inc.

As of March 31, 2022, we now expect to sell our life, accident and supplemental benefits businesses in six countries (Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand) to Chubb for $ 5.72 billion in cash (the "Chubb Transaction");

we no longer expect to sell our interest in a joint venture in Turkey as part of the Chubb Transaction.

See Note 5 for further information on the classification of these businesses as held for sale.

In connection with the pending Chubb Transaction, we revised our business reporting structure.

As such, we adjusted our segment reporting effective in the fourth quarter of 2021 and segment results for the three months ended March 31, 2021 have been restated to conform to the new segment presentation (see Note 19).

On July 1, 2022, the Company completed the sale of its life, accident and supplemental benefits businesses in six countries (Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand) to Chubb INA Holdings, Inc.

("Chubb") for approximately $ 5.4 billion in cash (the "Chubb Transaction");

as previously agreed, we excluded our interest in a joint venture in Türkiye from the Chubb Transaction.

The Company aggregated and classified the assets and liabilities of these businesses as held for sale in our Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 (see Note 5).

During the fourth quarter of 2021, in connection with the Chubb Transaction, we revised our business reporting structure and adjusted our segment reporting accordingly.

Segment results for the three and six months ended June 30, 2021 have been restated to conform to the new segment presentation (see Note 19).

A full description of our segments follows:

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

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

Cigna Healthcare includes U.S.

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• Corporate-Owned Life Insurance ("COLI") offers permanent insurance contracts sold to corporations to provide coverage on the lives of certain employees for the purpose of financing employer-paid future benefit obligations.

• Our interest in a joint venture in Turkey.

• Our interest in a joint venture in Türkiye.

• Exiting businesses:

• International Life, Accident and Supplemental Benefits Businesses in six countries to be sold pursuant to the Chubb Transaction.

• International Life, Accident and Supplemental Benefits Businesses in six countries sold on July 1, 2022 pursuant to the Chubb Transaction.

• Run-off businesses:

19 unchanged sentences

Recent Accounting Pronouncements

There were no new accounting standards adopted as of March 31, 2022 that had a material impact on our financial statements.

There were no new accounting standards adopted as of June 30, 2022 that had a material impact on our financial statements.

There are no accounting pronouncements not yet adopted, with the exception of Accounting Standards Update 2018-12, Targeted Improvements to the Accounting for Long-Duration Insurance Contracts ("LDTI") that are expected to impact Cigna's operations or our financial statements.

1 unchanged sentence

We continue to make progress on our LDTI implementation plan and are on track for the January 1, 2023 adoption date.

In July 2022, the Financial Accounting Standards Board ("FASB") issued a proposed standard for comment that would simplify the retrospective adoption of LDTI.

The proposal would permit companies to make an accounting policy election to exclude contracts that are sold and removed from the balance sheet prior to the effective date of the standard from the retrospective adoption of LDTI.

If the FASB approves the proposed standard, Cigna expects to make this policy election for the contracts sold in the Chubb Transaction.

Note 3 – Accounts Receivable, Net

The following amounts were included within Accounts receivable, net:

(In millions) March 31, 2022 December 31, 2021

(In millions) June 30, 2022 December 31, 2021

Noninsurance customer receivables $ 7,578 $ 6,274

5 unchanged sentences

Accounts receivable, net per Consolidated Balance Sheets $ 18,290 $ 15,071

These receivables are reported net of our allowances of $ 1.5 billion as of March 31, 2022 and $ 1.4 billion as of December 31, 2021.

These receivables are reported net of our allowances of $ 1.9 billion as of June 30, 2022 and $ 1.4 billion as of December 31, 2021.

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

The Company's allowance for current expected credit losses was $ 65 million as of March 31, 2022 and $ 60 million as of December 31, 2021.

The Company's allowance for current expected credit losses was $ 75 million as of June 30, 2022 and $ 60 million as of December 31, 2021.

Note 4 – Mergers, Acquisitions and Divestitures

4 unchanged sentences

The Company's 2021 Form 10-K includes detailed disclosures of merger consideration, purchase price allocation and intangible assets identified in this transaction.

In accordance with GAAP, the total consideration transferred has been allocated to the tangible and intangible net assets acquired based on management's estimates of their fair values and is now finalized as of March 31, 2022.

For the three months ended March 31, 2022, there were immaterial changes to the purchase price allocation.

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 months ended March 31, 2022.

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

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

Integration and Transaction-related Costs

The Company incurred costs related to the acquisition of MDLIVE, the sale of the U.S.

Group Disability and Life business and the terminated merger with Anthem, Inc.

In the first three months of 2022, the Company also incurred costs related to the pending Chubb Transaction (see Note 5 for further information on assets and liabilities of businesses held for sale).

These costs were $ 52 million pre-tax ($ 37 million after-tax) for the three months ended March 31, 2022 and $ 29 million pre-tax ($ 22 million after-tax) for the three months ended March 31, 2021.

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.

In the first six months of 2022 and 2021, the Company incurred costs related to the acquisition of MDLIVE, the sale of the U.S.

Group Disability and Life business and the terminated merger with Elevance Health, Inc.

("Elevance"), formerly known as Anthem, Inc.

In the first six months of 2022, the Company also incurred costs related to the Chubb Transaction (see Note 5 for further information).

These costs were $ 36 million pre-tax ($ 26 million after-tax) for the three months ended and $ 88 million pre-tax ($ 63 million after-tax) for the six months ended June 30, 2022, compared with $ 16 million pre-tax ($ 14 million after-tax) for the three months ended and $ 45 million pre-tax ($ 36 million after-tax) for the six months ended June 30, 2021.

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

Note 5 – Assets and Liabilities of Businesses Held for Sale

We entered into a definitive agreement in October 2021 to sell our life, accident and supplemental benefits businesses in several countries to Chubb.

Subject to applicable regulatory approvals and customary closing conditions, we expect to complete the sale of these businesses in the second quarter of 2022.

The Company has aggregated and classified the assets and liabilities of these businesses as held for sale in our Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021.

The assets and liabilities of our interest in a joint venture in Turkey were classified as held for sale in our Consolidated Balance Sheet as of December 31, 2021;

however, we no longer expect to sell this business to Chubb and the assets and liabilities are no longer classified as held for sale.

The Company aggregated and classified the assets and liabilities of these businesses as held for sale in our Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021.

The assets and liabilities of our interest in a joint venture in Türkiye were classified as held for sale in our Consolidated Balance Sheet as of December 31, 2021;

however, we subsequently agreed to exclude this business from the Chubb Transaction and the assets and liabilities are no longer classified as held for sale.

The assets and liabilities of businesses held for sale were as follows:

(In millions) March 31, 2022 December 31, 2021

(In millions) June 30, 2022 December 31, 2021

Cash and cash equivalents $ 455 $ 406

9 unchanged sentences

Total liabilities of businesses held for sale $ 5,851 $ 6,423

The held for sale businesses reported Gross unrealized (depreciation) appreciation on securities and derivatives of $( 33 ) million and $ 137 million and Gross cumulative translation losses on foreign currencies of $ 160 million and $ 209 million on our Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, respectively.

The held for sale businesses reported Gross unrealized appreciation (depreciation) on securities and derivatives of $( 208 ) million and $ 137 million and Gross cumulative translation losses on foreign currencies of $ 366 million and $ 209 million in our Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021, respectively.

Note 6 – Earnings Per Share ("EPS")

1 unchanged sentence

Three Months Ended

March 31, 2022 March 31, 2021

June 30, 2022 June 30, 2021

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

6 unchanged sentences

EPS $ 4.95 $ ( 0.05 ) $ 4.90 $ 4.30 $ ( 0.05 ) $ 4.25

Six Months Ended

June 30, 2022 June 30, 2021

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

Dilution Diluted Basic Effect of

Dilution Diluted

Shareholders' net income $ 2,742 $ 2,742 $ 2,628 $ 2,628

Weighted average 316,795 316,795 344,845 344,845

Common stock equivalents 2,989 2,989 3,589 3,589

Total shares 316,795 2,989 319,784 344,845 3,589 348,434

EPS $ 8.66 $ ( 0.09 ) $ 8.57 $ 7.62 $ ( 0.08 ) $ 7.54

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

Three Months Ended March 31,

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

(In millions) 2022 2021 2022 2021

Anti-dilutive options 1.3 1.5 2.0 1.5

The Company held approximately 77.3 million shares of common stock in treasury at March 31, 2022, 71.2 million shares as of December 31, 2021 and 48.7 million shares as of March 31, 2021.

The Company held approximately 81.3 million shares of common stock in treasury at June 30, 2022, 71.2 million shares as of December 31, 2021 and 52.2 million shares as of June 30, 2021.

Note 7 – Debt

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

(In millions) March 31, 2022 December 31, 2021

(In millions) June 30, 2022 December 31, 2021

Short-term debt

41 unchanged sentences

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 March 31, 2022, Cigna had a $ 3.0 billion five-year revolving credit and letter of credit agreement maturing in April 2026;

a $ 1.0 billion three-year revolving credit agreement maturing in April 2024;

and a $ 1.0 billion 364-day revolving credit agreement maturing in April 2022.

There were no outstanding balances under these revolving credit agreements as of March 31, 2022.

In April 2022, Cigna entered into the following revolving credit agreements ("Credit Agreements"), which replaced the agreements discussed above:

As of June 30, 2022, there were no outstanding balances under these revolving credit agreements.

In April 2022, Cigna entered into the following revolving credit agreements (the "Credit Agreements"):

• a $ 3.0 billion five-year revolving credit and letter of credit agreement that will mature in April 2027 with an option to extend the maturity date for additional one-year periods, subject to consent of the banks.

9 unchanged sentences

Each facility also contains customary covenants and restrictions, including a financial covenant that the Company's leverage ratio, as defined in the Credit Agreements, may not exceed 60 %, subject to certain exceptions upon the consummation of an acquisition.

The Credit Agreements replaced a prior $ 3.0 billion five-year revolving credit and letter of credit agreement maturing on April 2026;

a $ 1.0 billion three-year revolving credit agreement maturing on April 2024;

and a $ 1.0 billion 364-day revolving credit agreement maturing in April 2022.

Commercial Paper.

2 unchanged sentences

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

The commercial paper average interest rate was 0.60 % at March 31, 2022.

The Company was in compliance with its debt covenants as of March 31, 2022.

Interest expense on long-term and short-term debt was $ 314 million for the three months ended March 31, 2022 and $ 325 million for the three months ended March 31, 2021.

The commercial paper average interest rate was 1.60 % at June 30, 2022.

The Company was in compliance with its debt covenants as of June 30, 2022.

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

Note 8 – Common and Preferred Stock

In the first quarter of 2022, Cigna declared and paid a quarterly cash dividend of $ 1.12 per share of Cigna common stock.

In the first and second quarters of 2022, Cigna declared quarterly cash dividends of $ 1.12 per share of Cigna common stock.

In 2021, Cigna initiated and declared quarterly cash dividends of $ 1.00 per share of Cigna common stock.

The following table provides details of Cigna's dividend payments for the three months ended March 31:

The following table provides details of Cigna's dividend payments for the six months ended June 30:

Record Date Payment Date Amount per Share Total Amount Paid (in millions)

March 9, 2022 March 24, 2022 $ 1.12 $ 357

June 8, 2022 June 23, 2022 $ 1.12 $ 352

March 10, 2021 March 25, 2021 $ 1.00 $ 345

On April 27, 2022, the Board of Directors declared the second quarter cash dividend of $ 1.12 per share of Cigna common stock to be paid on June 23, 2022 to shareholders of record on June 8, 2022.

June 8, 2021 June 23, 2021 $ 1.00 $ 342

On July 27, 2022, the Board of Directors declared the third quarter cash dividend of $ 1.12 per share of Cigna common stock to be paid on September 22, 2022 to shareholders of record on September 7, 2022.

Cigna currently intends to pay regular quarterly dividends, with future declarations subject to approval by its Board of Directors and the Board's determination that the declaration of dividends remains in the best interests of Cigna and its shareholders.

The decision of whether to pay future dividends and the amount of any such dividends will be based on the Company's financial position, results of operations, cash flows, capital requirements, the requirements of applicable law and any other factors the Board of Directors may deem relevant.

Accelerated Share Repurchase Agreements

On June 15, 2022, as part of our existing share repurchase program, we entered into separate accelerated share repurchase agreements ("ASR agreements") with Mizuho Markets Americas LLC and Morgan Stanley & Co.

LLC (collectively, the "Counterparties") to repurchase $ 3.5 billion of common stock in aggregate.

The ASR agreements provided that if the public announcement of the first closing of the Chubb Transaction did not occur on or before July 1, 2022, the ASR Agreements would be cancelled in whole.

In July 2022, in accordance with the ASR agreements, we remitted $ 3.5 billion to the Counterparties and received an initial delivery of 10.4 million shares of our common stock.

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

We expect final settlement under the ASR agreements to occur in the fourth quarter of 2022.

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

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

Note 9 – Insurance and Contractholder Liabilities

1 unchanged sentence

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

March 31, 2022 December 31, 2021 March 31, 2021

June 30, 2022 December 31, 2021 June 30, 2021

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

10 unchanged sentences

Total insurance and contractholder liabilities $ 5,654 $ 11,777 $ 17,431 $ 5,318 $ 12,563 $ 17,881 $ 22,515

(1) Amounts classified as Liabilities of businesses held for sale primarily include $ 3.7 billion of Future policy benefits, $ 0.4 billion of Unpaid claims and $ 0.4 billion of Unearned premiums as of March 31, 2022 and $ 3.8 billion of Future policy benefits, $ 0.4 billion of Unpaid claims and $ 0.4 billion of Unearned premiums as of December 31, 2021.

(1) Amounts classified as Liabilities of businesses held for sale primarily include $ 3.6 billion of Future policy benefits, $ 0.4 billion of Unpaid claims and $ 0.4 billion of Unearned premiums as of June 30, 2022 and $ 3.8 billion of Future policy benefits, $ 0.4 billion of Unpaid claims and $ 0.4 billion of Unearned premiums as of December 31, 2021.

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

3 unchanged sentences

The prior year roll forward has been updated to reflect this segment change.

The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $ 4.2 billion at March 31, 2022 and $ 3.7 billion at March 31, 2021.

Activity, net of intercompany transactions, in the unpaid claims liability for the Cigna Healthcare segment for the three months ended March 31 was as follows:

Three Months Ended

(In millions) March 31, 2022 March 31, 2021

The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $ 4.1 billion at June 30, 2022 and $ 3.9 billion at June 30, 2021.

Activity, net of intercompany transactions, in the unpaid claims liability for the Cigna Healthcare segment for the six months ended June 30 was as follows:

Six Months Ended

(In millions) June 30, 2022 June 30, 2021

Beginning balance $ 4,261 $ 3,695

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See Note 10 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 three months ended March 31 were as follows:

Three Months Ended

(Dollars in millions) March 31, 2022 March 31, 2021

Six Months Ended

(Dollars in millions) June 30, 2022 June 30, 2021

Actual completion factors $ 84 0.2 % $ 92 0.3 %

9 unchanged sentences

The prior year roll forward has been updated to reflect the segment change.

(In millions) March 31, 2022 March 31, 2021

(In millions) June 30, 2022 June 30, 2021

Other Operations

International businesses to be sold and our interest in a joint venture in Turkey $ 436 $ 442

International businesses held for sale and our interest in a joint venture in Türkiye

Other Operations 289 284

Unpaid claims and claim expenses - Other Operations

Activity in the unpaid claims and claim expenses for international businesses held for sale and our interest in a joint venture in Turkey is presented in the following table.

Activity in the unpaid claims and claim expenses for international businesses held for sale and our interest in a joint venture in Türkiye is presented in the following table.

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 largely reinsured.

Three Months Ended

(In millions) March 31, 2022 (1)

March 31, 2021

Six Months Ended

(In millions) June 30, 2022 (1)

June 30, 2021

Beginning balance $ 447 $ 452

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The Company reviews its reinsurance arrangements and establishes reserves against the recoverables.

The Company's reinsurance recoverables as of March 31, 2022 are presented in the following table by range of external credit rating and collateral level:

The Company's reinsurance recoverables as of June 30, 2022 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

12 unchanged sentences

Berkshire Hathaway Life Insurance Company of Nebraska 260 428 — 688

Prudential Retirement Insurance and Annuity 149 — — 149

Prudential Retirement Insurance and Annuity (marketed under Empower brand) 140 — — 140

Prudential Insurance Company of America 394 — — 394

7 unchanged sentences

(1) Certified by a Nationally Recognized Statistical Rating Organization ("NRSRO").

(2) Includes $ 143 million of current reinsurance recoverables that are reported in Other current assets and $ 95 million of recoverables classified as Assets of businesses held for sale as of March 31, 2022.

(2) Includes $ 164 million of current reinsurance recoverables that are reported in Other current assets and $ 90 million of recoverables classified as Assets of businesses held for sale as of June 30, 2022.

(3) Includes collateral provisions requiring the reinsurer to fully collateralize its obligation if its external credit rating is downgraded to a specified level.

3 unchanged sentences

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 March 31, 2022.

The reinsurance agreement is subject to an overall limit with approximately $ 3.1 billion remaining at June 30, 2022.

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

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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) March 31, 2022 December 31, 2021

(Dollars in millions, excludes impact of reinsurance ceded) June 30, 2022 December 31, 2021

Account value $ 7,626 $ 9,795

5 unchanged sentences

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

GMIB liabilities totaling $ 514 million as of March 31, 2022 and $ 572 million as of December 31, 2021 are classified as Level 3 because fair value inputs are largely unobservable.

GMIB liabilities totaling $ 463 million as of June 30, 2022 and $ 572 million as of December 31, 2021 are classified as Level 3 because fair value inputs are largely unobservable.

The GMIB liabilities reflect the Company's credit risk, while the reinsurance recoverable reflects the credit risk of the reinsurers.

There were three reinsurers covering 100 % of the GMIB exposures as of March 31, 2022 and December 31, 2021 as follows:

There were three reinsurers covering 100 % of the GMIB exposures as of June 30, 2022 and December 31, 2021 as follows:

(In millions)

Line of Business Reinsurer March 31, 2022 December 31, 2021 Collateral and Other Terms at March 31, 2022

Line of Business Reinsurer June 30, 2022 December 31, 2021 Collateral and Other Terms at June 30, 2022

GMIB Berkshire $ 230 $ 283 100 % were secured by assets in a trust.

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

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

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

14 unchanged sentences

Debt Securities

The amortized cost and fair value by contractual maturity periods for debt securities were as follows at March 31, 2022:

The amortized cost and fair value by contractual maturity periods for debt securities were as follows at June 30, 2022:

(In millions) Amortized

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Depreciation Fair

March 31, 2022

June 30, 2022

Federal government and agency $ 303 $ — $ 56 $ ( 6 ) $ 353

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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 March 31, 2022 and December 31, 2021.

March 31, 2022 December 31, 2021

Our allowance for credit losses on debt securities was not material as of June 30, 2022 and December 31, 2021.

June 30, 2022 December 31, 2021

(Dollars in millions) Fair

14 unchanged sentences

Equity Securities

The following table provides the values of the Company's equity security investments as of March 31, 2022 and December 31, 2021:

March 31, 2022 December 31, 2021

The following table provides the values of the Company's equity security investments as of June 30, 2022 and December 31, 2021:

June 30, 2022 December 31, 2021

(In millions) Cost Carrying Value Cost Carrying Value

8 unchanged sentences

For more information on the Company's accounting policies and methodologies regarding these investments, see Note 11 to the Company's 2021 Form 10-K for the year ended December 31, 2021.

The following table summarizes the credit risk profile of the Company's commercial mortgage loan portfolio as of March 31, 2022 and December 31, 2021:

(Dollars in millions) March 31, 2022 December 31, 2021

The following table summarizes the credit risk profile of the Company's commercial mortgage loan portfolio as of June 30, 2022 and December 31, 2021:

(Dollars in millions) June 30, 2022 December 31, 2021

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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80% to 100% 108 1.21 129 1.47

Greater than 100% 63 1.04 — —

Allowance for credit losses ( 9 ) ( 6 )

Total $ 1,579 1.84 59 % $ 1,566 1.96 61 %

All commercial mortgage loans in the Company's portfolio are current as of March 31, 2022 and December 31, 2021.

Other Long-Term Investments

6 unchanged sentences

Carrying value as of

(In millions) March 31, 2022 December 31, 2021

(In millions) June 30, 2022 December 31, 2021

Real estate investments $ 1,356 $ 1,152

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The gross fair values of our derivative financial instruments are presented in Note 12.

As of March 31, 2022 and December 31, 2021, the effects of derivative financial instruments used in these individual hedging strategies were not material to the Consolidated Financial Statements, including gains or losses reclassified from Accumulated other comprehensive loss into Shareholders' net income, amounts excluded from the assessment of hedge effectiveness and fair values of assets posted or held as collateral supporting the fair values of these derivative financial instruments.

As of June 30, 2022 and December 31, 2021, the effects of derivative financial instruments used in these individual hedging strategies were not material to the Consolidated Financial Statements, including gains or losses reclassified from Accumulated other comprehensive loss into Shareholders' net income, amounts excluded from the assessment of hedge effectiveness and fair values of assets posted or held as collateral supporting the fair values of these derivative financial instruments.

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

Notional Value as of

(In millions) March 31, 2022 December 31, 2021

(In millions) June 30, 2022 December 31, 2021

Purpose Type of Instrument

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Foreign currency swap contracts are denominated in Euros, while foreign currency forward contracts are primarily denominated in Korean Won, with the remaining instruments denominated in New Zealand Dollars and Taiwan Dollars.

As of June 30, 2022 there were no forward contracts denominated in the Taiwan Dollar.

Foreign currency swap contracts

6 unchanged sentences

Foreign currency forward contracts (1)

(1) These instruments are associated with the international life, accident and supplemental benefits businesses that are held for sale and will be unwound, terminated, or otherwise disposed in conjunction with the Chubb Transaction.

As there have been no changes to the types of derivative financial instruments the Company uses, refer to the Company's 2021 Form 10-K for further discussion on our accounting policy.

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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 March 31,

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

(In millions) 2022 2021 2022 2021

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Net realized investment gains (losses), before income taxes $ ( 95 ) $ 59 $ ( 414 ) $ 60

Net realized investment losses for the three months ended March 31, 2022 were primarily mark-to-market losses on equity securities held in a strategic health care sector investment.

Net realized investment losses for the six months ended June 30, 2022 were primarily due to mark-to-market losses on a strategic health care equity securities investment.

Note 12 – Fair Value Measurements

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The Company's financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP.

The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and

liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3).

The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3).

An asset's or a liability's classification is based on the lowest level of input that is significant to its measurement.

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Financial Assets and Financial Liabilities Carried at Fair Value

The following table provides information as of March 31, 2022 and December 31, 2021 about the Company's financial assets and liabilities carried at fair value.

The following table provides information as of June 30, 2022 and December 31, 2021 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 March 31, 2022 As of December 31, 2021 As of March 31, 2022 As of December 31, 2021 As of March 31, 2022 As of December 31, 2021 As of March 31, 2022 As of December 31, 2021

As of June 30, 2022 As of December 31, 2021 As of June 30, 2022 As of December 31, 2021 As of June 30, 2022 As of December 31, 2021 As of June 30, 2022 As of December 31, 2021

Financial assets at fair value

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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 March 31, 2022 and December 31, 2021.

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, 2022 and December 31, 2021.

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 ) March 31, 2022 December 31, 2021 Unobservable input March 31, 2022 March 31, 2022 December 31, 2021

(Fair value in millions ) June 30, 2022 December 31, 2021 Unobservable input June 30, 2022 June 30, 2022 December 31, 2021

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 months ended March 31, 2022 and 2021.

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, 2022 and 2021.

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

For the Three Months Ended

June 30, For the Six Months Ended

(In millions) 2022 2021 2022 2021

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

( 11 ) 1 ( 23 ) ( 7 )

Purchases, sales and settlements

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Total gains (losses) included in Shareholders' net income attributable to instruments held at the reporting date

Change in unrealized gains or losses included in Other comprehensive (loss), net of tax for assets held at the end of the reporting period

$ ( 3 ) $ ( 1 ) $ ( 2 ) $ ( 12 )

Change in unrealized gains or losses included in Other comprehensive income (loss), net of tax for assets held at the end of the reporting period

$ ( 11 ) $ 7 $ ( 25 ) $ ( 9 )

(1) Amounts do not accrue to shareholders.

Total gains and losses included in Shareholders' net income in the tables above are reflected in the Consolidated Statements of Income as Net realized investment gains (losses) and Net investment income.

Gains and losses included in Other comprehensive (loss), net of tax in the tables above are reflected in Net unrealized (depreciation) appreciation on securities and derivatives in the Consolidated Statements of Comprehensive Income.

Gains and losses included in Other comprehensive income (loss), net of tax in the tables above are reflected in Net unrealized appreciation (depreciation) on securities and derivatives in the Consolidated Statements of Comprehensive Income.

Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company's best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement.

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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 March 31, 2022 and December 31, 2021 were as follows:

Fair values of Separate account assets at June 30, 2022 and December 31, 2021 were as follows:

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

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(Level 3) Total

March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021 June 30, 2022 December 31, 2021 June 30, 2022 December 31, 2021 June 30, 2022 December 31, 2021

Guaranteed separate accounts (See Note 18)

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Separate account assets per Consolidated Balance Sheets $ 7,495 $ 8,337

(1) Non-guaranteed separate accounts include $ 4.4 billion as of March 31, 2022 and $ 4.5 billion as of December 31, 2021 in assets supporting the Company's pension plans, including $ 0.3 billion classified in Level 3 as of March 31, 2022 and December 31, 2021.

(1) Non-guaranteed separate accounts include $ 4.2 billion as of June 30, 2022 and $ 4.5 billion as of December 31, 2021 in assets supporting the Company's pension plans, including $ 0.2 billion classified in Level 3 as of June 30, 2022 and $ 0.3 billion as of December 31, 2021.

(2) Investments related to the international life, accident and supplemental benefits businesses that are held for sale.

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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 months ended March 31, 2022 or 2021.

Activity, including transfers into and out of Level 3, was not material for the three and six months ended June 30, 2022 or 2021.

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 March 31, 2022 Redemption Frequency

Fair Value as of Unfunded Commitment as of June 30, 2022 Redemption Frequency

(if currently eligible) Redemption Notice

(In millions) March 31, 2022 December 31, 2021

(In millions) June 30, 2022 December 31, 2021

Securities partnerships $ 540 $ 513 $ 252 Not applicable Not applicable

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Total $ 920 $ 842 $ 252

As of March 31, 2022, the Company does not have plans to sell any of these assets at less than fair value.

As of June 30, 2022, the Company does not have plans to sell any of these assets at less than fair value.

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

3 unchanged sentences

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 three months ended March 31, 2022 and 2021, no impairments were recognized requiring these assets to be measured at fair value.

Realized investment gains and losses from these observable price changes for the three months ended March 31, 2022 and March 31, 2021 were not material.

For the six months ended June 30, 2022 and 2021, no impairments were recognized requiring these assets to be measured at fair value.

Realized investment gains and losses from these observable price changes for the three and six months ended June 30, 2022 and June 30, 2021 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, however fair value disclosure is required at March 31, 2022 and December 31, 2021.

The following table includes the Company's financial instruments not recorded at fair value, however fair value disclosure is required at June 30, 2022 and December 31, 2021.

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 March 31, 2022 December 31, 2021

Classification in Fair Value Hierarchy June 30, 2022 December 31, 2021

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

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

The Company determined that it was no t a primary beneficiary in any material variable interest entity as of March 31, 2022 or December 31, 2021.

The Company determined that it was no t a primary beneficiary in any material variable interest entity as of June 30, 2022 or December 31, 2021.

The Company’s involvement with variable interest entities for which it is not the primary beneficiary has not changed materially from December 31, 2021.

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Changes in the components of AOCI were as follows:

Three Months Ended March 31,

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

(In millions) 2022 2021 2022 2021

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Beginning balance $ 125 $ 627 $ 685 $ 900

(Depreciation) appreciation on securities and derivatives ( 705 ) ( 342 )

Tax benefit 154 65

Net (depreciation) appreciation on securities and derivatives ( 551 ) ( 277 )

Appreciation (depreciation) on securities and derivatives ( 541 ) 170 ( 1,246 ) ( 172 )

Tax (expense) benefit 101 ( 40 ) 255 25

Net Appreciation (depreciation) on securities and derivatives ( 440 ) 130 ( 991 ) ( 147 )

Reclassification adjustment for (gains) losses included in Shareholders' net income (Net realized investment (gains) losses) 38 ( 11 ) 27 ( 6 )

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Net (gains) losses reclassified from AOCI to Shareholders' net income 30 ( 8 ) 21 ( 4 )

Other comprehensive (loss), net of tax ( 560 ) ( 273 )

Other comprehensive income (loss), net of tax ( 410 ) 122 ( 970 ) ( 151 )

Ending balance $ ( 285 ) $ 749 $ ( 285 ) $ 749

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Tax (expense) ( 26 ) — ( 29 ) ( 5 )

Other comprehensive (loss), net of tax ( 63 ) ( 119 )

Other comprehensive income (loss), net of tax ( 206 ) 16 ( 269 ) ( 103 )

Net translation gain (loss) on foreign currencies attributable to noncontrolling interests ( 1 ) ( 1 ) ( 3 ) ( 5 )

Shareholders' other comprehensive (loss), net of tax ( 61 ) ( 115 )

Shareholders' other comprehensive income (loss), net of tax ( 205 ) 17 ( 266 ) ( 98 )

Ending balance $ ( 499 ) $ ( 113 ) $ ( 499 ) $ ( 113 )

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Net adjustments reclassified from AOCI to Shareholders' net income 13 15 26 33

Other comprehensive income, net of tax 13 18

Valuation update 18 — 18 —

Tax (expense) ( 4 ) — ( 4 ) —

Net change due to valuation update 14 — 14 —

Other comprehensive income (loss), net of tax 27 15 40 33

Ending balance $ ( 1,296 ) $ ( 1,713 ) $ ( 1,296 ) $ ( 1,713 )

2 unchanged sentences

As a result, during the fourth quarter of 2021, we recognized a charge in Selling, general and administrative expenses of $ 168 million, pre-tax ($ 119 million, after-tax) that included $ 59 million of one-time expenses related to abandonment of leased assets and impairment of property and equipment as well as $ 109 million of accrued expenses primarily for severance costs related to headcount reductions.

We expect most of the severance to be paid by 2023.

As previously anticipated, during the second quarter of 2022, the Company updated our strategic plan and recognized an additional charge in Selling, general and administrative expenses of $ 22 million, pre-tax ($ 17 million, after-tax) related to accrued expenses primarily for severance costs.

The following table summarizes a roll forward of the accrued liability recorded in Accrued expenses and other liabilities:

2 unchanged sentences

2022 payments ( 37 )

Balance, March, 31, 2022 $ 89

Second quarter 2022 charge 22

Balance, June 30, 2022 $ 88

We expect most of the accrued liability to be paid by the end of 2023.

Note 16 – Leases

Operating and finance lease right-of-use ("ROU") assets and lease liabilities were as follows:

(In millions) March 31, 2022 December 31, 2021

(In millions) June 30, 2022 December 31, 2021

Operating leases:

10 unchanged sentences

Total finance lease liabilities $ 58 $ 51

(1) Operating leases include $ 28 million as of March 31, 2022 and $ 27 million as of December 31, 2021 classified as Assets of businesses held for sale and $ 25 million as of March 31, 2022, and $ 28 million as of December 31, 2021 classified as Liabilities of businesses held for sale.

(1) Operating leases include $ 28 million as of June 30, 2022 and $ 27 million as of December 31, 2021 classified as Assets of businesses held for sale and $ 22 million as of June 30, 2022, and $ 28 million as of December 31, 2021 classified as Liabilities of businesses held for sale.

Note 17 – Income Taxes

Income Tax Expense

The 22.7 % effective tax rate for the three months ended March 31, 2022 was higher than the 22.6 % rate for the same period in 2021.

This increase is primarily attributable to an increase in state and foreign income taxes, partially offset by the favorable impact of the remeasurement of deferred income taxes.

The 20.8 % effective tax rate for the three months ended June 30, 2022 and the 21.6 % effective tax rate for the six months ended June 30, 2022 were lower than the 22.2 % rate for the three months ended June 30, 2021 and the 22.4 % rate for the six months ended June 30, 2021.

These decreases are primarily attributable to favorable results relative to our foreign operations and for the six months ended June 30, 2022 the favorable impact of the remeasurement of deferred taxes, partially offset by the absence of the favorable impact of non-recurring items recorded in 2021.

Note 18 – Contingencies and Other Matters

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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 March 31, 2022, employers maintained assets that generally exceeded the benefit obligations under these arrangements of approximately $ 430 million.

As of June 30, 2022, employers maintained assets that generally exceeded the benefit obligations under these arrangements of approximately $ 430 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 March 31, 2022.

there were no additional liabilities required for these guarantees,

net of reinsurance, as of June 30, 2022.

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 March 31, 2022 in connection with acquisition and disposition transactions.

The Company had indemnification obligations as of June 30, 2022 in connection with acquisition and disposition transactions.

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

These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as

statutes of limitation.

These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation.

In some cases, the maximum potential amount due is subject to contractual limitations based on a percentage of the transaction purchase price, while in other cases limitations are not specified or applicable.

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

There were no liabilities for these indemnification obligations as of March 31, 2022.

There were no liabilities for these indemnification obligations as of June 30, 2022.

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 three months ended March 31, 2022.

There were no material charges or credits resulting from existing or new guaranty fund assessments for the six months ended June 30, 2022.

Legal and Regulatory Matters

10 unchanged sentences

Litigation Matters

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").

On April 19, 2016, in response to Anthem's complaint, Express Scripts filed its answer denying Anthem's Allegations in their entirety and asserting affirmative defenses and counterclaims against Anthem.

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

Express Scripts Litigation with Elevance .

In March 2016, Elevance 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.

Elevance also requested that the court enter declaratory judgment that Express Scripts is required to provide Elevance competitive benchmark pricing, that Elevance can terminate the agreement and that Express Scripts is required to provide Elevance with post-termination services at competitive benchmark pricing for one year following any termination by Elevance.

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

On April 19, 2016, in response to Elevance's complaint, Express Scripts filed its answer denying Elevance's Allegations in their entirety and asserting

affirmative defenses and counterclaims against Elevance.

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

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

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

Elevance completed filing of its Response to Express Scripts' Motion for Summary Judgment on October 16, 2021.

Express Scripts filed its Reply in Support of its Motion for Summary Judgment on November 19, 2021.

On March 31, 2022, the court granted summary judgment in favor of Express Scripts on all of Anthem's pricing claims for damages totaling $ 14.8 billion and on most of Anthem's claims relating to service issues.

Anthem's only remaining service claim relates to the review or processing of prior authorizations.

On March 31, 2022, the court granted summary judgment in favor of Express Scripts on all of Elevance's pricing claims for damages totaling $ 14.8 billion and on most of Elevance's claims relating to service issues.

Elevance's only remaining service claims relate to the review or processing of prior authorizations.

On June 10, 2022, Express Scripts filed a Motion for Partial Summary Judgment seeking to limit Elevance’s remaining prior authorization claims and a Motion to Exclude certain opinions offered by its experts.

Elevance filed its opposition to both motions, and a cross-motion to submit a supplemental expert report, on July 9, 2022.

Express Scripts’ pending Motions were fully briefed by the end of July 2022.

Medicare Advantage.

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Attorney's Offices for the Southern District of New York and the Middle District of Tennessee) filed a motion to partially intervene, which is pending before the court.

The Company has opposed the

DOJ's motion to intervene and the government filed its reply brief on February 1, 2022.

The Company has opposed the DOJ's motion to intervene and the government filed its reply brief on February 1, 2022.

The motion has been fully briefed and is under the court's review.

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The Company does not report total assets by segment because this is not a metric used to allocate resources or evaluate segment performance.

The following tables present the special items recorded by the Company for the three months ended March 31, 2022 and 2021:

Three Months Ended

(In millions) March 31, 2022 March 31, 2021

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

The following tables present the special items recorded by the Company for the three and six months ended June 30, 2022 and 2021:

Three Months Ended Six Months Ended

(In millions) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

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

Integration and transaction-related costs

(Selling, general and administrative expenses) $ 26 $ 36 $ 14 $ 16 $ 63 $ 88 $ 36 $ 45

Debt extinguishment costs

(Benefits) charges associated with litigation matters

Charge for organizational efficiency plan

(Selling, general and administrative expenses) 17 22 — — 17 22 — —

Charges (benefits) associated with litigation matters

(Selling, general and administrative expenses) ( 20 ) ( 28 ) — — ( 20 ) ( 28 ) ( 21 ) ( 27 )

Debt extinguishment costs — — 9 10 — — 110 141

Total impact from special items $ 23 $ 30 $ 23 $ 26 $ 60 $ 82 $ 125 $ 159

Summarized segment financial information was as follows:

(In millions) Evernorth Cigna Healthcare

(In millions) Evernorth

Cigna Healthcare

Other Operations

Corporate and Eliminations

Three months ended March 31, 2022

Three months ended June 30, 2022

Revenues from external customers $ 33,716 $ 10,622 $ 817 $ — $ 45,155

Inter-segment revenues 1,287 562 — ( 1,849 )

Intersegment revenues 1,131 586 — ( 1,717 )

Net investment income 16 178 131 — 325

1 unchanged sentence

Net realized investment results from certain equity method investments — ( 49 ) — — ( 49 )

Adjusted revenues $ 34,863 $ 11,337 $ 948 $ ( 1,717 ) $ 45,431

Income (loss) before income taxes $ 1,044 $ 1,205 $ 167 $ ( 431 ) $ 1,985

Pre-tax adjustments to reconcile to adjusted income from operations

(Income) attributable to noncontrolling interests ( 13 ) — ( 2 ) — ( 15 )

Net realized investment (gains) losses (1)

— ( 22 ) 68 — 46

Amortization of acquired intangible assets 444 57 — — 501

Special items

Integration and transaction-related costs — — — 36 36

Charge for organizational efficiency plan — — — 22 22

Charges (benefits) associated with litigation matters — — — ( 28 ) ( 28 )

Pre-tax adjusted income (loss) from operations $ 1,475 $ 1,240 $ 233 $ ( 401 ) $ 2,547

(In millions) Evernorth

Cigna Healthcare

Other Operations

Corporate and Eliminations

Three months ended June 30, 2021

Revenues from external customers $ 31,553 $ 10,403 $ 865 $ — $ 42,821

Intersegment revenues 1,034 590 — ( 1,624 )

Net investment income 5 180 125 — 310

Total revenues 32,592 11,173 990 ( 1,624 ) 43,131

Net realized investment results from certain equity method investments — ( 24 ) — — ( 24 )

Adjusted revenues $ 32,592 $ 11,149 $ 990 $ ( 1,624 ) $ 43,107

Income (loss) before taxes $ 870 $ 859 $ 215 $ ( 395 ) $ 1,549

Income (loss) before income taxes $ 929 $ 1,111 $ 228 $ ( 370 ) $ 1,898

Pre-tax adjustments to reconcile to adjusted income from operations

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Integration and transaction-related costs — — — 16 16

Debt extinguishment costs — — — 10 10

Pre-tax adjusted income (loss) from operations $ 1,413 $ 1,049 $ 215 $ ( 344 ) $ 2,333

(1) Includes the Company's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting.

(In millions) Evernorth Cigna Healthcare

Other Operations

Corporate and Eliminations

Six months ended June 30, 2022

Revenues from external customers $ 66,005 $ 21,083 $ 1,658 $ — $ 88,746

Intersegment revenues 2,418 1,148 — ( 3,566 )

Net investment income 26 444 269 — 739

Total revenues 68,449 22,675 1,927 ( 3,566 ) 89,485

Net realized investment results from certain equity method investments

Adjusted revenues $ 68,449 $ 22,729 $ 1,927 $ ( 3,566 ) $ 89,539

Income (loss) before income taxes $ 1,914 $ 2,064 $ 382 $ ( 826 ) $ 3,534

Pre-tax adjustments to reconcile to adjusted income from operations

(Income) attributable to noncontrolling interests ( 24 ) ( 1 ) ( 7 ) — ( 32 )

Net realized investment (gains) losses (1)

— 384 84 — 468

Amortization of acquired intangible assets 887 72 — — 959

Special items

Integration and transaction-related costs — — — 88 88

Charge for organizational efficiency plan — — — 22 22

Charges (benefits) associated with litigation matters — — — ( 28 ) ( 28 )

Pre-tax adjusted income (loss) from operations $ 2,777 $ 2,519 $ 459 $ ( 744 ) $ 5,011

(In millions) Evernorth

2 unchanged sentences

Corporate and Eliminations

Three months ended March 31, 2021

Six months ended June 30, 2021

Revenues from external customers

$ 60,972 $ 20,688 $ 1,741 $ — $ 83,401

Inter-segment revenues 1,198 509 — ( 1,707 )

Intersegment revenues 2,232 1,099 — ( 3,331 )

Net investment income 8 439 254 — 701

2 unchanged sentences

Adjusted revenues $ 63,212 $ 22,216 $ 1,995 $ ( 3,331 ) $ 84,092

Income (loss) before taxes $ 749 $ 1,045 $ 206 $ ( 487 ) $ 1,513

Income (loss) before income taxes $ 1,678 $ 2,156 $ 434 $ ( 857 ) $ 3,411

Pre-tax adjustments to reconcile to adjusted income from operations

5 unchanged sentences

Integration and transaction-related costs — — — 45 45

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

Debt extinguishment costs — — — 141 141

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

Pre-tax adjusted income (loss) from operations $ 2,636 $ 2,091 $ 446 $ ( 698 ) $ 4,475

1 unchanged sentence

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 months ended March 31:

Three Months Ended March 31,

The following table presents these revenues by product, premium and service type for the three and six months ended June 30, 2022 and 2021:

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

(In millions) 2022 2021 2022 2021

2 unchanged sentences

Home delivery and specialty revenues 15,268 13,341 29,967 26,115

Other 1,712 1,388

Other revenues 1,667 1,619 3,379 3,007

Intercompany eliminations ( 1,070 ) ( 1,079 ) ( 2,315 ) ( 2,354 )

11 unchanged sentences

International businesses held for sale 737 809 1,500 1,618

Other 74 50 143 108

Intercompany eliminations — ( 2 ) ( 2 ) ( 3 )

1 unchanged sentence

Services (Fees) (ASC 606)

1,790 1,456 3,414 2,770

Cigna Healthcare

1,478 1,425 2,974 2,859

Other Operations

8 unchanged sentences

Historically, adjustments to original estimates have not been material.

The performance guarantee liability was $ 1.3 billion as of March 31, 2022 and $ 1.1 billion as of December 31, 2021.

This guarantee liability was $ 1.0 billion as of June 30, 2022 and $ 1.1 billion as of December 31, 2021.

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