What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-04 · 312 added, 229 removed, 965 unchanged (36% 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) 2022 2021 2022 2021

13 unchanged sentences

Debt extinguishment costs — — — ( 141 )

Net realized investment gains (losses) ( 95 ) 59 ( 414 ) 60

Gain on sale of businesses 1,735 — 1,735 —

Net realized investment (losses) gains ( 81 ) 68 ( 495 ) 128

Income before income taxes 3,491 2,059 7,025 5,470

10 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) 2022 2021 2022 2021

1 unchanged sentence

Other comprehensive income (loss), net of tax

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

Net unrealized (depreciation) appreciation on securities and derivatives ( 99 ) 32 ( 1,069 ) ( 119 )

Net translation gains (losses) on foreign currencies 161 ( 125 ) ( 108 ) ( 228 )

5 unchanged sentences

Net income attributable to other noncontrolling interests 18 10 41 21

Other comprehensive loss attributable to redeemable noncontrolling interests ( 1 ) ( 1 ) ( 3 ) ( 5 )

Other comprehensive income (loss) attributable to redeemable noncontrolling interests 1 ( 1 ) ( 2 ) ( 6 )

Total comprehensive income attributable to noncontrolling interests 22 13 47 27

3 unchanged sentences

Consolidated Balance Sheets

June 30, As of

September 30, As of

(In millions) 2022 2021

41 unchanged sentences

(1) Par value per share, $ 0.01 ;

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

shares issued, 397 million as of September 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 June 30, 2022

Three Months Ended September 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

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

Effects of issuing stock for employee benefits plans 165 ( 2 ) 163 163

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

Other comprehensive income 71 71 71 1

Net income 2,757 2,757 18 2,775 3

3 unchanged sentences

Other transactions impacting noncontrolling interests — — ( 6 ) ( 6 ) 1

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 September 30, 2022 $ 4 $ 29,395 $ ( 2,009 ) $ 37,041 $ ( 19,390 ) $ 45,041 $ 42 $ 45,083 $ 50

Three Months Ended September 30, 2021

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

Effect of issuing stock for employee benefit 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

3 unchanged sentences

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

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

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

1 unchanged sentence

Consolidated Statements of Changes in Total Equity

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

7 unchanged sentences

Other transactions impacting noncontrolling interests — — ( 17 ) ( 17 ) ( 10 )

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 September 30, 2022 $ 4 $ 29,395 $ ( 2,009 ) $ 37,041 $ ( 19,390 ) $ 45,041 $ 42 $ 45,083 $ 50

Nine Months Ended September 30, 2021

7 unchanged sentences

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

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

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

1 unchanged sentence

Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

(In millions) 2022 2021

3 unchanged sentences

Depreciation and amortization 2,202 2,180

Realized investment (gains) losses, net 414 ( 60 )

Realized investment losses (gains), net

Deferred income tax benefit

( 300 ) ( 104 )

Gain on sale of businesses

Debt extinguishment costs — 141

Net changes in assets and liabilities, net of non-operating effects:

Accounts receivable ( 2,769 ) ( 3,233 )

Accounts receivable, net ( 2,339 ) ( 4,039 )

Inventories ( 296 ) 145

19 unchanged sentences

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

Divestiture, net of cash sold ( 57 ) —

Divestitures, net of cash sold 4,838 ( 61 )

Other, net ( 33 ) 51

NET CASH (USED IN) INVESTING ACTIVITIES ( 732 ) ( 3,024 )

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 3,714 ( 3,734 )

Cash Flows from Financing Activities

11 unchanged sentences

Effect of foreign currency rate changes on cash, cash equivalents and restricted cash ( 98 ) ( 46 )

Net (decrease) in cash, cash equivalents and restricted cash ( 625 ) ( 6,367 )

Net increase (decrease) in cash, cash equivalents and restricted cash 1,569 ( 6,705 )

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

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 June 30, per Consolidated Balance Sheets (2)

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

$ 7,117 $ 3,540

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 June 30, 2022 and June 30, 2021.

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

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

29 unchanged sentences

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).

("Chubb") for approximately $ 5.4 billion in cash (the "Chubb transaction") (see Notes 4 and 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).

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

A full description of our segments follows:

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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 Türkiye.

• Exiting businesses:

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

• Our interest in a joint venture in Türkiye:

In October 2022, we entered into an agreement to sell our interest to our partner.

We are targeting to close the transaction by the end of 2022, subject to applicable regulatory approvals and customary closing conditions.

• Run-off businesses:

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Recent Accounting Pronouncements

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.

Refer to the Company's 2021 Form 10-K for discussion of the LDTI standard and related expected effects to Cigna.

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

There were no new accounting standards adopted as of September 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 Contracts ("LDTI") that are expected to impact Cigna's operations or our financial statements.

Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12) and related amendments

Effective date of January 1, 2023 for Cigna (early adoption permitted) and requires the following key provisions (for insurance entities that issue long-duration contracts):

• Changes to the measurement of the future policy benefits liability for traditional and limited-pay insurance contracts:

• Assumptions used to measure cash flows (such as mortality, morbidity and lapse assumptions) to be updated at least annually with the effect of changes in those assumptions remeasured retrospectively and reflected in current period Net income.

• Discount rate assumptions to be updated quarterly based on market-level yields for low credit risk fixed income instruments ("upper-medium grade fixed-income instrument"), with any changes reflected in other comprehensive income.

The upper-medium grade fixed-income instrument yield is interpreted to mean A-rated.

• Deferred policy acquisition costs ("DAC") related to long-duration insurance contracts to be amortized on a constant-level basis over the expected term of the related contracts.

Other related deferred or capitalized balances (such as unearned revenue liability and value of business acquired) may use this simplified amortization method.

• Market risk benefits (defined as protecting the contractholder from other-than-nominal capital market risk and exposing the insurer to that risk) to be measured at fair value, with changes in fair value recognized in Net income each period, except for the effect of changes in the insurance entity's credit risk to be recognized in other comprehensive income.

• Additional disclosures, including disaggregated roll forwards for the liability for future policy benefits, market risk benefits, separate account liabilities and DAC, as well as information about significant inputs, judgments, assumptions and methods used in measurement.

• Transition methods at adoption vary:

• Changes to the liability for future policy benefits to use a modified retrospective approach applied to all outstanding contracts on the basis of their existing carrying amounts as of the beginning of the earliest period presented, with an option to elect a full retrospective transition under certain criteria.

Remeasuring the future policy benefits liability for the discount rate to be recorded through Accumulated other comprehensive loss at transition.

• DAC to follow the transition method used for future policyholder benefits.

• Market risk benefits to be transitioned retrospectively and measured at fair value at the beginning of the earliest period presented.

The difference between this fair value and carrying value to be recognized in the opening balance

of retained earnings, excluding the effect of credit risk changes that are to be recognized in Accumulated other comprehensive loss.

Expected effects:

• The new guidance will apply to our long-duration insurance products predominantly within the Cigna Healthcare segment and Other Operations.

• The Company developed a cross-functional implementation project plan and is executing on the necessary changes to our systems, processes and controls.

• The Company will adopt the standard on January 1, 2023, using the modified retrospective transition method for changes to the liability for future policy benefits and DAC.

We currently do not expect the impact of adoption to be material to Shareholders' equity.

• While we currently do not expect adoption to result in a material restatement of prior periods, we continue to model the new requirements of the standard and their impacts to financial results across various products.

It is possible that our income recognition pattern could change for several reasons:

• Applying periodic assumption updates, versus the current locked-in model, may change our timing of profit or loss recognition.

• DAC amortization will be on a constant level basis over the expected term of the related contracts and no longer tied to the emergence of profit on such contracts.

• Features, such as the Company's GMDB product, that provide market-risk benefits are not currently measured at fair value, so these liabilities and related reinsurance recoverables will become subject to market sensitivity, notably to interest rates.

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

3 unchanged sentences

The following amounts were included within Accounts receivable, net:

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

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

Noninsurance customer receivables $ 7,544 $ 6,274

2 unchanged sentences

Other receivables 320 456

Total 18,326 15,125

Accounts receivable, net classified as Assets of businesses held for sale ( 54 )

Accounts receivable, net per Consolidated Balance Sheets $ 17,275 $ 15,071

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 receivables are reported net of our allowances of $ 1.7 billion as of September 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 $ 75 million as of June 30, 2022 and $ 60 million as of December 31, 2021.

The Company's allowance for current expected credit losses was $ 80 million as of September 30, 2022 and $ 60 million as of December 31, 2021.

Note 4 – Mergers, Acquisitions and Divestitures

Divestiture of International Businesses

The Company recognized a gain of $ 1.7 billion pre-tax ($ 1.4 billion after-tax), which includes recognition of previously unrealized capital losses on investments sold and translation loss on foreign currencies (see Note 14 for further information).

Also see Note 5 for further information regarding the assets and liabilities of these divested businesses.

Acquisition of MDLIVE

5 unchanged sentences

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 and six months ended June 30, 2021.

We remain on track and are nearly complete with MDLIVE integration activities.

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

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.

In the first nine 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.

In the first nine months of 2022, the Company also incurred costs related to the Chubb transaction.

These costs were $ 24 million pre-tax ($ 23 million after-tax) for the three months ended and $ 112 million pre-tax ($ 86 million after-tax) for the nine months ended September 30, 2022, compared with $ 13 million pre-tax ($( 35 ) million after-tax) for the three months ended and $ 58 million pre-tax ($ 1 million after-tax) for the nine months ended September 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.

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 – Assets and Liabilities of Businesses 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;

See Note 4 for information on the gain recognized upon sale.

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

The assets and liabilities of our interest in a joint venture in Türkiye were also 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) June 30, 2022 December 31, 2021

(In millions) December 31, 2021

Cash and cash equivalents $ 406

9 unchanged sentences

Total liabilities of businesses held for sale $ 6,423

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.

The held for sale businesses reported Gross unrealized appreciation on securities and derivatives of $ 137 million and Gross cumulative translation losses on foreign currencies of $ 209 million within Accumulated other comprehensive loss in our Consolidated Balance Sheet as of December 31, 2021.

Note 6 – Earnings Per Share ("EPS")

1 unchanged sentence

Three Months Ended

June 30, 2022 June 30, 2021

September 30, 2022 September 30, 2021

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

6 unchanged sentences

EPS $ 9.07 $ ( 0.10 ) $ 8.97 $ 4.84 $ ( 0.04 ) $ 4.80

Six Months Ended

June 30, 2022 June 30, 2021

Nine Months Ended

September 30, 2022 September 30, 2021

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

7 unchanged sentences

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) 2022 2021 2022 2021

Anti-dilutive options — 1.5 1.3 1.5

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.

The Company held approximately 91.8 million shares of common stock in treasury at September 30, 2022, 71.2 million shares as of December 31, 2021 and 62.6 million shares as of September 30, 2021.

The increase in Treasury stock as of September 30, 2022 and the reduction in weighted average shares outstanding for the three and nine months ended September 30, 2022 was driven in part by 10.4 million shares of our common stock repurchased in July 2022 under the accelerated share repurchase agreements (the "ASR agreements").

Additionally, we expect final settlement of the ASR agreements to occur in the fourth quarter.

S ee Note 8 for additional information.

Note 7 – Debt

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

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

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

Short-term debt

Commercial paper $ — $ 2,027

$ 500 million, 3.05 % Notes due 11/2022

$ 17 million, 8.3 % Notes due 1/2023

$ 63 million, 7.65 % Notes due 3/2023

$ 500 million, 3.05 % Notes due November 2022

$ 17 million, 8.3 % Notes due January 2023

$ 63 million, 7.65 % Notes due March 2023

$ 700 million, Floating Rate Notes due July 2023

$ 1,000 million, 3 % Notes due July 2023

$ 1,187 million, 3.75 % Notes due July 2023

Other, including finance leases 32 23

1 unchanged sentence

Long-term debt

$ 17 million, 8.3 % Notes due 2023

$ 63 million, 7.65 % Notes due 2023

$ 700 million, Floating Rate Notes due 2023

$ 1,000 million, 3 % Notes due 2023

$ 1,187 million, 3.75 % Notes due 2023

$ 500 million, 0.613 % Notes due 2024

$ 1,000 million, 3.5 % Notes due 2024

$ 900 million, 3.25 % Notes due 2025 (1)

$ 2,200 million, 4.125 % Notes due 2025

$ 1,500 million, 4.5 % Notes due 2026

$ 800 million, 1.25 % Notes due 2026

$ 1,500 million, 3.4 % Notes due 2027

$ 259 million, 7.875 % Debentures due 2027

$ 600 million, 3.05 % Notes due 2027

$ 3,800 million, 4.375 % Notes due 2028

$ 1,500 million, 2.4 % Notes due 2030

$ 1,500 million, 2.375 % Notes due 2031 (1)

$ 45 million, 8.3 % Step Down Notes due 2033

$ 190 million, 6.15 % Notes due 2036

$ 2,200 million, 4.8 % Notes due 2038

$ 750 million, 3.2 % Notes due 2040

$ 121 million, 5.875 % Notes due 2041

$ 448 million, 6.125 % Notes due 2041

$ 317 million, 5.375 % Notes due 2042

$ 1,500 million, 4.8 % Notes due 2046

$ 1,000 million, 3.875 % Notes due 2047

$ 3,000 million, 4.9 % Notes due 2048

$ 1,250 million, 3.4 % Notes due 2050

$ 1,500 million, 3.4 % Notes due 2051

$ 17 million, 8.3 % Notes due January 2023

$ 63 million, 7.65 % Notes due March 2023

$ 700 million, Floating Rate Notes due July 2023

$ 1,000 million, 3 % Notes due July 2023

$ 1,187 million, 3.75 % Notes due July 2023

$ 500 million, 0.613 % Notes due March 2024

$ 1,000 million, 3.5 % Notes due June 2024

$ 900 million, 3.25 % Notes due April 2025 (1)

$ 2,200 million, 4.125 % Notes due November 2025

$ 1,500 million, 4.5 % Notes due February 2026

$ 800 million, 1.25 % Notes due March 2026

$ 1,500 million, 3.4 % Notes due March 2027

$ 259 million, 7.875 % Debentures due May 2027

$ 600 million, 3.05 % Notes due October 2027

$ 3,800 million, 4.375 % Notes due October 2028

$ 1,500 million, 2.4 % Notes due March 2030

$ 1,500 million, 2.375 % Notes due March 2031 (1)

$ 45 million, 8.3 % Step Down Notes due January 2033

$ 190 million, 6.15 % Notes due November 2036

$ 2,200 million, 4.8 % Notes due August 2038

$ 750 million, 3.2 % Notes due March 2040

$ 121 million, 5.875 % Notes due March 2041

$ 448 million, 6.125 % Notes due November 2041

$ 317 million, 5.375 % Notes due February 2042

$ 1,500 million, 4.8 % Notes due July 2046

$ 1,000 million, 3.875 % Notes due October 2047

$ 3,000 million, 4.9 % Notes due December 2048

$ 1,250 million, 3.4 % Notes due March 2050

$ 1,500 million, 3.4 % Notes due March 2051

Other, including finance leases 69 28

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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, 2022, there were no outstanding balances under these revolving credit agreements.

As of September 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"):

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

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.

There was no commercial paper outstanding balance as of September 30, 2022.

Debt Covenants.

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

Interest Expense.

Interest expense on long-term and short-term debt was $ 317 million for the three months ended and $ 947 million for the nine months ended September 30, 2022, compared with $ 312 million for the three months ended and $ 948 million for the nine months ended September 30, 2021.

Note 8 – Common and Preferred Stock

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

In the first nine months 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 six months ended June 30:

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

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

1 unchanged sentence

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

September 7, 2022 September 22, 2022 $ 1.12 $ 341

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

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.

September 8, 2021 September 23, 2021 $ 1.00 $ 330

On October 26, 2022, the Board of Directors declared the fourth quarter cash dividend of $ 1.12 per share of Cigna common stock to be paid on December 21, 2022 to shareholders of record on December 6, 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.

1 unchanged sentence

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.

As part of our existing share repurchase program, we entered into separate accelerated share repurchase 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.

The final number of shares to be received under the ASR agreements is determined based on the daily Volume-Weighted Average Share Price ("VWAP") 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 recorded the payments to the Counterparties as a reduction to Total Shareholders' Equity, consisting of a $ 2.8 billion increase in Treasury stock, which reflects the value of the initial 10.4 million shares received, and a $ 700 million decrease in Additional paid-in capital, which reflects the value of the stock held back by the Counterparties pending final settlement of the agreement.

The $ 700 million recorded in Additional paid-in capital will be reclassified to Treasury stock upon settlement of the ASR agreements in the fourth quarter of 2022.

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 July 1, 2022, the effective date of the ASR agreements.

The final VWAP calculation dates of the ASR agreements are November 2, 2022 and November 3, 2022.

In aggregate, we expect to receive an additional 1.9 million shares of our common stock for no additional consideration as the value of this stock was held back by the Counterparties pending final settlement of the agreements.

The total number of shares of our common stock repurchased under the ASR agreements is expected to be 12.3 million.

Note 9 – Insurance and Contractholder Liabilities

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

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

September 30, 2022 December 31, 2021 September 30, 2021

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

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( 611 ) ( 4,033 ) ( 4,644 )

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 $ 3.6 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.

Total insurance and contractholder liabilities per Consolidated Balance Sheets $ 6,095 $ 11,655 $ 17,750 $ 5,318 $ 12,563 $ 17,881 $ 22,493

(1) Amounts classified as Liabilities of businesses held for sale primarily include $ 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.

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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 $ 4.1 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

The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $ 4.0 billion at September 30, 2022 and $ 4.1 billion at September 30, 2021.

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

Nine Months Ended

(In millions) September 30, 2022 September 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 six months ended June 30 were as follows:

Six Months Ended

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

Nine Months Ended

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

Actual completion factors $ 81 0.3 % $ 82 0.3 %

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Liability balance details.

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

The liability details for unpaid claims and claim expenses are presented in the following table.

The liability balance no longer includes the International Health businesses now reported in Cigna Healthcare following our change in segment reporting.

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

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

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

Other Operations

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

Our interest in a joint venture in Türkiye and divested international businesses

Other Operations 268 267

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 Türkiye is presented in the following table.

Activity in the unpaid claims and claim expenses for the divested international businesses 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.

Six Months Ended

(In millions) June 30, 2022 (1)

June 30, 2021

Nine Months Ended

(In millions) September 30, 2022 (1)

September 30, 2021

Beginning balance $ 447 $ 452

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Foreign currency ( 28 ) ( 31 )

Divestiture of international businesses ( 369 ) —

Ending balance, net 5 384

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Ending balance

(1) Includes unpaid claims amounts classified as Liabilities of businesses held for sale.

(1) Beginning balance includes unpaid claims amounts classified as Liabilities of businesses held for sale.

Reinsurance in the table above reflects amounts due from reinsurers related to unpaid claims liabilities.

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

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:

The Company's reinsurance recoverables as of September 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

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

(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.

(2) Includes $ 179 million of current reinsurance recoverables that are reported in Other current assets.

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

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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 $ 3.1 billion remaining at June 30, 2022.

The reinsurance agreement is subject to an overall limit with approximately $ 3.1 billion remaining at September 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 net amount at risk is the amount that the Company would have to pay if all contractholders died as of the specified date.

As of September 30, 2022, the account value decreased primarily due to unfavorable equity market performance, which resulted in an increase to the net amount at risk.

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, 2022 December 31, 2021

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

Account value $ 7,143 $ 9,795

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

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.

GMIB liabilities totaling $ 410 million as of September 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 June 30, 2022 and December 31, 2021 as follows:

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

(In millions)

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

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

GMIB Berkshire $ 207 $ 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:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

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

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Investments per Consolidated Balance Sheets $ 783 $ 16,273 $ 17,056 $ 920 $ 18,438 $ 19,358

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

These investments are primarily comprised of debt securities and other long-term investments, and to a lesser extent, equity securities and short-term investments.

(1) Investments related to the international life, accident and supplemental benefits businesses that were held for sale as of December 31, 2021.

These investments were primarily comprised of debt securities and other long-term investments, and to a lesser extent, equity securities and short-term investments.

See Note 4 to the Consolidated Financial Statements for additional information.

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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, 2022:

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

(In millions) Amortized

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Actual maturities of these securities could differ from their contractual maturities used in the table above because issuers may have the right to call or prepay obligations, with or without penalties.

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

Gross unrealized appreciation (depreciation) on debt securities by type of issuer is shown below:

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Depreciation Fair

June 30, 2022

September 30, 2022

Federal government and agency $ 304 $ — $ 41 $ ( 12 ) $ 333

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Total $ 11,026 $ ( 56 ) $ 136 $ ( 1,276 ) $ 9,830

Investments supporting liabilities of the Company's run-off settlement annuity business (included in total above) (1)

$ 2,266 $ ( 5 ) $ 220 $ ( 185 ) $ 2,296

December 31, 2021

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(1) Net unrealized appreciation for these investments is excluded from Accumulated other comprehensive loss.

As of September 30, 2022 net unrealized depreciation for these investments is included in Accumulated other comprehensive loss.

Review of declines in fair value.

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The table below summarizes debt securities with a decline in fair value from amortized cost for which an allowance for credit losses has not been recorded, by investment grade and the length of time these securities have been in an unrealized loss position.

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, 2022 and December 31, 2021.

June 30, 2022 December 31, 2021

Unrealized depreciation on these debt securities is primarily due to declines in fair value resulting from increasing interest rates since these securities were purchased.

September 30, 2022 December 31, 2021

(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, 2022 and December 31, 2021:

June 30, 2022 December 31, 2021

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

September 30, 2022 December 31, 2021

(In millions) Cost Carrying Value Cost Carrying Value

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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 June 30, 2022 and December 31, 2021:

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

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

(Dollars in millions) September 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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Carrying Value as of

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

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

Real estate investments $ 1,231 $ 1,152

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

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.

Although we may incur a loss if dealers failed to perform under derivative contracts, collateral has been posted to cover substantially all of the net fair value owed to the Company.

As of September 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.

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

Notional Value as of

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

(In millions) September 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

Foreign currency forward contracts (1)

$ 720 $ 1,380

Economic hedge:

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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.

(1) These instruments were associated with the international life, accident and supplemental benefits businesses that were disposed in the Chubb transaction as discussed in Note 4 to the Consolidated Financial Statements.

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 June 30, Six Months Ended June 30,

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

(In millions) 2022 2021 2022 2021

Net realized investment gains (losses), excluding credit loss expense and asset write-downs $ ( 71 ) $ 60 $ ( 390 ) $ 70

Net realized investment (losses) gains, excluding credit loss expense and asset write-downs $ ( 65 ) $ 44 $ ( 455 ) $ 114

Credit loss (expense) recoveries ( 16 ) 24 ( 40 ) 14

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

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.

Net realized investment (losses) gains, before income taxes $ ( 81 ) $ 68 $ ( 495 ) $ 128

Net realized investment losses for the nine months ended September 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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Financial Assets and Financial 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.

The following table provides information as of September 30, 2022 and December 31, 2021 about the Company's financial assets and liabilities carried at fair value.

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

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(Level 3) Total

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

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

Financial assets at fair value

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Derivative assets (2)

— — 340 143 — — 340 143

Financial liabilities at fair value

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

(2) Derivative assets above include $ 5 million as of September 30, 2022 that are presented in the Short-term investments category disclosed in Note 11.

See Note 11 for more information on our Derivative Financial Instruments.

Level 3 Financial Assets and Financial Liabilities

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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, 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 September 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 ) June 30, 2022 December 31, 2021 Unobservable input June 30, 2022 June 30, 2022 December 31, 2021

(Fair value in millions) September 30, 2022 December 31, 2021 Unobservable input September 30, 2022 September 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 and six months ended June 30, 2022 and 2021.

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, 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

September 30, For the Nine Months Ended

September 30,

(In millions) 2022 2021 2022 2021

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Beginning balance $ 512 $ 854 $ 796 $ 854

Total gains (losses) included in shareholders' net income ( 2 ) ( 1 ) 10 ( 11 )

Gains (losses) included in other comprehensive income ( 13 ) 7 ( 28 ) ( 9 )

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

Gains (losses) included in Shareholders' net income

(Losses) gains included in Other comprehensive income (loss)

( 34 ) 2 ( 62 ) ( 7 )

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

Purchases, sales and settlements

Purchases 81 37 157 108

Sales — ( 36 ) — ( 36 )

Settlements ( 54 ) ( 1 ) ( 206 ) ( 26 )

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Ending balance $ 504 $ 899 $ 504 $ 899

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

$ ( 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

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

$ — $ ( 3 ) $ ( 2 ) $ ( 3 )

Change in unrealized gains or losses included in Other comprehensive income (loss) for assets held at the end of the reporting period $ ( 33 ) $ 2 $ ( 60 ) $ ( 8 )

(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 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.

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 (losses) gains and Net investment income.

Gains and losses included in Other comprehensive income (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.

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 June 30, 2022 and December 31, 2021 were as follows:

Fair values of Separate account assets at September 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

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

September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021

Guaranteed separate accounts (See Note 18)

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Non-guaranteed separate accounts priced at net asset value ("NAV") as a practical expedient (1)

Total 8,143 9,215

Separate account assets of businesses classified as held for sale (2)

( 648 ) ( 878 )

Separate account assets per Consolidated Balance Sheets $ 7,260 $ 8,337

(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.

(1) Non-guaranteed separate accounts include $ 4.0 billion as of September 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 September 30, 2022 and $ 0.3 billion as of December 31, 2021.

(2) Investments related to the international life, accident and supplemental benefits businesses that were held for sale as of December 31, 2021.

See Note 4 to the Consolidated Financial Statements for additional information.

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, 2022 or 2021.

Activity, including transfers into and out of Level 3, was not material for the three and nine months ended September 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 June 30, 2022 Redemption Frequency

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

(if currently eligible) Redemption Notice

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

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

Securities partnerships $ 475 $ 513 $ 263 Not applicable Not applicable

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Total $ 832 $ 842 $ 263

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

As of September 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.

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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 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.

For the nine months ended September 30, 2022 and 2021, impairments recognized requiring these assets to be measured at fair value were not material.

Realized investment gains and losses from these observable price changes for the three and nine months ended September 30, 2022 and September 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 June 30, 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 September 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 June 30, 2022 December 31, 2021

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

The Company determined that it was no t a primary beneficiary in any material variable interest entity as of September 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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Note 14 – Accumulated Other Comprehensive Income (Loss) ("AOCI")

AOCI includes net unrealized appreciation (depreciation) on securities and derivatives (excluding appreciation on investments supporting future policy benefit liabilities of the run-off settlement annuity business) (see Note 11), foreign currency translation and the net postretirement benefits liability adjustment.

AOCI includes net unrealized (depreciation) appreciation on securities and derivatives (excluding appreciation on investments supporting future policy benefit liabilities of the run-off settlement annuity business) (see Note 11), foreign currency translation and the net postretirement benefits liability adjustment.

AOCI includes the Company's share from unconsolidated entities reported on the equity method.

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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) 2022 2021 2022 2021

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Beginning balance $ ( 285 ) $ 749 $ 685 $ 900

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

(Depreciation) appreciation on securities and derivatives

( 259 ) 59 ( 1,505 ) ( 113 )

Tax (expense) benefit

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 )

Reclassification adjustment for tax expense (benefit) included in Shareholders' net income ( 8 ) 3 ( 6 ) 2

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

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

( 22 ) ( 16 ) 233 9

Net (depreciation) appreciation on securities and derivatives

( 281 ) 43 ( 1,272 ) ( 104 )

Reclassification adjustment for losses included in Shareholders' net income (Gain on sale of businesses)

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

14 ( 14 ) 41 ( 20 )

Reclassification adjustment for tax (benefit) expense included in Shareholders' net income

( 3 ) 3 ( 9 ) 5

Net losses (gains) reclassified from AOCI to Shareholders' net income

182 ( 11 ) 203 ( 15 )

Other comprehensive (loss) income, net of tax

( 99 ) 32 ( 1,069 ) ( 119 )

Ending balance $ ( 384 ) $ 781 $ ( 384 ) $ 781

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Translation of foreign currencies ( 105 ) ( 118 ) ( 345 ) ( 216 )

Tax (expense) ( 26 ) — ( 29 ) ( 5 )

Tax benefit (expense)

1 ( 7 ) ( 28 ) ( 12 )

Net translation of foreign currencies ( 104 ) ( 125 ) ( 373 ) ( 228 )

Reclassification adjustment for losses included in Net income (Gain on sale of businesses)

Reclassification adjustment for tax expense included in Net income

Net translation losses reclassified from AOCI to Net income

Translation of foreign currencies 131 ( 118 ) ( 109 ) ( 216 )

Tax benefit (expense)

30 ( 7 ) 1 ( 12 )

Other comprehensive income (loss), net of tax

161 ( 125 ) ( 108 ) ( 228 )

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

1 ( 1 ) ( 2 ) ( 6 )

Shareholders' other comprehensive income (loss), net of tax

160 ( 124 ) ( 106 ) ( 222 )

Ending balance $ ( 339 ) $ ( 237 ) $ ( 339 ) $ ( 237 )

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Reclassification adjustment for amortization of net prior actuarial losses and prior service costs (Interest expense and other)

Reclassification adjustment for (gains) included in Shareholders' net income (Gain on sale of businesses)

( 2 ) — ( 2 ) —

Reclassification adjustment for settlement (Interest expense and other)

Reclassification adjustment for tax (benefit) included in Shareholders' net income

( 5 ) ( 5 ) ( 12 ) ( 15 )

Net adjustments reclassified from AOCI to Shareholders' net income

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Net change due to valuation update — — 14 —

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

Other comprehensive income, net of tax

Ending balance $ ( 1,286 ) $ ( 1,697 ) $ ( 1,286 ) $ ( 1,697 )

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Second quarter 2022 charge 22

Balance, June 30, 2022 $ 88

Balance, September 30, 2022 $ 60

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

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

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

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

Operating leases:

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Total finance lease liabilities $ 101 $ 51

(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.

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

Note 17 – Income Taxes

Income Tax Expense

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.

The 20.4 % effective tax rate for the three months ended September 30, 2022 and the 21.0 % effective tax rate for the nine months ended September 30, 2022 were each lower than the 20.6 % rate for the three months ended September 30, 2021 and the 21.7 % rate for the nine months ended September 30, 2021.

These decreases are driven largely by a foreign tax rate differential, including the impact of the Chubb transaction.

As of September 30, 2022, we had approximately $ 360 million in deferred tax assets ("DTAs") associated with unrealized investment losses that are primarily recorded in Accumulated other comprehensive loss.

We have determined that a valuation allowance against the DTAs is not currently required based on the Company's ability to carryback losses and other known investment strategies.

We will monitor and evaluate the need for any valuation allowance in the future.

Note 18 – 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, 2022, employers maintained assets that generally exceeded the benefit obligations under these arrangements of approximately $ 430 million.

As of September 30, 2022, employers maintained assets that generally exceeded the benefit obligations under these arrangements of approximately $ 420 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, 2022.

there were no additional liabilities required for these guarantees, net of reinsurance, as of September 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 June 30, 2022 in connection with acquisition and disposition transactions.

The Company had indemnification obligations as of September 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.

2 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, 2022.

There were no liabilities for these indemnification obligations as of September 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 six months ended June 30, 2022.

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

Legal and Regulatory Matters

The Company is routinely involved in numerous claims, lawsuits, regulatory inquiries and audits, government investigations, including under the federal False Claims Act and state false claims acts initiated by a government investigating body or by a qui tam relator's filing of a complaint under court seal, and other legal matters arising, for the most part, in the ordinary course of managing a global health services business.

global health services business.

Additionally, the Company has received and is cooperating with subpoenas or similar processes from various governmental agencies requesting information, all arising in the normal course of its business.

12 unchanged sentences

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.

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.

6 unchanged sentences

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.

Express Scripts' pending Motions were fully briefed at the end of July 2022.

Medicare Advantage.

4 unchanged sentences

Department of Justice ("DOJ") (U.S.

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

Attorney's Offices for the Southern District of New York and the Middle District of Tennessee) filed a motion to partially intervene, which was granted on August 2, 2022.

On October 14, 2022, the DOJ filed its complaint-in-intervention alleging that certain diagnoses made during in-home exams were invalid for risk adjustment purposes.

Cigna's response is due by December 16, 2022.

Regulatory Matters

19 unchanged sentences

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 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

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

Three Months Ended Nine Months Ended

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

Integration and transaction-related costs (benefits)

(Selling, general and administrative expenses) $ 23 $ 24 $ ( 35 ) $ 13 $ 86 $ 112 $ 1 $ 58

1 unchanged sentence

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

Charges (benefits) associated with litigation matters

(Benefits) associated with litigation matters

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

(Gain) on sale of businesses ( 1,388 ) ( 1,735 ) — — ( 1,388 ) ( 1,735 ) — —

Debt extinguishment costs — — — — — — 110 141

5 unchanged sentences

Corporate and Eliminations

Three months ended June 30, 2022

Three months ended September 30, 2022

Revenues from external customers $ 34,670 $ 10,328 $ 78 $ — $ 45,076

1 unchanged sentence

Net investment income

25 101 75 3 204

Total revenues 35,698 11,096 153 ( 1,667 ) 45,280

2 unchanged sentences

Income (loss) before income taxes

$ 1,200 $ 879 $ 1,752 $ ( 340 ) $ 3,491

Pre-tax adjustments to reconcile to adjusted income from operations

(Income) attributable to noncontrolling interests

Net realized investment (gains) losses (1)

( 17 ) ( 1 ) ( 4 ) — ( 22 )

Net realized investment losses (1)

— 158 3 — 161

Amortization of acquired intangible assets 442 17 1 — 460

1 unchanged sentence

Integration and transaction-related costs — — — 24 24

Charge for organizational efficiency plan — — — 22 22

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

(Gain) on sale of businesses — — ( 1,735 ) — ( 1,735 )

Pre-tax adjusted income (loss) from operations $ 1,625 $ 1,053 $ 17 $ ( 316 ) $ 2,379

3 unchanged sentences

Corporate and Eliminations

Three months ended June 30, 2021

Three months ended September 30, 2021

Revenues from external customers $ 32,668 $ 10,283 $ 869 $ — $ 43,820

1 unchanged sentence

Net investment income

4 333 131 — 468

Total revenues 33,614 11,200 1,000 ( 1,526 ) 44,288

2 unchanged sentences

Income (loss) before income taxes

$ 1,074 $ 1,110 $ 196 $ ( 321 ) $ 2,059

Pre-tax adjustments to reconcile to adjusted income from operations

(Income) attributable to noncontrolling interests

( 10 ) ( 1 ) ( 5 ) — ( 16 )

Net realized investment (gains) losses (1)

3 unchanged sentences

Integration and transaction-related costs — — — 13 13

Debt extinguishment costs — — — 10 10

Pre-tax adjusted income (loss) from operations $ 1,548 $ 1,046 $ 225 $ ( 308 ) $ 2,511

3 unchanged sentences

Corporate and Eliminations

Six months ended June 30, 2022

Nine months ended September 30, 2022

Revenues from external customers $ 100,675 $ 31,411 $ 1,736 $ — $ 133,822

1 unchanged sentence

Net investment income

51 545 344 3 943

Total revenues 104,147 33,771 2,080 ( 5,233 ) 134,765

Net realized investment results from certain equity method investments

— 134 — — 134

Adjusted revenues $ 104,147 $ 33,905 $ 2,080 $ ( 5,233 ) $ 134,899

Income (loss) before income taxes

$ 3,114 $ 2,943 $ 2,134 $ ( 1,166 ) $ 7,025

Pre-tax adjustments to reconcile to adjusted income from operations

(Income) attributable to noncontrolling interests

Net realized investment (gains) losses (1)

( 41 ) ( 2 ) ( 11 ) — ( 54 )

Net realized investment losses (1)

— 542 87 — 629

Amortization of acquired intangible assets 1,329 89 1 — 1,419

2 unchanged sentences

Charge for organizational efficiency plan — — — 22 22

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

(Benefits) associated with litigation matters — — — ( 28 ) ( 28 )

(Gain) on sale of businesses — — ( 1,735 ) — ( 1,735 )

Pre-tax adjusted income (loss) from operations $ 4,402 $ 3,572 $ 476 $ ( 1,060 ) $ 7,390

3 unchanged sentences

Corporate and Eliminations

Six months ended June 30, 2021

Nine months ended September 30, 2021

Revenues from external customers

2 unchanged sentences

Net investment income

12 772 385 — 1,169

Total revenues 96,826 33,426 2,995 ( 4,857 ) 128,390

2 unchanged sentences

Income (loss) before income taxes

$ 2,752 $ 3,266 $ 630 $ ( 1,178 ) $ 5,470

Pre-tax adjustments to reconcile to adjusted income from operations

(Income) attributable to noncontrolling interests

Net realized investment (gains) losses (1)

( 21 ) ( 2 ) ( 16 ) — ( 39 )

Net realized investment losses (gains) (1)

4 ( 163 ) 43 — ( 116 )

Amortization of acquired intangible assets 1,449 36 14 — 1,499

1 unchanged sentence

Integration and transaction-related costs — — — 58 58

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

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

Debt extinguishment costs — — — 141 141

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, 2022 and 2021:

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, 2022 and 2021:

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

(In millions) 2022 2021 2022 2021

15 unchanged sentences

Total Cigna Healthcare 9,508 9,417 28,649 28,231

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

Divested international businesses — 800 1,500 2,418

Other 76 61 219 169

15 unchanged sentences

Historically, adjustments to original estimates have not been material.

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

This guarantee liability was $ 1.1 billion as of September 30, 2022 and 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