What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-23 compared with 2022-02-24 · 661 added, 621 removed, 1660 unchanged (44% of the section changed)

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Cigna Corporation

To the Board of Directors and Shareholders of The Cigna Group

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Cigna Corporation and its subsidiaries (the "Company") as of December 31, 2021 and 2020, and the related consolidated statements of income, comprehensive income, changes in total equity and cash flows for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the "consolidated financial statements").

We have audited the accompanying consolidated balance sheets of The Cigna Group and its subsidiaries (the "Company") as of December 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income, changes in total equity and cash flows for each of the three years in the period ended December 31, 2022, including the related notes and financial statement schedules listed in the index appearing on page FS-1 of this Form 10-K (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Assessment - Evernorth and U.S.

Government Reporting Units

As described in Note 18 to the consolidated financial statements, as of December 31, 2021, goodwill is primarily reported in the Evernorth segment ($35.1 billion) and the Cigna Healthcare segment ($10.7 billion), of which a portion of the goodwill balance for the Cigna Healthcare segment relates to the U.S.

Goodwill Impairment Assessment - U.S.

Government Reporting Unit

As described in Note 19 to the consolidated financial statements, as of December 31, 2022, goodwill in the Cigna Healthcare segment was $10.7 billion, of which a portion of the balance relates to the U.S.

Government reporting unit.

Management conducts its annual quantitative evaluation for goodwill impairment during the third quarter at the reporting unit level and writes it down through shareholders' net income if impaired.

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A discount rate is selected to correspond with each reporting unit's weighted average cost of capital.

Future cash flows for Evernorth are primarily driven by the forecasted gross margins of the business, as well as operating expenses and long-term growth rates.

Future cash flows for the U.S.

Government reporting unit is primarily driven by forecasted revenues, benefit expenses, operating expenses and long-term growth rates.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Evernorth and the U.S.

Government reporting units is a critical audit matter are the significant judgment by management when estimating the fair value of the reporting units.

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's estimate of the reporting units' fair value determined using significant assumptions related to the discount rate, forecasted gross margins, and long-term growth rates for the Evernorth reporting unit and the discount rate, forecasted revenues, benefit expenses, operating expenses, and long-term growth rates for the U.S.

Government reporting unit (collectively referred to as the "significant assumptions").

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the U.S.

Government reporting unit is a critical audit matter are the significant judgment by management when developing the fair value estimate of the reporting unit.

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to the discount rate, forecasted revenues, benefit expenses, operating expenses, and long-term growth rates (collectively referred to as the "significant assumptions").

In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management's goodwill impairment assessment, including controls over management's methodology, inputs and assumptions used in its goodwill impairment assessment of the Evernorth and the U.S.

Government reporting units.

These procedures also included, among others (i) testing management's process for determining the fair value estimate of the reporting units;

These procedures included testing the effectiveness of controls relating to management's goodwill impairment assessment, including controls over management's methodology, inputs, and assumptions used in developing the fair value estimate of the U.S.

Government reporting unit.

These procedures also included, among others (i) testing management's process for developing the fair value estimate of the reporting unit;

(ii) evaluating the appropriateness of the discounted cash flow analysis and market approach;

(iii) testing the completeness and accuracy of underlying data used in the discounted cash flow analysis and market approach and (iv) evaluating the reasonableness of the significant assumptions.

Evaluating the reasonableness of the significant assumptions involved consideration of (i) the current and past performance of the reporting units;

(iii) testing the completeness and accuracy of underlying data used in the discounted cash flow analysis and market approach;

and (iv) evaluating the reasonableness of the significant assumptions used by management.

Evaluating the reasonableness of the significant assumptions involved consideration of (i) the current and past performance of the reporting unit;

(ii) the consistency with external market and industry data;

and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit, as applicable.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the reasonableness of the discount rate and long-term growth rate significant assumptions .

Professionals with specialized skill and knowledge were used to assist in the evaluation of the reasonableness related to the discount rate and long-term growth rates significant assumptions .

/s/ PricewaterhouseCoopers LLP

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We have served as the Company's auditor since 1983.

Cigna Corporation

The Cigna Group

Consolidated Statements of Income

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Debt extinguishment costs — ( 141 ) ( 199 )

Gain (loss) on sale of business — 4,203 —

Net realized investment gains (losses) 196 149 177

Gain on sale of businesses 1,662 — 4,203

Net realized investment (losses) gains ( 495 ) 196 149

Income before income taxes 8,353 6,782 10,868

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

Cigna Corporation

The Cigna Group

Consolidated Statements of Comprehensive Income

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Other comprehensive income (loss), net of tax

Net unrealized appreciation (depreciation) on securities and derivatives ( 215 ) ( 75 ) 957

Net unrealized depreciation on securities and derivatives ( 1,005 ) ( 215 ) ( 75 )

Net translation gains (losses) on foreign currencies 72 ( 232 ) 252

Postretirement benefits liability adjustment 420 410 ( 105 )

Other comprehensive income (loss), net of tax ( 37 ) 72 765

Other comprehensive (loss) income, net of tax ( 513 ) ( 37 ) 72

Total comprehensive income 6,233 5,378 8,561

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

Cigna Corporation

The Cigna Group

Consolidated Balance Sheets

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Reinsurance recoverables 4,743 4,970

Deferred policy acquisition costs 677 3,385

Property and equipment 3,774 3,692

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

Cigna Corporation

The Cigna Group

Consolidated Statements of Changes in Total Equity

(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

(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 December 31, 2019 $ 4 $ 28,306 $ ( 941 ) $ 20,162 $ ( 2,193 ) $ 45,338 $ 6 $ 45,344 $ 35

Cumulative effect of adopting new lease accounting guidance (ASU 2016-02) ( 15 ) ( 15 ) ( 15 )

Cumulative effect of adopting new credit loss guidance (ASU 2016-13) ( 30 ) ( 30 ) ( 30 )

Effect of issuing stock for employee benefit plans 672 ( 90 ) 582 582

Other comprehensive income (loss)

Net income 5,104 5,104 5 5,109 11

80 80 80 ( 8 )

8,458 8,458 17 8,475 14

Common dividends declared (per share:

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

Cumulative effect of adopting new credit loss guidance (ASU 2016-13)

( 30 ) ( 30 ) ( 30 )

Effect of issuing stock for employee benefit plans 604 ( 93 ) 511 511

Other comprehensive income (loss) 80 80 80 ( 8 )

Net income 8,458 8,458 17 8,475 14

Other comprehensive loss

( 23 ) ( 23 ) ( 23 ) ( 14 )

5,365 5,365 31 5,396 19

Common dividends declared (per share:

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Effect of issuing stock for employee benefit plans 659 ( 76 ) 583 583

Other comprehensive income (loss) ( 23 ) ( 23 ) ( 23 ) ( 14 )

Net income 5,365 5,365 31 5,396 19

Other comprehensive loss

( 511 ) ( 511 ) ( 511 ) ( 2 )

6,668 6,668 67 6,735 11

Common dividends declared (per share:

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

Cigna Corporation

The Cigna Group

Consolidated Statements of Cash Flows

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Depreciation and amortization 2,937 2,923 2,802

Realized investment (gains) losses, net ( 196 ) ( 149 ) ( 177 )

Realized investment losses (gains), net

495 ( 196 ) ( 149 )

Deferred income tax benefit

Gain on sale of business — ( 4,203 ) —

( 480 ) ( 220 ) ( 386 )

Gain on sale of businesses

( 1,662 ) — ( 4,203 )

Debt extinguishment costs — 141 199

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

Accounts receivable ( 2,843 ) ( 1,496 ) ( 713 )

Accounts receivable, net ( 2,237 ) ( 2,843 ) ( 1,496 )

Inventories ( 1,055 ) ( 557 ) ( 504 )

Deferred policy acquisition costs ( 267 ) ( 307 ) ( 242 )

Reinsurance recoverable and Other assets ( 38 ) ( 656 ) ( 77 )

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Other sales, maturities and repayments (primarily short-term and other long-term investments)

1,039 1,936 1,575

Investments purchased or originated:

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Other (primarily short-term and other long-term investments)

( 1,563 ) ( 2,554 ) ( 1,924 )

Property and equipment purchases, net ( 1,295 ) ( 1,154 ) ( 1,094 )

Acquisitions, net of cash acquired — ( 1,833 ) ( 139 )

Divestiture, net of cash sold ( 61 ) 5,592 —

Divestitures, net of cash sold 4,835 ( 61 ) 5,592

Other, net ( 170 ) 97 23

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES ( 3,611 ) 2,976 ( 734 )

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 3,098 ( 3,611 ) 2,976

Cash Flows from Financing Activities

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Effect of foreign currency rate changes on cash, cash equivalents and restricted cash ( 86 ) ( 65 ) 41

Net (decrease) increase in cash, cash equivalents and restricted cash ( 4,697 ) 4,834 1,556

Net increase (decrease) in cash, cash equivalents and restricted cash 428 ( 4,697 ) 4,834

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

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5,976 5,548 10,245

Cash reclassified to assets of businesses held for sale ( 425 ) — ( 743 )

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

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

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(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 December 31, 2021 and December 31, 2020 and were reported in Other long-term investments and Other assets as of December 31, 2019.

(2) Restricted cash and cash equivalents were reported in other long-term investments.

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

CIGNA CORPORATION

THE CIGNA GROUP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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Variable Interest Entities

Collectively Significant Operating Unconsolidated Subsidiaries

Accumulated Other Comprehensive Income (Loss)

W ORKFORCE M ANAGEMENT AND C OMPENSATION

O rganizational Efficiency Plan

Organizational Efficiency Plan

Employee Incentive Plans

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Note 1 – Description of Business

Cigna Corporation, together with its subsidiaries (either individually or collectively referred to as "Cigna," the "Company," "we," "our" or "us") is a global health services organization with a mission of helping those we serve improve their health, well-being and peace of mind by making health care affordable, predictable and simple.

The Cigna Group, together with its subsidiaries, is a global health company.

On February 13, 2023, we changed our corporate name from Cigna Corporation to The Cigna Group.

We will not distinguish between our prior and current corporate name and will refer to our current corporate name throughout the Financial Statements and related footnotes.

As such, unless expressly indicated or the context requires otherwise, the terms "Company," "we," "us," and "our" in this document refer to The Cigna Group, a Delaware corporation, and, where appropriate, its subsidiaries.

On February 13, 2023, we also changed the name of our Evernorth segment to Evernorth Health Services.

We will not distinguish between our prior and current segment name and will refer to our current segment name throughout the Financial Statements and related footnotes.

Our common stock continues to be listed with, and trades on, the New York Stock Exchange under the ticker symbol "CI".

The Cigna Group has a mission of helping those we serve improve their health and vitality.

Our subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental and supplemental products and services.

The majority of these products are offered through employers and other groups such as governmental and non-governmental organizations, unions and associations.

Cigna also offers commercial health and dental insurance and Medicare products to individuals in the United States and selected international markets.

In addition to these ongoing operations, Cigna also has certain run-off operations.

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 seven countries to Chubb INA Holdings, Inc.

("Chubb") for $ 5.75 billion cash (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 so that the results previously reported in the International Markets segment are now reported as follows:

• The businesses to be retained by Cigna are now reported in the newly created International Health operating segment that will be aggregated with our existing U.S.

Commercial and U.S.

Government operating segments in the renamed Cigna Healthcare reporting segment (previously named U.S.

Medical segment).

• The businesses to be sold pursuant to the Chubb Transaction are now reported in Other Operations.

Segment results for the years ended December 31, 2020 and 2019 have been restated to conform to the new segment presentation (see Note 23).

Cigna Healthcare also offers commercial health and dental insurance and Medicare products to individuals in the United States and selected international markets.

In addition to these ongoing operations, The Cigna Group also has certain run-off operations.

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.

Cigna Healthcare includes U.S.

Evernorth Health Services 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, Home Delivery Pharmacy, Specialty Pharmacy, Distribution and Care Delivery and Management Solutions, which are provided to health plans, employers, government organizations and health care providers.

Cigna Healthcare includes the U.S.

Commercial, U.S.

Government and International Health operating segments that provide comprehensive medical and coordinated solutions to clients and customers.

Commercial products and services include medical, pharmacy, behavioral health, dental, vision, health advocacy programs and other products and services for insured and self-insured customers.

Government solutions include Medicare Advantage, Medicare Supplement and Medicare Part D plans for seniors and individual health insurance plans both on and off the public exchanges.

Government and International Health operating segments which provide comprehensive medical and coordinated solutions to clients and customers.

Commercial products and services include medical, pharmacy, behavioral health, dental and other products and services for insured and self-insured clients.

Government solutions include Medicare Advantage, Medicare Supplement and Medicare Part D plans for seniors and individual health insurance plans.

International Health solutions include health care coverage in our international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations.

The Cigna Healthcare segment is comprised of the previously named U.S.

Medical segment and the businesses to be retained from the previous International Markets segment.

Other Operations contains the remainder of our business operations, consisting of the following:

• Ongoing business:

• 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.

• Exiting businesses:

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

• Group Disability and Life .

Prior to the sale of the U.S.

Group Disability and Life business on December 31, 2020, this operating segment provided group long-term and short-term disability, group life, accident, voluntary and specialty insurance products and related services.

• Run-off businesses:

• Reinsurance:

predominantly comprised of guaranteed minimum death benefit ("GMDB") and guaranteed minimum income benefit ("GMIB") business effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska ("Berkshire") in 2013.

• Settlement Annuity business in run-off.

• Individual Life Insurance and Annuity and Retirement Benefits businesses:

deferred gains from the sales of these businesses.

Other Operations was previously named Group Disability and Other.

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

Other Operations comprises the remainder of our business operations, which includes ongoing businesses and exiting businesses.

Our ongoing businesses include continuing business, corporate-owned life insurance ("COLI") and our run-off businesses.

Our run-off businesses include (i) guaranteed minimum death benefit ("GMDB") and guaranteed minimum income benefit ("GMIB") business that was effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska ("Berkshire") in 2013, (ii) settlement annuity business, and (iii) individual life insurance and annuity and retirement benefits businesses comprised of deferred gains from the sales of these businesses.

Our exiting businesses include our interest in a joint venture in Türkiye, which was sold to our partner in December 2022, the international life, accident and supplemental benefits businesses sold on July 1, 2022, and the Group Disability and Life business sold on December 31, 2020.

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") (see Note 4).

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

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements include the accounts of Cigna Corporation and its consolidated subsidiaries.

The Consolidated Financial Statements include the accounts of The Cigna Group and its consolidated subsidiaries.

Intercompany transactions and accounts have been eliminated in consolidation.

These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP").

Certain amounts in prior years have been reclassified to conform to the current year presentation.

Amounts recorded in the Consolidated Financial Statements necessarily reflect management's estimates and assumptions about medical costs, investment and receivable valuations, interest rates and other factors.

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Accounting Guidance Not Yet Adopted

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04) and related amendments

• Permits optional expedients and exceptions to simplify the accounting for contract modifications, hedging arrangements and held-to-maturity investments, when certain changes are made to a contract or instrument to facilitate reference rate reform and the discontinuation of reference interbank offered rates, including LIBOR.

• An entity may elect to apply the amendments, by topic or subsection, at any point prospectively through December 31, 2022.

When elected, the optional expedients must be applied consistently for all eligible contracts or transactions.

The Company has performed a comprehensive evaluation of our exposures and does not believe the cessation of LIBOR will materially impact our operations or financial results, primarily because many of the Company's contracts contain contractual fallback language for a new benchmark rate or the underlying exposure is minimal.

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):

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

Effective date of January 1, 2023 for The Cigna Group 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:

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• 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 rollforwards 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.

• 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 income at transition.

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

• Changes to the liability for future policy benefits and DAC 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.

• 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 income.

Expected effects:

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

• The Company developed a cross-functional implementation project plan and is executing on the necessary significant 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 shareholder's equity.

• Although we continue to evaluate the new requirements of the standard and model their impacts across various products, we are unable to project or estimate the magnitude or frequency of expected changes to our financial results.

However, it is possible that our income recognition pattern could change for several reasons:

• The new guidance applies 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 executed on the necessary changes to our systems, processes and controls.

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

The impact of adoption was not material to Shareholders' equity and did not result in a material restatement of prior periods.

• It is possible that our income recognition pattern could change on a prospective basis for several reasons:

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

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• 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 December 2022, the Financial Accounting Standards Board ("FASB") published Accounting Standards Update (ASU) 2022-05, which simplifies the retrospective adoption of LDTI.

The ASU permits 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.

The Cigna Group made this policy election for the contracts sold in the Chubb transaction and our divested interest in a joint venture in Türkiye.

Significant Accounting Policies

The Company's accounting policies are described either in this Note or in the applicable Notes to the Consolidated Financial Statements as listed in the table of contents.

The Company's accounting policies are described either in this Note or in the applicable Notes to the Consolidated Financial Statements as listed in the table of contents on page 83 .

Cash and Cash Equivalents

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Deferred Policy Acquisition Costs

Costs eligible for deferral include incremental, direct costs of acquiring new or renewal insurance and investment contracts and other costs directly related to successful contract acquisition.

Costs eligible for deferral, recorded within Other assets (non-current), include incremental, direct costs of acquiring new or renewal insurance and investment contracts and other costs directly related to successful contract acquisition.

Examples of deferrable costs include commissions, sales compensation and benefits, policy issuance and underwriting costs.

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• Supplemental health, life and accident insurance products (primarily individual products) that comprise the majority of the Company's deferred policy acquisition costs and group health and accident insurance products are deferred and amortized, generally in proportion to the ratio of periodic revenue to the estimated total revenues over the contract periods.

See Note 5 for Deferred policy acquisition costs reclassified to Assets of businesses held for sale.

• Universal life products are deferred and amortized in proportion to the present value of total estimated gross profits over the expected lives of the contracts.

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Other current assets consist primarily of prepaid expenses, accrued investment income, the current portion of reinsurance recoverables and income tax receivables.

Other non-current assets consist primarily of GMIB assets, operating lease right-of-use assets and various other insurance-related assets.

See Note 10 for the Company's accounting policy for GMIB assets and Note 19 for the Company's accounting policy related to leases.

Additionally, other non-current assets include the carrying value of our equity-method investments in business-related joint ventures in China, India, the U.S.

Other assets (non-current) consist primarily of the carrying value of our equity-method investments in business-related joint ventures in China, India, the U.S.

and other foreign jurisdictions.

Earnings or losses from these equity-method investments in joint ventures are recorded in Fees and other revenues.

See Note 14 for additional information on unconsolidated subsidiaries.

Additionally, Other assets (non-current) include deferred policy acquisition costs, operating lease right-of-use assets, GMIB assets, overfunded pension obligations (see Note 17) and various other insurance-related assets.

See Note 10 for the Company's accounting policy for GMIB assets and Note 20 for the Company's accounting policy related to leases.

Redeemable Noncontrolling Interests

Redeemable noncontrolling interests on our Consolidated Balance Sheets represents the noncontrolling shareholders' preferred and common stock interests of the Company's consolidated less than fully owned subsidiaries.

Those shareholders may choose to require the Company to purchase their redeemable noncontrolling interest.

We also have the right to require those shareholders to sell their redeemable noncontrolling interest to us.

The redeemable noncontrolling interest was recorded at fair value as of the date of purchase.

When the estimated redemption value for a redeemable noncontrolling interest exceeds its carrying value, an adjustment to increase the redeemable noncontrolling interest is recorded with an offsetting reduction to retained earnings or additional paid-in capital in the

absence of retained earnings.

Redeemable noncontrolling interests in our Consolidated Balance Sheets represents the noncontrolling shareholders' preferred and common stock interests of the Company's consolidated less than fully owned subsidiaries.

Those shareholders may choose to require

the Company to purchase their equity interest.

For certain entities, we may also have the right to require those shareholders to sell their equity interest to us.

As these redeemable noncontrolling interests provide for redemption features not solely within our control, we classify the redeemable noncontrolling interests outside of permanent equity.

The noncontrolling interest was initially recorded at fair value.

In subsequent reporting periods, the values are adjusted to reflect the earnings, losses and distributions attributable to the noncontrolling interest.

When a shareholder's right to require the Company to purchase its equity interest is exercisable, the redeemable noncontrolling interest is recorded at estimated redemption value.

When the estimated redemption value for a redeemable noncontrolling interest exceeds its initial carrying value, an adjustment to increase or decrease the redeemable noncontrolling interest is recorded with an offsetting adjustment to Retained earnings or Additional paid-in capital in the absence of Retained earnings.

When an adjustment is made to the carrying value of the redeemable noncontrolling interest, the calculation of shareholders' net income per share will be adjusted if the redemption value exceeds fair value.

Accrued Expenses and Other Current and Non-Current Liabilities

Accrued expenses (current) primarily includes financial and performance guarantee liabilities under pharmacy contracts (see section H), management compensation and various insurance-related liabilities, including experience-rated refunds, reinsurance contracts and the risk adjustment and minimum medical loss ratio rebate accruals under The Patient Protection and Affordable Care Act (the "ACA").

Other non-current liabilities primarily include obligations for pension (see Note 16), GMIB contract liabilities (see Note 10), lease liabilities (see Note 19), uncertain tax positions (see Note 21) and self-insured exposures not expected to be settled within one year.

Accrued expenses and other liabilities (current) primarily includes financial and performance guarantee liabilities under pharmacy contracts (see section H), management compensation and various insurance-related liabilities, including experience-rated refunds, reinsurance contracts and the risk adjustment and minimum medical loss ratio rebate accruals under The Patient Protection and Affordable Care Act (the "ACA").

Other non-current liabilities primarily include uncertain tax positions (see Note 22), GMIB contract liabilities (see Note 10), lease liabilities (see Note 20), self-insured exposures not expected to be settled within one year and underfunded pension obligations (see Note 17).

The Company accrues for legal and regulatory matters when a loss contingency is both probable and estimable.

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The Company uses exchange rates as of the balance sheet date to translate assets and liabilities into U.S.

Translation gains or losses on functional currencies, net of applicable taxes, are recorded in Accumulated other comprehensive income (loss).

Translation gains or losses on functional currencies, net of applicable taxes, are recorded in Accumulated other comprehensive loss.

The Company uses average monthly exchange rates during the year to translate revenues and expenses into U.S.

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Home delivery and specialty pharmacy revenues are due and recognized as each prescription is shipped, net of reserves for discounts and contractual allowances estimated based on historical experience.

Any differences between estimates and actual collections are reflected in operations when payments are received.

Any differences between estimates and actual collections are reflected in Pharmacy revenues when payments are received.

Historically, adjustments to original estimates and returns have not been material.

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Clients may be entitled to receive compensation if we fail to meet the guarantees.

Actual performance is compared to the contractual guarantee for each measure throughout the period and the Company defers revenue

for any estimated payouts within Accrued expenses and other liabilities (current).

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

Actual performance is compared to the contractual guarantee for each measure throughout the period and the Company defers revenue for any estimated payouts within Accrued expenses and other liabilities (current).

These estimates are adjusted and paid at the end of the annual guarantee period.

Historically, adjustments to original estimates have not been material.

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

The liability for these financial and performance guarantees was $ 1.3 billion as of December 31, 2022 and $ 1.1 billion as of December 31, 2021.

The Company administers programs through which we may receive rebates and other vendor consideration from pharmaceutical manufacturers.

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In retail, home delivery and specialty transactions, amounts may be collected from third-party payors.

These are billed and collected subject to normal account receivable collections procedures.

These are billed and collected in accordance with the Company's standard accounts receivable collection procedures.

Other pharmacy service revenues are earned by distributing specialty pharmaceuticals and medical supplies to providers, clinics and hospitals.

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Premiums and Related Expenses

Premiums for group life, accident and health insurance and managed care coverages are recognized as revenue on a pro rata basis over the contract period.

Benefits and expenses are recognized when incurred and, for our Cigna Healthcare insured business, are presented net of pharmaceutical manufacturer rebates.

Premiums for short-duration group health, accident and life insurance and managed care coverages are recognized as revenue on a pro rata basis over the contract period.

Benefits and expenses are recognized when incurred and, for our Cigna Healthcare business, are presented net of pharmaceutical manufacturer rebates.

For experience-rated contracts, premium revenue includes an adjustment for experience-rated refunds based on contract terms and calculated using the customer's experience (including estimates of incurred but not reported claims).

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Medicare Part D premiums include payments from CMS for risk-sharing adjustments that are estimated quarterly based on claim experience by comparing actual incurred prescription drug costs to the estimated costs submitted in the original contracts.

These adjustments may result in more or less revenue from CMS.

adjustments may result in more or less revenue from CMS.

Final revenue adjustments generally occur in the year following the contract year.

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The risk-adjustment program reallocates funds from insurers with lower risk populations to insurers with higher risk populations based on the relative risk scores of participants.

We estimate our receivable or payable based on the risk of our

customers compared to the risk of other customers in the same state and market, considering data obtained from industry studies and the United States Department of Health and Human Services ("HHS").

We estimate our receivable or payable based on the risk of our customers compared to the risk of other customers in the same state and market, considering data obtained from industry studies and the United States Department of Health and Human Services ("HHS").

Receivables or payables are recorded as adjustments to premium revenue based on our year-to-date experience when the amounts are reasonably estimable and collection is reasonably assured.

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These rebate liabilities are settled in the subsequent year.

Premiums for individual life, accident and supplemental health insurance and annuity products, excluding universal life and investment-related products, are recognized as revenue when due.

Premiums for long-duration insurance contracts, including individual life, accident and supplemental health insurance and annuity products, and excluding universal life and investment-related products, are recognized as revenue when due.

Benefits and expenses are matched with premiums.

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Expenses are recognized when claims are incurred and income is credited to policyholders in accordance with contract provisions.

The unrecognized portion of premiums received is recorded as unearned premiums included in insurance and contractholder liabilities (see Note 9 for further information).

The unrecognized portion of premiums received is recorded as unearned premiums included in Insurance and contractholder liabilities (current and non-current) (see Note 9 for further information).

Fees and Related Expenses

The majority of the Company's service fees are derived from administrative services only ("ASO") arrangements, fee-for-service clinical solutions, administration of certain rebate arrangements, health benefit management services and administration of services to specialty pharmacy manufacturers.

The majority of the Company's service fees are derived from administrative services only ("ASO") arrangements, fee-for-service clinical solutions, Wholesale Marketplace Drug Formulary Management services, health benefit management services and administration of services to specialty pharmacy manufacturers.

ASO arrangements allow plan sponsors to self-fund claims and assume the risk of medical or other benefit costs.

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Amounts accrued and paid for these performance guarantees during the reporting periods were not material.

Rebates from pharmaceutical manufacturers for ASO client purchases at retail pharmacies, net of amounts payable to ASO clients, were considered compensation for use of the manufacturer's products and recorded in Fees and other revenues prior to transitioning U.S.

Commercial customers to Express Scripts' retail pharmacy network in the third quarter of 2019.

After this transition, these rebates are reflected as a reduction to pharmacy costs (see "Pharmacy costs" above).

Expenses associated with administrative programs and services are recognized as incurred in Selling, general and administrative expenses.

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Direct costs associated with these programs are recognized in Pharmacy and other service costs, and other related expenses are recorded as incurred in Selling, general and administrative expenses.

The Company earns fees from our Pharmacy Rebate Program services.

These services include either our formulary rebate administrative service arrangements or our formulary processing arrangements.

Formulary rebate administrative services may include formulary consultation, administration of rebate contracts, rebate submission, collection from drug manufacturers and the distribution of rebates to clients.

The Company earns fees from our Wholesale Marketplace Drug Formulary Management services.

These services include either our drug formulary administrative service arrangements or our formulary processing arrangements.

Drug formulary administrative services may include formulary consultation, administration of rebate contracts, rebate submission, collection from drug manufacturers and the distribution of rebates to clients.

Services may also include facilitating audits of data submissions and reporting of rebates to clients.

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Clients agree to allow the Company to retain a portion of each rebate collected in exchange for formulary processing services provided.

These rebate and administrative fee revenues are reported net in Fees and other revenues in the Consolidated Statements of Income.

These drug formulary service and administrative fee revenues are reported net in Fees and other revenues in the Consolidated Statements of Income.

Revenue is recognized as rebates are processed.

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Accounting policy.

The allowance for expected credit losses for current accounts receivable is based primarily on past collections experience relative to the length of time receivables are past due;

however, when available evidence reasonably supports an assumption that counterparty credit risk over the expected payment period will differ from current and historical payment collections, a forecasting adjustment is reflected in the allowance for expected credit losses.

All other (non-credit) allowances are based on the current status of each customer's receivable balance, current economic and market conditions and a variety of other factors, including the length of time the receivables are past due, the financial health of customers and our past experience.

We bill pharmaceutical manufacturers based on management's interpretation of contractual terms and estimate a contractual allowance based on the best information available at the time a claim is processed.

Contractual allowances for certain rebates receivable from pharmaceutical manufacturers are determined by reviewing payment experience and specific known items that could be adjusted under

contract terms.

Contractual allowances for certain rebates receivable from pharmaceutical manufacturers are determined by reviewing payment experience and specific known items that could be adjusted under contract terms.

The Company's estimation process for contractual allowances for pharmaceutical manufacturer receivables generally results in an allowance for balances outstanding greater than 90 days.

Contractual allowances for certain receivables from third-party payors are based on their contractual terms and are estimates based on the Company's best information available at the time revenue is recognized.

Allowances, discounts and claims adjustments issued to customers in the form of client credits and other non-credit adjustments are based on the current status of each customer's receivable balance, current economic and market conditions and a variety of other factors, including the length of time the receivables are past due, the financial health of customers and our past experience.

The allowance for expected credit losses for current accounts receivable is based primarily on past collections experience relative to the length of time receivables are past due;

Receivables and any associated allowance are written off only when all collection attempts have failed and such amounts are determined unrecoverable.

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When circumstances related to specific collection patterns change, estimates of the recoverability of receivables are adjusted.

The Company's accounts receivable include amounts due from clients, third-party payors, customers and pharmaceutical manufacturers, and are presented net of allowances.

The Company's accounts receivable include amounts due from pharmaceutical manufacturers, clients, third-party payors and customers, and are presented net of allowances.

These balances include:

• Pharmaceutical manufacturers receivables - amounts due from pharmaceutical manufacturers.

• Noninsurance customer receivables - amounts due from customers for noninsurance services, primarily pharmacy benefit management and ASO contracts.

• Pharmaceutical manufacturers receivable - amounts due from pharmaceutical manufacturers.

• Insurance customer receivables - amounts due from customers under insurance contracts, primarily premiums receivable and amounts due from CMS.

• Other receivables - all other accounts receivable not defined in the categories above.

• Insurance customer receivables - amounts due from customers under insurance and managed care contracts, primarily premiums receivable and amounts due from CMS.

• Other receivables - all other accounts receivable not included in the categories above.

The following amounts were included within Accounts receivable, net:

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

Pharmaceutical manufacturers receivables $ 7,108 $ 5,463

Noninsurance customer receivables 6,899 6,274

Pharmaceutical manufacturers receivable 5,463 4,676

Insurance customer receivables 2,963 2,932

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These receivables are reported net of our allowances of $ 1.9 billion as of December 31, 2022 and $ 1.4 billion as of December 31, 2021 as follows:

• Included in our Pharmaceutical manufacturers receivable are contractual allowances for certain rebates receivable with pharmaceutical manufacturers of $ 926 million as of December 31, 2021 and $ 757 million as of December 31, 2020.

• Included in our Pharmaceutical manufacturers receivables are contractual allowances for certain rebates receivable with pharmaceutical manufacturers of $ 1.3 billion as of December 31, 2022 and $ 926 million as of December 31, 2021.

• Included in our Noninsurance customer receivables are contractual allowances from third-party payors of $ 336 million as of December 31, 2022 and $ 321 million as of December 31, 2021 based upon the contractual payment terms.

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Note 4 – Mergers, Acquisitions and Divestitures

Acquisition of MDLIVE

On April 19, 2021, Cigna acquired 97 % of MDLIVE, Inc.

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

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

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

The purchase price of $ 2.0 billion consisted of cash consideration.

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

As of December 31, 2021, the Company made immaterial measurement period adjustments to the purchase price allocation.

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

(In millions)

Goodwill $ 1,438

Acquired intangible assets 627

Tangible assets acquired net of liabilities assumed 17

Total consideration transferred 2,082

Fair value to Cigna's previously held equity interest ( 55 )

Total purchase price $ 2,027

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

Goodwill is not deductible for federal income tax purposes.

The acquired intangible assets primarily consist of customer relationships ($ 577 million) as well as internal-use software, provider networks and a trade name.

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

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

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

Revenues from MDLIVE and their results of operations were not material to Cigna's consolidated results of operations for the year ended December 31, 2021.

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

Divestiture of U.S.

Group Disability and Life business

On December 31, 2020, Cigna completed the sale of its U.S.

Group Disability and Life business to New York Life Insurance Company for cash proceeds of $ 6.2 billion.

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 15 for further information).

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

In December 2022, the Company also divested its ownership interest in a joint venture in Türkiye.

Divestiture of Group Disability and Life Business

On December 31, 2020, the Company completed the sale of its Group Disability and Life business to New York Life Insurance Company for cash proceeds of $ 6.2 billion.

The Company recognized a gain of $ 4.2 billion pre-tax ($ 3.2 billion after-tax), which included recognition of previously unrealized capital gains on investments sold (see Note 15 for further information).

Integration and Transaction-related Costs

In 2021, the Company incurred costs related to the acquisition of MDLIVE, the sale of the U.S.

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

("Anthem") and the pending Chubb Transaction (see Note 5 for further information on assets and liabilities of businesses held for sale).

In 2020 and 2019, the Company incurred costs related to the acquisition and integration of Express Scripts Holding Company ("Express Scripts"), the terminated merger with Anthem, the sale of the U.S.

Group Disability and Life insurance business and other transactions.

As part of our strategic plan, we incurred non-routine costs associated with the disposition and acquisition of certain businesses.

In 2022 and 2021, the Company incurred costs related to the Chubb transaction, the sale of the Group Disability and Life business, acquisition of MDLIVE and the terminated merger with Elevance Health, Inc.

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

In 2020, the Company incurred costs related to the acquisition and integration of Express Scripts Holding Company ("Express Scripts"), the terminated merger with Elevance, the sale of the Group Disability and Life business and other transactions.

These costs were $ 135 million pre-tax ($ 103 million after-tax) for the year ended December 31, 2022, compared with $ 169 million pre-tax ($ 71 million after-tax) for the year ended December 31, 2021 and $ 527 million pre-tax ($ 404 million after-tax) for the year ended December 31, 2020.

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

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 year ended December 31, 2021 included a tax benefit from the resolution of a tax matter related to the sold Group Disability and Life business.

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Deferred policy acquisition costs continue to be amortized.

Cigna entered into a definitive agreement in October 2021 to sell its life, accident and supplemental benefits businesses in seven countries to Chubb for $ 5.75 billion cash.

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

The Company believes this sale is probable and has aggregated and classified the assets and liabilities directly associated with the pending sale as held for sale and has reported them separately on our Consolidated Balance Sheets as of December 31, 2021.

On July 1, 2022, the Company completed the sale of its life, accident and supplemental benefits businesses in six countries to Chubb for approximately $ 5.4 billion in cash.

Additionally, in December 2022, the Company divested its interest in a joint venture in Türkiye.

See Note 4 for additional information.

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

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

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Goodwill, other intangible assets and all other assets 909

Total assets of business held for sale 10,057

Total assets of businesses held for sale 10,057

Insurance and contractholder liabilities 4,644

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Separate account liabilities 878

Total liabilities of business held for sale $ 6,423

The held for sale businesses reported Redeemable noncontrolling interests of $ 24 million, Gross unrealized appreciation on securities and derivatives of $ 137 million and Gross translation loss on foreign currencies of $ 209 million on our Consolidated Balance Sheets as of December 31, 2021.

Note 6 – Earnings Per Share ("EPS")

Total liabilities of businesses held for sale $ 6,423

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 Sheets as of December 31, 2021.

These amounts, as well as subsequent activity through the sale dates, were recognized within Gain on sale of businesses in our Consolidated Statements of Income as of December 31, 2022, as described in Note 4.

Note 6 – Earnings Per Share

Accounting policy.

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Basic and diluted earnings per share were computed as follows:

For the Years Ended December 31,

2022 2021 2020

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Total shares 309,546 3,519 313,065 337,962 3,004 340,966 364,979 3,410 368,389

EPS $ 15.87 $ ( 0.14 ) $ 15.73 $ 23.17 $ ( 0.21 ) $ 22.96 $ 13.58 $ ( 0.14 ) $ 13.44

Earnings per share $ 21.54 $ ( 0.24 ) $ 21.30 $ 15.87 $ ( 0.14 ) $ 15.73 $ 23.17 $ ( 0.21 ) $ 22.96

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

For the Years Ended December 31,

(In millions) 2022 2021 2020

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Note 7 – Debt

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

The outstanding amounts of debt, net of issuance costs, discounts or premiums, and finance leases were as follows:

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

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Commercial paper $ — $ 2,027

$ 500 million, 3.05 % Notes due 11/2022

$ 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, 3.0 % Notes due July 2023

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

Other, including finance leases 33 23

$ 78 million, 6.37 % Notes due 6/2021

$ 1,000 million, Floating Rate Notes due 9/2021

$ 1,250 million, 3.4 % Notes due 9/2021

Total short-term debt $ 2,993 $ 2,545

Long-term debt

$ 277 million, 4 % Notes due 2022

$ 973 million, 3.9 % Notes due 2022

$ 500 million, 3.05 % Notes due 2022

$ 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

$ 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 (2)

$ 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 66 28

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See Note 11 for further information about the Company's interest rate risk management and these derivative instruments.

Debt Issuance and Redemption.

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

• Debt issuance:

On March 3, 2021, the Company issued $ 4.3 billion of new senior notes.

The proceeds of this issuance were mainly used to redeem outstanding debt securities.

The remaining proceeds are available for general corporate purposes.

Interest on this debt is paid semi-annually.

Principal Maturity Date Interest Rate Net Proceeds

$ 500 million (1)

March 15, 2024 0.613 % $ 499 million

$ 800 million (2)

March 15, 2026 1.250 % $ 797 million

$ 1,500 million (3)

March 15, 2031 2.375 % $ 1,492 million

$ 1,500 million (4)

March 15, 2051 3.400 % $ 1,479 million

(1) Redeemable at any time discounted at the U.S.

Treasury rate plus 7.5 basis points.

Redeemable at par on or after March 15, 2022.

(2) Redeemable at any time discounted at the U.S.

Treasury rate plus 10 basis points.

Redeemable at par on or after February 15, 2026.

(3) Redeemable at any time discounted at the U.S.

Treasury rate plus 15 basis points.

Redeemable at par on or after December 15, 2030.

(4) Redeemable at any time discounted at the U.S.

Treasury rate plus 20 basis points.

Redeemable at par on or after September 15, 2050.

• Debt redemption:

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

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

(2) Interest rate step down to 8.08 % effective January 15, 2023.

Short-term and Credit Facilities Debt

Revolving Credit Agreements.

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As of December 31, 2022, there were no outstanding balances under these revolving credit agreements.

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

Under the current agreements, Cigna can borrow up to $ 3.0 billion and $ 1.0 billion, respectively, for general corporate purposes, with up to $ 500 million available under the five-year facility for issuance of letters of credit.

The revolving credit agreements also include an option to extend the termination date for an additional one-year period, subject to consent of the banks.

Additionally, in April 2021, Cigna entered into a $ 1.0 billion 364-day revolving credit agreement that will mature in April 2022 and is diversified among 23 banks.

This agreement replaced the prior $ 1.0 billion 364-day revolving credit agreement that was scheduled to expire in October 2021.

Pursuant to this revolving credit agreement, Cigna can borrow up to $ 1.0 billion for general corporate purposes.

The agreement includes the option to "term out" any revolving loans that are outstanding at maturity by converting them into a term loan maturing on the one-year anniversary of conversion.

Each of the five-year facility, the three-year facility and the 364-day facility include an option to increase commitments in an aggregate amount of up to $ 1.5 billion across all three facilities.

Each of the three facilities also contain 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.

In April 2022, The Cigna Group 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.

The Company can borrow up to $ 3.0 billion under the credit agreement for general corporate purposes, with up to $ 500 million available for issuance of letters of credit.

• a $ 1.0 billion three-year revolving credit agreement that will mature in April 2025 with an option to extend the maturity date for additional one-year periods, subject to consent of the banks.

The Company can borrow up to $ 1.0 billion under the credit agreement for general corporate purposes.

• a $ 1.0 billion 364-day revolving credit agreement that will mature in April 2023.

The Company can borrow up to $ 1.0 billion under the credit agreement for general corporate purposes.

This agreement includes the option to "term out" any revolving loans that are outstanding at maturity by converting them into a term loan maturing on the one-year anniversary of conversion.

Each of the Credit Agreements include an option to increase commitments in an aggregate amount of up to $ 1.5 billion across all three facilities for a maximum total commitment of $ 6.5 billion.

The Credit Agreements allow for borrowings at either a base rate or an adjusted term Secured Overnight Funding Rate ("SOFR") plus, in each case, an applicable margin based on the Company's senior unsecured credit ratings.

Each of the three facilities is diversified among 22 banks.

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.

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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 0.26 % at December 31, 2021.

There was no commercial paper outstanding balance as of December 31, 2022.

Long-term debt

Debt Issuance and Redemption.

The Company did not enter into any debt issuances or redemptions in 2022.

During 2021, in order to decrease future interest expense, mitigate future refinancing risk and raise proceeds for general corporate purposes, the Company entered into the following transactions:

• Debt issuance:

On March 3, 2021, the Company issued $ 4.3 billion of new senior notes.

The proceeds of this issuance were mainly used to redeem outstanding debt securities.

The remaining proceeds were used primarily for general corporate purposes.

• Debt redemption:

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

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

Debt Covenants.

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

Maturities of outstanding long-term debt are as follows:

Debt Maturities.

Maturities of outstanding long-term debt as of December 31, 2022 are as follows:

(In millions) Scheduled Maturities (1)

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(1) Long-term debt maturity amounts include current maturities of long-term debt.

Interest expense on long-term and short-term debt was $ 1.3 billion in 2021, $ 1.4 billion in 2020 and $ 1.6 billion in 2019.

Finance leases are excluded from this table.

See Note 20 - Leases for finance lease maturity amounts.

Interest Expense

Interest expense on long-term and short-term debt was $ 1.3 billion in 2022 and 2021 and $ 1.4 billion in 2020.

Note 8 – Common and Preferred Stock

Cigna has a total of 25 million shares of $ 1 par value preferred stock authorized for issuance.

The Cigna Group has a total of 25 million shares of $ 1 par value preferred stock authorized for issuance.

No shares of preferred stock were outstanding at December 31, 2022, 2021 or 2020.

The following table presents the share activity of Cigna for the years ended December 31, 2021, 2020 and 2019:

The following table presents the share activity of The Cigna Group:

For the Years Ended December 31,

(Shares in thousands) 2022 2021 2020

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Issued- December 31, 397,819 394,194 390,276

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

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.

On February 3, 2022, the Board of Directors declared a quarterly cash dividend of $ 1.12 per share of Cigna common stock to be paid on March 27, 2022 to shareholders of records on March 9, 2022.

The following table provides details of Cigna's dividend payments:

In 2022, The Cigna Group declared quarterly cash dividends of $ 1.12 per share of the Company's common stock.

In 2021, The Cigna Group initiated and declared quarterly cash dividends of $ 1.00 per share of the Company's common stock.

The following table provides details of the Company's dividend payments:

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

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December 6, 2022 December 21, 2022 $ 1.12 $ 334

March 10, 2020 April 9, 2020 $ 0.04 $ 15

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

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

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

December 7, 2021 December 22, 2021 $ 1.00 $ 324

March 10, 2020 April 9, 2020 $ 0.04 $ 15

On February 2, 2023, the Board of Directors declared the first quarter cash dividend of $ 1.23 per share of The Cigna Group common stock to be paid on March 23, 2023 to shareholders of record on March 8, 2023.

The Company 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 The Cigna Group 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 may deem relevant.

Accelerated Share Repurchase Agreements

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

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

LLC (collectively, the "2022 Counterparties") to repurchase $ 3.5 billion of common stock in aggregate.

In July 2022, we remitted $ 3.5 billion to the 2022 Counterparties and received an initial delivery of 10.4 million shares of our common stock representing $ 2.8 billion of the total remitted.

Upon final settlement of the 2022 ASR agreements in November 2022, we received 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 2022 Counterparties pending final settlement of the agreements.

The total number of shares of our common stock repurchased under the 2022 ASR agreements was 12.3 million based on an average daily Volume-Weighted Average Share Price ("VWAP") of our common stock over the term of the agreements, less a discount, of $ 285.10 per share.

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

LLC and JP Morgan Chase Bank, N.A.

(collectively, the "2021 Counterparties") to repurchase $ 2.0 billion of common stock in aggregate.

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

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

Upon final settlement of the ASR agreements on November 29, 2021 and December 1, 2021, we received an additional 1.8 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 was 9.5 million based on an average daily volume weighted-average share price of our common stock during the term of the agreements, less a discount, of $ 209.53 .

In addition, we reclassified the $ 400 million recorded in Additional paid-in capital to Treasury stock upon settlement.

We remitted $ 2.0 billion to the 2021 Counterparties and received an initial delivery of 7.7 million shares of our common stock representing $ 1.6 billion of the total remitted.

Upon final settlement of the 2021 ASR agreements in fourth quarter of 2021, we received an additional 1.8 million shares of our common stock for no additional consideration as the value of this stock was held back by the 2021 Counterparties pending final settlement of the agreements.

The total number of shares of our common stock repurchased under the 2021 ASR agreements was 9.5 million based on an average daily VWAP of our common stock over the term of the agreements, less a discount, of $ 209.53 per share.

Note 9 – Insurance and Contractholder Liabilities

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

Total insurance and contractholder liabilities $ 5,318 $ 12,563 $ 17,881 $ 5,308 $ 16,844 $ 22,152

Total insurance and contractholder liabilities per Consolidated Balance Sheets $ 5,385 $ 11,481 $ 16,866 $ 5,318 $ 12,563 $ 17,881

(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.

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Future policy benefits represent the present value of estimated future obligations under long-term life and supplemental health insurance policies and annuity products currently in force.

These obligations are estimated using actuarial methods and consist primarily of reserves for annuity contracts, life insurance benefits, GMDB contracts (GMDB contracts are fully reinsured, see Note 10 for additional information) and certain life and accident insurance products of our international businesses to be sold.

These obligations are estimated using actuarial methods and consist primarily of reserves for annuity contracts, life insurance benefits, GMDB contracts (GMDB

contracts are fully reinsured, see Note 10 for additional information) and certain life and accident insurance products of our sold international businesses.

Obligations for annuities represent specified periodic benefits to be paid to an individual or groups of individuals over their remaining lives.

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Mortality, morbidity and surrender assumptions are based on the Company's own experience and published actuarial tables.

Interest rate

assumptions are based on management's judgment considering the Company's experience and future expectations and range from 1 % to 9 %.

Interest rate assumptions are based on management's judgment considering the Company's experience and future expectations and range from 2 % to 9 %.

Obligations for the direct and assumed run-off settlement annuity business include adjustments for realized and unrealized investment returns consistent with GAAP when a premium deficiency exists.

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Accounting policy - Unearned Premium.

The unrecognized portion of premiums received is recorded as unearned premiums included in insurance and contractholder liabilities.

The unrecognized portion of premiums received is recorded as unearned premiums included in Insurance and contractholder liabilities (current and non-current).

Unpaid Claims and Claim Expenses – Cigna Healthcare

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

This liability includes amounts from the International Health businesses now reported in Cigna Healthcare following our change in segment reporting in 2021.

Prior year rollforwards have been updated to reflect this segment change.

Accounting policy.

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The total of incurred but not reported liabilities plus expected development on reported claims, including reported claims in process, was $ 3.9 billion at December 31, 2022 and $ 4.0 billion at December 31, 2021.

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

Activity, net of intercompany transactions, in the unpaid claims liability for the Cigna Healthcare segment was as follows:

For the Years Ended December 31,

(In millions) 2022 2021 2020

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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 years ended December 31 were as follows:

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 were as follows:

For the Years Ended December 31,

(Dollars in millions) $ % (1)

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Favorable prior year development in both years reflects lower than expected utilization of medical services as compared to our assumptions.

The following table depicts the incurred and paid claims development as of December 31, 2021 (net of reinsurance), claims frequency metrics and incurred but not reported liabilities reported in the Cigna Healthcare segment.

The following table depicts the incurred and paid claims development and unpaid claims liability as of December 31, 2022 (net of reinsurance) reported in the Cigna Healthcare segment.

The information about incurred and paid claims development for the year ended December 31, 2021 is presented as supplementary information and is unaudited.

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Incurral Year 2021

(Unaudited) 2021 Unpaid Claims & Claim Expenses Claims Frequency

(Unaudited) 2022 Unpaid Claims & Claim Expenses

(In millions)

2020 $ 26,532 $ 26,332 156 4.7 million

2021 30,735 3,696 5.1 million

2021 $ 30,735 $ 30,493 180

2022 30,309 3,622

Cumulative incurred costs for the periods presented $ 60,802

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Unpaid claims and claim expenses - Cigna Healthcare

More than 95 % of health claims incurred in a calendar year are paid within one year of their incurred date.

Incurred claims do not typically remain outstanding for multiple years;

more than 95 % of health claims incurred in a year are paid by the end of the following year.

There is no single or common claim frequency metric used in the health care industry.

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Claims that did not result in a liability are not included in the frequency metric.

The claim frequency for 2022 and 2021 was approximately 5 million.

Unpaid Claims and Claim Expenses – Other Operations

Accounting policy.

Liabilities for unpaid claims and claim expenses are established by book of business within Other Operations including the international businesses to be sold.

Unpaid claims and claim expenses within the Other Operations consist of (1) case or claims reserves for reported claims that are unpaid as of the balance sheet date;

Liabilities for unpaid claims and claim expenses are established by book of business within Other Operations including the liabilities divested in the Chubb transaction and divested through the sale of our ownership interest in a joint venture in Türkiye ("divested International businesses").

Unpaid claims and claim expenses within Other Operations consist of (1) case or claims reserves for reported claims that are unpaid as of the balance sheet date;

(2) incurred but not reported reserves for claims when the insured event has occurred but has not been reported to the Company and (3) loss adjustment expense reserves for the expected costs of settling these claims.

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Liability balance details.

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

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

Prior year rollforwards have been updated to reflect the segment change.

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

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

Other Operations

International businesses to be sold $ 447 $ 452

Divested International businesses

Other Operations 275 281

Unpaid claims and claim expenses - Other Operations

Activity in the unpaid claims and claim expenses for international businesses held for sale and, prior to the sale, Group Disability and Life (see Note 4 for further information) is presented in the following table.

Activity in the unpaid claims and claim expenses for the divested International and Group Disability and Life business 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.

For the Years Ended December 31,

(In millions) 2022 (1)

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Foreign currency ( 28 ) ( 34 ) 21

Divestiture of Group Disability and Life business (2)

Divestiture of businesses (2)

( 374 ) — ( 5,142 )

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$ — $ 447 $ 452

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

(2) Includes Group Disability and Life reserves sold or reinsured to New York Life Insurance Company as part of the sale of the Group Disability and Life business and immaterial retained balances which are now excluded from this table.

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

(2) 2020 amounts include Group Disability and Life reserves sold or reinsured to New York Life Insurance Company as part of the sale of the Group Disability and Life business and immaterial retained balances which are now excluded from this table.

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

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The current portion of reinsurance recoverables is reported in Other current assets and consists primarily of recoverables on paid claims expected to be settled within one year.

Reinsurance recoverables are presented net of allowances, consisting primarily of an allowance for expected credit losses which is recognized on reinsurance recoverable balances each period and adjusted through benefits expense.

Estimates of the allowance for expected credit losses are based on internal and external data used to develop expected loss rates over the anticipated duration of the recoverable asset that vary by external credit rating and collateral level.

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

Included in the table below are $ 129 million of current reinsurance recoverables that are reported in Other current assets as of December 31, 2021;

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

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

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

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Ongoing Operations

A-A A- equivalent and higher current ratings (1)

A- equivalent and higher current ratings (1)

$ — $ — $ 87 $ 87

BBB BBB- to BBB+ equivalent current credit ratings (1)

BBB- to BBB+ equivalent current credit ratings (1)

Not rated 139 4 43 186

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139 4 188 331

Acquisition, disposition or runoff activities

A- equivalent and higher current ratings (1)

Acquisition, disposition or run-off activities

BBB+ equivalent and higher current ratings (1)

Lincoln National Life and Lincoln Life & Annuity of New York — 2,795 — 2,795

Berkshire Hathaway Life Insurance Company of Nebraska 248 432 — 680

Prudential Retirement Insurance and Annuity 565 — — 565

Empower Annuity Insurance Company — — 133 133

Prudential Insurance Company of America 375 — — 375

Life Insurance Company of North America — 387 — 387

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Not rated — 12 3 15

Total recoverables related to acquisition, disposition or runoff activities 1,061 3,771 20 4,852

Total recoverables related to acquisition, disposition or run-off activities 826 3,645 152 4,623

Total $ 965 $ 3,649 $ 340 $ 4,954

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

(2) Includes $ 174 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.

(3) Includes $ 95 million of recoverables classified as Assets of businesses held for sale.

Collateral levels are defined internally based on the fair value of the collateral relative to the carrying amount of the reinsurance recoverable, the frequency at which collateral is required to be replenished and the potential for volatility in the collateral's fair value.

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The following table presents direct, assumed and ceded premiums for both short-duration and long-duration insurance contracts.

It also presents reinsurance recoveries that have been netted against benefit expenses in the Company's Consolidated Statements of Income.

It also presents reinsurance recoveries that have been netted against Medical costs and other benefit expenses in the Company's Consolidated Statements of Income.

For the Years Ended December 31,

(In millions) 2022 2021 2020

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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 December 31, 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.

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The Company will also pay and receive cash depending on changes in account values and interest rates when contractholders first elect to receive minimum income payments.

Cash flows on these contracts are reported in operating activities.

Assumptions used in fair value measurement .

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The impact of non-performance risk was immaterial for the years ended December 31, 2022 and December 31, 2021.

GMIB liabilities totaling $ 572 million as of December 31, 2021 and $ 729 million as of December 31, 2020 are classified as Level 3 because fair value inputs are largely unobservable.

GMIB liabilities totaled $ 404 million as of December 31, 2022 and $ 572 million as of December 31, 2021.

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

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Note 11 – Investments

Cigna's investment portfolio consists of a broad range of investments including debt securities, equity securities, commercial mortgage loans, policy loans, other long-term investments, short-term investments and derivative financial instruments.

The Cigna Group's investment portfolio consists of a broad range of investments including debt securities, equity securities, commercial mortgage loans, policy loans, other long-term investments, short-term investments and derivative financial instruments.

The sections below provide more detail regarding our investment balances and realized investment gains and losses.

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Investments per Consolidated Balance Sheets $ 905 $ 16,288 $ 17,193 $ 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.

See Note 5 to the Consolidated Financial Statements for additional information.

(1) Investments related to the divested International 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 for additional information.

Investment Portfolio

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Accounting policy.

Debt securities (including bonds, mortgage and other asset-backed securities and preferred stocks redeemable by the investor) are classified as available for sale and are carried at fair value with changes in fair value recorded either in Accumulated other comprehensive income (loss) within Shareholders' equity or in credit loss expense based on fluctuations in the allowance for credit losses, as further discussed below.

Net unrealized appreciation on debt securities supporting the Company's run-off settlement annuity business is reported in Non-current insurance and contractholder liabilities rather than Accumulated other comprehensive income (loss).

When the Company intends to sell or determines that it is more likely than not to be required to sell an impaired debt security, the excess of amortized cost over fair value is directly written down with a charge to Realized investment gains and losses.

Certain asset-backed securities are considered variable interest entities, see Note 13 for additional information.

The Company reviews declines in fair value from a debt security's amortized cost basis to determine whether a credit loss exists, and when appropriate, recognizes a credit loss allowance with a corresponding charge to credit loss expense, presented in Realized investment gains and losses in the Company's Consolidated Statements of Income.

Debt securities (including bonds, mortgage and other asset-backed securities and preferred stocks redeemable by the investor) are classified as available for sale and are carried at fair value with changes in fair value recorded either in Accumulated other comprehensive loss within Shareholders' equity or in credit loss expense based on fluctuations in the allowance for credit losses, as further discussed below.

Certain asset-backed securities are considered variable interest entities.

See Note 13 for additional information.

The Company reviews declines in fair value from a debt security's amortized cost basis to determine whether a credit loss exists, and when appropriate, recognizes a credit loss allowance with a corresponding charge to credit loss expense, presented in Net realized investment (losses) gains in the Company's Consolidated Statements of Income.

The allowance for credit loss represents the excess of amortized cost over the greater of its fair value or the net present value of the debt security's projected future cash flows (based on qualitative and quantitative factors, including the probability of default and the estimated timing and amount of recovery).

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When interest payments are delinquent based on contractual terms or when certain terms (interest rate or maturity date) of the investment have been restructured, accrued interest, reported in Other current assets, is written off through a charge to Net investment income and interest income is recognized on a cash basis.

The amortized cost and fair value by contractual maturity periods for debt securities were as follows at December 31, 2021:

The amortized cost and fair value by contractual maturity periods for debt securities were as follows:

December 31, 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 December 31, 2022 and December 31, 2021.

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

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Total $ 10,842 $ ( 44 ) $ 133 $ ( 1,059 ) $ 9,872

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

$ 2,262 $ ( 5 ) $ 720 $ ( 10 ) $ 2,967

December 31, 2021

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$ 2,262 $ ( 5 ) $ 720 $ ( 10 ) $ 2,967

(1) Net unrealized appreciation for these investments is excluded from accumulated other comprehensive income.

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

As of December 31, 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 December 31, 2021 and December 31, 2020.

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

December 31, 2022 December 31, 2021

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Accounting policy .

Equity securities with a readily determinable fair value consist primarily of mutual funds that invest in fixed income debt securities while those without a readily determinable fair value consist of private equity investments.

Changes in the fair values of equity securities that have a readily determinable fair value are reported in Net realized investment gains (losses).

Equity securities with a readily determinable fair value consist primarily of public equity investments in the health care sector and mutual funds that invest in fixed income debt securities while those without a readily determinable fair value consist of private equity investments.

Changes in the fair values of equity securities that have a readily determinable fair value are reported in Net realized investment (losses) gains.

Equity securities without a readily determinable fair value are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes.

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

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

The following table provides the values of the Company's equity security investments.

The amount of impairments or value changes resulting from observable price changes on equity securities with no readily determinable fair value still held was not material to the financial statements as of December 31, 2022 or 2021.

December 31, 2022 December 31, 2021

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Total $ 1,053 $ 622 $ 527 $ 603

As of December 31, 2021, the Company had a commitment to purchase $ 550 million of equity securities in Bright Health Group, Inc., a technology-enabled health insurance carrier.

This transaction was completed in January 2022.

As of December 31, 2022, the Company had a commitment to purchase up to $ 2.7 billion of preferred equity in VillageMD.

We funded $ 2.5 billion of this commitment during January 2023.

Approximately 70 % of our investments in equity securities as of December 31, 2022 are in the health care sector, consistent with our strategy to invest in targeted startup and growth-stage companies in the health care industry.

Commercial Mortgage Loans

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Commercial mortgage loans are carried at unpaid principal balances, net of an allowance for expected credit losses, and classified as either current or long-term investments based on their contractual maturities.

Changes in the allowance for expected credit losses are recognized as credit loss expense and presented in Realized investment gains and losses in the Company's Consolidated Statements of Income.

Changes in the allowance for expected credit losses are recognized as credit loss expense and presented in Net realized investment (losses) gains in the Company's Consolidated Statements of Income.

Each period, the Company establishes (or adjusts) its allowance for expected credit losses for commercial mortgage loans.

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The loan-to-value ratio, commonly expressed as a percentage, compares the amount of the loan to the fair value of the underlying property collateralizing the loan.

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

The following table summarizes the credit risk profile of the Company's commercial mortgage loan portfolio:

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

3 unchanged sentences

80% to 100% 149 1.17 123 1.47

Allowance for credit losses ( 6 ) ( 6 )

Total $ 1,614 1.89 60 % $ 1,566 1.96 61 %

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

Accounting policy .

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Accounting policy.

Other long-term investments include investments in unconsolidated entities, including certain limited partnerships and limited liability companies holding real estate, securities or loans and healthcare related investments.

These investments are carried at cost plus the Company's ownership percentage of reporting income or loss, based on the financial statements of the underlying investments that are generally reported at fair value.

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Investment real estate as of December 31, 2022 and 2021 is expected to be held longer than one year and may include real estate acquired through the foreclosure of commercial mortgage loans.

Additionally, statutory and other restricted deposits and foreign currency swaps carried at fair value are reported in the table below as "Other." See discussion below for information on the Company's accounting policies for derivative financial instruments.

Additionally, foreign currency swaps carried at fair value as well as statutory and other restricted deposits are reported in the table below as "Other." See discussion below for information on the Company's accounting policies for derivative financial instruments.

Other long-term investments and related commitments are diversified by issuer, property type and geographic regions.

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The Company expects to disburse approximately 30 % of the committed amounts in 2023.

Our limited partnership investments are reduced as the Company receives cash distributions for returns on its investment that were previously recognized in Net investment income.

The amount of these cash distributions was $ 487 million in 2022, $ 568 million in 2021 and $ 227 million in 2020.

Unfunded Commitments as of

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Accounting policy.

Derivatives are recorded on our Consolidated Balance Sheets at fair value and are classified as current or non-current according to their contractual maturities.

Derivatives are recorded in our Consolidated Balance Sheets at fair value and are classified as current or non-current according to their contractual maturities.

Further information on our policies for determining fair value are discussed in Note 12.

The Company applies hedge accounting when derivatives are designated, qualified and highly effective as hedges.

Under hedge accounting, the changes in fair value of the derivative and the hedged risk are generally recognized together and offset each other when reported in Shareholders' net income.

Various qualitative or quantitative methods appropriate for each hedge are used to formally assess and document hedge effectiveness at inception and each period throughout the life of a hedge.

Under hedge accounting, the changes in fair value of the derivative and the hedged risk are generally recognized together and offset each other

when reported in Shareholders' net income Various qualitative or quantitative methods appropriate for each hedge are used to formally assess and document hedge effectiveness at inception and each period throughout the life of a hedge.

The Company's derivative financial instruments are presented as follows:

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Swap fair values are reported in Long-term investments or Other non-current liabilities.

Offsetting changes in fair values attributable to the foreign exchange risk of the swap contracts and the hedged bonds are reported in Realized investment gains and losses.

The portion of the swap contracts' changes in fair value excluded from the assessment of hedge effectiveness is recorded in Other comprehensive income and recognized in Net investment income as swap coupon payments are accrued, offsetting the foreign-denominated coupons received on the designated bonds.

Offsetting changes in fair values attributable to the foreign exchange risk of the swap contracts and the hedged bonds are reported in Net realized investment (losses) gains.

The portion of the swap contracts' changes in fair value excluded from the assessment of hedge effectiveness is recorded in Other comprehensive (loss) income and recognized in Net investment income as swap coupon payments are accrued, offsetting the foreign-denominated coupons received on the designated bonds.

Net cash flows are reported in Operating activities, while exchanges of notional principal amounts are reported in Investing activities.

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The fair values of the foreign currency swap and forward contracts are reported in other assets or other liabilities.

The changes in fair values of these instruments are reported in Other comprehensive income, specifically in translation of foreign currencies.

The changes in fair values of these instruments are reported in Other comprehensive (loss) income, specifically in translation of foreign currencies.

The portion of the change in fair values relating to foreign exchange spot rates will be recognized in earnings upon deconsolidation of the hedged foreign subsidiaries.

The remaining changes in fair value of these instruments are

excluded from our effectiveness assessment and recognized in Interest expense and other over the term of the instrument.

The remaining changes in fair value of these instruments are excluded from our effectiveness assessment and recognized in Interest expense and other over the term of the instrument.

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

• Economic hedges for derivatives not designated as accounting hedges :

Fair values of forward contracts are reported in Current investments or Accrued expenses and other liabilities.

The changes in fair values are reported in Realized investment gains and losses.

Fair values of forward contracts are reported in Investments (current) or Accrued expenses and other liabilities.

The changes in fair values are reported in Net realized investment (losses) gains.

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

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

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

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

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The notional value of these derivatives matches the amortized cost of the hedged bonds.

A majority of these instruments are denominated in Euro, with the remaining instruments denominated in British Pound Sterling and Australian Dollars.

A majority of these instruments are denominated in Euros, with the remaining instruments denominated in British Pounds Sterling and Australian Dollars.

Foreign currency swap contracts

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The notional value of hedging instruments matches the hedged amount of subsidiary net assets.

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 Dollar and Taiwan Dollar.

Foreign currency swap contracts are denominated in Euros.

Foreign currency swap contracts

Foreign currency forward contracts

$ 1,380 $ 636

Economic hedge:

To hedge the foreign exchange-related changes in fair value of U.S.

dollar-denominated investment assets to reflect the local currency for the Company's foreign subsidiary in South Korea.

The notional value of hedging instruments generally aligns with the fair value of the hedged investments.

Foreign currency forward contracts

Foreign currency forward contracts used in net investment hedge and economic hedge strategies with notional values of approximately $ 1.4 billion and $ 0.7 billion as of December 31, 2021, respectively, were associated with the International businesses divested to Chubb during 2022.

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

Concentration of Risk

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Investment income attributed to the Company's separate accounts is excluded from our earnings because associated gains and losses generally accrue directly to separate account policyholders.

The components of Net investment income for the years ended December 31 were as follows:

The components of Net investment income were as follows:

For the Years Ended December 31,

(In millions) 2022 2021 2020

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Net investment income $ 1,155 $ 1,549 $ 1,244

Investment income for the year ended December 31, 2021 increased versus the year ended December 31, 2020 due to strong performance of assets underlying our limited partnership investments reported in Other long-term investments.

The overall increase in investment income was partially offset by lower investment income from our debt securities as a result of lower invested asset levels following the divestiture of Cigna's U.S.

Group Disability and Life business on December 31, 2020.

The Company received income distributions of $ 568 million in 2021, $ 227 million in 2020 and $ 202 million in 2019 from its limited partnership investments reported in Other long-term investments.

Realized Investment Gains and Losses

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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:

For the Years Ended December 31,

(In millions) 2022 2021 2020

Net realized investment gains (losses), excluding credit loss expense and asset write-downs $ 194 $ 186 $ 189

Net realized investment (losses) gains, excluding credit loss expense and asset write-downs

$ ( 459 ) $ 194 $ 186

Credit loss (expense) recoveries

( 36 ) 2 ( 27 )

Other investment asset write-downs — — ( 10 )

Net realized investment gains (losses), before income taxes $ 196 $ 149 $ 177

Net realized investment gains, excluding credit loss expense and asset write-downs for the year ended December 31, 2021 was primarily driven by mark-to-market gains on equity securities and gains on the sales of real estate partnerships, partially offset by mark-to-market losses on derivatives.

This activity for the year ended December 31, 2020 was primarily driven by mark-to-market on equity securities and sales of debt securities, while activity for the year ended December 31, 2019 was primarily driven by gains on the sales of real estate partnerships and debt securities.

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

Net realized investment (losses) gains, before income taxes

$ ( 495 ) $ 196 $ 149

Net realized investment losses for the year ended December 31, 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 December 31, 2021 and December 31, 2020 about the Company's financial assets and liabilities carried at fair value.

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

The following table provides information 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 December 31, 2021 As of December 31, 2020 As of December 31, 2021 As of December 31, 2020 As of December 31, 2021 As of December 31, 2020 As of December 31, 2021 As of December 31, 2020

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

Financial assets at fair value

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Derivative assets — — 230 143 1 — 231 143

— — 143 72 — — 143 72

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 $ 34 million as of December 31, 2020 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 1 Financial Assets

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Nearly all of these instruments are valued using recent trades or pricing models.

Less than 1 % of the fair value of investments classified in Level 2 represents foreign bonds that are valued using a single, unadjusted market-observable input derived by averaging multiple broker-dealer quotes, consistent with local market practice.

Short-term investments are carried at fair value that approximates cost.

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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 December 31, 2021 and December 31, 2020.

The following table summarizes the fair value and significant unobservable inputs that were developed directly by the Company and used in pricing these debt securities.

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.

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bps 60 - 390 ( 100 )

Securities not priced by the Company (1)

Other debt securities — 1

Total Level 3 debt securities $ 447 $ 765

(1) The fair values for these securities use single, unadjusted non-binding broker quotes not developed directly by the Company.

A significant increase in liquidity spread adjustments would result in a lower fair value measurement, while a decrease would result in a higher fair value measurement.

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 years ended December 31, 2021 and 2020.

The following table summarizes the changes in financial assets and financial liabilities classified in Level 3.

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 Years Ended December 31,

(In millions) 2022 2021

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Beginning balance $ 796 $ 854

Total gains (losses) included in shareholders' net income ( 22 ) ( 7 )

Gains (losses) included in other comprehensive income ( 6 ) ( 12 )

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

Gains (losses) included in Shareholders' net income

Losses included in Other comprehensive (loss) income

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

Purchases, sales and settlements

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Ending balance $ 447 $ 796

Total gains (losses) included in Shareholders' net income attributable to instruments held at the reporting date $ ( 17 ) $ ( 17 )

Change in unrealized gains or losses included in Other comprehensive income for assets held at the end of the reporting period $ ( 10 ) $ ( 6 )

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

$ ( 2 ) $ ( 17 )

Change in unrealized gain or (loss) included in Other comprehensive (loss) income for assets held at the end of the reporting period

$ ( 60 ) $ ( 10 )

(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 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 (loss) income, net of tax in the tables above are reflected in Net unrealized 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.

Market activity typically decreases during periods of economic uncertainty and this decrease in activity reduces the availability of market observable data.

activity typically decreases during periods of economic uncertainty and this decrease in activity reduces the availability of market observable data.

As a result, the level of unobservable judgment that must be applied to the pricing of certain instruments increases and is typically observed through the widening of liquidity spreads .

Transfers between Level 2 and Level 3 during 2022 and 2021 primarily reflected changes in liquidity estimates for certain private placement issuers across several sectors.

Transfers into and out of Level 3 were higher in 2020 due to significant fluctuations in unobservable inputs experienced as a result of the uncertainty over the economic impacts related to COVID-19.

See discussion under Quantitative Information about Unobservable Inputs above for more information.

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Investments that are measured using the practical expedient of net asset value ("NAV") are excluded from the fair value hierarchy.

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

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

Fair values of Separate account assets were as follows:

Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

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(Level 3) Total

December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020

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

Guaranteed separate accounts (See Note 23)

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Separate account assets per Consolidated Balance Sheets $ 7,278 $ 8,337

(1) Non-guaranteed separate accounts included $ 4.5 billion as of December 31, 2021 and $ 4.2 billion as of December 31, 2020 in assets supporting the Company's pension plans, including $ 0.3 billion classified in Level 3 as of December 31, 2021 and December 31, 2020.

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

See Note 5 to the Consolidated Financial Statements for additional information.

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

(2) Investments related to the divested International businesses that were held for sale as of December 31, 2021.

See Note 4 for additional information.

Separate account assets classified as Level 1 primarily include exchange-listed equity securities.

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• actively-traded institutional and retail mutual fund investments.

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 year ended December 31, 2021 or 2020.

Separate account assets classified in Level 3 primarily support the Company'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 years ended December 31, 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 .

Substantially all of these assets support the Cigna Pension Plans.

Substantially all of these assets support the Company's pension plans.

The following table provides additional information on these investments:

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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 years ended December 31, 2021 and 2020, no impairments were recognized requiring these assets to be measured at fair value.

For the years ended December 31, 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 years ended December 31, 2022 and December 31, 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 that are subject to fair value disclosure requirements at December 31, 2021 and December 31, 2020.

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

The following table includes the Company's financial instruments not recorded at fair value but for which fair value disclosure is required.

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

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

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• the Company's ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity including its sponsors, equity holders, guarantors, creditors and servicers.

The Company determined it was no t a primary beneficiary in any material variable interest entity as of December 31, 2021 or December 31, 2020.

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

The Company's involvement in variable interest entities for which it is not the primary beneficiary is described below.

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See Note 11 for further information on the Company's accounting policy for other long-term investments.

The Company has guaranteed debt payments to mortgage lenders for certain real estate limited partnerships should potential environmental obligations arise.

No liability has been incurred related to these guarantees, and the Company's maximum exposure to these guarantees was approximately $ 340 million as of December 31, 2022.

Other variable interest entities .

The Company is involved in other types of variable interest entities, including certain asset-backed and corporate securities, real estate joint ventures that develop properties for residential and commercial use, independent physician associations (IPAs) that provide care management services and international healthcare joint ventures.

The Company is involved in other types of variable interest entities, including certain asset-backed and corporate securities, real estate joint ventures that develop properties for residential and commercial use, independent physician associations ("IPAs") that provide care management services and international health care joint ventures.

The Company's maximum exposure to loss is $ 0.6 billion from certain asset-backed and corporate securities and $ 0.6 billion from real estate joint ventures, which represents the sum of our carrying value and the additional funding commitments for these entities.

The carrying values and maximum exposures for remaining unconsolidated variable interest entities was not material as of December 31, 2021.

The carrying values and maximum exposures for the remaining unconsolidated variable interest entities were not material as of December 31, 2022.

The Company has not provided, and does not intend to provide, financial support to any of the variable interest entities in excess of its maximum exposure.

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

Note 14 – Collectively Significant Operating Unconsolidated Subsidiaries

In addition to equity method investments, including certain limited partnerships and limited liability companies holding real estate, securities or loans (as disclosed in Note 11), we maintain a portfolio of operating joint ventures accounted for as equity method investments.

Operating joint ventures accounted for under the equity method had a carrying value of $ 1.1 billion as of December 31, 2022 and $ 1.2 billion as of December 31, 2021.

For the years ended December 31, 2022, 2021 and 2020, none of our unconsolidated subsidiary investments were individually significant.

Accounting policy.

We record in our Consolidated Statements of Income our proportionate share of net income or loss generated by equity method operating joint ventures within Fees and other revenues.

In certain instances, income or loss is reported on a one month lag due to the timing of when financial information is received.

The below summarized results of operations and financial position of the operating joint venture investments accounted for under the equity method reflects the latest available financial information and does not represent the Company's proportionate share of the assets, liabilities or earnings of such entities.

The net loss for the year ended December 31, 2022 is primarily attributable to realized investment losses as a result of market volatility experienced by our joint venture in China.

For the Years Ended December 31,

(In millions) 2022 2021 2020

Revenues $ 4,208 $ 3,400 $ 2,457

Net (loss) income $ ( 15 ) $ 200 $ 401

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

Total assets $ 20,676 $ 18,942

Total liabilities $ 18,441 $ 16,510

Note 15 – Accumulated Other Comprehensive Income (Loss) ("AOCI")

AOCI includes unrealized 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.

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 also includes the Company's share from unconsolidated entities accounted for under the equity method.

Generally, tax effects in AOCI are established at the currently enacted tax rate and reclassified to Shareholders' net income in the same period that the related pre-tax AOCI reclassifications are recognized.

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Beginning balance $ 685 $ 900 $ 975

Appreciation (depreciation) on securities and derivatives ( 230 ) 776 1,266

Tax (expense) benefit 31 ( 150 ) ( 270 )

Net appreciation (depreciation) on securities and derivatives ( 199 ) 626 996

Reclassification adjustment for (gains) losses included in Shareholders' net income ((Gain) loss on sale of business) — ( 862 ) —

Reclassification adjustment for (gains) losses included in Shareholders' net income (Net realized investment (gains) losses) ( 21 ) ( 26 ) ( 49 )

Reclassification adjustment for tax expense included in Shareholders' net income 5 187 10

Net (gains) losses reclassified from AOCI to Shareholders' net income ( 16 ) ( 701 ) ( 39 )

Other comprehensive income (loss), net of tax ( 215 ) ( 75 ) 957

Unrealized (depreciation) appreciation on securities and derivatives

( 1,528 ) ( 230 ) 776

Tax benefit (expense)

310 31 ( 150 )

Net unrealized (depreciation) appreciation on securities and derivatives

( 1,218 ) ( 199 ) 626

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

172 — ( 862 )

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

52 ( 21 ) ( 26 )

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

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

213 ( 16 ) ( 701 )

Other comprehensive (loss), net of tax

( 1,005 ) ( 215 ) ( 75 )

Ending balance $ ( 320 ) $ 685 $ 900

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Tax (expense) benefit

( 33 ) ( 19 ) 12

Net translation of foreign currencies ( 315 ) ( 232 ) 244

Reclassification adjustment for (gains) losses included in Net income ((Gain) loss on sale of business) — 11 —

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

Reclassification adjustment for tax expense (benefit) included in Net income

Net translation (gains) losses reclassified from AOCI to Net income — 8 —

Net translation losses reclassified from AOCI to Net income

Other comprehensive income (loss), net of tax

Net translation gain (loss) on foreign currencies attributable to noncontrolling interests ( 14 ) ( 8 ) ( 5 )

72 ( 232 ) 252

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

( 2 ) ( 14 ) ( 8 )

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

74 ( 218 ) 260

Ending balance $ ( 159 ) $ ( 233 ) $ ( 15 )

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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)

Reclassification adjustment for settlement (Interest expense and other)

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

( 16 ) ( 21 ) ( 17 )

Net adjustments reclassified from AOCI to Shareholders' net income

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Tax (expense) benefit

( 115 ) ( 106 ) 48

Net change due to valuation update 372 342 ( 158 )

Other comprehensive income (loss), net of tax

420 410 ( 105 )

Ending balance $ ( 916 ) $ ( 1,336 ) $ ( 1,746 )

Total Accumulated other comprehensive loss

Beginning balance $ ( 884 ) $ ( 861 ) $ ( 941 )

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

( 511 ) ( 23 ) 80

Ending balance $ ( 1,395 ) $ ( 884 ) $ ( 861 )

Note 16 – Organizational Efficiency Plan

During the fourth quarter of 2021, we approved a strategic plan to further leverage the Company's ongoing growth to drive operational efficiency through enhancements to organizational structure and increased use of automation and shared services.

As a result we recognized a charge in Selling, general and administrative expenses of $ 168 million, pre-tax ($ 119 million, after-tax) in the fourth quarter of 2021.

This charge 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.

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

(In millions)

Fourth quarter 2021 charge $ 109

2021 payments ( 6 )

Balance, December 31, 2021 $ 103

During 2021, the Company approved a strategic plan to further leverage its ongoing growth to drive operational efficiency through enhancements to organizational structure and increased use of automation and shared services.

As of December 31, 2022, the remaining accrued liability recorded in Accrued expenses and other liabilities was $ 39 million.

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

Note 17 – Pension

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The market-related asset value was approximately $ 3.8 billion, compared with a fair value of approximately $ 4.2 billion at December 31, 2022.

Funded Status and Amounts Included in Accumulated Other Comprehensive Income

Funded Status and Amounts Included in Accumulated Other Comprehensive Loss

The following table summarizes the projected benefit obligations and assets related to our U.S.

pension plans as of and for the years ended December 31:

Pension Benefits

pension plans:

For the Years Ended December 31,

(In millions) 2022 2021

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Interest cost 140 132

Actuarial (gains) losses, net (1)

Actuarial (gains), net (1)

( 1,094 ) ( 189 )

Benefits paid from plan assets ( 296 ) ( 304 )

Benefits paid – other

( 27 ) ( 18 )

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Funded status $ 238 $ ( 377 )

Liability in Consolidated Balance Sheets

Amounts presented in Consolidated Balance Sheets

Accrued expenses and other liabilities

Other non-current liabilities

(1) 2021 gain reflects an increase in the discount rate;

2020 loss reflects a decrease in the discount rate, partially offset by a favorable change in the mortality assumption.

$ — $ ( 363 )

(1) 2022 and 2021 gains reflect an increase in the discount rate.

We fund our qualified pension plans at least at the minimum amount required by the Employee Retirement Income Security Act of 1974 and the Pension Protection Act of 2006.

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For 2023, contributions to the qualified pension plans are expected to be immaterial.

Future years' contributions will ultimately be based on a wide range of factors including but not limited to asset returns, discount rates and funding targets.

Non-qualified pension and other postretirement benefit plans are generally funded on a pay-as-you-go basis as there are no plan assets for these plans.

Future years' contributions will ultimately be based

on a wide range of factors including but not limited to asset returns, discount rates and funding targets.

Non-qualified pension plans are generally funded on a pay-as-you-go basis as there are no plan assets for these plans.

Benefit payments.

The following benefit payments are expected to be paid in:

(In millions) Pension Benefits

2027-2031 $ 1,532

Amounts reflected in the pension liabilities shown above that have not yet been reported in net income and, therefore, have been included in Accumulated other comprehensive loss consisted of the following as of December 31:

Pension Benefits

(In millions)

2028 - 2032 $ 1,508

Amounts reflected in the pension assets/(liabilities) shown above that have not yet been reported in Net income and, therefore, have been included in Accumulated other comprehensive loss consisted of the following:

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

Unrecognized net (losses)

$ ( 1,208 ) $ ( 1,753 )

Unrecognized prior service cost ( 5 ) ( 5 )

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Net pension cost was as follows:

Pension Benefits

For the Years Ended December 31,

(In millions) 2022 2021 2020

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Prior actuarial losses, net 89 78 78

Litigation settlement – plan amendment — — 142

Settlement loss — 4 —

Net (benefit) cost $ ( 41 ) $ ( 53 ) $ ( 12 )

The Cigna Pension Plan (the "Plan"), together with its Plan Sponsor, was a defendant in a class action lawsuit related to the Plan's conversion of certain employees from an annuity to a cash balance benefit in 1997.

In the first quarter of 2019, the Plan implemented the court order resulting in an increase to the pension liability of $ 142 million.

The Company reversed a litigation reserve for the expenses recognized for this matter in 2019 aggregating to the same amount resulting in no impact on net income.

Assumptions Used for Pension

For the Years Ended December 31,

Discount rate:

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Pension Plan Assets

As of December 31, 2021, pension assets included $ 4.5 billion invested in the separate accounts of Connecticut General Life Insurance Company, a subsidiary of the Company, as well as an additional $ 0.3 billion, primarily invested directly in funds offered by an unaffiliated insurance company.

The fair values of pension assets by category are as follows as of December 31, 2021 and 2020:

(In millions) 2021 2020

As of December 31, 2022, pension assets included $ 4.0 billion invested in the separate accounts of Connecticut General Life Insurance Company, a subsidiary of the Company, and an additional $ 0.2 billion invested in funds of unaffiliated investment managers.

The fair values of pension assets by category are as follows:

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

Debt securities:

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(1) A pooled separate account has several participating benefit plans and each owns a share of the total pool of investments.

The Company's current target investment allocation percentages ( 58 % fixed income, 25 % public equity securities and 17 % in other investments, including private equity (securities partnerships) and real estate) are developed by management as guidelines, although the fair values of each asset category are expected to vary as a result of changes in market conditions.

The Company's current target investment allocation percentages are 80 % fixed income and 20 % in other investments, including private equity (securities partnerships), public equity securities, and real estate, and are developed by management as guidelines, although the fair values of each asset category are expected to vary as a result of changes in market conditions.

These allocation percentages were updated during 2022 to increase the allocation to fixed income investments as a result of improvements in the plan's funding status, as interest rates increased during the year.

The Company will evaluate further allocation changes to equity securities, other investments and fixed income securities as funding levels change.

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These assets are valued using recent trades of similar securities or are fund investments priced using their daily net asset value that is the exit price.

A substantial portion of domestic equity securities within pension assets are classified as Level 1, while international equity funds within pension assets are predominantly classified in Level 2 using daily net asset value.

Approximately one-third of equity securities are classified in Level 1 because they are priced according to unadjusted quotes from active markets, while another one-third of this balance is classified in Level 2 and priced using the daily net asset value.

The remaining balance of equity securities is classified in Level 3.

Securities partnerships, real estate and hedge funds are valued using net asset value as a practical expedient and are excluded from the fair value hierarchy.

See Note 12 for additional disclosures related to these assets invested in the separate accounts of the Company's subsidiaries.

See Note 12 for additional disclosures related to these assets invested in the separate accounts of the Company's subsidiary.

Certain securities as described in Note 12, as well as commercial mortgage loans and guaranteed deposit account contracts, are classified in Level 3 because unobservable inputs used in their valuation are significant.

The Company sponsors a 401(k) plan in which the Company matches a portion of employees' pre-tax contributions.

Participants in the plan may invest in various funds that invest in the Company's common stock, several diversified stock funds, a bond fund or a fixed-income fund.

The Company sponsors a 401(k) plan.

All employees are immediately eligible for the plan at hire and the Company matches a portion of employees' contributions to the plan.

Participants in the plan may invest in various funds that invest in the Company's common stock, several diversified stock funds, a bond fund or stable value funds.

The Company common stock fund under the plan constitutes

an "employee stock ownership plan" as defined in the Internal Revenue Code.

Dividends from the Company common stock fund are reinvested in a participant's stock fund account unless the participant elects to receive the dividends in cash.

The Company may elect to increase its matching contributions if the Company's annual performance meets certain targets.

The Company's annual expense for these plans was as follows:

The Company's annual expense for the plan was as follows:

For the Years Ended December 31,

(In millions) 2022 2021 2020

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Fair value is determined differently for each type of award as discussed below.

Shares of common stock available for award at December 31, were as follows:

(In millions) 2021 2020 2019

Shares of common stock available for award were as follows:

(In millions) December 31, 2022 December 31, 2021 December 31, 2020

Common shares available for award 16.6 19.1 20.6

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Accounting policy.

The Company awards options to purchase Cigna common stock at the market price of the stock on the grant date.

The Company awards options to purchase The Cigna Group common stock at the market price of the stock on the grant date.

Options vest over periods ranging from one year to three years and expire no later than 10 years from grant date.

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The dividend yield reflects expected future dividends.

In 2021, the Company increased its dividend and expects to continue dividends at least at that level for the foreseeable future.

The expected volatility reflects the past daily stock price volatility of Cigna stock.

The Company intends to continue to pay dividends for the foreseeable future.

The expected volatility reflects the past daily stock price volatility of The Cigna Group stock.

The Company does not consider volatility implied in the market prices of traded options to be a good indicator of future volatility because remaining traded options will expire within one year .

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Expected option life reflects the Company's historical experience.

The following table shows the status of, and changes in, common stock options during the last three years:

(Options in thousands) 2021 2020 2019

Options Weighted Average Exercise Price Options Weighted Average Exercise Price Options Weighted Average Exercise Price

The following table shows the status of, and changes in, common stock options:

For the Years Ended December 31,

2022 2021 2020

(Options in thousands) Options Weighted Average Exercise Price Options Weighted Average Exercise Price Options Weighted Average Exercise Price

Outstanding - January 1 8,490 $ 169.47 9,742 $ 152.40 11,438 $ 136.19

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Compensation expense of $ 63 million related to unvested stock options at December 31, 2022 will be recognized over the next two years (weighted average period).

The table below summarizes information for stock options exercised during the last three years:

The table below summarizes information for stock options exercised:

For the Years Ended December 31,

(In millions) 2022 2021 2020

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Tax benefit from options exercised $ 47 $ 50 $ 57

The following table summarizes information for outstanding common stock options at December 31, 2021:

The following table summarizes information for outstanding common stock options:

December 31, 2022

Outstanding Options

7 unchanged sentences

Accounting policy.

Fair value of restricted stock awards is equal to the market price of Cigna's common stock on the date of grant.

Fair value of restricted stock awards is equal to the market price of The Cigna Group's common stock on the date of grant.

This fair value is reduced by awards that are expected to forfeit.

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This fair value, net of forfeitures, is recognized in Selling, general and administrative expenses over the vesting period on a straight-line basis.

The following table shows the status of and changes in restricted stock awards during the last three years:

(Awards in thousands) 2021 2020 2019

Grants/Units Weighted Average Fair Value at Award Date Grants/Units Weighted Average Fair Value at Award Date Grants/Units Weighted Average Fair Value at Award Date

The following table shows the status of, and changes in, restricted stock awards:

For the Years Ended December 31,

2022 2021 2020

(Awards in thousands) Grants/Units Weighted Average Fair Value at Award Date Grants/Units Weighted Average Fair Value at Award Date Grants/Units Weighted Average Fair Value at Award Date

Outstanding - January 1 1,524 $ 202.85 1,600 $ 186.12 1,945 $ 178.78

3 unchanged sentences

Outstanding - December 31 1,535 $ 219.25 1,524 $ 202.85 1,600 $ 186.12

The fair value of vested restricted stock at the vesting date for the years ended December 31 was as follows:

The fair value of vested restricted stock at the vesting date was as follows:

For the Years Ended December 31,

(In millions) 2022 2021 2020

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These targets are set by the Committee at the beginning of the performance period.

Holders of these awards receive shares of Cigna common stock at the end of the performance period ranging anywhere from 0 to 200 % of the original awards.

Holders of these awards receive shares of The Cigna Group common stock at the end of the performance period ranging anywhere from 0 to 200 % of the original awards.

Accounting policy.

3 unchanged sentences

Expense is adjusted to the actual outcome (number of shares awarded times the share price at the grant date) at the end of the performance period.

The following table shows the status of and changes in SPSs during the last three years:

The following table shows the status of, and changes in, SPSs:

For the Years Ended December 31,

2022 2021 2020

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The weighted average fair value per share of SPSs for expense purposes, including the Monte Carlo factor, at the award date for the years ended December 31, 2022, 2021 and 2020 was $ 258.37 , $ 239.57 and $ 206.86 , respectively.

The fair value of vested SPSs at the vesting date for the years ended December 31 was as follows:

The fair value of vested SPSs at the vesting date was as follows:

For the Years Ended December 31,

2022 2021 2020

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$ in millions) Shares Fair Value Shares Fair Value Shares Fair Value

Shares of Cigna common stock distributed upon SPS vesting 243 $ 51 306 $ 55 254 $ 45

Shares of The Cigna Group common stock distributed upon SPS vesting 137 $ 31 243 $ 51 306 $ 55

Approximately 500 employees held 780,000 SPSs at the end of 2022 and $ 69 million of related compensation expense is expected to be recognized over the next two years .

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The difference between tax benefits based on the expense and the actual tax benefit realized are also recorded in Net income when stock options are exercised, or when restricted stock and SPSs vest.

For the Years Ended December 31,

(In millions) 2022 2021 2020

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The resulting goodwill is assigned to those reporting units expected to realize cash flows from the acquisition, based on those reporting units' relative fair values.

As a result, goodwill is primarily reported in the Evernorth segment ($ 35.1 billion) and the Cigna Healthcare segment ($ 10.7 billion).

The Company's reporting units are aligned with its operating segments as described in Note 1.

1 unchanged sentence

On a quarterly basis, the Company performs a qualitative impairment assessment to determine if events or changes in circumstances indicate that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value.

Fair value of a reporting unit is generally estimated based on both a discounted cash flow analysis and a market approach using assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price.

Fair value of a reporting unit is generally estimated based on discounted cash flow analysis and market approach models using assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price.

The significant assumptions and estimates used in determining fair value primarily include the discount rate and future cash flows.

A discount rate is selected to correspond with each reporting unit's weighted average cost of capital, consistent with that used for investment decisions considering the specific and detailed operating plans and strategies within that reporting unit.

Projections of future cash flows differ by reporting unit and are consistent with our strategic projection processes.

Future cash flows for Evernorth are primarily driven by the forecasted gross margins of the business, as well as operating expenses and long-term growth rates.

Projections of future cash flows differ by reporting unit and are consistent with our ongoing strategic projections.

Future cash flows for Evernorth Health Services are primarily driven by the forecasted gross margins of the business, as well as operating expenses and long-term growth rates.

Future cash flows for our other reporting units are primarily driven by forecasted revenues, benefit expenses, operating expenses and long-term growth rates.

Goodwill activity.

Goodwill activity during 2021 and 2020 was as follows:

(In millions) 2021 2020

Goodwill activity was as follows:

(In millions) Evernorth Health Services Cigna Healthcare Other Operations Total

Balance at January 1, 2021

Goodwill acquired, net 1,428 29

Impact of foreign currency translation ( 31 ) 17

Goodwill classified as Assets of businesses held for sale ( 234 )

Goodwill per Consolidated Balance Sheets at December 31, $ 45,811 $ 44,648

Other Intangibles

$ 33,806 $ 10,577 $ 265 $ 44,648

Goodwill acquired 1,322 116 — 1,438

Goodwill disposed — ( 10 ) — ( 10 )

Impact of foreign currency translation and other adjustments — — ( 31 ) ( 31 )

Goodwill at December 31, 2021 (1)

35,128 10,683 234 46,045

Goodwill disposed — — ( 234 ) ( 234 )

Impact of foreign currency translation and other adjustments 2 ( 2 ) — —

Goodwill at December 31, 2022

$ 35,130 $ 10,681 $ — $ 45,811

(1) Includes $ 234 million classified as Assets of businesses held for sale, all reported within Other Operations.

Other Intangible Assets

Accounting policy.

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If the total of the expected future undiscounted cash flows generated by the underlying asset group is less than the carrying amount of the asset group, the Company recognizes an impairment charge equal to the difference between the carrying value of the asset group and its estimated fair value.

The Company's indefinite-lived intangible assets are each reviewed for impairment at least annually by comparing their fair value with their carrying value.

The Company's indefinite-lived intangible assets are reviewed for impairment at least annually by comparing their fair value with their carrying value.

If the carrying value exceeds fair value, that excess is recognized as an impairment loss.

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Components of other assets, including other intangibles.

Other intangible assets were comprised of the following at December 31:

Other intangible assets were comprised of the following:

(In millions) Cost Accumulated Amortization Net Carrying Value

December 31, 2022

Customer relationships $ 29,974 6,099 23,875

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Other intangible assets 38,722 6,230 32,492

Value of business acquired ("VOBA" reported in Deferred policy acquisition costs) 646 171 475

$ 39,490 4,791 34,699

Value of business acquired ("VOBA" reported in Other assets)

Total $ 38,932 6,363 32,569

December 31, 2021

Customer relationships $ 29,997 4,539 25,458

2 unchanged sentences

Other intangible assets 38,844 4,620 34,224

Value of business acquired (reported in Deferred policy acquisition costs) 670 152 518

Total $ 38,977 3,280 35,697

(1) Includes $ 386 million of VOBA and $ 122 million of Other intangible assets classified as Assets of businesses held for sale.

The Company has indefinite-lived intangible assets totaling $ 8.5 billion at December 31, 2021 and $ 8.5 billion at December 31, 2020, largely consisting of trade names and licenses.

Value of business acquired (reported in Other assets)

$ 39,490 4,791 34,699

(1) Includes $ 386 million of VOBA and $ 122 million of Other intangible assets intangible assets classified as Assets of businesses held for sale.

The Company has indefinite-lived intangible assets totaling $ 8.5 billion at December 31, 2022 and December 31, 2021, largely consisting of trade names and licenses.

Property and Equipment

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Cost includes interest, real estate taxes and other costs incurred during construction when applicable.

Internal-use software that is acquired, developed or modified solely to meet the Company's internal needs, with no plan to market externally, is also included in this category.

Internal-use software that is acquired, developed or modified solely to

meet the Company's internal needs, with no plan to market externally, is also included in this category.

Costs directly related to acquiring, developing or modifying internal-use software are capitalized.

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Components of property and equipment.

Property and equipment was comprised of the following as of December 31:

Property and equipment was comprised of the following:

(In millions) Cost Accumulated Amortization Net Carrying Value

December 31, 2022

Internal-use software $ 8,948 $ 6,100 $ 2,848

Other property and equipment 2,256 1,330 926

Total property and equipment $ 11,204 $ 7,430 $ 3,774

December 31, 2021

Internal-use software $ 7,869 $ 5,060 $ 2,809

Other property and equipment 2,839 1,653 1,186

Total 10,708 6,713 3,995

Property and equipment classified as Assets of businesses held for sale

( 424 ) ( 121 ) ( 303 )

Total Property and equipment per Consolidated Balance Sheets $ 10,284 $ 6,592 $ 3,692

Internal-use software $ 7,061 $ 4,048 $ 3,013

Other property and equipment 2,719 1,527 1,192

Total property and equipment $ 9,780 $ 5,575 $ 4,205

Components of depreciation and amortization.

Depreciation and amortization expense was comprised of the following for the years ended December 31:

Depreciation and amortization expense was comprised of the following:

For the Years Ended December 31,

(In millions) 2022 2021 2020

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Other property and equipment 251 253 276

Value of business acquired (reported in Deferred policy acquisition costs) 25 28 34

Value of business acquired (reported in Other assets)

Other intangibles 1,606 1,548 1,527

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Both operating and finance leases result in (1) a right-of-use ("ROU") asset that represents our right to use the underlying asset for the lease term and (2) a lease liability that represents our obligation to make lease payments arising from the lease.

ROU assets and lease liabilities are reflected in the following lines in the Company's Consolidated Balance Sheet:

assets and lease liabilities are reflected in the following lines in the Company's Consolidated Balance Sheets:

ROU Asset Current Lease Liability Non-Current Lease Liability

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Total lease cost $ 200 $ 233 $ 269

In addition, the Company recognized $ 33 million of one-time selling, general and administrative expenses related to abandonment of leased assets associated with the Organizational Efficiency Plan.

See Note 15 for further information.

Supplemental cash flow information related to leases was as follows:

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Finance leases $ 84 $ 20 $ 9

Operating and finance lease ROU assets and lease liabilities were as follows:

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

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

Operating leases:

Operating lease ROU assets $ 478 $ 552

Operating lease ROU assets in Other assets

Accrued expenses and other liabilities $ 114 $ 159

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Total finance lease liabilities $ 99 $ 51

(1) Operating leases include Assets of $ 27 million and Liabilities of $ 28 million in 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.

As of December 31, 2022, the weighted average remaining lease term was 5 years for operating leases and 3 years for finance leases, and the weighted average discount rate was 2.80 % for operating leases and 3.45 % for finance leases.

Maturities of lease liabilities as of December 31, 2021 were as follows:

Maturities of lease liabilities are as follows:

(In millions) Operating Leases Finance Leases

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imputed interest 34 6

(1) Operating leases include Liabilities of $ 28 million in businesses held for sale.

Total $ 460 $ 99

Note 21 – Shareholders' Equity and Dividend Restrictions

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Additionally, these subsidiaries may be subject to regulatory restrictions on the amount of annual dividends or other distributions (such as loans or cash advances) that insurance companies may extend to their parent companies without prior approval.

As of December 31, 2021, these amounts, including restricted GAAP net assets of the Company's subsidiaries, were as follows:

(In billions) 2021

These amounts, including restricted GAAP net assets of the Company's subsidiaries, were as follows:

(In billions) December 31, 2022

Minimum statutory surplus required by regulators (1)

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Maximum loans to the parent company permitted without regulatory approval $ 1.4

Restricted GAAP net assets of Cigna Corporation's subsidiaries (5)

Restricted GAAP net assets of The Cigna Group's subsidiaries $ 14.8

(1) Excludes amounts associated with foreign operated equity method joint ventures.

(2) Includes approximately $ 1 billion associated with businesses held for sale.

(3) Includes approximately $ 40 million associated with businesses held for sale.

(4) Includes approximately $ 200 million associated with businesses held for sale.

(5) Includes approximately $ 3.0 billion associated with businesses held for sale.

Permitted practices used by the Company's insurance subsidiaries in 2022 that differed from prescribed regulatory accounting had an immaterial impact on statutory surplus.

Undistributed earnings for equity method subsidiaries are $ 1.1 billion as of December 31, 2021.

Undistributed earnings for equity method investments are $ 1.2 billion as of December 31, 2022.

Note 22 – Income Taxes

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Deferred income tax assets are recognized when available evidence indicates that realization is more likely than not and a valuation allowance is established to the extent this standard is not met.

The deferred income tax provision generally represents the net change in deferred income tax assets and liabilities during the reporting period excluding adjustments to accumulated other comprehensive income or amounts recorded in connection with a business combination.

The deferred income tax provision generally represents the net change in deferred income tax assets and liabilities during the reporting period excluding adjustments to Accumulated other comprehensive income (loss) or amounts recorded in connection with a business combination.

The current income tax provision generally represents estimated amounts due on income tax returns for the year reported to various jurisdictions plus the effect of any uncertain tax positions.

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Income Tax Expense

The components of income taxes for the years ended December 31 were as follows:

The components of income taxes were as follows:

For the Years Ended December 31,

(In millions) 2022 2021 2020

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Deferred taxes (benefits)

income taxes (benefits) ( 167 ) ( 217 ) ( 236 )

Foreign income taxes 69 11 16

income tax benefits

( 283 ) ( 167 ) ( 217 )

Foreign income (tax benefits) taxes

State income tax benefits

Total deferred taxes (benefits) ( 220 ) ( 386 ) ( 313 )

( 169 ) ( 122 ) ( 180 )

Total deferred tax benefits

( 480 ) ( 220 ) ( 386 )

Total income taxes $ 1,607 $ 1,367 $ 2,379

Total income taxes for the years ended December 31 were different from the amount computed using the nominal federal income tax rate for the following reasons:

Total income taxes were different from the amount computed using the nominal federal income tax rate for the following reasons:

For the Years Ended December 31,

2022 2021 2020

1 unchanged sentence

Tax expense at nominal rate $ 1,754 21.0 % $ 1,424 21.0 % $ 2,282 21.0 %

Impact of sale of business — — 104 1.0 — —

Impact of sale of businesses ( 37 ) ( 0.4 ) — — 104 1.0

Effect of foreign earnings ( 96 ) ( 1.2 ) ( 33 ) ( 0.5 ) ( 61 ) ( 0.6 )

Health insurance industry tax — — — — 93 0.9

State income tax (net of federal income tax benefit) ( 9 ) ( 0.1 ) 24 0.2 32 0.5

State income tax (benefit), net of federal income tax benefit

16 0.2 ( 9 ) ( 0.1 ) 24 0.2

Other ( 30 ) ( 0.4 ) ( 15 ) ( 0.2 ) ( 63 ) ( 0.6 )

1 unchanged sentence

Consolidated pre-tax income from the Company's foreign operations was approximately 46 % of the Company's pre-tax income in 2022, 26 % in 2021 and 14 % in 2020.

The increase over 2021 is primarily driven by the gain from the Chubb transaction, an increase to the Company's international pharmaceutical operations, partially offset by a reduction in earnings from the sold entities.

Deferred Income Taxes

Deferred income tax assets and liabilities as of December 31, were as follows:

(In millions) 2021 2020

Deferred income tax assets and liabilities were as follows:

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

Deferred tax assets

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Other accrued liabilities 265 412

Policy acquisition expenses 41 —

Unrealized depreciation on investments and foreign currency translation 156 —

Other 190 246

7 unchanged sentences

Unrealized appreciation on investments and foreign currency translation — 104

Other 212 122

Total deferred tax liabilities 8,900 10,052

Net deferred income tax liabilities

Net deferred income tax (liabilities) assets classified as Liabilities of businesses held for sale ( 449 )

Net deferred income tax (liabilities) assets per Consolidated Balance Sheets $ ( 8,346 ) $ ( 8,939 )

Net deferred income tax liabilities classified as Liabilities of businesses held for sale

Net deferred income tax liabilities per Consolidated Balance Sheets

$ ( 7,751 ) $ ( 8,346 )

Management believes that future results will be sufficient to realize a majority of the Company's gross deferred tax assets.

As of December 31, 2022, we had approximately $ 270 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.

Valuation allowances are established against deferred tax assets when it is determined that it is more likely than not that the asset will not be recognized.

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Uncertain Tax Positions

Reconciliations of unrecognized tax benefits for the years ended December 31 were as follows:

Reconciliations of unrecognized tax benefits were as follows:

For the Years Ended December 31,

(In millions) 2022 2021 2020

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Substantially all unrecognized tax benefits would impact Shareholders' net income if recognized.

The Company classifies net interest expense on uncertain tax positions as a component of income tax expense and in Accrued expenses and other liabilities on the balance sheet.

The Company classifies net interest expense on uncertain tax positions as a component of income tax expense and in Other non-current liabilities in the Consolidated Balance Sheets.

In addition to the amounts in the table above, the liability for net interest expense on uncertain tax positions was approximately $ 176 million as of December 31, 2022, $ 148 million as of December 31, 2021 and $ 127 million as of December 31, 2020.

Other Tax Matters

The statute of limitations for Cigna's consolidated federal income tax returns through 2016 have closed.

However, Cigna filed amended returns for both the 2015 and 2016 tax years, which are under review by the Internal Revenue Service ("IRS").

Additionally, the IRS is examining Cigna's returns for 2017 and 2018.

The statute of limitations for Express Scripts' consolidated federal income tax returns through 2012 has closed.

The statutes of limitations for The Cigna Group's consolidated federal income tax returns through 2016 have closed.

However, The Cigna Group filed amended returns for both the 2015 and 2016 tax years, which are under review by the Internal Revenue Service ("IRS").

Additionally, the IRS is examining The Cigna Group's returns for 2017 and 2018.

The statutes of limitations for Express Scripts' consolidated federal income tax returns through 2012 has closed.

However, for 2010 through 2012 tax years, there remains a significant disputed matter.

2 unchanged sentences

The Company conducts business in a number of state and foreign jurisdictions and may be engaged in multiple audit proceedings at any given time.

Generally, no further state or foreign audit activity is expected for tax years prior to 2013 for Cigna's entities and 2006 for Express Scripts' entities.

Generally, no further state or foreign audit activity is expected for tax years prior to 2013 for The Cigna Group's entities and 2010 for Express Scripts' entities.

Note 23 – Contingencies and Other Matters

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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.

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 December 31, 2022.

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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.

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 company.

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.

Disputed tax matters arising from audits by the Internal Revenue Service or other state and foreign jurisdictions, including those resulting in litigation, are accounted for under GAAP guidance for uncertain tax positions.

See Note 21 for additional information on tax matters.

Pending litigation and legal or regulatory matters that the Company has identified with a reasonably possible material loss and certain other material litigation matters are described below.

1 unchanged sentence

The Company's accruals for the matters discussed below under "Litigation Matters" and "Regulatory Matters" are not material.

Due to numerous uncertain factors presented in these cases, it is not possible to estimate an aggregate range of loss (if

any) for these matters at this time.

Due to numerous uncertain factors presented in these cases, it is not possible to estimate an aggregate range of loss (if any) for these matters at this time.

In light of the uncertainties involved in these matters, there is no assurance that their ultimate resolution will not exceed the amounts currently accrued by the Company.

2 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 claimed 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.

There is no tentative trial date.

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 at the end of July 2022.

Medicare Advantage.

A qui tam action that was filed by a relator in the United States District Court for the Southern District of New York in 2017 was unsealed on August 6, 2020.

A qui tam action that was filed by a private individual on behalf of the government in the United States District Court for the Southern District of New York in 2017 was unsealed on August 6, 2020.

The action asserts claims related to risk adjustment practices arising from certain health exams conducted as part of the Company's Medicare Advantage business.

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

On January 11, 2022, the U.S.

January 11, 2022, the U.S.

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, seeking unspecified damages and penalties under the federal False Claims Act.

The Company filed motions to dismiss the DOJ's complaint and the remainder of the qui tam complaint on December 16, 2022.

Briefing is ongoing.

Regulatory Matters

1 unchanged sentence

The DOJ is conducting industry-wide investigations of Medicare Advantage organizations' risk adjustment practices.

For certain Medicare Advantage organizations, including Cigna, those investigations have resulted in litigation (see above).

The Company is currently responding to information requests (civil investigative demand) from the DOJ (U.S.

For certain Medicare Advantage organizations, including The Cigna Group, those investigations have resulted in litigation (see "Litigation Matters—Medicare Advantage" above).

The Company is currently responding to information requests (civil investigative demands) from the DOJ (U.S.

Attorney's Office for the Eastern District of Pennsylvania).

The Company is cooperating with the DOJ and has responded and continues to respond to its requests.

The Company is cooperating with the DOJ and continues to respond to its requests.

Note 24 – Segment Information

See Note 1 for a description of our segments, including the segment change effective in the fourth quarter of 2021.

Prior year segment information has been adjusted to reflect the segment change and a description of our basis of reporting segment operating results is outlined below.

Intersegment revenues primarily reflect pharmacy related transactions between the Evernorth and Cigna Healthcare segments.

See Note 1 for a description of our segments.

On February 13, 2023, we changed the name of our Evernorth segment to Evernorth Health Services.

We will not distinguish between our prior and current segment name and will refer to our current segment name.

A description of our basis for reporting segment operating results is outlined below.

Intersegment revenues primarily reflect pharmacy-related transactions between the Evernorth Health Services and Cigna Healthcare segments.

The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes these metrics best reflect the underlying results of business operations and permit analysis of trends in underlying revenue, expenses and profitability.

We define pre-tax adjusted income from operations as income before income taxes excluding net realized investment results, amortization of acquired intangible assets, results of transitioning clients prior to 2020, and special items.

Cigna's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded.

We define pre-tax adjusted income from operations as income before income taxes excluding pre-tax income (loss) attributable to noncontrolling interests, net realized investment results, amortization of acquired intangible assets, and special items.

The Cigna Group's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded.

Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size.

1 unchanged sentence

The Company defines adjusted revenues as total revenues excluding the following adjustments:

special items, revenue contribution from transitioning clients prior to 2020, and Cigna's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting.

special items and The Cigna Group's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting.

Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size.

1 unchanged sentence

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 year ended December 31, 2021, 2020 and 2019:

(In millions) 2021 2020 2019

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

Charge for organizational efficiency plan

(Selling, general and administrative expenses) $ 119 $ 168 $ 24 $ 31 $ 162 $ 207

Debt extinguishment costs

The following table presents the special items charges (benefits) recorded by the Company, as well as the respective financial statement line items impacted:

For the Years Ended December 31,

2022 2021 2020

Integration and transaction-related (benefits) costs

(In millions) Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax

Integration and transaction-related costs

(Selling, general and administrative expenses) $ 135 $ 103 $ 169 $ 71 $ 527 $ 404

Charge for organizational efficiency plan

(Selling, general and administrative expenses) 22 17 168 119 31 24

(Benefits) charges associated with litigation matters

(Selling, general and administrative expenses) ( 28 ) ( 20 ) ( 27 ) ( 21 ) 25 19

(Gain) on sale of businesses ( 1,662 ) ( 1,332 ) — — ( 4,203 ) ( 3,217 )

Debt extinguishment costs — — 141 110 199 151

Risk corridors recovery

2 unchanged sentences

(Pharmacy revenues) — — — — ( 204 ) ( 155 )

(Gain) on sale of business — — ( 3,217 ) ( 4,203 ) — —

Total impact from special items $ ( 1,533 ) $ ( 1,232 ) $ 451 $ 279 $ ( 3,726 ) $ ( 2,850 )

Summarized segment financial information was as follows:

(In millions) Evernorth Cigna Healthcare

(In millions) Evernorth Health Services

Cigna Healthcare

Other Operations

1 unchanged sentence

Revenues from external customers $ 135,786 $ 41,737 $ 1,838 $ — $ 179,361

Inter-segment revenues 4,203 2,271 — ( 6,474 )

Intersegment revenues 4,463 2,535 — ( 6,998 )

Net investment income

86 638 424 7 1,155

Total revenues 140,335 44,910 2,262 ( 6,991 ) 180,516

Net realized investment results from certain equity method investments

— 126 — — 126

Adjusted revenues $ 140,335 $ 45,036 $ 2,262 $ ( 6,991 ) $ 180,642

Depreciation and amortization $ 2,283 $ 638 $ 6 $ 10 $ 2,937

Income (loss) before taxes $ 3,908 $ 3,812 $ 852 $ ( 1,790 ) $ 6,782

Income (loss) before income taxes

$ 4,421 $ 3,443 $ 2,084 $ ( 1,595 ) $ 8,353

Pre-tax adjustments to reconcile to adjusted income from operations

(Income) attributable to noncontrolling interests

Net realized investment (gains) losses (1)

( 66 ) ( 4 ) ( 14 ) — ( 84 )

Net realized investment losses (1)

— 530 91 — 621

Amortization of acquired intangible assets 1,772 103 1 — 1,876

Special items

Integration and transaction-related costs — — — 135 135

Charge for organizational efficiency plan — — — 22 22

Debt extinguishment costs — — — 141 141

Integration and transaction-related (benefits) costs — — — 169 169

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

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

(Gain) on sale of businesses — — ( 1,662 ) — ( 1,662 )

Pre-tax adjusted income (loss) from operations $ 6,127 $ 4,072 $ 500 $ ( 1,466 ) $ 9,233

(In millions) Evernorth

(In millions) Evernorth Health Services

Cigna Healthcare

3 unchanged sentences

$ 127,692 $ 41,378 $ 3,459 $ — $ 172,529

Inter-segment revenues 3,655 1,966 23 ( 5,644 )

Net investment income 32 473 739 — 1,244

Intersegment revenues 4,203 2,271 — ( 6,474 )

Net investment income (loss)

17 1,003 530 ( 1 ) 1,549

Total revenues 131,912 44,652 3,989 ( 6,475 ) 174,078

Net realized investment results from certain equity method investments — — — — —

Special item related to contractual adjustment for a former client ( 204 ) — — — ( 204 )

Adjusted revenues $ 131,912 $ 44,652 $ 3,989 $ ( 6,475 ) $ 174,078

Depreciation and amortization $ 2,316 $ 551 $ 52 $ 4 $ 2,923

Income (loss) before taxes $ 3,684 $ 4,291 $ 5,227 $ ( 2,334 ) $ 10,868

Income (loss) before income taxes

$ 3,908 $ 3,812 $ 852 $ ( 1,790 ) $ 6,782

Pre-tax adjustments to reconcile to adjusted income from operations

(Income) attributable to noncontrolling interests

Net realized investment (gains) losses (1)

( 31 ) ( 3 ) ( 24 ) — ( 58 )

Net realized investment losses (gains) (1)

4 ( 247 ) 47 — ( 196 )

Amortization of acquired intangible assets 1,937 47 14 — 1,998

Special items

Integration and transaction-related costs — — — 169 169

Charge for organizational efficiency plan — — — 168 168

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

Debt extinguishment costs — — — 141 141

Integration and transaction-related (benefits) costs — — — 527 527

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

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

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

(Gain) on sale of business — — ( 4,203 ) — ( 4,203 )

Pre-tax adjusted income (loss) from operations $ 5,818 $ 3,609 $ 889 $ ( 1,339 ) $ 8,977

(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

(In millions) Evernorth Health Services

Cigna Healthcare

2 unchanged sentences

Revenues from external customers $ 112,647 $ 38,826 $ 7,684 $ — $ 159,157

Inter-segment revenues 2,380 1,168 26 ( 3,574 )

Net investment income (loss) 60 510 822 ( 2 ) 1,390

Intersegment revenues 3,655 1,966 23 ( 5,644 )

Net investment income

32 473 739 — 1,244

Total revenues 116,334 41,265 8,446 ( 5,644 ) 160,401

Revenue contributions from transitioning clients ( 13,347 ) — — — ( 13,347 )

Net realized investment results from certain equity method investments — ( 130 ) — — ( 130 )

Special item related to contractual adjustment for a former client ( 204 ) — — — ( 204 )

Adjusted revenues $ 116,130 $ 41,135 $ 8,446 $ ( 5,644 ) $ 160,067

Depreciation and amortization $ 2,248 $ 458 $ 71 $ 25 $ 2,802

Income (loss) before taxes $ 3,983 $ 4,071 $ 1,180 $ ( 2,664 ) $ 6,570

Income (loss) before income taxes

$ 3,684 $ 4,291 $ 5,227 $ ( 2,334 ) $ 10,868

Pre-tax adjustments to reconcile to adjusted income from operations

Adjustment for transitioning clients ( 1,726 ) — — — ( 1,726 )

(Income) attributable to noncontrolling interests

Net realized investment (gains) losses (1)

( 17 ) ( 1 ) ( 19 ) — ( 37 )

Net realized investment (gains) (1)

( 17 ) ( 202 ) ( 60 ) — ( 279 )

Amortization of acquired intangible assets 1,917 44 21 — 1,982

Special items

Integration and transaction-related costs — — — 527 527

Charge for organizational efficiency plan — — — 31 31

Integration and transaction-related (benefits) costs — — — 552 552

(Benefits) charges associated with litigation matters — ( 30 ) — 81 51

Charges associated with litigation matters — — — 25 25

(Gain) on sale of businesses — — ( 4,203 ) — ( 4,203 )

Debt extinguishment costs — — — 199 199

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

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

Pre-tax adjusted income (loss) from operations $ 5,363 $ 4,031 $ 966 $ ( 1,552 ) $ 8,808

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

(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.

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 year ended December 31:

The following table presents these revenues by product, premium and service type:

For the Years Ended December 31,

(In millions) 2022 2021 2020

2 unchanged sentences

Home delivery and specialty revenues 61,283 54,391 49,906

Other 6,428 5,403 4,900

Other revenues 6,753 6,428 5,403

Intercompany eliminations ( 4,416 ) ( 4,398 ) ( 3,905 )

10 unchanged sentences

Total Cigna Healthcare 38,094 37,737 35,069

International businesses held for sale 3,205 3,039 2,884

Divested International businesses 1,596 3,205 3,039

Domestic disability, life and accident — — 4,423

3 unchanged sentences

Services (Fees) (ASC 606)

Evernorth Health Services

7,234 6,070 4,611

6 unchanged sentences

Total revenues from external customers $ 179,361 $ 172,529 $ 159,157

Foreign and U.S.

revenues from external customers for the three years ended December 31 are shown below.

and foreign revenues from external customers are shown below.

The Company's foreign revenues are generated by its foreign operating entities.

In the periods shown, no foreign country contributed more than 2 % of consolidated revenues from external customers.

In the periods shown, no single foreign country contributed more than 2 % of consolidated revenues from external customers.

For the Years Ended December 31,

(In millions) 2022 2021 2020

3 unchanged sentences

Total $ 179,361 $ 172,529 $ 159,157

(1) International life, accident and supplemental benefits businesses in seven countries to be sold pursuant to the Chubb Transaction as described in Note 1 comprised of $ 3.2 billion, $ 3.1 billion and $ 2.9 billion in 2021, 2020 and 2019, respectively.

(1) The divested International businesses as described in Note 4 comprised $ 1.6 billion, $ 3.2 billion and $ 3.1 billion in 2022, 2021 and 2020, respectively.

Revenues from U.S.

Federal Government agencies, under a number of contracts, were 14 % of consolidated revenues in 2021, 15 % in 2020 and 14 % in 2019.

These amounts were reported in the Evernorth and Cigna Healthcare segments.

Federal Government agencies, under a number of contracts, were 14 % of consolidated revenues in 2022 and 2021 and 15 % in 2020.

These amounts were reported in the Evernorth Health Services and Cigna Healthcare segments.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data