Item 9A. Controls and Procedures
Item 9A. CONTROLS AND PROCEDURES
A. Disclosure Controls and Procedures
Based on an evaluation of the effectiveness of The Cigna Group's disclosure controls and procedures conducted under the supervision and with the participation of The Cigna Group's management (including The Cigna Group's Chief Executive Officer and Chief Financial Officer), The Cigna Group's Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, The Cigna Group's disclosure controls and procedures are effective to ensure that information required to be disclosed by The Cigna Group in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms and is accumulated and communicated to The Cigna Group's management, including The Cigna Group's Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
B. Internal Control Over Financial Reporting
Management's Annual Report on Internal Control over Financial Reporting
Management of The Cigna Group is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal controls were designed to provide reasonable assurance that the Company's consolidated published financial statements for external purposes were prepared in accordance with accounting principles generally accepted in the United States. The Company's internal control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the Company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated Framework (2013). Based on management's assessment and the criteria set forth by COSO, it was determined that the Company's internal control over financial reporting is effective as of December 31, 2023.
The Company's independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of the Company's internal control over financial reporting, as stated in their report located in Item 8 of this Form 10-K.
Change in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, The Cigna Group's internal control over financial reporting.
Item 9B. OTHER INFORMATION
Rule 10b5-1 Plan Elections
During the three months ended December 31, 2023, no director or officer of the Company adopted , modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
137
PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
A. Directors of the Registrant
The information under the captions "Corporate Governance Matters – Board of Directors' Nominees" and "Corporate Governance Matters – Board Meetings and Committees" (as it relates to Audit Committee disclosure) in The Cigna Group's definitive proxy statement related to the 2024 annual meeting of shareholders ("the 2024 Proxy Statement") is incorporated herein by reference.
B. Executive Officers of the Registrant
See Part I – "Information about our Executive Officers" in this Form 10-K.
C. Code of Ethics and Other Corporate Governance Disclosures
The information under the caption "Corporate Governance Matters – Codes of Ethics" in the 2024 Proxy Statement is incorporated herein by reference. We intend to promptly disclose on our website, in accordance with applicable rules, any required disclosure of changes to or waivers, if any, of our Code of Ethics or our Director Code of Business Conduct and Ethics.
D. Delinquent Section 16(a) Reports
The information under the caption "Ownership of The Cigna Group Common Stock – Delinquent Section 16(a) Reports", if included in the 2024 Proxy Statement, is incorporated herein by reference.
Item 11. EXECUTIVE COMPENSATION
The information under the captions "Corporate Governance Matters – Non-Employee Director Compensation," "Certain Transactions – Compensation Committee Interlocks and Insider Participation," "Compensation Matters – Compensation Discussion and Analysis," "Compensation Matters – Report of the People Resources Committee" and "Compensation Matters – Executive Compensation Tables" in the 2024 Proxy Statement is incorporated herein by reference.
138
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table presents information regarding The Cigna Group's equity compensation plans as of December 31, 2023:
(a) (1)
(b) (2)
(c) (3)
Plan Category Securities To Be Issued
Upon Exercise Of
Outstanding Options,
Warrants And Rights Weighted Average
Exercise Price Of
Outstanding Options,
Warrants And Rights Securities Remaining
Available For Future
Issuance Under Equity
Compensation Plans
(Excluding Securities
Reflected In Column (a))
Equity Compensation Plans Approved by Security Holders 8,161,152 $ 202.02 14,371,589
Equity Compensation Plans Not Approved by Security Holders — — —
Total 8,161,152 $ 202.02 14,371,589
(1) Includes, in addition to outstanding stock options:
(i) 57,961 restricted stock units, 34,015 deferred shares and 1,372,834 strategic performance shares that are reported at the maximum 200% payout rate granted under the Cigna Long-Term Incentive Plan, the Cigna Corporation Stock Plan and the Cigna Corporation Director Equity Plan; and
(ii) 235,858 shares of common stock underlying stock option awards granted under the Express Scripts Holding Company 2016 Long-Term Incentive Plan, 390,212 shares of common stock underlying stock option awards granted under the Express Scripts, Inc. 2011 Long-Term Incentive Plan, and 182,865 shares of common stock underlying stock option awards granted under the Medco Health Solutions, Inc. 2002 Stock Incentive Plan that were all approved by the applicable company's shareholders before The Cigna Group's acquisition of Express Scripts in December 2018.
(2) The weighted-average exercise price is based only on outstanding stock options. The outstanding stock options assumed due to The Cigna Group's acquisition of Express Scripts, in aggregate, have a weighted-average exercise price of $154.55. Excluding the assumed options from this acquisition results in a weighted-average exercise price of $208.54.
(3) Represents 14,371,589 shares of common stock available as of the close of business December 31, 2023 for future issuance under the Cigna Long-Term Incentive Plan. No further grants may be made and no shares remain available for future issuance under any plan other than the Cigna Long-Term Incentive Plan.
The information under the captions "Ownership of The Cigna Group Common Stock – Stock Held by Directors, Nominees and Executive Officers" and "Ownership of The Cigna Group Common Stock – Stock Held by Certain Beneficial Owners" in the 2024 Proxy Statement is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information under the captions "Corporate Governance Matters – Director Independence" and " – Certain Transactions" in the 2024 Proxy Statement is incorporated herein by reference.
Item 14 . PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information under the captions "Audit Matters – Policy for the Pre-Approval of Audit and Non-Audit Services" and "Audit Matters – Fees to Independent Registered Public Accounting Firm" in the 2024 Proxy Statement is incorporated herein by reference.
139
PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) (1) The following Financial Statements can be found under Part II Item 8 of this Form 10-K:
Report of Independent Registered Public Accounting Firm. (Public Company Accounting Oversight Board ID: 238 )
Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021.
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021.
Consolidated Balance Sheets as of December 31, 2023 and 2022.
Consolidated Statements of Changes in Total Equity for the years ended December 31, 2023, 2022 and 2021.
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021.
Notes to the Consolidated Financial Statements.
(2) The financial statement schedules listed in the Index to Financial Statement Schedules on page FS-1 which list is incorporated herein.
(3) Set forth in this Item 15 is a list of exhibits filed or incorporated by reference as part of this Annual Report on Form 10-K.
(b) The exhibits listed in the accompanying "Index to Exhibits" in this Item 15 are filed or incorporated by reference as part of this Annual Report on Form 10-K.
(c) The financial statement schedules listed in the Index to Financial Statement Schedules on page FS-1 are filed as part of this Annual Report on Form 10-K.
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INDEX TO EXHIBITS
Number Description Method of Filing
2.1(a) Agreement and Plan of Merger, dated as of March 8, 2018, by and among Cigna Corporation (formerly Halfmoon Parent, Inc.), Express Scripts Holding Company, Cigna Holding Company (formerly Cigna Corporation), Halfmoon I, Inc. and Halfmoon II, Inc.
Filed by Cigna Holding Company ("CHC") as Exhibit 2.1 to the Current Report on Form 8-K on March 13, 2018 and incorporated herein by reference.
2.1(b) Amendment No. 1, dated as of June 27, 2018, to the Agreement and Plan of Merger, dated as of March 8, 2018, by and among Cigna Corporation, Express Scripts Holding Company, Cigna Holding Company, Halfmoon I, Inc. and Halfmoon II, Inc.
Filed by CHC as Exhibit 2.1 to the Current Report on Form 8-K on July 2, 2018 and incorporated herein by reference.
3.2 Restated Certificate of Incorporation of the registrant effective as of April 26, 2023
Filed by the registrant as Exhibit 3.1 to the Quarterly Report on Form 10-Q for the period ended March 31, 2023 and incorporated herein by reference.
3.3 Amended and Restated By-Laws of the registrant as last amended February 13, 2023
Filed by the registrant as Exhibit 3.3 to the Current Report on Form 8-K on February 13, 2023 and incorporated herein by reference.
4.1(a) Indenture, dated as of September 17, 2018, between Cigna Corporation (formerly Halfmoon Parent, Inc.) and U.S. Bank National Association, as trustee
Filed by CHC as Exhibit 4.1 to the Current Report on Form 8-K on September 21, 2018 and incorporated herein by reference.
4.1(b) Supplemental Indenture, dated as of September 17, 2018, between Cigna Corporation (formerly Halfmoon Parent, Inc.) and U.S. Bank National Association, as trustee
Filed by CHC as Exhibit 4.2 to the Current Report on Form 8-K on September 21, 2018 and incorporated herein by reference.
4.1(c) Second Supplemental Indenture dated as of December 20, 2018, by and among Express Scripts Holding Company, Cigna Holding Company and U.S. Bank National Association, as trustee
Filed by the registrant as Exhibit 4.7 to the Current Report on Form 8-K on December 20, 2018 and incorporated herein by reference.
4.1(d) Third Supplemental Indenture, dated as of October 11, 2019, by and among Cigna Corporation, as the Issuer, Cigna Holding Company and Express Scripts Holding Company, each as guarantors, and U.S. Bank, National Association, as trustee
Filed by the registrant as Exhibit 4.1 to the Current Report on Form 8-K on October 11, 2019 and incorporated herein by reference.
4.1(e) Fourth Supplemental Indenture, dated as of March 16, 2020, between Cigna Corporation and U.S. Bank, National Association, as trustee
Filed by the registrant as Exhibit 4.1 to the Current Report on Form 8-K on March 16, 2020 and incorporated herein by reference.
4.1(f) Fifth Supplemental Indenture, dated as of March 3, 2021, between Cigna Corporation and U.S. Bank National Association, as trustee
Filed by the registrant as Exhibit 4.1 to the Current Report on Form 8-K on March 3, 2021 and incorporated herein by reference.
4.1 (g) Sixth Supplemental Indenture, dated as of March 7, 2023, between Cigna Corporation and U.S. Bank National Association, as trustee
Filed by the registrant as Exhibit 4.1 to the Current Report on Form 8-K on March 7, 2023 and incorporated herein by reference.
4.2 Registration Rights Agreement, dated as of October 11, 2019, by and among Cigna Corporation, as the Issuer, Cigna Holding Company and Express Scripts Holding Company, each as guarantors, and J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., and Wells Fargo Securities, LLC, each as dealer managers
Filed by the registrant as Exhibit 4.2 to the Current Report on Form 8-K on October 11, 2019 and incorporated herein by reference.
4.3(a) Senior Indenture dated as of August 16, 2006 between Cigna Holding Company (formerly Cigna Corporation) and U.S. Bank National Association
Filed by CHC as Exhibit 4.1(a) to the Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated herein by reference.
4.3(b) Supplemental Indenture No. 1 dated as of November 10, 2006 between Cigna Holding Company and U.S. Bank National Association
Filed by CHC as Exhibit 4.1(b) to the Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated herein by reference.
4.3(c) Supplemental Indenture No. 8 dated as of November 10, 2011 between Cigna Holding Company and U.S. Bank National Association
Filed by CHC as Exhibit 4.1 to the Current Report on Form 8-K on November 14, 2011 and incorporated herein by reference.
141
4.3(d) Supplemental Indenture No. 9 dated as of March 20, 2015, between Cigna Holding Company and U.S. Bank National Association, as trustee
Filed by CHC as Exhibit 4.1 to the Current Report on Form 8-K on March 26, 2015 and incorporated herein by reference.
4.3(e) Supplemental Indenture No. 10 dated as of September 14, 2017 between Cigna Holding Company and U.S. Bank National Association, as trustee
Filed by CHC as Exhibit 4.1 to the Current Report on Form 8-K filed September 14, 2017 and incorporated herein by reference.
4.3(f) Supplemental Indenture No. 11 dated as of December 20, 2018, by and among Cigna Corporation, Cigna Holding Company and U.S. Bank National Association, as trustee
Filed by the registrant as Exhibit 4.1 to the Current Report on Form 8-K on December 20, 2018 and incorporated herein by reference.
4.3(g) Supplemental Indenture No. 12, dated as of October 11, 2019, among Cigna Holding Company, as Issuer, Cigna Corporation, as parent guarantor, and U.S. Bank National Association, as trustee
Filed by the registrant as Exhibit 4.3 to the Current Report on Form 8-K on October 11, 2019 and incorporated herein by reference.
4.4(a) Indenture dated as of January 1, 1994 between Cigna Holding Company (formerly Cigna Corporation) and Marine Midland Bank
Filed by CHC as Exhibit 4.2 to the Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference.
4.4(b) Supplemental Indenture No. 1 dated as of December 20, 2018, by and among Cigna Corporation (formerly Halfmoon Parent, Inc.), Cigna Holding Company and HSBC Bank USA, National Association (as successor to Marine Midland Bank, N.A.), as trustee
Filed by the registrant as Exhibit 4.2 to the Current Report on Form 8-K on December 20, 2018 and incorporated herein by reference.
4.4(c) Supplemental Indenture No. 2, dated as of October 11, 2019, among Cigna Holding Company, as Issuer, Cigna Corporation, as parent guarantor, and HSBC Bank USA, National Association, as trustee
Filed by the registrant as Exhibit 4.4 to the Current Report on Form 8-K on October 11, 2019 and incorporated herein by reference.
4.5(a) Indenture dated as of June 30, 1988 between Cigna Holding Company (formerly Cigna Corporation) and Bankers Trust Company
Filed by CHC as Exhibit 4.3 to the Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference.
4.5(b) Supplemental Indenture No. 1 dated as of December 20, 2018, by and among Cigna Corporation (formerly Halfmoon Parent, Inc.), Cigna Holding Company and Deutsche Bank Trust Company Americas, a New York banking corporation (as successor to Bankers Trust Company), as trustee
Filed by the registrant as Exhibit 4.3 to the Current Report on Form 8-K on December 20, 2018 and incorporated herein by reference.
4.6(a) Indenture, dated as of November 21, 2011, among Express Scripts, Inc., Express Scripts Holding Company (formerly Aristotle Holding, Inc.), the other subsidiaries of Express Scripts Holding Company party thereto and Wells Fargo Bank, National Association, as trustee
Filed by Express Scripts, Inc. ("ESI") as Exhibit 4.1 to the Current Report on Form 8-K filed November 25, 2011 and incorporated herein by reference.
4.6(b) Fourth Supplemental Indenture, dated as of November 21, 2011, among Express Scripts, Inc., Express Scripts Holding Company, the other subsidiaries of Express Scripts Holding Company party thereto and Wells Fargo Bank, National Association, as trustee
Filed by ESI as Exhibit 4.5 to the Current Report on Form 8-K on November 25, 2011 and incorporated herein by reference.
4.6(c) Eighth Supplemental Indenture, dated as of April 2, 2012, among Express Scripts, Inc., Express Scripts Holding Company, Medco Health Solutions, Inc., the other subsidiaries of Express Scripts Holding Company party thereto and Wells Fargo Bank, National Association, as trustee
Filed by Express Scripts Holding Company ("ESRX") as Exhibit 4.1 to the Current Report on Form 8-K on April 6, 2012 and incorporated herein by reference.
4.6(d) Thirteenth Supplemental Indenture, dated as of June 5, 2014, among Express Scripts Holding Company, the Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association, as trustee
Filed by ESRX as Exhibit 4.3 to the Current Report on Form 8-K on June 5, 2014 and incorporated herein by reference.
4.6(e) Seventeenth Supplemental Indenture, dated as of February 25, 2016, among Express Scripts Holding Company, the Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association, as trustee
Filed by ESRX as Exhibit 4.2 to the Current Report on Form 8-K on February 25, 2016 and incorporated herein by reference.
4.6(f) Eighteenth Supplemental Indenture, dated as of July 5, 2016, among Express Scripts Holding Company, the Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association, as trustee
Filed by ESRX as Exhibit 4.1 to the Current Report on Form 8-K on July 5, 2016 and incorporated herein by reference.
4.6(g) Nineteenth Supplemental Indenture, dated as of July 5, 2016, among Express Scripts Holding Company, the Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association, as trustee
Filed by ESRX as Exhibit 4.2 to the Current Report on Form 8-K on July 5, 2016 and incorporated herein by reference.
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4.6(h) Twentieth Supplemental Indenture, dated as of July 5, 2016, among Express Scripts Holding Company, the Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association, as trustee
Filed by ESRX as Exhibit 4.3 to the Current Report on Form 8-K on July 5, 2016 and incorporated herein by reference.
4.6(i) Twenty-Fifth Supplemental Indenture dated as of December 20, 2018, by and among Cigna Corporation, Express Scripts Holding Company and Wells Fargo Bank, National Association, as trustee
Filed by the registrant as Exhibit 4.4 to the Current Report on Form 8-K on December 20, 2018 and incorporated herein by reference.
4.6(j) Twenty-Sixth Supplemental Indenture, dated as of October 11, 2019, among Express Scripts Holding Company, as Issuer, Cigna Corporation, as parent guarantor, and Wells Fargo Bank, National Association, as trustee
Filed by the registrant as Exhibit 4.5 to the Current Report on Form 8-K on October 11, 2019 and incorporated herein by reference.
4.7 Description of Securities
Filed herewith.
Exhibits 10.1 through 10.26 are identified as compensatory plans, management contracts or arrangements pursuant to Item 15 of Form 10-K.
10.1(a) Cigna Long-Term Incentive Plan, amended and restated effective April 28, 2021 (the "Cigna LTIP")
Filed by the registrant as Exhibit 10.1 to the Current Report on Form 8-K on May 3, 2021 and incorporated herein by reference.
10.1(b) Amendment No.1 to the Cigna Long-Term Incentive Plan effective December 1, 2022
Filed by the registrant as Exhibit 10.1(b) to the Annual Report on Form 10-K for the year ended December 31, 2022 and incorporated herein by reference.
10.1(c) Form of Cigna LTIP: Nonqualified Stock Option Grant Agreement
Filed by CHC as Exhibit 10.3 to Form 10-Q for the period ended March 31, 2015 and incorporated herein by reference.
10.1(d) Form of Cigna LTIP: Nonqualified Stock Option Grant Agreement
Filed by CHC as Exhibit 10.3 to Form 10-Q for the period ended March 31, 2017 and incorporated herein by reference.
10.1(e) Form of Cigna LTIP: Nonqualified Stock Option Grant Agreement
Filed by CHC as Exhibit 10.5 to Quarterly Report on Form 10-Q for the period ended March 31, 2018 and incorporated herein by reference.
10.1(f) Form of Cigna LTIP: Nonqualified Stock Option Grant Agreement
Filed by the registrant as Exhibit 10.2 to Quarterly Report on Form 10-Q for the period ended March 31, 2019 and incorporated herein by reference.
10.1(g) Form of Cigna LTIP: Nonqualified Stock Option Grant Agreement
Filed by the registrant as Exhibit 10.2 to Quarterly Report on Form 10-Q for the period ended March 31, 2020 and incorporated herein by reference.
10.1(h) Form of Cigna LTIP: Strategic Performance Share Grant Agreement
Filed by the registrant as Exhibit 10.1 to Quarterly Report on Form 10-Q for the period ended March 31, 2021 and incorporated herein by reference.
10.1(i) Form of Cigna LTIP: Nonqualified Stock Option Grant Agreement
Filed by the registrant as Exhibit 10.2 to Quarterly Report on Form 10-Q for the period ended March 31, 2021 and incorporated herein by reference.
10.1(j)
Form of Cigna LTIP: Restricted Stock Grant Agreement
Filed by the registrant as Exhibit 10.3 to Quarterly Report on Form 10-Q for the period ended March 31, 2021 and incorporated herein by reference.
10.1(k) Form of Cigna Stock Unit Plan: Restricted Stock Unit Grant Agreement
Filed by the registrant as Exhibit 10.4 to Quarterly Report on Form 10-Q for the period ended March 31, 2021 and incorporated herein by reference.
143
10.1(l) Form of Cigna LTIP: Strategic Performance Share Grant Agreement
Filed by the registrant as Exhibit 10.1 to Quarterly Report on Form 10-Q for the period ended March 31, 2021 and incorporated herein by reference.
10.1(m) Form of Cigna LTIP: Nonqualified Stock Option Grant Agreement
Filed by the registrant as Exhibit 10.2 to Quarterly Report on Form 10-Q for the period ended March 31, 2021 and incorporated herein by reference.
10.1(n) Form of Cigna LTIP: Restricted Stock Grant Agreement
Filed by the registrant as Exhibit 10.3 to Quarterly Report on Form 10-Q for the period ended March 31, 2021 and incorporated herein by reference.
10.1(o)
Form of Cigna LTIP: Restricted Stock Unit Grant Agreement
Filed by the registrant as Exhibit 10.4 to Quarterly Report on Form 10-Q for the period ended March 31, 2021 and incorporated herein by reference.
10.1(p)
Form of Cigna LTIP: Covenant Agreement
Filed by the registrant as Exhibit 10.5 to Quarterly Report on Form 10-Q for the period ended March 31, 2020 and incorporated herein by reference.
10.2 Cigna Corporation Stock Plan, as amended through July 2000
Filed by CHC as Exhibit 10.7 to the Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference.
10.3 Cigna Stock Unit Plan, as amended and restated effective February 22, 2017
Filed by CHC as Exhibit 10.5 to the Quarterly Report on Form 10-Q for the period ended March 31, 2017 and incorporated herein by reference.
10.4(a) Express Scripts Holding Company 2016 Long-Term Incentive Plan (the "ESRX LTIP")
Filed by ESRX as Appendix A to ESRX's Definitive Proxy Statement on Schedule 14A for its 2016 Annual Meeting of Stockholders, filed March 21, 2016 and incorporated herein by reference.
10.4(b) Form of Stock Option Grant Notice for Non-Employee Directors used with respect to grants of stock options by Express Scripts Holding Company to non-employee directors under the ESRX LTIP
Filed by ESRX as Exhibit 10.4 to the Current Report on Form 8-K on May 4, 2016 and incorporated herein by reference.
10.4(c) Form of Stock Option Grant Notice used with respect to grants of stock options by Express Scripts Holding Company under the ESRX LTIP
Filed by ESRX as Exhibit 10.7 to Current Report on Form 8-K on May 4, 2016 and incorporated herein by reference.
10.5(a) Express Scripts, Inc. 2011 Long-Term Incentive Plan (as amended and restated effective April 2, 2012) (the "ESI LTIP")
Filed by the registrant as Exhibit 4.10 to the Registration Statement on Form S-8 (No. 333-228930) on December 20, 2018 and incorporated herein by reference.
10.5(b) Form of Stock Option Grant Notice for Non-Employee Directors used with respect to grants of stock options by Express Scripts Holding Company under the ESI LTIP
Filed by ESRX as Exhibit 10.6 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 and incorporated herein by reference.
10.5(c) Form of Stock Option Grant Notice used with respect to grants of stock options by Express Scripts Holding Company under the ESI LTIP
Filed by ESRX as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 and incorporated herein by reference.
10.6 Medco Health Solutions, Inc. 2002 Stock Incentive Plan (as amended and restated effective April 2, 2012)
Filed by the registrant as Exhibit 4.11 to the Registration Statement on Form S-8 (No. 333-228930) on December 20, 2018 and incorporated herein by reference.
144
10.7 Deferred Compensation Plan for Directors of Cigna Corporation, as amended and restated January 1, 1997
Filed by CHC as Exhibit 10.1 to the Annual Report on Form 10-K for the year ended December 31, 2011 and incorporated herein by reference.
10.8 Cigna Deferred Compensation Plan, as amended and restated October 24, 2001
Filed by CHC as Exhibit 10.14 to the Annual Report on Form 10-K for the year ended December 31, 2011 and incorporated herein by reference.
10.9 Cigna Deferred Compensation Plan of 2005 effective as of January 1, 2005
Filed by the registrant as Exhibit 4.6 to the Registration Statement on Form S-8 (No. 333-228930) on December 20, 2018 and incorporated herein by reference.
10.10 Express Scripts, Inc. Amended and Restated Executive Deferred Compensation Plan (effective December 31, 2004 and grandfathered for the purposes of Section 409A of the Code)
Filed by ESI as Exhibit No. 10.1 to the Current Report on Form 8-K on May 25, 2007 and incorporated herein by reference.
10.11(a) Express Scripts, Inc. Executive Deferred Compensation Plan of 2005 (as amended and restated effective December 20, 2018)
Filed by the registrant as Exhibit 4.13 to the Registration Statement on Form S-8 (No. 333-228930) on December 20, 2018 and incorporated herein by reference.
10.11(b) Amendment No. 1 to the Express Scripts, Inc. Executive Deferred Compensation Plan of 2005
Filed by the registrant as Exhibit 10.12(b) to the Annual Report on Form 10-K for the year ended December 31, 2019 and incorporated herein by reference.
10.11(c)
Amendment No. 2 to the Express Scripts, Inc. Executive Deferred Compensation Plan of 2005
Filed by the registrant as Exhibit 10.3 to Quarterly Report on Form 10-Q for the period ended June 30, 2021 and incorporated herein by reference.
10.12(a) Cigna Supplemental Pension Plan as amended and restated effective August 1, 1998
Filed by CHC as Exhibit 10.15(a) to the Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference.
10.12(b) Amendment No. 1 to the Cigna Supplemental Pension Plan, amended and restated effective as of September 1, 1999
Filed by CHC as Exhibit 10.15(b) to the Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference.
10.12(c) Amendment No. 2 dated December 6, 2000 to the Cigna Supplemental Pension
Filed by CHC as Exhibit 10.16(c) to the Annual Report on Form 10-K for the year ended December 31, 2011 and incorporated herein by reference.
10.13(a) Cigna Supplemental Pension Plan of 2005 effective as of January 1, 2005
Filed by CHC as Exhibit 10.15 to the Annual Report on Form 10-K for the year ended December 31, 2007 and incorporated herein by reference.
10.13(b) Amendment No. 1 to the Cigna Supplemental Pension Plan of 2005
Filed by CHC as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the period ended June 30, 2009 and incorporated herein by reference.
10.14(a) Cigna Supplemental 401(k) Plan effective January 1, 2010
Filed by the registrant as Exhibit 4.7 to the Registration Statement on Form S-8 (No. 333-228930) on December 20, 2018 and incorporated herein by reference.
10.14(b) Amendment No. 1 to the Cigna Supplemental 401(k) Plan
Filed by the registrant as Exhibit 10.15(b) to the Annual Report on Form 10-K for the year ended December 31, 2019 and incorporated herein by reference.
10.14(c) Amendment No. 2 to the Cigna Supplemental 401(k) Plan
Filed by the registrant as Exhibit 10.15(c) to the Annual Report on Form 10-K for the year ended December 31, 2019 and incorporated herein by reference.
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10.14(d) Amendment No. 3 to the Cigna Supplemental 401(k) Plan
Filed by the registrant as Exhibit 10.15(d) to the Annual Report on Form 10-K for the year ended December 31, 2019 and incorporated herein by reference.
10.15 Cigna Corporation Non-Employee Director Compensation Program amended and restated effective February 26, 2014
Filed by CHC as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the period ended March 31, 2014 and incorporated herein by reference.
10.16(a)
Cigna Corporation Non-Employee Director Compensation Program, amended and restated effective January 1, 2022
Filed by the registrant as Exhibit 10.17(a) to the Annual Report on Form 10-K for the year ended December 31, 2021 and incorporated herein by reference.
10.16(b)
Cigna Corporation Non-Employee Director Compensation Program, amended and restated effective April 1, 2022
Filed by the registrant as Exhibit 10.17(b) to the Annual Report on Form 10-K for the year ended December 31, 2021 and incorporated herein by reference.
10.17 Cigna Corporation Director Equity Plan, as amended December 4, 2020
Filed by the registrant as Exhibit 10.18 to the Annual Report on Form 10-K for the year ended December 31, 2020 and incorporated herein by reference.
10.18 Cigna Restricted Share Equivalent Plan for Non-Employee Directors as amended and restated effective January 1, 2008
Filed by CHC as Exhibit 10.4 to the Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated herein by reference.
10.19 Deferred Compensation Plan of 2005 for Directors of Cigna Corporation, Amended and Restated effective April 28, 2010
Filed by the registrant as Exhibit 4.8 to the Registration Statement on Form S-8 (No. 333-228930) on December 20, 2018 and incorporated herein by reference.
10.20 Form of Indemnification Agreement with Express Scripts Holding Company's executive officers and former members of the Express Scripts Holding Company's board of directors
Filed by ESRX as Exhibit 10.1 to the Current Report on Form 8-K on March 5, 2014 and incorporated herein by reference.
10.21 Cigna Executive Severance Benefits Plan as amended and restated effective December 21, 2020
Filed by the registrant as Exhibit 10.1 to the Current Report on Form 8-K on October 30, 2020 and incorporated herein by reference.
10.22 Description of Cigna Corporation Financial Services Program
Filed by CHC as Exhibit 10.18 to the Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference.
10.23 Offer Letter for Eric P. Palmer dated January 16, 2024
Filed herewith.
10.24 Offer Letter for Nicole S. Jones dated September 14, 2023
Filed by the registrant as Exhibit 10.2 to the Quarterly Report on Form 10-Q for the period ended September 30, 2023 and incorporated herein by reference.
10.25 Offer Letter for Noelle K. Eder dated September 14, 2023
Filed by the registrant as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the period ended September 30, 2023 and incorporated herein by reference.
10.26 Offer letter for Brian Evanko dated January 16, 2024
Filed herewith.
10.27 Revolving Credit and Letter of Credit Agreement, dated as of April 28, 2022, with the banks named therein, JPMorgan Chase Bank, N.A., as administrative agent, BofA Securities, Inc., Citibank, N.A., Morgan Stanley Senior Funding, Inc., MUFG Bank, LTD and Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners
Filed by the registrant as Exhibit 10.1 to the Current Report on Form 8-K on April 29, 2022 and incorporated herein by reference.
146
10.28 Master Transaction Agreement, dated February 4, 2013 among Connecticut General Life Insurance Company, Berkshire Hathaway Life Insurance Company of Nebraska and, solely for purposes of Sections 3.10, 6.1, 6.3, 6.4, 6.6, 6.9 and Articles II, V, VII and VIII, thereof, National Indemnity Company (including the Forms of Retrocession Agreement, the Collateral Trust Agreement, the Security and Control Agreement, the Surety Policy and the ALC Model Purchase Option Agreement as exhibits)
Filed by CHC as Exhibit 10.29 to the Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated herein by reference.
21 Subsidiaries of the Registrant
Filed herewith.
23 Consent of Independent Registered Public Accounting Firm
Filed herewith.
31.1 Certification of Chief Executive Officer of The Cigna Group pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
Filed herewith.
31.2 Certification of Chief Financial Officer of The Cigna Group pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
Filed herewith.
32.1 Certification of Chief Executive Officer of The Cigna Group pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350
Furnished herewith.
32.2 Certification of Chief Financial Officer of The Cigna Group pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350
Furnished herewith.
97.1 Incentive Compensation Clawback Policy
Filed herewith.
101 The following materials from The Cigna Group's Annual Report on Form 10-K for the year ended December 31, 2023, formatted in inline XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; (v) the Consolidated Statements of Changes in Total Equity; (vi) the Notes to Consolidated Financial Statements; and (vii) Financial Statement Schedules I and II.
Filed herewith.
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) Filed herewith.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than the terms of the agreements or other documents themselves and you should not rely on them for that purpose. In particular, any representations and warranties made by the Company in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs at the date they were made or at any other time.
Item 16. FORM 10-K SUMMARY
None.
147
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 29, 2024
THE CIGNA GROUP
By: /s/ Brian C. Evanko
Brian C. Evanko
Executive Vice President, Chief Financial Officer, The Cigna Group, and President and Chief Executive Officer, Cigna Healthcare
(Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of February 29, 2024.
Signature Title
/s/ David M. Cordani
David M. Cordani Chairman and Chief Executive Officer
(Principal Executive Officer)
/s/ Brian C. Evanko
Brian C. Evanko Executive Vice President, Chief Financial Officer, The Cigna Group, and President and Chief Executive Officer, Cigna Healthcare
(Principal Financial Officer)
/s/ Mary T. Agoglia Hoeltzel
Mary T. Agoglia Hoeltzel Senior Vice President, Tax and Chief Accounting Officer
(Principal Accounting Officer)
/s/ William J. DeLaney
William J. DeLaney Director
/s/ Eric J. Foss
Eric J. Foss Director
/s/ Elder Granger, M.D.
Elder Granger, M.D. Director
/s/ Neesha Hathi
Neesha Hathi Director
148
/s/ George Kurian
George Kurian Director
/s/ Kathleen M. Mazzarella
Kathleen M. Mazzarella Director
/s/ Mark B. McClellan, M.D.
Mark B. McClellan, M.D. Director
/s/ Philip O. Ozuah, M.D., Ph.D.
Philip O. Ozuah Director
/s/ Kimberly A. Ross
Kimberly A. Ross Director
/s/ Eric C. Wiseman
Eric C. Wiseman Lead Independent Director
/s/ Donna F. Zarcone
Donna F. Zarcone Director
149
THE CIGNA GROUP AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENT SCHEDULES
PAGE
Schedules
I Condensed Financial Information of The Cigna Group (Registrant) FS-2
Statements of Income for the Years Ended December 31, 2023, 2022 and 2021
FS-2
Balance Sheets as of December 31, 2023 and 2022
FS-3
Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021
FS-4
Notes to Condensed Financial Statements FS-5
II Valuation and Qualifying Accounts and Reserves for the Years Ended December 31, 2023, 2022 and 2021
FS-7
Schedules other than those listed above are omitted because they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto.
FS-1
THE CIGNA GROUP AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF THE CIGNA GROUP
(REGISTRANT)
STATEMENTS OF INCOME
For the Years Ended December 31,
(In millions) 2023 2022 (1)
2021 (1)
Revenues
Net investment income $ 22 $ 5 $ —
Intercompany interest income 516 478 471
Total revenues 538 483 471
Operating expenses
Selling, general and administrative expenses 2 2 8
Total operating expenses 2 2 8
Income from operations 536 481 463
Interest and other expense
( 1,332 ) ( 1,215 ) ( 1,197 )
Intercompany interest expense
( 118 ) ( 147 ) ( 13 )
Debt extinguishment costs — — ( 131 )
Loss before income taxes ( 914 ) ( 881 ) ( 878 )
Income tax benefits
( 192 ) ( 183 ) ( 180 )
Loss of Parent Company ( 722 ) ( 698 ) ( 698 )
Equity in income of subsidiaries 5,886 7,402 6,068
Shareholders' net income 5,164 6,704 5,370
Shareholders' other comprehensive income (loss), net of tax
Net unrealized appreciation (depreciation) on securities and derivatives
503 ( 1,598 ) ( 302 )
Net long-duration insurance and contractholder liabilities measurement adjustments ( 715 ) 509 67
Net translation gains (losses) of foreign currencies
5 79 ( 218 )
Postretirement benefits liability adjustment 1 420 410
Shareholders' other comprehensive loss, net of tax
( 206 ) ( 590 ) ( 43 )
Shareholders' comprehensive income $ 4,958 $ 6,114 $ 5,327
(1) Amounts have been restated to reflect the adoption of Targeted Improvements to the Accounting for Long-Duration Contracts in 2023. See Note 1 to Schedule 1 for further information.
See Notes to Financial Statements on the following pages.
FS-2
THE CIGNA GROUP AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF THE CIGNA GROUP
(REGISTRANT)
BALANCE SHEETS
As of December 31,
(In millions) 2023 2022 (1)
Assets
Cash and cash equivalents $ 303 $ 115
Other current assets 6 6
Total current assets 309 121
Investments in subsidiaries 69,703 70,679
Intercompany receivable 11,475 10,366
Other non-current assets 77 99
TOTAL ASSETS $ 81,564 $ 81,265
Liabilities
Short-term debt $ 2,448 $ 2,749
Other current liabilities 1,854 1,295
Total current liabilities 4,302 4,044
Long-term debt 27,151 26,815
Intercompany payable 3,874 5,705
Other non-current liabilities 14 26
TOTAL LIABILITIES 35,341 36,590
Shareholders' Equity
Common stock (shares issued, 400 and 398 ; authorized, 600 )
4 4
Additional paid-in capital 30,669 30,233
Accumulated other comprehensive loss ( 1,864 ) ( 1,658 )
Retained earnings 41,652 37,940
Less treasury stock, at cost ( 24,238 ) ( 21,844 )
TOTAL SHAREHOLDERS' EQUITY 46,223 44,675
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 81,564 $ 81,265
(1) Amounts have been restated to reflect the adoption of Targeted Improvements to the Accounting for Long-Duration Contracts in 2023. See Note 1 to Schedule 1 for further information.
See Notes to Financial Statements on the following pages.
FS-3
THE CIGNA GROUP AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF THE CIGNA GROUP
(REGISTRANT)
STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
(In millions) 2023 2022 (1)
2021 (1)
Cash Flows from Operating Activities
Shareholders' net income $ 5,164 $ 6,704 $ 5,370
Adjustments to reconcile shareholders' net income
to net cash provided by operating activities
Equity in income of subsidiaries ( 5,886 ) ( 7,402 ) ( 6,068 )
Debt extinguishment costs — — 131
Dividends received from subsidiaries 1,381 2,056 2,726
Other liabilities 540 5 184
Other, net 640 298 439
NET CASH PROVIDED BY OPERATING ACTIVITIES
1,839 1,661 2,782
Cash Flows from Investing Activities
Net change in amounts due from affiliates 622 ( 901 ) ( 1,007 )
Net proceeds from short-term investments sold (purchased)
— 99 ( 50 )
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
622 ( 802 ) ( 1,057 )
Cash Flows from Financing Activities
Net change in amounts due to affiliates 1,473 10,392 2,062
Net change in commercial paper 1,237 ( 2,027 ) 997
Payments for debt extinguishment — — ( 126 )
Repayment of long-term debt ( 2,822 ) ( 430 ) ( 4,199 )
Net proceeds on issuance of long-term debt 1,491 — 4,260
Issuance of common stock 187 389 326
Common dividends paid ( 1,450 ) ( 1,384 ) ( 1,341 )
Repurchase of common stock ( 2,284 ) ( 7,607 ) ( 7,742 )
Tax withholding on stock compensation and other ( 110 ) ( 73 ) ( 86 )
NET CASH USED IN FINANCING ACTIVITIES
( 2,278 ) ( 740 ) ( 5,849 )
Net increase (decrease) in cash, cash equivalents and restricted cash
183 119 ( 4,124 )
Cash, cash equivalents and restricted cash, beginning of year 152 33 4,157
Cash, cash equivalents and restricted cash, end of year (2)
$ 335 $ 152 $ 33
Noncash Investing and Financing Activities:
Net amounts due to/(from) affiliates settled through capital transactions ( 5,221 ) ( 5,037 ) ( 8,429 )
(1) Amounts have been restated to reflect the adoption of Targeted Improvements to the Accounting for Long-Duration Contracts in 2023. See Note 1 to Schedule 1 for further information.
(2) Includes restricted cash reported in Other non-current assets as of December 31, 2023 and December 31, 2022.
See Notes to Financial Statements on the following pages.
FS-4
THE CIGNA GROUP AND SUBSIDIARIES
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF THE CIGNA GROUP
(REGISTRANT)
NOTES TO CONDENSED FINANCIAL STATEMENTS
The accompanying condensed financial statements should be read in conjunction with the Consolidated Financial Statements and the accompanying notes thereto contained in this Annual Report on Form 10-K ("Form 10-K").
Note 1 - For purposes of these condensed financial statements, The Cigna Group's (the "Company") wholly-owned and majority-owned subsidiaries are recorded using the equity method of accounting. On January 1, 2023, The Cigna Group and its subsidiaries adopted Targeted Improvements to the Accounting for Long-Duration Contracts, Accounting Standards Update ("ASU") 2018-12 and related amendments. See Note 2 - Summary of significant accounting policies included in Part II, Item 8 of this Form 10-K for a description of the key provisions and impacts.
The Cigna Group, through its predecessor companies, was incorporated in Delaware in 1981. Cigna Corporation was renamed The Cigna Group in February 2023.
Note 2 - See Note 8 – Debt included in Part II, Item 8 of this Form 10-K for a description of the short-term and long-term debt obligations of The Cigna Group and its subsidiaries.
Short-term and Credit Facilities Debt
Revolving Credit Agreements. Our revolving credit agreements provide us with the ability to borrow amounts for general corporate purposes, including for the purpose of providing liquidity support if necessary under our commercial paper program discussed below. As of December 31, 2023, there were no outstanding balances under these revolving credit agreements.
In April 2023, The Cigna Group entered into the following revolving credit agreements (the "Credit Agreements"):
• a $ 4.0 billion five-year revolving credit and letter of credit agreement that will mature in April 2028 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 $ 4.0 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 364-day revolving credit agreement that will mature in April 2024. 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 both 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 two facilities is diversified among 21 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 2027, a $ 1.0 billion three-year revolving credit agreement maturing on April 2025 and a $ 1.0 billion 364-day revolving credit agreement maturing in April 2023.
Commercial Paper. Under our commercial paper program, we may issue short-term, unsecured commercial paper notes privately placed on a discounted basis through certain broker-dealers at any time not to exceed an aggregate amount of $ 5.0 billion. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The net proceeds of issuances have been and are expected to be used for general corporate purposes. The commercial paper program had approximately
$ 1.2 billion outstanding at December 31, 2023 and an average interest rate of 5.63 %.
FS-5
Long-Term Debt
Debt Issuance and Debt Tender Offers. On February 5, 2024, we issued $ 4.5 billion of new senior notes. The proceeds from this debt were used to pay the consideration for the cash tender offers as described below. We intend to use the remaining net proceeds to fund the repayment of our senior notes maturing in March 2024 and for general corporate purposes, which may include repayment of indebtedness and repurchases of shares of our common stock.
Concurrent with the debt issuance, The Company and its subsidiaries commenced tender offers to purchase for cash up to $ 2.25 billion in aggregate principal amount of outstanding notes, which included any and all of the $ 1.0 billion senior notes due June 2024. Following the early tender results, we increased the tender offers to up to $ 2.55 billion. On February 22, 2024, we purchased $ 1.8 billion principal amount of notes at early settlement of the tender offers. The tender offers will expire on March 5, 2024.
On March 7, 2023, the Company issued $ 1.5 billion of new senior notes. The proceeds of this issuance were used for general
corporate purposes, and included repayment of outstanding debt securities. Interest on this debt is paid semi-annually.
Principal Maturity Date Interest Rate Net Proceeds
$ 700 million (1)
March 15, 2026 5.685 % $ 698 million
$ 800 million (2)
March 15, 2033 5.400 % $ 796 million
(1) Redeemable at any time discounted at the U.S. Treasury rate plus 20 basis points. Redeemable at par on or after March 15, 2024.
(2) Redeemable at any time discounted at the U.S. Treasury rate plus 25 basis points. Redeemable at par on or after December 15, 2032.
Debt Maturities. Maturities of the Company's long-term debt are as follows and exclude the impacts of the 2024 debt issuance and debt tender offers discussed above.
(In millions)
2024 $ 1,214
2025 $ 2,957
2026 $ 2,734
2027 $ 2,056
2028 $ 3,800
Maturities after 2028 $ 15,091
Debt Covenants. The Company was in compliance with its debt covenants as of December 31, 2023.
Note 3 - The Company's intercompany receivables consist primarily of net intercompany loan amounts due from Evernorth Health, Inc. of $ 8.5 billion as of December 31, 2023 and $ 8.3 billion as of December 31, 2022. Interest income on the loan receivable was accrued at an average rate of 5.21 % in 2023.
The Company's intercompany payables primarily reflect intercompany balances related to cash pooling arrangements as well as net intercompany loan borrowing from three indirect wholly-owned subsidiaries as of December 31, 2023. Interest expense on the loan payable was accrued at an average rate of 3.65 % in 2023.
Note 4 - The Company guaranteed approximately $ 2.9 billion primarily related to intercompany indebtedness and financial obligations of certain direct and indirect wholly-owned subsidiaries. There were immaterial liabilities required for these guarantees as of December 31, 2023. Effective January 2024, the amount of such guarantees increased to $ 6.4 billion.
Note 5 - In February 2024, as part of our existing share repurchase program, we entered into separate ASR agreements ("2024 ASR agreements") with Deutsche Bank AG and Bank of America, N.A. (collectively, the "2024 Counterparties") to repurchase $ 3.2 billion of common stock in aggregate. We remitted $ 3.2 billion to the 2024 Counterparties and received an initial delivery of approximately 7.6 million shares of our common stock on February 15, 2024 representing $ 2.6 billion of the total remitted. We expect final settlement under the 2024 ASR agreements to occur in the second quarter of 2024.
FS-6
THE CIGNA GROUP AND SUBSIDIARIES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(In millions) Balance at beginning of year Charged (Credited) to costs and expenses Charged (Credited) to other accounts Other deductions Balance at end of year
Description
2023
Investment asset valuation reserves
Available-for-sale debt securities $ 44 $ 11 $ — $ ( 22 ) $ 33
Commercial mortgage loans $ 21 $ 10 $ — $ — $ 31
Accounts receivable, net $ 160 $ 90 $ 1 $ ( 88 ) $ 163
Deferred tax asset valuation allowance $ 208 $ 1,286 $ 4 $ — $ 1,498
Reinsurance recoverables $ 35 $ — $ — $ — $ 35
2022
Investment asset valuation reserves
Available-for-sale debt securities $ 23 $ 43 $ — $ ( 22 ) $ 44
Commercial mortgage loans $ 6 $ 15 $ — $ — $ 21
Accounts receivable, net $ 126 $ 99 $ — $ ( 65 ) $ 160
Deferred tax asset valuation allowance $ 246 $ ( 13 ) $ ( 25 ) $ — $ 208
Reinsurance recoverables (1)
$ 28 $ 7 $ — $ — $ 35
2021
Investment asset valuation reserves
Available-for-sale debt securities $ 26 $ 29 $ — $ ( 32 ) $ 23
Commercial mortgage loans $ 6 $ — $ — $ — $ 6
Accounts receivable, net $ 156 $ 54 $ — $ ( 84 ) $ 126
Deferred tax asset valuation allowance $ 207 $ 23 $ 16 $ — $ 246
Reinsurance recoverables (1)
$ 30 $ ( 2 ) $ — $ — $ 28
(1) Amounts have been restated to reflect the adoption of Targeted Improvements to the Accounting for Long-Duration Contracts ("LDTI") in 2023. See Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for further information.
FS-7