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Item 2. Management’s Discussion and Analysis

2024-10-31 compared with 2024-08-01 · 206 added, 150 removed, 472 unchanged (43% of the section changed)

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Investment Assets

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide information to assist you in better understanding and evaluating our financial condition as of June 30, 2024, compared with December 31, 2023 and our results of operations for the three and six months ended June 30, 2024, compared with the same periods last year and is intended to help you understand the ongoing trends in our business.

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide information to assist you in better understanding and evaluating our financial condition as of September 30, 2024, compared with December 31, 2023 and our results of operations for the three and nine months ended September 30, 2024, compared with the same periods last year and is intended to help you understand the ongoing trends in our business.

We encourage you to read this MD&A in conjunction with our Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2023 ("2023 Form 10-K").

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In this MD&A, our consolidated measures "adjusted income from operations," earnings per share on that same basis and "adjusted revenues" are not determined in accordance with GAAP and should not be viewed as substitutes for the most directly comparable GAAP measures of "shareholders' net income," "earnings per share" and "total revenues." We also use pre-tax adjusted income (loss) from operations and adjusted revenues to measure the results of our 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.

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 reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability.

We define adjusted income (loss) from operations as shareholders' net income (or income (loss) before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net realized investment results, amortization of acquired intangible assets and special items.

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economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas and the impact of developing inflationary and interest rate pressures;

financing or capital deployment plans and amounts available for future deployment;

capital deployment plans and amounts available for future deployment;

our prospects for growth in the coming years;

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our ability to invest in and properly maintain our information technology and other business systems;

our ability to prevent or contain effects of a potential cyberattack or other privacy or data security incident;

our ability to prevent or contain effects of a potential cyberattack or other privacy or data security incidents;

risks related to our use of artificial intelligence and machine learning;

political, legal, operational, regulatory, economic and other risks that could affect our multinational operations, including currency exchange rates;

risks related to strategic transactions and realization of the expected benefits of such transactions, as well as integration or separation difficulties or underperformance relative to expectations;

risks related to an impairment of goodwill, intangible assets and/or investments (including as a result of the failure to realize the expected benefits of strategic transactions, as well as integration or separation difficulties or underperformance of such transactions relative to expectations);

dependence on success of relationships with third parties;

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

For further information on our business and strategy, see Part 1, Item 1, "Business" of our 2023 Form 10-K.

For further information on our business and strategy, see Part 1, Item 1.

"Business" of our 2023 Form 10-K.

Financial Highlights

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Financial highlights by segment

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

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

(Dollars in millions, except per share amounts) 2024 2023 Change 2024 2023 Change

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Net realized investment results from certain equity method investments 177 (30) N/M 238 (22) N/M

Special item related to impairment of dividend receivable (182) — N/M (182) — N/M

Total revenues $ 63,694 $ 49,048 30 % $ 181,472 $ 144,151 26 %

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Cigna Healthcare 1,174 1,222 (4) 3,718 3,509 6

Other Operations (16) 29 N/M 2 44 (95)

Other Operations (6) 26 N/M (4) 70 N/M

Corporate, net of eliminations (425) (435) (2) (1,269) (1,272) —

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99 44 125 271 142 91

Net realized investment income (losses) (1)

Net realized investment (losses) (1)

(744) (44) N/M (2,567) (66) N/M

Amortization of acquired intangible assets (436) (454) (4) (1,279) (1,368) (7)

Special items (63) (6) N/M (119) (7) N/M

Special items (346) (235) 47 (465) (242) 92

Income before income taxes

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Consolidated Results of Operations (GAAP basis)

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

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

(Dollars in millions) 2024 2023 Change 2024 2023 Change

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(87) (21) N/M (106) (21) N/M

Net realized investment (losses) gains

Net realized investment losses

(921) (14) N/M (2,805) (44) N/M

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Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations

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

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

2024 2023 2024 2023

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Adjustments to reconcile to adjusted income from operations

Net realized investment (gains) losses (1)

Net realized investment losses (1)

$ 744 740 $ 44 41 $ 2,567 2,547 $ 66 56

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Special items

Impairment of dividend receivable

182 138 — — 182 138 — —

Integration and transaction-related costs

Loss (gain) on sale of businesses — — — — 19 (43) — —

77 59 13 9 177 135 20 15

Loss on sale of businesses

87 62 21 19 106 19 21 19

Deferred tax expenses, net (2)

— 41 — — — 75 — —

Charges associated with litigation matters

— — 201 171 — — 201 171

Total special items $ 346 300 $ 235 199 $ 465 367 $ 242 205

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Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations

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

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

2024 2023 2024 2023

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Adjustments to reconcile to adjusted income from operations

Net realized investment (gains) losses (1)

Net realized investment losses (1)

$ 2.64 2.63 $ 0.15 0.14 $ 9.00 8.93 $ 0.22 0.19

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Special items

Impairment of dividend receivable

0.65 0.49 — — 0.64 0.48 — —

Integration and transaction-related costs

Loss (gain) on sale of businesses — — — — 0.07 (0.15) — —

0.27 0.21 0.04 0.03 0.62 0.48 0.07 0.05

Loss on sale of businesses

0.31 0.22 0.07 0.06 0.37 0.07 0.07 0.06

Deferred tax expenses, net (2)

— 0.15 — — — 0.26 — —

Charges associated with litigation matters

— — 0.68 0.58 — — 0.67 0.58

Total special items $ 1.23 1.07 $ 0.79 0.67 $ 1.63 1.29 $ 0.81 0.69

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See Note 23 to the Consolidated Financial Statements in our 2023 Form 10-K for additional details.

Three and Six Months Ended June 30, 2024 versus Three and Six Months Ended June 30, 2023

The commentary presented below, and the segment discussions that follow, compare results for the three and six months ended June 30, 2024 with results for the three and six months ended June 30, 2023.

Unless specified otherwise, commentary applies to both the three and six month periods.

Shareholders' net income increased 6% for the three months ended June 30, 2024, primarily due to higher adjusted income from operations.

For the six months ended June 30, 2024, shareholders' net income decreased 53%, primarily driven by the impairment of equity securities reported in the quarter ended March 31, 2024 (see Note 11 to the Consolidated Financial Statements for further discussion), partially offset by higher adjusted income from operations.

Adjusted income from operations increased 5% and 10% primarily driven by higher earnings in our Evernorth Health Services and Cigna Healthcare segments.

Medical customers decreased 2% primarily reflecting a decline in Individual and Family Plans customers.

See the "Segment Reporting - Cigna Healthcare Segment" section of this MD&A for further discussion.

Pharmacy revenues increased 33% and 32% reflecting higher claims volume, primarily due to new clients, including Centene Corporation ("Centene") and organic growth.

See the "Segment Reporting - Evernorth Health Services Segment" section of this MD&A for further discussion.

Premiums increased 4% and 5%, reflecting higher premium rates in Cigna Healthcare due to expected increases in underlying medical costs, partially offset by business mix.

See the "Segment Reporting - Cigna Healthcare Segment" section of this MD&A for further discussion.

Fees and other revenues increased 10% and 9%, primarily reflecting continued affordability improvements and business growth within Evernorth Health Services.

Net investment income increased 15% and 10%, primarily due to growth in average assets.

See the "Investment Assets" section of this MD&A for further discussion.

Pharmacy and other service costs increased 33% and 32%, reflecting higher claims volume, primarily due to new clients, including Centene, and organic growth.

Medical costs and other benefit expenses increased 5% for both the three and six months ended June 30, 2024 primarily reflecting medical cost trend in Cigna Healthcare, partially offset by business mix.

Selling, general and administrative expenses increased 7% and 6%, primarily driven by strategic investments to support business growth and continued advancement of our digital capabilities and solutions.

Realized investment results decreased for the three months ended June 30, 2024, primarily due to expected credit loss charges on debt securities.

For the six months ended June 30, 2024, realized investment results decreased primarily reflecting the impairment of equity securities reported in the first quarter of 2024.

See Note 11 to the Consolidated Financial Statements for further discussion.

The effective tax rate decreased for the three months ended June 30, 2024, primarily as a result of decreases in state taxes following a favorable state audit resolution.

For the six months ended June 30, 2024, the effective tax rate increased substantially driven by a valuation allowance relative to the impairment of equity securities, partially offset by decreases in state taxes and a decrease relative to the businesses held for sale.

Three and Nine Months Ended September 30, 2024 versus Three and Nine Months Ended September 30, 2023

The commentary presented below, and the segment discussions that follow, compare results for the three and nine months ended September 30, 2024 with results for the three and nine months ended September 30, 2023.

Unless specified otherwise, commentary applies to both the three and nine month periods.

In addition to the below, see the "Segment Reporting" section of this MD&A for further commentary.

Shareholders' net income decreased 48% and 51%, as higher earnings in Evernorth Health Services in both periods, as well as higher earnings in Cigna Healthcare for the nine months ended were more than offset by the impairment of VillageMD equity securities.

See Note 11 to the Consolidated Financial Statements for further discussion of the impairment of VillageMD equity securities.

Adjusted income from operations increased 5% and 8%, reflecting higher earnings in Evernorth Health Services in both periods, as well as higher earnings in Cigna Healthcare for the nine months ended.

Medical customers decreased 3%, primarily reflecting a decrease in Individual and Family Plans customers.

Pharmacy revenues increased 40% and 35%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.

Premiums increased 4% in both periods, primarily reflecting higher premiums in our U.S.

Healthcare operating segment to cover expected increases in underlying medical costs.

Fees and other revenues increased 22% and 13%, primarily reflecting growth in affordability services within our Pharmacy Benefit Services operating segment.

Net investment income decreased 74% and 21%, primarily due to establishing a $182 million impairment of dividend receivable in the third quarter of 2024 related to VillageMD accrued dividends.

Pharmacy and other service costs increased 41% and 35%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.

Medical costs and other benefit expenses increased 7% and 5%, primarily reflecting higher medical costs in our U.S.

Healthcare operating segment.

Selling, general and administrative expenses decreased 5% for the three months ended September 30, 2024, primarily driven by the absence of litigation settlements that occurred during the three months ended September 30, 2023 and increased 2% for the nine

months ended September 30, 2024, primarily driven by strategic investments to support both business growth and continued advancement of our digital capabilities and solutions.

Realized investment results for the three months and nine months ended September 30, 2024 primarily reflect the impairment of VillageMD equity securities.

See Note 11 to the Consolidated Financial Statements for further discussion of the impairment of VillageMD equity securities.

The effective tax rate increased for the three and nine months ended September 30, 2024, primarily driven by a valuation allowance related to the impairment of VillageMD equity securities.

Sale of Medicare Advantage and Related Businesses

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Healthcare operating segment to Health Care Service Corporation ("HCSC"), subject to applicable regulatory approvals and other customary closing conditions.

The transaction is expected to close in the first quarter of 2025 and provide approximately $3.7 billion in transaction value, which consists primarily of cash.

The transaction is expected to close in the first quarter of 2025 and provide approximately $3.7 billion in transaction value, which consists primarily of the purchase price cash subject to adjustments to align with the final balance sheet of the divested businesses.

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

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CMS recognizes plans with Star Ratings of four stars or greater with quality bonus payments and the ability to offer enhanced benefits.

We expect 67% of our MA customers to be in four star or greater plans for bonus payments to be received in 2024.

On July 2, 2024, CMS published an update to the original Star Ratings (announced on October 13, 2023) for bonus payments to be received in 2025.

Based upon the updated Star Ratings, we estimate 69% of our MA customers to be in four star or greater plans for bonus payments to be received in 2025.

See Part I, Item I, "Business - Regulation" section of our 2023 Form 10-K for further discussion of Star Ratings.

On October 10, 2024, CMS announced Medicare Star Ratings for bonus payments to be received in 2026.

We estimate 69% of our MA customers to be in four star or greater plans for bonus payments to be received in 2025 and 2026.

See Part I, Item I.

"Business - Regulation" section of our 2023 Form 10-K for further discussion of Star Ratings.

Medicare Advantage Rates

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We manage the portfolio to both optimize returns in the current economic environment and meet our liquidity needs.

Cash flows for the six months ended June 30 were as follows:

Six Months Ended June 30,

Cash flows for the nine months ended September 30 were as follows:

Nine Months Ended September 30,

(In millions) 2024 2023

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Financing activities $ (4,399) $ (3,044)

The following discussion explains variances in the various categories of cash flows for the six months ended June 30, 2024 compared with the same period in 2023.

The following discussion explains variances in the various categories of cash flows for the nine months ended September 30, 2024 compared with the same period in 2023.

Operating activities

Cash flows from operating activities consist principally of cash receipts and disbursements for pharmacy revenues and costs, premiums, fees, investment income, taxes, benefit costs and other expenses.

Operating cash flows decreased for the six months ended June 30, 2024 due to higher accounts receivable as a result of timing and organic business growth, the absence of an early CMS payment received in June 2023 as well as higher insurance claim payments.

This decrease is partially offset by the favorable net cash flow impacts of new clients.

Operating cash flows decreased for the nine months ended September 30, 2024 due to higher accounts receivable as a result of timing and organic business growth, higher insurance claims and related payments, as well as the absence of an early CMS payment received in September 2023.

This decrease is partially offset by the favorable net cash flow impacts of new clients in Evernorth Health Services.

Investing activities

The decrease in cash used in investing activities during the six months ended June 30, 2024 was due to lower purchases of equity securities.

The decrease in cash used in investing activities during the nine months ended September 30, 2024 was due to lower purchases of equity securities.

Financing activities

The Company had higher share repurchases including from the recently completed ASR Agreements (described below) as well as an increase in cash used for debt financing activities in 2024.

The Company had higher share repurchases, including the completed ASR Agreements (described below), partially offset by net cash provided by debt financing activities in 2024.

Capital Resources

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Dividends received from U.S.

regulated subsidiaries were $1.1 billion for the six months ended June 30, 2024 and $0.5 billion for the six months ended June 30,

regulated subsidiaries were $1.7 billion for the nine months ended September 30, 2024 and $0.8 billion for the nine months ended

September 30, 2023.

Non-regulated subsidiaries also generate significant cash flows from operating activities, which is typically available immediately to the parent company for general corporate purposes.

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The Cigna Group maintains a commercial paper program and may issue short-term, unsecured commercial paper notes privately placed on a discount basis through certain broker-dealers at any time not to exceed an aggregate amount of $6.5 billion.

In July 2024, our commercial paper program size was increased to $6.5 billion.

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

The commercial paper program had approximately $790 million outstanding at June 30, 2024.

The commercial paper program had approximately $1.6 billion outstanding at September 30, 2024.

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 above.

As of June 30, 2024, The Cigna Group's revolving credit agreements include:

As of September 30, 2024, The Cigna Group's revolving credit agreements include:

a $5.0 billion five-year revolving credit and letter of credit agreement that expires in April 2029;

and a $1.5 billion 364-day revolving credit agreement that expires in April 2025.

As of June 30, 2024, we had $6.5 billion of undrawn committed capacity under our revolving credit agreements (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $4.2 billion of remaining capacity under our commercial paper program and $7.0 billion in cash and short-term investments, approximately $1.1 billion of which was held by the parent company or certain non-regulated subsidiaries.

As of September 30, 2024, we had $6.5 billion of undrawn committed capacity under our revolving credit agreements (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $4.9 billion of remaining capacity under our commercial paper program and $6.0 billion in cash and short-term investments, approximately $0.5 billion of which was held by the parent company or certain non-regulated subsidiaries.

See Note 7 to the Consolidated Financial Statements for further information on our credit agreements and commercial paper program.

Our debt-to-capitalization ratio was 43.6% at June 30, 2024 and 44.3% at March 31, 2024.

Our debt-to-capitalization ratio was 43.8% at September 30, 2024 and 43.6% at June 30, 2024.

We actively monitor our debt obligations and engage in issuance or redemption activities as needed in accordance with our capital management strategy.

Subsidiary Borrowings.

In addition to the sources of liquidity discussed above, the parent company can borrow an additional $1.0 billion from its subsidiaries without further approvals as of June 30, 2024.

In addition to the sources of liquidity discussed above, the parent company can borrow an additional $1.4 billion from its subsidiaries without further approvals as of September 30, 2024.

Use of Capital Resources

Long-term Debt.

In June 2024, $790 million of senior notes became due and were repaid.

Debt Issuance and Debt Tender Offers.

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The proceeds from this debt were used to complete the repurchase of a total of $1.8 billion in aggregate principal amount of existing senior notes tendered to the Company pursuant to cash tender offers.

We used the remaining net proceeds to fund the repayment of our senior notes which matured in March 2024 and for general corporate purposes, which may include repayment of indebtedness and repurchases of shares of our common stock.

We used the remaining net proceeds to fund the repayment of our senior notes which matured in March 2024 and for general corporate purposes, which includes repayment of indebtedness and repurchases of shares of our common stock.

Capital Expenditures .

Capital expenditures for property, equipment and computer software were $0.7 billion in the six months ended June 30, 2024 compared to $0.8 billion in the six months ended June 30, 2023.

Capital expenditures for property, equipment and computer software were $1.1 billion in the nine months ended September 30, 2024 compared to $1.2 billion in the nine months ended September 30, 2023.

Anticipated capital expenditures will be funded primarily from operating cash flows.

The Cigna Group declared and paid quarterly cash dividends of $1.40 per share of its common stock during the first six months of 2024, compared to quarterly cash dividends of $1.23 per share during the first six months of 2023.

The Cigna Group declared and paid quarterly cash dividends of $1.40 per share of its common stock during the first nine months of 2024, compared to quarterly cash dividends of $1.23 per share during the first nine months of 2023.

See Note 8 to the Consolidated Financial Statements for further information on our dividend payments.

On July 24, 2024, the Board of Directors declared the third quarter cash dividend of $1.40 per share of The Cigna Group common stock to be paid on September 19, 2024 to shareholders of record on September 4, 2024.

The Cigna Group 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 Company and its shareholders.

On October 23, 2024, the Board of Directors declared the fourth quarter cash dividend of $1.40 per share of The Cigna Group common stock to be paid on December 19, 2024 to shareholders of record on December 4, 2024.

The Cigna Group 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 Company 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.

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In February 2024, as part of our share repurchase program, we entered into separate Accelerated Share Repurchase ("ASR") agreements to repurchase $3.2 billion of common stock in aggregate.

We remitted $3.2 billion and received an initial delivery of approximately 7.6 million shares of our common stock, representing $2.6 billion of the total remitted.

Upon final settlement of the ASR agreements in May 2024, we received approximately 1.7 million additional shares of our common stock for no additional consideration.

The total number of shares of our common stock repurchased under the agreements was approximately 9.3 million.

See Note 8 to the Consolidated Financial Statements for further information on our ASR agreements.

As anticipated, including the ASR agreements, we repurchased 14.7 million shares for approximately $5.0 billion during the six months ended June 30, 2024, compared to 3.8 million shares for approximately $1.1 billion during the six months ended June 30, 2023.

Including the ASR agreements, we repurchased 14.7 million shares for approximately $5.0 billion during the nine months ended September 30, 2024, compared to 6.1 million shares for approximately $1.8 billion during the nine months ended September 30, 2023.

From October 1, 2024 through October 30, 2024, we repurchased 2.2 million shares for approximately $715 million.

Share repurchase authority was $5.6 billion as of October 30, 2024.

Other Sources of Funds and Uses of Capital Resources

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Healthcare operating segment to HCSC, subject to applicable regulatory approvals and other customary closing conditions.

The transaction is expected to close in the first quarter of 2025 and provide approximately $3.7 billion in transaction value, which consists primarily of cash.

Following the completion of the sale, we anticipate use of the proceeds in alignment with our capital deployment priorities, with the majority allocated to share repurchases.

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See Note 16 to the Consolidated Financial Statements for discussion of various guarantees.

Due to the issuance and repurchase of certain senior notes in the three months ended March 31, 2024, we have updated long-term debt obligations as of June 30, 2024 compared to those previously provided in our 2023 Form 10-K.

Due to the issuance and repurchase of certain senior notes in the three months ended March 31, 2024, we have updated long-term debt obligations as of September 30, 2024 compared to those previously provided in our 2023 Form 10-K.

See Note 7 to the Consolidated Financial Statements for discussion of these debt activities.

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Our most critical accounting estimates, as well as the effect of hypothetical changes in material assumptions used to develop each estimate, are described in our 2023 Form 10-K.

As of June 30, 2024, there were no significant changes to the critical accounting estimates from what was reported in our 2023 Form 10-K.

As of September 30, 2024, there were no significant changes to the critical accounting estimates from what was reported in our 2023 Form 10-K.

Goodwill and Other intangible assets

Our annual evaluations of goodwill and other intangible assets for impairments were completed during the third quarter of 2024.

These evaluations were performed at the reporting unit level, based on discounted cash flow analyses or market data.

The estimated fair value of each of our reporting units exceeded their carrying values by substantial margins.

Management believes the current assumptions used to estimate amounts reflected in our Consolidated Financial Statements are appropriate.

However, if actual experience significantly differs from the assumptions used in estimating amounts reflected in our Consolidated Financial Statements, the resulting changes could have a material adverse effect on our consolidated results of operations and in certain situations, could have a material adverse effect on liquidity and our financial condition.

SEGMENT REPORTING

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In segment discussions, we present "adjusted revenues" and "pre-tax adjusted income (loss) from operations," defined as income (loss) 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 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 reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability.

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.

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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, within our Pharmacy Benefit Services and Specialty and Care Services operating segments.

See Note 1 to our Consolidated Financial Statements for further discussion of these two operating segments.

See Note 1 to the Consolidated Financial Statements for further discussion of these two operating segments.

As described in the introduction to Segment Reporting, Evernorth Health Services' performance is measured using adjusted revenues and pre-tax adjusted income (loss) from operations.

The key factors that impact Evernorth Health Services' Pharmacy Benefit Services and Specialty and Care Services revenues and income from operations are volume, mix of claims, price, contract affordability services, specialty distribution customer growth and client growth.

Key Factors Affecting Segment Performance

Specialty and Care Services revenue is also impacted by specialty distribution customer growth and client growth.

These key factors are discussed further below.

Certain of the key factors impact both operating segments as services are offered through an integrated client contract.

See Note 2 to the Consolidated Financial Statements included in our 2023 Form 10-K for additional information on revenue and cost recognition policies for this segment.

Pharmacy Benefit Services and Specialty and Care Services key factors:

• Pharmacy claim volume relates to processing prescription claims filled by retail pharmacies in our network and from dispensing prescription claims from our home delivery and specialty pharmacies and other claims.

As our clients' prescriptions claim volumes increase or decrease, our results correspondingly increase or decrease.

See Note 2 to the

Consolidated Financial Statements included in our 2023 Form 10-K for additional information on revenue and cost recognition policies for this segment.

Key Factors that impact both Pharmacy Benefit Services and Specialty and Care Services:

• Pharmacy claim volume (also referred to as utilization) relates to processing prescription claims filled by retail pharmacies in our network and from dispensing prescription claims from our home delivery and specialty pharmacies and other claims.

As pharmacy prescription claim volumes increase or decrease due to customer utilization, organic customer growth through the expansion of existing clients or new clients, our gross profit and income from operations correspondingly increase or decrease.

• The mix of claims generally considers the type of drug and distribution method used for dispensing and fulfilling.

In addition to the types of drugs, the mix of generic claims also impacts our results.

Generally, a higher mix of generic drugs reduces revenues, as generic drugs are typically priced lower than the branded drugs they replace.

However, as ingredient cost paid to

pharmacies on generic drugs is incrementally lower than the price charged to our clients, a higher mix of generic drugs generally has a favorable impact on our income from operations.

In addition to the types of drugs, the mix of generic or biosimilar claims also impacts our results.

Generally, a higher mix of generic and biosimilar drugs reduces revenues, as generic and biosimilar drugs are typically priced lower than the branded drugs they replace.

However, as ingredient cost paid to pharmacies on generic and biosimilar drugs is incrementally lower than the price charged to our clients, a higher mix of generic and biosimilar drugs generally has a favorable impact on our gross profit and income from operations.

• Pharmaceutical manufacturer inflation also impacts our pricing because most of our contracts provide that we bill clients and pay pharmacies based on a generally recognized price index for pharmaceuticals.

Therefore, the rate of inflation for prescription drugs and our efforts to manage this inflation for our clients continues to be a significant driver of our revenues and cost of revenues in the current environment.

• Our client contract pricing is impacted by our ongoing ability to negotiate favorable contracts for pharmacy network, pharmaceutical and wholesaler purchasing and manufacturer rebates on our clients' behalf.

Through these affordability services, we seek to improve the effectiveness of our integrated solutions for the benefit of our clients by continuously innovating, improving affordability and implementing drug purchasing contract initiatives.

Specialty and Care Services key factors:

• Customer growth and higher volume in our specialty distribution services where we deliver pharmaceuticals and medical supplies directly to health care providers, clinics and hospitals, primarily to physicians who regularly order costly specialty pharmaceuticals.

Through these affordability services, we seek to improve the effectiveness of our integrated and fee-for-service solutions, for the benefit of our new and existing clients, by continuously innovating, improving affordability and implementing drug purchasing contract initiatives.

Our continued affordability improvements further reduce drug costs for the benefit of our consumers and clients and we share in the value delivered, which generally results in a favorable impact on our gross profit and income from operations.

Key factors that impact Specialty and Care Services:

• Customer growth generally results in increased revenues and income from operations.

This generally includes both organic customer growth through the expansion of existing business and new business, as well as higher volume in our specialty distribution services where we deliver pharmaceuticals and medical supplies directly to health care providers, clinics and hospitals, primarily to physicians who regularly order costly specialty pharmaceuticals.

This business provides competitive pricing on pharmaceuticals and medical supplies and leverages our distribution platform to improve our results.

• Client growth in our Care Delivery and Management Solutions, through our virtual care, in-home care, physical primary care, benefits management, and behavioral health services, as we expand our businesses and build upon our cross-enterprise leverage.

In this MD&A, we present revenues and gross profit, as well as adjusted revenues, adjusted gross profit and pre-tax adjusted income from operations, consistent with our segment reporting metrics, which exclude special items.

• Client growth, both organic and new business, in our Care Delivery and Management Solutions business generally results in increased revenues and income from operations.

This includes client movement in our virtual care, in-home care, physical primary care, benefits management, and behavioral health services, as we expand our businesses and build upon our cross-enterprise leverage.

In this MD&A, we present our segment performance measures adjusted revenues and pre-tax adjusted income from operations.

We also present adjusted gross profit, which is calculated as adjusted revenues less Pharmacy and other service costs (which is inclusive of all costs of revenue).

We utilize adjusted revenues in this calculation, consistent with our reporting measure that excludes special items, as this reflects the underlying results of business operations.

Results of Operations

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Dollars in millions) 2024 2023 Change 2024 2023 Change

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Pre-tax adjusted income from operations $ 1,876 $ 1,716 9 % $ 4,855 $ 4,552 7 %

Pre-tax adjusted margin 3.3 % 4.0 % (70) bps 3.1 % 3.8 % (70) bps

Adjusted expense ratio (3)

Pre-tax adjusted margin (3)

3.6 % 4.4 % (80) bps 3.3 % 4.0 % (70) bps

(1) Total revenues and gross profit were equal to adjusted revenues and adjusted gross profit as there were no special items in the periods presented.

(2) Gross profit and adjusted gross profit are calculated as total revenues or adjusted revenues less pharmacy and other service costs.

(3) Adjusted expense ratio is calculated as selling, general and administrative expenses as a percentage of adjusted revenues.

SG&A expense ratio (4)

1.7 % 2.3 % (60) bps 1.9 % 2.2 % (30) bps

Adjusted SG&A expense ratio (4)

1.7 % 2.2 % (50) bps 1.9 % 2.2 % (30) bps

(1) Adjusted revenues and adjusted gross profit each exclude $182 million of the Special item related to impairment of dividend receivable for each of the three and nine months ended September 30, 2024.

There were no special items in the comparable prior periods.

(2) Gross profit and adjusted gross profit are calculated as total revenues and adjusted revenues, respectively, less pharmacy and other service costs.

(3) Pre-tax adjusted margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues.

See Note 17 to the Consolidated Financial Statements for reconciliation of pre-tax adjusted income from operations and adjusted revenues to Income before income taxes and Total revenues, respectively.

(4) SG&A expense ratio is calculated as selling, general and administrative expenses including special items ($894 million and $881 million for the three months ended September 30, 2024 and 2023, respectively, and $2,825 million and $2,512 million, for the nine months ended September 30, 2024 and 2023, respectively) divided by total revenues.

Adjusted SG&A expense ratio is calculated as selling, general and administrative expenses excluding special items ($894 million and $837 million for the three months ended September 30, 2024 and 2023, respectively, and $2,825 million and $2,468 million for the nine months ended September 30, 2024 and 2023, respectively) as a percentage of adjusted revenues.

There were no special items for the three and nine months ended September 30, 2024;

special items were $44 million for the three and nine months ended September 30, 2023.

In this selected financial information, we present adjusted revenues and pre-tax income from operations by our two operating segments, Pharmacy Benefit Services and Specialty and Care Services.

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Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

(Dollars and adjusted scripts in millions) 2024 2023 2024 2023

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Net investment income (1)

40 63 (37) 164 175 (6)

Total adjusted revenues $ 52,637 $ 38,596 36 % $ 148,411 $ 112,980 31 %

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Net investment income (1)

40 63 (37) 164 175 (6)

Total pre-tax adjusted income from operations $ 1,876 $ 1,716 9 % $ 4,855 $ 4,552 7 %

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531 394 35 % 1,577 1,171 35 %

(1) Net investment income excludes the Special item related to impairment of dividend receivable for certain accrued dividends of $182 million for each of the three and nine months ended September 30, 2024.

(2) Non-specialty network prescriptions filled through 90-day programs and home delivery prescriptions are counted as three claims.

All other network and specialty prescriptions are counted as one claim.

Three and Six Months Ended June 30, 2024 versus Three and Six Months Ended June 30, 2023

Adjusted revenues increased 30% and 29%, reflecting higher claims volume driven by Pharmacy Benefit Services and Specialty and Care Services, primarily due to new clients, including Centene, and organic growth.

Gross profit increased 14% and 11%, reflecting continued affordability improvements and growth in Specialty and Care Services businesses.

Pre-tax adjusted income from operations increased 7% and 5%, reflecting growth in Specialty and Care Services businesses and continued affordability improvements.

This increase was partially offset by strategic investments to support business growth and continued advancement of our capabilities and solutions.

The adjusted expense ratio decreased 10 bps and 20 bps, reflecting higher adjusted revenues, primarily due to new clients, including Centene, and organic growth, partially offset by strategic investments to support business growth and continued advancement of our capabilities and solutions.

Three and Nine Months Ended September 30, 2024 versus Three and Nine Months Ended September 30, 2023

Commentary in parentheses regarding percentage changes represents the driver's impact on the overall category.

Adjusted revenues increased 36% and 31%, primarily reflecting higher utilization of prescription drugs from customer growth in both Pharmacy Benefit Services and Specialty and Care Services.

Adjusted gross profit increased 11% for both periods, primarily reflecting relatively equal contributions from customer growth in Specialty and Care Services and continued affordability improvements in Pharmacy Benefit Services.

Pre-tax adjusted income from operations increased 9% and 7%, primarily reflecting customer growth in Specialty and Care Services (+11% and +10%) and continued affordability improvements in Pharmacy Benefit Services (+3% in both periods).

This increase was partially offset by strategic investments to support business growth and continued advancement of our capabilities and solutions (-2% and -4% in Specialty and Care Services and -2% in both periods in Pharmacy Benefit Services).

The adjusted SG&A expense ratio decreased 50 bps and 30 bps, primarily reflecting higher adjusted revenues as discussed above.

Cigna Healthcare Segment

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As described in the introduction to Segment Reporting, performance of the Cigna Healthcare segment is measured using adjusted revenues and pre-tax adjusted income from operations.

Key factors affecting results for this segment include:

• customer growth;

• revenue growth;

• percentage of Medicare Advantage customers in plans eligible for quality bonus payments;

• medical costs as a percentage of premiums (medical care ratio or "MCR") for our insured businesses;

• selling, general and administrative expenses as a percentage of adjusted revenues (adjusted expense ratio).

In January 2024, we entered into a definitive agreement to sell the Medicare Advantage, Medicare Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits and CareAllies businesses within the U.S.

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

Key Factors Affecting Segment Performance

Key factors affecting results for this segment include:

• customer growth;

• revenue growth, including increases to premium rates in consideration of anticipated medical costs (also referred to as premium rate increases);

• medical cost trend (also referred to as higher medical costs), which is impacted by utilization (the quantity of medical services consumed by our customers), unit costs (the cost per medical service) and mix of services;

• percentage of Medicare Advantage customers in plans eligible for quality bonus payments;

• medical costs as a percentage of premiums (medical care ratio or "MCR") for our insured businesses, which includes affordability initiatives that serve to mitigate medical cost inflation;

• selling, general and administrative expenses excluding special items as a percentage of adjusted revenues (which we refer to as adjusted SG&A expense ratio).

Results of Operations

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Three Months Ended

June 30, Change Six Months Ended

June 30, Change

September 30, Change Nine Months Ended

September 30, Change

(Dollars in millions) 2024 2023 2024 2023

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Pre-tax adjusted income from operations $ 1,174 $ 1,222 (4) % $ 3,718 $ 3,509 6 %

Pre-tax adjusted margin 9.2 % 9.2 % — bps 9.6 % 9.0 % 60 bps

Pre-tax adjusted margin (1)(2)

8.9 % 9.6 % (70) bps 9.4 % 9.2 % 20 bps

Medical care ratio 82.8 % 80.5 % 230 bps 81.7 % 81.0 % 70 bps

Adjusted expense ratio 20.0 % 20.9 % (90) bps 20.2 % 21.1 % (90) bps

Three and Six Months Ended June 30, 2024 versus Three and Six Months Ended June 30, 2023

Adjusted revenues increased 3% and 4%, primarily reflecting higher premium rates due to expected increases in underlying medical costs, partially offset by business mix.

Pre-tax adjusted income from operations increased 3% and 11%, primarily due to a lower adjusted expense ratio and higher net investment income.

The improvement for the three months ended June 30, 2024 was partially offset by a higher medical care ratio.

The medical care ratio increased 110 bps for the three months ended June 30, 2024, primarily due to a higher U.S.

Healthcare medical care ratio reflecting business mix and unfavorable revenue adjustments related to prior years, partially offset by effective pricing execution and affordability initiatives.

The adjusted expense ratio decreased 90 bps in both periods, primarily due to revenue growth outpacing volume-related expenses as well as ongoing efficiencies and disciplined expense management.

SG&A expense ratio (2)(3)

19.8 % 22.9 % (310) bps 20.1 % 21.7 % (160) bps

Adjusted SG&A expense ratio (2)(3)

20.0 % 21.6 % (160) bps 20.2 % 21.3 % (110) bps

(1) Pre-tax adjusted margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues.

(2) See Note 17 to the Consolidated Financial Statements for reconciliation of pre-tax adjusted income from operations and adjusted revenues to Income before income taxes and Total revenues, respectively.

(3) SG&A expense ratio is calculated as selling, general and administrative expenses including special items ($2,637 million and $2,920 million for the three months ended September 30, 2024 and 2023, respectively, and $7,986 million and $8,298 million for the nine months ended September 30, 2024 and 2023, respectively) divided by Total revenues.

Adjusted SG&A expense ratio is calculated as selling, general and administrative expenses excluding special items ($2,637 million and $2,763 million for the three months ended September 30, 2024 and 2023, respectively, and $7,986 million and $8,141 million for the nine months ended September 30, 2024 and 2023, respectively) as a percentage of adjusted revenues.

There were no special items for the three and nine months ended September 30, 2024;

special items were $157 million for the three and nine months ended September 30, 2023.

Three and Nine Months Ended September 30, 2024 versus Three and Nine Months Ended September 30, 2023

Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on overall category.

Adjusted revenues increased 3% and 4%, primarily due to higher premiums within employer insured (+$238 million and +$810 million), Medicare Part D (+$202 million and +$410 million) and stop loss (+$141 million and +$457 million), in each case reflecting premium rate increases to cover expected increases in underlying medical costs, partially offset by lower premiums within Individual and Family Plans (-$268 million and -$754 million), reflecting a decrease in customers.

Pre-tax adjusted income from operations decreased 4% for the three months ended September 30, 2024, primarily due to higher medical costs (-$569 million), partially offset by higher adjusted revenues (+$395 million) and lower selling, general and administrative expenses excluding special items (+$126 million), primarily reflecting ongoing efficiencies.

Pre-tax adjusted income from operations increased 6% for the nine months ended September 30, 2024, primarily due to higher adjusted revenues (+$1.4 billion) and lower selling, general and administrative expenses excluding special items (+$155 million), primarily reflecting ongoing efficiencies, partially offset by higher medical costs (-$1.3 billion).

The impact of higher premiums in adjusted revenues and medical costs are reflected in the medical care ratio calculation.

The medical care ratio increased 230 bps for the three months ended September 30, 2024, primarily due to a higher U.S.

Healthcare medical care ratio, reflecting relatively equal contributions from business mix and one additional business day in the third quarter of 2024.

The medical care ratio increased 70 bps for the nine months ended September 30, 2024, primarily due to a higher U.S.

Healthcare medical care ratio driven by business mix.

The adjusted SG&A expense ratio decreased 160 bps and 110 bps, primarily due to revenue growth outpacing volume-related expenses (-80 bps and -60 bps) and ongoing efficiencies (-60 bps and -30 bps).

Medical Customers

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Cigna Healthcare Medical Customers

As of June 30,

As of September 30,

(In thousands) 2024 2023 Change

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Healthcare operating segment.

Medical Customer information presented as of June 30, 2023 has been restated to conform to the new operating segment presentation.

Medical Customer information presented as of September 30, 2023 has been restated to conform to the new operating segment presentation.

Unpaid Claims and Claim Expenses

June 30, As of

September 30, As of

(In millions) 2024 2023 Change

Unpaid claims and claim expenses – Cigna Healthcare

$ 5,202 $ 5,092 2 %

Our unpaid claims and claim expenses liability increased 2%, driven by stop loss seasonality, partially offset by a decrease in Individual and Family Plans customers.

Unpaid claims and claim expenses $ 5,088 $ 5,092 — %

Our unpaid claims and claim expenses liability was flat, driven by a decrease in Individual and Family Plans customers (-$290 million), mostly offset by stop loss seasonality (+$175 million) and Medicare Advantage (+$80 million).

Other Operations

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Results of Operations

Financial Summary Three Months Ended June 30, Change Six Months Ended

June 30, Change

Financial Summary

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

(Dollars in millions) 2024 2023 2024 2023

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Pre-tax adjusted (loss) income from operations

$ (16) $ 29 N/M % $ 2 $ 44 (95) %

$ (6) $ 26 N/M % $ (4) $ 70 N/M %

Pre-tax adjusted margin (2.6) % 17.7 % (2,030) bps (0.6) % 15.2 % (1,580) bps

Three and Six Months Ended June 30, 2024 versus Three and Six Months Ended June 30, 2023

Adjusted revenues for both periods primarily reflect Premiums revenue and Net investment income associated with COLI, our run-off operations and other non-strategic businesses.

Three and Nine Months Ended September 30, 2024 versus Three and Nine Months Ended September 30, 2023

Adjusted revenues for both periods primarily reflect premiums and net investment income associated with COLI, our run-off operations and other non-strategic businesses.

Pre-tax adjusted (loss) income from operations decreased for both periods primarily driven by unfavorable margins in our non-strategic businesses.

Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate financing 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 eliminations for products and services sold between segments.

Financial Summary Three Months Ended June 30, Change Six Months Ended

June 30, Change

Financial Summary

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

(In millions) 2024 2023 2024 2023

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$ (425) $ (435) (2) % $ (1,269) $ (1,272) — %

Three and Six Months Ended June 30, 2024 versus Three and Six Months Ended June 30, 2023

Pre-tax adjusted loss from operations increased 3% and 1% respectively, primarily due to higher interest rates on our indebtedness partially offset by lower pension costs.

Three and Nine Months Ended September 30, 2024 versus Three and Nine Months Ended September 30, 2023

Commentary regarding bps represents the driver's impact on overall category.

Pre-tax adjusted loss from operations decreased for both periods primarily due to lower operating and pension costs (-800 bps for both periods), partially offset by higher interest rates on our indebtedness (+600 bps for both periods).

INVESTMENT ASSETS

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Additional information regarding our investment assets is included in Notes 11, 12, 13 and 14 to the Consolidated Financial Statements.

(In millions) June 30,

(In millions) September 30,

2024 December 31,

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Investments per Consolidated Balance Sheets $ 16,134 $ 18,910

(1) Investments related to the HCSC transaction that were held for sale as of June 30, 2024 and December 31, 2023.

(1) Investments related to the HCSC transaction that were held for sale as of September 30, 2024 and December 31, 2023.

These investments were primarily comprised of debt securities and commercial mortgage loans, and to a lesser extent, other long-term investments.

Investment Outlook

Although portfolio impact has been limited to date, we continue to actively monitor geopolitical events and economic conditions and their potential impact on the investment portfolio, including expectations for inflation and interest rates, the potential for a recession, and ongoing conflict in Europe and the Middle East.

Although impacts to our core insurance and operating business portfolios have been limited to date, we continue to actively monitor geopolitical events and economic conditions and their potential impact on the investment portfolio, including expectations for inflation and interest rates, the potential for a recession, and ongoing conflict in Europe and the Middle East.

Future realized and unrealized investment results will be driven largely by market conditions and these future conditions are not reasonably predictable.

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The following table reflects our portfolio of debt securities by type of issuer:

(In millions) June 30,

(In millions) September 30,

2024 December 31,

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Total $ 9,881 $ 9,855

The carrying value of our debt securities portfolio decreased during the six months ended June 30, 2024, reflecting net sales activity and a valuation decrease due to rising market interest rates .

The carrying value of our debt securities portfolio slightly increased during the nine months ended September 30, 2024, reflecting a valuation increase due to a decline of market interest rates, offset by net sales activity .

Our portfolio remains in a net unrealized depreciation position due to generally increasing interest rates over the past few years.

More detailed information about debt securities by type of issuer, maturity dates and net unrealized position is included in Note 11 to the Consolidated Financial Statements.

As of June 30, 2024, $8.0 billion, or 86%, of the debt securities in our investment portfolio were investment grade (Baa and above, or equivalent) and the remaining $1.3 billion were below investment grade.

As of September 30, 2024, $8.6 billion, or 86%, of the debt securities in our investment portfolio were investment grade (Baa and above, or equivalent) and the remaining $1.3 billion were below investment grade.

The majority of the bonds that are below investment grade were rated at the higher end of the non-investment grade spectrum.

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Commercial Mortgage Loans

As of June 30, 2024, our $1.5 billion commercial mortgage loan portfolio consisted of approximately 50 fixed-rate loans, diversified by property type, location and borrower.

As of September 30, 2024, our $1.5 billion commercial mortgage loan portfolio consisted of approximately 45 fixed-rate loans, diversified by property type, location and borrower.

These loans are carried in our Consolidated Balance Sheets at their unpaid principal balance, net of an allowance for expected credit losses.

As a result of increasing market interest rates since the majority of these loans were made, the carrying value exceeds the market value of these loans as of June 30, 2024.

As a result of increasing market interest rates since the majority of these loans were made, the carrying value exceeds the market value of these loans as of September 30, 2024.

See Note 12 to the Consolidated Financial Statements for further details.

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Other Long-term Investments

Other long-term investments of $4.4 billion as of June 30, 2024 included investments in securities limited partnerships and real estate limited partnerships, direct investments in real estate joint ventures and other deposit activity that is required to support various insurance and health services businesses.

Other long-term investments of $4.5 billion as of September 30, 2024 included investments in securities limited partnerships and real estate limited partnerships, direct investments in real estate joint ventures and other deposit activity that is required to support various insurance and health services businesses.

Accounting policies for these investments are discussed in Note 11 to the Consolidated Financial Statements.

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Our 50% share of the investment portfolio supporting the joint venture's liabilities is approximately $15.1

billion as of June 30, 2024.

billion as of September 30, 2024.

These investments were comprised of approximately 75% debt securities, including government and corporate debt diversified by issuer, industry and geography;

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We continuously review the joint venture's investment strategy and its execution.

There were no investments with a material unrealized loss as of June 30, 2024.

There were no investments with a material unrealized loss as of September 30, 2024.

Financial Instruments

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We encourage you to read this in conjunction with "Market Risk – Financial Instruments" included in the MD&A section of our 2023 Form 10-K.

As of June 30, 2024, there was an increase in our interest rate risk due to an increase in the fair value of our long-term debt since December 31, 2023.

In the event of a 100 basis point increase in interest rates, the fair value of the Company's long-term debt would decrease approximately $1.9 billion at June 30, 2024 compared to approximately $1.8 billion at December 31, 2023.

If the market price for all equity securities declined by 10%, the fair value of the Company's equity securities would decrease by approximately $0.2 billion as of June 30, 2024, compared to approximately $0.3 billion at December 31, 2023.

As of September 30, 2024, there was an increase in our interest rate risk due to an increase in the fair value of our long-term debt since December 31, 2023.

In the event of a 100 basis point increase in interest rates, the fair value of the Company's long-term debt would decrease approximately $2.1 billion at September 30, 2024 compared to approximately $1.8 billion at December 31, 2023.

If the market price for all equity securities declined by 10%, the fair value of the Company's equity securities would decrease by approximately $0.1 billion as of September 30, 2024, compared to approximately $0.3 billion at December 31, 2023.

This decline in our equity price risk exposure is driven by the impairment of equity securities.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis