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Item 2. Management’s Discussion and Analysis

2026-04-30 compared with 2025-10-30 · 199 added, 298 removed, 269 unchanged (65% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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, 2025 compared with December 31, 2024 and our results of operations for the three and nine months ended September 30, 2025 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 March 31, 2026 compared with December 31, 2025 and our results of operations for the three months ended March 31, 2026 compared with the same period 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 in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K").

In particular, we encourage you to refer to the "Risk Factors" contained in Part I, Item 1A of our 2024 Form 10-K.

In particular, we encourage you to refer to the "Risk Factors" contained in Part I, Item 1A in our 2025 Form 10-K.

Unless otherwise indicated, financial information in this MD&A is presented in accordance with accounting principles generally accepted in the United States of America ("GAAP").

See Note 2 to the Consolidated Financial Statements in our 2024 Form 10-K for

additional information regarding the Company's significant accounting policies and see Note 2 to the Consolidated Financial Statements in this Form 10-Q for updates to those policies resulting from adopting new accounting guidance, if any.

See Note 2 to the Consolidated Financial Statements in our 2025 Form 10-K for additional information regarding the Company's significant accounting policies and see Note 2 to the Consolidated Financial

Statements in this Form 10-Q for updates to those policies resulting from adopting new accounting guidance, if any.

The preparation of interim consolidated financial statements necessarily relies heavily on estimates.

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The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded.

Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size.

Special items are matters that management believes are not representative of the underlying results of normal, recurring operations due to their nature or size.

Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results.

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special items and The Cigna Group's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting.

Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size.

Special items are matters that management believes are not representative of the underlying results of normal, recurring operations due to their nature or size.

We exclude these items from this measure because management believes they are not indicative of past or future underlying performance of the business.

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See the below Financial Highlights section for a reconciliation of consolidated adjusted revenues to total revenues.

See Note 15 to the Consolidated Financial Statements for additional discussion of these metrics and a reconciliation of income (loss) before income taxes to pre-tax adjusted income (loss) from operations, as well as a reconciliation of Total revenues to adjusted revenues.

Note 15 to the Consolidated Financial Statements also explains that segment revenues include both external revenues and sales between segments that are eliminated in Corporate.

Ratios presented in the segment discussion exclude the same items as adjusted revenues and pre-tax adjusted income (loss) from operations.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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Such risks and uncertainties include, but are not limited to:

our ability to achieve our strategic and operational initiatives;

our ability to adapt to changes in an evolving and rapidly changing industry;

our ability to compete effectively, differentiate our products and services from those of our competitors, and maintain or increase market share;

price competition, inflation and other pressures that could compress our margins or result in premiums that are insufficient to cover the cost of services delivered to our customers;

our ability to manage health care costs and respond to price competition, inflation and other pressures that could compress our margins or result in premiums that are insufficient to cover the cost of services delivered to our customers;

our ability to compete effectively, differentiate our products and services from those of our competitors and adapt to changes in an evolving and rapidly changing industry;

our ability to develop and effectively implement products and services to improve the accessibility, affordability and transparency of health care;

changes in drug pricing or industry pricing benchmarks;

our ability to maintain relationships with one or more key pharmaceutical manufacturers or if payments made or discounts provided decline;

changes in the pharmacy provider

marketplace or pharmacy networks;

the potential for actual claims to exceed our estimates related to expected medical claims;

our ability to develop and maintain satisfactory relationships with health care payors, physicians, hospitals, other health service providers and with producers and consultants;

our ability to maintain relationships with one or more key pharmaceutical manufacturers or if payments made or discounts provided decline;

changes in the pharmacy provider marketplace or pharmacy networks;

changes in drug pricing or industry pricing benchmarks;

potential liability in connection with managing medical practices and operating pharmacies, onsite clinics and other types of medical facilities;

uncertainties surrounding participation in government-sponsored programs and providing services to payors who participate in government-sponsored programs;

the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws or regulations;

compliance with applicable privacy, security and data laws, regulations and standards;

the outcome of litigation, regulatory audits and investigations;

compliance costs and potential failure of our prevention, detection and control systems;

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

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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, which could lead to an impairment charge;

dependence on success of relationships with third parties;

risk of significant disruption within our operations or among key suppliers or third parties;

potential liability in connection with managing medical practices and operating pharmacies, onsite clinics and other types of medical facilities;

the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws, regulations or government guidance;

uncertainties surrounding participation in government-sponsored programs and providing services to payors who participate in government-sponsored programs;

the outcome of litigation, regulatory audits and investigations;

compliance with applicable privacy, security and data laws, regulations and standards;

potential failure of our prevention, detection and control systems;

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 which could lead to an impairment charge;

our ability to achieve our strategic and operational initiatives;

unfavorable economic and market conditions, the risk of a recession or other economic downturn and resulting impact on employment metrics, stock market or changes in interest rates;

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Consolidated Results of Operations (GAAP basis)

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

(Dollars in millions) 2025 2024 Change 2025 2024 Change

Three Months Ended March 31,

(Dollars in millions) 2026 2025 Change

Pharmacy revenues $ 54,037 $ 48,633 11 %

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Interest expense and other (357) (362) (1)

Gain (loss) on sale of businesses

38 (87) N/M 79 (106) N/M

Gain on sale of businesses

Net investment gains (losses)

26 (921) N/M 76 (2,805) N/M

Income before income taxes

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Net income attributable to noncontrolling interests

105 86 22 291 232 25

Shareholders' net income

$ 1,654 $ 1,323 25 %

Consolidated effective tax rate 14.0 % 30.8 % (1,680) bps 15.9 % 31.2 % (1,530) bps

Medical customers (in thousands) 18,059 19,048 (5) %

Consolidated effective tax rate 18.0 % 14.5 % 350 bps

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

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

2025 2024 2025 2024

(In millions) Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax

Three Months Ended March 31,

(In millions) Pre-tax After-tax Pre-tax After-tax

Shareholders' net income

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Adjustments to reconcile to adjusted income from operations

Net investment (gains) losses (1)

Net investment (gains) (1)

$ (235) (233) $ (48) (48)

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35 27 216 164

(Gain) loss on sale of businesses

(38) (241) 87 62 (79) (356) 106 19

(Benefits) associated with litigation matters

(17) (13) — — (17) (13) — —

Deferred tax expenses, net

— 19 — 41 — 53 — 75

Impairment of dividend receivable

(Gain) on sale of businesses

— (3) (41) (115)

(Benefits) associated with litigation matters

Total special items $ 404 322 $ 390 229

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(1) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.

(2) Represents amortization of a foreign tax attribute.

See Note 20 to the Consolidated Financial Statements in our 2024 Form 10-K for additional details.

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

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

2025 2024 2025 2024

(Diluted earnings per share) Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax

Three Months Ended March 31,

(Diluted earnings per share) Pre-tax After-tax Pre-tax After-tax

Shareholders' net income

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Adjustments to reconcile to adjusted income from operations

Net investment (gains) losses (1)

Net investment (gains) (1)

$ (0.89) (0.88) $ (0.18) (0.18)

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0.13 0.10 0.79 0.60

(Gain) loss on sale of businesses

(0.14) (0.90) 0.31 0.22 (0.29) (1.32) 0.37 0.07

(Benefits) associated with litigation matters

(0.06) (0.05) — — (0.06) (0.05) — —

Deferred tax expenses, net

— 0.06 — 0.06

Impairment of dividend receivable

(Gain) on sale of businesses

— (0.01) (0.15) (0.42)

(Benefits) associated with litigation matters

(0.04) (0.03) — —

Total special items $ 1.53 1.22 $ 1.43 0.84

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(2) Represents amortization of a foreign tax attribute.

See Note 20 to the Consolidated Financial Statements in our 2024 Form 10-K for additional details.

Financial highlights by segment

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

(Dollars in millions, except per share amounts) 2025 2024 Change 2025 2024 Change

Three Months Ended March 31,

(Dollars in millions, except per share amounts) 2026 2025 Change

Adjusted revenues by segment

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Adjusted revenues 68,517 65,452 5

Net investment results from certain equity method investments 178 177 1 272 238 14

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

Net investment results from certain equity method investments (23) 50 N/M

Total revenues $ 68,494 $ 65,502 5 %

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Cigna Healthcare 1,514 1,287 18

Other Operations 36 (6) N/M 61 (4) N/M

Other Operations 27 — N/M

Corporate, net of eliminations (404) (411) (2)

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Income attributable to noncontrolling interests

123 99 24 342 271 26

Net investment income (losses) (1)

204 (744) N/M 348 (2,567) N/M

Net investment gains (1)

Amortization of acquired intangible assets (390) (422) (8)

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For further analysis and explanation of each segment's results, see the "Segment Reporting" section in this MD&A.

Three and Nine Months Ended September 30, 2025 versus Three and Nine Months Ended September 30, 2024

The commentary presented below, and the segment commentaries that follow, compare results for the three and nine months ended September 30, 2025 with results for the three and nine months ended September 30, 2024.

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

The commentary presented below, and the segment commentaries that follow, compare results for the three months ended March 31, 2026 with results for the three months ended March 31, 2025.

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

Shareholders' net income for the three and nine months ended increased 153% and 135%, primarily reflecting the absence of the impairment of VillageMD equity securities that was recorded in 2024.

Shareholders' net income increased 25%, primarily reflecting higher adjusted income from operations in Cigna Healthcare, as well as Evernorth Health Services.

See discussion of segment results in the "Segment Reporting" section.

Adjusted income from operations.

See discussion of segment results in the "Segment Reporting" section.

Medical customers decreased 5%, primarily reflecting the closing of the HCSC transaction (defined below) in the three months ended March 31, 2025.

Pharmacy revenues increased 16% and 17%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.

Premiums decreased 21% and 10%, primarily driven by the impact of the HCSC transaction (-25% and -15%, respectively), partially offset by higher premium rates within our ongoing U.S.

Healthcare businesses (+4% in both periods).

Fees and other revenues increased 13% and 14%, primarily reflecting growth in affordability services (defined in the "Segment Reporting" section) within our Pharmacy Benefit Services operating segment.

Net investment income increased 174% and 2%, primarily due to the absence of the $182 million impairment of the dividend receivable in the third quarter of 2024 related to VillageMD accrued dividends.

For the nine months ended, this impact was offset by lower average assets, due in part to the impact of the HCSC transaction.

Pharmacy and other service costs increased 17% and 18%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.

Medical costs and other benefit expenses decreased 18% and 8%, primarily driven by the impact of the HCSC transaction (-26% and -16%, respectively), partially offset by higher medical costs within our ongoing U.S.

Healthcare businesses (+8% in both periods).

Selling, general and administrative ("SG&A") expenses decreased 6% for the three months ended and was flat for the nine months ended.

Both periods were primarily impacted by the HCSC transaction (-16% and -8%, respectively), partially offset by the strategic optimization program (+5% and +4%, respectively) and supporting business growth (+3% and +4%, respectively).

See Note 14 to the Consolidated Financial Statements for further discussion of the strategic optimization program.

Gain (loss) on sale of businesses primarily reflects the HCSC transaction for the three and nine months ended.

See the "Divestiture of Medicare Advantage and Related Businesses" section below and Note 5 to the Consolidated Financial Statements for further discussion of the HCSC transaction.

Investment results for the three and nine months ended increased, reflecting the absence of the impairment of VillageMD equity securities that was recorded in the three and nine months periods in 2024.

The effective tax rate decreased for the three and nine months ended, primarily driven by the absence of a valuation allowance related to the impairment of equity securities recorded in 2024 (-18% in both periods), partially offset by the absence of state tax benefits recorded in 2024 (+3% and +5%, respectively).

See Note 15 to the Consolidated Financial Statements for further discussion of these matters.

Divestiture of Medicare Advantage and Related Businesses

On March 19, 2025, the Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies businesses within the U.S.

Healthcare operating segment to Health Care Service Corporation ("HCSC," and such transaction, the "HCSC transaction").

The purchase price increased from $3.3 billion to $4.9 billion, reflecting higher statutory surplus for the legal entities when conveyed to HCSC and post-closing contractual adjustments.

The Company received approximately $4.2 billion cash proceeds at closing.

We expect receipt of the remaining approximately $0.6 billion in the fourth quarter of 2025 upon HCSC's collection of amounts due from the Centers for Medicare and Medicaid Services ("CMS") and completion of post-closing contractual adjustments.

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

LIQUIDITY AND CAPITAL RESOURCES

We maintain liquidity at two levels:

the subsidiary level and the parent company level.

Subsidiary Level.

Cash requirements at the subsidiary level generally consist of pharmacy, medical costs and other benefit payments;

expense requirements, primarily for employee compensation and benefits, information technology, and facilities costs;

income taxes;

and debt service.

Our subsidiaries normally meet their liquidity requirements by maintaining appropriate levels of cash, cash equivalents and short-term investments;

using cash flows from operating activities;

matching durations of investments to estimated durations for the related insurance and contractholder liabilities;

selling investments;

and borrowing from affiliates, subject to applicable regulatory limits.

Parent Company Level.

Cash requirements at the parent company level generally consist of debt service, payment of declared dividends to shareholders, lending to subsidiaries as needed and pension plan funding.

The parent company normally meets its liquidity requirements by maintaining appropriate levels of cash and various types of marketable investments;

collecting dividends from its subsidiaries;

using proceeds from issuing debt and common stock;

and borrowing from its subsidiaries, subject to applicable regulatory limits.

Regulatory Restrictions.

Dividends from our insurance, Health Maintenance Organization ("HMO") and certain foreign subsidiaries are subject to regulatory restrictions.

See Note 19 to the Consolidated Financial Statements in our 2024 Form 10-K for additional information regarding these restrictions.

Most of the Evernorth Health Services segment operations are not subject to regulatory restrictions regarding dividends and therefore provide significant financial flexibility to The Cigna Group.

Investment Portfolio.

We support the liquidity needs of our businesses by managing the duration of invested assets to be consistent with the duration of liabilities.

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

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

Nine Months Ended September 30,

(In millions) 2025 2024

Operating activities $ 3,452 $ 5,151

Investing activities $ (3,987) $ (1,911)

Financing activities $ (2,355) $ (4,399)

The following discussion explains variances in the various categories of cash flows for the nine months ended September 30, 2025 compared with the same period in 2024.

Operating Activities.

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

Operating cash flows decreased for the nine months ended September 30, 2025 primarily due to the absence of the favorable net cash flow impacts from onboarding significant new clients in 2024 and the unfavorable impact of pharmacy and services costs payments, as well as timing of settlements related to the accounts receivable factoring facility.

This decrease is partially offset by higher insurance liabilities and the favorable impact of accrued liabilities.

Investing Activities.

The increase in cash used in investing activities reflects higher investment purchases, partially offset by the net proceeds on the HCSC transaction.

Financing Activities.

The decrease in net cash used in financing activities in 2025 is primarily driven by lower share repurchases.

Capital Resources

Our capital resources consist primarily of cash, cash equivalents and investments maintained at regulated subsidiaries required to underwrite insurance risks, cash flows from operating activities, our commercial paper program, revolving credit facility, and the issuance of long-term debt and equity securities.

Our businesses generate significant cash flows from operations, some of which is subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company.

Dividends received from U.S.-regulated subsidiaries were $0.6 billion for the nine months ended September 30, 2025 and $1.7 billion for the nine months ended September 30, 2024.

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

We prioritize our use of capital resources to (i) invest in capital expenditures (primarily related to technology to support innovative solutions for our clients and customers), provide the capital necessary to maintain or improve the financial strength ratings of subsidiaries, and to repay debt and fund pension obligations if necessary;

(ii) pay dividends to shareholders;

(iii) consider acquisitions and investments that are strategically and economically advantageous;

and (iv) return capital to shareholders through share repurchases.

Funds Available

Commercial Paper Program .

There was no commercial paper outstanding balance as of September 30, 2025.

Revolving Credit Agreement.

Our revolving credit agreement provides 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.

In April 2025, the Company replaced its previous revolving credit agreements and entered into a $6.5 billion, five-year revolving credit and letter of credit agreement that will mature in April 2030.

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

As of September 30, 2025, we had $6.5 billion of undrawn committed capacity under our revolving credit agreement (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $6.5 billion of remaining capacity under our commercial paper program, and $6.3 billion in cash and short-term investments, approximately $0.8 billion of which was held by the parent company or certain non-regulated subsidiaries.

Our debt-to-capitalization ratio (calculated as Short-term debt and Long-term debt ("Total debt") as a percentage of Total shareholders' equity and Total debt ("Total capitalization")) was 44.9% and 43.3% as of September 30, 2025 and June 30, 2025, respectively.

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

Debt Issuance and Term Loan :

In September 2025, we issued $4.5 billion of new senior notes.

The proceeds from this debt were used to repay the $2.0 billion of loans outstanding under the Term Loan Facility, dated August 2025, the proceeds of which were used to fund an investment in Shields Health Solutions, a leading specialty pharmacy management company.

We used the remainder for general corporate purposes, including investments and repayment of indebtedness.

See Note 7 to the Consolidated Financial Statements for further information regarding our debt issuance and the Term Loan Facility.

Subsidiary Borrowings.

In addition to the sources of liquidity discussed above, the parent company can borrow an additional $1.2 billion from its subsidiaries without further approvals as of September 30, 2025.

Use of Capital Resources

Short-Term and Long-Term Debt.

During the three months ended March 31, 2025, the Company redeemed at par its $700 million 5.685% senior notes that were due March 2026.

In April 2025, $900 million of 3.250% senior notes were repaid at maturity.

The Company may, from time to time, repay or repurchase debt in advance of maturities when it deems appropriate.

Capital Expenditures .

Capital expenditures for property, equipment and computer software were $0.9 billion in the nine months ended September 30, 2025 compared with $1.1 billion in the nine months ended September 30, 2024.

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

See Note 8 to the Consolidated Financial Statements for further information regarding dividend payments and declarations.

Share Repurchases .

The Company maintains a share repurchase program authorized by the Board of Directors, under which it may repurchase shares of its common stock from time to time.

The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital.

The share repurchase program may be effected through open market purchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including through Rule 10b5-1 trading plans or privately negotiated transactions.

The program may be suspended or discontinued at any time.

We repurchased 8.2 million shares for approximately $2.6 billion during the nine months ended September 30, 2025, compared with 14.7 million shares for approximately $5.0 billion during the nine months ended September 30, 2024.

Other Sources of Funds and Uses of Capital Resources

As discussed in the "Developments" section above, the HCSC transaction was completed on March 19, 2025.

We used the proceeds in alignment with our capital deployment priorities, with the majority allocated to share repurchases.

Risks to Liquidity and Capital Resources

Risks to our liquidity and capital resources outlook include cash projections that may not be realized, and the demand for funds could exceed available cash if our ongoing businesses experience unexpected shortfalls in earnings or we experience material adverse effects from one or more risks or uncertainties described more fully in the "Risk Factors" section in our 2024 Form 10-K.

Guarantees and Contractual Obligations

We are contingently liable for various contractual obligations and financial and other guarantees entered into in the ordinary course of business.

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

Due to the issuance, redemption and maturity of senior notes in the nine months ended September 30, 2025, our long-term debt obligations as of September 30, 2025 have been updated compared to those previously provided in our 2024 Form 10-K.

See Note 7 to the Consolidated Financial Statements for further discussion.

Ex cept for the item listed below, there have been no material changes to other information presented in our guarantees and contractual obligations set forth in our 2024 Form 10-K.

Long-Term Debt.

Total scheduled payments on long-term debt are $53.0 billion through January 2056 (of which $1.5 billion relate to the remainder of 2025), which include scheduled interest payments and maturities of long-term debt.

CRITICAL ACCOUNTING ESTIMATES

The preparation of Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures in the Consolidated Financial Statements.

Management considers an accounting estimate to be critical if:

• it requires assumptions to be made that were uncertain at the time the estimate was made;

• changes in the estimate or different estimates that could have been selected could have a material effect on our consolidated results of operations or financial condition.

Management has discussed how critical accounting estimates are developed and selected with the Audit Committee of our Board of Directors, and the Audit Committee has reviewed the disclosures presented in our 2024 Form 10-K.

We regularly evaluate items that may impact critical accounting estimates.

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 2024 Form 10-K.

As of September 30, 2025, there were no significant changes to the critical accounting estimates from what was reported in our 2024 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 2025.

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

The following section in this MD&A discusses the results of each of our segments.

See Note 1 to the Consolidated Financial Statements for further description of our segments.

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 investment gains/losses, 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 share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded.

Special items are matters that management, including the chief operating decision maker, believes are not representative of the underlying results of operations due to their nature or size.

Ratios presented in this segment discussion exclude the same items as adjusted revenues and pre-tax adjusted income (loss) from operations.

See Note 17 to the Consolidated Financial Statements for additional discussion of these metrics and a reconciliation of income (loss) before income taxes to pre-tax adjusted income (loss) from operations, as well as a reconciliation of Total revenues to adjusted revenues.

Note 17 to the Consolidated Financial Statements also explains that segment revenues include both external revenues and sales between segments that are eliminated in Corporate.

In these segment discussions, we also present "pre-tax margin," calculated as pre-tax adjusted income (loss) from operations divided by adjusted revenues.

See the "Executive Overview" section in this MD&A for summarized financial results of each of our segments.

Pharmacy revenues increased 11%, primarily reflecting changes in claims composition (defined in the "Segment Reporting" section) within our Pharmacy Benefit Services operating segment.

Premiums decreased 23%, primarily driven by the impact of the HCSC transaction (defined in the "Segment Reporting" section) (-30%), offset primarily by higher premium rates within our ongoing U.S.

Healthcare businesses.

Fees and other revenues increased 14%, primarily reflecting growth in fee-based services within our Pharmacy Benefit Services operating segment.

Net investment income decreased 15%, primarily due to lower average assets, due to the impact of the HCSC transaction.

Pharmacy and other service costs increased 12%, primarily reflecting changes in claims composition within our Pharmacy Benefit Services operating segment.

Medical costs and other benefit expenses decreased 25%, primarily driven by the impact of the HCSC transaction (-32%), offset primarily by higher medical costs within our ongoing U.S.

Healthcare businesses.

Selling, general and administrative ("SG&A") expenses decreased 12%, primarily impacted by the HCSC transaction.

Investment results increased, primarily due to fair value changes of derivative instruments associated with certain equity securities.

The effective tax rate increased, primarily due to the absence of a benefit related to the HCSC transaction.

S EGMENT REPORTING

Evernorth Health Services Segment

Evernorth Health Services includes a broad range of coordinated and point solution health services and capabilities within our Pharmacy Benefit Services and Specialty and Care Services operating segments.

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

In 2025, the Company renewed or extended contracts with the business’s largest clients through the end of the decade.

Additionally, to further deliver value for the benefit of those we serve and to build a more sustainable model for health care, the Company will incur investment and transition costs to support its recently announced transformational rebate-free model for pharmacy benefits, designed to lower medication costs, improve transparency and support local pharmacies.

As a result, we expect these efforts to impact pre-tax adjusted income from operations for Evernorth Health Services over the short term.

Evernorth Health Services includes our Pharmacy Benefit Services and Specialty and Care Services operating segments, which provide independent and coordinated health solutions and capabilities to enable the health care system to work better and help people live healthier lives.

As described in the MD&A introduction, the performance of Evernorth Health Services is measured using adjusted revenues and pre-tax adjusted income (loss) from operations.

Key Factors Affecting Segment Performance

The key factors that impact the segment's revenues and income from operations are claims utilization, claims composition and contract affordability services.

The key factors that impact the segment's revenues and income from operations are claims volume, claims composition and client- and customer-focused initiatives.

Specialty and Care Services revenues are also impacted by customer and client growth.

These key factors are discussed further below.

See Note 2 to the Consolidated Financial Statements included in our 2024 Form 10-K for additional information on revenue and cost recognition policies for this segment.

See Note 2 to the Consolidated Financial Statements in our 2025 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:

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We manage pharmaceutical manufacturer increases in prices through programs designed to reduce drug spend, providing positive impacts on our clients, our customers and us.

Changes to claims mix, including types of drugs, distribution methods, pharmaceutical manufacturer prices, and alternative uses of drugs within our formularies continue to be a significant driver of our revenues and income from operations 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 (also referred to as "affordability improvements" or "affordability services").

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

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

Changes to claims mix, including types of drugs, distribution methods, pharmaceutical manufacturer prices (including government programs) and alternative uses of drugs within our formularies continue to be a significant driver of our revenues and income from operations in the current environment.

• The business continues to evolve amid changing legislative, regulatory, and client dynamics, including our business model plans announced in October 2025.

The Company has undertaken certain client- and customer-focused initiatives, which include proactive renewals or extensions of large client contracts, investments to support the recently announced rebate-free model, and multi-stakeholder recontracting efforts (including affordability-related contract changes and responses to government programs such as the Inflation Reduction Act).

These initiatives are intended to support long-term growth, reduce medication costs, and enhance transparency and are expected to impact income from operations.

Key factors that impact Specialty and Care Services:

• Customer and client growth, both organic and new business, and key relationships in our Specialty and Care Services business generally results in increased revenues and income from operations.

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

• Customer and client growth, both organic and new business, and key strategic relationships in our Specialty and Care Services business generally results in increased revenues and income from operations (also referred to as growth).

This includes client movement in our specialty pharmacy, specialty distribution services, virtual care, benefits management and behavioral health services as we expand our businesses.

Results of Operations

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Three Months Ended

September 30, Nine Months Ended

September 30,

(Dollars in millions) 2025 2024 Change 2025 2024 Change

(Dollars in millions) 2026 2025 Change

Adjusted revenues (1)

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Pre-tax margin (1)(2)

3.2 % 3.6 % (40) bps 2.9 % 3.3 % (40) bps

2.5 % 2.7 % (20) bps

SG&A expense ratio (3)

1.7 % 1.7 % — bps 1.8 % 1.9 % (10) bps

1.8 % 1.9 % (10) bps

(1) See Note 15 to the Consolidated Financial Statements for reconciliation of adjusted revenues and pre-tax adjusted income from operations to Total revenues and Income before income taxes, respectively.

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Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

March 31, Change

(Dollars and adjusted scripts in millions) 2026 2025

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

Three and Nine Months Ended September 30, 2025 versus Three and Nine Months Ended September 30, 2024

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

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

Adjusted revenues increased 15% and 16% for the three and nine months ended, respectively, primarily reflecting higher utilization of prescription drugs from customer growth in Pharmacy Benefit Services (+7% and +6%, respectively) and Specialty and Care Services (+5% and +6%, respectively) and an increase due to claims composition in Pharmacy Benefit Services (+3% and +4%, respectively).

Pre-tax adjusted income from operations increased 1% and 4% for the three and nine months ended, respectively, primarily reflecting specialty pharmacy growth in Specialty and Care Services (+6% and +6%, respectively), and contract affordability improvements and customer growth in Pharmacy Benefit Services (+2% for the nine months ended), partially offset by strategic investments and initiatives to support business growth in Pharmacy and Benefit Services (-4% and -2%, respectively) and Specialty and Care Services (-1% and -2%, respectively).

The SG&A expense ratio was flat for the three months ended and decreased 10 bps for the nine months ended, primarily reflecting higher adjusted revenues as discussed above, offset by strategic investments and initiatives to support business growth.

Adjusted revenues increased 9%, primarily reflecting an increase due to claims composition in Pharmacy Benefit Services (+7%) and higher claims volume from customer growth in Specialty and Care Services (+2%).

Pre-tax adjusted income from operations increased 2%, primarily reflecting growth in Specialty and Care Services (+13%), partially offset by client- and customer-focused initiatives in Pharmacy Benefits Services (-8%) and a decrease in claims volume in Pharmacy Benefit Services (-3%).

The SG&A expense ratio decreased 10 bps, primarily reflecting higher adjusted revenues as discussed above.

Cigna Healthcare Segment

Cigna Healthcare includes the U.S.

Healthcare and International Health businesses, which provide comprehensive medical and coordinated solutions to clients and customers.

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.

Cigna Healthcare includes our U.S.

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

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

Healthcare operating segment.

See "Developments" for further discussion.

Healthcare operating segment (the "HCSC transaction").

Key Factors Affecting Segment Performance

The key factors that impact the segment's revenues and income from operations include revenue growth, customer growth, medical cost trend, percentage of Medicare Advantage customers in plans eligible for quality bonus payments, the medical care ratio ("MCR") and the SG&A expense ratio.

The key factors that impact the segment's revenues and income from operations include revenue growth, customer growth, medical cost trend, the medical care ratio ("MCR") and the SG&A expense ratio.

These key factors are discussed further below.

See Note 2 to the Consolidated Financial Statements included in our 2024 Form 10-K for additional information on revenue and cost recognition policies for this segment.

See Note 2 to the Consolidated Financial Statements in our 2025 Form 10-K for additional information on revenue and cost recognition policies for this segment.

• Revenue growth includes increases to premium rates in consideration of anticipated medical cost increases, customer growth driven by new clients and customers, and increased fee revenue from the expansion of products and services to existing clients and customers, including solutions provided by Evernorth Health Services.

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

• Prior to the divestiture of our Medicare Advantage and related businesses to HCSC, the percentage of Medicare Advantage customers in bonus-eligible plans impacted the amount of quality bonus payments we receive.

• MCR represents medical costs as a percentage of premiums for our segment's insured businesses, and it is impacted by medical cost trend and premium rates.

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Three Months Ended

September 30, Change Nine Months Ended

September 30, Change

March 31, Change

(Dollars in millions) 2026 2025

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Pre-tax margin (1)(2)

9.7 % 8.9 % 80 bps 9.5 % 9.4 % 10 bps

Medical care ratio 84.8 % 82.8 % 200 bps 83.3 % 81.7 % 160 bps

13.2 % 8.9 % 430 bps

Medical care ratio 79.8 % 82.2 % (240) bps

SG&A expense ratio (3)

19.9 % 20.0 % (10) bps 19.8 % 20.2 % (40) bps

20.0 % 19.4 % 60 bps

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See Note 15 to the Consolidated Financial Statements for further details.

Three and Nine Months Ended September 30, 2025 versus Three and Nine Months Ended September 30, 2024

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

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

Adjusted revenues decreased 18%, or $2,408 million, and 9%, or $3,592 million, primarily due to the impact of the HCSC transaction (-$2,998 million and -$5,524 million, respectively), partially offset by higher premiums within employer insured (+$323 million and +$952 million, respectively) and stop loss (+$219 million and +$633 million, respectively), primarily reflecting premium rate increases.

Pre-tax adjusted income from operations decreased 12%, or $136 million, and 8%, or $299 million, primarily due to a higher MCR.

The medical care ratio increased 200 bps for the three months ended, primarily due to relatively equal contributions from our Individual and Family Plans business and higher expected stop loss medical costs.

The medical care ratio increased 160 bps for the nine months ended, primarily due to higher expected stop loss medical costs.

The SG&A expense ratio decreased 10 bps and 40 bps, primarily due to revenue growth outpacing volume-related expenses within the ongoing businesses (-60 bps and -50 bps, respectively), partially offset by the impact of the HCSC transaction (+60 bps and +20 bps, respectively).

Adjusted revenues decreased 21%, or $3,005 million, primarily due to the impact of the HCSC transaction (-$3,850 million), partially offset by higher premiums within employer insured (+$308 million) and stop loss (+$248 million), primarily reflecting premium rate increases.

Pre-tax adjusted income from operations increased 18%, or $227 million, primarily due to higher contributions from U.S.

Healthcare, reflecting improved margins in both the U.S.

Employer and Individual and Family Plans businesses.

The medical care ratio decreased 240 bps, due to the impact of the HCSC transaction.

The SG&A expense ratio increased 60 bps, primarily due to the impact of the HCSC transaction (+170 bps), partially offset by expense management efficiencies (-70 bps) and revenue growth outpacing volume-related expenses within the ongoing businesses (-60 bps).

Medical Customers

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Cigna Healthcare Medical Customers

As of September 30,

(In thousands) 2026 2025 Change

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(1) International Health excludes medical customers served by less than 100%-owned subsidiaries, as well as certain customers served by our third-party administrator.

Total medical customers decreased 5%, primarily due to the HCSC transaction.

Unpaid Claims and Claim Expenses

September 30, As of

(In millions) 2025 2024 Change

Total medical customers increased 2%, primarily due to customer growth within the Middle Market and Select market segments (+3% and +1%, respectively), partially offset by a decrease in National Accounts segment customers (-2%).

Unpaid Claims and Claim Expenses

Our unpaid claims and claim expenses liability decreased 7%, driven by the HCSC transaction (-$983 million), partially offset by an increase in stop loss reserves (+$620 million), primarily due to seasonality.

Our unpaid claims and claim expenses liability increased to $4,920 million as of March 31, 2026 from $4,241 million as of December 31, 2025, primarily due to stop loss seasonality.

Other Operations

Other Operations includes corporate-owned life insurance ("COLI"), the Company's run-off operations and other non-strategic businesses.

As described in the introduction of Segment Reporting, performance of Other Operations is measured using adjusted revenues and pre-tax adjusted income from operations.

As described in the MD&A introduction, performance of Other Operations is measured using adjusted revenues and pre-tax adjusted income from operations.

Results of Operations

Financial Summary

Three Months Ended September 30, Change Nine Months Ended

September 30, Change

Three Months Ended

March 31, Change

(Dollars in millions) 2026 2025

Adjusted revenues $ 120 $ 175 (31) %

Pre-tax adjusted income (loss) from operations

$ 36 $ (6) N/M % $ 61 $ (4) N/M %

Pre-tax margin 22.2 % (2.6) % 2,480 bps 11.7 % (0.6) % 1,230 bps

Three and Nine Months Ended September 30, 2025 versus Three and Nine Months Ended September 30, 2024

Adjusted revenues primarily reflects premiums and net investment income associated with COLI and our run-off operations, as well as revenues from other non-strategic businesses.

Pre-tax adjusted income (loss) from operations increased for both periods, primarily driven by the decision to discontinue certain small non-strategic businesses.

Pre-tax adjusted income from operations

$ 27 $ — N/M %

Pre-tax margin 22.5 % — % 2,250 bps

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

Adjusted revenues decreased and Pre-tax adjusted income from operations increased, primarily driven by the discontinuation of certain small 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 September 30, Change Nine Months Ended

September 30, Change

Three Months Ended

March 31, Change

(In millions) 2026 2025

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$ (404) $ (411) (2) %

Three and Nine Months Ended September 30, 2025 versus Three and Nine Months Ended September 30, 2024

Pre-tax adjusted loss from operations decreased for both periods, primarily due to lower interest expense.

Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025

Pre-tax adjusted loss from operations decreased, primarily due to lower interest expense.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash requirements generally consist of pharmacy, medical and other benefit costs;

operating and capital expenditures primarily for employee compensation and benefits, information technology, and facilities costs;

purchases of investment securities;

income taxes;

debt service;

and payment of declared dividends.

Liquidity requirements are generally met by maintaining appropriate levels of cash, cash equivalents and short-term investments;

using cash flows from operating activities;

matching durations of investments to estimated durations for the related liabilities;

selling investments;

and using proceeds from issuing debt and common stock.

Cash flows for the three months ended March 31 were as follows:

Three Months Ended March 31,

(In millions) 2026 2025

Operating activities $ 1,131 $ 1,920

Investing activities $ (637) $ 1,197

Financing activities $ (1,141) $ (3,681)

The following discussion explains variances in the various categories of cash flows for the three months ended March 31, 2026 compared with the same period in 2025.

Operating Activities.

Operating cash flows decreased for the three months ended March 31, 2026, primarily due to the unfavorable net cash flow impact related to the Inflation Reduction Act, lower insurance liabilities, and the timing of pharmaceutical manufacturer receivables.

These decreases are partially offset by the favorable timing of noninsurance customer receivables and accounts receivable factoring settlements.

Investing Activities.

The increase in cash used in investing activities reflects the absence of the net proceeds from the HCSC transaction.

Financing Activities.

The decrease in net cash used in financing activities in 2026 is primarily driven by the absence of share repurchases as well as lower debt repayments.

Capital Resources

Our businesses generate significant cash flows from operations, some of which is

subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company.

Dividends received from U.S.-regulated subsidiaries were $0.5 billion for the three months ended March 31, 2026 and 2025.

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

Funds Available

Commercial Paper Program .

There was no commercial paper outstanding balance as of March 31, 2026.

Revolving Credit Agreement.

See Note 6 to the Consolidated Financial Statements for further information on our credit agreement and commercial paper program.

As of March 31, 2026, we had $6.5 billion of undrawn committed capacity under our revolving credit agreement (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $6.5 billion of remaining capacity under our commercial paper program, and $7.3 billion in cash and short-term investments, approximately $1.1 billion of which was held by the parent company or certain non-regulated subsidiaries.

Our debt-to-capitalization ratio (calculated as Short-term debt and Long-term debt ("Total debt") as a percentage of Total shareholders' equity and Total debt ("Total capitalization")) was 42.3% and 43.0% as of March 31, 2026 and December 31, 2025, respectively.

We actively monitor our debt obligations and engage in issuance and repayment 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 $1.4 billion from its subsidiaries without further approvals as of March 31, 2026.

Regulatory Restrictions.

Dividends from our insurance, Health Maintenance Organization ("HMO") and certain foreign subsidiaries are subject to regulatory restrictions.

See Note 20 to the Consolidated Financial Statements in our 2025 Form 10-K for additional information regarding these restrictions.

Most of the Evernorth Health Services segment operations are not subject to regulatory restrictions regarding dividends and therefore provide significant financial flexibility to The Cigna Group.

Use of Capital Resources

Our capital resources are directed towards several areas, including (i) investing in capital expenditures (primarily related to technology to support innovative solutions for our clients and customers), providing the capital necessary to maintain or improve the financial strength ratings of subsidiaries, and repaying debt and funding pension obligations if necessary;

(ii) paying dividends to shareholders;

(iii) considering acquisitions and investments that are strategically and economically advantageous;

and (iv) returning capital to shareholders through share repurchases.

Short-Term and Long-Term Debt.

See Note 6 to the Consolidated Financial Statements for further information regarding changes to our short-term and long-term debt.

The Company may, from time to time, repay or repurchase debt in advance of maturities when it deems appropriate.

Capital Expenditures .

Capital expenditures for property, equipment and computer software were $0.3 billion in both the three months ended March 31, 2026 and 2025.

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

See Note 5 to the Consolidated Financial Statements for further information regarding future dividend declarations.

Share Repurchases .

The Company maintains a share repurchase program authorized by our Board, under which it may repurchase shares of its common stock from time to time.

There were no share repurchases during the three months ended March 31, 2026, compared with repurchases of 5.0 million shares for approximately $1.5 billion during the three months ended March 31, 2025.

Risks to Liquidity and Capital Resources

Guarantees and Contractual Obligations

We are contingently liable for various contractual obligations and financial and other guarantees entered into in the ordinary course of business.

See Note 14 to the Consolidated Financial Statements for discussion of various guarantees.

During the three months ended March 31, 2026, there were no material changes to the guarantees and contractual obligations set forth in our 2025 Form 10-K.

CRITICAL ACCOUNTING ESTIMATES

Management considers an accounting estimate to be critical if:

• it requires assumptions to be made that were uncertain at the time the estimate was made;

• changes in the estimate or different estimates that could have been selected could have a material effect on our consolidated results of operations or financial condition.

Management has discussed how critical accounting estimates are developed and selected with the Audit and Compliance Committee of our Board, and the Audit and Compliance Committee has reviewed the disclosures presented in our 2025 Form 10-K.

We regularly evaluate items that may impact critical accounting estimates.

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 2025 Form 10-K.

As of March 31, 2026, there were no significant changes to the critical accounting estimates from what was reported in our 2025 Form 10-K.

INVESTMENT ASSETS

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Investment Outlook

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

Investment results will be driven largely by market conditions that are not reasonably predictable.

We believe that the vast majority of our investments will continue to perform under their contractual terms.

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therefore, we expect to hold a significant portion of these assets for the long term.

Although future declines in investment fair values remain possible due to interest rate movements and credit deterioration due to both investment-specific uncertainties and global economic uncertainties as discussed below, we do not expect these losses to have a material unfavorable effect on our financial condition or liquidity.

The below discussion addresses the strategies and risks associated with our various classes of investment assets.

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Debt Securities

The carrying value of our debt securities portfolio decreased from $9.4 billion as of December 31, 2024 to $8.4 billion as of September 30, 2025, primarily reflecting the HCSC transaction .

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

The carrying value of our debt securities portfolio decreased from $8.4 billion as of December 31, 2025 to $8.3 billion as of March 31, 2026 .

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

As of September 30, 2025, $7.3 billion, or 87%, of the debt securities in our investment portfolio were investment grade (Baa and above, or equivalent) and the remaining $1.1 billion were below investment grade.

As of March 31, 2026, $7.3 billion, or 88%, of the debt securities in our investment portfolio were investment grade (Baa and above, or equivalent) and the remaining $1.0 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.

These quality characteristics have not materially changed since the prior year and remain consistent with our investment strategy.

Investments in debt securities are diversified by issuer, geography and industry.

On an aggregate basis, the debt securities portfolio continues to perform according to original expectations, which includes a long-term economic investment strategy.

Primary risks facing many of the issuers in our portfolio include ongoing geopolitical events and economic conditions.

To date, most issuers have been successful in managing these issues without a meaningful change in credit quality.

We continue to monitor the economic environment and its effect on our portfolio;

we also continue to consider the impact of various factors in determining the allowance for credit losses on debt securities, which is discussed in Note 11 to the Consolidated Financial Statements.

Commercial Mortgage Loans

As of September 30, 2025, our $1.3 billion commercial mortgage loan portfolio consisted of approximately 40 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 September 30, 2025.

Given the quality and diversity of the underlying real estate, positive debt service coverage, and significant borrower cash invested in the property generally ranging between 30% and 40%, we remain confident that the vast majority of borrowers will continue to perform as expected under

their contract terms.

As of March 31, 2026, our $1.3 billion commercial mortgage loan portfolio consisted of approximately 40 fixed-rate loans.

Given the quality and diversity of the underlying real estate, positive debt service coverage, loan-to-value ratio and significant borrower cash invested in the property generally ranging between 30% and 40%, we remain confident that the vast majority of borrowers will

continue to perform as expected under their contract terms.

For further discussion of the results and changes in key credit quality indicators, see Note 9 to the Consolidated Financial Statements.

Office sector fundamentals are weak but have begun to stabilize for higher-quality assets.

Lower-quality assets will likely continue to experience value erosion due to weak tenant demand and low investor interest.

Additionally, the current macroeconomic headwinds are impacting capital markets and reducing investor appetite for capital-intensive assets (e.g., offices and regional shopping malls).

Our commercial mortgage loan portfolio has no exposure to regional shopping malls and less than 25% exposure to office properties.

Our commercial mortgage loan portfolio has approximately 25% exposure to office properties.

Although future losses remain possible due to further credit deterioration, we do not expect these losses to have a material unfavorable effect on our results of operations, financial condition or liquidity.

Other Long-Term Investments

Other long-term investments of $4.9 billion as of September 30, 2025 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 $5.2 billion as of March 31, 2026 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.

These limited partnership entities typically invest in mezzanine debt or equity of privately held companies and equity real estate.

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To mitigate risk, these investments are diversified by industry sector or property type and geographic region.

No single partnership investment exceeded 3% of our securities and real estate limited partnership portfolio.

We expect continued volatility in private equity and real estate fund performance going forward as fair market valuations are adjusted to reflect market and portfolio transactions.

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We account for this joint venture under the equity method of accounting.

Our 50% share of the investment portfolio supporting the joint venture's liabilities was approximately $17.4 billion as of September 30, 2025.

Our 50% share of the investment portfolio supporting the joint venture's liabilities was approximately $19.1 billion as of March 31, 2026.

These investments were comprised of approximately 70% 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 September 30, 2025.

There were no investments with a material unrealized loss as of March 31, 2026.

See Note 14 to the Consolidated Financial Statements in our 2025 Form 10-K for additional information regarding unconsolidated subsidiaries.

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We encourage you to read this in conjunction with "Market Risk – Financial Instruments" included in the MD&A section in our 2025 Form 10-K.

As of September 30, 2025, there was no material change in our risk exposure as reported in our 2024 Form 10-K.

As of March 31, 2026, there was no material change in our risk exposure as reported in our 2025 Form 10-K.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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What changed 10-Q

Item 2. Management’s Discussion and Analysis