Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of The Cigna Group

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of The Cigna Group and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of income, comprehensive income, changes in total equity and cash flows for each of the three years in the period ended December 31, 2025, including the related notes and financial statement schedules listed in the index appearing on page FS-1 of this Form 10-K (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of incurred but not reported (IBNR) liabilities plus expected development on reported claims and reported claims in process for the Cigna Healthcare segment

As described in Note 9 to the consolidated financial statements, the total of incurred but not reported (IBNR) liabilities plus expected development on reported claims and reported claims in process for the Cigna Healthcare segment as of December 31, 2025 was $4.0 billion. Management estimates the liability for claims incurred in each month by applying the current estimates of completion factors to the current paid claims data. As disclosed by management, the unpaid claims liability is primarily impacted by assumptions related to completion factors and medical cost trend. Management develops completion factors by comparing the claim incurral date to the date claims were paid. Completion factors are impacted by several key items including changes in: 1) electronic (auto-adjudication) versus manual claim processing; 2) frequency and timeliness of provider claims submissions; 3) number of customers and 4) the mix of products. Management uses historical completion factors combined with an analysis of current trends and operational factors to develop current estimates of completion factors. Medical cost trend is primarily impacted by medical service utilization and unit costs.

The principal considerations for our determination that performing procedures relating to the valuation of IBNR liabilities plus expected development on reported claims and reported claims in process for the Cigna Healthcare segment is a critical audit matter are (i) the significant judgment by management when developing the estimate of IBNR liabilities plus expected development on reported claims and reported claims in process for the Cigna Healthcare segment; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management's significant assumptions related to completion factors and medical cost trend; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the valuation of IBNR liabilities plus expected development on reported claims and reported claims in process for the Cigna Healthcare segment, including controls over the development of significant assumptions related to completion factors and medical cost trend. These procedures also included, among others, (i) testing the completeness and accuracy of data provided by management and (ii) the involvement of professionals with specialized skill and knowledge to assist in evaluating the reasonableness of management's estimate by performing one or a combination of procedures, including (a) developing an independent estimate of IBNR liabilities plus expected development on reported claims and reported claims in process for the Cigna Healthcare segment, and comparing the independent range of outcomes to management's estimate; (b) evaluating the appropriateness of management’s actuarial methodologies and the reasonableness of management's significant assumptions related to completion factors and medical cost trend by considering claims reporting and payment experience, historical trends, and other industry data; and (c) evaluating the consistency of management's actuarial methodologies period-over-period.

/s/ PricewaterhouseCoopers LLP

Hartford, Connecticut

February 26, 2026

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


The Cigna Group Consolidated Statements of Income

	For the Years Ended December 31,
(In millions, except per share amounts)		2025		2024		2023
Revenues
Pharmacy revenues		$	216,672	$	185,362	$	137,243
Premiums		40,261		45,996		44,237
Fees and other revenues		16,921		14,790		12,619
Net investment income		1,046		973		1,166
TOTAL REVENUES		274,900		247,121		195,265
Benefits and expenses
Pharmacy and other service costs		214,991		182,509		133,801
Medical costs and other benefit expenses		34,349		38,648		36,287
Selling, general and administrative expenses		14,617		14,844		14,822
Amortization of acquired intangible assets		1,743		1,703		1,819
TOTAL BENEFITS AND EXPENSES		265,700		237,704		186,729
Income from operations		9,200		9,417		8,536
Interest expense and other		(1,408)		(1,435)		(1,446)

Net gain (loss) on sale of businesses		13		24		(1,499)
Net investment losses		(24)		(2,737)		(78)
Income before income taxes		7,781		5,269		5,513
TOTAL INCOME TAXES		1,493		1,491		141
Net income		6,288		3,778		5,372
Less: Net income attributable to noncontrolling interests		331		344		208
SHAREHOLDERS' NET INCOME		$	5,957	$	3,434	$	5,164
Shareholders' net income per share
Basic		$	22.33	$	12.25	$	17.57
Diluted		$	22.18	$	12.12	$	17.39

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


The Cigna Group Consolidated Statements of Comprehensive Income

	For the Years Ended December 31,
(In millions)		2025		2024		2023
Net income		$	6,288	$	3,778	$	5,372
Other comprehensive income (loss), net of tax
Net unrealized (depreciation) appreciation on securities and derivatives		(238)		661		503
Net long-duration insurance and contractholder liabilities measurement adjustments		(291)		(1,067)		(715)
Net translation gains (losses) on foreign currencies		71		(49)		5
Postretirement benefits liability adjustment		(7)		(22)		1
Other comprehensive loss, net of tax		(465)		(477)		(206)
Total comprehensive income		5,823		3,301		5,166

Comprehensive income attributable to noncontrolling interests
Net income attributable to redeemable noncontrolling interests		—		—		180
Net income attributable to other noncontrolling interests		331		344		28
Total comprehensive income attributable to noncontrolling interests		331		344		208
SHAREHOLDERS' COMPREHENSIVE INCOME		$	5,492	$	2,957	$	4,958

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


The Cigna Group Consolidated Balance Sheets


	As of December 31,
(In millions)	2025		2024
Assets
Cash and cash equivalents	$	7,676	$	7,550
Investments	1,056		665
Accounts receivable, net	28,768		24,227
Inventories	7,338		6,692
Other current assets	2,976		2,732
Assets of businesses held for sale	—		7,004
Total current assets	47,814		48,870
Long-term investments	18,471		15,128
Reinsurance recoverables	4,103		4,378

Property and equipment	3,651		3,654
Goodwill	44,924		44,370
Other intangible assets	28,560		29,417
Other assets	2,885		2,786
Separate account assets	7,511		7,278

TOTAL ASSETS	$	157,919	$	155,881
Liabilities
Current insurance and contractholder liabilities	$	5,710	$	5,388
Pharmacy and other service costs payable	30,333		28,465
Accounts payable	10,659		9,294
Accrued expenses and other liabilities	9,048		9,387
Short-term debt	592		3,035
Liabilities of businesses held for sale	—		2,410
Total current liabilities	56,342		57,979
Non-current insurance and contractholder liabilities	9,938		10,254
Deferred tax liabilities, net	7,145		6,975
Other non-current liabilities	4,238		3,215
Long-term debt	30,871		28,937
Separate account liabilities	7,511		7,278

TOTAL LIABILITIES	116,045		114,638
Contingencies — Note 22

Shareholders' equity
Common stock (1)	4		4
Additional paid-in capital	31,790		31,288
Accumulated other comprehensive loss	(2,806)		(2,341)
Retained earnings	47,865		43,519
Less: Treasury stock, at cost	(35,140)		(31,437)
TOTAL SHAREHOLDERS' EQUITY	41,713		41,033
Noncontrolling interests	161		210
Total equity	41,874		41,243
Total liabilities and equity	$	157,919	$	155,881

*(1)*Par value per share, $0.01; shares issued, 405 million as of December 31, 2025 and 403 million as of December 31, 2024; authorized shares, 600 million.

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


The Cigna Group
Consolidated Statements of Changes in Total Equity
(In millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss)		Retained Earnings		Treasury Stock		Shareholders' Equity		Other Non- controlling Interests		Total Equity		Redeemable Noncontrolling Interests


Balance at December 31, 2022	$	4	$	30,233	$	(1,658)	$	37,940	$	(21,844)	$	44,675	$	13	$	44,688	$	66
Effect of issuing stock for employee benefit plans			477						(112)		365				365
Other comprehensive loss					(206)						(206)				(206)		—
Net income							5,164				5,164		28		5,192		180
Common dividends declared (per share: $4.92)							(1,452)				(1,452)				(1,452)
Repurchase of common stock			—						(2,282)		(2,282)				(2,282)
Other transactions impacting noncontrolling interests			(41)								(41)		(20)		(61)		(139)
Balance at December 31, 2023	$	4	$	30,669	$	(1,864)	$	41,652	$	(24,238)	$	46,223	$	21	$	46,244	$	107

Effect of issuing stock for employee benefit plans			619						(120)		499				499
Other comprehensive loss					(477)						(477)				(477)		—
Net income							3,434				3,434		344		3,778		—
Common dividends declared (per share: $5.60)							(1,567)				(1,567)				(1,567)
Repurchase of common stock			—						(7,079)		(7,079)				(7,079)
Other transactions impacting noncontrolling interests			—								—		(155)		(155)		(107)
Balance at December 31, 2024	$	4	$	31,288	$	(2,341)	$	43,519	$	(31,437)	$	41,033	$	210	$	41,243	$	—

Effect of issuing stock for employee benefit plans			502						(114)		388				388
Other comprehensive loss					(465)						(465)				(465)		—
Net income							5,957				5,957		331		6,288		—
Common dividends declared (per share: $6.04)							(1,611)				(1,611)				(1,611)
Repurchase of common stock			—						(3,589)		(3,589)				(3,589)
Other transactions impacting noncontrolling interests			—								—		(380)		(380)		—
Balance at December 31, 2025	$	4	$	31,790	$	(2,806)	$	47,865	$	(35,140)	$	41,713	$	161	$	41,874	$	—

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

The Cigna Group

Consolidated Statements of Cash Flows



	For the Years Ended December 31,

(In millions)	2025		2024		2023
Cash Flows from Operating Activities
Net income	$	6,288	$	3,778	$	5,372
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,775		2,775		3,035
Investment losses, net	24		2,737		78
Deferred income tax expense (benefit)	326		(95)		(1,659)
Net (gain) loss on sale of businesses	(13)		(24)		1,499

Net changes in assets and liabilities, net of non-operating effects:
Accounts receivable, net	(4,630)		(7,369)		(1,663)
Inventories	(646)		(1,032)		(868)
Reinsurance recoverable and Other assets	(897)		(485)		(539)
Insurance liabilities	1,247		(591)		584
Pharmacy and other service costs payable	1,868		8,757		2,030
Accounts payable and Accrued expenses and other liabilities	2,797		1,138		3,481
Other, net	462		774		463
NET CASH PROVIDED BY OPERATING ACTIVITIES	9,601		10,363		11,813
Cash Flows from Investing Activities
Proceeds from investments sold:
Debt securities and equity securities	782		856		1,078
Investment maturities and repayments:
Debt securities and equity securities	986		839		972
Commercial mortgage loans	223		188		186
Other sales, maturities and repayments (primarily short-term and other long-term investments)	884		752		586
Investments purchased or originated:
Debt securities and equity securities	(5,788)		(1,386)		(4,334)
Commercial mortgage loans	(117)		(54)		(118)
Other (primarily short-term and other long-term investments)	(1,416)		(1,309)		(1,205)
Property and equipment purchases, net	(1,212)		(1,406)		(1,573)
Acquisitions, net of cash acquired	(597)		(131)		(447)
Divestitures, net of cash sold	2,984		521		13
Renewable energy tax credit equity investments	(1,102)		(1,030)		(313)
Other, net	(34)		58		(19)
NET CASH USED IN INVESTING ACTIVITIES	(4,407)		(2,102)		(5,174)
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds	152		166		167
Withdrawals and benefit payments from contractholder deposit funds	(253)		(228)		(223)
Net change in short-term debt, excluding term loan	(927)		(402)		1,198
Net proceeds on issuance of term loan	1,999		—		—
Repayment of term loan	(2,000)		—		—

Repayment of long-term debt	(4,197)		(3,000)		(2,967)
Net proceeds on issuance of long-term debt	4,458		4,462		1,491
Repurchase of common stock	(3,621)		(7,034)		(2,284)
Issuance of common stock	203		305		187
Common stock dividend paid	(1,611)		(1,567)		(1,450)
Other, net	(624)		(349)		(413)
NET CASH USED IN FINANCING ACTIVITIES	(6,421)		(7,647)		(4,294)
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash	32		(20)		16
Net (decrease) increase in cash, cash equivalents and restricted cash	(1,195)		594		2,361
Cash, cash equivalents and restricted cash January 1, (1)	8,931		8,337		5,976
Cash, cash equivalents and restricted cash December 31, (1)	7,736		8,931		8,337
Cash and cash equivalents reclassified to assets of businesses held for sale	—		(1,339)		(467)
Cash, cash equivalents and restricted cash December 31, per Consolidated Balance Sheets (1)	$	7,736	$	7,592	$	7,870
Supplemental Disclosure of Cash Information:
Interest paid	$	1,350	$	1,342	$	1,330

*(1)*Restricted cash and cash equivalents were reported in other long-term investments and Other assets.

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

THE CIGNA GROUP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS



Note Number	Footnote	Page

BUSINESS AND CAPITAL STRUCTURE
1	Description of Business	61
2	Summary of Significant Accounting Policies	61
3	Accounts Receivable, Net	65
4	Supplier Finance Program	66

5	Divestiture	66
6	Earnings Per Share	67
7	Debt	68
8	Common and Preferred Stock	70
INSURANCE INFORMATION
9	Insurance and Contractholder Liabilities	71
10	Reinsurance	75
INVESTMENTS
11	Investments	77
12	Fair Value Measurements	82
13	Variable Interest Entities	86
14	Collectively Significant Operating Unconsolidated Subsidiaries	87
15	Accumulated Other Comprehensive Income (Loss)	89
WORKFORCE MANAGEMENT AND COMPENSATION
16	Strategic Optimization Program	90
17	Pension	90
18	Employee Incentive Plans	93
PROPERTY AND OTHER ASSET BALANCES
19	Goodwill, Other Intangibles, and Property and Equipment	96

COMPLIANCE, REGULATION AND CONTINGENCIES
20	Shareholders' Equity and Dividend Restrictions	98
21	Income Taxes	99
22	Contingencies and Other Matters	103
RESULTS DETAILS
23	Segment Information	104

Note 1 – Description of Business

The Cigna Group®, together with its subsidiaries (either individually or collectively referred to as the "Company," "we," "us" or "our"), is a global health company committed to creating a better future for every individual and every community. Powered by our dedicated people and valued brands, we advance our mission to improve the health and vitality of those we serve.

Our subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental, and related products and services. The majority of these products and services are offered through employers and other entities, such as governmental and nongovernmental organizations, unions and associations. Certain subsidiaries also offer health and dental insurance products to individuals in the United States and select international markets. In addition to these operations, The Cigna Group also has certain run-off operations.

A full description of our segments follows:

The Evernorth Health Services® reportable segment includes the Pharmacy Benefit Services and the 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.

Pharmacy Benefit Services drives high-quality, cost-effective pharmacy care through various services, such as drug claim adjudication, retail pharmacy network administration, benefit design consultation, drug utilization review, drug formulary management and access to our home delivery pharmacy. Specialty and Care Services provides specialty drugs for the treatment of complex and rare diseases, specialty distribution of pharmaceuticals and medical supplies, as well as clinical programs to help our clients drive better whole-person health outcomes through care services.

The Cigna Healthcare**®** reportable segment includes the U.S. Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers. U.S. Healthcare provides medical plans and other benefits and solutions for insured and self-insured clients as well as for individual and family plan customers. International Health provides health care solutions in our international markets, as well as health solutions for globally mobile individuals and employees of multinational organizations. U.S. Healthcare also included the Medicare Advantage and related businesses until the divestiture of such businesses to Health Care Services Corporation ("HCSC") on March 19, 2025 (see Note 5 to the Consolidated Financial Statements for further information).

Other Operations comprises the remainder of our business operations, which includes certain continuing business (corporate-owned life insurance ("COLI")), as well as run-off and other non-strategic businesses. Our run-off businesses include the (i) variable annuity reinsurance business that was effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska ("Berkshire") in 2013; (ii) settlement annuity business; and (iii) individual life insurance and annuity and retirement benefits businesses, which were sold through reinsurance agreements.

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.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements include the accounts of The Cigna Group and its consolidated subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation. These Consolidated Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP").

Amounts recorded in the Consolidated Financial Statements necessarily reflect management's estimates and assumptions about medical costs, investment, tax and receivable valuations, interest rates, and other factors. Significant estimates are discussed throughout these Notes; however, actual results could differ from those estimates. The impact of a change in estimate is generally included in earnings in the period of adjustment.

Recent Accounting Pronouncements

There were no new accounting standards adopted during the year ended December 31, 2025 that had a material impact on our Consolidated Financial Statements.

Accounting Guidance Not Yet Adopted

Accounting Standards Update ("ASU") 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40). Required to be adopted January 1, 2028, with early adoption permitted and requires the following:

Seeks to improve the operability of the recognition guidance considering different methods of software development, mainly more iterative methods, by:

◦Aligning internal-use software capitalization requirements to probable completion and required funding and authorization.

◦Clarifying certain criteria for probable completion, including that the significant performance requirements of the software be identified and no longer subject to substantial revision.

Transition options include prospective from the date of adoption as well as retrospective and modified retrospective adoption.

The Company is currently evaluating the impact of this guidance on our results of operations and financial position, as well as potential impacts to information systems and controls.

ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). Required to be adopted for the annual reporting period ending December 31, 2027 and for interim reporting periods beginning January 1, 2028 and requires:

Additional expense detail in the footnotes disaggregating income statement captions including any of the following: inventory purchases; employee compensation; depreciation; and intangible asset amortization, as well as a qualitative description of remaining expenses to reconcile to the total expense within those income statement captions;
Disclosure of the definition and total amount of selling expenses; and
Transition options include prospective from the date of adoption as well as retrospective adoption.

The only financial statement impact resulting from adoption will be increased disclosure. The Company continues to evaluate the effects the adoption requirements on information systems and controls.

Significant Accounting Policies

The Company's accounting policies are described either in this Note or in the applicable Notes to the Consolidated Financial Statements as listed in the table of contents on page 60.

**A.**Cash and Cash Equivalents

Cash and cash equivalents are carried at cost that approximates fair value. Cash equivalents consist of short-term investments with maturities of three months or less from the time of purchase. The Company reclassifies cash overdraft positions to liabilities when the legal right of offset does not exist.

**B.**Inventories

Inventories consist of prescription drugs and medical supplies and are stated at the lower of first-in-first-out cost or net realizable value.

**C.**Translation of Foreign Currencies

The Company generally conducts its international business through foreign operating entities that maintain assets and liabilities in local currencies that are their functional currencies. The Company uses exchange rates as of the balance sheet date to translate assets and liabilities into U.S. dollars. Translation gains or losses on functional currencies, net of applicable taxes, are recorded in Accumulated other comprehensive loss. The Company uses average monthly exchange rates during the year to translate revenues and expenses into U.S. dollars.

**D.**Pharmacy Revenues and Costs

Pharmacy Revenues. Pharmacy revenues are primarily derived from providing pharmacy benefit management services to clients and customers. Pharmacy revenues are recognized when control of the promised goods or services is transferred to clients and customers in an amount that reflects the consideration the Company expects to receive for those goods or services.

The Company provides or makes available various services supporting benefit management and claims administration and is generally obligated to provide prescription drugs to clients' members using multiple distribution methods, including retail networks, home delivery and specialty pharmacies. These goods and services are integrated into a single performance obligation to process claims, dispense prescription drugs and provide other services over the contract period (generally three years). This performance obligation is satisfied as the business stands ready to fulfill its obligation.

Revenues for dispensing prescription drugs through retail pharmacies are reported gross and consist of the prescription price (ingredient cost and dispensing fee) contracted with clients, including the customer copayment, and any associated fees for services, because the Company acts as the principal in these arrangements. When a prescription is presented to a retail network pharmacy, the Company is solely responsible for customer eligibility, drug utilization review, drug-to-drug interaction review, any required clinical intervention, plan provision information, payment to the pharmacy and client billing. These revenues are recognized based on the full prescription price when the pharmacy claim is processed and approved for payment. The Company also provides benefit design and formulary consultation services to clients and negotiates separate contractual relationships with clients and network pharmacies. These factors indicate that the Company has control over these transactions until the prescription is processed. Revenues are billed, due and recognized at contract rates either on a periodic basis or as services are provided (such as based on volume of claims processed). This recognition pattern aligns with the benefits from services provided.

Home delivery and specialty pharmacy revenues are due and recognized as each prescription is shipped, net of reserves for discounts and contractual allowances estimated based on historical experience. Any differences between estimates and actual collections are reflected in Pharmacy revenues when payments are received. Historically, adjustments to original estimates and returns have not been material. The Company has elected the practical expedient to account for shipping and handling as a fulfillment activity.

We may also provide certain financial and performance guarantees, including a minimum level of discounts a client may receive, generic utilization rates and various service levels. Clients may be entitled to receive compensation if we fail to meet the guarantees. Actual performance is compared to the contractual guarantee for each measure throughout the period and the Company defers revenue for any estimated payouts within Accrued expenses and other liabilities (current). These estimates are adjusted and paid at the end of the annual guarantee period. Historically, adjustments to original estimates have not been material. The liability for these financial and performance guarantees was $1.8 billion as of December 31, 2025 and $1.9 billion as of December 31, 2024.

The Company administers programs through which we may receive rebates and other vendor consideration from pharmaceutical manufacturers. The amounts of such rebates or other vendor consideration shared with pharmacy benefit management services clients vary based on the contractual arrangement with the client and in some cases the type of consideration received from the pharmaceutical manufacturer. Rebates and other vendor consideration payable to pharmacy benefit management services clients are recorded as a reduction of Pharmacy revenues. Estimated amounts payable to clients are based on contractual sharing arrangements between the Company and the client and these amounts are adjusted when amounts are collected from pharmaceutical manufacturers in accordance with the contractual arrangement between the Company and the client. Historically, these adjustments have not been material.

Other pharmacy service revenues are earned by distributing specialty pharmaceuticals and medical supplies to providers, clinics and hospitals. These revenues are billed, due and recognized at contracted rates as prescriptions and supplies are shipped and services are provided.

Pharmacy Costs**.** Pharmacy costs include the cost of prescriptions sold, network pharmacy claim costs and copayments. Also included are direct costs of dispensing prescriptions including supplies, shipping and handling, and direct costs associated with clinical programs, such as drug utilization management and medication adherence counseling. Home delivery and specialty pharmacy costs are recognized when the drug is shipped, and retail network costs are recognized when the drug is processed and approved for payment. Rebates and other vendor consideration received when providing pharmacy benefit management services are recorded as a reduction of pharmacy costs. Rebates are recognized as prescriptions are shipped or processed and approved for payment. Historically, the effect of adjustments resulting from the reconciliation of rebates recognized to the amounts billed and collected, net of contractual allowances, has not been material. The Company maintains reimbursement guarantees with certain retail network pharmacies. For each such guarantee, the Company records a pharmacy and other service costs payable or prepaid asset for applicable retail network claims based on our actual performance throughout the period against the contractual reimbursement rate. The Company's contracts with certain retail pharmacies give the Company the right to adjust reimbursement rates during the annual guarantee period.

**E.**Premiums and Related Expenses

Premiums for short-duration group health, accident and life insurance and managed care coverages are recognized as revenue on a pro rata basis over the contract period. Benefits and expenses are recognized when incurred and, for our Cigna Healthcare business, are presented net of pharmaceutical manufacturer rebates. For experience-rated contracts, premium revenue includes an adjustment for

experience-rated refunds based on contract terms and calculated using the customer's experience (including estimates of incurred but not reported claims).

The Patient Protection and Affordable Care Act ("ACA") established a risk adjustment program that transfers funds among insurers based on the relative risk of their covered populations of individuals who purchased insurance on a public exchange. We recognize receivables or payables from the Centers for Medicare and Medicaid Services ("CMS") for the Company's Individual and Family Plans as adjustments to premium revenue when amounts are reasonably estimable and collection is reasonably assured, using year-to-date experience and industry data. Final settlements are determined by the United States Department of Health and Human Services ("HHS") in the subsequent year.

Premium revenue may also include an adjustment to reflect the estimated effect of rebates due to customers under medical loss ratio provisions of the ACA. These rebate liabilities are settled in the subsequent year.

Liabilities related to experience-rated refunds, risk adjustment programs and the minimum medical loss ratio are included in Accrued expenses and other liabilities (current).

Premiums for supplemental health, accident and individual life insurance and annuity long-duration products are recognized as revenue when due. Cigna Healthcare long-duration premium revenues are associated with contracts that provide coverage greater than one year or are guaranteed to be renewed at the option of the policyholder beyond one year. Benefits and expenses are matched with premiums.

Revenue for universal life products is recognized as follows:

Investment income on assets supporting universal life products is recognized in Net investment income/losses as earned.
Charges for mortality, administration and policy surrender are recognized in Premiums as earned. Administrative fees are considered earned when services are provided.

Benefits and expenses for universal life products consist of benefit claims in excess of policyholder account balances and income earned by policyholders. Expenses are recognized when claims are incurred and income is credited to policyholders in accordance with contract provisions.

The unrecognized portion of premiums received is recorded as unearned premiums included in Insurance and contractholder liabilities (current and non-current). See Note 9 to the Consolidated Financial Statements for further information.

**F.**Fees and Related Expenses

The majority of the Company's service fee revenues are derived from the following programs:

Administrative Services Only ("ASO") arrangements allow plan sponsors to self-fund claims and assume the risk of medical or other benefit costs. In return for fees from these clients, the Company provides access to our participating provider networks and other services supporting benefit management.
Fee-for-service clinical solutions offered to clients, such as drug utilization management and medication adherence counseling help clients to drive better health outcomes at a lower cost by identifying and addressing potentially unsafe or wasteful prescribing, dispensing and utilization of prescription drugs, and communicating with, or supporting communications with, physicians, pharmacies and patients.
Wholesale Marketplace Drug Formulary Management services include either our drug formulary administrative service arrangements or our formulary processing arrangements. Drug formulary administrative services may include formulary consultation, administration of rebate contracts, rebate submission, collection from drug manufacturers and the distribution of rebates to clients. Services may also include facilitating audits of data submissions and reporting of rebates to clients.
Health benefit management solutions are offered primarily to sponsors of health benefit plans to drive cost reductions and improve quality outcomes for clients as well as provide behavioral health services to third-party health plans, employers and administrators. In certain arrangements, the Company assumes the financial obligation for third-party provider costs for medical services provided to the health plan's customers.

Arrangements are generally short-term (one year or less) except for certain three-year health benefit management solutions contracts, and each consists of a single performance obligation. Performance obligations are satisfied as services are provided to clients, either on a stand-ready or utilization basis. Fees are billed, due and recognized at contracted rates on a periodic basis, generally monthly or agreed-upon arrangements terms. Fee revenues for services are generally recorded on a gross basis with the associated direct and indirect costs presented in Pharmacy and other service costs, or Selling, general and administrative expenses.

Retained rebates reported in Fees and other revenues in our formulary processing arrangements are either recognized gross as services are provided to clients, consistent with the related service fee, or net as rebates are processed. The latter applies in arrangements in which the Company is permitted to retain a portion of rebates collected in exchange for services, but the Company does not obtain control of the retained rebate until rebates are transferred to the client.

Fees for services may include variable consideration as a component of the transaction price, which is estimated at contract inception, recognized and adjusted through the contract period through Accrued expenses and other liabilities. Variable consideration includes certain health benefit management contracts requiring the Company to share the results of medical cost experience that differ from specified targets and ASO performance guarantees that compensate clients if certain service standards, clinical outcomes or financial metrics are not met.

Note 3 – Accounts Receivable, Net

Accounting Policy. We bill pharmaceutical manufacturers based on management's interpretation of contractual terms and estimate a contractual allowance based on the best information available at the time a claim is processed. Contractual allowances for certain rebates receivable from pharmaceutical manufacturers are determined by reviewing payment experience and specific known items that could be adjusted under contract terms. The Company's estimation process for contractual allowances for pharmaceutical manufacturer receivables generally results in an allowance for balances outstanding greater than 90 days.

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

The allowance for expected credit losses for current accounts receivable is based primarily on past collections experience relative to the length of time receivables are past due; however, when available evidence reasonably supports an assumption that counterparty credit risk over the expected payment period will differ from current and historical payment collections, a forecasting adjustment is reflected in the allowance for expected credit losses.

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

Receivables and any associated allowance are written off only when all collection attempts have failed and such amounts are determined unrecoverable. We regularly review the adequacy of these allowances based on a variety of factors, including age of the outstanding receivable and collection history. When circumstances related to specific collection patterns change, estimates of the recoverability of receivables are adjusted.

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

Noninsurance customer receivables - amounts due from customers for noninsurance services, primarily pharmacy benefit management and ASO contracts.
Pharmaceutical manufacturers receivables - amounts due from pharmaceutical manufacturers.
Insurance customer receivables - amounts due from customers under insurance and managed care contracts, primarily premiums receivable and amounts due from CMS.
Other receivables - all other accounts receivable not included in the categories above.

The following amounts were included within Accounts receivable, net:


(In millions)	December 31, 2025		December 31, 2024
Noninsurance customer receivables	$	14,707	$	11,879
Pharmaceutical manufacturers receivables	12,437		10,914
Insurance customer receivables	1,385		3,199
Other receivables	239		162
Total			$	26,154
Accounts receivable, net classified as assets of businesses held for sale			(1,927)
Total	$	28,768	$	24,227

These receivables are reported net of our allowances of $6.8 billion and $5.0 billion as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, these allowances were primarily comprised of $6.2 billion and $4.3 billion, respectively,

associated with contractual allowances for certain pharmaceutical manufacturers rebate receivables; $270 million and $388 million, respectively, associated with contractual allowances for third-party payor noninsurance customer receivables; and $199 million and $84 million, respectively, associated with allowances for current expected credit losses. The remaining allowances include discounts and claims adjustments issued to customers in the form of client credits and other non-credit adjustments.

Accounts Receivable Factoring Facility

The Company maintains an uncommitted factoring facility (the "Facility") with a total capacity of $1.5 billion under which certain accounts receivable may be sold on a non-recourse basis to a financial institution. The Facility automatically renewed in July 2025 and is subject to one-year renewal terms unless terminated by either party. The transactions under the Facility are accounted for as a sale and recorded as a reduction to accounts receivable in the Consolidated Balance Sheets because control of, and risk related to, the accounts receivable are transferred to the financial institution. Although the sale is made without recourse, we provide collection services related to the transferred assets. Amounts associated with this Facility are reflected within Net cash provided by operating activities in the Consolidated Statements of Cash Flows. Factoring fees paid under this Facility are reflected in Interest expense and other in the Consolidated Statements of Income.

We sold pharmaceutical manufacturers receivables under the Facility of $4.4 billion and $5.5 billion during the years ended December 31, 2025 and December 31, 2024, respectively. For the years ended December 31, 2025, 2024 and 2023, factoring fees paid were not material. As of December 31, 2025 and December 31, 2024, all sold accounts receivable had been collected from pharmaceutical manufacturers and had been removed from the Company's Consolidated Balance Sheets. As of December 31, 2025 and December 31, 2024, there were $0.4 billion and $1.0 billion, respectively, of collections from pharmaceutical manufacturers that had not been remitted to the financial institution. Such amounts are recorded within Accrued expenses and other liabilities in the Consolidated Balance Sheets.

Note 4 – Supplier Finance Program

The Company facilitates a voluntary supplier finance program (the "Program") that provides suppliers the opportunity to sell their accounts receivable due from us (i.e., our payment obligations to the suppliers) to a financial institution, on a non-recourse basis, in order to be paid earlier than our payment terms require. The Cigna Group is not a party to the Program and agrees to commercial terms with its suppliers independently of their participation in the Program. Amounts due to suppliers that participate in the Program are generally paid within one month following the invoice date. A supplier's participation in the Program has no impact on the Company's payment terms and the Company has no economic interest in a supplier's decision to participate in the Program. The suppliers, at their sole discretion, determine which invoices, if any, to sell to the financial institution. No guarantees or pledged assets are provided by the Company or any of our subsidiaries under the Program.

The obligations confirmed as valid within the Program by the financial institutions were as follows and are reflected in Accounts payable in the Consolidated Balance Sheets:


	For the Years Ended December 31,
(in millions)	2025		2024
Confirmed obligations outstanding at the beginning of the year	$	1,637	$	1,536
Invoices confirmed during the year	39,108		39,091
Less: confirmed invoices paid during the year	39,143		38,990
Confirmed obligations outstanding at the end of the year	$	1,602	$	1,637

The amounts confirmed as valid for both periods are predominately associated with one supplier.

Note 5 – Divestiture

Accounting Policy**.** The Company classifies assets and liabilities as held for sale ("disposal group") when management commits to a plan to sell the disposal group, the sale is probable within one year and the disposal group is available for immediate sale in its present condition. The Company considers various factors, particularly whether actions required to complete the plan indicate it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. Assets held for sale are measured at the lower of carrying value or fair value less costs to sell. Any loss resulting from the measurement is recognized in the period the held for sale criteria are met. Conversely, gains are not recognized until the date of the sale. When the disposal group is classified as held for sale, depreciation and amortization for most long-lived assets ceases, and the Company tests the assets for impairment. Deferred policy acquisition costs continue to be amortized.

The Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies® businesses (the "Disposal Group") on March 19, 2025 (the "HCSC transaction"). The final purchase price and total cash proceeds collected in 2025 were $4.9 billion, representing an increase from the initial $3.3 billion purchase price, driven by higher statutory surplus for the legal entities when conveyed to HCSC and post-closing contractual adjustments.

The Company recognized within Net gain (loss) on sale of businesses in the Consolidated Statements of Income a gain of $9 million pre-tax ($401 million after-tax) for the year ended December 31, 2025, a loss of $472 million ($363 million after-tax) for the year ended December 31, 2024, and a loss of $1.5 billion ($1.4 billion after-tax) for the year ended December 31, 2023. See Note 21 to the Consolidated Financial Statements for discussion of tax matters for the year ended December 31, 2025 resulting in an after-tax gain on sale of businesses. The estimated loss on sale for both the years ended December 31, 2024 and December 31, 2023 primarily represented goodwill impairments of $302 million pre-tax in 2024 and $1.2 billion pre-tax in 2023.

The Company determined that the Disposal Group met the criteria to be classified as held for sale and aggregated and classified the assets and liabilities as held for sale in our Consolidated Balance Sheets as of December 31, 2024. The assets and liabilities held for sale as of December 31, 2024 were as follows:


(In millions)	December 31, 2024
Cash and cash equivalents	$	1,339
Investments	1,444
Accounts receivable, net	1,927
Other assets, including Goodwill (1)	2,294
Total assets of businesses held for sale	7,004
Insurance and contractholder liabilities	1,579
All other liabilities	831
Total liabilities of businesses held for sale	$	2,410

(1) Included Goodwill of $94 million.

Integration and Transaction-Related Costs

In 2025, 2024 and 2023, the Company incurred transaction-related costs associated with the HCSC transaction. These costs incurred consisted primarily of certain projects to separate the Company's systems, products and services; fees for legal, advisory and other professional services; and certain employment-related costs. These costs were $327 million pre-tax ($247 million after-tax) for the year ended December 31, 2025, compared with $275 million pre-tax ($211 million after-tax) for the year ended December 31, 2024, and $45 million pre-tax ($35 million after-tax) for the year ended December 31, 2023.

Note 6 – Earnings Per Share

Accounting Policy. The Company computes basic earnings per share using the weighted-average number of unrestricted common and deferred shares outstanding. Diluted earnings per share also includes the dilutive effect of outstanding employee stock options and restricted stock using the treasury stock method and the effect of strategic performance shares.

Basic and diluted earnings per share were computed as follows:




	For the Years Ended December 31,
	2025						2024						2023
(Shares in thousands, dollars in millions, except per share amounts)	Basic		Effect of Dilution		Diluted		Basic		Effect of Dilution		Diluted		Basic		Effect of Dilution		Diluted
Shareholders' net income	$	5,957			$	5,957	$	3,434			$	3,434	$	5,164			$	5,164
Shares:
Weighted average	266,744				266,744		280,294				280,294		293,892				293,892
Common stock equivalents			1,819		1,819				2,924		2,924				2,990		2,990
Total shares	266,744		1,819		268,563		280,294		2,924		283,218		293,892		2,990		296,882
Earnings per share	$	22.33	$	(0.15)	$	22.18	$	12.25	$	(0.13)	$	12.12	$	17.57	$	(0.18)	$	17.39

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



	For the Years Ended December 31,
(In millions)	2025	2024	2023
Anti-dilutive options	2.0	1.1	0.9

Note 7 – Debt

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


(In millions)	December 31, 2025		December 31, 2024
Short-term debt
Commercial paper	$	—	$	880
$900 million, 3.250% Notes due April 2025	—		897
$1,216 million, 4.125% Notes due November 2025	—		1,215

$550 million, 1.250% Notes due March 2026	549		—
Other, including finance leases	43		43
Total short-term debt	$	592	$	3,035
Long-term debt
$1,284 million, 4.500% Notes due February 2026	$	—	$	1,285
$700 million, 5.685% Notes due March 2026	—		699
$550 million, 1.250% Notes due March 2026	—		549
$1,500 million, 3.400% Notes due March 2027	1,481		1,466
$259 million, 7.875% Debentures due May 2027	260		259
$600 million, 3.050% Notes due October 2027	599		598
$3,800 million, 4.375% Notes due October 2028	3,792		3,790
$1,000 million, 5.000% Notes due May 2029	996		995
$1,400 million, 2.400% Notes due March 2030 (1)	1,406		1,386
$1,000 million, 4.500% Notes due September 2030	993		—
$1,500 million, 2.375% Notes due March 2031 (1)	1,420		1,384
$750 million, 5.125% Notes due May 2031 (1)	750		745
$1,250 million, 4.875% Notes due September 2032	1,243		—
$45 million, 8.080% Step Down Notes due January 2033	45		45
$800 million, 5.400% Notes due March 2033 (1)	796		795
$1,250 million, 5.250% Notes due February 2034 (1)	1,250		1,226
$1,500 million, 5.250% Notes due January 2036	1,488		—
$190 million, 6.150% Notes due November 2036	190		190
$2,200 million, 4.800% Notes due August 2038 (1)	2,194		2,193
$750 million, 3.200% Notes due March 2040	748		744
$121 million, 5.875% Notes due March 2041	119		119
$448 million, 6.125% Notes due November 2041	484		485
$317 million, 5.375% Notes due February 2042	315		315
$1,500 million, 4.800% Notes due July 2046	1,469		1,469
$1,000 million, 3.875% Notes due October 2047	990		990
$3,000 million, 4.900% Notes due December 2048	2,972		2,971
$1,184 million, 3.400% Notes due March 2050	1,172		1,237
$1,429 million, 3.400% Notes due March 2051	1,410		1,479
$1,500 million, 5.600% Notes due February 2054	1,486		1,482
$750 million, 6.000% Notes due January 2056	735		—
Other, including finance leases	68		41
Total long-term debt	$	30,871	$	28,937

*(1)*The Company has entered into interest rate swap contracts hedging a portion of these fixed-rate debt instruments as of December 31, 2025. See Note 11 to the Consolidated Financial Statements for further information about the Company's interest rate risk management and these derivative instruments.

Debt Issuance. In September 2025, we issued $4.5 billion of new senior notes, as detailed in the table below. The proceeds from this debt issuance were used to repay the $2.0 billion of loans outstanding under the Term Loan Facility as described below. We used the remaining net proceeds for general corporate purposes, including investments and repayment of indebtedness. Interest on this debt is paid semiannually.


Principal	Maturity Date	Interest Rate	Net Proceeds	Redeemable Date(1)	"Make Whole" Premium (2)
$1,000 million	September 15, 2030	4.500%	$994 million	August 15, 2030	15
$1,250 million	September 15, 2032	4.875%	$1,245 million	July 15, 2032	15
$1,500 million	January 15, 2036	5.250%	$1,490 million	October 15, 2035	15
$750 million	January 15, 2056	6.000%	$736 million	July 15, 2055	20

(1) Redeemable at any time prior to this date at a "make whole" premium, defined below. Redeemable at par on or after this date.

(2) "Make whole" premium calculated using a comparable U.S. Treasury rate plus the amount of basis points set forth in this column.

Term Loan. In August 2025, the Company entered into a new 364-day term loan facility (the "Term Loan Facility") and borrowed $2.0 billion to partially fund an investment in Shields Health Solutions ("Shields"), a leading specialty pharmacy management company. The full outstanding balance was repaid and the Term Loan Facility was terminated in September 2025, using proceeds from the debt issuance described above.

Revolving Credit Agreement. Our Credit Agreement (defined below) provides us with the ability to borrow amounts for general corporate purposes, including providing liquidity support if necessary under our commercial paper program discussed below. As of December 31, 2025, there was no outstanding balance under the Credit Agreement.

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, with an option to extend the maturity date for an additional one-year period, subject to consent of the banks (the "Credit Agreement"). The Company can borrow up to $6.5 billion under the Credit Agreement for general corporate purposes, with up to $500 million available for issuance of letters of credit.

The Credit Agreement includes an option to increase commitments up to $1.5 billion for a maximum total commitment of $8.0 billion. The Credit Agreement allows for borrowings at either a base rate, term Secured Overnight Financing Rate ("SOFR") or daily simple SOFR, plus, in each case, an applicable margin based on the Company's senior unsecured credit ratings.

The Credit Agreement also contains customary covenants and restrictions, including a financial covenant that the Company's leverage ratio, as defined in the Credit Agreement, may not exceed 60%, subject to certain exceptions upon the consummation of an acquisition.

Commercial Paper. Under our commercial paper program, we may issue short-term, unsecured commercial paper notes privately placed on a discounted basis through certain broker-dealers at any time not to exceed an aggregate amount of $6.5 billion. Amounts available under the program may be borrowed, repaid and re-borrowed from time to time. The net proceeds of issuances have been and are expected to be used for general corporate purposes. There was no commercial paper balance as of December 31, 2025.

Debt Maturities. Maturities of outstanding long-term debt as of December 31, 2025 are as follows:


(In millions)	Scheduled Maturities (1)
2026	$	550
2027	$	2,359
2028	$	3,800
2029	$	1,000
2030	$	2,400
Maturities after 2030	$	21,485

(1) Long-term debt maturity amounts include current maturities of long-term debt. Finance leases are excluded from this table.

Interest Expense. Interest expense on long-term and short-term debt was $1.4 billion in 2025, $1.5 billion in 2024 and $1.4 billion in 2023.

Debt Covenants. The Company was in compliance with its debt covenants as of December 31, 2025.

Note 8 – Common and Preferred Stock

The Cigna Group has a total of 25 million shares of $1 par value preferred stock authorized for issuance. No shares of preferred stock were outstanding at December 31, 2025, 2024 or 2023.

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


	For the Years Ended December 31,
(Shares in thousands)	2025	2024	2023
Common: Par value $0.01; 600,000 shares authorized
Outstanding- January 1,	273,789	292,504	298,676
Net issued for stock option exercises and other benefit plans	1,569	2,198	1,619
Repurchased common stock	(11,894)	(20,913)	(7,791)
Outstanding- December 31,	263,464	273,789	292,504
Treasury stock	141,136	128,723	107,390
Issued- December 31,	404,600	402,512	399,894

Dividends

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


Record Date	Payment Date	Amount per Share	Total Amount Paid (in millions)
2025
March 5, 2025	March 20, 2025	$1.51	$412
June 3, 2025	June 18, 2025	$1.51	$401
September 4, 2025	September 18, 2025	$1.51	$402
December 4, 2025	December 18, 2025	$1.51	$396
2024
March 6, 2024	March 21, 2024	$1.40	$401
June 4, 2024	June 20, 2024	$1.40	$392
September 4, 2024	September 19, 2024	$1.40	$390
December 4, 2024	December 19, 2024	$1.40	$384
2023
March 8, 2023	March 23, 2023	$1.23	$368
June 7, 2023	June 22, 2023	$1.23	$362
September 6, 2023	September 21, 2023	$1.23	$362
December 6, 2023	December 21, 2023	$1.23	$358

On February 5, 2026, the Board of Directors of The Cigna Group (the "Board") declared the first quarter cash dividend of $1.56 per share of The Cigna Group common stock to be paid on March 19, 2026 to shareholders of record on March 5, 2026. The Company currently intends to pay regular quarterly dividends, with future declarations subject to approval by the Board and the Board's determination that the declaration of dividends remains in the best interests of The Cigna Group and its shareholders. The decision of whether to pay future dividends and the amount of any such dividends will be based on the Company's financial position, results of operations, cash flows, capital requirements, the requirements of applicable law and any other factors the Board may deem relevant.

Note 9 – Insurance and Contractholder Liabilities

**A.**Account Balances – Insurance and Contractholder Liabilities

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


	December 31, 2025						December 31, 2024
(In millions)	Current		Non-current		Total		Current		Non-current		Total
Unpaid claims and claim expenses
Cigna Healthcare	$	4,180	$	61	$	4,241	$	4,932	$	86	$	5,018
Other	167		176		343		147		144		291
Future policy benefits
Cigna Healthcare	38		153		191		91		507		598
Other Operations	142		3,081		3,223		157		3,140		3,297
Contractholder deposit funds
Cigna Healthcare	—		—		—		9		115		124
Other Operations	336		5,778		6,114		366		5,958		6,324
Market risk benefits	25		649		674		25		760		785
Unearned premiums	822		40		862		753		31		784
Total							6,480		10,741		17,221
Insurance and contractholder liabilities classified as liabilities of businesses held for sale (1)							(1,092)		(487)		(1,579)
Total insurance and contractholder liabilities	$	5,710	$	9,938	$	15,648	$	5,388	$	10,254	$	15,642

(1) Amounts classified as liabilities of businesses held for sale include $983 million of Unpaid claims, $408 million of Future policy benefits, $85 million of Unearned premiums and $103 million of Contractholder deposit funds as of December 31, 2024.

Insurance and contractholder liabilities expected to be paid within one year are classified as current.

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

The Company evaluates certain insurance contracts subject to premium deficiency testing and recognizes a premium deficiency loss and corresponding reserve when expected claims costs, claims adjustment expenses, maintenance costs, and unamortized acquisition costs exceed unearned premium. Anticipated investment income is considered in the calculation of premium deficiency.

**B.**Unpaid Claims and Claim Expenses – Cigna Healthcare

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

Accounting Policy. The Company uses actuarial principles and assumptions that are consistently applied each reporting period and recognizes the actuarial best estimate of the ultimate liability along with a margin for adverse deviation. This approach is consistent with actuarial standards of practice that the liabilities be adequate under moderately adverse conditions.

The Company compares key assumptions used to establish the medical costs payable to actual experience for each reporting period. The unpaid claims liability is adjusted through current period Shareholders' net income when actual experience differs from these assumptions. Additionally, the Company evaluates expected future developments and emerging trends that may impact key assumptions. The process used to determine this liability requires the Company to make critical accounting estimates that involve considerable judgment, reflecting the variability inherent in forecasting future claim payments. These estimates are highly sensitive to changes in the Company's key assumptions, specifically completion factors and medical cost trend.

The liability is primarily calculated using "completion factors" developed by comparing the claim incurral date to the date claims were paid. Completion factors are impacted by several key items including changes in: (i) electronic (auto-adjudication) versus manual claim processing; (ii) frequency and timeliness of provider claims submissions; (iii) number of customers; and (iv) the mix of products. The Company uses historical completion factors combined with an analysis of current trends and operational factors to

develop current estimates of completion factors. The Company estimates the liability for claims incurred in each month by applying the current estimates of completion factors to the current paid claims data. This approach implicitly assumes that historical completion rates will be a useful indicator for the current period.

The Company relies more heavily on medical cost trend analysis that reflects expected claim payment patterns and other relevant operational considerations for more recent months. Medical cost trend is primarily impacted by medical service utilization and unit costs that are affected by changes in the level and mix of health benefits offered, including inpatient, outpatient and pharmacy; the impact of copays and deductibles; changes in provider practices; and changes in consumer demographics and consumption behavior.

The total of incurred but not reported liabilities plus expected development on reported claims and reported claims in process was $4.0 billion as of December 31, 2025 and $4.6 billion as of December 31, 2024. The decrease was driven by the HCSC transaction.

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


	For the Years Ended December 31,
(In millions)	2025 (1)		2024 (1)		2023 (1)
Beginning balance	$	5,018	$	5,092	$	4,176
Less: Reinsurance and other amounts recoverable	159		236		221
Beginning balance, net	4,859		4,856		3,955

Incurred costs related to:
Current year	33,816		38,347		35,953
Prior years	(342)		(456)		(279)
Total incurred	33,474		37,891		35,674
Paid costs related to:
Current year	28,769		33,718		31,322
Prior years	4,147		4,170		3,451
Total paid	32,916		37,888		34,773
Less: Divestiture and other	1,323		—		—
Ending balance, net	4,094		4,859		4,856
Add: Reinsurance and other amounts recoverable	147		159		236
Ending balance	$	4,241	$	5,018	$	5,092

(1) Includes unpaid claims amounts classified as liabilities of businesses held for sale prior to the completion of the HCSC transaction. As of December 31, 2024 and December 31, 2023, includes $983 million and $823 million, respectively, classified as liabilities of businesses held for sale.

Reinsurance and other amounts recoverable reflect amounts due from reinsurers and policyholders to cover incurred but not reported and pending claims of certain business for which the Company administers the plan benefits without any right of offset. See Note 10 to the Consolidated Financial Statements for additional information on reinsurance.

Variances in incurred costs related to prior years' unpaid claims and claim expenses that resulted from the differences between actual experience and the Company's key assumptions were as follows:


	For the Years Ended December 31,
	2025				2024
(Dollars in millions)	$		% (1)		$		% (2)
Actual completion factors and other	$	200	0.5	%	$	223	0.6	%
Medical cost trend	142		0.4		233		0.7

Total favorable variance	$	342	0.9	%	$	456	1.3	%

*(1)*Percentage of current year incurred costs as reported for the year ended December 31, 2024.

*(2)*Percentage of current year incurred costs as reported for the year ended December 31, 2023.

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

The following table depicts the incurred and paid claims development and unpaid claims liability as of December 31, 2025 (net of reinsurance) reported in the Cigna Healthcare segment. The information about incurred and paid claims development for the year ended December 31, 2024 is presented as supplementary information and is unaudited.


	Incurred Costs
Incurral Year	2024 (Unaudited)		2025		Unpaid Claims and Claim Expenses
(In millions)
2024	$	37,179	$	36,853	88
2025			33,530		4,006
Cumulative incurred costs for the periods presented			$	70,383

	Cumulative Costs Paid
Incurral Year	2024 (Unaudited)		2025
(In millions)
2024	$	32,719	$	36,544
2025			28,635
Cumulative paid costs for the periods presented			$	65,179

Outstanding liabilities for the periods presented, net of reinsurance			$	5,204
Divestiture and other			(1,110)
Net unpaid claims and claims expenses - Cigna Healthcare			4,094
Reinsurance and other amounts recoverable			147
Unpaid claims and claim expenses - Cigna Healthcare			$	4,241

Incurred claims do not typically remain outstanding for multiple years; more than 95% of health claims incurred in a year are paid by the end of the following year.

There is no single or common claim frequency metric used in the health care industry. The Company believes a relevant metric for its health insurance business is the number of customers for whom an insured medical claim was paid. Customers for whom no insured medical claim was paid are excluded from the calculation. Claims that did not result in a liability are not included in the frequency metric. The claim frequency for 2025 and 2024 was approximately 4.9 million and 5.3 million, respectively.

**C.**Future Policy Benefits

Accounting Policy. Future policy benefits represent the present value of estimated future obligations, estimated using actuarial methods, for long-duration insurance policies and annuity products currently in force, consisting primarily of reserves for annuity contracts, life insurance benefits and certain supplemental health products that are guaranteed renewable beyond one year.

Contracts are grouped at a level no higher than issue year, based on the original contract issue date, and at lower levels of disaggregation within each issue year for certain businesses to reflect factors including product type, plan type and currency. Management estimates these obligations based on assumptions for premiums, interest rates, mortality or morbidity, future claim adjudication expenses, and surrenders. Mortality, morbidity and surrender assumptions are based on the Company's own experience and published actuarial tables and are updated at least annually, to the extent changes in circumstances require. Interest rate assumptions are based on market-level yields for low credit risk fixed income instruments ("upper-medium grade fixed income instruments"). For interest accretion purposes, interest rates are fixed at the year of the cohort's inception; however, for purposes of liability measurement, they are updated to the current rate quarterly, with all changes in the interest rate from inception to current period reported through Accumulated other comprehensive loss. For contracts issued domestically, we use observable inputs from a published spot rate curve for terms up to 30 years and extrapolate for longer terms using a constant forward rate approach. For contracts issued by foreign operating entities with functional currencies other than the U.S. dollar, we use observable inputs to approximate a risk-free rate and add a credit spread adjustment to align with a low credit risk fixed income instrument. For terms beyond the last observable risk-free rates, which vary by international market, we extrapolate to the ultimate forward rate assuming a constant credit spread.

For the annuity business, the premium paying period is shorter than the benefit coverage period, and a deferred profit liability is reported in future policy benefits representing gross premium received in excess of net premiums. Deferred profit liability is amortized based on expected future benefit payments.

As of December 31, 2025, approximately 36% of the liability for future policy benefits was supported by assets in trust for the benefit of the ceding company under reinsurance agreements.

Cigna Healthcare

Future policy benefits for the Cigna Healthcare segment were primarily related to the businesses divested to HCSC on March 19, 2025. Excluding the divestiture, changes in the future policy benefits for the years ended December 31, 2025 and December 31, 2024 were not material.

Other Operations

The weighted average interest rates applied and duration for future policy benefits in Other Operations, consisting of annuity and life insurance products, were as follows:


	As of
	December 31, 2025		December 31, 2024
Interest accretion rate	5.64	%	5.64	%
Current discount rate	5.18	%	5.42	%
Weighted average duration	10.6 years		10.8 years

Obligations for annuities represent discounted periodic benefits to be paid to an individual or groups of individuals over their remaining lives. Other Operations' traditional insurance contracts, which are in run-off, have no premium remaining to be collected; therefore, future policy benefit reserves represent the present value of expected future policy benefits, discounted using the current discount rate, and the remaining amortizable deferred profit liability.

Future policy benefits for Other Operations include deferred profit liability of $347 million and $366 million as of December 31, 2025 and December 31, 2024, respectively. As of December 31, 2025, December 31, 2024 and December 31, 2023, future policy benefits excluding deferred profit liability were $2.9 billion, $2.9 billion and $3.2 billion, respectively. Undiscounted expected future policy benefits were $4.2 billion and $4.3 billion as of December 31, 2025 and December 31, 2024, respectively. As of December 31, 2025 and December 31, 2024, $0.8 billion and $0.9 billion, respectively, of the future policy benefit reserve was recoverable through treaties with external reinsurers.

**D.**Contractholder Deposit Funds

Accounting Policy. Liabilities for contractholder deposit funds primarily include deposits received from customers for investment-related and universal life products as well as investment earnings on their fund balances in Other Operations. These liabilities are adjusted to reflect administrative charges and, for universal life fund balances, mortality charges. Interest credited on these funds is accrued ratably over the contract period.

Contractholder deposit fund liabilities within Other Operations were $6.1 billion, $6.3 billion and $6.5 billion as of December 31, 2025, December 31, 2024 and December 31, 2023, respectively. Approximately 37% and 38% of the balance is reinsured externally as of December 31, 2025 and December 31, 2024, respectively. Activity in these liabilities is presented net of reinsurance in the Consolidated Statements of Cash Flows. The net year-to-date decrease in contractholder deposit fund liabilities generally relates to withdrawals and benefit payments from contractholder deposit funds, partially offset by deposits and interest credited to contractholder deposit funds.

As of December 31, 2025, the weighted average crediting rate, net amount at risk and cash surrender value for contractholder deposit fund liabilities not effectively exited through reinsurance were 3.29%, $2.5 billion and $2.8 billion, respectively. The comparative amounts as of December 31, 2024 were 3.33%, $2.8 billion and $2.8 billion, respectively. More than 99% of the $3.9 billion liability as of December 31, 2025 and the $4.0 billion liability as of December 31, 2024 not reinsured externally is for contracts with guaranteed interest rates of 3% - 4%, and approximately $1.2 billion represented contracts with policies at the guarantee for both period ends. At these same period ends, $1.1 billion and $1.2 billion was 50 - 150 basis points ("bps") above the guarantee, and the remaining $1.6 billion as of both December 31, 2025 and December 31, 2024 represented contracts above the guarantee that pay the policyholder based on the greater of a guaranteed minimum cash value or the actual cash value. As of both December 31, 2025 and December 31, 2024, more than 90% of these contracts have actual cash values of at least 110% of the guaranteed cash value.

**E.**Market Risk Benefits

Liabilities for market risk benefits ("MRBs") consist of variable annuity reinsurance contracts in Other Operations. These liabilities arise under annuities and riders to annuities written by ceding companies that guarantee the benefit received at death and, for a subset of policies, also provide contractholders the option, within 30 days of a policy anniversary after the appropriate waiting period, to elect minimum income payments. The Company's capital market risk exposure on variable annuity reinsurance contracts arises when the reinsured guaranteed minimum benefit exceeds the contractholder's account value in the related underlying mutual funds at the time the insurance benefit is payable under the respective contract. The Company receives and pays premium periodically based on the terms of the reinsurance agreements.

Accounting Policy. Variable annuity reinsurance liabilities are measured as MRBs at fair value, net of nonperformance risk, with fluctuations in value gross of reinsurer nonperformance risk reported in benefit expenses, while fluctuations in the Company's own nonperformance risk (own credit risk) are reported in Accumulated other comprehensive loss. Nonperformance risk reflects risk that a party might default and therefore not fulfill its obligations (i.e., nonpayment risk). The nonperformance risk adjustment reflects a market participant's view of nonpayment risk by adding an additional spread to the discount rate in the calculation of both (a) the variable annuity reinsurance liabilities to be paid by the Company and (b) the variable annuity reinsurance assets to be paid by the reinsurers, after considering collateral. The Company classifies variable annuity assets and liabilities in Level 3 of the fair value hierarchy described in Note 12 to the Consolidated Financial Statements because assumptions related to future annuitant behavior are largely unobservable. As discussed further in Note 10 to the Consolidated Financial Statements, due to the reinsurance agreements covering these liabilities, the liabilities do not generally impact net income except for the change in nonperformance risk on the reinsurance recoverable, which is reported in benefit expenses and does not offset the nonperformance risk valuation on the liability. Variable annuity liabilities are established using capital market assumptions and assumptions related to future annuitant behavior (including mortality, lapse and annuity election rates).

Market risk benefits activity was as follows:


	For the Years Ended December 31,
(In millions)	2025		2024
Balance, beginning of year	$	785	$	1,003
Balance, beginning of year, before the effect of nonperformance risk (own credit risk)	838		1,085
Changes due to expected run-off	(20)		(12)
Changes due to capital markets versus expected	(63)		(233)
Changes due to policyholder behavior versus expected	(24)		(39)
Assumption changes	(17)		37
Balance, end of period, before the effect of changes in nonperformance risk (own credit risk)	714		838
Nonperformance risk (own credit risk), end of period	(40)		(53)
Balance, end of period	$	674	$	785
Reinsured market risk benefit, end of period	$	712	$	836

The following table presents the account value, net amount at risk, average attained age of contractholders (weighted by exposure) and the number of contractholders for guarantees assumed by the Company. The net amount at risk is the amount that the Company would have to pay to contractholders if all deaths or annuitizations occurred as of the earliest possible date in accordance with the insurance contract. As of December 31, 2025, the account value and net amount at risk decreased, reflecting a reduction in contractholders and favorable equity market performance. The Company should be reimbursed in full for these payments unless the Berkshire reinsurance limit is exceeded.


(Dollars in millions, excludes impact of reinsurance ceded)	December 31, 2025		December 31, 2024
Account value	$	7,281	$	7,777
Net amount at risk	$	1,115	$	1,283
Average attained age of contractholders (weighted by exposure)	78.3 years		77.7 years
Number of contractholders (estimated)	110,000		130,000

Note 10 – Reinsurance

The Company's insurance subsidiaries enter into agreements with other insurance companies to limit losses from large exposures and to permit recovery of a portion of incurred losses. Reinsurance is ceded primarily in acquisition and disposition transactions when the underwriting company is not being acquired. Reinsurance does not relieve the originating insurer of liability. Therefore, reinsured

liabilities must continue to be reported along with the related reinsurance recoverables. The Company regularly evaluates the financial condition of its reinsurers and monitors concentrations of its credit risk.

Accounting Policy. Reinsurance recoverables represent amounts due from reinsurers for both paid and unpaid claims of the Company's insurance businesses. The Company bears the risk of loss if its reinsurers and retrocessionaires do not meet or are unable to meet their reinsurance obligations to the Company. Most reinsurance recoverables are classified as non-current assets. The current portion of reinsurance recoverables is reported in Other current assets and consists primarily of recoverables on paid claims expected to be settled within one year. Reinsurance recoverables are presented net of allowances, consisting primarily of an allowance for expected credit losses, which is recognized on reinsurance recoverable balances each period and adjusted through Medical costs and other benefit expenses. Estimates of the allowance for expected credit losses are based on internal and external data used to develop expected loss rates over the anticipated duration of the recoverable asset that vary by external credit rating and collateral level.

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

The Company's reinsurance recoverables as of December 31, 2025 are presented at amount due by range of external credit rating and collateral level in the following table, with reinsurance recoverables that are market risk benefits separately presented at fair value:


(In millions)	Fair Value of Collateral Contractually Required to Meet or Exceed Carrying Value of Recoverable		Collateral Provisions Exist That May Mitigate Risk of Credit Loss (1)		No Collateral		Total
Ongoing operations
A- equivalent and higher current ratings (2)	$	—	$	5	$	211	$	216
BBB- to BBB+ equivalent current credit ratings (2)	—		—		64		64
Not rated	85		1		4		90
Acquisition, disposition or run-off activities
BBB+ equivalent and higher current ratings (2)(3)	288		2,838		32		3,158

Not rated	—		5		1		6
Total reinsurance recoverables before market risk benefits	$	373	$	2,849	$	312	$	3,534
Allowance for uncollectible reinsurance							(23)
Market risk benefits							712
Total reinsurance recoverables (4)							$	4,223

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

*(2)*Certified by a nationally recognized statistical ratings organization ("NRSRO").

*(3)*Comprised of six reinsurers, of which 76% is held by two reinsurers, Lincoln National Life Insurance Company and Lincoln Life and Annuity Company of New York.

*(4)*Includes $120 million of current reinsurance recoverables that are reported in Other current assets.

The Company entered into an agreement with Berkshire to effectively exit the variable annuity reinsurance business via a reinsurance transaction in 2013. Variable annuity contracts are accounted for as assumed and ceded reinsurance and categorized as market risk benefits as discussed in Note 9 to the Consolidated Financial Statements. Berkshire reinsured 100% of the Company's future cash flows in this business, net of other reinsurance arrangements existing at that time. The reinsurance agreement is subject to an overall limit, with approximately $3.0 billion remaining as of December 31, 2025. As a result of the reinsurance transaction, amounts payable are offset by a corresponding reinsurance recoverable, provided the increased recoverable remains within the overall Berkshire limit. As of both December 31, 2025 and 2024, market risk benefits (shown in the table net of nonperformance risk as of December 31, 2025) were predominantly reinsured by Berkshire, which is rated AA+ by an NRSRO. As of December 31, 2025, approximately 100% of the Berkshire recoverable is secured by assets in a trust.

Effects of Reinsurance

Net short-duration contract premiums (direct, assumed and ceded) were $39.3 billion, $43.9 billion and $42.3 billion for the years ended December 31, 2025, 2024 and 2023, respectively. Net long-duration contract premiums (direct, assumed and ceded) were $1.0 billion, $2.0 billion and $1.9 billion for the years ended December 31, 2025, 2024 and 2023, respectively. Reinsurance recoveries of $671 million, $573 million and $456 million as of December 31, 2025, 2024 and 2023, respectively, have been netted against Medical costs and other benefit expenses in the Company’s Consolidated Statements of Income.

Both short- and long-duration premiums are primarily direct premiums; the amounts assumed and ceded were not material. Written premiums for short-duration contracts were not materially different from the recognized premium amounts.

Note 11 – Investments

The following table summarizes the Company's investments by category and current or long-term classification:


	December 31, 2025						December 31, 2024
(In millions)	Current		Long-Term		Total		Current		Long-Term		Total
Debt securities	$	691	$	7,671	$	8,362	$	463	$	8,960	$	9,423
Equity securities	22		3,534		3,556		7		554		561
Commercial mortgage loans	86		1,147		1,233		108		1,243		1,351
Policy loans	—		1,082		1,082		—		1,156		1,156
Other long-term investments	—		5,037		5,037		—		4,576		4,576
Short-term investments	257		—		257		170		—		170
Total							$	748	$	16,489	$	17,237
Investments classified as assets of businesses held for sale (1)							(83)		(1,361)		(1,444)
Investments per Consolidated Balance Sheets	$	1,056	$	18,471	$	19,527	$	665	$	15,128	$	15,793

(1) Investments related to the HCSC transaction that were held for sale as of December 31, 2024. These investments were primarily comprised of debt securities.

Accounting Policy. Debt securities, commercial mortgage loans, derivative financial instruments and short-term investments with contractual maturities during the next 12 months are classified on the balance sheet as current investments unless they are held as statutory deposits or restricted for other purposes, in which case they are classified as Long-term investments. All other investments are classified as Long-term investments, with the exception of equity security funds that are used in our cash management strategy and are classified as current investments. See Note 12 to the Consolidated Financial Statements for information about the valuation of the Company's investment portfolio.

**A.**Investment Portfolio

Debt Securities

Accounting Policy. Debt securities (including bonds, mortgage and other asset-backed securities, and preferred stocks redeemable by the investor) are classified as available for sale and are carried at fair value with changes in fair value recorded either in Accumulated other comprehensive loss within Shareholders' equity or in credit loss expense based on fluctuations in the allowance for credit losses, as further discussed below. When the Company intends to sell or determines that it is more likely than not to be required to sell an impaired debt security, the excess of amortized cost over fair value is directly written down with a charge to Net investment gains/losses. Certain asset-backed securities are considered variable interest entities. See Note 13 to the Consolidated Financial Statements for additional information.

The Company reviews declines in fair value from a debt security's amortized cost basis to determine whether a credit loss exists and, when appropriate, recognizes a credit loss allowance with a corresponding charge to credit loss expense, presented in Net investment gains/losses in the Company's Consolidated Statements of Income. The allowance for credit loss represents the excess of amortized cost over the greater of its fair value or the net present value of the debt security's projected future cash flows (based on qualitative and quantitative factors, including the probability of default and the estimated timing and amount of recovery). Each period, the allowance for credit loss is adjusted as needed through credit loss expense.

The Company does not measure an allowance for credit losses for accrued interest receivables. When interest payments are delinquent based on contractual terms or when certain terms (interest rate or maturity date) of the investment have been restructured, accrued interest, reported in Other current assets, is written off through a charge to Net investment income/losses and interest income is recognized on a cash basis.

The amortized cost and fair value by contractual maturity periods for debt securities were as follows as of December 31, 2025:



(In millions)	Amortized Cost		Fair Value
Due in one year or less	$	695	$	598
Due after one year through five years	3,700		3,703
Due after five years through ten years	2,030		1,995
Due after ten years	1,968		1,822
Mortgage and other asset-backed securities	267		244
Total	$	8,660	$	8,362

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

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


(In millions)	Amortized Cost		Allowance for Credit Loss		Unrealized Appreciation		Unrealized Depreciation		Fair Value
December 31, 2025
Federal government and agency	$	215	$	—	$	15	$	(3)	$	227
State and local government	24		—		1		—		25
Foreign government	450		—		12		(6)		456
Corporate	7,704		(137)		175		(332)		7,410
Mortgage and other asset-backed	267		—		3		(26)		244
Total	$	8,660	$	(137)	$	206	$	(367)	$	8,362


December 31, 2024
Federal government and agency	$	276	$	—	$	14	$	(9)	$	281
State and local government	37		—		1		(1)		37
Foreign government	350		—		5		(11)		344
Corporate	9,091		(111)		102		(659)		8,423
Mortgage and other asset-backed	371		—		1		(34)		338
Total	$	10,125	$	(111)	$	123	$	(714)	$	9,423

Review of Declines in Fair Value. Management reviews debt securities in an unrealized loss position to determine whether a credit loss allowance is needed based on criteria that include severity of decline; financial health and specific prospects of the issuer; and changes in the regulatory, economic or general market environment of the issuer's industry or geographic region.

The table below summarizes debt securities with a decline in fair value from amortized cost for which an allowance for credit losses has not been recorded (by investment grade and the length of time these securities have been in an unrealized loss position). Unrealized depreciation on these debt securities is primarily due to declines in fair value resulting from increasing interest rates since these securities were purchased.


	December 31, 2025							December 31, 2024
(Dollars in millions)	Fair Value		Amortized Cost		Unrealized Depreciation		Number of Issues	Fair Value		Amortized Cost		Unrealized Depreciation		Number of Issues
One year or less
Investment grade	$	384	$	386	$	(2)	149	$	1,203	$	1,227	$	(24)	545
Below investment grade	120		125		(5)		239	245		250		(5)		739
More than one year
Investment grade	3,044		3,382		(338)		799	4,687		5,319		(632)		1,297
Below investment grade	185		207		(22)		86	416		469		(53)		123
Total	$	3,733	$	4,100	$	(367)	1,273	$	6,551	$	7,265	$	(714)	2,704

Equity Securities

Accounting Policy**.** Equity securities with a readily determinable fair value consist primarily of public equity investments in the health care sector and mutual funds that invest in fixed income debt securities while those without a readily determinable fair value consist of private equity investments. Changes in the fair values of equity securities that have a readily determinable fair value are reported in Net investment gains/losses. Equity securities without a readily determinable fair value are carried at cost minus impairment plus or minus changes resulting from observable price changes.

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


	December 31, 2025				December 31, 2024
(In millions)	Cost		Carrying Value		Cost		Carrying Value
Equity securities with readily determinable fair values	$	78	$	92	$	635	$	37
Equity securities with no readily determinable fair value	6,792		3,464		3,215		524
Total	$	6,870	$	3,556	$	3,850	$	561

In the third quarter of 2025, the Company invested $3.5 billion in preferred stock of Shields, and a compounding dividend is recorded in Fees and other revenues within the Consolidated Statements of Income. The investment is included in equity securities with no readily determinable fair value in the table above.

Commercial Mortgage Loans

Accounting Policy. Commercial mortgage loans are carried at unpaid principal balances, net of an allowance for expected credit losses, and classified as either current or long-term investments based on their contractual maturities. Changes in the allowance for expected credit losses are recognized as credit loss expense and presented in Net investment gains/losses in the Company's Consolidated Statements of Income.

Each period, the Company establishes (or adjusts) its allowance for expected credit losses for commercial mortgage loans. The allowance for expected credit losses is based on a credit risk category that is assigned to each loan at origination using key credit quality indicators, including debt service coverage and loan-to-value ratios. Credit risk categories are updated as key credit quality indicators change. An expected loss rate, assigned based on the credit risk category, is applied to each loan's unpaid principal balance to develop the aggregate allowance for expected credit losses. Commercial mortgage loans are considered impaired and written off against the allowance when it is probable that the Company will not collect all amounts due per the terms of the promissory note. In situations involving foreclosure or the use of real estate operations to recover value, the allowance for credit losses is determined by the extent to which the mortgage loan’s carrying value exceeds the fair value of its underlying collateral.

Mortgage loans held by the Company are made exclusively to commercial borrowers and are diversified by property type, location and borrower. Loans are generally issued at fixed rates of interest and are secured by high-quality, primarily completed and substantially leased operating properties.

Credit Quality**.** The Company regularly evaluates and monitors credit risk. Mortgage origination professionals employ an internal credit quality rating system designed to evaluate the relative risk of the transaction at origination that is then updated each year as part of the annual portfolio loan review. The Company evaluates and monitors credit quality on a consistent and ongoing basis. The annual portfolio review performed in the second quarter of 2025 confirmed ongoing strong overall credit quality in line with the previous year's results.

Quality ratings are based on our evaluation of a number of key inputs related to the loan. The two most significant contributors to the credit quality rating are the debt service coverage and loan-to-value ratios. The debt service coverage ratio measures the amount of property cash flow available to meet annual interest and principal payments on debt, with a ratio below 1.0 indicating that there is not enough cash flow to cover the required loan payments. The loan-to-value ratio, commonly expressed as a percentage, compares the amount of the loan to the fair value of the underlying property collateralizing the loan.

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


(Dollars in millions)	December 31, 2025					December 31, 2024
Loan-to-Value Ratio	Carrying Value		Average Debt Service Coverage Ratio	Average Loan-to-Value Ratio		Carrying Value		Average Debt Service Coverage Ratio	Average Loan-to-Value Ratio
Below 60%	$	355	2.13			$	547	2.07
60% to 79%	694		1.81			595		1.83
80% to 100%	184		0.79			209		0.51



Total	$	1,233	1.72	71	%	$	1,351	1.70	69	%

Policy Loans

Accounting Policy**.** Policy loans, primarily associated with our corporate-owned life insurance business, are carried at unpaid principal balances plus accumulated interest, the total of which approximates fair value. These loans are collateralized by life insurance policy cash values and therefore have minimal exposure to credit loss. Interest rates are reset annually based on a rolling average of benchmark interest rates.

Other Long-Term Investments

Accounting Policy. Other long-term investments include investments in unconsolidated entities, including certain limited partnerships and limited liability companies holding real estate, securities or loans, and health care-related investments. These investments are carried at cost plus the Company's ownership percentage of reporting income or loss, based on the financial statements of the

underlying investments that are generally reported at fair value. Income or loss from these investments is reported on a one-quarter lag due to the timing of when financial information is received from the general partner or manager of the investments.

Other long-term investments also include investment real estate carried at depreciated cost less any impairment write-downs to fair value when cash flows indicate that the carrying value may not be recoverable. Depreciation is generally recorded using the straight-line method based on the estimated useful life of each asset. Investment real estate as of December 31, 2025 and 2024 is expected to be held longer than one year and may include real estate acquired through the foreclosure of commercial mortgage loans.

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

Other long-term investments and related commitments are diversified by issuer, property type and geographic region. These investments are primarily unconsolidated variable interest entities (see Note 13 to the Consolidated Financial Statements for additional information). The following table provides unfunded commitment and carrying value information for these investments. The Company expects to disburse approximately 30% of the committed amounts in 2026.

Our limited partnership investments are reduced as the Company receives cash distributions for returns on its investment that were previously recognized in Net investment income/losses. The amount of these cash distributions was $314 million in 2025, $344 million in 2024 and $253 million in 2023.



					Unfunded Commitments as of
	Carrying Value as of December 31,
(In millions)	2025		2024		December 31, 2025
Real estate investments	$	1,895	$	1,763	$	1,106
Securities partnerships	2,948		2,587		2,058
Other	194		226		—
Total	$	5,037	$	4,576	$	3,164

Short-Term Investments

Accounting Policy. Security investments with maturities of greater than three months to one year from time of purchase are classified as short-term, available for sale and carried at fair value that approximates cost.

Concentration of Risk

The Company did not have a concentration of investments in a single issuer or borrower exceeding 10% of shareholders' equity as of December 31, 2025 or 2024.

**B.**Derivative Financial Instruments

The Company uses derivative financial instruments to manage the characteristics of investment assets (such as duration, yield, currency and liquidity) to meet the varying demands of the related insurance and contractholder liabilities. The Company also uses derivative financial instruments to hedge the risk of changes in the net assets of certain of its foreign subsidiaries due to changes in foreign currency exchange rates and to hedge the interest rate risk of certain long-term debt. The Company also has derivative instruments associated with certain equity securities; see Note 12 to the Consolidated Financial Statements for further discussion.

Accounting Policy. Derivatives are recorded in our Consolidated Balance Sheets at fair value and are classified as current or non-current according to their contractual maturities. Further information on our policies for determining fair value are discussed in Note 12. The Company applies hedge accounting when derivatives are designated, qualified and highly effective as hedges. Under hedge accounting, the changes in fair value of the derivative and the hedged risk are generally recognized together and offset each other when reported in Shareholders' net income. Various qualitative or quantitative methods appropriate for each hedge are used to formally assess and document hedge effectiveness at inception and each period throughout the life of a hedge.

Fair Value Hedges of the Foreign Exchange-Related Changes in Fair Values of Certain Foreign-Denominated Bonds**:**

This program hedges the foreign exchange-related changes in fair values of certain foreign-denominated bonds. The notional value of these derivatives matches the amortized cost of the hedged bonds. A majority of these instruments are denominated in Euros, with the remaining instruments denominated in British Pounds Sterling and Australian Dollars. Swap fair values are reported in Long-term investments or Other non-current liabilities. Offsetting changes in fair values attributable to the foreign exchange risk of the swap contracts and the hedged bonds are reported in Net investment gains/losses. The portion of the swap contracts' changes in fair value excluded from the assessment of hedge effectiveness is recorded in Other comprehensive loss and recognized in Net investment

income/losses as swap coupon payments are accrued, offsetting the foreign-denominated coupons received on the designated bonds. Net cash flows are reported in Operating activities, while exchanges of notional principal amounts are reported in Investing activities.

Fair Value Hedges of the Interest Rate Exposure on the Company's Long-Term Debt**:**

This program converts a portion of the interest rate exposure on the Company's long-term debt from fixed to variable rates. This more closely aligns the Company's interest expense with the interest income received on its cash equivalent and short-term investment balances. The variable rates are benchmarked to SOFR. Using fair value hedge accounting, the fair values of the swap contracts are reported in other assets or other liabilities. The critical terms of these swaps match those of the long-term debt being hedged. As a result, the carrying value of the hedged debt is adjusted to reflect changes in its fair value driven by SOFR. The effects of those adjustments on interest expense are offset by the effects of corresponding changes in the swaps' fair value. The net impact from the hedge reported in Interest expense and other reflects interest expense on the hedged debt at the variable interest rate. Cash flows relating to these contracts are reported in Operating activities.

Net Investment Hedges of Certain Foreign Subsidiaries Operating Principally in Currencies Other than the U.S. Dollar**:**

This program reduces the risk of changes in net assets due to changes in foreign currency spot exchange rates for certain foreign subsidiaries that conduct their business principally in currencies other than the U.S. Dollar. The notional value of hedging instruments matches the hedged amount of subsidiary net assets. Foreign currency swap contracts are denominated in Euros. The fair values of the foreign currency swap and forward contracts are reported in other assets or other liabilities. The changes in fair values of these instruments are reported in Other comprehensive loss, specifically in translation of foreign currencies. The portion of the change in fair values relating to foreign exchange spot rates will be recognized in earnings upon deconsolidation of the hedged foreign subsidiaries. Cash flows relating to these contracts are reported in Investing activities.

The effects of derivative financial instruments used in our individual hedging strategies were not material to the Consolidated Financial Statements as of December 31, 2025 and December 31, 2024. The gross fair values of our derivative financial instruments are presented in Note 12 to the Consolidated Financial Statements. The following table summarizes the types and notional quantity of derivative instruments held by the Company:


	Notional Value as of
(In millions)	December 31, 2025		December 31, 2024
Type of Instrument
Fair value hedge - Foreign currency swap contracts	$	908	$	975
Fair value hedge - Interest rate swap contracts	$	3,150	$	2,700
Net investment hedge - Foreign currency swap contracts	$	415	$	415

**C.**Net Investment Income

Accounting Policy. When interest and principal payments on investments are current, the Company recognizes interest income when it is earned. The Company recognizes interest income on a cash basis when interest payments are delinquent based on contractual terms or when certain terms (interest rate or maturity date) of the investment have been restructured. For unconsolidated entities that are included in other long-term investments, investment income is generally recognized according to the Company's share of the reported income or loss on the underlying investments. Investment income attributed to the Company's separate accounts is excluded from our earnings because associated gains and losses generally accrue directly to separate account policyholders.

The components of Net investment income were as follows:


	For the Years Ended December 31,
(In millions)	2025		2024		2023
Debt securities	$	454	$	492	$	500
Equity securities (1)	6		(114)		123
Commercial mortgage loans	52		61		65
Policy loans	51		56		60
Other long-term investments	232		75		123
Short-term investments and cash	294		447		339
Total investment income	1,089		1,017		1,210
Less investment expenses	43		44		44
Net investment income	$	1,046	$	973	$	1,166

*(1)*Includes a $182 million impairment of dividend receivable for the year ended December 31, 2024.

**D.**Investment Gains and Losses

Accounting Policy. Investment gains and losses are based on specifically identified assets and result from sales, investment asset write-downs, changes in the fair value of certain derivatives and equity securities and changes in allowances for credit losses on debt securities and commercial mortgage loan investments.

Net investment losses before income taxes were $24 million, $2,737 million and $78 million for the years ended December 31, 2025, 2024 and 2023, respectively. Net investment losses in 2024 were primarily driven by the impairment of equity securities in 2024. These amounts exclude investment gains and losses attributed to the Company's separate accounts because those gains and losses generally accrue directly to separate account policyholders.

Note 12 – Fair Value Measurements

Accounting Policy. The Company carries certain financial instruments at fair value in the financial statements including debt securities, certain equity securities, short-term investments and derivatives. Other financial instruments are measured at fair value only under certain conditions, such as when impaired or when there are observable price changes for equity securities with no readily determinable fair value.

Fair value is defined as the price at which an asset could be exchanged in an orderly transaction between market participants at the balance sheet date. A liability's fair value is defined as the amount that would be paid to transfer the liability to a market participant, not the amount that would be paid to settle the liability with the creditor.

The Company's financial assets and liabilities carried at fair value have been classified based upon a hierarchy defined by GAAP. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset's or a liability's classification is based on the lowest level of input that is significant to its measurement. For example, a financial asset or liability carried at fair value would be classified in Level 3 if unobservable inputs were significant to the instrument's fair value, even though the measurement may be derived using inputs that are both observable (Levels 1 and 2) and unobservable (Level 3).

The Company estimates fair values using prices from third parties or internal pricing methods. Fair value estimates received from third-party pricing services are based on reported trade activity and quoted market prices when available and other market information that a market participant would use to estimate fair value. The internal pricing methods are performed by the Company's investment professionals and generally involve using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality as well as other qualitative factors. In instances where there is little or no market activity for the same or similar instruments, fair value is estimated using methods, models and assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of estimation and judgment that becomes significant with increasingly complex instruments or pricing models.

The Company is responsible for determining fair value and for assigning the appropriate level within the fair value hierarchy based on the significance of unobservable inputs. The Company reviews methodologies, processes and controls of third-party pricing services and compares prices on a test basis to those obtained from other external pricing sources or internal estimates. The Company performs ongoing analyses of both prices received from third-party pricing services and those developed internally to determine that they represent appropriate estimates of fair value. The controls executed by the Company include evaluating changes in prices and monitoring for potentially stale valuations. The Company also performs sample testing of sales values to confirm the accuracy of prior fair value estimates. The minimal exceptions identified during these processes indicate that adjustments to prices are infrequent and do not significantly impact valuations. An annual due diligence review of the most significant pricing service is conducted to review their processes, methodologies and controls. This review includes a walk-through of inputs for a sample of securities held across various asset types to validate the documented pricing process.

**A.**Financial Assets and Financial Liabilities Carried at Fair Value

The following table provides information about the Company's investment and derivative financial assets and liabilities carried at fair value on a recurring basis. Further information regarding insurance assets and liabilities carried at fair value is provided in Note 9E to the Consolidated Financial Statements. Separate account assets are also recorded at fair value on the Company's Consolidated Balance Sheets and are reported separately in the Separate Accounts section below as gains and losses related to these assets generally accrue directly to contractholders.


(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
	December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024
Financial assets at fair value
Debt securities
Federal government and agency	$	105	$	165	$	122	$	116	$	—	$	—	$	227	$	281
State and local government	—		—		25		37		—		—		25		37
Foreign government	—		—		446		344		10		—		456		344
Corporate	—		—		7,133		8,049		277		374		7,410		8,423
Mortgage and other asset-backed	—		—		206		295		38		43		244		338
Total debt securities	105		165		7,932		8,841		325		417		8,362		9,423
Equity securities (1)	54		1		36		36		2		—		92		37
Short-term investments	—		—		257		170		—		—		257		170
Derivative assets	—		—		68		168		923		—		991		168
Financial liabilities at fair value
Derivative liabilities	$	—	$	—	$	22	$	1	$	354	$	—	$	376	$	1

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

Level 1 Financial Assets

Inputs for instruments classified in Level 1 include unadjusted quoted prices for identical assets in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets. Assets in Level 1 include actively traded U.S. government bonds and exchange-listed equity securities.

Level 2 Financial Assets and Financial Liabilities

Inputs for instruments classified in Level 2 include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are market-observable or can be corroborated by market data for the term of the instrument. Such other inputs include market interest rates and volatilities, spreads, and yield curves. An instrument is classified in Level 2 if the Company determines that unobservable inputs are insignificant.

Debt and Equity Securities. Third-party pricing services and internal methods often use recent trades of securities with similar features and characteristics because many debt securities do not trade daily. Pricing models are used to determine these prices when recent trades are not available. These models calculate fair values by discounting future cash flows at estimated market interest rates. Such market rates are derived by calculating the appropriate spreads over comparable U.S. Treasury securities based on the credit quality, industry and structure of the asset. Typical inputs and assumptions to pricing models include, but are not limited to, a combination of benchmark yields, reported trades, issuer spreads, liquidity, benchmark securities, bids, offers, reference data, and industry and economic events. For mortgage-backed securities, inputs and assumptions may also include characteristics of the issuer, collateral attributes, prepayment speeds and credit rating. Nearly all of these instruments are valued using recent trades or pricing models.

Short-term Investments are carried at fair value that approximates cost. The Company compares market prices for these securities to recorded amounts on a regular basis to validate that current carrying amounts approximate exit prices. The short-term nature of the investments and corroboration of the reported amounts over the holding period support their classification in Level 2.

Derivative Assets and Liabilities classified in Level 2 represent over-the-counter instruments, such as foreign currency forward and swap contracts. Fair values for these instruments are determined using market-observable inputs, including forward currency and

interest rate curves and widely published market-observable indices. Credit risk related to the counterparty and the Company is considered when estimating the fair values of these derivatives. The nature and use of these derivative financial instruments are described in Note 11.

Level 3 Financial Assets and Financial Liabilities

Certain inputs for instruments classified in Level 3 are unobservable (supported by little or no market activity) and significant to their resulting fair value measurement. Unobservable inputs reflect the Company's best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date. Additionally, as discussed in Note 9E, the Company classifies variable annuity assets and liabilities in Level 3 of the fair value hierarchy.

The Company classifies certain newly issued, privately placed, complex or illiquid securities in Level 3. Approximately 4% of debt securities are priced using significant unobservable inputs and classified in this category.

Fair values of mortgage and other asset-backed securities, as well as corporate and government debt securities, are primarily determined using pricing models that incorporate the specific characteristics of each asset and related assumptions, including the investment type and structure, credit quality, industry and maturity date in comparison to current market indices, spreads, and liquidity of assets with similar characteristics. Inputs and assumptions for pricing may also include characteristics of the issuer, collateral attributes, and prepayment speeds for mortgage and other asset-backed securities. Recent trades in the subject security or similar securities are assessed when available, and the Company may also review published research in its evaluation, as well as the issuer's financial statements.

Information about Debt Securities. The significant unobservable input used to value our corporate and government debt securities, and mortgage and other asset-backed securities, is an adjustment for liquidity. This adjustment is needed to reflect current market conditions and issuer circumstances when there is limited trading activity for the security.

The following table summarizes the fair value and significant unobservable inputs that were developed directly by the Company and used in pricing these debt securities. The range and weighted average basis point amounts for liquidity reflect the Company's best estimates of the unobservable adjustments a market participant would make to calculate these fair values. An increase in liquidity spread adjustments would result in a lower fair value measurement, while a decrease would result in a higher fair value measurement.


	Fair Value as of					Unobservable Adjustment Range (Weighted Average by Quantity) as of
(Fair value in millions)	December 31, 2025		December 31, 2024		Unobservable Input December 31, 2025	December 31, 2025		December 31, 2024
Debt securities
Corporate	$	286	$	373	Liquidity	60 - 920 (175)	bps	60 - 1520 (370)	bps
Mortgage and other asset-backed securities	38		43		Liquidity	105 - 350 (160)	bps	100 - 550 (280)	bps
Other debt securities	1		1
Total Level 3 debt securities	$	325	$	417

Information about Derivative Instruments. Derivative instruments associated with certain equity securities are valued each reporting period using a Monte Carlo simulation of enterprise value and are recorded in Other assets and Other non-current liabilities in the Consolidated Balance Sheets. The estimation of enterprise value is derived from a discounted cash flow model utilizing management's forecasts and industry benchmarks. The significant unobservable Level 3 measurement inputs used as of December 31, 2025 are: volatility of adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA") (55%), volatility of equity (85%), correlation (35%), purchaser credit spread (0.7%) and weighted average cost of capital (13.5%). Changes in these assumptions could increase or decrease the fair value measurements. See Note 11A to the Consolidated Financial Statements for further information.

Changes in Level 3 Financial Assets and Financial Liabilities Carried at Fair Value

The following table summarizes the changes in financial assets and financial liabilities classified in Level 3. Gains and losses reported in the table may include net changes in fair value that are attributable to both observable and unobservable inputs.



	Years Ended December 31,
(In millions)		2025		2024

Beginning balance		$	417	$	447
Losses included in Shareholders' net income		(90)		(69)
Gains (losses) included in Other comprehensive loss		33		(9)

Purchases, sales and settlements
Purchases		655		17
Sales		(8)		(2)
Settlements		(105)		(21)
Total purchases, sales and settlements		542		(6)
Transfers into / (out of) Level 3
Transfers into Level 3		59		72
Transfers out of Level 3		(65)		(18)
Total transfers into / (out of) Level 3		(6)		54
Ending balance		$	896	$	417
Total losses included in Shareholders' net income attributable to instruments held at the reporting date		$	(94)	$	(69)
Change in unrealized gain or (loss) included in Other comprehensive loss for assets held at the end of the reporting period		$	19	$	(9)

Total gains and losses included in Shareholders' net income in the table above are reflected in the Consolidated Statements of Income as Net investment gains/losses and as Net investment income/losses. Gains and losses included in Other comprehensive loss, net of tax, in the table above are reflected in Net unrealized (depreciation) appreciation on securities and derivatives in the Consolidated Statements of Comprehensive Income.

Transfers into or out of the Level 3 category occur when unobservable inputs, such as the Company's best estimate of what a market participant would use to determine a current transaction price, become more or less significant to the fair value measurement. Market activity typically decreases during periods of economic uncertainty, and this decrease in activity reduces the availability of market observable data. As a result, the level of unobservable judgment that must be applied to the pricing of certain instruments increases and is typically observed through the widening of liquidity spreads. Transfers between Level 2 and Level 3 during 2025 and 2024 primarily reflected changes in liquidity estimates for certain private placement issuers across several sectors. See discussion under Level 3 Financial Assets and Financial Liabilities above for more information.

Separate Accounts

Accounting Policy. Separate account assets and liabilities are contractholder funds maintained in accounts with specific investment objectives. Our subsidiaries or external advisors manage invested assets of separate accounts on behalf of contractholders, including The Cigna Group Pension Plan, variable universal life products sold through our corporate-owned life insurance products and the run-off businesses. The assets of these accounts are legally segregated and are not subject to claims that arise out of any of the Company's other businesses. These separate account assets are carried at fair value with equal amounts recorded for related separate account liabilities. The investment income and fair value gains and losses of separate account assets generally accrue directly to the contractholders and, together with their deposits and withdrawals, are excluded from the Company's Consolidated Statements of Income and Cash Flows. Fees and charges earned for mortality risks, asset management or administrative services are reported in either Premiums or Fees and other revenues. Investments that are measured using the practical expedient of net asset value are excluded from the fair value hierarchy. The separate account activity for the years ended December 31, 2025 and 2024 was primarily driven by changes in the market values of the underlying separate account investments.

Fair values of Separate account assets were as follows:


	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
(In millions)	December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024		December 31, 2025		December 31, 2024
Guaranteed separate accounts (see Note 22)	$	247	$	231	$	330	$	345	$	—	$	—	$	577	$	576
Non-guaranteed separate accounts (1)	271		267		5,769		5,575		209		228		6,249		6,070
Subtotal	$	518	$	498	$	6,099	$	5,920	$	209	$	228	6,826		6,646
Non-guaranteed separate accounts priced at net asset value as a practical expedient (1)													661		632
Total													$	7,487	$	7,278

*(1)*Non-guaranteed separate accounts include $3.8 billion as of both December 31, 2025 and December 31, 2024 in assets supporting the Company's pension plans, including $0.2 billion classified in Level 3 as of both December 31, 2025 and December 31, 2024. Non-guaranteed separate accounts are primarily comprised of securities partnerships, real estate and real estate funds.

Separate account assets classified in Level 1 primarily include exchange-listed equity securities. Level 2 assets primarily include corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates, as described above, and actively traded institutional and retail mutual fund investments.

Separate account assets classified in Level 3 primarily support the Company's pension plans and include certain newly issued, privately placed, complex or illiquid securities that are priced using methods discussed above, as well as commercial mortgage loans. Activity, including transfers into and out of Level 3, was not material for the years ended December 31, 2025 or 2024.

**B.**Assets and Liabilities Measured at Fair Value under Certain Conditions

Some financial assets and liabilities are not carried at fair value, such as commercial mortgage loans that are carried at unpaid principal, investment real estate that is carried at depreciated cost and equity securities with no readily determinable fair value when there are no observable market transactions. However, these financial assets and liabilities may be measured using fair value under certain conditions, such as when investments become impaired and are written down to their fair value, or when there are observable price changes from orderly market transactions of equity securities that otherwise had no readily determinable fair value.

For the year ended December 31, 2025, impairments recognized requiring the assets and liabilities described above to be measured at fair value were not material. For the year ended December 31, 2024, we determined our investment in VillageMD was fully impaired and recorded a $2.7 billion loss in Net investment gains/losses in the Company's Consolidated Statements of Income. Observable price changes for equity securities with no readily determinable fair value were not material for the years ended December 31, 2025 or December 31, 2024.

**C.**Fair Value Disclosures for Financial Instruments Not Carried at Fair Value

The following table includes the Company's financial instruments not recorded at fair value but for which fair value disclosure is required. In addition to universal life products and finance leases, financial instruments that are carried in the Company's Consolidated Balance Sheets at amounts that approximate fair value are excluded from the following table.


	Classification in Fair Value Hierarchy		December 31, 2025						December 31, 2024
(In millions)		Fair Value			Carrying Value			Fair Value			Carrying Value
Commercial mortgage loans	Level 3		$	1,195		$	1,233		$	1,256		$	1,351
Long-term debt, including current maturities, excluding finance leases	Level 2		$	29,907		$	31,352		$	28,392		$	31,008

Note 13 – Variable Interest Entities

When the Company becomes involved with a variable interest entity and when there is a change in the Company's involvement with an entity, the Company must determine if it is the primary beneficiary and must consolidate the entity. The Company is considered the primary beneficiary if it has the power to direct the entity's most significant economic activities and has the right to receive benefits or obligation to absorb losses that could be significant to the entity.

The Company evaluates the following criteria: the structure and purpose of the entity; the risks and rewards created by and shared through the entity; and the Company's ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity, including its sponsors, equity holders, guarantors, creditors and servicers.

The Company determined it was not a primary beneficiary in any material variable interest entity as of December 31, 2025 or 2024. The Company's involvement in variable interest entities for which it is not the primary beneficiary is described below.

Securities Limited Partnerships and Real Estate Limited Partnerships. The Company owns interests in securities limited partnerships and real estate limited partnerships that are defined as unconsolidated variable interest entities. These partnerships invest in the equity or mezzanine debt of privately held companies and real estate properties. General partners unaffiliated with the Company control decisions that most significantly impact the partnership's operations, and the limited partners do not have substantive kick-out or participating rights. The Company has invested in approximately 215 limited partnerships that have a carrying value of $3.7 billion as of December 31, 2025 reported in other long-term investments. As of December 31, 2025, we have commitments to contribute an additional $2.8 billion to these entities, and the Company's maximum exposure to loss from these investments is $6.5 billion, calculated as the sum of our carrying value and the additional funding commitments. Our noncontrolling interest in each of these limited partnerships is generally less than 9% of the partnership ownership interests. See Note 11 to the Consolidated Financial Statements for further information on the Company's accounting policy for other long-term investments.

The Company has guaranteed debt payments to mortgage lenders for certain real estate limited partnerships should potential environmental obligations arise. No liability has been incurred related to these guarantees, and the Company's maximum exposure to these guarantees was approximately $380 million as of December 31, 2025.

Other Variable Interest Entities. The Company is involved in other types of variable interest entities, including certain asset-backed and corporate securities, real estate joint ventures that develop properties for residential and commercial use, and international health care joint ventures. As of December 31, 2025, the Company's maximum exposure to loss is $0.4 billion from certain asset-backed and corporate securities and $1.0 billion from real estate joint ventures, which represents the sum of our carrying value and the additional funding commitments for these entities. The carrying values and maximum exposures for the remaining unconsolidated variable interest entities were not material as of December 31, 2025.

The Company has not provided, and does not intend to provide, financial support to any of the variable interest entities in excess of its maximum exposure. We perform ongoing qualitative analyses of our involvement with these variable interest entities to determine if consolidation is required.

Note 14 – Collectively Significant Operating Unconsolidated Subsidiaries

In addition to equity method investments in certain limited partnerships and limited liability companies holding real estate, securities or loans (as disclosed in Note 11), we maintain a portfolio of operating joint ventures accounted for as equity method investments. Operating joint ventures had a carrying value of $(211) million as of December 31, 2025 and $656 million as of December 31, 2024, of which $(296) million as of December 31, 2025 and $43 million as of December 31, 2024 related to our joint venture in China. The carrying value of our joint venture in China includes the Company's share of Accumulated Other Comprehensive Income (Loss) ("AOCI") losses of $1,672 million as of December 31, 2025 and $979 million as of December 31, 2024, primarily related to the requirement to update discount rate assumptions for certain long-duration liabilities as well as the impact of unrealized investment gains and losses.

For the years ended December 31, 2025, 2024 and 2023, none of our equity method investments were individually significant.

In the fourth quarter of 2024, we sold a portion of an operating joint venture, reducing our ownership. As a result, we recognized $496 million within Net gain (loss) on sale of businesses in our Consolidated Statements of Income.

Accounting Policy. We record in our Consolidated Statements of Income our proportionate share of net income or loss generated by operating joint ventures within Fees and other revenues. In certain instances, income or loss is reported on a one-month lag due to the timing of when financial information is received.

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


	For the Years Ended December 31,
(In millions)	2025		2024		2023
Revenues	$	7,747	$	7,309	$	5,962
Net income	$	755	$	607	$	98


(In millions)	December 31, 2025		December 31, 2024
Total assets	$	39,547	$	34,395
Total liabilities	$	40,009	$	33,892

Note 15 – Accumulated Other Comprehensive Income (Loss)

AOCI includes net unrealized (depreciation) appreciation on securities and derivatives, change in discount rate and instrument-specific credit risk for certain long-duration insurance contractholder liabilities (see Note 9 to the Consolidated Financial Statements), foreign currency translation, and the net postretirement benefits liability adjustment. AOCI includes the Company's share from unconsolidated entities reported on the equity method. Generally, tax effects in AOCI are established at the currently enacted tax rate and reclassified to Shareholders' net income in the same period that the related pre-tax AOCI reclassifications are recognized.

Shareholders' other comprehensive loss, net of tax, for the years ended December 31, 2025, 2024 and 2023 is primarily attributable to the change in discount rates for certain long-duration liabilities and unrealized changes in the market values of securities and derivatives, including the impacts from unconsolidated entities reported on the equity method.

Changes in the components of AOCI were as follows:


	For The Years Ended December 31,
(In millions)		2025		2024		2023
Securities and derivatives


Beginning balance		$	832	$	171	$	(332)
Unrealized (depreciation) appreciation on securities and derivatives, before reclassification, net of tax benefit (expense) of $118, $(207) and $(146), respectively		(309)		601		474
Amounts reclassified to Shareholders' net income, net of tax (benefit) of $(20), $(16) and $(8), respectively		71		60		29
Shareholders' other comprehensive (loss) income, net of tax		(238)		661		503
Ending balance		$	594	$	832	$	171
Net long-duration insurance and contractholder liabilities measurement adjustments


Beginning balance		$	(2,038)	$	(971)	$	(256)
Net current period change in discount rate for certain long-duration liabilities, before reclassification, net of tax benefit of $71, $357 and $222, respectively		(225)		(1,044)		(691)
Amounts reclassified to Shareholders' net income, net of tax expense of $16, $— and $— respectively		(56)		—		—
Net current period change in discount rate for certain long-duration liabilities, net of tax benefit of $87, $357 and $222, respectively		(281)		(1,044)		(691)
Net current period change in instrument-specific credit risk for market risk benefits, net of tax benefit of $3, $6 and $5, respectively		(10)		(23)		(24)
Shareholders' other comprehensive (loss), net of tax		(291)		(1,067)		(715)
Ending balance		$	(2,329)	$	(2,038)	$	(971)
Translation of foreign currencies


Beginning balance		$	(198)	$	(149)	$	(154)
Net translation of foreign currencies, before reclassification, net of tax (expense) benefit of $(9), $2 and $5, respectively		71		(60)		5
Amounts reclassified to Shareholders' net income, net of tax expense of $—, $— and $—, respectively		—		11		—
Shareholders' other comprehensive income (loss), net of tax		71		(49)		5
Ending balance		$	(127)	$	(198)	$	(149)
Postretirement benefits liability
Beginning balance		$	(937)	$	(915)	$	(916)
Amounts reclassified to Shareholders' net income, net of tax (benefit) of $(8), $(7) and $(11), respectively		25		22		35
Net change due to valuation update, before reclassification, net of tax benefit of $9, $14 and $12, respectively		(32)		(44)		(34)
Shareholders' other comprehensive (loss) income, net of tax		(7)		(22)		1
Ending balance		$	(944)	$	(937)	$	(915)
Total Accumulated other comprehensive loss


Beginning balance		$	(2,341)	$	(1,864)	$	(1,658)
Shareholders' other comprehensive (loss), net of tax benefit of $180, $149 and $79, respectively		(465)		(477)		(206)
Ending balance		$	(2,806)	$	(2,341)	$	(1,864)

Note 16 – Strategic Optimization Program

In the first quarter of 2025, the Company commenced an enterprise-wide initiative to evolve our business and deliver a more efficient and improved experience for our patients, providers and customers. At commencement, this program was expected to continue through December 2026; however, the Company is continuing to evaluate additional opportunities and expects that the program will continue through 2028. The program includes severance and other employee costs, asset impairments and accelerated asset amortization, and the operating results of certain small non-strategic businesses that we plan to discontinue. As we continue to evaluate additional opportunities to improve the overall efficiency and effectiveness of our operations, we anticipate future charges.

During the year ended December 31, 2025, we reported total costs of $749 million pre-tax ($565 million after-tax) associated with this initiative. The total costs included $616 million, pre-tax in Selling, general and administrative expenses which were primarily associated with severance ($378 million) and asset impairments ($101 million). The remainder reflects the operating results of certain non-strategic businesses. We expect substantially all of the accrued liability to be paid by the end of 2026. See Note 23 to the Consolidated Financial Statements for further details of the strategic optimization program by segment.

The following table presents a roll forward of the accrued liability recorded in Accrued expenses and other liabilities during the year ended December 31, 2025:


(In millions)



Balance, December 31, 2024	$	—
2025 charges	378
2025 payments	(238)
Balance, December 31, 2025	$	140

Note 17 – Pension

**A.**About Our Plans

The Company sponsors U.S. and non-U.S. defined benefit pension plans; future benefit accruals for the domestic plans are frozen.

Accounting Policy. The Company measures the assets and liabilities of its domestic pension plans as of December 31. Benefit obligations are measured at the present value of estimated future payments based on actuarial assumptions. The Company uses the corridor method to account for changes in the benefit obligation when actual results differ from those assumed or when assumptions change. These changes are called net unrecognized actuarial gains (losses). Under the corridor method, net unrecognized actuarial gains (losses) are initially recorded in Accumulated other comprehensive loss. When the unrecognized gain (loss) exceeds 10% of the benefit obligation, that excess is amortized to expense over the expected remaining lives of plan participants. The net plan expense is reported in Interest expense and other in the Consolidated Statements of Income.

We measure plan assets at fair value for balance sheet purposes and to measure pension benefit costs. When the actual return differs from the expected return, those differences are reflected in the net unrealized actuarial gain (loss) discussed above.

**B.**Funded Status and Amounts Included in Accumulated Other Comprehensive Loss

The following table summarizes the projected benefit obligations and assets related to our U.S. and non-U.S. pension plans:


	For the Years Ended December 31,
(In millions)	2025		2024
Change in benefit obligation
Benefit obligation, January 1	$	3,643	$	3,934
Service cost	—		1
Interest cost	196		194

Actuarial losses (gains), net (1)	109		(146)
Benefits paid from plan assets	(309)		(328)

Other	(9)		(12)
Benefit obligation, December 31	3,630		3,643
Change in plan assets
Fair value of plan assets, January 1	3,854		4,138
Actual return on plan assets	302		40
Benefits paid	(309)		(328)
Contributions	1		4
Fair value of plan assets, December 31	3,848		3,854
Funded status	$	218	$	211
Amounts presented in Consolidated Balance Sheets
Other assets	$	218	$	211

(1) 2025 losses reflect a decrease in the discount rate, while 2024 gains reflect an increase in the discount rate.

We fund our qualified pension plans at least at the minimum amount required by the Employee Retirement Income Security Act of 1974 and the Pension Protection Act of 2006. Contributions made by the Company to the qualified pension plan in 2025 and anticipated contributions for 2026 are immaterial. Future years' contributions will ultimately be based on a wide range of factors, including but not limited to asset returns, discount rates and funding targets. Nonqualified pension plans are generally funded on a pay-as-you-go basis as there are no plan assets for these plans.

Benefit Payments. The following benefit payments are expected to be paid in:


(In millions)
2026	$	316
2027	$	312
2028	$	310
2029	$	307
2030	$	304
2031 - 2035	$	1,409

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


(In millions)	December 31, 2025		December 31, 2024
Unrecognized net losses	$	(1,230)	$	(1,228)
Unrecognized prior service cost	(4)		(4)
Postretirement benefits liability adjustment	$	(1,234)	$	(1,232)

**C.**Cost of Our Plans

Net pension cost (benefit) was as follows:


	For the Years Ended December 31,
(In millions)	2025		2024		2023
Service cost	$	—	$	1	$	1
Interest cost	196		194		204
Expected long-term return on plan assets	(232)		(247)		(204)
Amortization of:
Prior actuarial losses, net	38		39		52


Curtailment loss	—		1		—
Net cost (benefit)	$	2	$	(12)	$	53

**D.**Assumptions Used for Pension


	For the Years Ended December 31,
	2025	2024
Discount rate:
Pension benefit obligation	5.27%	5.57%
Pension benefit cost	5.57%	5.10%
Expected long-term return on plan assets:
Pension benefit cost	6.50%	6.50%
Mortality table for pension obligations	White Collar mortality table with MP 2021 projection scale	White Collar mortality table with MP 2021 projection scale

The Company develops discount rates by applying actual annualized yields for high-quality bonds by duration to the expected pension plan liability cash flows. The bond yields represent a diverse mix of actively traded, high-quality fixed-income securities that have an above-average return at each duration, as management believes this approach is representative of the yield achieved through plan asset investment strategy. The expected long-term return on plan assets was developed considering historical long-term actual returns, expected long-term market conditions, plan asset mix and management's plan asset investment strategy.

**E.**Pension Plan Assets

As of December 31, 2025, pension assets included $3.8 billion invested in the separate accounts of Connecticut General Life Insurance Company, a subsidiary of the Company, and an additional $0.1 billion invested in funds of unaffiliated investment managers.

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


(In millions)	December 31, 2025		December 31, 2024
Debt securities:
Federal government and agency	$	100	$	99
Corporate	2,674		2,673
Asset-backed	138		138
Fund investments	66		76
Total debt securities	2,978		2,986
Equity securities:
Domestic	23		21
International, including funds and pooled separate accounts (1)	—		6
Total equity securities	23		27
Securities partnerships, including pooled separate accounts (1)	447		402
Real estate and real estate funds, including pooled separate accounts (1)	212		228
Commercial mortgage loans	21		27

Guaranteed deposit account contract	48		47
Cash equivalents and other current assets, net	119		137
Total pension assets at fair value	$	3,848	$	3,854

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

The Company's current target investment allocation percentages are 90% fixed income and 10% in other investments, including private equity (securities partnerships), public equity securities, and real estate, and are developed by management as guidelines, although the fair values of each asset category are expected to vary as a result of changes in market conditions. The Company will evaluate further allocation changes to equity securities, other investments and fixed-income securities as funding levels change.

See Note 12 to the Consolidated Financial Statements for further details regarding how fair value is determined, including the level within the fair value hierarchy and the procedures we use to validate fair value measurements. The Company classifies substantially all debt securities in Level 2 for pension plan assets. These assets are valued using recent trades of similar securities or are fund investments priced using their daily net asset value that is the exit price. All domestic equity securities and international equity funds within pension assets are classified in Level 3.

Securities partnerships, real estate and hedge funds are valued using net asset value as a practical expedient and are excluded from the fair value hierarchy. See Note 12 to the Consolidated Financial Statements for additional disclosures related to these assets invested in the separate accounts of the Company's subsidiary. Certain securities as described in Note 12 to the Consolidated Financial Statements, as well as commercial mortgage loans and guaranteed deposit account contracts, are classified in Level 3 because unobservable inputs used in their valuation are significant.

**F.**401(k) Plan

The Company sponsors a 401(k) plan. All employees are immediately eligible for the plan at hire. The Company matches a portion of employees' contributions to the plan and may increase its matching contributions if the Company's annual performance meets certain targets. Plan participants may invest in various funds that invest in the Company's common stock, several diversified stock funds, a bond fund or stable value funds. The Company common stock fund under the plan constitutes an "employee stock ownership plan" as defined in the Internal Revenue Code. Dividends from the Company common stock fund are reinvested in a participant's stock fund account unless the participant elects to receive the dividends in cash. The Company's annual expense for the plan was $280 million, $301 million and $296 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Note 18 – Employee Incentive Plans

**A.**About Our Plans

The People Resources Committee (the "Committee") of the Board of Directors awards stock options, restricted stock grants, restricted stock units, deferred stock and strategic performance shares to certain employees. The Company issues original issue shares for these awards.

The Company records compensation expense for stock and option awards over their vesting periods primarily based on the estimated fair value at the grant date. Fair value is determined differently for each type of award as discussed below.

Shares of common stock available for award were as follows:


(In millions)						December 31, 2025						December 31, 2024						December 31, 2023
Common shares available for award						10.4						12.4						14.4

**B.**Stock Options

Accounting Policy. The Company awards options to purchase The Cigna Group common stock at the market price of the stock on the grant date. Options vest over periods ranging from one year to three years and expire no later than 10 years from grant date. Fair value is estimated using the Black-Scholes option pricing model by applying the assumptions presented below. That fair value is reduced by options expected to be forfeited during the vesting period. The Company estimates forfeitures at the grant date based on our experience and adjusts the expense to reflect actual forfeitures over the vesting period. The fair value of options, net of forfeitures, is recognized in Selling, general and administrative expenses on a straight-line basis over the vesting period.

Black-Scholes option pricing model assumptions and the resulting fair value of options are presented in the following table:


	2025			2024			2023
Dividend yield	2.04		%	1.74		%	1.58		%
Expected volatility	31.0		%	30.0		%	30.0		%
Risk-free interest rate	4.4		%	4.0		%	3.6		%
Expected option life	4.9 years			4.8 years			4.7 years
Weighted average fair value of options	$	86.13		$	92.36		$	79.66

The dividend yield reflects expected future dividends. The Company intends to continue to pay dividends for the foreseeable future. The expected volatility reflects the past daily stock price volatility of The Cigna Group stock. The Company does not consider volatility implied in the market prices of traded options to be a good indicator of future volatility because remaining traded options will expire within one year. The risk-free interest rate is derived using the four-year U.S. Treasury bond yield rate as of the award date for the primary annual grant. Expected option life reflects the Company's historical experience.

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


	For the Years Ended December 31,
	2025			2024			2023
(Options in thousands)	Options	Weighted Average Exercise Price		Options	Weighted Average Exercise Price		Options	Weighted Average Exercise Price
Outstanding - January 1	5,655	$	226.38	6,696	$	202.02	6,992	$	186.54
Granted	857	$	305.86	781	$	336.48	915	$	294.37
Exercised	(1,088)	$	192.40	(1,727)	$	178.82	(1,080)	$	174.66
Expired or canceled	(222)	$	314.78	(95)	$	278.78	(131)	$	246.95
Outstanding - December 31	5,202	$	242.81	5,655	$	226.38	6,696	$	202.02
Options exercisable at year-end	3,806	$	216.90	3,941	$	196.01	4,616	$	179.28

Compensation expense of $62 million related to unvested stock options as of December 31, 2025 will be recognized over the next two years (weighted average period).

The table below summarizes information for stock options exercised:


	For the Years Ended December 31,
(In millions)	2025		2024		2023
Intrinsic value of options exercised	$	128	$	275	$	126
Cash received for options exercised	$	203	$	305	$	187
Tax benefit from options exercised	$	16	$	34	$	17

The following table summarizes information for outstanding common stock options:


	December 31, 2025
	Options Outstanding		Options Exercisable
Number (in thousands)	5,202		3,806
Total intrinsic value (in millions)	$	246	$	246
Weighted average exercise price	$	242.81	$	216.90
Weighted average remaining contractual life	5.7 years		4.6 years

**C.**Restricted Stock

The Company awards restricted stock (grants and units) to the Company's employees that vest over periods ranging from one year to three years. Recipients of restricted stock awards accumulate dividends during the vesting period but generally forfeit their awards and accumulated dividends if their employment terminates before the vesting date.

Accounting Policy. Fair value of restricted stock awards is equal to the market price of The Cigna Group common stock on the date of grant. This fair value is reduced by awards that are expected to be forfeited. At the grant date, the Company estimates forfeitures based on experience and adjusts the expense to reflect actual forfeitures over the vesting period. This fair value, net of forfeitures, is recognized in Selling, general and administrative expenses over the vesting period on a straight-line basis.

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


	For the Years Ended December 31,
	2025			2024			2023
(Awards in thousands)	Grants/Units	Weighted Average Fair Value at Award Date		Grants/Units	Weighted Average Fair Value at Award Date		Grants/Units	Weighted Average Fair Value at Award Date
Outstanding - January 1	1,250	$	302.42	1,404	$	257.38	1,535	$	219.25
Awarded	701	$	305.67	624	$	319.39	700	$	294.60
Vested	(664)	$	284.20	(713)	$	245.35	(759)	$	214.70
Forfeited	(149)	$	316.12	(65)	$	283.62	(72)	$	256.24
Outstanding - December 31	1,138	$	313.25	1,250	$	302.42	1,404	$	257.38

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


	For the Years Ended December 31,
(In millions)	2025		2024		2023
Fair value of vested restricted stock	$	203	$	238	$	220

Approximately 8,400 employees held 1.1 million restricted stock awards at the end of 2025 with $187 million of related compensation expense to be recognized over the next two years (weighted average period).

**D.**Strategic Performance Shares ("SPSs")

The Company awards SPSs to executives and certain other key employees generally with a performance period of three years. Half of these shares are subject to a market condition (total shareholder return relative to industry peer companies), and half are subject to a performance condition (cumulative adjusted net income). These targets are set by the Committee at the beginning of the performance period. Holders of these awards receive shares of The Cigna Group common stock at the end of the performance period ranging anywhere from 0% to 200% of the original awards.

Accounting Policy. Compensation expense for SPSs is recorded over the performance period. Fair value is determined at the grant date for "market condition" SPSs using a Monte Carlo simulation model and not subsequently adjusted regardless of the final outcome. Expense is initially accrued for "performance condition" SPSs based on the most likely outcome but evaluated for adjustment each period for updates in the expected outcome. Expense is adjusted to the actual outcome (number of shares awarded multiplied by the share price at the grant date) at the end of the performance period.

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


	For the Years Ended December 31,
	2025			2024			2023
(Awards in thousands)	Shares	Weighted Average Fair Value at Award Date		Shares	Weighted Average Fair Value at Award Date		Shares	Weighted Average Fair Value at Award Date
Outstanding - January 1	601	$	282.83	686	$	243.90	780	$	212.68
Awarded	217	$	305.28	195	$	336.81	219	$	293.85
Vested	(233)	$	231.75	(242)	$	214.93	(250)	$	191.78
Forfeited	(80)	$	317.01	(38)	$	289.35	(63)	$	237.50
Outstanding - December 31	505	$	310.78	601	$	282.83	686	$	243.90

The weighted average fair value per share of SPSs for expense purposes, including the Monte Carlo factor, at the award date for the years ended December 31, 2025, 2024 and 2023 was $323.60, $377.23 and $329.11, respectively.

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


	For the Years Ended December 31,
	2025			2024			2023
(Shares in thousands; $ in millions)	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Shares of The Cigna Group common stock distributed upon SPS vesting	301	$	92	257	$	86	257	$	76

Approximately 600 employees held 505,000 SPSs at the end of 2025, and $43 million of related compensation expense is expected to be recognized over the next two years. The amount of expense for "performance condition" SPSs will vary based on actual performance in 2026 and 2027.

**E.**Compensation Cost and Tax Effects of Share-Based Compensation

The Company records tax benefits in Shareholders' net income during the vesting period based on the amount of expense being recognized. The difference between tax benefits based on the expense and the actual tax benefit realized are also recorded in income tax expense when stock options are exercised, or when restricted stock and SPSs vest.


	For the Years Ended December 31,
(In millions)	2025		2024		2023
Total compensation cost for shared-based awards	$	291	$	308	$	286
Tax benefits recognized	$	69	$	94	$	92

Note 19 – Goodwill, Other Intangibles, and Property and Equipment

**A.**Goodwill

Accounting Policy. Goodwill represents the excess of the cost of businesses acquired over the fair value of their net assets. The resulting goodwill is assigned to those reporting units expected to realize cash flows from the acquisition, based on those reporting units' relative fair values. The Company's reporting units are aligned with its operating segments as described in Note 1.

The Company conducts its annual quantitative evaluation for goodwill impairment during the third quarter at the reporting unit level and writes it down through Shareholders' net income if impaired. On a quarterly basis, the Company performs a qualitative impairment assessment to determine if events or changes in circumstances indicate that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. The fair value of a reporting unit is generally estimated based on discounted cash flow analysis and market approach models using assumptions that the Company believes a hypothetical market participant would use to determine a current transaction price. Following a change in reporting units or held for sale determination, goodwill is allocated using relative fair value. The significant assumptions and estimates used in determining fair value primarily include the discount rate and future cash flows. A discount rate is selected to correspond with each reporting unit's weighted average cost of capital, consistent with that used for investment decisions considering the specific and detailed operating plans and strategies within each reporting unit. Projections of future cash flows differ by reporting unit and are consistent with our ongoing strategic projections. Future cash flows for Evernorth Health Services reporting units are primarily driven by the forecasted gross margins of the business, as well as operating expenses and long-term growth rates. Future cash flows for our other reporting units are primarily driven by forecasted revenues, benefit expenses, operating expenses and long-term growth rates.

Goodwill Activity. Goodwill activity was as follows:


(In millions)	Evernorth Health Services		Cigna Healthcare		Total
Balance at January 1, 2024	$	35,130	$	9,129	$	44,259
Goodwill acquired	114		—		114

Impact of foreign currency translation and other adjustments	190		(193)		(3)
Goodwill at December 31, 2024	35,434		8,936		44,370
Goodwill acquired	548		—		548


Impact of foreign currency translation and other adjustments	—		6		6
Goodwill at December 31, 2025	$	35,982	$	8,942	$	44,924

**B.**Other Intangible Assets

Accounting Policy. The Company's Other intangible assets primarily include purchased customer and producer relationships, trademarks, and provider networks. The fair value of purchased customer relationships and the amortization method were determined as of the dates of purchase using an income approach that relies on projected future net cash flows, including key assumptions for customer attrition and discount rates. The Company's definite-lived intangible assets are amortized on an accelerated or straight-line basis, reflecting their pattern of economic benefits, over periods from 1 year to 30 years. Management revises amortization periods if it believes there has been a change in the length of time that an intangible asset will continue to have value. Costs incurred to renew or extend the terms of these intangible assets are generally expensed as incurred.

The Company's amortized intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the total of the expected future undiscounted cash flows generated by the underlying asset group is less than the carrying amount of the asset group, the Company recognizes an impairment charge equal to the difference between the carrying value of the asset group and its estimated fair value. The Company's indefinite-lived intangible assets are reviewed for impairment at least annually by comparing their fair value with their carrying value. If the carrying value exceeds fair value, that excess is recognized as an impairment loss.

Components of Other Assets, Including Other Intangibles. Other intangible assets were comprised of the following:


(In millions)	Cost		Accumulated Amortization		Net Carrying Value
December 31, 2025
Customer relationships	$	30,624	$	10,655	$	19,969
Trade name - Express Scripts	8,400				8,400
Other	346		155		191
Total	39,370		10,810		28,560
December 31, 2024
Customer relationships	$	29,971	$	9,119	$	20,852
Trade name - Express Scripts	8,400				8,400
Other	316		131		185
Other intangible assets (1)	38,687		9,250		29,437
Value of business acquired ("VOBA") (reported in Other assets) (2)	211		142		69
Total	$	38,898	$	9,392	$	29,506

(1) Includes $20 million of Other intangible assets classified as assets of businesses held for sale as of December 31, 2024.

(2) Includes $69 million of VOBA classified as assets of businesses held for sale as of December 31, 2024.

The Company has indefinite-lived intangible assets totaling $8.4 billion as of December 31, 2025 and $8.5 billion as of December 31, 2024, largely consisting of the Express Scripts trade name.

**C.**Property and Equipment

Accounting Policy. Property and equipment is carried at cost less accumulated depreciation. Cost includes interest, real estate taxes and other costs incurred during construction when applicable. Internal-use software that is acquired, developed or modified solely to meet the Company's internal needs, with no plan to market externally, is also included in this category. Costs directly related to acquiring, developing or modifying internal-use software are capitalized.

The Company calculates depreciation and amortization principally using the straight-line method generally based on the estimated useful life of each asset as follows: buildings and improvements, 10 to 40 years; purchased and internally developed software, 3 to 5 years; and furniture and equipment (including computer equipment), 3 to 10 years. Improvements to leased facilities are depreciated over the lesser of the remaining lease term or the estimated life of the improvement. The Company considers events and circumstances that would indicate the carrying value of property, equipment or capitalized software might not be recoverable. An impairment charge is recorded if the Company determines the carrying value of any of these assets is not recoverable. The Company also reviews and shortens the estimated useful lives of these assets, if necessary.

Components of Property and Equipment. Property and equipment were comprised of the following:


(In millions)	Cost		Accumulated Amortization		Net Carrying Value
December 31, 2025
Internal-use software	$	11,678	$	8,904	$	2,774
Other property and equipment	2,075		1,198		877
Total property and equipment	13,753		10,102		3,651


December 31, 2024
Internal-use software	$	11,295	$	8,167	$	3,128
Other property and equipment	2,115		1,287		828
Total property and equipment (1)	13,410		9,454		3,956

*(1)*Includes $302 million of Property and equipment net carrying value classified as assets of businesses held for sale as of December 31, 2024.

Components of Depreciation and Amortization. Depreciation and amortization expense was comprised of the following:


	For the Years Ended December 31,
(In millions)	2025		2024		2023
Internal-use software	$	987	$	1,021	$	1,216
Other property and equipment	239		248		260
Value of business acquired (reported in Other assets)	—		—		7
Other intangibles	1,549		1,506		1,552
Total depreciation and amortization	$	2,775	$	2,775	$	3,035

The Company estimates annual pre-tax amortization for intangible assets, including internal-use software, over the next five calendar years to be as follows:


(In millions)	Pre-tax Amortization
2026	$	2,360
2027	$	2,237
2028	$	2,062
2029	$	1,821
2030	$	1,592

Note 20 – Shareholders' Equity and Dividend Restrictions

State insurance departments and foreign jurisdictions that regulate certain of the Company's subsidiaries prescribe accounting practices (differing in some respects from GAAP) to determine statutory net income and surplus. The Company's life, accident, and health insurance and Health Maintenance Organization ("HMO") subsidiaries are regulated by such statutory requirements. The statutory net income of the Company's life, accident, and health insurance and HMO subsidiaries for the years ended, and their statutory surplus as of, December 31 were as follows:


(In billions)	2025		2024		2023
Net income	$	3.7	$	3.9	$	5.3
Surplus	$	13.0	$	16.0	$	14.9

The Company's HMO and life, accident and health insurance subsidiaries are also subject to minimum statutory surplus requirements and may be required to maintain investments on deposit with state departments of insurance or other regulatory bodies. Additionally, these subsidiaries may be subject to regulatory restrictions on the amount of annual dividends or other distributions (such as loans or cash advances) that insurance companies may extend to their parent companies without prior approval. These amounts, including restricted GAAP net assets of the Company's subsidiaries, were as follows:


(In billions)	December 31, 2025
Minimum statutory surplus required by regulators (1)	$	4.5
Investments on deposit with regulatory bodies	$	0.3
Maximum dividend distributions permitted in 2026 without regulatory approval	$	2.0
Maximum loans to the parent company permitted without regulatory approval	$	1.2
Restricted GAAP net assets of subsidiaries of The Cigna Group	$	11.3

(1) Excludes amounts associated with foreign operated equity method joint ventures.

Permitted practices used by the Company's insurance subsidiaries in 2025 that differed from prescribed regulatory accounting had an immaterial impact on statutory surplus.

Undistributed earnings for equity method investments are $1.6 billion as of December 31, 2025.

Note 21 – Income Taxes

Accounting Policy. Deferred income taxes are reflected in the Consolidated Balance Sheets for differences between the financial and income tax reporting bases of the Company's underlying assets and liabilities and are established based upon enacted tax rates and laws. Deferred income tax assets are recognized when available evidence indicates that realization is more likely than not, and a valuation allowance is established to the extent this standard is not met. The deferred income tax provision generally represents the net change in deferred income tax assets and liabilities during the reporting period excluding adjustments to Accumulated other comprehensive income (loss) or amounts recorded in connection with a business combination. The current income tax provision generally represents estimated amounts due on income tax returns for the year reported to various jurisdictions plus the effect of any uncertain tax positions. The Company uses the deferral method of accounting on investments that generate tax credits. Under this method, the investment tax credits are recognized as a reduction to the related asset, which are generally reported in Other assets in the Consolidated Balance Sheets. The Company recognizes a liability for uncertain tax positions if management believes the probability that the positions will be sustained is 50% or less. For uncertain positions that management believes are more likely than not to be sustained, the Company recognizes a liability based upon management's estimate of the most likely settlement outcome with the taxing authority. The liabilities for uncertain tax positions are classified as current when the position is expected to be settled within 12 months or the statute of limitation expires within 12 months.

Income taxes attributable to the Company's foreign operations are provided using the foreign jurisdictions' applicable tax rate.

The Company prospectively adopted ASU 2023-09, Improvements to Income Tax Disclosures*.* As a result, disclosures for 2025 reflect the requirements of ASU 2023-09, including the reconciliation of the statutory federal income tax rate and disaggregated tax payment information. Prior years (2024 and 2023) are presented under the previous disclosure requirements.

**A.**Income Tax Expense

The components of income taxes were as follows:


	For the Years Ended December 31,
(In millions)	2025		2024		2023
Current taxes
U.S. income taxes	$	807	$	1,167	$	1,459
Foreign income taxes	191		248		161
State income taxes	169		171		180
Total current taxes	1,167		1,586		1,800
Deferred taxes (tax benefits)
U.S. income tax benefits	(69)		(142)		(533)
Foreign income taxes (tax benefits)	447		64		(1,046)
State income tax benefits	(52)		(17)		(80)
Total deferred taxes (tax benefits)	326		(95)		(1,659)
Total income taxes	$	1,493	$	1,491	$	141

Total income taxes were different from the amount computed using the statutory federal income tax rate in 2025 for the following reasons:


	For the Year Ended December 31,
	2025
(in millions)	$		%
Tax expense at statutory rate	$	1,634	21.0	%
State income tax effect, net of federal income tax effect (1)	93		1.2
Nontaxable or nondeductible items	13		0.2
Effects of cross-border tax laws:
Global intangible low-taxed income ("GILTI")	127		1.6
Other cross-border tax laws	11		0.1
Tax credits	(83)		(1.1)
Change in valuation allowance	(74)		(1.0)
Change in unrecognized tax benefits	37		0.5
Other
Impact of sale of business	(173)		(2.2)
Tax equity investments	(102)		(1.3)
Other reconciling items	3		0.2
Foreign tax effects:
Switzerland
Effect of rates different than U.S. statutory	(360)		(4.6)
Cantonal income taxes	206		2.6
Change in valuation allowance	384		4.9

Other countries	(223)		(2.9)
Total income taxes	$	1,493	19.2	%

(1) The jurisdictions that make up the majority (greater than 50 percent) of the state and local tax impact are Florida and California.

Total income taxes were different from the amount computed using the statutory federal income tax rate in 2024 and 2023 for the following reasons:


	For the Years Ended December 31,
	2024				2023
(In millions)	$		%		$		%
Tax expense at statutory rate	$	1,107	21.0	%	$	1,158	21.0	%
Change in valuation allowance	767		14.6		1,290		23.4
State income tax effect, net of federal income tax effect	62		1.2		(39)		(0.7)
Investment tax credits	(111)		(2.1)		(48)		(0.8)
Impact of businesses held for sale	(129)		(2.4)		(213)		(3.9)
Effect of foreign earnings	(252)		(4.9)		(173)		(3.1)
Other foreign tax attributes	—		—		(153)		(2.8)
Swiss tax attributes	—		—		(1,674)		(30.4)


Other	47		0.9		(7)		(0.1)
Total income taxes	$	1,491	28.3	%	$	141	2.6	%

Tax Equity Investments. Company investments in renewable energy projects provided $968 million, $1,057 million and $453 million of investment tax credits for the years ended December 31, 2025, 2024 and 2023, respectively. The Company accounted for the tax credits using the deferral method and accordingly reduced the associated carrying value of the related assets by these amounts.

Pre-tax Income Disaggregation. Consolidated pre-tax income from the Company's foreign operations was approximately 53% of the Company's pre-tax income in 2025, 62% in 2024 and 48% in 2023. The change relative to 2024 is primarily attributable to lower 2024 domestic earnings driven by the impairment of equity securities in 2024 (see Note 11 to the Consolidated Financial Statements).

**B.**Deferred Income Taxes

Deferred income tax assets and liabilities were as follows:


(In millions)	December 31, 2025		December 31, 2024
Deferred tax assets
Foreign tax attributes	$	1,615	$	1,752
Deferred loss - sale of business	—		773
Investments	587		561
Other insurance and contractholder liabilities	241		300
Loss carryforwards	492		270
Other accrued liabilities	321		207
Employee and retiree benefit plans	190		177
Unrealized depreciation on investments and foreign currency translation	10		93
Policy acquisition expenses	53		—
Other	339		256
Deferred tax assets before valuation allowance	3,848		4,389
Valuation allowance for deferred tax assets	(2,374)		(2,332)
Deferred tax assets, net of valuation allowance	1,474		2,057
Deferred tax liabilities
Acquisition-related basis differences	7,558		7,822
Depreciation and amortization	602		243
Policy acquisition expenses	—		74




Total deferred tax liabilities	8,160		8,139
Net deferred income tax liabilities (1)	$	(6,686)	$	(6,082)

*(1)*Deferred tax liabilities, net in the Consolidated Balance Sheets excludes $459 million and $954 million reported in Other assets as of December 31, 2025 and December 31, 2024, respectively, and $61 million reported in liabilities of businesses held for sale as of December 31, 2024.

Management believes that it is more likely than not that future results will be sufficient to realize the Company's gross deferred tax assets ("DTAs") that remain after valuation allowance. Valuation allowances have been established against certain federal, state and foreign tax attributes. There are multiple expiration dates associated with these tax attributes.

Foreign Jurisdiction Tax Attributes. As of December 31, 2025 and 2024, the Company had DTAs of approximately $1.6 billion and $1.8 billion, respectively, and had a related $1.2 billion and $0.8 billion valuation allowance, respectively, against these deferred tax assets based on projections of future earnings and requirements to utilize the assets within certain time periods. In 2025, the Company recorded an increase to the valuation allowance as a result of management's reassessment of the composition of future foreign and domestic earnings. It is possible that the Company may revalue these net deferred tax assets in future periods due to modifications in certain assumptions, such as forecasted future earnings.

Capital DTAs: Impairments, Unrealized Investment Losses and Sale of Medicare Advantage and Related Businesses**.** As of December 31, 2025 and 2024, the Company had approximately $819 million and $880 million, respectively, in DTAs associated with the impairment of equity securities and other unrealized investment losses (see Note 11 to the Consolidated Financial Statements), as well as $237 million and $773 million, respectively, of DTAs in connection with the HCSC transaction, reflecting total capital DTAs of approximately $1,056 million and $1,653 million, respectively. A valuation allowance of $1,025 million and $1,351 million, respectively, has been established against these DTAs as of December 31, 2025 and 2024 due to the uncertainty relative to the recovery of the deferred tax benefits as the Company does not anticipate having sufficient sources of capital income to support these capital losses. We have determined that a valuation allowance against the remaining capital DTAs is not currently required based on the Company's loss carryback capacity and ability and intent to hold certain investment securities until recovery. We continue to monitor and evaluate the need for any additional valuation allowance.

During 2025, the reallocation of the HCSC transaction purchase price by legal entity resulted in an equal write-off of the DTAs and valuation allowance associated with the tax-deductible capital loss on the sale, resulting in zero net impact to the Company's total tax provision. Additionally, a reallocation of available sources of capital income generated a substantial portion of the after-tax gain on sale presented in Note 5 to the Consolidated Financial Statements. There was no material change to the realizability assessment of the Company's consolidated DTAs and no material net impact to the Company's consolidated tax expense as a result of this reallocation.

**C.**Uncertain Tax Positions

Reconciliations of unrecognized tax benefits were as follows:


	For the Years Ended December 31,
(In millions)	2025		2024		2023
Balance at January 1,	$	1,477	$	1,399	$	1,343
Decrease due to prior year positions	(50)		(7)		(26)

Increase due to current year positions	187		165		107
Reduction related to settlements with taxing authorities	(62)		(22)		(13)
Reduction related to lapse of applicable statute of limitations	(14)		(58)		(12)
Balance at December 31,	$	1,538	$	1,477	$	1,399

Substantially all unrecognized tax benefits would increase Shareholders' net income if recognized.

The Company classifies net interest expense on uncertain tax positions as a component of income tax expense and in Other non-current liabilities in the Consolidated Balance Sheets. In addition to the amounts in the table above, the liability for net interest expense on uncertain tax positions was approximately $223 million, $228 million and $220 million as of December 31, 2025, 2024 and 2023, respectively.

**D.**Other Tax Matters

The statutes of limitations for the Company's consolidated federal income tax returns through 2016 have closed. The statute of limitations for the Company's 2020 and 2021 tax returns have also closed. However, The Cigna Group filed amended returns for both the 2015 and 2016 tax years, which are under review by the Internal Revenue Service ("IRS"). Additionally, the IRS is examining the Company's returns for 2017, 2018, 2019, 2022 and 2023. The IRS has examined Express Scripts' tax returns for 2010 through 2017, for which there remain significant disputed matters. In addition, the Company has pending refund claims for various years. The Company has established adequate reserves for these matters.

The Company conducts business in a number of state and foreign jurisdictions and may be engaged in multiple audit proceedings at any given time. Generally, no further state or foreign audit activity is expected for tax years prior to 2013 for Express Scripts entities and 2014 for all other entities of The Cigna Group.

Pillar Two. The Organization for Economic Co-operation and Development ("OECD") Pillar Two Framework defines a minimum effective tax rate of 15%. The Company is within the scope of the OECD Pillar Two model rules, which did not have a significant impact on our 2025 results. We will continue to monitor the potential impact on future periods but do not currently expect Pillar Two to significantly impact future periods.

**E.**Income Taxes Paid

For the year ended December 31, 2025, the Company made tax payments, net of refunds, in the amount of $399 million to the following jurisdictions: U.S. federal refund ($4 million), U.S. state payment ($140 million), and foreign payments ($263 million), primarily Switzerland. The Company’s federal tax payments reflect the benefit of $968 million of renewable energy tax credits, which have been applied against the Company’s federal tax liability under existing tax rules.

For the years ended December 31, 2024 and 2023, the company made tax payments, net of refunds in the amount of $898 million and $1,471 million, respectively. For the years ended December 31, 2024 and 2023, the Company’s federal tax payments reflect the benefit of $1,057 million and $453 million, respectively, of renewable energy tax credits, which were applied against the Company’s federal tax liability under existing tax rules.

Note 22 – Contingencies and Other Matters

The Company, through its subsidiaries, is contingently liable for various guarantees provided in the ordinary course of business.

**A.**Financial Guarantees: Retiree and Life Insurance Benefits

The Company guarantees that separate account assets will be sufficient to pay certain life insurance or retiree benefits. For the majority of these benefits, the sponsoring employers are primarily responsible for ensuring that assets are sufficient to pay these benefits and are required to maintain assets that exceed a certain percentage of benefit obligations. If employers fail to do so, the Company or an affiliate of the buyer of the retirement benefits business has the right to redirect the management of the related assets to provide for benefit payments. As of December 31, 2025, employers maintained assets that generally exceeded the benefit obligations under these arrangements of approximately $400 million. An additional liability is established if management believes that the Company will be required to make payments under the guarantees; there were no additional liabilities required for these guarantees, net of reinsurance, as of December 31, 2025. Separate account assets supporting these guarantees are classified in Levels 1 and 2 of the GAAP fair value hierarchy.

The Company does not expect that these financial guarantees will have a material effect on the Company's consolidated results of operations, liquidity or financial condition.

**B.**Certain Other Guarantees

The Company had indemnification obligations as of December 31, 2025 in connection with acquisition and disposition transactions. These indemnification obligations are triggered by the breach of representations or covenants provided by the Company, such as representations for the presentation of financial statements, filing of tax returns, compliance with laws or regulations, or identification of outstanding litigation. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential amount due is subject to contractual limitations based on a stated dollar amount or a percentage of the transaction purchase price, while in other cases limitations are not specified or applicable. The Company does not believe that it is possible to determine the maximum potential amount due under these obligations because not all amounts due under these indemnification obligations are subject to limitation. There were no recorded liabilities for these indemnification obligations as of December 31, 2025.

**C.**Guaranty Fund Assessments

The Company operates in a regulatory environment that may require its participation in assessments under state insurance guaranty association laws. The Company's exposure to assessments for certain obligations of insolvent insurance companies to policyholders and claimants is based on its share of business written in the relevant jurisdictions. There were no material charges or credits resulting from existing or new guaranty fund assessments for the year ended December 31, 2025.

**D.**Legal and Regulatory Matters

The Company is routinely involved in numerous claims, lawsuits, regulatory inquiries and audits, government investigations, including under the federal False Claims Act and state false claims acts initiated by a government investigating body or by a qui tam relator's filing of a complaint under court seal, and other legal matters arising, for the most part, in the ordinary course of managing a global health company. Additionally, the Company has received and is cooperating with subpoenas or similar processes from various governmental agencies requesting information, all arising in the normal course of its business. Disputed tax matters arising from audits by the IRS or other state and foreign jurisdictions, including those resulting in litigation, are accounted for under GAAP guidance for uncertain tax positions, as described in Note 21.

Accounting Policy. The Company accrues for legal and regulatory matters when a loss contingency is both probable and estimable. The estimated loss is generally recorded in Selling, general and administrative expenses and represents the Company's best estimate of the loss contingency. If the loss estimate is a range, the Company accrues the minimum amount in the range if no amount is better than any other estimated amount in the range. Legal costs to defend the Company's litigation and arbitration matters are expensed as incurred in cases that the Company cannot reasonably estimate the ultimate cost to defend. If the Company can reasonably estimate the cost to defend, a liability for these costs is accrued when the claim is reported.

Note 23 – Segment Information

See Note 1 to the Consolidated Financial Statements for a description of our segments. A description of our basis for reporting segment operating results is outlined below. Intersegment revenues primarily reflect pharmacy and care services transactions between the Evernorth Health Services and Cigna Healthcare segments. The Chairman and Chief Executive Officer is the chief operating decision maker ("CODM") responsible for making decisions about resources to be allocated to each segment and assessing its performance.

The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management, including the CODM, believes these metrics reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability to enable resource allocation decisions. We define pre-tax adjusted income (loss) from operations 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 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, including the CODM, believes are not representative of the underlying results of 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.

The Company defines adjusted revenues as total revenues excluding the following adjustments: 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, including the CODM, believes are not representative of the underlying results of operations due to their nature or size. We exclude these items from this measure because management, including the CODM, believes they are not indicative of past or future underlying performance of the business.

The Company does not report total assets by segment because this is not a metric used by the CODM to allocate resources or evaluate segment performance.

The following table presents the special items charges (benefits) recorded by the Company, as well as the respective financial statement line items impacted:


	For the Years Ended December 31,
		2025	2024				2023
(In millions)			Pre-tax		After-tax		Pre-tax		After-tax		Pre-tax		After-tax
Strategic optimization program (primarily Selling, general and administrative expenses)			$	749	$	565	$	—	$	—	$	—	$	—
Deferred tax expenses (benefits), net (Income taxes, less amount attributable to noncontrolling interests)			—		427		—		84		—		(1,071)
Integration and transaction-related costs (Selling, general and administrative expenses)			327		247		275		211		45		35
(Benefits) charges associated with litigation matters (Selling, general and administrative expenses)			(17)		(13)		—		—		201		171
Net (gain) loss on sale of businesses			(13)		(404)		(24)		(2)		1,499		1,429
Impairment of dividend receivable (Net investment income)			—		—		182		138		—		—
Charge for organizational efficiency plan (Selling, general and administrative expenses)			—		—		—		—		252		193


Total impact from special items			$	1,046	$	822	$	433	$	431	$	1,997	$	757

Summarized segment financial information was as follows:


(In millions)	Evernorth Health Services		Cigna Healthcare		Other Operations		Corporate and Eliminations		Total
2025
Revenues from external customers	$	232,098	$	41,426	$	325	$	5	$	273,854
Intersegment revenues	2,713		5,405		51		(8,169)
Net investment income	142		581		298		25		1,046
Total revenues	234,953		47,412		674		(8,139)		274,900
Net investment results from certain equity method investments	—		(249)		—		—		(249)


Adjusted revenues	$	234,953	$	47,163	$	674	$	(8,139)	$	274,651
Pharmacy and other service costs	223,086		—
Medical costs	—		33,474
Selling, general and administrative expenses	4,170		9,545
Other segment items (1)
Interest (expense) and other	(1)		9
Less: Income attributable to noncontrolling interests	475		—
Pre-tax adjusted income (loss) from operations	7,221		4,153		89		(1,593)		9,870

Income (loss) before income taxes	$	5,826	$	4,344	$	(46)	$	(2,343)	$	7,781
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests	(475)		—		—		—		(475)
Net investment (gains) losses (2)	(20)		(210)		2		3		(225)
Amortization of acquired intangible assets	1,720		23		—		—		1,743
Special items
Strategic optimization program	174		22		133		420		749
Integration and transaction-related costs	—		—		—		327		327




Net (gain) on sale of businesses	(4)		(9)		—		—		(13)
(Benefits) associated with litigation matters	—		(17)		—		—		(17)

Pre-tax adjusted income (loss) from operations	$	7,221	$	4,153	$	89	$	(1,593)	$	9,870

Other segment information
Depreciation and amortization	$	2,400	$	339	$	16	$	20	$	2,775

*(1)*Other segment items represent the difference between segment adjusted revenues less significant segment expenses and pre-tax adjusted income (loss) from operations, and they do not represent significant segment items relative to the CODM's review and oversight.

*(2)*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.


(In millions)	Evernorth Health Services		Cigna Healthcare		Other Operations		Corporate and Eliminations		Total
2024
Revenues from external customers	$	198,177	$	47,528	$	440	$	3	$	246,148
Intersegment revenues	3,775		4,972		79		(8,826)
Net investment income	21		618		309		25		973
Total revenues	201,973		53,118		828		(8,798)		247,121
Net investment results from certain equity method investments	—		(204)		—		—		(204)
Special item related to impairment of dividend receivable	182		—		—		—		182
Adjusted revenues	$	202,155	$	52,914	$	828	$	(8,798)	$	247,099
Pharmacy and other service costs	190,968		—
Medical costs	—		37,887
Selling, general and administrative expenses	3,779		10,805
Other segment items (1)
Interest (expense) and other	(2)		7
Less: Income attributable to noncontrolling interests	405		—
Pre-tax adjusted income (loss) from operations	7,001		4,229		(9)		(1,688)		9,533

Income (loss) before income taxes	$	3,929	$	3,315	$	(12)	$	(1,963)	$	5,269
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests	(405)		—		—		—		(405)
Net investment losses (2)	2,129		401		3		—		2,533
Amortization of acquired intangible assets	1,662		41		—		—		1,703
Special items
Integration and transaction-related costs	—		—		—		275		275
Impairment of dividend receivable	182		—		—		—		182





Net (gain) loss on sale of businesses	(496)		472		—		—		(24)

Pre-tax adjusted income (loss) from operations	$	7,001	$	4,229	$	(9)	$	(1,688)	$	9,533

Other segment information
Depreciation and amortization	$	2,319	$	417	$	9	$	30	$	2,775


(In millions)	Evernorth Health Services		Cigna Healthcare		Other Operations		Corporate and Eliminations		Total
2023
Revenues from external customers	$	147,588	$	46,219	$	291	$	1	$	194,099
Intersegment revenues	5,670		4,332		—		(10,002)
Net investment income	241		597		305		23		1,166
Total revenues	153,499		51,148		596		(9,978)		195,265
Net investment results from certain equity method investments	—		57		—		—		57

Adjusted revenues	$	153,499	$	51,205	$	596	$	(9,978)	$	195,322
Pharmacy and other service costs	143,571		—
Medical costs	—		35,678
Selling, general and administrative expenses	3,340		11,055
Other segment items (1)
Interest (expense) and other	(2)		8
Less income attributable to noncontrolling interests	144		2
Pre-tax adjusted income (loss) from operations	6,442		4,478		96		(1,698)		9,318

Income (loss) before income taxes	$	4,768	$	2,664	$	76	$	(1,995)	$	5,513
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests	(144)		(2)		—		—		(146)
Net investment losses (2)	—		133		2		—		135
Amortization of acquired intangible assets	1,774		45		—		—		1,819
Special items
Net loss on sale of businesses	—		1,481		18		—		1,499
Charge for organizational efficiency plan	—		—		—		252		252
Charges associated with litigation matters	44		157		—		—		201
Integration and transaction-related costs	—		—		—		45		45





Pre-tax adjusted income (loss) from operations	$	6,442	$	4,478	$	96	$	(1,698)	$	9,318

Other segment information
Depreciation and amortization	$	2,438	$	569	$	3	$	25	$	3,035

Revenue from external customers includes Pharmacy revenues, Premiums and Fees and other revenues. The following table presents these revenues by product, premium and service type:


	For the Years Ended December 31,
(In millions)		2025		2024		2023
Products (Pharmacy revenues) (ASC 606)
Network revenues		$	125,573	$	105,340	$	67,514
Home delivery and specialty revenues		80,492		72,476		65,732
Other revenues		13,329		11,545		9,047
Total Evernorth Health Services		219,394		189,361		142,293
Other Operations		54		60		—
Corporate and eliminations		(2,776)		(4,059)		(5,050)
Total Pharmacy revenues		216,672		185,362		137,243
Insurance premiums (ASC 944)
Cigna Healthcare
U.S. Healthcare
Employer insured		18,852		17,576		16,490
Medicare Advantage		2,363		8,679		8,771
Stop loss		7,599		6,744		6,143
Individual and Family Plans		3,371		3,951		5,088
Other		3,366		4,938		4,095
U.S. Healthcare		35,551		41,888		40,587
International Health		4,126		3,624		3,295
Total Cigna Healthcare		39,677		45,512		43,882
Other Operations		288		380		281
Corporate and eliminations		296		104		74
Total Premiums		40,261		45,996		44,237
Services (Fees) (ASC 606) and Other revenues (1)
Evernorth Health Services		15,417		12,591		10,965
Cigna Healthcare		7,154		6,988		6,669
Other Operations		34		79		10
Corporate and eliminations		(5,684)		(4,868)		(5,025)
Total Fees and other revenues (1)		16,921		14,790		12,619
Total revenues from external customers		$	273,854	$	246,148	$	194,099

*(1)*Other revenues for the years ended December 31, 2025, 2024 and 2023 were $696 million, $584 million and $210 million, respectively.

Major Customers. Revenues from a single pharmacy benefit client were approximately 19% and 16% of total revenues from external customers for the years ended December 31, 2025 and 2024, respectively. These amounts were reported in the Evernorth Health Services segment.

Additionally, revenues from U.S. Federal Government agencies, under a number of contracts, were 11% and 15% of total revenues from external customers for the years ended December 31, 2024 and 2023, respectively. These amounts were reported in the Evernorth Health Services and Cigna Healthcare segments. For the year ended December 31, 2025, revenues from U.S. Federal Government agencies were less than 10%.

U.S. and Foreign Revenues. Revenues from U.S. external customers as a percentage of total revenues from external customers were 98% for the years ended December 31, 2025, 2024 and 2023.

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