Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

			PAGE
Executive Overview			36
Liquidity and Capital Resources			40
Critical Accounting Estimates			43
Segment Reporting			43
Evernorth Health Services			44
Cigna Healthcare			46
Other Operations			47
Corporate			48
Investment Assets			48

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide information to assist you in better understanding and evaluating our financial condition as of March 31, 2023, compared with December 31, 2022 and our results of operations for the three months ended March 31, 2023, compared with the same period last year and is intended to help you understand the ongoing trends in our business. We encourage you to read this MD&A in conjunction with our Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 Form 10-K"). In particular, we encourage you to refer to the "Risk Factors" contained in Part I, Item 1A of our 2022 Form 10-K.

Unless otherwise indicated, financial information in this MD&A is presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). See Note 2 to the Consolidated Financial Statements in our 2022 Form 10-K for additional information regarding the Company's significant accounting policies and see Notes 2 and 9 to the Consolidated Financial Statements in this Form 10-Q for updates to those policies resulting from adopting Accounting Standards Update 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts ("LDTI"), and related amendments, effective January 1, 2023. The preparation of interim consolidated financial statements necessarily relies heavily on estimates. This and certain other factors call for caution in estimating full-year results based on interim results of operations. In some of our financial tables in this MD&A, we present either percentage changes or "N/M" when those changes are so large as to become not meaningful. Changes in percentages are expressed in basis points ("bps").

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

The Company uses "pre-tax adjusted income (loss) from operations" and "adjusted revenues" as its principal financial measures of segment operating performance because management believes these metrics best reflect the underlying results of business operations and permit analysis of trends in underlying revenue, expenses and profitability. We define adjusted income from operations as shareholders' net income (or income before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net realized investment results, amortization of acquired intangible assets, and special items. The Cigna Group's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results. Consolidated adjusted income (loss) from operations is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders' net income. See the below Financial Highlights section for a reconciliation of consolidated adjusted income from operations to shareholders' net income.

The Company defines adjusted revenues as total revenues excluding the following adjustments: special items and The Cigna Group's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. We exclude these items from this measure because management believes they are not indicative of past or future underlying performance of the business. Adjusted revenues is not determined in accordance with GAAP and should not be viewed as a

substitute for the most directly comparable GAAP measure, total revenues. See the below Financial Highlights section for a reconciliation of consolidated adjusted revenues to total revenues.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on The Cigna Group's current expectations and projections about future trends, events and uncertainties. These statements are not historical facts. Forward-looking statements may include, among others, statements concerning future financial or operating performance, including our ability to improve the health and vitality of those we serve; future growth, business strategy, and strategic or operational initiatives; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas and the impact of developing inflationary and interest rate pressures; financing or capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; strategic transactions; expectations related to our Medicare Advantage Capitation Rates; and other statements regarding The Cigna Group's future beliefs, expectations, plans, intentions, liquidity, cash flows, financial condition or performance. You may identify forward-looking statements by the use of words such as "believe," "expect," "project," "plan," "intend," "anticipate," "estimate," "predict," "potential," "may," "should," "will" or other words or expressions of similar meaning, although not all forward-looking statements contain such terms.

Forward-looking statements are subject to risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those expressed or implied in forward-looking statements. Such risks and uncertainties include, but are not limited to: our ability to achieve our strategic and operational initiatives; our ability to adapt to changes in an evolving and rapidly changing industry; our ability to compete effectively, differentiate our products and services from those of our competitors and maintain or increase market share; price competition, inflation and other pressures that could compress our margins or result in premiums that are insufficient to cover the cost of services delivered to our customers; the potential for actual claims to exceed our estimates related to expected medical claims; our ability to develop and maintain satisfactory relationships with physicians, hospitals, other health service providers and with producers and consultants; our ability to maintain relationships with one or more key pharmaceutical manufacturers or if payments made or discounts provided decline; changes in the pharmacy provider marketplace or pharmacy networks; changes in drug pricing or industry pricing benchmarks; our ability to invest in and properly maintain our information technology and other business systems; our ability to prevent or contain effects of a potential cyberattack or other privacy or data security incident; political, legal, operational, regulatory, economic and other risks that could affect our multinational operations, including currency exchange rates; risks related to strategic transactions and realization of the expected benefits of such transactions, as well as integration or separation difficulties or underperformance relative to expectations; dependence on success of relationships with third parties; risk of significant disruption within our operations or among key suppliers or third parties; potential liability in connection with managing medical practices and operating pharmacies, onsite clinics and other types of medical facilities; the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws or regulations; uncertainties surrounding participation in government-sponsored programs such as Medicare; the outcome of litigation, regulatory audits and investigations; compliance with applicable privacy, security and data laws, regulations and standards; potential failure of our prevention, detection and control systems; unfavorable economic and market conditions, including bank failures, the risk of a recession or other economic downturn and resulting impact on employment metrics, stock market or changes in interest rates and risks related to a downgrade in financial strength ratings of our insurance subsidiaries; the impact of our significant indebtedness and the potential for further indebtedness in the future; credit risk related to our reinsurers; as well as more specific risks and uncertainties discussed in Part I, Item 1A – Risk Factors in our 2022 Form 10-K, Part II, Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Form 10-K, and as described from time to time in our future reports filed with the Securities and Exchange Commission.

You should not place undue reliance on forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. The Cigna Group undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law.

EXECUTIVE OVERVIEW

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 with a mission of helping those we serve improve their health and vitality. Our subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental and related products and services. For further information on our business and strategy, see Item 1, "Business" of our 2022 Form 10-K.

Financial Highlights

See Note 1 to the Consolidated Financial Statements for a description of our segments. Effective January 1, 2023, we adopted amended accounting guidance for long-duration insurance contracts. Prior period Financial highlights and Results of operations have

been retrospectively adjusted to conform to this new basis of accounting. For the three months ended March 31, 2023, the impact of this amended guidance is immaterial. See Note 2 to the Consolidated Financial Statements for additional information.

Summarized below are certain key measures of our performance by segment:

Financial highlights by segment
															Three Months Ended March 31,
(Dollars in millions, except per share amounts)																											2023						2022												% Change
Revenues
Adjusted revenues by segment
Evernorth Health Services																											$	36,179					$	33,586											8			%
Cigna Healthcare																											12,718						11,393												12
Other Operations																											157						979												(84)
Corporate, net of eliminations																											(2,575)						(1,849)												(39)
Adjusted revenues																											46,479						44,109												5
Net realized investment results from certain equity method investments																											38						(103)												N/M
Total revenues																											$	46,517					$	44,006											6			%
Shareholders' net income																											$	1,267					$	1,197											6			%
Adjusted income from operations																											$	1,618					$	1,948											(17)			%
Earnings per share (diluted)
Shareholders' net income																											$	4.24					$	3.73											14			%
Adjusted income from operations																											$	5.41					$	6.06											(11)			%
Pre-tax adjusted income (loss) from operations by segment
Evernorth Health Services																											$	1,320					$	1,302											1			%
Cigna Healthcare																											1,115						1,297												(14)
Other Operations																											15						229												(93)
Corporate, net of eliminations																											(414)						(343)												(21)
Consolidated pre-tax adjusted income from operations																											2,036						2,485												(18)
Income attributable to noncontrolling interests																											43						17												153
Net realized investment losses (1)																											(18)						(425)												96
Amortization of acquired intangible assets																											(459)						(458)												—
Special items																											(1)						(52)												98
Income before income taxes																											$	1,601					$	1,567											2			%

*(1)*Includes the Company's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting.

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

Consolidated Results of Operations (GAAP basis)
												Three Months Ended March 31,
(Dollars in millions)																								2023						2022																		% Change
Pharmacy revenues																											$	32,144					$	30,697																	5			%
Premiums																											11,025						10,356																		6
Fees and other revenues																											3,071						2,539																		21
Net investment income																											277						414																		(33)
Total revenues																											46,517						44,006																		6
Pharmacy and other service costs																											31,459						29,813																		6
Medical costs and other benefit expenses																											9,046						8,272																		9
Selling, general and administrative expenses																											3,538						3,275																		8
Amortization of acquired intangible assets																											459						458																		—
Total benefits and expenses																											44,502						41,818																		6
Income from operations																											2,015						2,188																		(8)
Interest expense and other																											(358)						(299)																		(20)
Net realized investment losses																											(56)						(322)																		83
Income before income taxes																											1,601						1,567																		2
Total income taxes																											295						355																		(17)
Net income																											1,306						1,212																		8
Less: Net income attributable to noncontrolling interests																											39						15																		160
Shareholders' net income																											$	1,267					$	1,197																	6			%
Consolidated effective tax rate																											18.4			%			22.7			%															(430)			bps
Medical customers (in thousands)																											19,473						17,779																		10			%

Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations
												Three Months Ended March 31,
																		2023									2022
(Dollars in millions)																								Pre-tax			After-tax						Pre-tax			After-tax
Shareholders' net income																											$	1,267								$	1,197
Adjustments to reconcile to adjusted income from operations
Net realized investment losses (1)																								$	18		6						$	425		358
Amortization of acquired intangible assets																								459			344						458			356
Special items
Integration and transaction-related costs																								1			1						52			37
Total special items																								$	1		1						$	52		37
Adjusted income from operations																											$	1,618								$	1,948

*(1)*Includes the Company's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting.

Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations
												Three Months Ended March 31,
																		2023									2022
(Diluted Earnings Per Share)																								Pre-tax			After-tax						Pre-tax			After-tax
Shareholders' net income																											$	4.24								$	3.73
Adjustments to reconcile to adjusted income from operations
Net realized investment losses (1)																								$	0.06		0.02						$	1.32		1.10
Amortization of acquired intangible assets																								1.54			1.15						1.43			1.11
Special items
Integration and transaction-related costs																								—			—						0.16			0.12
Total special items																								$	—		—						$	0.16		0.12
Adjusted income from operations																											$	5.41								$	6.06

*(1)*Includes the Company's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting.

Recent Events

Economic Conditions

We continue to monitor global economic conditions, including inflation, labor market dynamics and the recent banking failures. We did not have a material exposure to banks recently impacted by the financial environment. We continue to proactively address impacts to our pricing with third parties (including vendors, health care providers and drug providers), our investment portfolio and our workforce. We are also monitoring the potential impact on client and customer health care needs.

Our results of operations or cash flows for the three months ended March 31, 2023, were not materially impacted by inflation, labor market dynamics, or the recent banking failures. For further information regarding risks we encounter in our business due to economic conditions, see "Risk Factors" contained in Part I, Item 1A of our 2022 Form 10-K.

Commentary: Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

The commentary presented below, and in the segment discussions that follow, compare results for the three months ended March 31, 2023 with results for the three months ended March 31, 2022.

Shareholders' net income increased 6% due primarily to improved realized investment results reflecting lower mark to market losses on equity securities. This favorable effect was partially offset by lower adjusted income from operations.

Adjusted income from operations declined 17%, driven primarily by the absence of earnings from our life, accident and supplemental health benefits business in six countries sold in 2022 (the "Chubb transaction") and lower net investment income (see below).

Medical customers increased 10%, reflecting growth in fee-based products as well as a higher customer base in our Individual and Medicare Advantage businesses. See Part I, Item 1 of our 2022 Form 10-K for definitions of Cigna Healthcare's market segments.

Pharmacy revenues increased 5%, reflecting higher specialty claims volume as well as inflation on, and higher sales of, branded drugs. See the "Segment Reporting - Evernorth Health Services Segment" section of this MD&A for further discussion.

Premiums increased 6%, reflecting growth in the insured customer base (primarily within our Individual business), the favorable impact of increased specialty contributions and higher premium rates in Cigna Healthcare due to anticipated underlying medical cost trend. See the "Segment Reporting - Cigna Healthcare Segment" section of this MD&A for further discussion. These favorable effects were partially offset by a decline in premiums due to the Chubb transaction.

Fees and other revenues increased 21%, primarily reflecting client growth from our continued contract affordability services within Evernorth Health Services and higher net realized investment results in certain equity method investments within Cigna Healthcare.

Net investment income decreased 33%, primarily reflecting lower returns on our partnership investments and the unfavorable impact of the Chubb transaction. See the "Investment Assets" section of this MD&A for further discussion.

Pharmacy and other service costs increased 6%, reflecting higher specialty claims volume as well as inflation on, and higher sales of, branded drugs.

Medical costs and other benefit expenses increased 9%, primarily reflecting an increased insured customer base (primarily within our Individual business) and trend in Cigna Healthcare, partially offset by the impact of the Chubb transaction.

Selling, general and administrative expenses increased 8%, primarily driven by volume-related expenses in Cigna Healthcare and Evernorth Health Services due to business growth, as well as strategic investments to support business growth and continued advancement of our capabilities in Evernorth Health Services and Cigna Healthcare. These increases were partially offset by the impact of the Chubb transaction.

Interest expense and other increased 20%, primarily reflecting higher interest rates on our indebtedness and increased pension costs.

Realized investment results were substantially improved, primarily due to lower mark to market losses on equity securities. See Note 11 to the Consolidated Financial Statements for further discussion.

The effective tax rate decreased by 430 basis points, driven by favorable results relative to the Company's foreign operations, partially offset by an increase pertaining to the year over year impact of remeasurement of deferred taxes.

Developments

Medicare Advantage Rates

On March 31, 2023, Centers for Medicare and Medicaid Services ("CMS") released the final Calendar Year 2024 Medicare Advantage Program and Part D Payment Policies (the "2024 Final Notice"). The 2024 Final Notice rates were improved from the advance notice rates (previously released on February 1, 2023). We do not expect the final rates to have a material impact on our consolidated results of operations in 2024.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

We maintain liquidity at two levels: the subsidiary level and the parent company level.

Cash requirements at the subsidiary level generally consist of:

• pharmacy, medical costs and other benefit payments;

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

• income taxes; and

• debt service.

Our subsidiaries normally meet their liquidity requirements by:

• maintaining appropriate levels of cash, cash equivalents and short-term investments;

• using cash flows from operating activities;

• matching investment durations to those estimated for the related insurance and contractholder liabilities;

• selling investments; and

• borrowing from affiliates, subject to applicable regulatory limits.

Cash requirements at the parent company level generally consist of:

• debt service;

• payment of declared dividends to shareholders;

• lending to subsidiaries as needed; and

• pension plan funding.

The parent company normally meets its liquidity requirements by:

• maintaining appropriate levels of cash and various types of marketable investments;

• collecting dividends from its subsidiaries;

• using proceeds from issuing debt and common stock; and

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

Dividends from our insurance, Health Maintenance Organization ("HMO") and certain foreign subsidiaries are subject to regulatory restrictions. See Note 21 to the Consolidated Financial Statements in our 2022 Form 10-K for additional information regarding these

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

With respect to our investment portfolio, we support the liquidity needs of our businesses by managing the duration of assets to be consistent with the duration of liabilities. We manage the portfolio to both optimize returns in the current economic environment and meet our liquidity needs.

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

						Three Months Ended March 31,
(In millions)						2023						2022
Operating activities						$	5,028					$	2,030
Investing activities						$	(2,983)					$	(324)
Financing activities						$	(37)					$	(2,171)

The following discussion explains variances in the various categories of cash flows for the three months ended March 31, 2023 compared with the same period in 2022.

Operating activities

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

Operating cash flows for the three months ended March 31, 2023 included the benefits from the early receipt of April Medicare premiums from CMS and a higher CMS Medicare Part D annual settlement. The remaining increase was driven by higher insurance liabilities, timing of pharmacy and services cost payable and lower inventory purchases.

Investing activities

The Company invested $2.5 billion in VillageMD in 2023, which resulted in an increase in cash used in investing activities.

Financing activities

The Company issued new debt, had lower payments for commercial paper and lower share repurchases. These factors resulted in a decrease in cash used in financing activities in 2023.

Capital Resources

Our capital resources consist primarily of cash, cash equivalents and investments maintained at regulated subsidiaries required to underwrite insurance risks, cash flows from operating activities, our commercial paper program, credit agreements and the issuance of long-term debt and equity securities. Our businesses generate significant cash flow from operations, some of which is subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company. Dividends from U.S. regulated subsidiaries were $258 million for the three months ended March 31, 2023 and $475 million for the three months ended March 31, 2022. Non-regulated subsidiaries also generate significant cash flow from operating activities, which is typically available immediately to the parent company for general corporate purposes.

We prioritize our use of capital resources to:

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

• pay dividends to shareholders;

• consider acquisitions and investments that are strategically and economically advantageous; and

• return capital to shareholders through share repurchases.

Funds Available

Commercial Paper Program**.** The Cigna Group maintains a commercial paper program and may issue short-term, unsecured commercial paper notes privately placed on a discount basis through certain broker-dealers at any time not to exceed an aggregate amount of $5.0 billion. The net proceeds of issuances have been and are expected to be used for general corporate purposes.

Revolving Credit Agreements. Our revolving credit agreements provide us with the ability to borrow amounts for general corporate purposes, including for the purpose of providing liquidity support if necessary under our commercial paper program discussed above.

As of April 2023, The Cigna Group's revolving credit agreements include: a $4.0 billion five-year revolving credit and letter of credit agreement that expires in April 2028; and a $1.0 billion 364-day revolving credit agreement that expires in April 2024.

As of March 31, 2023, we had $5.0 billion of undrawn committed capacity under our revolving credit agreements that have since been replaced with the revolving credit agreements described above (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $5.0 billion of remaining capacity under our commercial paper program and $8.1 billion in cash and short-term investments, approximately $1.1 billion of which was held by the parent company or certain non-regulated subsidiaries.

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

Our debt-to-capitalization ratio was 42.2% at March 31, 2023 and 41.0% at December 31, 2022.

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

Subsidiary Borrowings. In addition to the sources of liquidity discussed above, the parent company can borrow an additional $2.8 billion from its subsidiaries without further approvals as of March 31, 2023.

Use of Capital Resources

Capital expenditures**.** Capital expenditures for property, equipment and computer software were $0.4 billion in the three months ended March 31, 2023 compared to $0.3 billion in the three months ended March 31, 2022. This increase reflects our continued strategic investment in technology for future growth. We expect to deploy approximately $1.4 billion to capital expenditures in 2023. Anticipated capital expenditures will be funded primarily from operating cash flow.

Dividends**.** In the first quarter of 2023, The Cigna Group declared and paid quarterly cash dividends of $1.23 per share of its common stock, compared to $1.12 per share in first quarter 2022. See Note 8 to the Consolidated Financial Statements for further information on our dividend payments. On April 26, 2023, the Board of Directors declared the second quarter cash dividend of $1.23 per share of The Cigna Group common stock to be paid on June 22, 2023 to shareholders of record on June 7, 2023. The Cigna Group currently intends to pay regular quarterly dividends, with future declarations subject to approval by its Board of Directors and the Board's determination that the declaration of dividends remains in the best interests of the Company and its shareholders. The decision of whether to pay future dividends and the amount of any such dividends will be based on the Company's financial position, results of operations, cash flows, capital requirements, the requirements of applicable law and any other factors the Board may deem relevant.

Share repurchases**.** We maintain a share repurchase program authorized by our Board of Directors, under which we may repurchase shares of our common stock from time to time. The timing and actual number of shares repurchased will depend on a variety of factors including price, general business and market conditions and alternate uses of capital. The share repurchase program may be effected through open market purchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including through Rule 10b5-1 trading plans or privately negotiated transactions. The program may be suspended or discontinued at any time.

We repurchased 3.2 million shares for approximately $1.0 billion during the three months ended March 31, 2023, compared to 5.8 million shares for approximately $1.3 billion during the three months ended March 31, 2022. From April 1, 2023, through May 4, 2023, we repurchased 0.5 million shares for approximately $139 million. Share repurchase authority was $2.5 billion as of May 4, 2023.

Strategic investments. In January 2023, we became a minority owner in VillageMD by investing $2.5 billion in VillageMD preferred equity. In April 2023, the Company invested an additional $200 million for a total investment of $2.7 billion. VillageMD provides health care services for individuals and communities across the United States, with primary, multi-specialty and urgent care providers serving patients in traditional clinic settings, in patients' homes and online appointments.

Risks to our liquidity and capital resources outlook include cash projections that may not be realized and the demand for funds could exceed available cash if our ongoing businesses experience unexpected shortfalls in earnings or we experience material adverse effects from one or more risks or uncertainties described more fully in the "Risk Factors" section of our 2022 Form 10-K. Though we believe we have adequate sources of liquidity, significant disruption or volatility in the capital and credit markets could affect our ability to access those markets for additional borrowings or increase costs.

Guarantees and Contractual Obligations

We are contingently liable for various contractual obligations and financial and other guarantees entered into in the ordinary course of business. See Note 16 to the Consolidated Financial Statements for discussion of various guarantees.

The Company adopted amended accounting guidance for long-duration insurance contracts effective January 1, 2023, which impacted the amounts presented on our Consolidated Balance Sheets. Within our Consolidated Financial Statements, see Note 2 for a summary of this accounting change and Note 9 for a summary of the insurance liabilities on our Consolidated Balance Sheets as well as future expected cash flow information. With the adoption of amended accounting guidance for long-duration insurance contracts and enhanced disclosure within Note 9 to the Consolidated Financial Statements, we will no longer present additional information regarding insurance liabilities within this section.

Our long-term debt obligations previously provided in our 2022 Form 10-K have been updated as of March 31, 2023 due to the issuance of $700 million in aggregate principal amount of our 5.685% senior notes due March 2026 and $800 million in aggregate principal amount of our 5.400% senior notes due March 2033. See Note 7 to the Consolidated Financial Statements for a discussion of the debt issuance.

• Total scheduled payments on long-term debt are $48.5 billion through March 2051, which include scheduled interest payments and maturities of long-term debt.

• We expect $3.9 billion of long-term debt payments (including scheduled interest payments) to be paid for the remainder of 2023.

There have been no other material changes to other information presented in guarantees and contractual obligations set forth in our 2022 Form 10-K.

CRITICAL ACCOUNTING ESTIMATES

The preparation of Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures in the Consolidated Financial Statements. Management considers an accounting estimate to be critical if:

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

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

Management has discussed how critical accounting estimates are developed and selected with the Audit Committee of our Board of Directors and the Audit Committee has reviewed the disclosures presented in our 2022 Form 10-K. We regularly evaluate items that may impact critical accounting estimates.

Our most critical accounting estimates, as well as the effect of hypothetical changes in material assumptions used to develop each estimate, are described in our 2022 Form 10-K. As of March 31, 2023, there were no significant changes to the critical accounting estimates from what was reported in our 2022 Form 10-K.

SEGMENT REPORTING

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

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

In segment discussions, we present "adjusted revenues" and "pre-tax adjusted income (loss) from operations," defined as income (loss) before income taxes excluding pre-tax income (loss) attributable to noncontrolling interests, net realized investment results, amortization of acquired intangible assets and special items. The Cigna Group's share of certain realized investment results of its joint

ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Ratios presented in this segment discussion exclude the same items as adjusted revenues and pre-tax adjusted income (loss) from operations. See Note 17 to the Consolidated Financial Statements for additional discussion of these metrics and a reconciliation of Income before income taxes to pre-tax adjusted income from operations, as well as a reconciliation of Total revenues to adjusted revenues. Note 17 to the Consolidated Financial Statements also explains that segment revenues include both external revenues and sales between segments that are eliminated in Corporate.

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

Evernorth Health Services Segment

Evernorth Health Services includes a broad range of coordinated and point solution health services and capabilities, as well as those from partners across the health care system, in Pharmacy Benefits, Home Delivery Pharmacy, Specialty Pharmacy, Distribution and Care Delivery and Management Solutions. As described in the introduction to Segment Reporting, Evernorth Health Services' performance is measured using adjusted revenues and pre-tax adjusted income (loss) from operations.

The key factors that impact Evernorth Health Services' Pharmacy revenues, Fee and other revenues and Pharmacy and other service costs are volume, mix of claims and price. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements included in our 2022 Form 10-K for additional information on revenue and cost recognition policies for this segment.

• As our clients' claim volumes increase or decrease, our resulting revenues and cost of revenues correspondingly increase or decrease. Our gross profit, defined as Total revenues less Pharmacy and other service costs, could also increase or decrease as a result of changes in purchasing discounts.

• The mix of claims generally considers the type of drug and distribution method used for dispensing and fulfilling. Types of drugs can have an impact on our Pharmacy revenues, Pharmacy and other service costs and gross profit, including amounts payable under certain financial and performance guarantees with our clients. In addition to the types of drugs, the mix of generic claims (i.e., generic fill rate) also impacts our gross profit. Generally, higher generic fill rates reduce revenues, as generic drugs are typically priced lower than the branded drugs they replace. However, as ingredient cost paid to pharmacies on generic drugs is incrementally lower than the price charged to our clients, higher generic fill rates generally have a favorable impact on our gross profit. The home delivery generic fill rate is currently lower than the network generic fill rate as fewer generic substitutions are available among maintenance medications (such as therapies for chronic conditions) commonly dispensed from home delivery pharmacies as compared to acute medications that are primarily dispensed by pharmacies in our retail networks. Furthermore, our gross profit differs among network, home delivery and specialty distribution methods and can impact our profitability.

• Our client contract pricing is impacted by our ongoing ability to negotiate favorable contracts for pharmacy network, pharmaceutical and wholesaler purchasing and manufacturer rebates on our clients' behalf. Through these contract affordability services, we seek to improve the effectiveness of our integrated solutions for the benefit of our clients by continuously innovating, improving affordability and implementing drug purchasing contract initiatives. Our revenues, cost of revenues and gross profit could increase or decrease as a result of these contract affordability services. Inflation also impacts our pricing because most of our contracts provide that we bill clients and pay pharmacies based on a generally recognized price index for pharmaceuticals. Therefore, the rate of inflation for prescription drugs and our efforts to manage this inflation for our clients continues to be a significant driver of our revenues and cost of revenues in the current environment.

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

Results of Operations

Financial Summary
															Three Months Ended March 31,																					Change Favorable (Unfavorable)
(Dollars in millions)																		2023						2022
Total revenues																								$	36,179					$	33,586																	8			%
Adjusted revenues (1)																								$	36,179					$	33,586																	8			%
Pharmacy and other service costs																								$	33,973					$	31,575																	8			%
Gross profit (2)																								$	2,206					$	2,011																	10			%
Adjusted gross profit (1),(2)																								$	2,206					$	2,011																	10			%
Pre-tax adjusted income from operations																								$	1,320					$	1,302																	1			%
Pre-tax adjusted margin																								3.6			%			3.9			%
Adjusted expense ratio (3)																								2.3			%			2.1			%

Selected Financial Information
															Three Months Ended March 31,																		Change Favorable (Unfavorable)
(Dollars and adjusted scripts in millions)																		2023						2022
Pharmacy revenue by distribution channel
Adjusted network revenues (1)																								$	15,748					$	15,531											1			%
Adjusted home delivery and specialty revenues (1)																								16,025						14,699												9
Other pharmacy revenues																								1,867						1,712												9
Total adjusted pharmacy revenues (1)																								$	33,640					$	31,942											5			%
Adjusted fees and other revenues (1)																								2,489						1,634												52
Net investment income																								50						10												N/M
Adjusted revenues (1)																								$	36,179					$	33,586											8			%
Pharmacy script volume (4)
Adjusted network scripts																								315						315												—			%
Adjusted home delivery and specialty scripts																								66						70												(6)
Total adjusted scripts																								381						385												(1)			%
Generic fill rate (5)
Network																								88.2			%			87.2			%									100			bps
Home delivery																								84.0			%			85.4			%									(140)			bps
Overall generic fill rate																								87.8			%			87.0			%									80			bps

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

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

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

*(4)*Non-specialty network scripts filled through 90-day programs and home delivery scripts are multiplied by three. All other network and specialty scripts are counted as one script.

*(5)*Generic fill rate is defined as the total number of generic scripts divided by the total overall scripts filled.

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

Adjusted network revenues slightly increased, reflecting inflation on branded drugs, partially offset by a decrease in mix and an increase in the generic fill rate.

Adjusted home delivery and specialty revenues increased 9%, reflecting higher specialty claims volume and inflation on, and higher sales of, branded drugs. These increases were partially offset by lower home delivery claims volume.

Other pharmacy revenues increased 9%, reflecting higher volume from our CuraScript Specialty Distribution business.

Adjusted fees and other revenues increased 52%, reflecting client growth of our Care Delivery and Management Solutions, including cross-enterprise leverage, and client growth from our continued contract affordability services.

Adjusted gross profit and pre-tax adjusted income from operations increased 10% and 1%, respectively, reflecting growth in specialty pharmacy, partially offset by strategic investments to support business growth and continued advancement of our capabilities.

The adjusted expense ratio increased 20 bps, reflecting increased strategic investments to support business growth and continued advancement of our capabilities.

Cigna Healthcare Segment

Cigna Healthcare includes the U.S. Commercial, U.S. Government and International Health businesses, which provide comprehensive medical and coordinated solutions to clients and customers. As described in the introduction to Segment Reporting, performance of the Cigna Healthcare segment is measured using adjusted revenues and pre-tax adjusted income from operations. Key factors affecting results for this segment include:

• customer growth;

• revenue growth;

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

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

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

Effective January 1, 2023, we adopted amended accounting guidance for long-duration insurance contracts. For the Cigna Healthcare segment, prior period results of operations have been retrospectively adjusted to conform to this new basis of accounting. For the three months ended March 31, 2023, the impact of this amended guidance is immaterial. See Note 2 to the Consolidated Financial Statements for additional information.

Results of Operations

Financial Summary
																					Three Months Ended March 31,																								Change Favorable (Unfavorable)
(Dollars in millions)																											2023						2022
Adjusted revenues																																	$	12,718					$	11,393																	12			%
Pre-tax adjusted income from operations																																	$	1,115					$	1,297																	(14)			%
Pre-tax adjusted margin																																	8.8			%			11.4			%															(260)			bps
Medical care ratio																																	81.3			%			81.5			%															20			bps
Adjusted expense ratio																																	21.4			%			20.5			%															(90)			bps

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

Adjusted revenues increased 12%, reflecting customer growth in U.S. Government and U.S. Commercial mostly driven by our Individual business, increased specialty contributions and higher premium rates due to anticipated underlying medical cost trend, partially offset by lower net investment income.

Pre-tax adjusted income from operations decreased 14%, primarily due to a higher adjusted expense ratio and lower net investment income, partially offset by a lower medical care ratio.

The medical care ratio decreased 20 bps, reflecting effective pricing execution and favorable cost trends, inclusive of lower COVID-19 costs.

The adjusted expense ratio increased 90 bps, primarily due to volume-related expenses, higher spend on investments to support growth and lower net investment income, partially offset by revenue growth across all segments.

Medical Customers

A medical customer is defined as a person meeting any one of the following criteria:

• is covered under a medical insurance policy, managed care arrangement or service agreement issued by us;

• has access to our provider network for covered services under their medical plan; or

• has medical claims that are administered by us.

Cigna Healthcare Medical Customers
						As of March 31,
(In thousands)						2023						2022																		% Change
Insured						5,205						4,682																		11			%
U.S. Commercial						2,218						2,166																		2
U.S. Government						1,837						1,397																		31
International Health (1)						1,150						1,119																		3
Services only						14,268						13,097																		9
U.S. Commercial						13,808						12,455																		11
U.S. Government						6						5																		20
International Health (1)						454						637																		(29)
Total						19,473						17,779																		10			%

*(1)*International Health excludes medical customers served by less than 100% owned subsidiaries. International Health lives as of March 31, 2023 reflect the transition of certain run-off business to Other Operations beginning January 1, 2023.

Our medical customer base increased 10%, primarily driven by growth in fee-based customers as well as growth in Individual and Medicare Advantage customers.

See Part I, Item 1 of our 2022 Form 10-K for definitions of Cigna Healthcare's market segments.

Unpaid Claims and Claim Expenses

(In millions)						As of March 31, 2023						As of December 31, 2022																		% Change
Unpaid claims and claim expenses – Cigna Healthcare						$	4,959					$	4,176																	19			%

Our unpaid claims and claim expenses liability increased 19%, driven by stop loss seasonality and higher volumes in our Individual and Medicare Advantage businesses.

Other Operations

Other Operations includes corporate owned life insurance ("COLI") and the Company's run-off operations. In the prior period, Other Operations also included the International businesses sold in July 2022 and our interest in a joint venture in Türkiye sold in December 2022. As described in the introduction of Segment Reporting, performance of Other Operations is measured using adjusted revenues and pre-tax adjusted income from operations.

Effective January 1, 2023, we adopted amended accounting guidance for long-duration insurance contracts. For the Other Operations segment, prior period results of operations have been retrospectively adjusted to conform to this new basis of accounting. For the three months ended March 31, 2023, the impact of this amended guidance is immaterial. See Note 2 to the Consolidated Financial Statements for additional information.

Results of Operations

Financial Summary															Three Months Ended March 31,																								Change Favorable (Unfavorable)
(Dollars in millions)																					2023						2022
Adjusted revenues																											$	157					$	979																	(84)			%
Pre-tax adjusted income from operations																											$	15					$	229																	(93)			%
Pre-tax adjusted margin																											9.6			%			23.4			%															(1,380)			bps

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

Adjusted revenues and pre-tax adjusted income from operations decreased 84% and 93%, respectively, primarily due to the absence of revenues and earnings from the businesses divested in the Chubb transaction.

Corporate

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

Financial Summary															Three Months Ended March 31,																								Change Favorable (Unfavorable)
(In millions)																		2023						2022
Pre-tax adjusted loss from operations																								$	(414)					$	(343)																	(21)			%

Three Months Ended March 31, 2023 versus Three Months Ended March 31, 2022

Pre-tax adjusted loss from operations increased 21%, primarily due to higher interest rates on our indebtedness and increased pension costs due to lower asset returns and a higher discount rate. While our pension expense has increased year-over-year, we continue to expect the required contributions for 2023 to be immaterial.

INVESTMENT ASSETS

The following table presents our investment asset portfolio excluding separate account assets. Additional information regarding our investment assets is included in Notes 11, 12, 13 and 14 to the Consolidated Financial Statements.

(In millions)						March 31, 2023						December 31, 2022
Debt securities						$	9,909					$	9,872
Equity securities						3,120						622
Commercial mortgage loans						1,607						1,614
Policy loans						1,211						1,218
Other long-term investments						3,936						3,728
Short-term investments						141						139
Total						$	19,924					$	17,193

Investment Outlook

We continue to actively monitor economic conditions including the impact of inflation, higher interest rates and the potential for a recession in 2023 on the investment portfolio. Although there has been very limited impact to date on our investment portfolio as a result of recent banking failures, we are also monitoring this situation and any potential impacts on our investments. Future realized and unrealized investment results will be driven largely by market conditions and these future conditions are not reasonably predictable. We believe that the vast majority of our investments will continue to perform under their contractual terms. We manage the portfolio for long-term economics and therefore we expect to hold a significant portion of these assets for the long term. The following discussion addresses the strategies and risks associated with our various classes of investment assets. Although future declines in investment fair values remain possible due to interest rate movements and credit deterioration due to both investment-specific uncertainties and global economic uncertainties as discussed below, we do not expect these losses to have a material adverse effect on our financial condition or liquidity.

Debt Securities

Investments in debt securities include publicly traded and privately placed bonds, mortgage and other asset-backed securities and preferred stocks redeemable by the investor. These investments are classified as available for sale and are carried at fair value in our Consolidated Balance Sheets. Additional information regarding valuation methodologies, key inputs and controls is included in Note 12 to the Consolidated Financial Statements.

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

(In millions)						March 31, 2023						December 31, 2022
Federal government and agency						$	297					$	312
State and local government						41						41
Foreign government						371						365
Corporate						8,856						8,806
Mortgage and other asset-backed						344						348
Total						$	9,909					$	9,872

Our debt securities portfolio increased during the three months ended March 31, 2023 primarily due to an increase in valuations due to a slight decrease in interest rates. Our portfolio remains in a net unrealized depreciation position due to generally increasing interest rates over the last several quarters. More detailed information about debt securities by type of issuer, maturity dates and net unrealized position is included in Note 11 to the Consolidated Financial Statements.

As of March 31, 2023, $8.1 billion, or 82%, of the debt securities in our investment portfolio were investment grade (Baa and above, or equivalent) and the remaining $1.8 billion were below investment grade. The majority of the bonds that are below investment grade were rated at the higher end of the non-investment grade spectrum. These quality characteristics have not materially changed since the prior year and remain consistent with our investment strategy.

Debt securities include private placement assets of $4.2 billion. These investments are generally less marketable than publicly traded bonds; however, yields on these investments tend to be higher than yields on publicly traded bonds with comparable credit risk. We perform a credit analysis of each issuer and require financial and other covenants that allow us to monitor issuers for deteriorating financial strength and pursue remedial actions, if warranted.

Investments in debt securities are diversified by issuer, geography and industry. On an aggregate basis, the debt securities portfolio continues to perform according to original expectations, which includes a long-term economic investment strategy. Elevated global inflation, higher interest rates, continuing supply chain disruptions and potential fallout from the current stress in the banking system are the primary risks that many of the issuers in our portfolio are facing. To date, most issuers have been successful in managing the cost escalation and product shortages without undue margin pressure. We continue to monitor the economic environment and its effect on our portfolio and consider the impact of various factors in determining the allowance for credit losses on debt securities, which is discussed in Note 11 to the Consolidated Financial Statements.

Commercial Mortgage Loans

As of March 31, 2023, our $1.6 billion commercial mortgage loan portfolio consisted of approximately 50 fixed-rate loans, diversified by property type, location and borrower. These loans are carried in our Consolidated Balance Sheets at their unpaid principal balance, net of an allowance for expected credit losses. As a result of increasing market interest rates since the majority of these loans were made, the carrying value exceeds the market value of these loans as of March 31, 2023. See Note 12 to the Consolidated Financial Statements for further details. Given the quality and diversity of the underlying real estate, positive debt service coverage and significant borrower cash invested in the property generally ranging between 30 and 40%, we remain confident that the vast majority of borrowers will continue to perform as expected under their contract terms. For further discussion of the results and changes in key loan metrics, see Note 11 to the Consolidated Financial Statements.

Loans are secured by high quality commercial properties, located in strong institutional markets and are generally made at less than 65% of the property's value at origination of the loan. Property value, debt service coverage, quality, building tenancy and stability of cash flows are all important financial underwriting considerations. We hold no direct residential mortgage loans and do not originate or service securitized mortgage loans.

We assess the credit quality of our commercial mortgage loan portfolio annually, generally in the second fiscal quarter by reviewing each holding's most recent financial statements, rent rolls, budgets and relevant market reports. The review performed in the second quarter of 2022 confirmed ongoing strong overall credit quality in line with the previous year's results.

Office sector fundamentals have been and continue to be weak and values are experiencing stress due to multiple headwinds: expanded work from home flexibility, shorter term leases, elevated tenant improvement allowances and corporate migration to lower cost states. Additionally, the current macroeconomic headwinds are impacting capital markets and reducing investor appetite for capital intensive assets (e.g., offices and regional shopping malls). Our commercial mortgage loan portfolio has no exposure to regional shopping malls and less than 30% exposure to office properties.

Other Long-term Investments

Other long-term investments of $3.9 billion as of March 31, 2023 included investments in securities limited partnerships and real estate limited partnerships, direct investments in real estate joint ventures and other deposit activity that is required to support various insurance and health services businesses. Accounting policies for these investments are discussed in Note 11 to the Consolidated Financial Statements. The increase in other long-term investments of $0.2 billion since December 31, 2022 is primarily driven by net additional funding activity. These limited partnership entities typically invest in mezzanine debt or equity of privately-held companies and equity real estate. Given our subordinate position in the capital structure of these underlying entities, we assume a higher level of risk for higher expected returns. To mitigate risk, these investments are diversified across approximately 200 separate partnerships and 90 general partners who manage one or more of these partnerships. Also, the underlying investments are diversified by industry sector or property type and geographic region. No single partnership investment exceeded 4% of our securities and real estate limited partnership portfolio.

Income from our limited partnership investments is generally 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. Accordingly, our net investment income in the first quarter largely reflects the underlying financial information from the fourth quarter of 2022. We expect continued volatility in private equity and real estate fund performance going forward as fair market valuations are adjusted to reflect market and portfolio transactions. Less than 5% of our other long-term investments are exposed to real estate in the office sector.

We participate in an insurance joint venture in China with a 50% ownership interest. We account for this joint venture under the equity method of accounting and report our share of the net assets of $0.4 billion in Other assets. Our 50% share of the investment portfolio supporting the joint venture's liabilities is approximately $10.3 billion as of March 31, 2023. These investments were comprised of approximately 70% debt securities, including government and corporate debt diversified by issuer, industry and geography; 20% equities, including mutual funds, equity securities and private equity partnerships; and 10% long-term deposits and policy loans. We participate in the approval of the joint venture's investment strategy and continuously review its execution. There were no investments with a material unrealized loss as of March 31, 2023.

MARKET RISK

Financial Instruments

Our assets and liabilities include financial instruments subject to the risk of potential losses from adverse changes in market rates and prices. Our primary market risk exposure is interest rate risk. We encourage you to read this in conjunction with "Market Risk – Financial Instruments" included in the MD&A section of our 2022 Form 10-K. As of March 31, 2023, there were no material changes in our risk exposures from those reported in our 2022 Form 10-K.