Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS


The Cigna Group Consolidated Statements of Income
	Unaudited
	Three Months Ended March 31,
(In millions, except per share amounts)		2026		2025
Revenues
Pharmacy revenues		$	54,037	$	48,633
Premiums		9,812		12,736
Fees and other revenues		4,443		3,895
Net investment income		202		238
TOTAL REVENUES		68,494		65,502
Benefits and expenses
Pharmacy and other service costs		54,100		48,398
Medical costs and other benefit expenses		7,924		10,498
Selling, general and administrative expenses		3,722		4,213
Amortization of acquired intangible assets		390		422
TOTAL BENEFITS AND EXPENSES		66,136		63,531
Income from operations		2,358		1,971
Interest expense and other		(357)		(362)

Gain on sale of businesses		11		41
Net investment gains (losses)		258		(2)
Income before income taxes		2,270		1,648
TOTAL INCOME TAXES		409		239
Net income		1,861		1,409
Less: Net income attributable to noncontrolling interests		207		86
SHAREHOLDERS' NET INCOME		$	1,654	$	1,323
Shareholders' net income per share
Basic		$	6.30	$	4.88
Diluted		$	6.26	$	4.85

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


The Cigna Group Consolidated Statements of Comprehensive Income
	Unaudited
	Three Months Ended March 31,
(In millions)		2026		2025
Net income		$	1,861	$	1,409
Other comprehensive income (loss), net of tax
Net unrealized depreciation on securities and derivatives		(129)		(100)
Net long-duration insurance and contractholder liabilities measurement adjustments		(635)		(168)
Net translation (depreciation) appreciation on foreign currencies		(35)		13
Postretirement benefits liability adjustment		7		6
Other comprehensive loss, net of tax		(792)		(249)
Total comprehensive income		1,069		1,160



Less: Net income attributable to other noncontrolling interests		207		86

SHAREHOLDERS' COMPREHENSIVE INCOME		$	862	$	1,074

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


The Cigna Group Consolidated Balance Sheets
	Unaudited
	As of March 31,		As of December 31,

(In millions)	2026		2025
Assets
Cash and cash equivalents	$	7,040	$	7,676
Investments	812		1,056
Accounts receivable, net	26,607		28,768
Inventories	5,831		7,338
Other current assets	2,742		2,976

Total current assets	43,032		47,814
Long-term investments	18,902		18,471
Reinsurance recoverables	4,073		4,103

Property and equipment	3,704		3,651
Goodwill	45,534		44,924
Other intangible assets	27,318		28,560
Other assets	3,253		2,885
Separate account assets	7,450		7,511

TOTAL ASSETS	$	153,266	$	157,919
Liabilities
Current insurance and contractholder liabilities	$	6,455	$	5,710
Pharmacy and other service costs payable	25,763		30,333
Accounts payable	9,879		10,659
Accrued expenses and other liabilities	8,980		9,048
Short-term debt	1,529		592

Total current liabilities	52,606		56,342
Non-current insurance and contractholder liabilities	9,777		9,938
Deferred tax liabilities, net	6,851		7,145
Other non-current liabilities	4,769		4,238
Long-term debt	29,371		30,871
Separate account liabilities	7,450		7,511

TOTAL LIABILITIES	110,824		116,045
Contingencies — Note 14

Shareholders' equity
Common stock (1)	4		4
Additional paid-in capital	31,914		31,790
Accumulated other comprehensive loss	(3,598)		(2,806)
Retained earnings	49,106		47,865
Less: Treasury stock, at cost	(35,216)		(35,140)
TOTAL SHAREHOLDERS' EQUITY	42,210		41,713
Noncontrolling interests	232		161
Total equity	42,442		41,874
Total liabilities and equity	$	153,266	$	157,919

*(1)*Par value per share, $0.01; shares issued, 406 million as of March 31, 2026 and 405 million as of December 31, 2025; authorized shares, 600 million.

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


The Cigna Group
Consolidated Statements of Changes in Total Equity
Unaudited
Three Months Ended March 31, 2026
(In millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss)		Retained Earnings		Treasury Stock		Shareholders' Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2025	$	4	$	31,790	$	(2,806)	$	47,865	$	(35,140)	$	41,713	$	161	$	41,874

Effects of issuing stock for employee benefit plans			127						(76)		51				51
Other comprehensive loss					(792)						(792)				(792)
Net income							1,654				1,654		207		1,861
Common dividends declared (per share: $1.56)							(413)				(413)				(413)
Repurchase of common stock			—						—		—				—
Other transactions impacting noncontrolling interests			(3)								(3)		(136)		(139)
Balance at March 31, 2026	$	4	$	31,914	$	(3,598)	$	49,106	$	(35,216)	$	42,210	$	232	$	42,442


Three Months Ended March 31, 2025
(In millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss)		Retained Earnings		Treasury Stock		Shareholders' Equity		Noncontrolling Interests		Total Equity


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			155						(107)		48				48
Other comprehensive loss					(249)						(249)				(249)
Net income							1,323				1,323		86		1,409
Common dividends declared (per share: $1.51)							(408)				(408)				(408)
Repurchase of common stock			—						(1,521)		(1,521)				(1,521)
Other transactions impacting noncontrolling interests			—								—		(108)		(108)
Balance at March 31, 2025	$	4	$	31,443	$	(2,590)	$	44,434	$	(33,065)	$	40,226	$	188	$	40,414

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

The Cigna Group

Consolidated Statements of Cash Flows


	Unaudited
	Three Months Ended March 31,

(In millions)	2026		2025
Cash Flows from Operating Activities
Net income	$	1,861	$	1,409
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	650		674
Investment (gains) losses, net	(258)		2
Deferred income tax benefit	(60)		(216)
Gain on sale of businesses	(11)		(41)

Net changes in assets and liabilities, net of non-operating effects:
Accounts receivable, net	2,152		(2,205)
Inventories	1,507		1,517
Reinsurance recoverable and Other assets	104		(219)
Insurance liabilities	739		1,778
Pharmacy and other service costs payable	(4,570)		135
Accounts payable and Accrued expenses and other liabilities	(988)		(1,174)
Other, net	5		260
NET CASH PROVIDED BY OPERATING ACTIVITIES	1,131		1,920
Cash Flows from Investing Activities
Proceeds from investments sold:
Debt securities and equity securities	54		94
Investment maturities and repayments:
Debt securities and equity securities	185		222
Commercial mortgage loans	2		85
Other sales, maturities and repayments (primarily short-term and other long-term investments)	426		331
Investments purchased or originated:
Debt securities and equity securities	(362)		(952)
Commercial mortgage loans	(39)		(34)
Other (primarily short-term and other long-term investments)	(557)		(475)
Property and equipment purchases, net	(267)		(327)

Divestitures, net of cash sold	20		2,346
Renewable energy tax credit equity investments	(94)		(92)
Other, net	(5)		(1)
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES	(637)		1,197
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds	39		36
Withdrawals and benefit payments from contractholder deposit funds	(99)		(64)
Net change in short-term debt	(13)		(891)



Repayment of long-term debt	(550)		(700)

Repurchase of common stock	—		(1,508)
Issuance of common stock	57		69
Common stock dividend paid	(417)		(412)
Other, net	(158)		(211)
NET CASH USED IN FINANCING ACTIVITIES	(1,141)		(3,681)
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash	(9)		9
Net decrease in cash, cash equivalents and restricted cash	(656)		(555)
Cash, cash equivalents and restricted cash January 1, (1)	7,736		8,931
Cash, cash equivalents and restricted cash March 31, (1)	$	7,080	$	8,376

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

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

THE CIGNA GROUP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

TABLE OF CONTENTS



Note Number	Footnote	Page

BUSINESS AND CAPITAL STRUCTURE
1	Description of Business	9
2	Summary of Significant Accounting Policies	9
3	Accounts Receivable, Net	10
4	Supplier Finance Program	11


5	Earnings Per Share	11
6	Debt	11

INSURANCE INFORMATION
7	Insurance and Contractholder Liabilities	12
8	Reinsurance	14
INVESTMENTS
9	Investments	15
10	Fair Value Measurements	18


11	Accumulated Other Comprehensive Income (Loss)	21
WORKFORCE MANAGEMENT AND COMPENSATION
12	Strategic Optimization Program	22





COMPLIANCE, REGULATION AND CONTINGENCIES

13	Income Taxes	22
14	Contingencies and Other Matters	22
RESULTS DETAILS
15	Segment Information	23

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 ("HCSC transaction").

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"). Certain goodwill and other intangible assets amounts in the Consolidated Balance Sheet have been reclassified as of March 31, 2026.

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.

These interim Consolidated Financial Statements are unaudited but include all adjustments (including normal recurring adjustments) necessary, in the opinion of management, for a fair statement of financial position and results of operations for the periods reported. The interim Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K"). The Company has not included certain footnote disclosures that would substantially duplicate the disclosures contained in its 2025 Form

10-K, unless the information in those disclosures materially changed or is required by GAAP. The preparation of interim Consolidated Financial Statements necessarily relies heavily on estimates. This and other factors, including the seasonal nature of portions of the health care and related benefits business, as well as competitive and other market conditions, call for caution in estimating full-year results based on interim results of operations.

Recent Accounting Pronouncements

The Company's 2025 Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted or may impact our financial statements in the future. There are no updates to significant accounting pronouncements recently adopted that have occurred since the Company filed its 2025 Form 10-K. There are no incremental significant accounting pronouncements recently issued and not yet adopted that are expected to impact our operations or financial statements beyond those described in the Company's 2025 Form 10-K*.* The Company continues to progress with its adoption plans, with no significant updates since the 2025 Form 10-K.

Note 3 – Accounts Receivable, Net

The following amounts were included within Accounts receivable, net:


(In millions)	March 31, 2026		December 31, 2025
Noninsurance customer receivables	$	13,797	$	14,707
Pharmaceutical manufacturers receivables	10,914		12,437
Insurance customer receivables	1,652		1,385
Other receivables	244		239


Total	$	26,607	$	28,768

These accounts receivable are reported net of our allowances of $7.7 billion and $6.8 billion as of March 31, 2026 and December 31, 2025, respectively. These allowances include contractual allowances for certain rebates receivable with pharmaceutical manufacturers and certain accounts receivable from third-party payors, discounts and claims adjustments issued to customers in the form of client credits, an allowance for current expected credit losses, and other non-credit adjustments.

The Company's allowance for current expected credit losses was $228 million and $199 million as of March 31, 2026 and December 31, 2025, respectively.

Accounts Receivable Factoring Facilities

The Company maintains uncommitted factoring facilities with a total capacity of $2.0 billion under which certain accounts receivable may be sold on a non-recourse basis to a financial institution. In the first quarter of 2026, the Company entered into a new accounts receivable factoring facility with an initial two-year term, in addition to the previously established accounts receivable factoring facility outlined in Note 3 to the Consolidated Financial Statements included in the Company's 2025 Form 10-K (together, the "Facilities"). The Facilities automatically renew and are subject to automatic one-year renewal terms following the expiration of the initial term unless terminated by either party. The transactions under the Facilities 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 the Facilities are reflected within Net cash provided by operating activities in the Consolidated Statements of Cash Flows. Factoring fees paid under the Facilities are reflected in Interest expense and other in the Consolidated Statements of Income.

We sold receivables under the Facilities of $0.3 billion and $1.4 billion for the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2026 and 2025, factoring fees paid were not material. As of March 31, 2026 and December 31, 2025, all sold accounts receivable had been collected. As of March 31, 2026, all collections have been remitted to the financial institution. As of December 31, 2025, there were $0.4 billion of collections 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.

As of March 31, 2026 and December 31, 2025, $1.3 billion and $1.6 billion, respectively, of the Company's outstanding payment obligations were confirmed as valid within the Program by the financial institution and are reflected in Accounts payable in the Consolidated Balance Sheets. The amounts confirmed as valid for both periods are predominately associated with one supplier.

Note 5 – Earnings Per Share

Basic and diluted earnings per share were computed as follows:


	Three Months Ended
	March 31, 2026						March 31, 2025


(Shares in thousands, dollars in millions, except per share amounts)	Basic		Effect of Dilution		Diluted		Basic		Effect of Dilution		Diluted
Shareholders' net income	$	1,654			$	1,654	$	1,323			$	1,323
Shares:
Weighted average	262,746				262,746		270,867				270,867
Common stock equivalents			1,271		1,271				2,086		2,086
Total shares	262,746		1,271		264,017		270,867		2,086		272,953
Earnings per share	$	6.30	$	(0.04)	$	6.26	$	4.88	$	(0.03)	$	4.85

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


	Three Months Ended March 31,
(In millions)		2026	2025
Anti-dilutive options		2.3	2.3

On April 22, 2026, the Board of Directors of The Cigna Group (the "Board") declared the second quarter cash dividend of $1.56 per share of The Cigna Group common stock to be paid on June 18, 2026 to shareholders of record on June 4, 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.

The Company held approximately 141.4 million shares of common stock in treasury as of March 31, 2026, 141.1 million shares as of December 31, 2025 and 134.1 million shares as of March 31, 2025.

Note 6 – Debt

Short-Term and Long-Term Debt. During the three months ended March 31, 2026, the Company repaid $550 million 1.250% senior notes that matured in March 2026. For more information regarding our short-term and long-term debt, see Note 7 to the Consolidated Financial Statements in the Company's 2025 Form 10-K.

Revolving Credit Agreement. The Company maintains 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 additional one-year periods, subject to consent of the banks (the "Credit Agreement"). Our Credit Agreement 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 March 31, 2026, there was no outstanding balance under the Credit Agreement.

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 March 31, 2026.

Interest Expense. Interest expense on long-term and short-term debt was $357 million for the three months ended March 31, 2026 and $362 million for the three months ended March 31, 2025.

Note 7 – Insurance and Contractholder Liabilities

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

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


	March 31, 2026						December 31, 2025						March 31, 2025
(In millions)	Current		Non-current		Total		Current		Non-current		Total		Total
Unpaid claims and claim expenses
Cigna Healthcare	$	4,856	$	64	$	4,920	$	4,180	$	61	$	4,241	$	4,508
Other	152		164		316		167		176		343		366
Future policy benefits
Cigna Healthcare	37		148		185		38		153		191		192
Other Operations	139		3,008		3,147		142		3,081		3,223		3,308
Contractholder deposit funds	329		5,701		6,030		336		5,778		6,114		6,251
Market risk benefits	28		647		675		25		649		674		830
Unearned premiums	914		45		959		822		40		862		838


Total insurance and contractholder liabilities	$	6,455	$	9,777	$	16,232	$	5,710	$	9,938	$	15,648	$	16,293

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

**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.

The total of incurred but not reported liabilities plus expected development on reported claims and reported claims in process was $4.7 billion as of March 31, 2026 and $4.4 billion as of March 31, 2025.

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


	Three Months Ended March 31,
(In millions)	2026		2025 (1)
Beginning balance	$	4,241	$	5,018
Less: Reinsurance and other amounts recoverable	147		159
Beginning balance, net	4,094		4,859

Incurred costs related to:
Current year	7,852		10,606
Prior years	(188)		(222)
Total incurred	7,664		10,384
Paid costs related to:
Current year	4,119		6,078
Prior years	2,859		3,472
Total paid	6,978		9,550
Less: Divestiture and other	—		1,323
Ending balance, net	4,780		4,370
Add: Reinsurance and other amounts recoverable	140		138
Ending balance	$	4,920	$	4,508

(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, includes $983 million 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 8 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:


	Three Months Ended March 31,
	2026				2025
(Dollars in millions)	$		% (1)		$		% (2)
Actual completion factors and other	$	96	0.3	%	$	96	0.3	%
Medical cost trend	92		0.3		126		0.3

Total favorable variance	$	188	0.6	%	$	222	0.6	%

*(1)*Percentage of current year incurred costs as reported for the year ended December 31, 2025.

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

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

**C.**Future Policy Benefits

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
	March 31, 2026		March 31, 2025
Interest accretion rate	5.64	%	5.64	%
Current discount rate	5.39	%	5.30	%
Weighted average duration	10.5 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 include deferred profit liability of $348 million as of March 31, 2026 and $359 million as of March 31, 2025. Future policy benefits excluding deferred profit liability were $2.8 billion as of March 31, 2026, $2.9 billion as of December 31, 2025, $3.0 billion as of March 31, 2025, and $2.9 billion as of December 31, 2024. Undiscounted expected future policy benefits were $4.1 billion as of March 31, 2026 and $4.3 billion as of March 31, 2025. As of March 31, 2026 and March 31, 2025, $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

Contractholder deposit fund liabilities within Other Operations were $6.0 billion as of March 31, 2026, $6.1 billion as of December 31, 2025 and $6.3 billion as of both March 31, 2025 and December 31, 2024. Approximately 37% of the balance is reinsured externally. Activity in these liabilities is presented net of reinsurance in the Consolidated Statements of Cash Flows.

As of March 31, 2026, the weighted average crediting rate, net amount at risk and cash surrender value for contractholder deposit fund liabilities not effectively exited through reinsurance were 3.19%, $2.4 billion and $2.8 billion, respectively. The comparative amounts as of March 31, 2025 were 3.20%, $2.8 billion and $2.8 billion, respectively. More than 99% of the $3.8 billion liability as of March 31, 2026 and the $4.0 billion liability as of March 31, 2025 not reinsured externally is for contracts with guaranteed interest rates of 3% - 4%, and approximately $1.2 billion as of both period ends represented contracts with policies at the guarantee. At these same period ends, $1.0 billion and $1.2 billion was 50 - 150 basis points ("bps") above the guarantee, and the remaining $1.6 billion as of both March 31, 2026 and March 31, 2025 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 March 31, 2026 and March 31, 2025, 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.

Market risk benefits activity was as follows:


	Three Months Ended March 31,
(In millions)	2026		2025
Balance, beginning of year	$	674	$	785
Balance, beginning of year, before the effect of nonperformance risk (own credit risk)	714		838
Changes due to expected run-off	(6)		(4)
Changes due to capital markets versus expected	13		44
Changes due to policyholder behavior versus expected	(5)		—

Balance, end of period, before the effect of changes in nonperformance risk (own credit risk)	716		878
Nonperformance risk (own credit risk), end of period	(41)		(48)
Balance, end of period	$	675	$	830
Reinsured market risk benefit, end of period	$	715	$	876

The following table presents the net amount at risk and the average attained age of contractholders (weighted by exposure) for contracts assumed by the Company. The net amount at risk is the amount 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. The Company should be reimbursed in full for these payments unless the Berkshire reinsurance limit is exceeded, as discussed further in Note 8 to the Consolidated Financial Statements.


(Dollars in millions, excludes impact of reinsurance ceded)	March 31, 2026		March 31, 2025
Net amount at risk	$	1,194	$	1,412
Average attained age of contractholders (weighted by exposure)	77.6 years		77.0 years

Note 8 – 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.

The majority of the Company's reinsurance recoverables resulted from acquisition and disposition transactions in which the underwriting company was not acquired. 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. The Company reviews its reinsurance arrangements and establishes reserves against the recoverables primarily for expected credit losses.

The Company's reinsurance recoverables as of March 31, 2026 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	$	227	$	232
BBB- to BBB+ equivalent current credit ratings (2)	—		—		64		64
Not rated	81		3		1		85
Acquisition, disposition or run-off activities
BBB+ equivalent and higher current ratings (2)(3)	280		2,810		26		3,116

Not rated	—		4		1		5
Total reinsurance recoverables before market risk benefits	$	361	$	2,822	$	319	$	3,502
Allowance for uncollectible reinsurance							(22)
Market risk benefits							715
Total reinsurance recoverables (4)							$	4,195

*(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 77% is held by two reinsurers, Lincoln National Life Insurance Company and Lincoln Life and Annuity Company of New York.

*(4)*Includes $122 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 7 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 March 31, 2026. 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 March 31, 2026 and 2025, market risk benefits (shown in the table net of nonperformance risk as of March 31, 2026) were predominantly reinsured by Berkshire, which is rated AA+ by an NRSRO. As of March 31, 2026, approximately 100% of the Berkshire recoverable is secured by assets in a trust.

Note 9 – Investments

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


	March 31, 2026						December 31, 2025
(In millions)	Current		Long-Term		Total		Current		Long-Term		Total
Debt securities	$	453	$	7,859	$	8,312	$	691	$	7,671	$	8,362
Equity securities	28		3,641		3,669		22		3,534		3,556
Commercial mortgage loans	52		1,220		1,272		86		1,147		1,233
Policy loans	—		1,024		1,024		—		1,082		1,082
Other long-term investments	—		5,158		5,158		—		5,037		5,037
Short-term investments	279		—		279		257		—		257


Total	$	812	$	18,902	$	19,714	$	1,056	$	18,471	$	19,527

**A.**Investment Portfolio

Debt Securities

The amortized cost and fair value by contractual maturity periods for debt securities were as follows as of March 31, 2026:



(In millions)	Amortized Cost		Fair Value
Due in one year or less	$	674	$	566
Due after one year through five years	3,842		3,783
Due after five years through ten years	2,017		1,969
Due after ten years	1,956		1,766
Mortgage and other asset-backed securities	250		228
Total	$	8,739	$	8,312

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
March 31, 2026
Federal government and agency	$	220	$	—	$	13	$	(3)	$	230
State and local government	24		—		1		—		25
Foreign government	452		—		9		(9)		452
Corporate	7,793		(135)		121		(402)		7,377
Mortgage and other asset-backed	250		—		1		(23)		228
Total	$	8,739	$	(135)	$	145	$	(437)	$	8,312


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

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.


	March 31, 2026							December 31, 2025
(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	$	1,674	$	1,700	$	(26)	609	$	384	$	386	$	(2)	149
Below investment grade	276		283		(7)		632	120		125		(5)		239
More than one year
Investment grade	2,757		3,146		(389)		743	3,044		3,382		(338)		799
Below investment grade	128		143		(15)		82	185		207		(22)		86
Total	$	4,835	$	5,272	$	(437)	2,066	$	3,733	$	4,100	$	(367)	1,273

Equity Securities

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


	March 31, 2026				December 31, 2025
(In millions)	Cost		Carrying Value		Cost		Carrying Value
Equity securities with readily determinable fair values	$	101	$	85	$	78	$	92
Equity securities with no readily determinable fair value	6,893		3,584		6,792		3,464
Total	$	6,994	$	3,669	$	6,870	$	3,556

Commercial Mortgage Loans

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.

The Company regularly evaluates and monitors credit risk from the initial mortgage loan underwriting and throughout the investment holding period. 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. For more information on the Company's accounting policies and methodologies regarding these investments, see Note 11 to the Consolidated Financial Statements in the Company's 2025 Form 10-K.

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


(Dollars in millions)	March 31, 2026					December 31, 2025
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%	$	393	2.13			$	355	2.13
60% to 79%	694		1.79			694		1.81
80% to 100%	185		0.92			184		0.79



Total	$	1,272	1.74	71	%	$	1,233	1.72	71	%

Other Long-Term Investments

Other long-term investments include investments in unconsolidated entities, including certain limited partnerships and limited liability companies holding real estate, securities or loans. 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 flow estimates indicate that the carrying value may not be recoverable. Additionally, statutory and other restricted deposits and foreign currency swaps carried at fair value are reported in the table below as Other. The following table provides the carrying value information for these investments:


	Carrying Value as of
(In millions)	March 31, 2026		December 31, 2025
Real estate investments	$	1,993	$	1,895
Securities partnerships	2,961		2,948
Other	204		194
Total	$	5,158	$	5,037

**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 12A to the Consolidated Financial Statements in the Company’s 2025 Form 10-K for further information.

As of March 31, 2026, the notional value of interest rate swap contracts increased to $3.5 billion compared with $3.2 billion as of December 31, 2025. There were no other material changes to the Company's individual derivative hedging strategies during the three months ended March 31, 2026. Please refer to the Company's 2025 Form 10-K for further discussion of the types of derivative financial instruments and associated accounting policies. The effects of derivative financial instruments used in our individual hedging strategies were not material to the Consolidated Financial Statements as of March 31, 2026 and December 31, 2025. The gross fair values of our derivative financial instruments are presented in Note 10 to the Consolidated Financial Statements.

**C.**Investment Gains and Losses

Net investment gains (losses) before income taxes were $258 million for the three months ended March 31, 2026 versus $(2) million for the three months ended March 31, 2025. Investment results increased primarily due to fair value changes of derivative instruments associated with certain equity securities. 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 10 – Fair Value Measurements

For a description of the policies, methods and assumptions that are used to estimate fair value and determine the fair value hierarchy for each class of financial instruments, see Note 12 to the Consolidated Financial Statements in the Company's 2025 Form 10-K.

**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 in the Company's 2025 Form 10-K. 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
	March 31, 2026		December 31, 2025		March 31, 2026		December 31, 2025		March 31, 2026		December 31, 2025		March 31, 2026		December 31, 2025
Financial assets at fair value
Debt securities
Federal government and agency	$	108	$	105	$	122	$	122	$	—	$	—	$	230	$	227
State and local government	—		—		25		25		—		—		25		25
Foreign government	—		—		442		446		10		10		452		456
Corporate	—		—		7,106		7,133		271		277		7,377		7,410
Mortgage and other asset-backed	—		—		195		206		33		38		228		244
Total debt securities	108		105		7,890		7,932		314		325		8,312		8,362
Equity securities (1)	44		54		39		36		2		2		85		92
Short-term investments	—		—		279		257		—		—		279		257
Derivative assets	—		—		97		68		1,173		923		1,270		991
Financial liabilities at fair value
Derivative liabilities	$	—	$	—	$	8	$	22	$	343	$	354	$	351	$	376

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

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 to the Consolidated Financial Statements in the Company's 2025 Form 10-K, the Company classifies variable annuity assets and liabilities in Level 3 of the fair value hierarchy.

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)	March 31, 2026		December 31, 2025		Unobservable Input March 31, 2026	March 31, 2026		December 31, 2025
Debt securities
Corporate	$	280	$	286	Liquidity	10 - 920 (135)	bps	60 - 920 (175)	bps
Mortgage and other asset-backed securities	33		38		Liquidity	115 - 340 (160)	bps	105 - 350 (160)	bps
Other debt securities	1		1
Total Level 3 debt securities	$	314	$	325

Information about Derivative Instruments. See Note 12A to the Consolidated Financial Statements in the Company’s 2025 Form 10-K for further information regarding our Level 3 derivative instruments.

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.



	Three Months Ended March 31,
(In millions)		2026		2025

Beginning balance		$	896	$	417
Gains (losses) included in Shareholders' net income		258		(10)
(Losses) gains included in Other comprehensive loss		(3)		7

Purchases, sales and settlements
Purchases		15		2
Sales		(6)		—
Settlements		(2)		(31)
Total purchases, sales and settlements		7		(29)
Transfers into / (out of) Level 3
Transfers into Level 3		26		18
Transfers out of Level 3		(38)		(30)
Total transfers into / (out of) Level 3		(12)		(12)
Ending balance		$	1,146	$	373
Total gains (losses) included in Shareholders' net income attributable to instruments held at the reporting date		$	258	$	(13)
Change in unrealized gain or (loss) included in Other comprehensive loss for assets held at the end of the reporting period		$	(3)	$	3

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 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 2026 and 2025 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

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. The separate account activity for the three months ended March 31, 2026 and 2025 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)	March 31, 2026		December 31, 2025		March 31, 2026		December 31, 2025		March 31, 2026		December 31, 2025		March 31, 2026		December 31, 2025
Guaranteed separate accounts (see Note 14)	$	238	$	247	$	332	$	330	$	—	$	—	$	570	$	577
Non-guaranteed separate accounts (1)	262		271		5,766		5,769		167		209		6,195		6,249
Subtotal	$	500	$	518	$	6,098	$	6,099	$	167	$	209	6,765		6,826
Non-guaranteed separate accounts priced at net asset value as a practical expedient (1)													662		661
Total													$	7,427	$	7,487

*(1)*Non-guaranteed separate accounts include $3.7 billion as of March 31, 2026 and $3.8 billion as of December 31, 2025 in assets supporting the Company's pension plans, including $0.1 billion classified in Level 3 as of March 31, 2026 and $0.2 billion as of December 31, 2025. Non-guaranteed separate accounts are primarily comprised of securities partnerships, real estate and real estate funds.

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 three months ended March 31, 2026 or 2025.

**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 three months ended March 31, 2026 and 2025, impairments recognized requiring the assets and liabilities described above to be measured at fair value were not material. Observable price changes for equity securities with no readily determinable fair value were not material for the three months ended March 31, 2026 or March 31, 2025.

**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		March 31, 2026						December 31, 2025
(In millions)		Fair Value			Carrying Value			Fair Value			Carrying Value
Commercial mortgage loans	Level 3		$	1,227		$	1,272		$	1,195		$	1,233
Long-term debt, including current maturities, excluding finance leases	Level 2		$	28,838		$	30,783		$	29,907		$	31,352

Note 11 – Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss) ("AOCI") includes net unrealized appreciation/depreciation on securities and derivatives, change in discount rate and instrument-specific credit risk for certain long-duration insurance contractholder liabilities (see Note 7 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 three months ended March 31, 2026 and March 31, 2025 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:


	Three Months Ended March 31,
(In millions)		2026		2025
Securities and derivatives


Beginning balance		$	594	$	832
Unrealized (depreciation) on securities and derivatives, before reclassification, net of tax benefit of $44 and $49, respectively		(133)		(134)
Amounts reclassified to Shareholders' net income, net of tax (benefit) of $(1) and $(9), respectively		4		34
Other comprehensive (loss), net of tax		(129)		(100)
Ending balance		$	465	$	732
Net long-duration insurance and contractholder liabilities measurement adjustments


Beginning balance		$	(2,329)	$	(2,038)
Net current period change in discount rate for certain long-duration liabilities, before reclassification, net of tax benefit of $214 and $33, respectively		(636)		(108)
Amounts reclassified to Shareholders' net income, net of tax expense of $— and $16, respectively		—		(56)
Net current period change in discount rate for certain long-duration liabilities, net of tax benefit of $214 and $49, respectively		(636)		(164)
Net current period change in instrument-specific credit risk for market risk benefits, net of tax benefit of $— and $1, respectively		1		(4)
Other comprehensive (loss), net of tax		(635)		(168)
Ending balance		$	(2,964)	$	(2,206)
Translation of foreign currencies


Beginning balance		$	(127)	$	(198)
Net translation of foreign currencies, before reclassification, net of tax benefit (expense) of $2 and $(6), respectively		(35)		13


Ending balance		$	(162)	$	(185)
Postretirement benefits liability
Beginning balance		$	(944)	$	(937)
Amounts reclassified to Shareholders' net income, net of tax (benefit) of $(2) and $(2), respectively		7		6


Ending balance		$	(937)	$	(931)
Total Accumulated other comprehensive loss


Beginning balance		$	(2,806)	$	(2,341)
Shareholders' other comprehensive (loss), net of tax benefit of $257 and $82, respectively		(792)		(249)
Ending balance		$	(3,598)	$	(2,590)

Note 12 – 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. The Company expects that the program will continue through 2028 and is continuing to evaluate additional opportunities to improve the overall efficiency and effectiveness of our operations. 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.

During the three months ended March 31, 2026, we reported total costs of $380 million pre-tax ($290 million after-tax) associated with this initiative, compared with $215 million ($163 million after-tax) for the three months ended March 31, 2025. The total costs for the three months ended March 31, 2026 included $377 million, pre-tax in Selling, general and administrative expenses, which was primarily associated with severance ($337 million). The total costs for the three months ended March 31, 2025 included $198 million, pre-tax in Selling, general and administrative expenses, which was primarily associated with severance ($171 million).

Program-to-date total costs of $1,129 million pre-tax ($855 million after-tax) included $993 million in Selling, general and administrative expenses, which were primarily associated with severance ($715 million) and asset impairments ($101 million). The remainder of the total program costs 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 15 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:


(In millions)



Balance, December 31, 2025	$	140
2026 charges	337
2026 payments	(75)
Balance, March 31, 2026	$	402

Note 13 – Income Taxes

Income Tax Expense. The 18.0% effective tax rate for the three months ended March 31, 2026 was higher than the 14.5% rate for the three months ended March 31, 2025 primarily due to the absence of a benefit related to the HCSC transaction.

Note 14 – 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 March 31, 2026, employers maintained assets that generally exceeded the benefit obligations under these arrangements of approximately $390 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 March 31, 2026. 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 March 31, 2026 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 March 31, 2026.

**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 three months ended March 31, 2026.

**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 services business. 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 Internal Revenue Service or other state and foreign jurisdictions, including those resulting in litigation, are accounted for under GAAP guidance for uncertain tax positions.

Note 15 – 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 Chair 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 normal, recurring operations due to their nature or size. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results.

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 normal, recurring 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:


	Three Months Ended March 31,
		2026	2025
(In millions)			Pre-tax		After-tax		Pre-tax		After-tax
Strategic optimization program (primarily Selling, general and administrative expenses)			$	380	$	290	$	215	$	163
Integration and transaction-related costs (Selling, general and administrative expenses)			35		27		216		164
Deferred tax expenses, net (Income taxes, less amount attributable to noncontrolling interests)			—		16		—		17
(Gain) on sale of businesses			—		(3)		(41)		(115)
(Benefits) associated with litigation matters (Selling, general and administrative expenses)			(11)		(8)		—		—




Total impact from special items			$	404	$	322	$	390	$	229

Integration and Transaction-Related Costs. For the three months ended March 31, 2026 and March 31, 2025 the Company incurred transaction-related costs, as shown in the table above, associated with the HCSC transaction. These costs incurred consisted primarily of post-closing technology activities to separate the divested systems; fees for legal, advisory and other professional services; and certain employment-related costs.

Summarized segment financial information was as follows:


(In millions)	Evernorth Health Services		Cigna Healthcare		Other Operations		Corporate and Eliminations		Total
Three months ended March 31, 2026
Revenues from external customers	$	58,206	$	10,039	$	47	$	—	$	68,292
Intersegment revenues	211		1,312		3		(1,526)
Net investment income	25		103		70		4		202
Total revenues	58,442		11,454		120		(1,522)		68,494
Net investment results from certain equity method investments	—		23		—		—		23


Adjusted revenues	$	58,442	$	11,477	$	120	$	(1,522)	$	68,517
Pharmacy and other service costs	55,700		—
Medical costs	—		7,664
Selling, general and administrative expenses	1,049		2,301
Other segment items (1)
Interest (expense) and other	(1)		2
Less: Income attributable to noncontrolling interests	226		—
Pre-tax adjusted income (loss) from operations	1,466		1,514		27		(404)		2,603

Income (loss) before income taxes	$	1,561	$	1,481	$	24	$	(796)	$	2,270
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests	(226)		—		—		—		(226)
Net investment (gains) losses (2)	(261)		29		—		(3)		(235)
Amortization of acquired intangible assets	388		2		—		—		390
Special items
Strategic optimization program	4		13		3		360		380
Integration and transaction-related costs	—		—		—		35		35





(Benefits) associated with litigation matters	—		(11)		—		—		(11)

Pre-tax adjusted income (loss) from operations	$	1,466	$	1,514	$	27	$	(404)	$	2,603

Other segment information
Depreciation and amortization	$	560	$	83	$	2	$	5	$	650

*(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
Three months ended March 31, 2025
Revenues from external customers	$	52,002	$	13,168	$	94	$	—	$	65,264
Intersegment revenues	1,648		1,231		12		(2,891)
Net investment income	31		133		69		5		238
Total revenues	53,681		14,532		175		(2,886)		65,502
Net investment results from certain equity method investments	—		(50)		—		—		(50)

Adjusted revenues	$	53,681	$	14,482	$	175	$	(2,886)	$	65,452
Pharmacy and other service costs	51,121		—
Medical costs	—		10,385
Selling, general and administrative expenses	1,024		2,812
Other segment items (1)
Interest (expense) and other	—		2
Less: Income attributable to noncontrolling interests	102		—
Pre-tax adjusted income (loss) from operations	1,434		1,287		—		(411)		2,310

Income (loss) before income taxes	$	1,108	$	1,364	$	(20)	$	(804)	$	1,648
Pre-tax adjustments to reconcile to adjusted income from operations
(Income) attributable to noncontrolling interests	(102)		—		—		—		(102)
Net investment (gains) losses (2)	(4)		(47)		3		—		(48)
Amortization of acquired intangible assets	415		7		—		—		422
Special items
Integration and transaction-related costs	—		—		—		216		216


Strategic optimization program	21		—		17		177		215



(Gain) on sale of businesses	(4)		(37)		—		—		(41)

Pre-tax adjusted income (loss) from operations	$	1,434	$	1,287	$	—	$	(411)	$	2,310

Other segment information
Depreciation and amortization	$	584	$	83	$	2	$	5	$	674

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:


	Three Months Ended March 31,
(In millions)		2026		2025
Products (Pharmacy revenues) (ASC 606)
Network revenues		$	31,080	$	28,212
Home delivery and specialty revenues		19,788		18,937
Other revenues		3,426		3,077
Total Evernorth Health Services		54,294		50,226
Other Operations		—		13
Corporate and eliminations		(257)		(1,606)
Total Pharmacy revenues		54,037		48,633
Insurance premiums (ASC 944)
Cigna Healthcare
U.S. Healthcare
Employer insured		4,996		4,688
Medicare Advantage		—		2,363
Stop loss		2,116		1,868
Individual and Family Plans		873		859
Other		507		1,872
U.S. Healthcare		8,492		11,650
International Health		1,113		978
Total Cigna Healthcare		9,605		12,628
Other Operations		53		81
Corporate and eliminations		154		27
Total Premiums		9,812		12,736
Services (Fees) (ASC 606) and other revenues (1)
Evernorth Health Services		4,123		3,424
Cigna Healthcare		1,746		1,771
Other Operations		(3)		12
Corporate and eliminations		(1,423)		(1,312)
Total Fees and other revenues (1)		4,443		3,895
Total revenues from external customers		$	68,292	$	65,264

*(1)*Other revenues for the three months ended March 31, 2026 and 2025 were $159 million and $162 million, respectively.

Financial and performance guarantees. Evernorth Health Services 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 following the end of the annual guarantee period. Historically, adjustments to original estimates have not been material. This guarantee liability was $2.0 billion as of March 31, 2026 and $1.8 billion as of December 31, 2025.

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