The CIGNA Corporation

04/30/2026 | Press release | Distributed by Public on 04/30/2026 09:48

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide information to assist you in better understanding and evaluating our financial condition as of March 31, 2026 compared with December 31, 2025 and our results of operations for the three months ended March 31, 2026 compared with the same period last year, and is intended to help you understand the ongoing trends in our business. We encourage you to read this MD&A in conjunction with our Consolidated Financial Statements included in Part I, Item 1 in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K"). In particular, we encourage you to refer to the "Risk Factors" contained in Part I, Item 1A in our 2025 Form 10-K.
Unless otherwise indicated, financial information in this MD&A is presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). See Note 2 to the Consolidated Financial Statements in our 2025 Form 10-K for additional information regarding the Company's significant accounting policies and see Note 2 to the Consolidated Financial
Statements in this Form 10-Q for updates to those policies resulting from adopting new accounting guidance, if any. The preparation of interim consolidated financial statements necessarily relies heavily on estimates. 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 reflect the underlying results of business operations and facilitate analysis of trends in underlying revenue, expenses and profitability. We define adjusted income (loss) from operations as shareholders' net income (or income (loss) before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net 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 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. 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 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 normal, recurring operations due to their nature or size. We exclude these items from this measure because management believes they are not indicative of past or future underlying performance of the business. 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.
See Note 15 to the Consolidated Financial Statements for additional discussion of these metrics and a reconciliation of income (loss) before income taxes to pre-tax adjusted income (loss) from operations, as well as a reconciliation of Total revenues to adjusted revenues. Note 15 to the Consolidated Financial Statements also explains that segment revenues include both external revenues and sales between segments that are eliminated in Corporate. Ratios presented in the segment discussion exclude the same items as adjusted revenues and pre-tax adjusted income (loss) from operations.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q 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 and their expected benefits; 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 manage health care costs and respond to price competition, inflation and other pressures that could compress our margins or result in premiums that are insufficient to cover the cost of services delivered to our customers; our ability to compete effectively, differentiate our products and services from those of our competitors and adapt to changes in an evolving and rapidly changing industry; our ability to develop and effectively implement products and services to improve the accessibility, affordability and transparency of health care; changes in drug pricing or industry pricing benchmarks; our ability to maintain relationships with one or more key pharmaceutical manufacturers or if payments made or discounts provided decline; changes in the pharmacy provider
marketplace or pharmacy networks; the potential for actual claims to exceed our estimates related to expected medical claims; our ability to develop and maintain satisfactory relationships with health care payors, physicians, hospitals, other health service providers and with producers and consultants; potential liability in connection with managing medical practices and operating pharmacies, onsite clinics and other types of medical facilities; uncertainties surrounding participation in government-sponsored programs and providing services to payors who participate in government-sponsored programs; the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws or regulations; compliance with applicable privacy, security and data laws, regulations and standards; the outcome of litigation, regulatory audits and investigations; compliance costs and potential failure of our prevention, detection and control systems; our ability to invest in and properly maintain our information technology and other business systems; our ability to prevent or contain effects of a potential cyberattack or other privacy or data security incident; risks related to our use of artificial intelligence and machine learning; dependence on success of relationships with third parties; risk of significant disruption within our operations or among key suppliers or third parties; political, legal, operational, regulatory, economic and other risks that could affect our multinational operations, including currency exchange rates; risks related to strategic transactions and realization of the expected benefits of such transactions, as well as integration or separation difficulties or underperformance relative to expectations which could lead to an impairment charge; our ability to achieve our strategic and operational initiatives; unfavorable economic and market conditions, the risk of a recession or other economic downturn and resulting impact on employment metrics, stock market or changes in interest rates; 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 2025 Form 10-K, discussed in Part II, Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 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 committed to creating a better future for every individual and every community. Our subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental, and related products and services. For further information on our business and strategy, see Part I, Item 1 - "Business" in our 2025 Form 10-K.
Financial Highlights
Consolidated Results of Operations (GAAP basis)
Three Months Ended March 31,
(Dollars in millions) 2026 2025 Change
Pharmacy revenues $ 54,037 $ 48,633 11 %
Premiums 9,812 12,736 (23)
Fees and other revenues 4,443 3,895 14
Net investment income 202 238 (15)
Total revenues 68,494 65,502 5
Pharmacy and other service costs 54,100 48,398 12
Medical costs and other benefit expenses 7,924 10,498 (25)
Selling, general and administrative expenses 3,722 4,213 (12)
Amortization of acquired intangible assets 390 422 (8)
Total benefits and expenses 66,136 63,531 4
Income from operations
2,358 1,971 20
Interest expense and other (357) (362) (1)
Gain on sale of businesses
11 41 (73)
Net investment gains (losses)
258 (2) N/M
Income before income taxes
2,270 1,648 38
Total income taxes 409 239 71
Net income
1,861 1,409 32
Less: Net income attributable to noncontrolling interests
207 86 141
Shareholders' net income
$ 1,654 $ 1,323 25 %
Consolidated effective tax rate 18.0 % 14.5 % 350 bps
Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations
Three Months Ended March 31,
2026 2025
(In millions) Pre-tax After-tax Pre-tax After-tax
Shareholders' net income
$ 1,654 $ 1,323
Adjustments to reconcile to adjusted income from operations
Net investment (gains) (1)
$ (235) (233) $ (48) (48)
Amortization of acquired intangible assets 390 315 422 336
Special items
Strategic optimization program
380 290 215 163
Integration and transaction-related costs
35 27 216 164
Deferred tax expenses, net
- 16 - 17
(Gain) on sale of businesses
- (3) (41) (115)
(Benefits) associated with litigation matters
(11) (8) - -
Total special items $ 404 322 $ 390 229
Adjusted income from operations
$ 2,058 $ 1,840
(1)Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
Reconciliation of Shareholders' Net Income (GAAP) to Adjusted Income from Operations
Three Months Ended March 31,
2026 2025
(Diluted earnings per share) Pre-tax After-tax Pre-tax After-tax
Shareholders' net income
$ 6.26 $ 4.85
Adjustments to reconcile to adjusted income from operations
Net investment (gains) (1)
$ (0.89) (0.88) $ (0.18) (0.18)
Amortization of acquired intangible assets 1.48 1.19 1.54 1.23
Special items
Strategic optimization program
1.44 1.10 0.79 0.60
Integration and transaction-related costs
0.13 0.10 0.79 0.60
Deferred tax expenses, net
- 0.06 - 0.06
(Gain) on sale of businesses
- (0.01) (0.15) (0.42)
(Benefits) associated with litigation matters
(0.04) (0.03) - -
Total special items $ 1.53 1.22 $ 1.43 0.84
Adjusted income from operations
$ 7.79 $ 6.74
(1) Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
Financial highlights by segment
Three Months Ended March 31,
(Dollars in millions, except per share amounts) 2026 2025 Change
Revenues
Adjusted revenues by segment
Evernorth Health Services $ 58,442 $ 53,681 9 %
Cigna Healthcare 11,477 14,482 (21)
Other Operations 120 175 (31)
Corporate, net of eliminations (1,522) (2,886) (47)
Adjusted revenues 68,517 65,452 5
Net investment results from certain equity method investments (23) 50 N/M
Total revenues $ 68,494 $ 65,502 5 %
Shareholders' net income
$ 1,654 $ 1,323 25 %
Adjusted income from operations
$ 2,058 $ 1,840 12 %
Earnings per share (diluted)
Shareholders' net income
$ 6.26 $ 4.85 29 %
Adjusted income from operations
$ 7.79 $ 6.74 16 %
Pre-tax adjusted income (loss) from operations by segment
Evernorth Health Services $ 1,466 $ 1,434 2 %
Cigna Healthcare 1,514 1,287 18
Other Operations 27 - N/M
Corporate, net of eliminations (404) (411) (2)
Consolidated pre-tax adjusted income from operations
2,603 2,310 13
Income attributable to noncontrolling interests
226 102 122
Net investment gains (1)
235 48 N/M
Amortization of acquired intangible assets (390) (422) (8)
Special items (404) (390) 4
Income before income taxes
$ 2,270 $ 1,648 38 %
(1)Includes Net investment gains/losses as presented in our Consolidated Statements of Income, as well as the Company's share of certain investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting, which are presented within Fees and other revenues in our Consolidated Statements of Income.
Commentary: Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025
The commentary presented below, and the segment commentaries that follow, compare results for the three months ended March 31, 2026 with results for the three months ended March 31, 2025. Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.
Shareholders' net income increased 25%, primarily reflecting higher adjusted income from operations in Cigna Healthcare, as well as Evernorth Health Services. See discussion of segment results in the "Segment Reporting" section.
Adjusted income from operations. See discussion of segment results in the "Segment Reporting" section.
Pharmacy revenues increased 11%, primarily reflecting changes in claims composition (defined in the "Segment Reporting" section) within our Pharmacy Benefit Services operating segment.
Premiums decreased 23%, primarily driven by the impact of the HCSC transaction (defined in the "Segment Reporting" section) (-30%), offset primarily by higher premium rates within our ongoing U.S. Healthcare businesses.
Fees and other revenues increased 14%, primarily reflecting growth in fee-based services within our Pharmacy Benefit Services operating segment.
Net investment income decreased 15%, primarily due to lower average assets, due to the impact of the HCSC transaction.
Pharmacy and other service costs increased 12%, primarily reflecting changes in claims composition within our Pharmacy Benefit Services operating segment.
Medical costs and other benefit expenses decreased 25%, primarily driven by the impact of the HCSC transaction (-32%), offset primarily by higher medical costs within our ongoing U.S. Healthcare businesses.
Selling, general and administrative ("SG&A") expenses decreased 12%, primarily impacted by the HCSC transaction.
Investment results increased, primarily due to fair value changes of derivative instruments associated with certain equity securities.
The effective tax rate increased, primarily due to the absence of a benefit related to the HCSC transaction.
SEGMENT REPORTING
Evernorth Health Services Segment
Evernorth Health Services includes our Pharmacy Benefit Services and Specialty and Care Services operating segments, which provide independent and coordinated health solutions and capabilities to enable the health care system to work better and help people live healthier lives. As described in the MD&A introduction, the performance of Evernorth Health Services is measured using adjusted revenues and pre-tax adjusted income (loss) from operations.
Key Factors Affecting Segment Performance
The key factors that impact the segment's revenues and income from operations are claims volume, claims composition and client- and customer-focused initiatives. Specialty and Care Services revenues are also impacted by customer and client growth. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements in our 2025 Form 10-K for additional information on revenue and cost recognition policies for this segment.
Key factors that impact both Pharmacy Benefit Services and Specialty and Care Services:
•Pharmacy claim volume (also referred to as utilization) relates to processing prescription claims filled by retail pharmacies in our network and dispensing prescription claims from our home delivery and specialty pharmacies, along with other claims. Pharmacy claim volume is impacted by new clients or organic customer growth through the expansion of existing clients or through the loss of customers and business.
•The composition of claims generally considers the types of drugs, including the mix of claims among branded and higher priced specialty drugs compared to generic or biosimilar alternatives. We manage pharmaceutical manufacturer increases in prices through programs designed to reduce drug spend, providing positive impacts on our clients, our customers and us. Changes to claims mix, including types of drugs, distribution methods, pharmaceutical manufacturer prices (including government programs) and alternative uses of drugs within our formularies continue to be a significant driver of our revenues and income from operations in the current environment.
•The business continues to evolve amid changing legislative, regulatory, and client dynamics, including our business model plans announced in October 2025. The Company has undertaken certain client- and customer-focused initiatives, which include proactive renewals or extensions of large client contracts, investments to support the recently announced rebate-free model, and multi-stakeholder recontracting efforts (including affordability-related contract changes and responses to government programs such as the Inflation Reduction Act). These initiatives are intended to support long-term growth, reduce medication costs, and enhance transparency and are expected to impact income from operations.
Key factors that impact Specialty and Care Services:
•Customer and client growth, both organic and new business, and key strategic relationships in our Specialty and Care Services business generally results in increased revenues and income from operations (also referred to as growth). This includes client movement in our specialty pharmacy, specialty distribution services, virtual care, benefits management and behavioral health services as we expand our businesses.
Results of Operations
Financial Summary
Three Months Ended
March 31,
(Dollars in millions) 2026 2025 Change
Adjusted revenues (1)
$ 58,442 $ 53,681 9 %
Pre-tax adjusted income from operations (1)
$ 1,466 $ 1,434 2 %
Pre-tax margin (1)(2)
2.5 % 2.7 % (20) bps
SG&A expense ratio (3)
1.8 % 1.9 % (10) bps
(1)See Note 15 to the Consolidated Financial Statements for reconciliation of adjusted revenues and pre-tax adjusted income from operations to Total revenues and Income before income taxes, respectively.
(2)Pre-tax margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues.
(3)SG&A expense ratio is calculated as segment selling, general and administrative expenses divided by adjusted revenues. See Note 15 to the Consolidated Financial Statements for further details.
In this selected financial information, we present adjusted revenues and pre-tax income from operations by our two operating segments, Pharmacy Benefit Services and Specialty and Care Services.
Selected Financial Information
Three Months Ended
March 31, 		Change
(Dollars and adjusted scripts in millions) 2026 2025
Total adjusted revenues
Pharmacy Benefit Services $ 33,002 $ 29,742 11 %
Specialty and Care Services 25,440 23,939 6
Total adjusted revenues $ 58,442 $ 53,681 9 %
Pre-tax adjusted income from operations
Pharmacy Benefit Services $ 394 $ 544 (28) %
Specialty and Care Services 1,072 890 20
Total pre-tax adjusted income from operations $ 1,466 $ 1,434 2 %
Pharmacy claim volume (1)
527 539 (2) %
(1)Non-specialty network prescriptions filled through 90-day programs and home delivery prescriptions are counted as three claims. All other network and specialty prescriptions are counted as one claim.
Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025
Commentary in parentheses regarding percentage changes (or bps) represents the driver's impact on the overall category.
Adjusted revenues increased 9%, primarily reflecting an increase due to claims composition in Pharmacy Benefit Services (+7%) and higher claims volume from customer growth in Specialty and Care Services (+2%).
Pre-tax adjusted income from operations increased 2%, primarily reflecting growth in Specialty and Care Services (+13%), partially offset by client- and customer-focused initiatives in Pharmacy Benefits Services (-8%) and a decrease in claims volume in Pharmacy Benefit Services (-3%).
The SG&A expense ratio decreased 10 bps, primarily reflecting higher adjusted revenues as discussed above.
Cigna Healthcare Segment
Cigna Healthcare includes our U.S. Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers. As described in the MD&A introduction, performance of the Cigna Healthcare segment is measured using adjusted revenues and pre-tax adjusted income from operations.
On March 19, 2025, the Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies businesses within the U.S. Healthcare operating segment (the "HCSC transaction").
Key Factors Affecting Segment Performance
The key factors that impact the segment's revenues and income from operations include revenue growth, customer growth, medical cost trend, the medical care ratio ("MCR") and the SG&A expense ratio. These key factors are discussed further below. See Note 2 to the Consolidated Financial Statements in our 2025 Form 10-K for additional information on revenue and cost recognition policies for this segment.
•Revenue growth includes increases to premium rates in consideration of anticipated medical cost increases, customer growth driven by new clients and customers, and increased fee revenue from the expansion of products and services to existing clients and customers, including solutions provided by Evernorth Health Services.
•Higher medical costs (also referred to as higher medical cost trend) are impacted by utilization (the quantity of medical services consumed by our customers), unit costs (the cost per medical service) and mix of services.
•MCR represents medical costs as a percentage of premiums for our segment's insured businesses, and it is impacted by medical cost trend and premium rates. Affordability initiatives that serve to mitigate medical cost inflation also impact the MCR.
•The SG&A expense ratio represents the segment's selling, general and administrative expenses divided by adjusted revenues.
Results of Operations
Financial Summary
Three Months Ended
March 31, 		Change
(Dollars in millions) 2026 2025
Adjusted revenues (1)
$ 11,477 $ 14,482 (21) %
Pre-tax adjusted income from operations (1)
$ 1,514 $ 1,287 18 %
Pre-tax margin (1)(2)
13.2 % 8.9 % 430 bps
Medical care ratio 79.8 % 82.2 % (240) bps
SG&A expense ratio (3)
20.0 % 19.4 % 60 bps
(1)See Note 15 to the Consolidated Financial Statements for reconciliation of adjusted revenues and pre-tax adjusted income from operations to Total revenues and Income before income taxes, respectively.
(2)Pre-tax margin is calculated as pre-tax adjusted income from operations divided by adjusted revenues.
(3)SG&A expense ratio is calculated as segment selling, general and administrative expenses divided by adjusted revenues. See Note 15 to the Consolidated Financial Statements for further details.
Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025
Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.
Adjusted revenues decreased 21%, or $3,005 million, primarily due to the impact of the HCSC transaction (-$3,850 million), partially offset by higher premiums within employer insured (+$308 million) and stop loss (+$248 million), primarily reflecting premium rate increases.
Pre-tax adjusted income from operations increased 18%, or $227 million, primarily due to higher contributions from U.S. Healthcare, reflecting improved margins in both the U.S. Employer and Individual and Family Plans businesses.
The medical care ratio decreased 240 bps, due to the impact of the HCSC transaction.
The SG&A expense ratio increased 60 bps, primarily due to the impact of the HCSC transaction (+170 bps), partially offset by expense management efficiencies (-70 bps) and revenue growth outpacing volume-related expenses within the ongoing businesses (-60 bps).
Medical Customers
Medical customers include individuals who meet any of the following criteria: (i) are covered under a medical insurance policy, managed care arrangement or administrative services agreement issued by Cigna Healthcare; (ii) have access to the Cigna Healthcare provider network for covered services under their medical plan; or (iii) have medical claims that are administered by Cigna Healthcare.
Cigna Healthcare Medical Customers
As of
March 31,
(In thousands) 2026 2025 Change
U.S. Healthcare
2,493 2,645 (6) %
International Health (1)
1,241 1,227 1
Insured 3,734 3,872 (4) %
U.S. Healthcare
14,130 13,719 3 %
International Health (1)
470 452 4
Administrative services only 14,600 14,171 3 %
Total 18,334 18,043 2 %
(1)International Health excludes medical customers served by less than 100%-owned subsidiaries, as well as certain customers served by our third-party administrator.
Total medical customers increased 2%, primarily due to customer growth within the Middle Market and Select market segments (+3% and +1%, respectively), partially offset by a decrease in National Accounts segment customers (-2%).
Unpaid Claims and Claim Expenses
Our unpaid claims and claim expenses liability increased to $4,920 million as of March 31, 2026 from $4,241 million as of December 31, 2025, primarily due to stop loss seasonality.
Other Operations
Other Operations includes corporate-owned life insurance ("COLI"), the Company's run-off operations and other non-strategic businesses. As described in the MD&A introduction, performance of Other Operations is measured using adjusted revenues and pre-tax adjusted income from operations.
Results of Operations
Financial Summary
Three Months Ended
March 31, 		Change
(Dollars in millions) 2026 2025
Adjusted revenues $ 120 $ 175 (31) %
Pre-tax adjusted income from operations
$ 27 $ - N/M %
Pre-tax margin 22.5 % - % 2,250 bps
Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025
Adjusted revenues decreased and Pre-tax adjusted income from operations increased, primarily driven by the discontinuation of certain small non-strategic businesses.
Corporate
Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate financing less net investment income on investments not supporting segment and other operations), certain litigation matters, expense associated with our frozen pension plans, charitable contributions, operating severance, certain overhead and enterprise-wide project costs, and eliminations for products and services sold between segments.
Financial Summary
Three Months Ended
March 31, 		Change
(In millions) 2026 2025
Pre-tax adjusted loss from operations
$ (404) $ (411) (2) %
Three Months Ended March 31, 2026 versus Three Months Ended March 31, 2025
Pre-tax adjusted loss from operations decreased, primarily due to lower interest expense.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
The Company's cash requirements generally consist of pharmacy, medical and other benefit costs; operating and capital expenditures primarily for employee compensation and benefits, information technology, and facilities costs; purchases of investment securities; income taxes; debt service; and payment of declared dividends.
Liquidity requirements are generally met by maintaining appropriate levels of cash, cash equivalents and short-term investments; using cash flows from operating activities; matching durations of investments to estimated durations for the related liabilities; selling investments; and using proceeds from issuing debt and common stock.
Cash flows for the three months ended March 31 were as follows:
Three Months Ended March 31,
(In millions) 2026 2025
Operating activities $ 1,131 $ 1,920
Investing activities $ (637) $ 1,197
Financing activities $ (1,141) $ (3,681)
The following discussion explains variances in the various categories of cash flows for the three months ended March 31, 2026 compared with the same period in 2025.
Operating Activities. Cash flows from operating activities consist principally of cash receipts and disbursements for pharmacy revenues and costs, premiums and medical costs, fees, investment income, taxes, and other expenses.
Operating cash flows decreased for the three months ended March 31, 2026, primarily due to the unfavorable net cash flow impact related to the Inflation Reduction Act, lower insurance liabilities, and the timing of pharmaceutical manufacturer receivables. These decreases are partially offset by the favorable timing of noninsurance customer receivables and accounts receivable factoring settlements.
Investing Activities. The increase in cash used in investing activities reflects the absence of the net proceeds from the HCSC transaction.
Financing Activities. The decrease in net cash used in financing activities in 2026 is primarily driven by the absence of share repurchases as well as lower debt repayments.
Capital Resources
Our capital resources consist primarily of cash, cash equivalents and investments maintained at regulated subsidiaries required to underwrite insurance risks, cash flows from operating activities, our commercial paper program, revolving credit facility, and the issuance of long-term debt and equity securities. Our businesses generate significant cash flows from operations, some of which is
subject to regulatory restrictions relative to the amount and timing of dividend payments to the parent company. Dividends received from U.S.-regulated subsidiaries were $0.5 billion for the three months ended March 31, 2026 and 2025. Non-regulated subsidiaries also generate significant cash flows from operating activities, which are typically available immediately to the parent company for general corporate purposes.
Funds Available
Commercial Paper Program. There was no commercial paper outstanding balance as of March 31, 2026.
Revolving Credit Agreement. Our revolving credit agreement provides us with the ability to borrow amounts for general corporate purposes, including for the purpose of providing liquidity support if necessary under our commercial paper program discussed above. See Note 6 to the Consolidated Financial Statements for further information on our credit agreement and commercial paper program.
As of March 31, 2026, we had $6.5 billion of undrawn committed capacity under our revolving credit agreement (these amounts are available for general corporate purposes, including providing liquidity support for our commercial paper program), $6.5 billion of remaining capacity under our commercial paper program, and $7.3 billion in cash and short-term investments, approximately $1.1 billion of which was held by the parent company or certain non-regulated subsidiaries.
Our debt-to-capitalization ratio (calculated as Short-term debt and Long-term debt ("Total debt") as a percentage of Total shareholders' equity and Total debt ("Total capitalization")) was 42.3% and 43.0% as of March 31, 2026 and December 31, 2025, respectively.
We actively monitor our debt obligations and engage in issuance and repayment activities as needed in accordance with our capital management strategy.
Subsidiary Borrowings. In addition to the sources of liquidity discussed above, the parent company can borrow an additional $1.4 billion from its subsidiaries without further approvals as of March 31, 2026.
Regulatory Restrictions. Dividends from our insurance, Health Maintenance Organization ("HMO") and certain foreign subsidiaries are subject to regulatory restrictions. See Note 20 to the Consolidated Financial Statements in our 2025 Form 10-K for additional information regarding these restrictions. Most of the Evernorth Health Services segment operations are not subject to regulatory restrictions regarding dividends and therefore provide significant financial flexibility to The Cigna Group.
Use of Capital Resources
Our capital resources are directed towards several areas, including (i) investing in capital expenditures (primarily related to technology to support innovative solutions for our clients and customers), providing the capital necessary to maintain or improve the financial strength ratings of subsidiaries, and repaying debt and funding pension obligations if necessary; (ii) paying dividends to shareholders; (iii) considering acquisitions and investments that are strategically and economically advantageous; and (iv) returning capital to shareholders through share repurchases.
Short-Term and Long-Term Debt. See Note 6 to the Consolidated Financial Statements for further information regarding changes to our short-term and long-term debt. The Company may, from time to time, repay or repurchase debt in advance of maturities when it deems appropriate.
Capital Expenditures. Capital expenditures for property, equipment and computer software were $0.3 billion in both the three months ended March 31, 2026 and 2025.
Dividends. The Company currently intends to pay regular quarterly dividends, with future declarations subject to approval by our Board of Directors ("Board") and our Board's determination that the declaration of dividends remains in the best interests of The Cigna Group and its shareholders. See Note 5 to the Consolidated Financial Statements for further information regarding future dividend declarations.
Share Repurchases. The Company maintains a share repurchase program authorized by our Board, under which it may repurchase shares of its common stock from time to time. There were no share repurchases during the three months ended March 31, 2026, compared with repurchases of 5.0 million shares for approximately $1.5 billion during the three months ended March 31, 2025.
Risks to Liquidity and Capital Resources
Risks to our liquidity and capital resources outlook include cash projections that may not be realized, and the demand for funds could exceed available cash if our ongoing businesses experience unexpected shortfalls in earnings or we experience material adverse effects from one or more risks or uncertainties described more fully in the "Risk Factors" section in our 2025 Form 10-K.
Guarantees and Contractual Obligations
We are contingently liable for various contractual obligations and financial and other guarantees entered into in the ordinary course of business. See Note 14 to the Consolidated Financial Statements for discussion of various guarantees.
During the three months ended March 31, 2026, there were no material changes to the guarantees and contractual obligations set forth in our 2025 Form 10-K.
CRITICAL ACCOUNTING ESTIMATES
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 and Compliance Committee of our Board, and the Audit and Compliance Committee has reviewed the disclosures presented in our 2025 Form 10-K. We regularly evaluate items that may impact critical accounting estimates.
Our most critical accounting estimates, as well as the effect of hypothetical changes in material assumptions used to develop each estimate, are described in our 2025 Form 10-K. As of March 31, 2026, there were no significant changes to the critical accounting estimates from what was reported in our 2025 Form 10-K.
INVESTMENT ASSETS
Information regarding our investment assets is included in Notes 9, 10 and 11 to the Consolidated Financial Statements.
Investment Outlook
Investment results will be driven largely by market conditions that are not reasonably predictable. We believe that the vast majority of our investments will continue to perform under their contractual terms. We manage the portfolio for long-term economics; therefore, we expect to hold a significant portion of these assets for the long term.
The below discussion addresses the strategies and risks associated with our various classes of investment assets. See Part I, Item 1A - "Risk Factors" in our 2025 Form 10-K for additional information regarding risks associated with our investment portfolio.
Debt Securities
The carrying value of our debt securities portfolio decreased from $8.4 billion as of December 31, 2025 to $8.3 billion as of March 31, 2026. Our portfolio remains in a net unrealized depreciation position due to generally increasing interest rates over the past few years.
As of March 31, 2026, $7.3 billion, or 88%, of the debt securities in our investment portfolio were investment grade (Baa and above, or equivalent) and the remaining $1.0 billion were below investment grade. The majority of the bonds that are below investment grade were rated at the higher end of the non-investment-grade spectrum. These quality characteristics have not materially changed since the prior year and remain consistent with our investment strategy.
Commercial Mortgage Loans
As of March 31, 2026, our $1.3 billion commercial mortgage loan portfolio consisted of approximately 40 fixed-rate loans. Given the quality and diversity of the underlying real estate, positive debt service coverage, loan-to-value ratio and significant borrower cash invested in the property generally ranging between 30% and 40%, we remain confident that the vast majority of borrowers will
continue to perform as expected under their contract terms. For further discussion of the results and changes in key credit quality indicators, see Note 9 to the Consolidated Financial Statements.
Office sector fundamentals are weak but have begun to stabilize for higher-quality assets. Our commercial mortgage loan portfolio has approximately 25% exposure to office properties. Although future losses remain possible due to further credit deterioration, we do not expect these losses to have a material unfavorable effect on our results of operations, financial condition or liquidity.
Other Long-Term Investments
Other long-term investments of $5.2 billion as of March 31, 2026 included investments in securities limited partnerships and real estate limited partnerships, direct investments in real estate joint ventures, and other deposit activity that is required to support various insurance and health services businesses. These limited partnership entities typically invest in mezzanine debt or equity of privately held companies and equity real estate. 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 by industry sector or property type and geographic region.
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 4% of our other long-term investments are exposed to real estate in the office sector.
Unconsolidated Subsidiary Investments Portfolio
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. Our 50% share of the investment portfolio supporting the joint venture's liabilities was approximately $19.1 billion as of March 31, 2026. These investments were comprised of approximately 70% debt securities, including government and corporate debt diversified by issuer, industry and geography; 20% equities, including mutual funds, equity securities and private equity partnerships; and 10% long-term deposits and policy loans. We continuously review the joint venture's investment strategy and its execution. There were no investments with a material unrealized loss as of March 31, 2026. See Note 14 to the Consolidated Financial Statements in our 2025 Form 10-K for additional information regarding unconsolidated subsidiaries.
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 in our 2025 Form 10-K.
As of March 31, 2026, there was no material change in our risk exposure as reported in our 2025 Form 10-K.
The CIGNA Corporation published this content on April 30, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 30, 2026 at 15:48 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]