Note 20 – Condensed Consolidating Financial Information

Effective with the Merger that closed on December 20, 2018 (see Note 3 for further information) the senior notes issued by Cigna, Old Cigna, Express Scripts, Inc. (“ESI”), Medco Health Solutions, Inc. (“Medco”), and Express Scripts became jointly and severally and fully and unconditionally (subject to certain customary release provisions, including sale, exchange, transfer or liquidation of the guarantor subsidiary) guaranteed by Cigna, Old Cigna, ESI, Medco and Express Scripts, as applicable. Details of these debt obligations are presented in Note 5. The following condensed consolidating financial information has been prepared in accordance with the requirements as prescribed by the SEC in Regulation S-X. The condensed consolidating financial information presented below is not indicative of what the financial position, results of operations or cash flows would have been had each of the entities operated as an independent company during the periods for various reasons, including, but not limited to, intercompany transactions and integration of systems.

The condensed consolidating financial information is presented separately for:

(i)

Cigna (the Parent Company), guarantor, the issuer of additional guaranteed obligations;

(ii)

Old Cigna (former Parent Company for the fiscal years ended 2017 and 2016), guarantor, the issuer of additional guaranteed obligations;

(iii)

Express Scripts, guarantor, the issuer of additional guaranteed obligations;

(iv)

ESI, guarantor, the issuer of additional guaranteed obligations;

(v)

Medco, guarantor, the issuer of additional guaranteed obligations;

(vi)

Non-guarantor subsidiaries, on a combined basis;

(vii)

Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among Cigna, Old Cigna, Express Scripts, ESI, Medco and the non-guarantor subsidiaries, (b) eliminate the investments in our subsidiaries and (c) record consolidating entries; and

(viii)

Cigna and subsidiaries on a consolidated basis.

Condensed Consolidating Statements of Income
(In millions)
For the year ended December 31, 2018	Cigna		Old Cigna		Express Scripts Holding Company		Express Scripts, Inc.		Medco Health Solutions, Inc.		Non-Guarantors		Eliminations and Consolidation Adjustments		Consolidated
Revenues
Premiums	$	-	$	-	$	-	$	-	$	-	$	36,113	$	-	$	36,113
Fees and other revenues		-		-		-		23		7		5,596		(48)		5,578
Pharmacy revenues		-		-		-		1,866		418		4,165		(970)		5,479
Net investment income		123		1		2		-		-		1,354		-		1,480
Total revenues		123		1		2		1,889		425		47,228		(1,018)		48,650
Benefits and expenses
Medical costs and other benefit expenses		-		-		-		-		-		27,528		-		27,528
Pharmacy and other service costs		-		-		-		1,763		417		3,583		(970)		4,793
Selling, general and administrative expenses		200		535		-		44		8		11,195		(48)		11,934
Amortization of acquired intangible assets		-		-		-		94		13		128		-		235
Total benefits and expenses		200		535		-		1,901		438		42,434		(1,018)		44,490
Income (loss) from operations		(77)		(534)		2		(12)		(13)		4,794		-		4,160
Interest and other income (expense)		(244)		(264)		15		(17)		(10)		22		-		(498)
Intercompany interest income (expense)		(5)		(58)		(15)		7		5		66		-		-
Net realized investment (losses)		(1)		-		-		-		-		(80)		-		(81)
Income (loss) before income taxes		(327)		(856)		2		(22)		(18)		4,802		-		3,581
Total income tax (benefit) expense		(74)		(163)		-		(4)		(4)		1,180		-		935
Income (loss) before equity in earnings of subsidiaries		(253)		(693)		2		(18)		(14)		3,622		-		2,646
Equity in earnings (loss) of subsidiaries		2,890		3,613		(32)		(33)		29		-		(6,467)		-
Net income (loss)		2,637		2,920		(30)		(51)		15		3,622		(6,467)		2,646
Less: Net income attributable to noncontrolling interests		-		-		-		-		-		9		-		9
Shareholders' net income (loss)	$	2,637	$	2,920	$	(30)	$	(51)	$	15	$	3,613	$	(6,467)	$	2,637
Other comprehensive (loss), net of tax		(390)		(390)		-		-		-		(536)		926		(390)
Shareholders' comprehensive income (loss)	$	2,247	$	2,530	$	(30)	$	(51)	$	15	$	3,077	$	(5,541)	$	2,247

Condensed Consolidating Statements of Income
(In millions)
For the year ended December 31, 2017	Cigna		Old Cigna		Express Scripts Holding Company		Express Scripts, Inc.		Medco Health Solutions, Inc.		Non-Guarantors		Eliminations and Consolidation Adjustments		Consolidated
Revenues
Premiums	$	-	$	-	$	-	$	-	$	-	$	32,491	$	-	$	32,491
Fees and other revenues		-		-		-		-		-		5,110		-		5,110
Pharmacy revenues		-		-		-		-		-		2,979		-		2,979
Net investment income		-		-		-		-		-		1,226		-		1,226
Total revenues		-		-		-		-		-		41,806		-		41,806
Benefits and expenses
Medical costs and other benefit expenses		-		-		-		-		-		25,263		-		25,263
Pharmacy and other service costs		-		-		-		-		-		2,456		-		2,456
Selling, general and administrative expenses		-		195		-		-		-		9,835		-		10,030
Amortization of acquired intangible assets		-		-		-		-		-		115		-		115
Total benefits and expenses		-		195		-		-		-		37,669		-		37,864
Income (loss) from operations		-		(195)		-		-		-		4,137		-		3,942
Interest and other (expense)		-		(246)		-		-		-		(6)		-		(252)
Intercompany interest income (expense)		-		(18)		-		-		-		18		-		-
Debt extinguishment (costs)		-		(321)		-		-		-		-		-		(321)
Net realized investment gains		-		-		-		-		-		237		-		237
Income (loss) before income taxes		-		(780)		-		-		-		4,386		-		3,606
Total income tax (benefit) expense		-		(194)		-		-		-		1,568		-		1,374
Income (loss) before equity in earnings of subsidiaries		-		(586)		-		-		-		2,818		-		2,232
Equity in earnings of subsidiaries		-		2,823		-		-		-		-		(2,823)		-
Net income		-		2,237		-		-		-		2,818		(2,823)		2,232
Less: Net (loss) attributable to noncontrolling interests		-		-		-		-		-		(5)		-		(5)
Shareholders' net income	$	-	$	2,237	$	-	$	-	$	-	$	2,823	$	(2,823)	$	2,237
Other comprehensive income, net of tax		-		300		-		-		-		269		(269)		300
Shareholders' comprehensive income	$	-	$	2,537	$	-	$	-	$	-	$	3,092	$	(3,092)	$	2,537

Condensed Consolidating Statements of Income
(In millions)
For the year ended December 31, 2016	Cigna		Old Cigna		Express Scripts Holding Company		Express Scripts, Inc.		Medco Health Solutions, Inc.		Non-Guarantors		Eliminations and Consolidation Adjustments		Consolidated
Revenues
Premiums	$	-	$	-	$	-	$	-	$	-	$	30,824	$	-	$	30,824
Fees and other revenues		-		-		-		-		-		4,901		-		4,901
Pharmacy revenues		-		-		-		-		-		2,966		-		2,966
Net investment income		-		-		-		-		-		1,147		-		1,147
Total revenues		-		-		-		-		-		39,838		-		39,838
Benefits and expenses
Medical costs and other benefit expenses		-		-		-		-		-		24,341		-		24,341
Pharmacy and other service costs		-		-		-		-		-		2,468		-		2,468
Selling, general and administrative expenses		-		281		-		-		-		9,509		-		9,790
Amortization of acquired intangible assets		-		-		-		-		-		151		-		151
Total benefits and expenses		-		281		-		-		-		36,469		-		36,750
Income (loss) from operations		-		(281)		-		-		-		3,369		-		3,088
Interest and other (expense)		-		(244)		-		-		-		(34)		-		(278)
Intercompany interest income (expense)		-		(3)		-		-		-		3		-		-
Net realized investment gains		-		-		-		-		-		169		-		169
Income (loss) before income taxes		-		(528)		-		-		-		3,507		-		2,979
Total income tax (benefit) expense		-		(146)		-		-		-		1,282		-		1,136
Income (loss) before equity in earnings of subsidiaries		-		(382)		-		-		-		2,225		-		1,843
Equity in earnings of subsidiaries		-		2,249		-		-		-		-		(2,249)		-
Net income		-		1,867		-		-		-		2,225		(2,249)		1,843
Less: Net (loss) attributable to noncontrolling interests		-		-		-		-		-		(24)		-		(24)
Shareholders' net income	$	-	$	1,867	$	-	$	-	$	-	$	2,249	$	(2,249)	$	1,867
Other comprehensive (loss), net of tax		-		(132)		-		-		-		(154)		154		(132)
Shareholders' comprehensive income	$	-	$	1,735	$	-	$	-	$	-	$	2,095	$	(2,095)	$	1,735

Condensed Consolidating Balance Sheets
(In millions)
As of December 31, 2018	Cigna		Old Cigna		Express Scripts Holding Company		Express Scripts, Inc.		Medco Health Solutions, Inc.		Non-Guarantors		Eliminations and Consolidation Adjustments		Consolidated
Assets
Cash and cash equivalents	$	243	$	-	$	633	$	43	$	-	$	2,936	$	-	$	3,855
Investments		-		-		-		-		-		2,045		-		2,045
Accounts receivable, net		-		-		-		4,206		748		5,519		-		10,473
Inventories		-		-		-		-		-		2,821		-		2,821
Other current assets		14		59		-		310		-		1,063		(210)		1,236
Total current assets		257		59		633		4,559		748		14,384		(210)		20,430
Long-term investments		-		10		-		-		-		26,919		-		26,929
Reinsurance recoverables		-		-		-		-		-		5,507		-		5,507
Deferred policy acquisition costs		-		-		-		-		-		2,821		-		2,821
Property and equipment		-		-		-		2,432		-		2,130		-		4,562
Investments in subsidiaries		68,969		27,544		52,035		17,115		8,117		-		(173,780)		-
Intercompany receivables		-		4,505		-		7,425		2,335		24,882		(39,147)		-
Goodwill		-		-		31,049		-		-		13,456		-		44,505
Other intangible assets		-		-		8,400		18,962		7,040		4,601		-		39,003
Other assets		48		198		-		68		74		1,488		(246)		1,630
Separate account assets		-		-		-		-		-		7,839		-		7,839
TOTAL ASSETS	$	69,274	$	32,316	$	92,117	$	50,561	$	18,314	$	104,027	$	(213,383)	$	153,226
Liabilities
Current insurance and contractholder liabilities	$	-	$	-	$	-	$	-	$	-	$	6,801	$	-	$	6,801
Pharmacy and service costs payable		-		-		-		8,422		1,579		701		-		10,702
Accounts payable		22		-		-		834		4		3,506		-		4,366
Accrued expenses and other liabilities		396		182		129		1,387		189		4,998		(210)		7,071
Short-term debt		-		1,500		995		353		-		107		-		2,955
Total current liabilities		418		1,682		1,124		10,996		1,772		16,113		(210)		31,895
Non-current insurance and contractholder liabilities		-		-		-		-		-		19,974		-		19,974
Deferred tax liabilities, net		-		-		2,001		5,012		1,685		1,001		(246)		9,453
Other non-current liabilities		-		685		-		497		290		1,998		-		3,470
Intercompany payables		4,965		4,361		29,569		-		-		252		(39,147)		-
Long-term debt		22,863		5,110		10,932		24		506		88		-		39,523
Separate account liabilities		-		-		-		-		-		7,839		-		7,839
TOTAL LIABILITIES		28,246		11,838		43,626		16,529		4,253		47,265		(39,603)		112,154
Redeemable noncontrolling interests		-		-		-		-		-		37		-		37
TOTAL SHAREHOLDERS’ EQUITY		41,028		20,478		48,491		34,032		14,061		56,718		(173,780)		41,028
Noncontrolling interests		-		-		-		-		-		7		-		7
TOTAL EQUITY		41,028		20,478		48,491		34,032		14,061		56,725		(173,780)		41,035
TOTAL LIABILITIES AND EQUITY	$	69,274	$	32,316	$	92,117	$	50,561	$	18,314	$	104,027	$	(213,383)	$	153,226

Condensed Consolidating Balance Sheets
(In millions)
As of December 31, 2017	Cigna		Old Cigna		Express Scripts Holding Company		Express Scripts, Inc.		Medco Health Solutions, Inc.		Non-Guarantors		Eliminations and Consolidation Adjustments		Consolidated
Assets
Cash and cash equivalents	$	-	$	9	$	-	$	-	$	-	$	2,963	$	-	$	2,972
Investments		-		63		-		-		-		2,073		-		2,136
Accounts receivable, net		-		-		-		-		-		3,155		-		3,155
Inventories		-		-		-		-		-		228		-		228
Other current assets		-		31		-		-		-		789		-		820
Total current assets		-		103		-		-		-		9,208		-		9,311
Long-term investments		-		-		-		-		-		26,483		-		26,483
Reinsurance recoverables		-		-		-		-		-		5,763		-		5,763
Deferred policy acquisition costs		-		-		-		-		-		2,237		-		2,237
Property and equipment		-		-		-		-		-		1,563		-		1,563
Investments in subsidiaries		-		22,631		-		-		-		-		(22,631)		-
Intercompany receivables		-		200		-		-		-		2,980		(3,180)		-
Deferred tax assets, net		-		221		-		-		-		(182)		-		39
Goodwill		-		-		-		-		-		6,164		-		6,164
Other intangible assets		-		-		-		-		-		345		-		345
Other assets		-		-		-		-		-		1,431		-		1,431
Separate account assets		-		-		-		-		-		8,423		-		8,423
TOTAL ASSETS	$	-	$	23,155	$	-	$	-	$	-	$	64,415	$	(25,811)	$	61,759
Liabilities
Current insurance and contractholder liabilities		-		-		-		-		-		6,317		-		6,317
Pharmacy and service costs payable		-		-		-		-		-		305		-		305
Accounts payable, accrued expenses and other liabilities		-		270		-		-		-		3,877		-		4,147
Short-term debt		-		231		-		-		-		9		-		240
Total current liabilities		-		501		-		-		-		10,508		-		11,009
Non-current insurance and contractholder liabilities		-		-		-		-		-		20,530		-		20,530
Intercompany payables		-		2,980		-		-		-		200		(3,180)		-
Other non-current liabilities		-		851		-		-		-		1,987		-		2,838
Long-term debt		-		5,112		-		-		-		87		-		5,199
Separate account liabilities		-		-		-		-		-		8,423		-		8,423
TOTAL LIABILITIES		-		9,444		-		-		-		41,735		(3,180)		47,999
Redeemable noncontrolling interests		-		-		-		-		-		49		-		49
SHAREHOLDERS’ EQUITY		-		13,711		-		-		-		22,631		(22,631)		13,711
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	-	$	23,155	$	-	$	-	$	-	$	64,415	$	(25,811)	$	61,759

Condensed Consolidating Cash Flow Statements
(In millions)
For the year ended December 31, 2018	Cigna		Old Cigna		Express Scripts Holding Company		Express Scripts, Inc.		Medco Health Solutions, Inc.		Non-Guarantors		Eliminations and Consolidation Adjustments		Consolidated
Net cash provided by (used in) operating activities	$	145	$	2,416	$	(36)	$	80	$	(304)	$	3,987	$	(2,518)	$	3,770
Cash Flows from Investing Activities
Net change in loans due (from) affiliates		-		(4,412)		(200)		-		-		(1,121)		5,733		-
Proceeds from investments sold:
Fixed maturities and equity securities		-		-		-		-		-		2,655		-		2,655
Investment maturities and repayments:
Fixed maturities and equity securities		-		-		-		-		-		2,151		-		2,151
Commercial mortgage loans		-		-		-		-		-		215		-		215
Other sales, maturities and repayments (primarily short-term and other long-term investments)		-		63		-		-		-		671		-		734
Investments purchased or originated:
Fixed maturities and equity securities		-		(10)		-		-		-		(5,627)		-		(5,637)
Commercial mortgage loans		-		-		-		-		-		(312)		-		(312)
Other sales, maturities and repayments (primarily short-term and other long-term investments)		-		-		-		-		-		(1,189)		-		(1,189)
Property and equipment purchases, net		-		-		-		(6)		-		(522)		-		(528)
Acquisitions, net of cash acquired		(27,115)		-		1,676		23		-		961		-		(24,455)
Other, net		-		-		-		-		-		(12)		-		(12)
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		(27,115)		(4,359)		1,476		17		-		(2,130)		5,733		(26,378)
Cash Flows from Financing Activities
Net change in amounts due to (from) affiliates		4,437		1,121		(807)		(54)		304		732		(5,733)		-
Intercompany dividends paid		-		-		-		-		-		(2,518)		2,518		-
Deposits and interest credited to contractholder deposit funds		-		-		-		-		-		1,040		-		1,040
Withdrawals and benefit payments from contractholder deposit funds		-		-		-		-		-		(1,151)		-		(1,151)
Net change in short-term debt		-		1,400		-		-		-		87		-		1,487
Payments for debt extinguishment		-		-		-		-		-		-		-		-
Repayment of long-term debt		-		(131)		-		-		-		-		-		(131)
Net proceeds on issuance of long-term debt		22,856		-		-		-		-		-		-		22,856
Repurchase of common stock		(32)		(310)		-		-		-		-		-		(342)
Issuance of common stock		1		67		-		-		-		-		-		68
Other, net		(49)		(213)		-		-		-		(50)		-		(312)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		27,213		1,934		(807)		(54)		304		(1,860)		(3,215)		23,515
Effect of foreign currency rate changes on cash and cash equivalents		-		-		-		-		-		(24)		-		(24)
Net increase (decrease) in cash and cash equivalents		243		(9)		633		43		-		(27)		-		883
Cash and cash equivalents, January 1,		-		9		-		-		-		2,963		-		2,972
Cash and cash equivalents, December 31,	$	243	$	-	$	633	$	43	$	-	$	2,936	$	-	$	3,855

Condensed Consolidating Cash Flow Statements
(In millions)
For the year ended December 31, 2017	Cigna		Old Cigna		Express Scripts Holding Company		Express Scripts, Inc.		Medco Health Solutions, Inc.		Non-Guarantors		Eliminations and Consolidation Adjustments		Consolidated
Net cash provided by operating activities	$	-	$	602	$	-	$	-	$	-	$	4,242	$	(758)	$	4,086
Cash Flows from Investing Activities
Net change in loans due (from) affiliates		-		-		-		-		-		(1,955)		1,955		-
Proceeds from investments sold:
Fixed maturities and equity securities		-		-		-		-		-		2,012		-		2,012
Investment maturities and repayments:
Fixed maturities and equity securities		-		-		-		-		-		2,051		-		2,051
Commercial mortgage loans		-		-		-		-		-		335		-		335
Other sales, maturities and repayments (primarily short-term and other long-term investments)		-		-		-		-		-		1,702		-		1,702
Investments purchased or originated:
Fixed maturities and equity securities		-		-		-		-		-		(5,628)		-		(5,628)
Commercial mortgage loans		-		-		-		-		-		(430)		-		(430)
Other sales, maturities and repayments (primarily short-term and other long-term investments)		-		(6)		-		-		-		(1,059)		-		(1,065)
Property and equipment purchases, net		-		-		-		-		-		(471)		-		(471)
Acquisitions, net of cash acquired		-		-		-		-		-		(209)		-		(209)
Other, net		-		(11)		-		-		-		11		-		-
NET CASH (USED IN) INVESTING ACTIVITIES		-		(17)		-		-		-		(3,641)		1,955		(1,703)
Cash Flows from Financing Activities
Net change in amounts due to affiliates		-		1,955		-		-		-		-		(1,955)		-
Intercompany dividends paid		-		-		-		-		-		(758)		758		-
Deposits and interest credited to contractholder deposit funds		-		-		-		-		-		1,230		-		1,230
Withdrawals and benefit payments from contractholder deposit funds		-		-		-		-		-		(1,363)		-		(1,363)
Net change in short-term debt		-		100		-		-		-		(20)		-		80
Payments for debt extinguishment		-		(313)		-		-		-		-		-		(313)
Repayment of long-term debt		-		(1,250)		-		-		-		-		-		(1,250)
Net proceeds on issuance of long-term debt		-		1,581		-		-		-		-		-		1,581
Repurchase of common stock		-		(2,725)		-		-		-		-		-		(2,725)
Issuance of common stock		-		131		-		-		-		-		-		131
Other, net		-		(73)		-		-		-		51		-		(22)
NET CASH (USED IN) FINANCING ACTIVITIES		-		(594)		-		-		-		(860)		(1,197)		(2,651)
Effect of foreign currency rate changes on cash and cash equivalents		-		-		-		-		-		55		-		55
Net decrease in cash and cash equivalents		-		(9)		-		-		-		(204)		-		(213)
Cash and cash equivalents, January 1,		-		18		-		-		-		3,167		-		3,185
Cash and cash equivalents, December 31,	$	-	$	9	$	-	$	-	$	-	$	2,963	$	-	$	2,972

Condensed Consolidating Cash Flow Statements
(In millions)
For the year ended December 31, 2016	Cigna		Old Cigna		Express Scripts Holding Company		Express Scripts, Inc.		Medco Health Solutions, Inc.		Non-Guarantors		Eliminations and Consolidation Adjustments		Consolidated
Net cash provided by operating activities	$	-	$	376	$	-	$	-	$	-	$	4,230	$	(580)	$	4,026
Cash Flows from Investing Activities
Net change in loans due to affiliates		-		-		-		-		-		78		(78)		-
Proceeds from investments sold:
Fixed maturities and equity securities		-		-		-		-		-		1,544		-		1,544
Investment maturities and repayments:
Fixed maturities and equity securities		-		-		-		-		-		1,755		-		1,755
Commercial mortgage loans		-		-		-		-		-		316		-		316
Other sales, maturities and repayments (primarily short-term and other long-term investments)		-		-		-		-		-		1,431		-		1,431
Investments purchased or originated:
Fixed maturities and equity securities		-		-		-		-		-		(5,191)		-		(5,191)
Commercial mortgage loans		-		-		-		-		-		(165)		-		(165)
Other sales, maturities and repayments (primarily short-term and other long-term investments)		-		(3)		-		-		-		(1,695)		-		(1,698)
Property and equipment purchases, net		-		-		-		-		-		(461)		-		(461)
Acquisitions, net of cash acquired		-		-		-		-		-		(4)		-		(4)
Other, net		-		(8)		-		-		-		(93)		-		(101)
NET CASH (USED IN) INVESTING ACTIVITIES		-		(11)		-		-		-		(2,485)		(78)		(2,574)
Cash Flows from Financing Activities
Net change in amounts due (from) affiliates		-		(78)		-		-		-		-		78		-
Intercompany dividends paid		-		-		-		-		-		(580)		580		-
Deposits and interest credited to contractholder deposit funds		-		-		-		-		-		1,460		-		1,460
Withdrawals and benefit payments from contractholder deposit funds		-		-		-		-		-		(1,362)		-		(1,362)
Net change in short-term debt		-		(100)		-		-		-		(48)		-		(148)
Payments for debt extinguishment		-		-		-		-		-		-		-		-
Repayment of long-term debt		-		-		-		-		-		-		-		-
Net proceeds on issuance of long-term debt		-		-		-		-		-		-		-		-
Repurchase of common stock		-		(139)		-		-		-		-		-		(139)
Issuance of common stock		-		36		-		-		-		-		-		36
Other, net		-		(82)		-		-		-		10		-		(72)
NET CASH (USED IN) FINANCING ACTIVITIES		-		(363)		-		-		-		(520)		658		(225)
Effect of foreign currency rate changes on cash and cash equivalents		-		-		-		-		-		(10)		-		(10)
Net increase in cash and cash equivalents		-		2		-		-		-		1,215		-		1,217
Cash and cash equivalents, January 1,		-		16		-		-		-		1,952		-		1,968
Cash and cash equivalents, December 31,	$	-	$	18	$	-	$	-	$	-	$	3,167	$	-	$	3,185