UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 1-38769

Cigna Corporation

(Exact name of registrant as specified in its charter)

Delaware	82-4991898
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

900 Cottage Grove Road

Bloomfield, Connecticut 06002

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (860) 226-6000

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.01	CI	New York Stock Exchange, Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No _

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No _

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Yes _

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of July 30, 2021, 340,107,539 shares of the issuer’s common stock were outstanding.

Cigna Corporation

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION
	Item 1. Financial Statements (Unaudited)	3
	Consolidated Statements of Income	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Balance Sheets	5
	Consolidated Statements of Changes in Total Equity	6
	Consolidated Statements of Cash Flows	8
	Notes to the Consolidated Financial Statements	10
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	56
	Item 4. Controls and Procedures	56
PART II	OTHER INFORMATION
	Item 1. Legal Proceedings	56
	Item 1.A. Risk Factors	56
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	57
	Item 6. Exhibits	58
SIGNATURE		59

As used herein, “Cigna” or the “Company” refers to one or more of Cigna Corporation and its consolidated

subsidiaries.

Part I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Cigna Corporation Consolidated Statements of Income
	Unaudited				Unaudited
	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share amounts)	2021		2020		2021		2020
Revenues
Pharmacy revenues	$	30,047	$	26,564	$	58,072	$	51,662
Premiums	10,323		10,406		20,537		21,246
Fees and other revenues	2,451		2,072		4,792		4,250
Net investment income	310		223		701		576
TOTAL REVENUES	43,131		39,265		84,102		77,734
Benefits and expenses
Pharmacy and other service costs	29,001		25,611		56,236		49,801
Medical costs and other benefit expenses	8,484		7,112		16,489		15,434
Selling, general and administrative expenses	2,996		3,407		6,275		6,805
Amortization of acquired intangible assets	503		496		998		994
TOTAL BENEFITS AND EXPENSES	40,984		36,626		79,998		73,034
Income from operations	2,147		2,639		4,104		4,700
Interest expense and other	(298)		(374)		(612)		(765)
Debt extinguishment costs	(10)		(14)		(141)		(199)
Net realized investment gains (losses)	59		38		60		(50)
Income before income taxes	1,898		2,289		3,411		3,686
TOTAL INCOME TAXES	422		529		764		737
Net income	1,476		1,760		2,647		2,949
Less: Net income attributable to noncontrolling interests	9		6		19		14
SHAREHOLDERS' NET INCOME	$	1,467	$	1,754	$	2,628	$	2,935
Shareholders’ net income per share
Basic	$	4.30	$	4.77	$	7.62	$	7.96
Diluted	$	4.25	$	4.73	$	7.54	$	7.88

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

3

Cigna Corporation Consolidated Statements of Comprehensive Income
	Unaudited				Unaudited
	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Net income	$	1,476	$	1,760	$	2,647	$	2,949
Other comprehensive income (loss), net of tax
Net unrealized appreciation (depreciation) on securities and derivatives	122		709		(151)		281
Net translation gains (losses) on foreign currencies	16		70		(103)		(105)
Postretirement benefits liability adjustment	15		(42)		33		(29)
Other comprehensive income (loss), net of tax	153		737		(221)		147
Total comprehensive income	1,629		2,497		2,426		3,096
Comprehensive income (loss) attributable to noncontrolling interests
Net income attributable to redeemable noncontrolling interest	3		4		8		8
Net income attributable to other noncontrolling interests	6		2		11		6
Other comprehensive (loss) attributable to redeemable noncontrolling interest	(1)		(2)		(5)		(6)
Total comprehensive income attributable to noncontrolling interests	8		4		14		8
SHAREHOLDERS' COMPREHENSIVE INCOME	$	1,621	$	2,493	$	2,412	$	3,088

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

4

Cigna Corporation Consolidated Balance Sheets
	Unaudited
	As of June 30,		As of December 31,
(In millions)	2021		2020
Assets
Cash and cash equivalents	$	3,821	$	10,182
Investments	1,305		1,331
Accounts receivable, net	15,462		12,191
Inventories	3,042		3,165
Other current assets	1,381		930
Total current assets	25,011		27,799
Long-term investments	23,622		23,262
Reinsurance recoverables	5,114		5,200
Deferred policy acquisition costs	3,397		3,385
Property and equipment	4,078		4,205
Goodwill	46,063		44,648
Other intangible assets	35,007		35,179
Other assets	2,654		2,687
Separate account assets	9,261		9,086
TOTAL ASSETS	$	154,207	$	155,451
Liabilities
Current insurance and contractholder liabilities	$	5,850	$	5,308
Pharmacy and other service costs payable	14,470		13,347
Accounts payable	5,647		5,478
Accrued expenses and other liabilities	7,212		8,515
Short-term debt	1,532		3,374
Total current liabilities	34,711		36,022
Non-current insurance and contractholder liabilities	16,665		16,844
Deferred tax liabilities, net	8,867		8,939
Other non-current liabilities	4,330		4,629
Long-term debt	31,606		29,545
Separate account liabilities	9,261		9,086
TOTAL LIABILITIES	105,440		105,065
Contingencies — Note 15
Redeemable noncontrolling interests	51		58
Shareholders’ equity
Common stock (1)	4		4
Additional paid-in capital	29,403		28,975
Accumulated other comprehensive loss	(1,077)		(861)
Retained earnings	30,513		28,575
Less: Treasury stock, at cost	(10,134)		(6,372)
TOTAL SHAREHOLDERS’ EQUITY	48,709		50,321
Other noncontrolling interests	7		7
Total equity	48,716		50,328
Total liabilities and equity	$	154,207	$	155,451

(1)Par value per share, $0.01; shares issued, 394 million as of June 30, 2021 and 390 million as of December 31, 2020; authorized shares, 600 million.

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

5

Cigna Corporation
Consolidated Statements of Changes in Total Equity
Unaudited
Three Months Ended June 30, 2021
(In millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss)		Retained Earnings		Treasury Stock		Shareholders’ Equity		Other Non- controlling Interests		Total Equity		Redeemable Noncontrolling Interests
Balance at March 31, 2021	$	4	$	29,254	$	(1,231)	$	29,389	$	(9,267)	$	48,149	$	6	$	48,155	$	59
Effects of issuing stock for employee benefits plans			152						(2)		150				150
Other comprehensive income (loss)					154						154				154		(1)
Net income							1,467				1,467		6		1,473		3
Common dividends declared (per share: $1.00)							(343)				(343)				(343)
Repurchase of common stock									(865)		(865)				(865)
Other transactions impacting noncontrolling interests			(3)								(3)		(5)		(8)		(10)
Balance at June 30, 2021	$	4	$	29,403	$	(1,077)	$	30,513	$	(10,134)	$	48,709	$	7	$	48,716	$	51
Three Months Ended June 30, 2020
(In millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss)		Retained Earnings		Treasury Stock		Shareholders’ Equity		Other Non- controlling Interests		Total Equity		Redeemable Noncontrolling Interests
Balance at March 31, 2020	$	4	$	28,554	$	(1,527)	$	21,298	$	(3,250)	$	45,079	$	7	$	45,086	$	35
Effect of issuing stock for employee benefit plans			145						(6)		139				139
Other comprehensive income (loss)					739						739				739		(2)
Net income							1,754				1,754		2		1,756		4
Repurchase of common stock									(345)		(345)				(345)
Other transactions impacting noncontrolling interests													(4)		(4)		(3)
Balance at June 30, 2020	$	4	$	28,699	$	(788)	$	23,052	$	(3,601)	$	47,366	$	5	$	47,371	$	34

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

6

Cigna Corporation
Consolidated Statements of Changes in Total Equity
Unaudited
Six Months Ended June 30, 2021
(In millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss)		Retained Earnings		Treasury Stock		Shareholders’ Equity		Other Non- controlling Interests		Total Equity		Redeemable Noncontrolling Interests
Balance at December 31, 2020	$	4	$	28,975	$	(861)	$	28,575	$	(6,372)	$	50,321	$	7	$	50,328	$	58
Effect of issuing stock for employee benefit plans			431						(89)		342				342
Other comprehensive loss					(216)						(216)				(216)		(5)
Net income							2,628				2,628		11		2,639		8
Common dividends declared (per share: $2.00)							(690)				(690)				(690)
Repurchase of common stock									(3,673)		(3,673)				(3,673)
Other transactions impacting noncontrolling interests			(3)								(3)		(11)		(14)		(10)
Balance at June 30, 2021	$	4	$	29,403	$	(1,077)	$	30,513	$	(10,134)	$	48,709	$	7	$	48,716	$	51
Six Months Ended June 30, 2020
(In millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss)		Retained Earnings		Treasury Stock		Shareholders’ Equity		Other Non- controlling Interests		Total Equity		Redeemable Noncontrolling Interests
Balance at December 31, 2019	$	4	$	28,306	$	(941)	$	20,162	$	(2,193)	$	45,338	$	6	$	45,344	$	35
Cumulative effect of adopting new credit loss guidance (ASU 2016-13)							(30)				(30)				(30)
Effect of issuing stock for employee benefit plans			393						(84)		309				309
Other comprehensive income (loss)					153						153				153		(6)
Net income							2,935				2,935		6		2,941		8
Common dividends declared (per share: $0.04)							(15)				(15)				(15)
Repurchase of common stock									(1,324)		(1,324)				(1,324)
Other transactions impacting noncontrolling interests													(7)		(7)		(3)
Balance at June 30, 2020	$	4	$	28,699	$	(788)	$	23,052	$	(3,601)	$	47,366	$	5	$	47,371	$	34

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

7

Cigna Corporation

Consolidated Statements of Cash Flows

	Unaudited
	Six Months Ended June 30,
(In millions)	2021		2020
Cash Flows from Operating Activities
Net income	$	2,647	$	2,949
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,446		1,387
Realized investment (gains) losses, net	(60)		50
Deferred income tax (benefit)	(80)		(259)
Debt extinguishment costs	141		199
Net changes in assets and liabilities, net of non-operating effects:
Accounts receivable	(3,233)		(2,121)
Inventories	124		(50)
Deferred policy acquisition costs	(117)		(177)
Reinsurance recoverable and Other assets	(416)		28
Insurance liabilities	677		483
Pharmacy and other service costs payable	1,123		1,655
Accounts payable and Accrued expenses and other liabilities	(1,643)		630
Other, net	188		387
NET CASH PROVIDED BY OPERATING ACTIVITIES	797		5,161
Cash Flows from Investing Activities
Proceeds from investments sold:
Debt securities and equity securities	852		1,638
Investment maturities and repayments:
Debt securities and equity securities	672		765
Commercial mortgage loans	96		10
Other sales, maturities and repayments (primarily short-term and other long-term investments)	897		664
Investments purchased or originated:
Debt securities and equity securities	(1,999)		(2,150)
Commercial mortgage loans	(129)		(13)
Other (primarily short-term and other long-term investments)	(1,136)		(934)
Property and equipment purchases, net	(500)		(523)
Acquisitions, net of cash acquired	(1,836)		—
Other, net	59		37
NET CASH (USED IN) INVESTING ACTIVITIES	(3,024)		(506)
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds	96		529
Withdrawals and benefit payments from contractholder deposit funds	(96)		(483)
Net change in short-term debt	472		445
Payments for debt extinguishment	(136)		(212)
Repayment of long-term debt	(4,578)		(4,798)
Net proceeds on issuance of long-term debt	4,260		3,465
Repurchase of common stock	(3,710)		(1,324)
Issuance of common stock	290		229
Common stock dividend paid	(687)		(15)
Other, net	(24)		34
NET CASH (USED IN) FINANCING ACTIVITIES	(4,113)		(2,130)
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash	(27)		(15)
Net (decrease) increase in cash, cash equivalents and restricted cash	(6,367)		2,510
Cash, cash equivalents and restricted cash January 1, (1)	10,245		5,411
Cash, cash equivalents and restricted cash, June 30,	3,878		7,921
Cash reclassified to assets of business held for sale