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 March 31, 2023

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 001-38769

The Cigna Group

(Exact name of registrant as specified in its charter)

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

900 Cottage Grove Road

Bloomfield, Connecticut 06002

(Address of principal executive offices) (Zip Code)

(860) 226-6000

(Registrant's telephone number, including area code)

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 ☐ 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 ☐ 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. ☐

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 April 28, 2023, 295,872,231 shares of the issuer's common stock were outstanding.

THE CIGNA GROUP

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	7
	Notes to the Consolidated Financial Statements	8
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	35
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	50
	Item 4. Controls and Procedures	51
PART II	OTHER INFORMATION
	Item 1. Legal Proceedings	52
	Item 1A. Risk Factors	52
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	52
	Item 5. Other Information	52
	Item 6. Exhibits	53
SIGNATURE		54

As used herein, the "Company" refers to one or more of The Cigna Group and its consolidated subsidiaries.

Part I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

The Cigna Group Consolidated Statements of Income
	Unaudited
	Three Months Ended March 31,
(In millions, except per share amounts)	2023		2022 (1)
Revenues
Pharmacy revenues	$	32,144	$	30,697
Premiums	11,025		10,356
Fees and other revenues	3,071		2,539
Net investment income	277		414
TOTAL REVENUES	46,517		44,006
Benefits and expenses
Pharmacy and other service costs	31,459		29,813
Medical costs and other benefit expenses	9,046		8,272
Selling, general and administrative expenses	3,538		3,275
Amortization of acquired intangible assets	459		458
TOTAL BENEFITS AND EXPENSES	44,502		41,818
Income from operations	2,015		2,188
Interest expense and other	(358)		(299)
Net realized investment losses	(56)		(322)
Income before income taxes	1,601		1,567
TOTAL INCOME TAXES	295		355
Net income	1,306		1,212
Less: Net income attributable to noncontrolling interests	39		15
SHAREHOLDERS' NET INCOME	$	1,267	$	1,197
Shareholders' net income per share
Basic	$	4.28	$	3.76
Diluted	$	4.24	$	3.73

(1) Amounts have been restated to reflect the adoption of Targeted Improvements to the Accounting for Long-Duration Contracts in 2023. See Note 2 to the Consolidated Financial Statements for further information.

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

3

The Cigna Group Consolidated Statements of Comprehensive Income
	Unaudited
	Three Months Ended March 31,
(In millions)	2023		2022 (1)
Net income	$	1,306	$	1,212
Other comprehensive income (loss), net of tax
Net unrealized appreciation (depreciation) on securities and derivatives	194		(843)
Net long-duration insurance and contractholder liabilities measurement adjustments	(331)		459
Net translation gains (losses) on foreign currencies	16		(63)
Postretirement benefits liability adjustment	10		13
Other comprehensive loss, net of tax	(111)		(434)
Total comprehensive income	1,195		778
Comprehensive income (loss) attributable to noncontrolling interests
Net income attributable to redeemable noncontrolling interests	34		3
Net income attributable to other noncontrolling interests	5		12
Other comprehensive loss attributable to redeemable noncontrolling interests	—		(2)
Total comprehensive income attributable to noncontrolling interests	39		13
SHAREHOLDERS' COMPREHENSIVE INCOME	$	1,156	$	765

(1) Amounts have been restated to reflect the adoption of Targeted Improvements to the Accounting for Long-Duration Contracts in 2023. See Note 2 to the Consolidated Financial Statements for further information.

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

4

The Cigna Group Consolidated Balance Sheets
	Unaudited
	As of March 31,		As of December 31,
(In millions)	2023		2022 (1)
Assets
Cash and cash equivalents	$	7,935	$	5,924
Investments	914		905
Accounts receivable, net	17,704		17,218
Inventories	4,211		4,777
Other current assets	1,263		1,298
Total current assets	32,027		30,122
Long-term investments	19,010		16,288
Reinsurance recoverables	5,286		5,416
Property and equipment	3,837		3,774
Goodwill	45,811		45,811
Other intangible assets	32,102		32,492
Other assets	2,563		2,704
Separate account assets	7,340		7,278
TOTAL ASSETS	$	147,976	$	143,885
Liabilities
Current insurance and contractholder liabilities	$	7,166	$	5,409
Pharmacy and other service costs payable	17,609		17,070
Accounts payable	7,360		7,775
Accrued expenses and other liabilities	9,174		7,978
Short-term debt	3,418		2,993
Total current liabilities	44,727		41,225
Non-current insurance and contractholder liabilities	11,790		11,976
Deferred tax liabilities, net	7,707		7,786
Other non-current liabilities	2,692		2,766
Long-term debt	29,124		28,100
Separate account liabilities	7,340		7,278
TOTAL LIABILITIES	103,380		99,131
Contingencies — Note 16
Redeemable noncontrolling interests	78		66
Shareholders' equity
Common stock (2)	4		4
Additional paid-in capital	30,332		30,233
Accumulated other comprehensive loss	(1,769)		(1,658)
Retained earnings	38,841		37,940
Less: Treasury stock, at cost	(22,906)		(21,844)
TOTAL SHAREHOLDERS' EQUITY	44,502		44,675
Other noncontrolling interests	16		13
Total equity	44,518		44,688
Total liabilities and equity	$	147,976	$	143,885

(1)Amounts have been restated to reflect the adoption of Targeted Improvements to the Accounting for Long-Duration Contracts in 2023. See Note 2 to the Consolidated Financial Statements for further information.

(2)Par value per share, $0.01; shares issued, 399 million as of March 31, 2023 and 398 million as of December 31, 2022; authorized shares, 600 million.

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

5

The Cigna Group
Consolidated Statements of Changes in Total Equity
Unaudited
Three Months Ended March 31, 2023
(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, 2022, as retrospectively restated (1)	$	4	$	30,233	$	(1,658)	$	37,940	$	(21,844)	$	44,675	$	13	$	44,688	$	66
Effect of issuing stock for employee benefit plans			99						(104)		(5)				(5)
Other comprehensive loss					(111)						(111)				(111)
Net income							1,267				1,267		5		1,272		34
Common dividends declared (per share: $1.23)							(366)				(366)				(366)
Repurchase of common stock									(958)		(958)				(958)
Other transactions impacting noncontrolling interests											—		(2)		(2)		(22)
Balance at March 31, 2023	$	4	$	30,332	$	(1,769)	$	38,841	$	(22,906)	$	44,502	$	16	$	44,518	$	78
Three Months Ended March 31, 2022 (1)
(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, 2021, as retrospectively restated (1)	4		29,574		(1,068)		32,623		(14,175)		46,958		18		46,976		54
Effect of issuing stock for employee benefit plans			162						(72)		90				90
Other comprehensive loss					(432)						(432)				(432)		(2)
Net income							1,197				1,197		12		1,209		3
Common dividends declared (per share: $1.12)							(356)				(356)				(356)
Repurchase of common stock			—						(1,334)		(1,334)				(1,334)
Other transactions impacting noncontrolling interests			—								—		(8)		(8)		—
Balance at March 31, 2022	$	4	$	29,736	$	(1,500)	$	33,464	$	(15,581)	$	46,123	$	22	$	46,145	$	55

(1)Amounts have been restated to reflect the adoption of Targeted Improvements to the Accounting for Long-Duration Contracts in 2023. See Note 2 to the Consolidated Financial Statements to the Consolidated Financial Statements for further information.

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

6

The Cigna Group

Consolidated Statements of Cash Flows

	Unaudited
	Three Months Ended March 31,
(In millions)	2023		2022 (1)
Cash Flows from Operating Activities
Net income	$	1,306	$	1,212
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	749		717
Realized investment losses, net	56		322
Deferred income tax benefit	(108)		(134)
Net changes in assets and liabilities, net of non-operating effects:
Accounts receivable, net	(479)		(983)
Inventories	566		222
Reinsurance recoverable and Other assets	72		584
Insurance liabilities	1,533		142
Pharmacy and other service costs payable	539		(74)
Accounts payable and Accrued expenses and other liabilities	690		85
Other, net	104		(63)
NET CASH PROVIDED BY OPERATING ACTIVITIES	5,028		2,030
Cash Flows from Investing Activities
Proceeds from investments sold:
Debt securities and equity securities	196		757
Investment maturities and repayments:
Debt securities and equity securities	257		456
Commercial mortgage loans	4		65
Other sales, maturities and repayments (primarily short-term and other long-term investments)	160		479
Investments purchased or originated:
Debt securities and equity securities	(2,794)		(1,246)
Commercial mortgage loans	—		(59)
Other (primarily short-term and other long-term investments)	(377)		(425)
Property and equipment purchases, net	(408)		(288)
Divestitures, net of cash sold	22		(57)
Other, net	(43)		(6)
NET CASH USED IN INVESTING ACTIVITIES	(2,983)		(324)
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds	45		43
Withdrawals and benefit payments from contractholder deposit funds	(48)		(49)
Net change in short-term debt	(9)		(463)
Repayment of long-term debt	(80)		—
Net proceeds on issuance of long-term debt	1,491		—
Repurchase of common stock	(962)		(1,368)
Issuance of common stock	30		93
Common stock dividend paid	(368)		(357)
Other, net	(136)		(70)
NET CASH USED IN FINANCING ACTIVITIES	(37)		(2,171)
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash	5		(23)
Net increase (decrease) in cash, cash equivalents and restricted cash	2,013		(488)
Cash, cash equivalents and restricted cash January 1, (2)	5,976		5,548
Cash, cash equivalents and restricted cash, March 31,	7,989		5,060
Cash and cash equivalents reclassified to Assets of businesses held for sale	—		(591)
Cash, cash equivalents and restricted cash March 31, per Consolidated Balance Sheets (3)	$	7,989	$	4,469
Supplemental Disclosure of Cash Information:
Income taxes paid, net of refunds	$	77	$	43
Interest paid	$	322	$	308

(1)Amounts have been restated to reflect the adoption of Targeted Improvements to the Accounting for Long-Duration Contracts in 2023. See Note 2 to the Consolidated Financial Statements for further information.

(2)Includes $425 million reported in Assets of businesses held for sale as of January 1, 2022.

(3)Restricted cash and cash equivalents were reported in other long-term investments.

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

7

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	11
4	Supplier Finance Program	11
5	Mergers, Acquisitions and Divestitures	11
6	Earnings Per Share	12
7	Debt	13
8	Common and Preferred Stock	14
INSURANCE INFORMATION
9	Insurance and Contractholder Liabilities	15
10	Reinsurance	20
INVESTMENTS
11	Investments	21
12	Fair Value Measurements	24
13	Variable Interest Entities	28
14	Accumulated Other Comprehensive Income (Loss)	29
COMPLIANCE, REGULATION AND CONTINGENCIES
15	Income Taxes	30
16	Contingencies and Other Matters	30
RESULTS DETAILS
17	Segment Information	32

8

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 with a mission of helping those we serve improve their health and vitality. Our subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental and related products and services.

The majority of these products are offered through employers and other groups such as governmental and non-governmental organizations, unions and associations. Cigna Healthcare also offers commercial health and dental insurance and Medicare products to individuals in the United States and selected international markets. In addition to these ongoing operations, The Cigna Group also has certain run-off operations.

A full description of our segments follows:

Evernorth Health Services includes a broad range of coordinated and point solution health services and capabilities, as well as those from partners across the health care system, in Pharmacy Benefits, Home Delivery Pharmacy, Specialty Pharmacy, Distribution and Care Delivery and Management Solutions, which are provided to health plans, employers, government organizations and health care providers.

Cigna Healthcare includes the U.S. Commercial, U.S. Government and International Health operating segments which provide comprehensive medical and coordinated solutions to clients and customers. U.S. Commercial products and services include medical, pharmacy, behavioral health, dental and other products and services for insured and self-insured clients. U.S. Government solutions include Medicare Advantage, Medicare Supplement and Medicare Part D plans for seniors and individual health insurance plans. International Health solutions include health care coverage in our international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations.

Other Operations comprises the remainder of our business operations, which includes ongoing businesses and exited businesses. Our ongoing businesses include continuing business (corporate-owned life insurance ("COLI")) and our run-off businesses. Our run-off businesses include (i) variable annuity reinsurance business (also referred to as "guaranteed minimum death benefit ("GMDB") and guaranteed minimum income benefit ("GMIB") 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 comprised of deferred gains from the sales of these businesses. Our exited businesses include our interest in a joint venture in Türkiye, which was sold in December 2022 and the international life, accident and supplemental benefits businesses sold in July 2022 (the "Chubb transaction").

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

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 amounts in prior years have been reclassified to conform to the current year presentation.

Amounts recorded in the Consolidated Financial Statements necessarily reflect management's estimates and assumptions about medical costs, investment 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 2022 Annual Report on Form 10-K ("2022 Form 10-K"). 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.

9

Recent Accounting Pronouncements

The Company's 2022 Form 10-K includes discussion of significant recent accounting pronouncements that either have impacted or may impact our financial statements in the future. The following information provides updates on recently adopted accounting pronouncements that have occurred since the Company filed its 2022 Form 10-K. There are no accounting pronouncements not yet adopted as of March 31, 2023.

Targeted Improvements to the Accounting for Long-Duration Contracts ("LDTI"), Accounting Standards Update ("ASU") 2018-12 and related amendments

The Cigna Group adopted LDTI January 1, 2023, which includes the following key provisions:

•Changes to the measurement of the future policy benefits liability for traditional and limited-pay insurance contracts:

•Assumptions used to measure cash flows (such as mortality, morbidity and lapse assumptions) are updated at least annually with the effect of changes in those assumptions remeasured retrospectively and reflected in current period net income.

•Discount rate assumptions are updated quarterly based on market-level yields for low credit risk fixed income instruments ("upper-medium grade fixed-income instrument"), with any changes reflected in other comprehensive income. The upper-medium grade fixed-income instrument yield is interpreted to mean A-rated.

•Deferred policy acquisition costs ("DAC") related to long-duration insurance contracts are amortized on a constant-level basis over the expected term of the related contracts. Other related deferred or capitalized balances (such as unearned revenue liability and value of business acquired) may use this simplified amortization method.

•Market risk benefits ("MRB"), defined as protecting the contractholder from other-than-nominal capital market risk and exposing the insurer to that risk, are measured at fair value, with changes in fair value recognized in net income each period, except for the effect of the Company's change in nonperformance risk (own credit risk), which is recognized in other comprehensive income.

•Additional disclosures, including disaggregated roll forwards for the liability for future policy benefits, market risk benefits, separate account liabilities and DAC, as well as information about significant inputs, judgments, assumptions and methods used in measurement.

•The transition methods applied at adoption were:

•The liability for future policy benefits was remeasured using a modified retrospective approach applied to all outstanding contracts as of the beginning of the earliest period presented and was recognized in the opening balance of retained earnings. The impact of remeasuring the future policy benefits liability for the discount rate was recorded through accumulated other comprehensive income.

•DAC followed the transition method used for future policyholder benefits.

•Market risk benefits were remeasured at fair value at the beginning of the earliest period presented. The difference between this fair value and carrying value was recognized in the opening balance of retained earnings, excluding the effect of the Company's change in nonperformance risk (own credit risk), which is recognized in accumulated other comprehensive income.

Effects of adoption:

•The new guidance applies to our long-duration insurance products predominantly within the Cigna Healthcare segment and Other Operations.

•The cumulative effects of adopting the new standard were immaterial. The impacts were a decrease to January 1, 2021 Shareholders' equity of $139 million and an increase to Shareholders' net income for the year ended December 31, 2022 and December 31, 2021 of $36 million and $5 million, respectively. The corresponding impact to diluted earnings per share was an increase of $0.11 and $0.02 for the year ended December 31, 2022 and December 31, 2021, respectively.

•The prior periods within our Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Balance Sheets, Consolidated Statements of Changes in Total Equity and Consolidated Statements of Cash Flows were restated to conform to the current presentation.

•Prior period balances in the Company's footnote disclosures have been updated to reflect adjustments resulting from the adoption of this standard. Refer to Note 9 to the Consolidated Financial Statements for the Company's updated accounting policies.

•It is possible that our income recognition pattern could change on a prospective basis for several reasons:

•Applying periodic assumption updates, versus the locked-in model, may change our timing of profit or loss recognition.

10

•DAC amortization is on a constant level basis over the expected term of the related contracts and no longer tied to the emergence of profit on such contracts.

Additionally, in December 2022, the Financial Accounting Standards Board ("FASB") published ASU 2022-05, which simplified the retrospective adoption of LDTI by permitting companies to make an accounting policy election to exclude contracts that are sold and removed from the balance sheet prior to the effective date of the standard from the retrospective adoption of LDTI. The Cigna Group made this policy election for the contracts sold in the Chubb transaction and our divested interest in a joint venture in Türkiye.

Note 3 – Accounts Receivable, Net

The following amounts were included within Accounts receivable, net:

(In millions)	March 31, 2023		December 31, 2022
Noninsurance customer receivables	$	7,845	$	6,899
Pharmaceutical manufacturers receivables	7,128		7,108
Insurance customer receivables	2,467		2,963
Other receivables	264		248
Total	$	17,704	$	17,218

These receivables are reported net of our allowances of $2.1 billion as of March 31, 2023 and $1.9 billion as of December 31, 2022. These allowances include contractual allowances for certain rebates receivable with pharmaceutical manufacturers and certain receivables 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 $87 million as of March 31, 2023 and $86 million as of December 31, 2022.

Note 4 – Supplier Finance Program

The Company facilitates a voluntary supplier finance program (the "program") that provides suppliers the opportunity to sell their receivables 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. The Cigna Group is not a party to the program and agrees to commercial terms with its suppliers independently of their participation in the program. Amounts due to suppliers that participate in the program are generally paid within one month following the invoice date. A supplier's participation in the program has no impact on the Company's payment terms and the Company has no economic interest in a supplier's decision to participate in the program. The suppliers, at their sole discretion, determine which invoices, if any, to sell to the financial institution. No guarantees or pledged assets are provided by the Company or any of our subsidiaries under the program.

As of March 31, 2023 and December 31, 2022, $1.5 billion and $1.3 billion, respectively, of the Company's outstanding payment obligations were confirmed as valid within the program by the financial institution and reflected in Accounts payable in the Consolidated Balance Sheets. The amounts confirmed as valid for both periods are predominately associated with one supplier. We have been informed by the financial institution that $324 million as of March 31, 2023 of the Company's outstanding payment obligations were voluntarily elected by suppliers to be sold to the financial institution under the program.

Note 5 – Mergers, Acquisitions and Divestitures

A.Divestiture of International Businesses

In July 2022, the Company completed the sale of its life, accident and supplemental benefits businesses in six countries (Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand) (the "Chubb transaction") for approximately $5.4 billion in cash. The Company recognized a gain of $1.7 billion pre-tax ($1.4 billion after-tax), which includes recognition of previously unrealized capital losses on investments sold and translation loss on foreign currencies. In December 2022, the Company also divested its ownership interest in a joint venture in Türkiye.

B.Integration and Transaction-related Costs

In 2023 and 2022, the Company incurred net costs mainly related to the Chubb transaction. In the first three months of 2022, the Company also incurred net costs related to the sale of the Group Disability and Life business and acquisition of MDLIVE. These net

11

costs were $1 million pre-tax ($1 million after-tax) for the three months ended March 31, 2023 and $52 million pre-tax ($37 million after-tax) for the three months ended March 31, 2022. These costs consisted primarily of certain projects to separate or integrate the Company's systems, products and services, fees for legal, advisory and other professional services and certain employment-related costs.

Note 6 – Earnings Per Share

Basic and diluted earnings per share were computed as follows:

	Three Months Ended
	March 31, 2023						March 31, 2022
(Shares in thousands, dollars in millions, except per share amounts)	Basic		Effect of Dilution		Diluted		Basic		Effect of Dilution		Diluted
Shareholders' net income	$	1,267			$	1,267	$	1,197			$	1,197
Shares:
Weighted average	295,706				295,706		318,487				318,487
Common stock equivalents			3,293		3,293				2,795		2,795
Total shares	295,706		3,293		298,999		318,487		2,795		321,282
Earnings per share	$	4.28	$	(0.04)	$	4.24	$	3.76	$	(0.03)	$	3.73

Amounts reflected above for the three months ended March 31, 2022 have been restated to reflect the impact of adopting amended accounting guidance for long-duration insurance contracts (discussed in Note 2 to the Consolidated Financial Statements).

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)	2023	2022
Anti-dilutive options	0.9	2.8

The Company held approximately 102.7 million shares of common stock in treasury at March 31, 2023, 99.1 million shares as of December 31, 2022 and 77.3 million shares as of March 31, 2022.

12

Note 7 – Debt

The outstanding amounts of debt, net of issuance costs, discounts or premiums, and finance leases were as follows:

(In millions)	March 31, 2023		December 31, 2022
Short-term debt
$17 million, 8.300% Notes due January 2023	—		17
$63 million, 7.650% Notes due March 2023	—		63
$700 million, Floating Rate Notes due July 2023	700		700
$1,000 million, 3.000% Notes due July 2023	996		994
$1,187 million, 3.750% Notes due July 2023	1,187		1,186
$500 million, 0.613% Notes due March 2024	499		—
Other, including finance leases	36		33
Total short-term debt	$	3,418	$	2,993
Long-term debt
$500 million, 0.613% Notes due March 2024	—		499
$1,000 million, 3.500% Notes due June 2024	992		990
$900 million, 3.250% Notes due April 2025 (1)	878		872
$2,200 million, 4.125% Notes due November 2025	2,195		2,195
$1,500 million, 4.500% Notes due February 2026	1,503		1,503
$800 million, 1.250% Notes due March 2026	797		797
$700 million, 5.685% Notes due March 2026	697		—
$1,500 million, 3.400% Notes due March 2027	1,440		1,436
$259 million, 7.875% Debentures due May 2027	259		259
$600 million, 3.050% Notes due October 2027	597