The Cigna Group Reports Strong Third Quarter 2024 Results, Reaffirms 2024 Adjusted EPS Outlook Form 8 K

The Cigna Group Reports Strong Third Quarter 2024 Results, Reaffirms 2024 Adjusted EPS Outlook

BLOOMFIELD, CT, October 31, 2024- Global health company The Cigna Group (NYSE: CI) today reported strong third quarter 2024 results demonstrating focused execution across Evernorth Health Services and Cigna Healthcare.

"Our strong performance this quarter is a testament to the leadership, stability and expertise of our team," said David M. Cordani, chairman and CEO of The Cigna Group. "Our disciplined execution of our strategic plan and our comprehensive health services ensure we remain well-positioned in a highly dynamic environment, while sustaining business growth in both the near- and long-term."

Shareholders' net income for third quarter 2024 was $0.7 billion, or $2.63 per share, including a non-cash after-tax investment loss of $1.0 billion, or $3.69 per share related to VillageMD. This compares with $1.4 billion, or $4.74 per share, for third quarter 2023.

The Cigna Group's adjusted income from operations¹ for third quarter 2024 was $2.1 billion, or $7.51 per share, compared with $2.0 billion, or $6.77 per share, for third quarter 2023, reflecting strong contributions from Evernorth Health Services, particularly within Specialty and Care Services.

A reconciliation of shareholders' net income to adjusted income from operations¹ is provided on the following page and on Exhibit 1 of this earnings release.

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CONSOLIDATED HIGHLIGHTS

The following table includes highlights of results andreconciliations of total revenues to adjusted revenues³ and shareholders' net income (loss) to adjusted income from operations¹:

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CUSTOMER RELATIONSHIPS

The following table summarizes The Cigna Group's medical customers and overall customer relationships:

Customer Relationships (in thousands):

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HIGHLIGHTS OF SEGMENT RESULTS

See Exhibit 1 for a reconciliation of adjusted income from operations¹ to shareholders' net income.

Evernorth Health Services

This segment includes the Pharmacy Benefit Services and the Specialty and Care Services operating segments, which partner with health plans, employers, governmental organizations and health care providers to solve challenges in the areas of pharmacy benefits, home delivery pharmacy, specialty pharmacy, specialty distribution, and care delivery and management solutions.

Pharmacy Benefit Services drives high-quality, cost-effective pharmacy care through various services such as drug claim adjudication, retail pharmacy network administration, benefit design consultation, drug utilization review, drug formulary management and access to our home delivery pharmacy. Specialty and Care Services provides specialty drugs for the treatment of complex and rare diseases, specialty distribution of pharmaceuticals and medical supplies, as well as clinical programs to help our clients drive better whole-person health outcomes through care delivery and management solutions.

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Cigna Healthcare

This segment includes the U.S. Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers. U.S. Healthcare provides commercial medical plans and specialty benefits and solutions for insured and self-insured clients, 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.

Corporate and Other Operations

Corporate reflects interest expense, amounts not allocated to operating segments and includes intersegment eliminations. Additionally, this discussion includes items reported in Other Operations, which is comprised of Corporate Owned Life Insurance ("COLI"), the Company's run-off operations and other non-strategic businesses.

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2024 OUTLOOK²

The Cigna Group's outlook² for full year 2024 consolidated adjusted income from operations^1,2 is at least $28.40 per share². Additionally, this outlook includes the impact of expected future share repurchases and anticipated 2024 dividends.

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The foregoing statements represent the Company's current estimates of The Cigna Group's 2024 consolidated and segment adjusted income from operations^1,2 and other key metrics as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.

This quarterly earnings release and the Quarterly Financial Supplement are available on The Cigna Group's website in the Investor Relations section (https://investors.thecignagroup.com/overview/default.aspx). Management will be hosting a conference call to review third quarter2024 results and discuss full year 2024 outlook beginning today at 8:30 a.m. ET. A link to the conference call is available in the Investor Relations section of The Cigna Group's website located at https://investors.thecignagroup.com/events-and-presentations/default.aspx.

The call-in numbers for the conference call are as follows:

Live Call

(888) 566-1889 (Domestic)

(773) 799-3989 (International)

Passcode: 10312024

Replay

(888) 282-0035 (Domestic)

(203) 369-3602 (International)

It is strongly suggested you dial in to the conference call by 8:15 a.m. ET.

About The Cigna Group

The Cigna Group (NYSE: CI) is a global health company committed to creating a better future built on the vitality of every individual and every community. We relentlessly challenge ourselves to partner and innovate solutions for better health. The Cigna Group includes products and services marketed under Evernorth Health Services, Cigna Healthcare, or its subsidiaries. The Cigna Group maintains sales capabilities in more than 30 markets and jurisdictions, and has approximately 184 million customer relationships around the world. Learn more at thecignagroup.com.

Notes:

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The Company's outlook excludes the potential effects of any other business combinations that may occur after the date of this earnings release. The Company's outlook includes the potential effects of expected future share repurchases and anticipated 2024 dividends.

The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital. The share repurchase program may be effected through open market purchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, including through Rule 10b5-1 trading plans, or privately negotiated transactions. The program may be suspended or discontinued at any time.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release, and oral statements made in connection with this release, may contain 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 our projected adjusted income from operations outlook for 2024 on a per share, and segment basis; projected medical care ratio; future dividends, including projected shareholder dividends for 2024; projected weighted average shares outstanding; 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 the developing inflationary and interest rate pressures; capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; 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 achieve our strategic and operational initiatives; our ability to adapt to changes in an evolving and rapidly changing industry; our ability to compete effectively, differentiate our products and services from those of our competitors and maintain or increase market share; 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; the potential for actual claims to exceed our estimates related to expected medical claims; our ability to develop and maintain satisfactory relationships with physicians, hospitals, other health service providers and with producers and consultants; 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; changes in drug pricing or industry pricing benchmarks; our ability to invest in and properly maintain our information technology and other business systems; our ability to prevent or contain effects of potential cyberattack or other privacy or data security incidents; risks related to our use of artificial intelligence and machine learning; political, legal, operational, regulatory, economic and other risks that could affect our multinational operations, including currency exchange rates; risks related to an impairment of goodwill, intangible assets and/or investments (including as a result of the failure to realize the expected benefits of strategic transactions, as well as integration or separation difficulties or underperformance of such transactions relative to expectations); dependence on success of relationships with third parties; risk of significant disruption within our operations or among key suppliers or third parties; potential liability in connection with managing medical practices and operating pharmacies, onsite clinics and other types of medical facilities; 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; uncertainties surrounding participation in government-sponsored programs such as Medicare; the outcome of litigation, regulatory audits and investigations; compliance with applicable privacy, security and data laws, regulations and standards; potential failure of our prevention, detection and control systems; 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 and 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 our most recent report on Form 10-K and subsequent reports on Forms 10-Q and 8-K available through the Investor Relations section of www.thecignagroup.com. 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.

THE CIGNA GROUP
COMPARATIVE SUMMARY OF FINANCIAL RESULTS (unaudited)
		Three Months Ended		Nine Months Ended		Three Months Ended
		September 30,		September 30,		June 30,
(Dollars in millions, except per share amounts)		2024		2023		2024		2023		2024
REVENUES
Pharmacy revenues		$	48,284		$	34,531		$	135,421		$	100,639		$	45,101
Premiums			11,436			10,998			34,493			33,062			11,454
Fees and other revenues			3,889			3,198			10,862			9,574			3,647
Net investment income			85			321			696			876			321
Total revenues			63,694			49,048			181,472			144,151			60,523
Net realized investment results from certain equity method investments			(177)			30			(238)			22			(53	)
Special item related to impairment of dividend receivable			182			-			182			-			-
Adjusted revenues (1)		$	63,699		$	49,078		$	181,416		$	144,173		$	60,470
Shareholders' net income		$	739		$	1,408		$	2,010		$	4,135		$	1,548
Pre-tax adjusted income (loss) from operations by segment
Evernorth Health Services		$	1,876		$	1,716		$	4,855		$	4,552		$	1,619
Cigna Healthcare			1,174			1,222			3,718			3,509			1,204
Corporate and Other Operations			(431)			(409)			(1,273)			(1,202)			(451	)
Adjusted income tax expense			(507	)		(518	)		(1,404	)		(1,410	)		(463	)
Consolidated after-tax adjusted income from operations		$	2,112		$	2,011		$	5,896		$	5,449		$	1,909
Weighted average shares (in thousands)			281,396			297,131			285,042			297,663			284,052
Common shares outstanding (in thousands)									279,839			293,764			279,520
SHAREHOLDERS' EQUITY at September 30,								$	42,095		$	45,691
SHAREHOLDERS' EQUITY PER SHARE at September 30,								$	150.43		$	155.54

		Three Months Ended		Nine Months Ended		Three Months Ended
		September 30,		September 30,		June 30,
		2024		2023		2024		2023		2024
(Dollars in millions, except per share amounts)		Pre-tax		After-tax		Pre-tax	After-tax		Pre-tax		After-tax		Pre-tax		After-tax		Pre-tax		After-tax
SHAREHOLDERS' NET INCOME
Shareholders' net income				$	739				$	1,408				$	2,010				$	4,135				$	1,548
Adjustments to reconcile adjusted income from operations
Net realized investment losses (gains)(2)		$	744			740	$	44			41		$	2,567			2,547		$	66			56		$	(5)			(20	)
Amortization of acquired intangible assets			436			333		454			363			1,279			972			1,368			1,053			420			317
Special Items
Impairment of dividend receivable			182			138		-			-			182			138			-			-			-			-
Integration and transaction-related costs			77			59		13			9			177			135			20			15			63			47
Loss on sale of businesses			87			62		21			19			106			19			21			19			-			-
Deferred tax expenses, net			-			41		-			-			-			75			-			-			-			17
Charges associated with litigation matters			-			-		201			171			-			-			201			171			-			-
Adjusted income from operations (3)					$	2,112				$	2,011					$	5,896					$	5,449					$	1,909
DILUTED EARNINGS PER SHARE
Shareholders' net income					$	2.63				$	4.74					$	7.05					$	13.89					$	5.45
Adjustments to reconcile to adjusted income from operations
Net realized investment losses (gains)(2)		$	2.64			2.63	$	0.15			0.14		$	9.00			8.93		$	0.22			0.19		$	(0.02)			(0.07	)
Amortization of acquired intangible assets			1.55			1.18		1.53			1.22			4.49			3.41			4.60			3.54			1.48			1.11
Special Items
Impairment of dividend receivable			0.65			0.49		-			-			0.64			0.48			-			-			-			-
Integration and transaction-related costs			0.27			0.21		0.04			0.03			0.62			0.48			0.07			0.05			0.22			0.17
Loss on sale of businesses			0.31			0.22		0.07			0.06			0.37			0.07			0.07			0.06			-			-
Deferred tax expenses, net			-			0.15		-			-			-			0.26			-			-			-			0.06
Charges associated with litigation matters			-			-		0.68			0.58			-			-			0.67			0.58			-			-
Adjusted income from operations					$	7.51				$	6.77					$	20.68					$	18.31					$	6.72