Company: CI
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001739940-25-000021
Chunk: 286

Company: Cigna Group
Filing Date: 2025-05-02
Form: 10-Q
Item: Part I, Item 2
Chunk 286
---
, 2025 versus Three Months Ended March 31, 2024

The commentary presented below, and the segment commentaries that follow, compare results for the three months ended March 31, 2025 with results for the three months ended March 31, 2024. Commentary regarding percentage changes (or bps) and dollar variances represents the driver's impact on the overall category.

Shareholders' net income (loss) increased $1,600 million, primarily reflecting the absence of net investment losses recorded in 2024 ($1,875 million, after tax) driven by the impairment of equity securities.

Adjusted income from operations decreased 2%, primarily reflecting the absence of state tax benefits recorded in 2024 (-2%) and lower earnings in Cigna Healthcare (-3%), partially offset by higher earnings in Evernorth Health Services (+4%).

Medical customers decreased 6%, primarily reflecting the HCSC transaction (defined below).

Pharmacy revenues increased 16%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.

Premiums increased 10%, primarily reflecting higher premium rates in our U.S. Healthcare operating segment.

Fees and other revenues increased 17%, primarily reflecting growth in affordability services within our Pharmacy Benefit Services operating segment.

Net investment income decreased 18%, primarily due to lower average assets.

33

Pharmacy and other service costs increased 17%, primarily reflecting higher utilization of prescription drugs from customer growth in Evernorth Health Services.

Medical costs and other benefit expenses increased 11%, primarily reflecting higher medical costs in our U.S. Healthcare operating segment.

Selling, general and administrative ("SG&A") expenses increased 14%, primarily reflecting costs associated with the Strategic Optimization Program (+5%) and the HCSC transaction costs (+5%).

Gain (loss) on sale of businesses primarily reflects the HCSC transaction. See the "Divestiture of Medicare Advantage and Related Businesses" section below and Note 5 to the Consolidated Financial Statements for further discussion of the HCSC transaction.

Investment results primarily reflect the absence of the impairment of VillageMD equity securities that was recorded in 2024.

The effective tax rate decreased, primarily driven by the absence of a valuation allowance related to the impairment of equity securities recorded in 2024 (-540%), partially offset by the absence of state tax benefits recorded in 2024 (+88%) and the impact related to the HCSC transaction (+69%). See Note 15 to the Consolidated Financial Statements for further discussion of these matters.

Developments

Divestiture