Company: CI
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001739940-25-000037
Chunk: 149

Company: Cigna Group
Filing Date: 2025-10-30
Form: 10-Q
Item: Part II, Item 7
Chunk 149
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 the three and nine months ended September 30, 2025, the total costs included a charge in Selling, general and administrative ("SG&A") expenses of $181 million, pre-tax and $467 million, pre-tax, respectively, that was primarily associated with employee severance. The remainder for both periods reflects the operating results of certain non-strategic businesses. We expect substantially all of the accrued liability to be paid by the end of 2026. See Note 17 to the Consolidated Financial Statements for further details of the strategic optimization program impact by segment.The following table summarizes a roll forward of the accrued liability recorded in Accrued expenses and other liabilities during the nine months ended September 30, 2025:(In millions)Balance, December 31, 2024$— 2025 charges335 2025 payments(171)Balance, September 30, 2025$164 

Note 15 – Income Taxes

Income Tax Expense The effective tax rates of 14.0% and 15.9% for the three and nine months ended September 30, 2025, respectively, were lower than the effective tax rates of 30.8% and 31.2% for the three and nine months ended September 30, 2024, respectively. The decrease in the three and nine months comparative rates was primarily due to the absence of a valuation allowance related to the impairment of equity securities in 2024, partially offset by the absence of tax benefits recorded in 2024 related to the release of tax reserves following favorable state audit resolutions.

During the three months ended September 30, 2025, the reallocation of the HCSC transaction purchase price by legal entity resulted in an equal write-off of the deferred tax asset ("DTA") and valuation allowance associated with the tax-deductible capital loss on the sale, resulting in zero net impact on the Company's total tax provision. Additionally, the decrease in valuation allowance associated with the tax-deductible capital loss on the sale recorded in the three months ended September 30, 2025 generated a substantial portion of the after-tax gain on sale discussed in Note 5 to the Consolidated Financial Statements. This valuation allowance decrease was offset by an increase in valuation allowance associated with DTAs on the impairment of equity securities, as discussed below. As such, there was no material change to the realizability assessment of the Company's consolidated DTAs and no material net impact to the Company's consolidated tax expense. We continue to monitor and