Cigna Group [CI] Filings

10-Q 1 ci-20240630.htm 10-Q ci-20240630

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, 2024

☐ 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 July 26, 2024, 279,548,797 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	8
	Notes to the Consolidated Financial Statements	9

	Item 2. Management 's Discussion and Analysis of Financial Condition and Results of Operations	37

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	53

	Item 4. Controls and Procedures	53

PART II	OTHER INFORMATION

	Item 1. Legal Proceedings	54

	Item 1A. Risk Factors	54

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	54

	Item 5. Other Information	54

	Item 6. Exhibits	56
SIGNATURE		57

As used herein, the term "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				Unaudited
	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share amounts)	2024		2023		2024		2023
Revenues
Pharmacy revenues	$	45,101	$	33,964	$	87,137	$	66,108
Premiums	11,454		11,039		23,057		22,064
Fees and other revenues	3,647		3,305		6,973		6,376
Net investment income	321		278		611		555
TOTAL REVENUES	60,523		48,586		117,778		95,103
Benefits and expenses
Pharmacy and other service costs	44,492		33,442		85,923		64,901
Medical costs and other benefit expenses	9,515		9,034		18,955		18,080
Selling, general and administrative expenses	3,684		3,434		7,389		6,972
Amortization of acquired intangible assets	420		455		843		914
TOTAL BENEFITS AND EXPENSES	58,111		46,365		113,110		90,867
Income from operations	2,412		2,221		4,668		4,236
Interest expense and other	(375)		(363)		(697)		(721)

Loss on sale of businesses	—		—		(19)		—
Net realized investment (losses) gains	(48)		26		(1,884)		(30)
Income before income taxes	1,989		1,884		2,068		3,485
TOTAL INCOME TAXES	360		374		651		669
Net income	1,629		1,510		1,417		2,816
Less: Net income attributable to noncontrolling interests	81		50		146		89
SHAREHOLDERS’ NET INCOME	$	1,548	$	1,460	$	1,271	$	2,727
Shareholders' net income per share
Basic	$	5.51	$	4.96	$	4.48	$	9.24
Diluted	$	5.45	$	4.92	$	4.43	$	9.15

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


The Cigna Group Consolidated Statements of Comprehensive Income
	Unaudited				Unaudited
	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2024		2023		2024		2023
Net income	$	1,629	$	1,510	$	1,417	$	2,816
Other comprehensive income (loss), net of tax
Net unrealized appreciation on securities and derivatives	108		20		229		214
Net long-duration insurance and contractholder liabilities measurement adjustments	(212)		(117)		(772)		(448)
Net translation (losses) on foreign currencies	(5)		(19)		(31)		(3)
Postretirement benefits liability adjustment	(9)		7		(4)		17
Other comprehensive loss, net of tax	(118)		(109)		(578)		(220)
Total comprehensive income	1,511		1,401		839		2,596

Comprehensive income (loss) attributable to noncontrolling interests
Net income attributable to redeemable noncontrolling interests	—		45		—		79
Net income attributable to other noncontrolling interests	81		5		146		10

Total comprehensive income attributable to noncontrolling interests	81		50		146		89
SHAREHOLDERS' COMPREHENSIVE INCOME	$	1,430	$	1,351	$	693	$	2,507

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


The Cigna Group Consolidated Balance Sheets
	Unaudited
	As of June 30,		As of December 31,

(In millions)	2024		2023
Assets
Cash and cash equivalents	$	6,788	$	7,822
Investments	1,068		925
Accounts receivable, net	25,111		17,722
Inventories	5,173		5,645
Other current assets	2,664		2,169
Assets of businesses held for sale	5,411		3,068
Total current assets	46,215		37,351
Long-term investments	15,944		17,985
Reinsurance recoverables	4,595		4,835

Property and equipment	3,551		3,695
Goodwill	44,258		44,259
Other intangible assets	30,176		30,863
Other assets	3,276		3,421
Separate account assets	7,431		7,430
Assets of businesses held for sale, non-current	—		2,922
TOTAL ASSETS	$	155,446	$	152,761
Liabilities
Current insurance and contractholder liabilities	$	5,616	$	5,514
Pharmacy and other service costs payable	27,503		19,815
Accounts payable	9,275		8,553
Accrued expenses and other liabilities	9,003		9,955
Short-term debt	1,717		2,775
Liabilities of businesses held for sale	2,259		2,104
Total current liabilities	55,373		48,716
Non-current insurance and contractholder liabilities	10,449		10,904
Deferred tax liabilities, net	6,953		7,173
Other non-current liabilities	3,538		3,441
Long-term debt	30,175		28,155
Separate account liabilities	7,431		7,430
Liabilities of businesses held for sale, non-current	—		591
TOTAL LIABILITIES	113,919		106,410
Contingencies — Note 16
Redeemable noncontrolling interests	—		107
Shareholders' equity
Common stock (1)	4		4
Additional paid-in capital	31,048		30,669
Accumulated other comprehensive loss	(2,442)		(1,864)
Retained earnings	42,132		41,652
Less: Treasury stock, at cost	(29,410)		(24,238)
TOTAL SHAREHOLDERS' EQUITY	41,332		46,223
Other noncontrolling interests	195		21
Total equity	41,527		46,244
Total liabilities and equity	$	155,446	$	152,761

(1)Par value per share, $0.01; shares issued, 402 million as of June 30, 2024 and 400 million as of December 31, 2023; authorized shares, 600 million.

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


The Cigna Group
Consolidated Statements of Changes in Total Equity
Unaudited
Three Months Ended June 30, 2024
(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, 2024	$	4	$	30,292	$	(2,324)	$	40,978	$	(27,769)	$	41,181	$	169	$	41,350	$	—

Effects of issuing stock for employee benefit plans			116						(1)		115				115
Other comprehensive loss					(118)						(118)				(118)		—
Net income							1,548				1,548		81		1,629		—
Common dividends declared (per share: $1.40)							(394)				(394)				(394)
Repurchase of common stock			640						(1,640)		(1,000)				(1,000)
Other transactions impacting noncontrolling interests			—								—		(55)		(55)		—
Balance at June 30, 2024	$	4	$	31,048	$	(2,442)	$	42,132	$	(29,410)	$	41,332	$	195	$	41,527	$	—


Three Months Ended June 30, 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 March 31, 2023	$	4	$	30,332	$	(1,769)	$	38,841	$	(22,906)	$	44,502	$	16	$	44,518	$	78
Effect of issuing stock for employee benefit plans			106						(1)		105				105
Other comprehensive loss					(109)						(109)				(109)		—
Net income							1,460				1,460		5		1,465		45
Common dividends declared (per share: $1.23)							(365)				(365)				(365)
Repurchase of common stock			—						(146)		(146)				(146)
Other transactions impacting noncontrolling interests			(2)								(2)		(2)		(4)		(61)
Balance at June 30, 2023	$	4	$	30,436	$	(1,878)	$	39,936	$	(23,053)	$	45,445	$	19	$	45,464	$	62

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


The Cigna Group
Consolidated Statements of Changes in Total Equity
Unaudited
Six Months Ended June 30, 2024
(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, 2023	$	4	$	30,669	$	(1,864)	$	41,652	$	(24,238)	$	46,223	$	21	$	46,244	$	107
Effect of issuing stock for employee benefit plans			379						(115)		264				264
Other comprehensive loss					(578)						(578)				(578)		—
Net income							1,271				1,271		146		1,417		—
Common dividends declared (per share: $2.80)							(791)				(791)				(791)
Repurchase of common stock			—						(5,057)		(5,057)				(5,057)
Other transactions impacting noncontrolling interests			—								—		28		28		(107)
Balance at June 30, 2024	$	4	$	31,048	$	(2,442)	$	42,132	$	(29,410)	$	41,332	$	195	$	41,527	$	—

Six Months Ended June 30, 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	$	4	$	30,233	$	(1,658)	$	37,940	$	(21,844)	$	44,675	$	13	$	44,688	$	66
Effect of issuing stock for employee benefit plans			205						(105)		100				100
Other comprehensive loss					(220)						(220)				(220)		—
Net income							2,727				2,727		10		2,737		79
Common dividends declared (per share: $2.46)							(731)				(731)				(731)
Repurchase of common stock			—						(1,104)		(1,104)				(1,104)
Other transactions impacting noncontrolling interests			(2)								(2)		(4)		(6)		(83)
Balance at June 30, 2023	$	4	$	30,436	$	(1,878)	$	39,936	$	(23,053)	$	45,445	$	19	$	45,464	$	62

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

The Cigna Group

Consolidated Statements of Cash Flows


	Unaudited
	Six Months Ended June 30,

(In millions)	2024		2023
Cash Flows from Operating Activities
Net income	$	1,417	$	2,816
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,479		1,504
Realized investment losses, net	1,884		30
Deferred income tax benefit	(199)		(207)
Loss on sale of businesses	19		—

Net changes in assets and liabilities, net of non-operating effects:
Accounts receivable, net	(7,313)		(1,144)
Inventories	472		263
Reinsurance recoverable and Other assets	(559)		109
Insurance liabilities	(125)		1,727
Pharmacy and other service costs payable	7,820		1,547
Accounts payable and Accrued expenses and other liabilities	(15)		638
Other, net	225		237
NET CASH PROVIDED BY OPERATING ACTIVITIES	5,105		7,520
Cash Flows from Investing Activities
Proceeds from investments sold:
Debt securities and equity securities	393		646
Investment maturities and repayments:
Debt securities and equity securities	414		502
Commercial mortgage loans	37		82
Other sales, maturities and repayments (primarily short-term and other long-term investments)	451		313
Investments purchased or originated:
Debt securities and equity securities	(493)		(3,339)
Commercial mortgage loans	(52)		(59)
Other (primarily short-term and other long-term investments)	(865)		(685)
Property and equipment purchases, net	(670)		(805)

Divestitures, net of cash sold	—		27
Other, net	(350)		(79)
NET CASH USED IN INVESTING ACTIVITIES	(1,135)		(3,397)
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds	84		96
Withdrawals and benefit payments from contractholder deposit funds	(135)		(100)
Net change in short-term debt	(467)		183



Repayment of long-term debt	(3,000)		(80)
Net proceeds on issuance of long-term debt	4,462		1,491
Repurchase of common stock	(5,012)		(1,116)
Issuance of common stock	221		59
Common stock dividend paid	(793)		(730)
Other, net	(198)		(275)
NET CASH USED IN FINANCING ACTIVITIES	(4,838)		(472)
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash	(12)		9
Net (decrease) increase in cash, cash equivalents and restricted cash	(880)		3,660
Cash, cash equivalents and restricted cash January 1, (1)	8,337		5,976
Cash, cash equivalents and restricted cash, June 30, (2)	7,457		9,636
Cash and cash equivalents reclassified to assets of businesses held for sale	(625)		—
Cash, cash equivalents and restricted cash June 30, per Consolidated Balance Sheets (2)	$	6,832	$	9,636
Supplemental Disclosure of Cash Information:
Income taxes paid, net of refunds	$	567	$	926
Interest paid	$	643	$	632

(1)Includes $467 million reported in Assets of businesses held for sale as of January 1, 2024.

(2)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.

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	10
2	Summary of Significant Accounting Policies	10
3	Accounts Receivable, Net	11
4	Supplier Finance Program	11

5	Assets and Liabilities of Businesses Held for Sale	12
6	Earnings Per Share	12
7	Debt	14
8	Common and Preferred Stock	16
INSURANCE INFORMATION
9	Insurance and Contractholder Liabilities	17
10	Reinsurance	21
INVESTMENTS
11	Investments	22
12	Fair Value Measurements	26
13	Variable Interest Entities	29
14	Accumulated Other Comprehensive Income (Loss)	29


COMPLIANCE, REGULATION AND CONTINGENCIES
15	Income Taxes	30
16	Contingencies and Other Matters	31
RESULTS DETAILS
17	Segment Information	32

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 committed to creating a better future for every individual and every community. We relentlessly challenge ourselves to partner and innovate solutions for better health. Powered by our people and our brands, we advance our mission to improve the health and vitality of those we serve.

Our subsidiaries offer a differentiated set of pharmacy, medical, behavioral, dental and related products and services. The majority of these products and services are offered through employers and other entities such as governmental and non-governmental organizations, unions and associations. Cigna Healthcare also offers health and dental insurance and Medicare products to individuals in the United States and select international markets. In addition to these operations, The Cigna Group also has certain run-off operations.

A full description of our segments follows:

The Evernorth Health Services reportable 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. The Company's reporting units remain aligned with its operating segments and Evernorth Health Services' goodwill was allocated on a relative fair value basis.

The Cigna Healthcare reportable 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 medical plans and specialty benefits and solutions for insured and self-insured clients, Medicare Advantage, Medicare Supplement and Medicare Stand-Alone Prescription Drug Plans for seniors and individual health insurance plans. International Health provides health care solutions in our international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations.

In January 2024, the Company entered into a definitive agreement to sell the Medicare Advantage, Medicare Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits and CareAllies businesses within the U.S. Healthcare operating segment to Health Care Service Corporation ("HCSC") for approximately $3.3 billion cash, subject to applicable regulatory approvals and other customary closing conditions (the "HCSC transaction"). See Note 5 to the Consolidated Financial Statements for further information.

Other Operations comprises the remainder of our business operations, which includes our continuing business (corporate-owned life insurance ("COLI")) and our run-off and other non-strategic businesses. Our run-off businesses include (i) variable annuity reinsurance 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 which were sold through reinsurance agreements.

Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate financing 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 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").

Amounts recorded in the Consolidated Financial Statements necessarily reflect management's estimates and assumptions about medical costs, investment, tax 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 2023 Annual Report on Form 10-K ("2023 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.

Recent Accounting Pronouncements

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

Note 3 – Accounts Receivable, Net

The following amounts were included within Accounts receivable, net:


(In millions)	June 30, 2024		December 31, 2023
Pharmaceutical manufacturers receivables	$	12,555	$	8,169
Noninsurance customer receivables	10,946		8,044
Insurance customer receivables	2,325		2,359
Other receivables	289		272
Total	$	26,115	$	18,844
Accounts receivable, net classified as assets of businesses held for sale	(1,004)		(1,122)
Total	$	25,111	$	17,722

These accounts receivable are reported net of our allowances of $4.4 billion as of June 30, 2024 and $3.7 billion as of December 31, 2023. These allowances include contractual allowances for certain rebates receivable with pharmaceutical manufacturers and certain accounts receivable 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 $95 million as of June 30, 2024 and $90 million as of December 31, 2023.

Accounts Receivable Factoring Facility

The Company maintains an uncommitted factoring facility (the "Facility") under which certain accounts receivable may be sold on a non-recourse basis to a financial institution. The Facility began in July 2023 with an initial term of two years, followed by automatic one year renewal terms unless terminated by either party. The Facility's total capacity at inception was $1.0 billion and was amended to $1.5 billion during the three months ended June 30, 2024. Further information regarding the accounting policy for the Facility can be found in Note 3 in the Company's 2023 Form 10-K.

For the three and six months ended June 30, 2024, we sold $1.3 billion and $3.2 billion of accounts receivable under the Facility and factoring fees paid were not material. As of June 30, 2024, there were $322 million of sold accounts receivable that have not been collected from pharmaceutical manufacturers and have been removed from the Company's Consolidated Balance Sheets. At December 31, 2023, all sold accounts receivable had been collected from pharmaceutical manufacturers. As of June 30, 2024 and December 31, 2023, there were $713 million and $515 million, respectively, of collections from pharmaceutical manufacturers that have not been remitted to the financial institution. Such amounts are recorded within Accrued expenses and other liabilities in the Consolidated Balance Sheets.

Note 4 – Supplier Finance Program

The Company facilitates a voluntary supplier finance program (the "Program") that provides suppliers the opportunity to sell their accounts receivable 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. Further information regarding the Program's terms can be found in Note 4 in the Company's 2023 Form 10-K.

As of June 30, 2024 and December 31, 2023, $1.7 billion and $1.5 billion, respectively, of the Company's outstanding payment obligations were confirmed as valid within the Program by the financial institution and are reflected in Accounts payable in the Consolidated Balance Sheets. The amounts confirmed as valid for both periods are predominately associated with one supplier. As of June 30, 2024, we have been informed by the financial institution that $348 million of the Company's outstanding payment obligations were voluntarily elected by suppliers to be sold to the financial institution under the Program.

Note 5 – Assets and Liabilities of Businesses Held for Sale

In January 2024, the Company entered into the HCSC transaction for a total purchase price of approximately $3.3 billion cash, subject to applicable regulatory approvals and other customary closing conditions. The transaction is expected to close in the first quarter of 2025.

The assets and liabilities of businesses held for sale were as follows:


(In millions)	June 30, 2024		December 31, 2023
Cash and cash equivalents	$	625	$	467
Investments	1,401		1,438
Accounts receivable, net	1,004		1,122
Other assets, including Goodwill (1)	2,381		2,963
Total assets of businesses held for sale	5,411		5,990
Insurance and contractholder liabilities	1,557		1,636
All other liabilities	702		1,059
Total liabilities of businesses held for sale	$	2,259	$	2,695

(1) Includes Goodwill of $396 million as of June 30, 2024 and December 31, 2023.

Integration and Transaction-related Costs

In 2024 and 2023, the Company incurred transaction-related costs associated with the HCSC transaction. In 2023, the Company also incurred net costs mainly related to the sale of our international life, accident and supplemental benefits businesses ("Chubb transaction"). These costs incurred in both 2024 and 2023 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. These costs were $63 million pre-tax ($47 million after-tax) for the three months ended and $100 million pre-tax ($76 million after-tax) for the six months ended June 30, 2024, compared with $6 million pre-tax ($5 million after-tax) for the three months ended and $7 million pre-tax ($6 million after-tax) for the six months ended June 30, 2023.

Note 6 – Earnings Per Share

Basic and diluted earnings per share were computed as follows:


	Three Months Ended
	June 30, 2024						June 30, 2023
(Shares in thousands, dollars in millions, except per share amounts)	Basic		Effect of Dilution		Diluted		Basic		Effect of Dilution		Diluted
Shareholders' net income	$	1,548			$	1,548	$	1,460			$	1,460
Shares:
Weighted average	281,133				281,133		294,512				294,512
Common stock equivalents			2,919		2,919				2,367		2,367
Total shares	281,133		2,919		284,052		294,512		2,367		296,879
Earnings per share	$	5.51	$	(0.06)	$	5.45	$	4.96	$	(0.04)	$	4.92


	Six Months Ended
	June 30, 2024						June 30, 2023


(Shares in thousands, dollars in millions, except per share amounts)	Basic		Effect of Dilution		Diluted		Basic		Effect of Dilution		Diluted
Shareholders' net income	$	1,271			$	1,271	$	2,727			$	2,727
Shares:
Weighted average	283,799				283,799		295,105				295,105
Common stock equivalents			3,085		3,085				2,831		2,831
Total shares	283,799		3,085		286,884		295,105		2,831		297,936
Earnings per share	$	4.48	$	(0.05)	$	4.43	$	9.24	$	(0.09)	$	9.15

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 June 30,		Six Months Ended June 30,

(In millions)	2024	2023	2024	2023
Anti-dilutive options	0.8	0.9	1.2	0.9

The Company held approximately 122.5 million shares of common stock in treasury at June 30, 2024, 107.4 million shares as of December 31, 2023 and 103.3 million shares as of June 30, 2023.

The increase in Treasury stock as of June 30, 2024 and the reduction in weighted average shares outstanding for the six months ended June 30, 2024 was driven in part by 9.3 million shares of our common stock repurchased under the accelerated share repurchase agreements (the "ASR agreements"), approximately 1.7 million of which were received in the three months ended June 30, 2024. See Note 8 for additional information.

Note 7 – Debt

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


(In millions)	June 30, 2024		December 31, 2023
Short-term debt
Commercial paper	$	790	$	1,237





$500 million, 0.613% Notes due March 2024	—		500
$790 million, 3.500% Notes due June 2024 (1)	—		996
$900 million, 3.250% Notes due April 2025 (2)	885		—
Other, including finance leases	42		42
Total short-term debt	$	1,717	$	2,775
Long-term debt
$900 million, 3.250% Notes due April 2025 (2)	—		882
$1,216 million, 4.125% Notes due November 2025