Cigna Group [CI] Filings

10-Q 1 ci-20240930.htm 10-Q ci-20240930

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 September 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 October 25, 2024, 278,152,606 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	54

	Item 4. Controls and Procedures	54

PART II	OTHER INFORMATION

	Item 1. Legal Proceedings	55

	Item 1A. Risk Factors	55

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	55

	Item 5. Other Information	55

	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 September 30,				Nine Months Ended September 30,
(In millions, except per share amounts)	2024		2023		2024		2023
Revenues
Pharmacy revenues	$	48,284	$	34,531	$	135,421	$	100,639
Premiums	11,436		10,998		34,493		33,062
Fees and other revenues	3,889		3,198		10,862		9,574
Net investment income	85		321		696		876
TOTAL REVENUES	63,694		49,048		181,472		144,151
Benefits and expenses
Pharmacy and other service costs	47,565		33,639		133,488		98,540
Medical costs and other benefit expenses	9,527		8,927		28,482		27,007
Selling, general and administrative expenses	3,590		3,788		10,979		10,760
Amortization of acquired intangible assets	436		454		1,279		1,368
TOTAL BENEFITS AND EXPENSES	61,118		46,808		174,228		137,675
Income from operations	2,576		2,240		7,244		6,476
Interest expense and other	(376)		(365)		(1,073)		(1,086)

Loss on sale of businesses	(87)		(21)		(106)		(21)
Net realized investment losses	(921)		(14)		(2,805)		(44)
Income before income taxes	1,192		1,840		3,260		5,325
TOTAL INCOME TAXES	367		391		1,018		1,060
Net income	825		1,449		2,242		4,265
Less: Net income attributable to noncontrolling interests	86		41		232		130
SHAREHOLDERS’ NET INCOME	$	739	$	1,408	$	2,010	$	4,135
Shareholders' net income per share
Basic	$	2.65	$	4.79	$	7.13	$	14.03
Diluted	$	2.63	$	4.74	$	7.05	$	13.89

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 September 30,				Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Net income	$	825	$	1,449	$	2,242	$	4,265
Other comprehensive income (loss), net of tax
Net unrealized appreciation (depreciation) on securities and derivatives	264		(192)		493		22
Net long-duration insurance and contractholder liabilities measurement adjustments	(28)		(28)		(800)		(476)
Net translation gains (losses) on foreign currencies	39		(29)		8		(32)
Postretirement benefits liability adjustment	4		8		—		25
Other comprehensive income (loss), net of tax	279		(241)		(299)		(461)
Total comprehensive income	1,104		1,208		1,943		3,804

Comprehensive income (loss) attributable to noncontrolling interests
Net income attributable to redeemable noncontrolling interests	—		37		—		116
Net income attributable to other noncontrolling interests	86		4		232		14

Total comprehensive income attributable to noncontrolling interests	86		41		232		130
SHAREHOLDERS' COMPREHENSIVE INCOME	$	1,018	$	1,167	$	1,711	$	3,674

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 September 30,		As of December 31,

(In millions)	2024		2023
Assets
Cash and cash equivalents	$	5,888	$	7,822
Investments	864		925
Accounts receivable, net	27,846		17,722
Inventories	5,083		5,645
Other current assets	2,667		2,169
Assets of businesses held for sale	6,874		3,068
Total current assets	49,222		37,351
Long-term investments	15,270		17,985
Reinsurance recoverables	4,557		4,835

Property and equipment	3,594		3,695
Goodwill	44,374		44,259
Other intangible assets	29,791		30,863
Other assets	3,180		3,421
Separate account assets	7,651		7,430
Assets of businesses held for sale, non-current	—		2,922
TOTAL ASSETS	$	157,639	$	152,761
Liabilities
Current insurance and contractholder liabilities	$	5,477	$	5,514
Pharmacy and other service costs payable	28,801		19,815
Accounts payable	8,515		8,553
Accrued expenses and other liabilities	8,920		9,955
Short-term debt	2,572		2,775
Liabilities of businesses held for sale	2,775		2,104
Total current liabilities	57,060		48,716
Non-current insurance and contractholder liabilities	10,573		10,904
Deferred tax liabilities, net	6,794		7,173
Other non-current liabilities	3,033		3,441
Long-term debt	30,230		28,155
Separate account liabilities	7,651		7,430
Liabilities of businesses held for sale, non-current	—		591
TOTAL LIABILITIES	115,341		106,410
Contingencies — Note 16
Redeemable noncontrolling interests	—		107
Shareholders' equity
Common stock (1)	4		4
Additional paid-in capital	31,186		30,669
Accumulated other comprehensive loss	(2,163)		(1,864)
Retained earnings	42,480		41,652
Less: Treasury stock, at cost	(29,412)		(24,238)
TOTAL SHAREHOLDERS' EQUITY	42,095		46,223
Other noncontrolling interests	203		21
Total equity	42,298		46,244
Total liabilities and equity	$	157,639	$	152,761

(1)Par value per share, $0.01; shares issued, 402 million as of September 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 September 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 June 30, 2024	$	4	$	31,048	$	(2,442)	$	42,132	$	(29,410)	$	41,332	$	195	$	41,527	$	—

Effects of issuing stock for employee benefit plans			138						(2)		136				136
Other comprehensive income					279						279				279		—
Net income							739				739		86		825		—
Common dividends declared (per share: $1.40)							(391)				(391)				(391)
Repurchase of common stock			—						—		—				—
Other transactions impacting noncontrolling interests			—								—		(78)		(78)		—
Balance at September 30, 2024	$	4	$	31,186	$	(2,163)	$	42,480	$	(29,412)	$	42,095	$	203	$	42,298	$	—


Three Months Ended September 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 June 30, 2023	$	4	$	30,436	$	(1,878)	$	39,936	$	(23,053)	$	45,445	$	19	$	45,464	$	62
Effect of issuing stock for employee benefit plans			127						(5)		122				122
Other comprehensive loss					(241)						(241)				(241)		—
Net income							1,408				1,408		4		1,412		37
Common dividends declared (per share: $1.23)							(362)				(362)				(362)
Repurchase of common stock			—						(681)		(681)				(681)
Other transactions impacting noncontrolling interests			—								—		(12)		(12)		(35)
Balance at September 30, 2023	$	4	$	30,563	$	(2,119)	$	40,982	$	(23,739)	$	45,691	$	11	$	45,702	$	64

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
Nine Months Ended September 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			517						(117)		400				400
Other comprehensive loss					(299)						(299)				(299)		—
Net income							2,010				2,010		232		2,242		—
Common dividends declared (per share: $4.20)							(1,182)				(1,182)				(1,182)
Repurchase of common stock			—						(5,057)		(5,057)				(5,057)
Other transactions impacting noncontrolling interests			—								—		(50)		(50)		(107)
Balance at September 30, 2024	$	4	$	31,186	$	(2,163)	$	42,480	$	(29,412)	$	42,095	$	203	$	42,298	$	—

Nine Months Ended September 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			332						(110)		222				222
Other comprehensive loss					(461)						(461)				(461)		—
Net income							4,135				4,135		14		4,149		116
Common dividends declared (per share: $3.69)							(1,093)				(1,093)				(1,093)
Repurchase of common stock			—						(1,785)		(1,785)				(1,785)
Other transactions impacting noncontrolling interests			(2)								(2)		(16)		(18)		(118)
Balance at September 30, 2023	$	4	$	30,563	$	(2,119)	$	40,982	$	(23,739)	$	45,691	$	11	$	45,702	$	64

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
	Nine Months Ended September 30,

(In millions)	2024		2023
Cash Flows from Operating Activities
Net income	$	2,242	$	4,265
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,129		2,270
Realized investment losses, net	2,805		44
Deferred income tax benefit	(351)		(303)
Loss on sale of businesses	106		21

Net changes in assets and liabilities, net of non-operating effects:
Accounts receivable, net	(10,600)		(1,916)
Inventories	577		360
Reinsurance recoverable and Other assets	(358)		281
Insurance liabilities	(214)		1,482
Pharmacy and other service costs payable	8,979		2,250
Accounts payable and Accrued expenses and other liabilities	(819)		1,337
Other, net	655		255
NET CASH PROVIDED BY OPERATING ACTIVITIES	5,151		10,346
Cash Flows from Investing Activities
Proceeds from investments sold:
Debt securities and equity securities	569		757
Investment maturities and repayments:
Debt securities and equity securities	585		715
Commercial mortgage loans	79		86
Other sales, maturities and repayments (primarily short-term and other long-term investments)	567		453
Investments purchased or originated:
Debt securities and equity securities	(943)		(4,005)
Commercial mortgage loans	(54)		(94)
Other (primarily short-term and other long-term investments)	(1,028)		(891)
Property and equipment purchases, net	(1,069)		(1,208)
Acquisitions, net of cash acquired	(132)		(443)
Divestitures, net of cash sold	—		13

Other, net	(485)		(117)
NET CASH USED IN INVESTING ACTIVITIES	(1,911)		(4,734)
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds	120		127
Withdrawals and benefit payments from contractholder deposit funds	(180)		(139)
Net change in short-term debt	366		1,484



Repayment of long-term debt	(3,000)		(2,967)
Net proceeds on issuance of long-term debt	4,462		1,491
Repurchase of common stock	(5,012)		(1,740)
Issuance of common stock	283		113
Common stock dividend paid	(1,183)		(1,092)
Other, net	(255)		(321)
NET CASH USED IN FINANCING ACTIVITIES	(4,399)		(3,044)
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash	6		2
Net (decrease) increase in cash, cash equivalents and restricted cash	(1,153)		2,570
Cash, cash equivalents and restricted cash January 1, (1)	8,337		5,976
Cash, cash equivalents and restricted cash, September 30, (2)	7,184		8,546
Cash and cash equivalents reclassified to assets of businesses held for sale	(1,249)		—
Cash, cash equivalents and restricted cash September 30, per Consolidated Balance Sheets (2)	$	5,935	$	8,546
Supplemental Disclosure of Cash Information:
Income taxes paid, net of refunds	$	839	$	1,380
Interest paid	$	1,037	$	1,019

(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	12

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	25
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 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 during the three months ended March 31, 2024.

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, including adjustments to align with the final balance sheet of the divested businesses (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)	September 30, 2024		December 31, 2023
Pharmaceutical manufacturers receivables	$	13,708	$	8,169
Noninsurance customer receivables	12,615		8,044
Insurance customer receivables	2,732		2,359
Other receivables	323		272
Total	$	29,378	$	18,844
Accounts receivable, net classified as assets of businesses held for sale	(1,532)		(1,122)
Total	$	27,846	$	17,722

These accounts receivable are reported net of our allowances of $4.6 billion as of September 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 $88 million as of September 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.

We sold accounts receivable under the Facility of $1.3 billion and $1.0 billion for the three months ended September 30, 2024 and 2023, respectively, and $4.5 billion and $1.0 billion for the nine months ended September 30, 2024 and 2023, respectively. For the three and nine months ended September 30, 2024 and 2023, factoring fees paid were not material. As of September 30, 2024, there were $258 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 September 30, 2024 and December 31, 2023, there were $1.1 billion 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 September 30, 2024 and December 31, 2023, $1.6 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 September 30, 2024, we have been informed by the financial institution that $534 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 purchase price of approximately $3.3 billion cash, subject to applicable regulatory approvals and other customary closing conditions, including adjustments to align with the final balance sheet of the divested businesses. 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)	September 30, 2024		December 31, 2023
Cash and cash equivalents	$	1,249	$	467
Investments	1,614		1,438
Accounts receivable, net	1,532		1,122
Other assets, including Goodwill (1)	2,479		2,963
Total assets of businesses held for sale	6,874		5,990
Insurance and contractholder liabilities	1,568		1,636
All other liabilities	1,207		1,059
Total liabilities of businesses held for sale	$	2,775	$	2,695

(1) Includes Goodwill of $396 million as of September 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 $77 million pre-tax ($59 million after-tax) for the three months ended and $177 million pre-tax ($135 million after-tax) for the nine months ended September 30, 2024, compared with $13 million pre-tax ($9 million after-tax) for the three months ended and $20 million pre-tax ($15 million after-tax) for the nine months ended September 30, 2023.

Note 6 – Earnings Per Share

Basic and diluted earnings per share were computed as follows:


	Three Months Ended
	September 30, 2024						September 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	$	739			$	739	$	1,408			$	1,408
Shares:
Weighted average	278,457				278,457		294,058				294,058
Common stock equivalents			2,939		2,939				3,073		3,073
Total shares	278,457		2,939		281,396		294,058		3,073		297,131
Earnings per share	$	2.65	$	(0.02)	$	2.63	$	4.79	$	(0.05)	$	4.74


	Nine Months Ended
	September 30, 2024						September 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	$	2,010			$	2,010	$	4,135			$	4,135
Shares:
Weighted average	282,005				282,005		294,752				294,752
Common stock equivalents			3,037		3,037				2,911		2,911
Total shares	282,005		3,037		285,042		294,752		2,911		297,663
Earnings per share	$	7.13	$	(0.08)	$	7.05	$	14.03	$	(0.14)	$	13.89

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 September 30,		Nine Months Ended September 30,

(In millions)	2024	2023	2024	2023
Anti-dilutive options	0.8	0.9	1.0	0.9

The Company held approximately 122.5 million shares of common stock in treasury at September 30, 2024, 107.4 million shares as of December 31, 2023 and 105.7 million shares as of September 30, 2023.

The increase in Treasury stock as of September 30, 2024 and the reduction in weighted average shares outstanding for the three and nine months ended September 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"). 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)	September 30, 2024		December 31, 2023
Short-term debt
Commercial paper	$	1,635	$	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)	893		—
Other, including finance leases	44		42
Total short-term debt	$	2,572	$	2,775
Long-term debt
$900 million, 3.250% Notes due April 2025 (2)	—		882
$1,216 million, 4.125% Notes due November 2025 (1)	1,215		2,197
$1,284 million, 4.500% Notes due February 2026 (1)	1,285