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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Cigna Group, economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	4,831)	7,303)	6,235)	9,227)	6,090)
Cost of capital²	7.82%	7.68%	7.02%	7.09%	6.96%
Invested capital³	85,777)	85,650)	90,679)	93,748)	93,745)

Economic profit⁴	(1,876)	727)	(130)	2,576)	(433)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 4,831 – 7.82% × 85,777 = -1,876

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Cigna Group economic profit increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Cigna Group, NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Shareholders’ net income	5,164)	6,668)	5,365)	8,458)	5,104)
Deferred income tax expense (benefit)¹	(1,659)	(480)	(220)	(386)	(313)
Increase (decrease) in equity equivalents²	(1,659)	(480)	(220)	(386)	(313)
Interest expense on long-term and short-term debt	1,400)	1,300)	1,300)	1,400)	1,600)
Interest expense, operating lease liability³	15)	13)	17)	23)	25)
Adjusted interest expense on long-term and short-term debt	1,415)	1,313)	1,317)	1,423)	1,625)
Tax benefit of interest expense on long-term and short-term debt⁴	(297)	(276)	(277)	(299)	(341)
Adjusted interest expense on long-term and short-term debt, after taxes⁵	1,118)	1,037)	1,040)	1,124)	1,283)
Net income (loss) attributable to noncontrolling interest	208)	78)	50)	31)	16)
Net operating profit after taxes (NOPAT)	4,831)	7,303)	6,235)	9,227)	6,090)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in equity equivalents to shareholders’ net income.

³ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 445 × 3.45% = 15

⁴ 2023 Calculation
Tax benefit of interest expense on long-term and short-term debt = Adjusted interest expense on long-term and short-term debt × Statutory income tax rate
= 1,415 × 21.00% = 297

⁵ Addition of after taxes interest expense to shareholders’ net income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Cigna Group NOPAT increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Cigna Group, cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Income taxes	141)	1,607)	1,367)	2,379)	1,450)
Less: Deferred income tax expense (benefit)	(1,659)	(480)	(220)	(386)	(313)
Add: Tax savings from interest expense on long-term and short-term debt	297)	276)	277)	299)	341)
Cash operating taxes	2,097)	2,363)	1,864)	3,064)	2,104)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Cigna Group cash operating taxes increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Cigna Group, invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Short-term debt	2,775)	2,993)	2,545)	3,374)	5,514)
Long-term debt	28,155)	28,100)	31,125)	29,545)	31,893)
Operating lease liability¹	445)	460)	595)	643)	631)
Total reported debt & leases	31,375)	31,553)	34,265)	33,562)	38,038)
Shareholders’ equity	46,223)	44,872)	47,112)	50,321)	45,338)
Net deferred tax (assets) liabilities²	6,187)	7,751)	8,346)	8,939)	9,387)
Equity equivalents³	6,187)	7,751)	8,346)	8,939)	9,387)
Accumulated other comprehensive (income) loss, net of tax⁴	1,864)	1,395)	884)	861)	941)
Redeemable noncontrolling interests	107)	66)	54)	58)	35)
Other noncontrolling interests	21)	13)	18)	7)	6)
Adjusted shareholders’ equity	54,402)	54,097)	56,414)	60,186)	55,707)
Invested capital	85,777)	85,650)	90,679)	93,748)	93,745)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of equity equivalents to shareholders’ equity.

⁴ Removal of accumulated other comprehensive income.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Cigna Group invested capital decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

Cigna Group, cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	98,272)	98,272)	÷	128,095)	=	0.77	0.77	×	9.22%	=	7.07%
Debt³	29,378)	29,378)	÷	128,095)	=	0.23	0.23	×	4.07% × (1 – 21.00%)	=	0.74%
Operating lease liability⁴	445)	445)	÷	128,095)	=	0.00	0.00	×	3.45% × (1 – 21.00%)	=	0.01%
Total:	128,095)					1.00					7.82%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	87,529)	87,529)	÷	116,741)	=	0.75	0.75	×	9.22%	=	6.91%
Debt³	28,752)	28,752)	÷	116,741)	=	0.25	0.25	×	3.89% × (1 – 21.00%)	=	0.76%
Operating lease liability⁴	460)	460)	÷	116,741)	=	0.00	0.00	×	2.80% × (1 – 21.00%)	=	0.01%
Total:	116,741)					1.00					7.68%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	72,032)	72,032)	÷	110,326)	=	0.65	0.65	×	9.22%	=	6.02%
Debt³	37,699)	37,699)	÷	110,326)	=	0.34	0.34	×	3.66% × (1 – 21.00%)	=	0.99%
Operating lease liability⁴	595)	595)	÷	110,326)	=	0.01	0.01	×	2.81% × (1 – 21.00%)	=	0.01%
Total:	110,326)					1.00					7.02%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	73,655)	73,655)	÷	113,058)	=	0.65	0.65	×	9.22%	=	6.01%
Debt³	38,760)	38,760)	÷	113,058)	=	0.34	0.34	×	3.96% × (1 – 21.00%)	=	1.07%
Operating lease liability⁴	643)	643)	÷	113,058)	=	0.01	0.01	×	3.51% × (1 – 21.00%)	=	0.02%
Total:	113,058)					1.00					7.09%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	67,686)	67,686)	÷	108,788)	=	0.62	0.62	×	9.22%	=	5.74%
Debt³	40,471)	40,471)	÷	108,788)	=	0.37	0.37	×	4.10% × (1 – 21.00%)	=	1.20%
Operating lease liability⁴	631)	631)	÷	108,788)	=	0.01	0.01	×	3.89% × (1 – 21.00%)	=	0.02%
Total:	108,788)					1.00					6.96%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Cigna Group, economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(1,876)	727)	(130)	2,576)	(433)
Invested capital²	85,777)	85,650)	90,679)	93,748)	93,745)
Performance Ratio
Economic spread ratio³	-2.19%	0.85%	-0.14%	2.75%	-0.46%
Benchmarks
Economic Spread Ratio, Competitors⁴
Abbott Laboratories	-1.81%	0.40%	0.84%	-2.42%	-3.75%
CVS Health Corp.	0.50%	-3.94%	0.03%	0.47%	-0.31%
Danaher Corp.	-7.52%	-2.58%	-1.93%	-3.33%	-6.74%
Elevance Health Inc.	-0.84%	-0.02%	1.25%	-0.74%	0.10%
Humana Inc.	1.20%	2.43%	2.76%	9.63%	7.77%
Intuitive Surgical Inc.	5.74%	5.45%	21.06%	9.05%	25.73%
Medtronic PLC	-3.65%	-2.42%	-4.00%	-3.14%	-2.04%
UnitedHealth Group Inc.	5.77%	4.82%	4.67%	5.25%	5.27%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -1,876 ÷ 85,777 = -2.19%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Cigna Group economic spread ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Cigna Group, economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(1,876)	727)	(130)	2,576)	(433)
Revenues from external customers	194,099)	179,361)	172,529)	159,157)	152,176)
Performance Ratio
Economic profit margin²	-0.97%	0.41%	-0.08%	1.62%	-0.28%
Benchmarks
Economic Profit Margin, Competitors³
Abbott Laboratories	-2.69%	0.56%	1.21%	-4.23%	-6.83%
CVS Health Corp.	0.19%	-1.51%	0.02%	0.24%	-0.17%
Danaher Corp.	-24.70%	-6.40%	-4.82%	-9.76%	-21.84%
Elevance Health Inc.	-0.35%	-0.01%	0.59%	-0.35%	0.05%
Humana Inc.	0.34%	0.76%	1.02%	2.77%	2.28%
Intuitive Surgical Inc.	5.72%	4.71%	16.57%	9.28%	19.07%
Medtronic PLC	-8.24%	-5.30%	-9.60%	-7.73%	-4.86%
UnitedHealth Group Inc.	2.87%	2.47%	2.29%	2.68%	2.57%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenues from external customers
= 100 × -1,876 ÷ 194,099 = -0.97%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Cigna Group economic profit margin improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Cigna Group (NYSE:CI)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin