Stock Analysis on Net

Cigna Group (NYSE:CI)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Cigna Group, income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
U.S. income taxes 1,459 1,679 1,268 2,128 1,476
Foreign income taxes 161 219 207 334 173
State income taxes 180 189 112 303 114
Current taxes 1,800 2,087 1,587 2,765 1,763
U.S. income tax benefits (533) (283) (167) (217) (236)
Foreign income (tax benefits) taxes (1,046) (28) 69 11 16
State income tax benefits (80) (169) (122) (180) (93)
Deferred tax benefits (1,659) (480) (220) (386) (313)
Income taxes 141 1,607 1,367 2,379 1,450

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).

Item Description The company
Current taxes Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Cigna Group current taxes increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.
Deferred tax benefits Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Cigna Group deferred tax benefits decreased from 2021 to 2022 and from 2022 to 2023.
Income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Cigna Group income taxes increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Effective Income Tax Rate (EITR)

Cigna Group, effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Nominal federal income tax rate 21.00% 21.00% 21.00% 21.00% 21.00%
Impact of sale of businesses 0.00% -0.40% 0.00% 1.00% 0.00%
Impact of businesses held for sale -3.90% 0.00% 0.00% 0.00% 0.00%
Effect of foreign earnings -3.10% -1.20% -0.50% -0.60% 0.40%
Health insurance industry tax 0.00% 0.00% 0.00% 0.90% 0.00%
State income tax (benefit), net of federal income tax benefit -0.70% 0.20% -0.10% 0.20% 0.50%
Swiss tax attributes -30.40% 0.00% 0.00% 0.00% 0.00%
Other foreign tax attributes -2.80% 0.00% 0.00% 0.00% 0.00%
Change in valuation allowance 23.40% 0.00% 0.00% 0.00% 0.00%
Other -0.90% -0.40% -0.20% -0.60% 0.20%
Effective income tax rate 2.60% 19.20% 20.20% 21.90% 22.10%

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).

Item Description The company
Effective income tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Cigna Group effective income tax rate decreased from 2021 to 2022 and from 2022 to 2023.

Components of Deferred Tax Assets and Liabilities

Cigna Group, components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Employee and retiree benefit plans 217 189 304 477 511
Other insurance and contractholder liabilities 353 311 263 278 282
Loss carryforwards 200 205 278 177 260
Deferred loss, sale of business 584
Other accrued liabilities 244 265 412 358 183
Policy acquisition expenses 39 41
Unrealized depreciation on investments and foreign currency translation 81 156
Foreign tax attributes 1,827
Other 242 190 246 209 218
Deferred tax assets before valuation allowance 3,787 1,357 1,503 1,499 1,454
Valuation allowance for deferred tax assets (1,498) (208) (246) (207) (196)
Deferred tax assets, net of valuation allowance 2,289 1,149 1,257 1,292 1,258
Depreciation and amortization (371) (512) (698) (660) (630)
Acquisition-related basis differences (8,105) (8,347) (8,726) (8,989) (9,386)
Policy acquisition expenses (312) (289) (113)
Unrealized appreciation on investments and foreign currency translation (104) (171) (223)
Other (41) (212) (122) (293)
Deferred tax liabilities (8,476) (8,900) (10,052) (10,231) (10,645)
Net deferred income tax assets (liabilities) (6,187) (7,751) (8,795) (8,939) (9,387)
Net deferred income tax assets (liabilities) classified as Liabilities of businesses held for sale 449
Net deferred income tax assets (liabilities) per Consolidated Balance Sheets (6,187) (7,751) (8,346) (8,939) (9,387)

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).

Item Description The company
Deferred tax assets before valuation allowance Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Cigna Group deferred tax assets before valuation allowance decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Deferred tax assets, net of valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Cigna Group deferred tax assets, net of valuation allowance decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Net deferred income tax assets (liabilities) per Consolidated Balance Sheets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Cigna Group net deferred income tax assets (liabilities) per Consolidated Balance Sheets increased from 2021 to 2022 and from 2022 to 2023.

Deferred Tax Assets and Liabilities, Classification

Cigna Group, deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Deferred tax assets (reported in Other assets) 1,055
Deferred tax liabilities 7,242 7,751 8,346 8,939 9,387

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).

Item Description The company
Deferred tax assets (reported in Other assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Cigna Group deferred tax liabilities decreased from 2021 to 2022 and from 2022 to 2023.

Adjustments to Financial Statements: Removal of Deferred Taxes

Cigna Group, adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 152,761 143,932 154,889 155,451 155,774
Less: Noncurrent deferred tax assets, net 1,055
Total assets (adjusted) 151,706 143,932 154,889 155,451 155,774
Adjustment to Total Liabilities
Total liabilities (as reported) 106,410 98,981 107,705 105,065 110,395
Less: Noncurrent deferred tax liabilities, net 7,242 7,751 8,346 8,939 9,387
Total liabilities (adjusted) 99,168 91,230 99,359 96,126 101,008
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported) 46,223 44,872 47,112 50,321 45,338
Less: Net deferred tax assets (liabilities) (6,187) (7,751) (8,346) (8,939) (9,387)
Shareholders’ equity (adjusted) 52,410 52,623 55,458 59,260 54,725
Adjustment to Shareholders’ Net Income
Shareholders’ net income (as reported) 5,164 6,668 5,365 8,458 5,104
Add: Deferred income tax expense (benefit) (1,659) (480) (220) (386) (313)
Shareholders’ net income (adjusted) 3,505 6,188 5,145 8,072 4,791

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).


Cigna Group, Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Cigna Group, adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 2.66% 3.72% 3.11% 5.31% 3.35%
Adjusted net profit margin 1.81% 3.45% 2.98% 5.07% 3.15%
Total Asset Turnover
Reported total asset turnover 1.27 1.25 1.11 1.02 0.98
Adjusted total asset turnover 1.28 1.25 1.11 1.02 0.98
Financial Leverage
Reported financial leverage 3.30 3.21 3.29 3.09 3.44
Adjusted financial leverage 2.89 2.74 2.79 2.62 2.85
Return on Equity (ROE)
Reported ROE 11.17% 14.86% 11.39% 16.81% 11.26%
Adjusted ROE 6.69% 11.76% 9.28% 13.62% 8.75%
Return on Assets (ROA)
Reported ROA 3.38% 4.63% 3.46% 5.44% 3.28%
Adjusted ROA 2.31% 4.30% 3.32% 5.19% 3.08%

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).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Cigna Group adjusted net profit margin ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Cigna Group adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Cigna Group adjusted financial leverage ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Cigna Group adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Cigna Group adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Cigna Group, Financial Ratios: Reported vs. Adjusted


Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Shareholders’ net income 5,164 6,668 5,365 8,458 5,104
Revenues from external customers 194,099 179,361 172,529 159,157 152,176
Profitability Ratio
Net profit margin1 2.66% 3.72% 3.11% 5.31% 3.35%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted shareholders’ net income 3,505 6,188 5,145 8,072 4,791
Revenues from external customers 194,099 179,361 172,529 159,157 152,176
Profitability Ratio
Adjusted net profit margin2 1.81% 3.45% 2.98% 5.07% 3.15%

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).

2023 Calculations

1 Net profit margin = 100 × Shareholders’ net income ÷ Revenues from external customers
= 100 × 5,164 ÷ 194,099 = 2.66%

2 Adjusted net profit margin = 100 × Adjusted shareholders’ net income ÷ Revenues from external customers
= 100 × 3,505 ÷ 194,099 = 1.81%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Cigna Group adjusted net profit margin ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Revenues from external customers 194,099 179,361 172,529 159,157 152,176
Total assets 152,761 143,932 154,889 155,451 155,774
Activity Ratio
Total asset turnover1 1.27 1.25 1.11 1.02 0.98
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues from external customers 194,099 179,361 172,529 159,157 152,176
Adjusted total assets 151,706 143,932 154,889 155,451 155,774
Activity Ratio
Adjusted total asset turnover2 1.28 1.25 1.11 1.02 0.98

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).

2023 Calculations

1 Total asset turnover = Revenues from external customers ÷ Total assets
= 194,099 ÷ 152,761 = 1.27

2 Adjusted total asset turnover = Revenues from external customers ÷ Adjusted total assets
= 194,099 ÷ 151,706 = 1.28

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Cigna Group adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 152,761 143,932 154,889 155,451 155,774
Shareholders’ equity 46,223 44,872 47,112 50,321 45,338
Solvency Ratio
Financial leverage1 3.30 3.21 3.29 3.09 3.44
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 151,706 143,932 154,889 155,451 155,774
Adjusted shareholders’ equity 52,410 52,623 55,458 59,260 54,725
Solvency Ratio
Adjusted financial leverage2 2.89 2.74 2.79 2.62 2.85

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).

2023 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity
= 152,761 ÷ 46,223 = 3.30

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 151,706 ÷ 52,410 = 2.89

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Cigna Group adjusted financial leverage ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Shareholders’ net income 5,164 6,668 5,365 8,458 5,104
Shareholders’ equity 46,223 44,872 47,112 50,321 45,338
Profitability Ratio
ROE1 11.17% 14.86% 11.39% 16.81% 11.26%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted shareholders’ net income 3,505 6,188 5,145 8,072 4,791
Adjusted shareholders’ equity 52,410 52,623 55,458 59,260 54,725
Profitability Ratio
Adjusted ROE2 6.69% 11.76% 9.28% 13.62% 8.75%

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).

2023 Calculations

1 ROE = 100 × Shareholders’ net income ÷ Shareholders’ equity
= 100 × 5,164 ÷ 46,223 = 11.17%

2 Adjusted ROE = 100 × Adjusted shareholders’ net income ÷ Adjusted shareholders’ equity
= 100 × 3,505 ÷ 52,410 = 6.69%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Cigna Group adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Shareholders’ net income 5,164 6,668 5,365 8,458 5,104
Total assets 152,761 143,932 154,889 155,451 155,774
Profitability Ratio
ROA1 3.38% 4.63% 3.46% 5.44% 3.28%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted shareholders’ net income 3,505 6,188 5,145 8,072 4,791
Adjusted total assets 151,706 143,932 154,889 155,451 155,774
Profitability Ratio
Adjusted ROA2 2.31% 4.30% 3.32% 5.19% 3.08%

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).

2023 Calculations

1 ROA = 100 × Shareholders’ net income ÷ Total assets
= 100 × 5,164 ÷ 152,761 = 3.38%

2 Adjusted ROA = 100 × Adjusted shareholders’ net income ÷ Adjusted total assets
= 100 × 3,505 ÷ 151,706 = 2.31%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Cigna Group adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.