Cigna Group (NYSE:CI)

Current Tax Expense

The current tax expense shows a generally decreasing trend over the observed periods. Starting at 2,765 million US dollars in 2020, it dropped significantly to 1,587 million in 2021. There was a subsequent increase to 2,087 million in 2022, followed by a reduction again to 1,800 million in 2023 and further down to 1,586 million in 2024. This indicates volatility but an overall downward pressure in current tax liabilities.

Deferred Tax Benefits

Deferred tax benefits present a fluctuating pattern with significant variation in magnitude. In 2020, these benefits were recorded at -386 million US dollars, then decreased to -220 million in 2021, showing a smaller benefit. A sharp increase in deferred benefits was noted in 2022 to -480 million. The most notable change occurred in 2023, when deferred tax benefits spiked substantially to -1,659 million, before reverting sharply to only -95 million in 2024. This sharp fluctuation, especially the peak in 2023, suggests substantial timing differences or changes in tax positions affecting future tax liabilities during that year.

Total Income Tax Expense

The total income tax expense mirrors the general downward trend seen in current taxes but with more pronounced fluctuation due to deferred tax impacts. Starting at 2,379 million in 2020, the amount decreased to 1,367 million in 2021 and rose to 1,607 million in 2022. In 2023, total income taxes drastically dropped to 141 million, the lowest value in the series, correlating with the large deferred tax benefits recorded that year. The amount then recovered to 1,491 million in 2024. This pattern indicates that deferred taxes substantially influence the overall tax expense, particularly in 2023.

Nominal Federal Income Tax Rate

The nominal federal income tax rate remained stable at 21% throughout the observed period from 2020 to 2024, showing no fluctuations.

Change in Valuation Allowance

The change in valuation allowance was not reported until 2023, where it increased significantly to 23.4%, then decreased to 14.6% in 2024, indicating notable adjustments in deferred tax assets valuation in these two years.

State Income Tax (Net of Federal Income Tax Benefit)

This rate fluctuated moderately over the period, starting at a small positive 0.2% in 2020, dipping slightly to -0.1% in 2021, returning to 0.2% in 2022, then sharply declining to -0.7% in 2023 before rising to 1.2% in 2024. This reflects varying impacts of state taxes relative to federal benefits.

Investment Tax Credits

Investment tax credits were introduced in 2022 with a small negative impact (-0.2%) and grew progressively more negative to -0.8% in 2023 and -2.1% in 2024, suggesting increasing utilization or recognition of such credits.

Impact of Businesses Held for Sale

Beginning in 2023, this factor contributed negatively to the tax rate (-3.9%) and slightly less so in 2024 (-2.4%), implying tax adjustments related to divestitures or business sales during these years.

Effect of Foreign Earnings

The effect of foreign earnings steadily increased the tax benefit over the years, moving from -0.6% in 2020 to -4.9% in 2024. This indicates growing influence of foreign income with favorable tax treatment or credits.

Other Foreign and Swiss Tax Attributes

Other foreign tax attributes appeared only in 2023 with a -2.8% impact. Additionally, Swiss tax attributes were significant in 2023, impacting the rate negatively by -30.4%, suggesting substantial specific tax treatments or adjustments related to Swiss operations in that year.

Impact of Sale of Businesses

The impact of sale of businesses was marginal, observed as 1% in 2020, dipping to -0.4% in 2022, and was otherwise not reported, indicating minimal and irregular tax effects from business sales.

Health Insurance Industry Tax

This tax was noted only in 2020 at 0.9%, with no further reported impact in subsequent years, reflecting a discontinued or one-time charge.

Other

Other tax effects showed small negative contributions from 2020 (-0.6%) to 2023 (-0.1%), then turned positive to 0.9% in 2024, indicating minor but varied influences on effective tax rates.

Effective Income Tax Rate

The effective income tax rate showed a declining trend from 21.9% in 2020 to a low of 2.6% in 2023, followed by a sharp increase to 28.3% in 2024. This considerable fluctuation corresponds with the significant tax attribute variations, especially the large Swiss tax benefits in 2023 and their disappearance in 2024, as well as changes in valuation allowances and other factors.

Deferred Tax Assets

The deferred tax assets before valuation allowance increased significantly from 1,499 million US dollars at the end of 2020 to 3,828 million US dollars by the end of 2024. This reflects a substantial growth, particularly noticeable from 2022 onward when the figure almost tripled.

However, the valuation allowance for deferred tax assets also increased negatively from -207 million US dollars in 2020 to -2,332 million US dollars in 2024, indicating a growing reservation against the realizability of these assets.

As a result, the net deferred tax assets, after accounting for the valuation allowance, displayed an initial decrease from 1,292 million US dollars in 2020 to 1,149 million in 2022, followed by a peak at 2,289 million in 2023 before declining to 2,057 million in 2024.

Deferred Tax Liabilities and Net Position

Deferred tax liabilities showed a consistent decrease over the five-year period, moving from -10,231 million US dollars in 2020 to -8,139 million by the end of 2024, suggesting a reduction in deferred tax obligations.

The net deferred income tax liabilities remained negative throughout, though the net liability decreased marginally from -8,939 million in 2020 to -6,082 million in 2024, indicating a trend toward a reduced net deferred tax liability position.

Tax Attributes and Related Assets

Foreign tax attributes were only reported from 2023, with a slight decrease from 1,827 million to 1,752 million in 2024, hinting at relatively stable foreign tax credits or attributes in recent years.

Deferred loss from the sale of a business increased significantly from 584 million in 2023 to 773 million in 2024, showing an increasing deferred tax impact related to disposals.

Other Liabilities and Expenses

Other insurance and contractholder liabilities presented fluctuations but displayed an overall moderate increase from 278 million in 2020 to a peak of 353 million in 2023 before falling to 300 million in 2024.

Loss carryforwards experienced variability, rising from 177 million in 2020 to 278 million in 2021, dropping in the subsequent years, and then recovering to 270 million by 2024, reflecting inconsistency but an overall recovery trend.

Other accrued liabilities decreased steadily from 358 million to 207 million over the five-year span, signifying a consistent reduction in liabilities recorded in this category.

Employee and retiree benefit plan liabilities exhibited a continuous downward trend from 477 million in 2020 to 177 million in 2024, indicating diminished obligations or better funded plans.

Unrealized depreciation on investments and foreign currency translation was reported only from 2022, starting at 156 million, decreasing to 81 million in 2023, and slightly increasing to 93 million in 2024, showing moderate volatility.

Policy acquisition expenses data is incomplete but suggest a decrease, with values of 41 million in 2022, 39 million in 2023, and a negative figure of -74 million in 2024, possibly reflecting a reclassification or adjustments.

The category labeled "Other" varied over the period, showing an overall increase from 209 million in 2020 to 256 million in 2024.

Acquisition-Related and Amortization Expenses

Acquisition-related basis differences consistently decreased in magnitude from -8,989 million in 2020 to -7,822 million in 2024, indicating amortization or write-downs of acquisition balances over time.

Depreciation and amortization expenses likewise declined markedly from -660 million in 2020 to -243 million in 2024, reflecting either a reduction in depreciable assets or changes in amortization schedules.

Summary of Overall Trends

The financial data depicts a dynamic tax position characterized by increased deferred tax assets but accompanied by rising valuation allowances, which moderated the net asset increase.

Deferred tax liabilities decreased, contributing to a reduction in net deferred tax liabilities, yet the net position remained significantly negative, indicating a substantial deferred tax liability overall.

There is evidence of active management or changes related to business disposals and acquisition accounting, reflected in deferred loss increases and decreasing acquisition-related basis differences.

Operational liabilities and expenses such as accrued liabilities and employee benefits consistently declined, indicating possible improvements in cost control or liability management.

Fluctuations in loss carryforwards and other miscellaneous categories underscore variability in tax attributes and other related financial items, with some recovery noted toward the latest period.

Deferred Tax Assets

The deferred tax assets data is available only for the years ending 2023 and 2024, showing values of 1,055 million and 893 million US dollars respectively. This indicates a reduction of approximately 15.3% from 2023 to 2024, suggesting a decrease in the taxable temporary differences or a utilization of deferred tax assets over this period.

Deferred Tax Liabilities

Deferred tax liabilities demonstrate a consistent downward trend throughout the five-year period from 2020 to 2024. Beginning at 8,939 million US dollars in 2020, the liabilities decreased each year, reaching 6,975 million US dollars by the end of 2024. This represents an overall decline of roughly 22% over the five years. The steady reduction may indicate effective management of taxable temporary differences or recognition of liabilities, which leads to a lower tax burden in future periods.

General Observations

The data reveals a pattern of diminishing deferred tax liabilities alongside a more limited snapshot of declining deferred tax assets in the latest two years. The reduction in both deferred tax assets and liabilities could reflect changes in the company's tax positions, such as adjustments in asset values, liabilities, or tax rates applied. The consistent decrease in liabilities suggests an ongoing strategy or operational factors contributing to lower future tax obligations.

The analysis of the adjusted and reported financial data over the five-year period reveals several notable trends and changes in the financial position of the entity.

Total Assets

Both reported and adjusted total assets experienced a general decline from the end of 2020 through 2022, dropping from approximately 155 billion US dollars to around 144 billion. Following this period, there was a recovery and slight increase in total assets by the end of 2023 and 2024, approaching the levels seen at the beginning of the timeframe. The adjusted total assets show a slightly lower value than reported figures in the last two years, highlighting the effect of income tax adjustments.

Total Liabilities

Reported total liabilities fluctuated without a clear upward or downward trend initially, rising from about 105 billion in 2020 to approximately 108 billion in 2021, then dropping to under 99 billion in 2022 before increasing again to nearly 115 billion in 2024. Adjusted liabilities consistently remain at lower levels than reported liabilities throughout the period, reflecting the adjustments made for deferred income taxes. The adjusted liabilities also follow a similar pattern, indicating volatility in debt obligations or other liabilities influenced by tax-related adjustments.

Shareholders’ Equity

Reported shareholders’ equity shows a downward trend over the five years, declining from over 50 billion in 2020 to just above 41 billion by 2024. The adjusted shareholders’ equity follows the same declining trajectory but is consistently higher than the reported figures each year. This difference suggests that tax adjustments provide a more favorable measure of equity than the reported amounts, possibly due to deferred tax assets being recognized in the adjustments.

Shareholders’ Net Income

Reported net income for shareholders declines sharply from 8.5 billion in 2020 to 3.4 billion in 2024, with a notable dip in 2021 and again in 2023. Adjusted net income displays a similar pattern but is consistently lower than the reported net income except in the last year, where the figures are closer. This indicates that income tax adjustments have a significant impact on net income recognition, with the adjusted figures reflecting potentially more conservative income reporting after tax considerations.

In summary, the data suggest a period of declining profitability and equity, coupled with fluctuating asset and liability positions. The adjustments for income tax notably affect the reported values, generally presenting a more conservative but consistent financial position with lower liabilities and higher equity. These patterns indicate the importance of analyzing both reported and adjusted figures to gain a comprehensive understanding of the company's financial health and the effects of deferred income tax on its financial statements.

Net Profit Margin Trends

The reported net profit margin shows a declining trend over the five-year period, decreasing from 5.31% in 2020 to 1.40% in 2024. The adjusted net profit margin follows a similar pattern, declining from 5.07% to 1.36%. The decline is most pronounced after 2022, with a steep drop in 2023 and 2024, indicating reduced profitability on sales after accounting for tax adjustments.

Total Asset Turnover Patterns

Both reported and adjusted total asset turnover ratios demonstrate an increasing trend throughout the observed period. Starting at 1.02 in 2020, the ratio rises steadily, reaching 1.58 reported and 1.59 adjusted by 2024. This indicates improved efficiency in asset utilization to generate revenue over time.

Financial Leverage Development

Reported financial leverage ratios exhibit moderate fluctuation, increasing from 3.09 in 2020 to 3.8 in 2024, with a slight dip around 2022. Adjusted financial leverage follows a similar path but at lower levels, rising from 2.62 in 2020 to 3.29 in 2024. This reflects a growing reliance on debt or other liabilities relative to equity, suggesting increased financial risk over the period.

Return on Equity (ROE) Movement

Reported ROE shows volatility with an initial sharp decline from 16.81% in 2020 to 11.39% in 2021, a rebound to 14.86% in 2022, followed by a decline to 8.37% in 2024. Adjusted ROE presents a similar but generally lower pattern, declining from 13.62% in 2020 to 7.09% in 2024, with the most significant drop between 2022 and 2023. These trends suggest weakening returns to shareholders, particularly after adjustments for deferred taxes.

Return on Assets (ROA) Observations

Reported ROA decreases from 5.44% in 2020 to 2.20% in 2024, reflecting reduced overall asset profitability. Adjusted ROA trends closely align but are slightly lower, dropping from 5.19% to 2.15%. The decline in ROA parallels the drop in profit margins, indicating that despite improved asset turnover, overall profitability on assets is decreasing.

Summary Insights

The company exhibits an overall decline in profitability metrics such as net profit margin, ROE, and ROA over the period analyzed, both in reported and adjusted forms. Despite this, asset utilization efficiency improves markedly, as reflected by the rising total asset turnover ratios. Concurrently, financial leverage is increasing, suggesting higher financial risk exposure. The disconnect between rising asset turnover and declining profitability may be indicative of pressure on margins, higher costs, or less favorable business conditions affecting net income. Adjusted figures, accounting for deferred taxes, consistently show lower profitability and returns, highlighting the impact of tax-related items on financial performance.

Reported shareholders’ net income

The reported shareholders’ net income exhibited a declining trend from 2020 to 2024, starting at 8,458 million US dollars in 2020 and decreasing sharply to 3,434 million US dollars by 2024. Significant drops occurred particularly between 2020 and 2021, and again from 2022 to 2023.

Adjusted shareholders’ net income

The adjusted shareholders’ net income followed a similar downward pattern, decreasing from 8,072 million US dollars in 2020 to 3,339 million US dollars in 2024. The decrease was relatively steady, with the most pronounced decline observed between 2022 and 2023, indicating possibly increased adjustments or operational challenges impacting net profit.

Reported net profit margin

The reported net profit margin mirrored the declining income figures, dropping from 5.31% in 2020 to 1.40% in 2024. This suggests a reduction in profitability relative to revenues over the period. The decrease was continuous year-over-year, with a notable fall between 2022 and 2023.

Adjusted net profit margin

The adjusted net profit margin also declined steadily, from 5.07% in 2020 to 1.36% in 2024. The margins remained slightly lower than the reported ones throughout the time series, indicating adjustments generally reduced the reported profitability. The margins revealed a notable dip from 2022 to 2023, consistent with the pattern in net income.

The financial data reveals a mixed trend in the asset base and related efficiency ratios over the five-year period examined. Total assets, both reported and adjusted for deferred income tax, exhibit a slight decline initially, followed by recovery and modest growth towards the end of the period.

Total Assets

Reported total assets decreased from US$155,451 million in 2020 to a low of US$143,932 million in 2022, representing a contraction of approximately 7.4%. This was followed by a rebound to US$155,881 million in 2024, effectively returning to the 2020 level. The adjusted total assets followed a very similar trend, with a slight divergence from 2023 onwards, indicating some adjustments related to deferred income tax items had a modest effect on asset values.

Asset Turnover Ratios

The reported total asset turnover ratio progressively increased over the period, rising from 1.02 in 2020 to 1.58 by 2024. This indicates improving efficiency in generating revenue from the asset base. The adjusted total asset turnover shows a consistent upward trajectory closely mirroring the reported values, suggesting that the deferred income tax adjustments had minimal impact on turnover efficiency metrics.

Overall, the data suggests that after a period of asset base contraction through 2022, the company regained and slightly expanded its asset base by 2024. Concurrently, it enhanced its ability to utilize those assets more effectively to generate revenue, as indicated by the increased asset turnover ratios. The coherence between reported and adjusted figures implies stability in financial reporting related to tax adjustments. This pattern points to operational improvements or strategic initiatives that optimized asset utilization despite fluctuations in asset size.

Total Assets

The reported total assets show a fluctuating trend, with a slight decline from US$155,451 million in 2020 to US$143,932 million in 2022, followed by a gradual recovery to US$155,881 million in 2024. The adjusted total assets follow a similar pattern, indicating consistency in adjustments applied. The minor difference between reported and adjusted figures in 2023 and 2024 suggests some revisions impacting asset valuation.

Shareholders’ Equity

Reported shareholders’ equity exhibits a consistent downward trend over the period, declining from US$50,321 million in 2020 to US$41,033 million in 2024, representing a significant erosion of equity. Adjusted shareholders’ equity also decreases, though the figures are consistently higher than reported, indicating that adjustments lead to recognition of additional equity value. However, the decline remains substantial, falling from US$59,260 million in 2020 to US$47,115 million in 2024.

Financial Leverage

Reported financial leverage increases gradually from 3.09 in 2020 to 3.8 in 2024, reflecting a rise in the ratio of total assets to shareholders' equity. The adjusted financial leverage likewise shows an upward trend but remains persistently lower than the reported leverage, rising from 2.62 to 3.29 over the same period. This divergence suggests that adjustments reduce the leverage ratio, potentially by increasing equity or adjusting asset values.

Overall Observations

The data reveal a general weakening of the equity base against total assets, as evidenced by rising leverage ratios and declining equity values. The company's asset base displays moderate volatility but stabilizes towards the end of the period. Adjustments for deferred income taxes and other accounting considerations appear to soften the decline in equity and leverage ratios, indicating the importance of these adjustments in portraying the company's financial position accurately. The increasing financial leverage signals heightened risk exposure, which may warrant closer monitoring.

Shareholders' Net Income

Reported shareholders' net income exhibited a declining trend from 2020 to 2024, decreasing from 8,458 million USD to 3,434 million USD. A notable drop occurred between 2020 and 2021, followed by a partial recovery in 2022, before another decline in subsequent years.

Adjusted shareholders' net income followed a similar downward trajectory, starting at 8,072 million USD in 2020 and ending at 3,339 million USD in 2024. The adjusted figures consistently remained below the reported values, with the gap widening somewhat post-2022.

Shareholders' Equity

Reported shareholders' equity showed a steady reduction over the period, declining from 50,321 million USD at the end of 2020 to 41,033 million USD by the end of 2024. Minor fluctuations were observed, with a slight increase in 2023, but the overall trend remained negative.

Adjusted shareholders' equity was consistently higher than reported equity throughout the period, though it also demonstrated a downward trend from 59,260 million USD in 2020 to 47,115 million USD in 2024. The rate of decline was somewhat more gradual compared to the reported equity values.

Return on Equity (ROE)

Reported ROE declined from 16.81% in 2020 to 8.37% in 2024, reflecting a significant decrease in profitability on shareholders’ equity. The trend indicates a diminishing efficiency in generating profits from equity capital.

Adjusted ROE paralleled the reported ROE pattern, declining from 13.62% in 2020 to 7.09% in 2024. Adjusted ROE values were consistently lower than reported ROE, highlighting the impact of income tax adjustments on profitability metrics.

Overall Insights

The analysis reveals a consistent downward trend in net income and equity, both on reported and adjusted bases, over the five-year period. Profitability, as measured by ROE, has notably decreased, suggesting challenges in maintaining prior earnings levels and returns on shareholder investment.

The adjusted figures indicate a more conservative financial position with lower net income and ROE compared to reported numbers, emphasizing the effects of income tax adjustments. This suggests careful consideration is needed when evaluating the company’s financial performance, as tax-related adjustments have a material impact.

Reported Shareholders’ Net Income

The reported shareholders’ net income showed a decline from 8,458 million US dollars in 2020 to 5,365 million in 2021. It then experienced a partial recovery in 2022, reaching 6,668 million, followed by a decrease in the subsequent years to 5,164 million in 2023 and further down to 3,434 million in 2024. The overall trend indicates a downward trajectory after the initial recovery in 2022.

Adjusted Shareholders’ Net Income

The adjusted shareholders’ net income follows a parallel downward trend to the reported figures, starting at 8,072 million in 2020 and declining to 5,145 million in 2021. It increased slightly to 6,188 million in 2022 but then declined sharply to 3,505 million in 2023 and 3,339 million in 2024. The adjustment results consistently show lower income values compared to the reported figures, especially notable in the later years.

Reported Total Assets

Reported total assets remained relatively stable across the periods, with slight fluctuations. Starting at 155,451 million in 2020, total assets decreased marginally to 154,889 million in 2021 and then to 143,932 million in 2022. The assets rebounded to 152,761 million in 2023 and slightly increased further to 155,881 million in 2024, suggesting a recovery after the dip in 2022.

Adjusted Total Assets

The adjusted total assets mirror the reported assets closely, with minimal differences. The values trend similarly, beginning at 155,451 million in 2020 and decreasing to 154,889 million in 2021 and 143,932 million in 2022. Subsequently, they increased to 151,706 million in 2023 and 154,988 million in 2024, indicating consistent asset levels after adjustments.

Reported Return on Assets (ROA)

The reported ROA shows a declining trend over the period. It started at 5.44% in 2020, dropped to 3.46% in 2021, increased slightly to 4.63% in 2022, then decreased again to 3.38% in 2023 and further to 2.20% in 2024. This pattern suggests decreasing efficiency in generating profit from assets, with a minor rebound in 2022.

Adjusted Return on Assets (ROA)

The adjusted ROA also demonstrates a downward trend, consistent with the reported figures. It began at 5.19% in 2020, dropped to 3.32% in 2021, and declined to 4.30% in 2022. Following this, there was a more pronounced decrease to 2.31% in 2023 and a slight reduction to 2.15% in 2024. The adjusted ROA is slightly lower than the reported ROA throughout the periods, reflecting the impact of adjustments on profitability measures.