Ladies and gentlemen, thank you for standing by for the Cigna Group's Fourth Quarter 2025 Results Review. At this time, callers are in a listen-only mode. We will conduct a question and answer session later during the conference and review procedures on how to enter the queue to ask questions at that time. If you should require assistance during the call, please press 0 on your touch-tone phone. As a reminder, ladies and gentlemen, this conference, including the Q&A session, is being recorded. We'll begin by turning the conference over to Ralph Giacobbe. Please go ahead.

Thanks. Good morning, everyone. Thanks for joining today's call. I'm Ralph Giacobbe, Senior Vice President of Investor Relations. With me on the line this morning are David Cordani, Cigna Group's Chairman and Chief Executive Officer, Brian Evanko, President and Chief Operating Officer, and Ann Dennison, Chief Financial Officer. In our remarks today, David, Brian, and Ann will cover a number of topics, including our fourth quarter and full year 2025 financial results, and our financial outlook for 2026. Following their prepared remarks, David, Brian, and Ann will be available for Q&A. As noted in our earnings release, when describing our financial results, we use certain financial measures including adjusted income from operations and adjusted revenues which are not determined in accordance with accounting principles generally accepted in the United States, otherwise known as GAAP. A reconciliation of these measures to the most directly comparable GAAP measures, shareholders' net income and total revenues, respectively, is contained in today's earnings release which is posted in the Investor Relations section of the cignagroup.com. We use the term labeled adjusted income from operations and adjusted earnings per share on the same basis as our principal measures of financial performance. In our remarks today, we will be making some forward-looking statements including statements regarding our outlook for 2026 and future performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. A description of these risks and uncertainties is contained in the cautionary note to today's earnings release and in our most recent reports filed with the SEC. Regarding our results in the fourth quarter, we recorded after-tax special item charges of $483 million or $1.82 per share. Details of the special items are included in our quarterly financial supplement. Additionally, please note that when we make prospective comments regarding financial performance, including our full year 2026 outlook, we will do so on a basis that includes the potential impact of future share repurchases and anticipated 2026 dividends. With that, I'll turn the call over to David.

Thanks, Ralph. Good morning, everyone, and thanks for joining our call. 2025 was a pivotal year for our company. We delivered new innovations for the benefit of our customers, strengthened meaningful partnerships, and extended strategic client relationships. Today, I'll briefly focus my comments on our financial commitments for 2025 and how we are leading through a dynamic environment by evolving and advancing our business for the benefit of our customers, clients, and partners. Then Brian will provide an update on our performance in our growth platforms and perspective on the year ahead. Then Ann will review additional details on our results and our '26 outlook, and we'll take your questions. Let's get started. In 2025, I'm pleased to report that the Cigna Group delivered full-year adjusted revenue of $275 billion or 11% growth. Full-year adjusted earnings per share of $29.84, a 9% increase, building on a multiyear track record of sustained earnings growth. We also took steps forward in improving our customer experience as evident by the increase in our customer net promoter score year over year in each of our largest businesses. At the Cigna Group, we also continue to shape our portfolio in 2025, emphasizing businesses where we see clear opportunities to generate attractive, sustainable growth. For example, we further expanded our specialty capabilities to serve hospitals and health systems, in part with our new investment in Shields Health Solutions. And we completed the sale of Cigna Healthcare's Medicare business earlier last year. We are well-positioned to continue leading and growing in a rapidly changing environment. To that end, I want to briefly comment on our global settlement with the Federal Trade Commission announced yesterday. The settlement is a comprehensive resolution of all matters brought by the FTC regarding our pharmacy benefits business. It includes the industry-wide insulin…

Thank you, David. Good morning, everyone. I'll start by outlining some highlights of our business performance in the fourth quarter and the full year. I will then highlight the key innovations we introduced in a dynamic environment and outline our view of the years ahead. Our performance underscores the value we provide for those we serve through our three business platforms, providing multiple paths for sustainable growth, including our specialty and care services businesses within EverNorth, our pharmacy benefit services business, also within EverNorth, and Cigna Healthcare, our health benefits business. During the quarter, our EverNorth portfolio demonstrated continued performance. Starting in our Specialty and Care businesses, we delivered strong results with 14% adjusted revenue growth, reflecting the demand for our services. And we saw 13% year-over-year growth in the number of specialty scripts in 2025. This is supported by the shift to biosimilars and our industry-leading patient support in Accredo. Our portfolio shaping efforts have resulted in an expansion of our specialty capabilities to serve hospitals and health systems, in part through our investment in Shields Health Solutions that we announced in late 2025. Next, in EverNorth Pharmacy Benefit Services business, our fourth quarter and full-year results reflect continued solid performance. We built on our track record of innovative benefit solutions to meet market demands. This includes our suite of GLP-1 solutions. In 2025, we added inReachRx, a new patient support model designed for pharmacies dispensing GLP-1 drugs, committed to providing enhanced clinical services. We also expanded our patient assurance program to include these GLP-1 medicines, which sets caps on member out-of-pocket costs to improve predictability and affordability. And we are proud of our continued focus on service. We delivered a seamless January 1 implementation for new and existing clients, ensuring customers and patients have access to care when…

Thank you, Brian, and good morning, everyone. Today, I'll review Cigna's fourth quarter and full year 2025 results and I'll provide our outlook for 2026. We are pleased to deliver another strong year for the Cigna Group, reflecting focused execution across EverNorth and Cigna Healthcare, with both segments achieving pretax adjusted earnings at or above the outlook we shared a year ago. For full year 2025, we delivered consolidated adjusted revenues of $275 billion, adjusted after-tax earnings of $8 billion, and adjusted earnings per share of $29.84. Now turning to our segment results. I'll start with EverNorth. 2025 marked another year of growth in EverNorth, and the introduction of an industry-leading innovation in pharmacy benefit services, as we advance our more simple, predictable, and transparent rebate-free model. We also advanced our specialty and care services capabilities through a strategic investment in Shields Health Solutions as we build on our market-leading position and enhance our offerings in one of the largest and fastest-growing areas in health care. Fourth quarter revenues grew to $63.1 billion and pretax adjusted earnings grew to $2.2 billion, in line with expectations. Our specialty and care services business delivered strong growth, generating $26.7 billion in revenue, an increase of 14% year over year, and $1 billion in adjusted earnings. This performance reflects sustained momentum in our fastest-growing business, driven by robust specialty volumes and rising biosimilar use, which continues to generate meaningful savings for our patients and clients. Our pharmacy benefit service business delivered $36.3 billion in revenue and $1.2 billion in adjusted earnings, reflecting the impact of our strategic investments, including initiatives to enhance patient experience. Overall, the fourth quarter capped another year of growth for EverNorth. The underlying strength across our EverNorth businesses reinforces our confidence in making deliberate near-term investments to transform our pharmacy…

Ladies and gentlemen, at this time, if you do have a question, please press *. If someone asked your question ahead of you, you can remove yourself from the queue by pressing star 2. Also, if you're using a speakerphone, please pick up your handset before pressing the button. One moment please for the first question. Our first question comes from Lisa Gill with JPMorgan. Your line is open. You may ask your question.

Oh, thanks very much, and good morning. David, I feel like we've been waiting for a long time for this PBM legislation to finally pass. It's finally passed. You've put behind you the FTC suit. Can we talk about a few things? The first is the change in economics. You talked about this with the new plan in October, but now that everything's kind of settled in place, we've got legislation, etcetera, can you spend a few minutes talking about the margin profile of what we would expect in the steady state for the PBM? And then secondly, one of the things that stood out to me in the FTC settlement was the moving of the GPO back to the US from Switzerland. I want to understand what that means to the tax rate. My understanding is that the tax rate over in Switzerland is about 15%. When I think about it then coming back, you know, what's the financial implication for that as well?

Good morning, Lisa. Thanks for your comments and your question. So first, pulling back up, we've been saying for some time that the pharmacy services space would go through a clearing event, be it driven by market innovation, legislation, or regulation. When you step back, many of those forces converged this week. And the clarity of direction that we established back in 2025 with the work we started in early 2025 and announced in the third quarter of 2025 with our new innovative model, from our point of view, is directly aligned. So to the first part of your question, at a level, as we said in the third quarter of last year, we believe the margin profile will remain similar. We have significant experience with a variety of programs today with the diverse population we serve, be it fee-based, full pass-through, the continued innovation we drive with our clinical programs and services that we are able to offer. From a big picture standpoint, we believe the margin profile will be similar and therefore, we believe the underlying growth algorithm for the pharmacy benefit services portion of our portfolio will remain intact to be similar as we get through this innovation. And importantly, before I come to your tax question, it's important to really underscore the underpinnings of our innovation. First and foremost, it starts with a customer-first orientation in its design, is therefore built to ensure that we are capable of delivering the lowest out-of-pocket cost for the consumer each and every time they consume a pharmaceutical at the counter. Most likely through their benefit program. In the vast majority of cases, that's the instance in unique cases where it could be a cash pay program or a direct program, etcetera. We have the ability to be able to…

Thank you. Our next question comes from Scott Fidel with Goldman Sachs. Your line is open. You may ask your question.

Hi. Thanks. Good morning. Just wanted to follow-up on Lisa's and then ask a follow-up around Brian's comments on the new pricing model with the customer. So first question, following up on Lisa's question, is just it really does feel like there's been a real sea change, inflection, and just the amount of activity and developments that actually occurred around sort of moving the PBM pricing model forward. And just from curious from your perspective is, do you feel like at this point now, you've largely fully aligned your PBM model with how the regulators, with how the policymakers, have been really pushing the industry to adapt to? Or are there still some regulatory battles, residual battles still ahead? And then why don't I just ask Brian around the PBM clients in terms of moving to the new pricing model, just the traction that you're seeing there in terms of your updated view on the ramp that you're expecting. In terms of, you know, '26 through '28. The percentage of clients that you expect to move on to the PBM pricing model? Thanks.

Scott, good morning. It's David. Let me take the first part of your question, and I'll transition to Brian for the second part. First, just contextually, it's important to note we are proud of the significant value that has been delivered over a long period of time to the people we have the privilege of serving. Our customers across the United States. And by way of context there, fully 80% of the Express Scripts customers have less than $250 out of pocket over the course of a full year. I'm going to come back to that in a moment. And as I noted, through the good work of the pharmacy benefit services industry over a long period of time, 90% of all drugs consumed in America are generic, and they make up just over 10% of the total cost equation. But 10% are brand, which make up almost 90% of the cost equation. That's creating undue pressure and force on everybody in the model today, including out-of-pocket dislocation for consumers. So when you come back to our model, we are confident that our model is built, the new innovation is built through a customer-first, no rebate, no spread, fully transparent, fee-based model where we step into the advocacy role for the consumer at the point of consumption of a pharmaceutical each and every time at the counter to dynamically shop and make sure they get the lowest out-of-pocket costs. So when you look at any of the legislation or regulation, it's been oriented around improving affordability and predictability, harnessing ultimately, transparency, and expanding value for ultimately the consumers along with the clients. Our innovation squarely goes in that direction, and we are excited and confident to lead the way for the industry. I'll transition to Brian for the second part of your question.

David. Morning, Scott. As it relates to the adoption rates and the pricing model, etcetera, consistent with what we talked about in the third quarter call. The entire Cigna Healthcare fully insured book will be adopting the new model in 2027. We expect at least 50% of our EverNorth business will adopt the model by year-end 2028. Early feedback from clients, brokers, and other external stakeholders has been positive to date. And I think importantly, coming back to link Lisa's question and yours, the core value creators in both our legacy models and our new rebate-free model really remain the same. Think about securing better unit pricing for prescription drugs, administering benefits for plan sponsors, and supporting patients with clinical safety checks and advanced clinical programs. Those three core value creators are the same in the legacy model as they are in the new model that we've introduced. The primary difference is the way in which we're compensated. So there's two primary ways we get paid in the future in this model. The first is a core admin fee. That'll be per member or per script, delinked from the price of the drug, that'll grow with inflation over time. And then the second category would be for clinical programs and other innovations that we bring to market. And we expect to take risk on this portion of compensation. But in aggregate, as David said earlier, we expect to achieve a comparable level of profitability between the legacy model and the new model, although the sources of profit will evolve as I outlined.

Okay. Thank you.

Thank you. Our next question comes from Charles Rhyee with TD Cowen. Your line is open. You may ask your question.

Yes. Thanks for taking the question. First one, on clarification is, I think, Brian, you kind of mentioned that with the settlement, the timing of the settlement requirements, is that aligned with the launch of the new rebate-free model is the first just sort of clarification question. But the second, my second question really is more, you know, obviously, all these settlement agreements are related to the standard offering, right, which largely aligns, it feels like, with the new model that you're launching by 2028. You know, I guess the question is, to the extent that clients don't take this new offering, you know, what is the responsibility for Cigna or EverNorth in this case to push the new standard offering so that these requirements are met? And if clients don't choose to take the new offering, you know, is there any sort of liability to Cigna down the road? And in particular, I'm kind of looking at, for example, ensuring members' out-of-pocket expenses are, you know, lowest net cost. But if an employer doesn't choose that new option or if the employer chooses to maybe increase a coinsurance amount or deductible, is there any kind of responsibility that falls back to Cigna? Thanks.

Charles, good morning. It's David. Let me take the second part of your question, and I'll tag team with Brian on that as well, part of your question he can pick up on. So a few important points here. First, macro. We have and we continue to believe in offering choice to the marketplace. And we serve a diverse number of clients from governmental agencies to health plans to employer clients, etcetera. Two, as Brian noted, we will adopt this innovation on 01/01/2027 for the Cigna Healthcare Guarantee Cost book of business where Cigna is the purchaser. So we will lead in the accelerated adoption. And third, we expect to see significant adoption in 2028, as Brian mentioned before. Second, it will be our standard offering. It will be our lead offering in 2028. And that is congruent with the settlement and the direction. Third, there is no liability that we assume if the adoption rate is above or below that. We will lead the market. We will support this with marketing dollars because we are convicted and believe that this is the future of pharmacy benefit services for the benefit of consumers as well as clients as well as community pharmacists. So our conviction, we will lean in and support the aggressive adoption of this, but choice will still be in the marketplace. We will still be able to afford enable solutions and afford solutions, either rebate, rebate pass-through, otherwise, as the market goes through its transitional process and ultimately, adopt this model on a forward basis. Anything to add to that or to the first part of the question?

Pretty comprehensive answer, David, but just a few additional comments, Charles. So our launch plan from the standpoint of our new rebate-free model is unchanged based upon the FTC agreement that we reached this week. So we'll continue with the same milestones, same expectations. And importantly, as David made reference to earlier, inherent in our new model is what we call our price assure technology, which guarantees patients the lowest possible price on the drug when they get it filled. So whether that's the price we've negotiated with drug manufacturers, whether it's a cash pay alternative, whether it's their co-pay, whatever the lowest possible price is, we're guaranteeing in the new model that the patient will get that. And so that enables us to meet the spirit of the FTC's goals as well to drive lower patient out-of-pocket. And to the point of what else could be a little bit different, Lisa's question earlier, the move of our GPO capabilities from Switzerland to the US is unrelated to the new rebate-free model. So there's some elements of the FTC agreement that are unrelated to it. But the launch plan for our rebate-free model is unchanged as a result of the agreement.

Thank you.

Thank you. Our next question comes from Kevin Fischbeck with Bank of America. Kevin, your line is open. You may ask your question.

Great. Thanks. I'm a little bit surprised that the MLR in 2026 isn't expected to make any progress given exchanges should be repriced and smaller and stop loss. It sounds like you're repricing that again, getting, generally speaking, better pricing this year than last year. Why is that? And then, I guess, if you could just maybe give us a sense on the current business mix, what the right MLR to think about is when the business is fully repriced? In the future. Thanks.

Morning, Kevin. So I'll start by just reminding you what I mentioned in my prepared remarks, our 2026 MCR outlook incorporates the pricing actions we've taken across stop loss and the individual exchange businesses as well as the assumption that the cost trend environment remains elevated. So when thinking about the walk, the MCR walk from 25 to 26, I point to two things that reduce the MCR and two things that increase it. With respect to the reductions, within stop loss, pricing is tracking in line with expectations, and we've achieved rate increases consistent with our targets for improvement in 2026. And then the second is for our individual business, we've repriced for margin improvement. So those are the two things that will reduce MCR going into '26. Items that increase the MCR on a comparative basis, if you recall, the 2025 MCR benefited from several one-time items in our individual business, both of which impact the jump-off point for the year and tempered the year-over-year MCR improvement. And beyond those items, there are mixed dynamics to consider as well. And lastly, I'd say sort of overall, our assumptions incorporate appropriate prudence given the continued elevated cost environment. So to summarize, our MCR outlook incorporates stop loss and individual pricing actions, one-time impact to 25 as well as mixed considerations impact that year-over-year view. And we continue to assume an elevated cost environment and appropriate prudence. And for your question around, you know, the MCR, I'd point you to the outlook that we provided in terms of range where we expect to end up for 2026.

Thank you. Our next question comes from Justin Lake with Wolfe Research. Your line is open. You may ask your question.

Thanks. Good morning. I wanted to ask a couple more PBM questions. As you look out to 2027, it certainly seems like you don't expect the business transition associated with the FTC settlement and the legislation to be a headwind to earnings, but wanted to confirm that is the case, and you expect 2027 PBM's earnings growth at this distance to be in line with your long-term algorithm. And then just from an accounting perspective, is there any changes to PBM revenue recognition here from all these business model changes effectively, you know, to move away from spread pricing, rebate guarantees, towards a fee-based model. Will PBM still be able to book the total pharmacy spending as revenue? Or would it move to kind of booking fee revenue similar to ASL on the medical side? Thanks.

Morning, Justin. So on the first part of your question, at this point in time, the FTC agreement will not impact our '27 financial outlook. Many of the agreements and commitments are multiyear in nature as we talked about earlier. And as David said, our long-term growth algorithm for PBS remains intact as we move through the transitional period here. As we talked about on the third quarter call, we do expect 2026 and 2027 to have investment-related costs as we build out technology and infrastructure to support our new rebate-free model. So that's really the only thing I'd have you think about as it relates to 2027 in terms of the PBS outlook. On the revenue recognition question, at this point in time, we do not expect there to be changes in the way that our revenue is being recognized in the PBS segment. Even with the transition to a fee-based model as opposed to a spread or rebate-oriented model that we have today. So we'll refine that over time and certainly can take that offline with you, but do not expect a change in the denominator and the margin profile.

Thank you. Our next question comes from Erin Wright with Morgan Stanley. Your line is open. You may ask your question.

Great. Thanks. I know there's a lot of focus on the PBM, but can you talk about the specialty business? You mentioned some of the strong organic growth there. Can you unpack a little bit some of the key drivers there, what you're anticipating in 2026? Any other implications, you know, from some of the dynamics at the PBM side as well. But also biosimilar pipeline. And as we head into 2026, how you're thinking about that? Thanks.

Good morning, Erin. It's Brian. So as we mentioned in our prepared comments, really pleased with the momentum of the specialty business, 14% top-line growth and attractive earnings contributions alongside of that. And we've talked about, before with you, this is already a $400 billion plus addressable market growing at a high single-digit secular growth rate, and we're really well-positioned to capitalize on that over the longer run. And we certainly saw those dynamics emerge throughout 2025. So the full year we had 13% growth in prescriptions, higher rate of growth in our Medicare book of business, but also strong growth in the commercial employer and the Medicaid portfolio, in our EverNorth business is really well-positioned to capitalize on each of those different payer types. We continue to expect long-term average annual income growth of 8% to 12% in this business, benefiting from some of these strong secular tailwinds. A few specific TRCs or cost categories I'd highlight that were particularly strong growers include inflammatory, asthma, and allergy. Those generated a good bit of the year-over-year growth in the specialty space. As it relates to biosimilars, we're really pleased to see the building momentum across the United States, really Humira the past two years becoming mainstream. Was a great win for the market. And as David said earlier, we expect another $100 billion of specialty drug spend to be subject to competition from biosimilars and generics by 2030. Each of these biosimilars have a slightly different adoption rate based on factors such as interchangeability, dosage levels, branded alternatives, and other dimensions. But we've, as you know, introduced a $0 patient out-of-pocket for both Humira and Stellara. And the Humira penetration in 2025 ended up representing the vast majority of eligible scripts. So that's clearly been a success story for American HealthCare. From the standpoint of patients getting significant savings, financiers, whether those be employers or health plans, getting the benefit of the savings on these biosimilars, and we look forward to continue driving savings for patients in the future in the biosimilar and specialty generic space. To kind of wrap this up, this space we're really excited about. It's 35% of the company's income now. That percentage will continue to grow in the future as we execute.

Thank you. Our next question comes from AJ Rice with UBS. Your line is open. You may ask your question.

Hi, everybody. Thanks for the question. First, just a point of clarification to the previous comments. You guys gave the outlook for the new rebate-free model. And what that might mean for growth. You talked about it in the third quarter. You haven't really changed that today, but you obviously had the FTC settlement and other things. Were those, I know those don't happen overnight. Were those largely contemplated when you made your comments about the outlook in the third quarter? And then the other thing I was wondering on your deals with manufacturers, on the pharmacy side. Do those need to be significantly renegotiated? How much of an unknown is that over the next few years? And do you envision formulary changes significant any other things we should be thinking about from the cost side of the pharmacy business?

AJ, good morning. It's David. Few parts to your question there. First, on your opening portion of your question. You're correct. Our outlook for the 2026 timeframe and our outlook for the direction of our new pharmacy benefit innovation remains consistent, both the adoption target for '27, the adoption target for '28, and the overall margin profile. Two, as I noted earlier, we began working on that in early 2025, the architecture of it, the design of it, etcetera, and we announced it in October, as you recall, of '25. And the architecture of what we built is quite congruent with where the regulatory environment was heading and was likely to head. When you step back, you can look at the legislative environment or the regulatory environment and say, what is the focus? The focus here is on increased transparency. The focus is on an environment that puts the customer first and tries to optimize the customer's out-of-pocket and improve the customer's affordability. It's one that is more performance-oriented. In some examples, I'll focus on the critical role of independent pharmacists in rural locations, etcetera. That was contemplated in our design that we began approximately a year ago. So, therefore, no change in the direction as a result of the settlement. No change in our direction as a result of what we saw in the legislation that passed this week. On the second part of your question, yeah, there's work that sits in front of us to do, as Brian talked about in the third quarter call, and we referenced briefly here, in terms of the build-out of the capabilities. But it is very familiar work to us and for our organization in terms of whether it's the technology work that needs to be enhanced, amplifying capabilities that we're already…

Okay. Thank you.

Thank you. Our next question comes from Steven Baxter with Wells Fargo. Your line is open. You may ask your question.

Yeah. Hi. Thank you. I was hoping you could maybe expand a little bit more on the health care medical membership outlook that you gave. Seems like we're seeing a bit more of an outsized shift into ASO funding models based on some of the other reports this earnings season. Maybe that's the higher cost run environment. So was hoping you could expand a little bit on what you're seeing there, whether you might see more outsized growth in Select this year, and then just broadly how you're thinking about in-group enrollment trends given some of the uncertainty in the macro right now. Thank you.

Morning, Steven. It's Brian. So as it relates to the Cigna Healthcare membership outlook, as you saw in the press release, we expect flat year over year at about 18.1 million lives. And really, you can think of that big picture as we expect growth in our US Employer and international health businesses offset by a decline in individual exchange customers. Within the US Employer portfolio, we expect to see growth in both our select and middle market sub-segments, reflecting the continued strength of the consultative model along with our integrated medical, pharmacy, and behavioral offerings plus our focus on affordability for these employers. I would not expect an outsized year of growth in your question on Select necessarily, but we do expect growth in that space in 2026. And that growth in Select and middle market is partially offset by some decline in national accounts customers in 2026, similar to what we signaled to you previously. Within the individual exchange business, we expect to end 2026 with fewer than 300,000 customers, reflecting another year where we prioritized margin over growth. So, again, the net effect of all of this is membership that's approximately flat, although we anticipate an attractive year of earnings growth within Cigna Healthcare. As it relates to the funding mix, we expect our group risk business to be stable for 2026 compared to 2025. So think of around 2.2 million lives, which again reflects our disciplined pricing posture. As we talked about in prior settings, our select segment mix today is roughly two-thirds self-funded. And our net growth in Select has been coming from ASO and level-funded style solutions in recent years. And as a reminder, we're not active in the under 50 regulated small group markets. So our commercial group risk business here is essentially all large group in nature. On in-group enrollment trends, we are not seeing anything out of the ordinary. Obviously, we continue to monitor economic data and unemployment data, but today, we have not seen anything out of the ordinary. And our 2026 outlook reflects our current view of what the economy will do.

Thank you. And this question comes from Jason Cassorla with Guggenheim. Your line is open. You may ask your question.

Great. Thanks. Good morning. I wanted to ask on specialty and care for 2026. I just wanted to confirm are you still anticipating AOI growth at the higher end of your 8% to 12% target for '26? And then can you help spike out what the implied AOI growth would be when excluding the income attribution from the Shield investment? Just maybe, like, more core basis growth would be helpful. Thanks.

Sure. Morning, Jason. So for specialty and care, we expect earnings to grow towards the high end of the long-term growth rate, reflecting both strong fundamentals and the contribution from the Shield investment. We're really pleased with what we saw in 2025 overall for specialty and care. Our expectations for 2026 remain consistent with what we shared coming out of the third quarter. We haven't shared the details specifically around Shields. It's built into our expectations. But that takes us to the high end of the range.

Thank you. Our next question comes from Andrew Mok with Barclays. Your line is open. You may ask your question.

Hi, good morning. The operating cash flow and CapEx guidance implies less than 80% free cash flow conversion on your pretax income, which is below recent history and lower sequentially. So can you walk us through the drivers of that pressure and comment on the expected impact of the new rebate-free model on working capital? Thanks.

I'll start with the cash flow expectations. So we were really pleased with $9.6 billion for this year coming out. And as I said in my prepared remarks, we do expect a dynamic of higher cash flow or more cash flow in the back half of the year next year. Stepping back and looking at our 2026 cash flow expectations, that's the decline up to the $9 billion that we're guiding to next year. Roughly $600 million less than what we saw in 2025. That primarily reflects the lower contribution from the PBS business from our pharmacy benefit services business. And really, that includes the impact of large client renewals and some of the investments that we're making in 2026.

And, Andrew, the rebate-free model will not impact the '26 cash flow outlook. And as we get closer to '27 to '28, we can square that up for you a bit in terms of reconciling how that moves year over year.

Great. Thank you.

Thank you. I will now turn the call over to David Cordani for closing remarks.

First, thank you for your questions and your time today. I just want to reiterate a few items. First, with our momentum, we are confident we will deliver on our adjusted EPS outlook of at least $30.25 for 2026. Important to note in the context of a very dynamic environment in 2025, we delivered competitively attractive results, and I'm proud of how our team works tirelessly each and every day for the benefit of those we serve. Where we work to know our customers, help them by delivering personalized solutions and support programs for their unique needs, and working every day to make it easier to access affordable care. We look forward to our future conversations. And have a good day.

Ladies and gentlemen, this concludes the Cigna Group fourth quarter 2025 results review. Cigna Investor Relations will be available to respond to additional questions shortly. A recording of this conference will be available for ten business days following this call. You may access the recorded conference by dialing (866) 405-7290 or (203) 369-0603. There is no passcode required for this replay. Thank you for participating. We will now disconnect.