-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ItlfJ4ybOkhaqfTsA20JU5B/wEswW1RgzozuWSvMYGIac7haOkYtknaSGJ1iX8Ll qhaURfwLIjXxnvc6LhkOQw== 0000893220-94-000094.txt : 19940216 0000893220-94-000094.hdr.sgml : 19940216 ACCESSION NUMBER: 0000893220-94-000094 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940214 ITEM INFORMATION: 5 FILED AS OF DATE: 19940215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIGNA CORP CENTRAL INDEX KEY: 0000701221 STANDARD INDUSTRIAL CLASSIFICATION: 6331 IRS NUMBER: 061059331 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 34 SEC FILE NUMBER: 001-08323 FILM NUMBER: 94509032 BUSINESS ADDRESS: STREET 1: ONE LIBERTY PL 1650 MARKET ST STREET 2: P O BOX 7716 CITY: PHILADELPHIA STATE: PA ZIP: 19192-1550 BUSINESS PHONE: 2157611000 8-K 1 8-K DATED FEBRUARY 14, 1994 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) FEBRUARY 14, 1994 ----------------- CIGNA CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 1-8323 06-1059331 -------- ------ ---------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) ONE LIBERTY PLACE, 1650 MARKET STREET, P.O. BOX 7716 PHILADELPHIA, PENNSYLVANIA 19192-1550 ------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (215) 761-1000 -------------- NOT APPLICABLE ------------------------------------------------------------- (Former name or former address, if changed since last report) 2 Item 5. Other Events. On February 14, 1994, the registrant issued a press release, a copy of which is filed as Exhibit 21 hereto and is incorporated herein by reference. Item 7. Financial Statements and Exhibits. (c) Exhibits accompanying this report are listed in the Index to Exhibits below. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CIGNA CORPORATION Date: February 14, 1994 By: /s/ Gary A. Swords --------------------------- Gary A. Swords Vice President and Chief Accounting Officer Index to Exhibits Method of Sequential Number Description Filing Page No. - ------ ----------- ---------- ----------- 21 CIGNA Corporation Filed herewith. press release dated February 14, 1994 -2- EX-21 2 CIGNA NEWS RELEASE 1 Exhibit 21 [CIGNA NEWS RELEASE LETTERHEAD] For Release: IMMEDIATE Contact: ROBERT W. SULLIVAN, FINANCIAL RELATIONS - (215) 761-6130 MICHAEL J. MONROE, MEDIA RELATIONS - (215) 761-6133 CIGNA'S FOURTH QUARTER AND YEAR-END 1993 RESULTS PHILADELPHIA, FEBRUARY 14, 1994 -- CIGNA Corporation (NYSE:CI) today reported fourth quarter 1993 consolidated net income of $194 million ($2.70 per share), compared with $50 million ($0.70 per share) a year ago. For full year 1993, consolidated net income was $234 million ($3.25 per share). This compares with $311 million ($4.34 per share) a year ago. OPERATING INCOME* Operating income for the fourth quarter of 1993 improved over the comparable period of 1992. The fourth quarter 1993 operating income was $92 million versus $31 million in 1992. For full year 1993, operating income was $10 million versus $145 million in 1992. Absent the referenced adjustments noted below, the fourth quarter 1993 operating income was $92 million versus $41 million in 1992, and for the full year 1993 was $320 million versus $158 million in 1992. "The operating income for our health, pension and life businesses was very strong in the quarter and for the year. Property and casualty results were poor. We have taken a number of actions during the year to restructure the property and casualty business and expect that they will lead to improvements in future results," said Wilson H. Taylor, CIGNA's Chief Executive Officer. * Operating income is defined as net income excluding realized investment gains and losses and the cumulative effect of accounting changes. 2 - 2 - NET INCOME The 1993 net income includes a $244 million after-tax charge for asbestos and environmental legal expenses and a $107 million after-tax restructuring charge affecting mostly the Property and Casualty segment in the third quarter. The 1992 net income included a $140 million net after-tax charge for London reinsurance exposures and a $182 million benefit from resolution of certain federal tax audit issues. For further detail of these and other specific adjustments in 1993 and 1992, see the supplemental information page. The following discussions of segment operating results exclude these adjustments. REALIZED GAINS/LOSSES The 1993 fourth quarter and full year consolidated net income includes after-tax realized investment gains of $102 million ($1.42 per share) and $224 million ($3.11 per share), respectively, compared with gains of $19 million ($0.27 per share) and $192 million ($2.68 per share) in the same periods of 1992. REVENUES Consolidated revenues were $4.9 billion and $4.8 billion for the fourth quarter of 1993 and 1992, respectively. For the full year of 1993, consolidated revenues were $18.4 billion, compared with $18.6 billion in 1992. ASSETS/SHAREHOLDERS' EQUITY Assets at the end of 1993 were $84.9 billion, up from $77.7 billion at year-end 1992. Shareholders' equity was $6.6 billion ($91.12 per share) at December 31, 1993, compared with $5.7 billion ($80.09 per share) at December 31, 1992. In the fourth quarter of 1993, investment 3 - 3 - assets and shareholders' equity increased approximately $1.6 billion and $900 million, respectively, due to the adoption of SFAS 115, which requires certain securities to be carried at fair value versus amortized cost. SEGMENT RESULTS: EMPLOYEE LIFE AND HEALTH BENEFITS This segment, which includes CIGNA's group indemnity and HMO operations, had operating income of $155 million in the fourth quarter of 1993. This compares with operating income of $115 million in the fourth quarter of 1992. For full year 1993, operating income was $464 million, compared with $327 million in 1992. For the full year 1993, the operating income increase reflects improvements in both the group indemnity and HMO operations. Indemnity improvements were due to sound underwriting execution and favorable claim experience. The HMO improvements were attributable to strong membership growth, rate increases and medical cost management; HMO medical membership grew by 400,000 covered lives, or 18%, in 1993. EMPLOYEE RETIREMENT AND SAVINGS BENEFITS This segment, which manages retirement accounts, had operating income of $44 million for both the fourth quarter of 1993 and 1992. For full year 1993, operating income was $175 million, compared with $173 million in 1992. Assets under management at December 31, 1993 were $34.4 billion, an increase of 5 percent from $32.7 billion as of December 31, 1992. Approximately $500 million of this increase resulted 4 - 4 - from the adoption of SFAS 115. Operating income growth for 1993 principally reflects the growth in managed assets. INDIVIDUAL FINANCIAL SERVICES This segment, which includes individual and corporate-owned life insurance as well as annuity businesses, had operating income of $33 million in the fourth quarter of 1993. This compares with operating income of $24 million in the fourth quarter of 1992. For full year 1993, operating income was $115 million, compared with $82 million in 1992. The operating income increase for 1993 reflects improved margins and higher sales on interest-sensitive products. PROPERTY AND CASUALTY This segment, which includes Domestic, International and Reinsurance operations, had an operating loss of $124 million in the fourth quarter of 1993. This compares with an operating loss of $115 million for the fourth quarter of 1992. For the full year 1993, the operating loss was $350 million, compared with a loss of $351 million in 1992. Operating results continue to be adversely affected by the highly competitive commercial pricing environment. The fourth quarter and full year 1993 included pre-tax catastrophe losses of $11 million and $145 million, respectively. This compares with losses of $59 million and $251 million for the 5 - 5 - respective periods of 1992, including $151 million for Hurricanes Andrew and Iniki in full year 1992. The GAAP combined operating ratio after policyholders' dividends was 132 and 137 for the fourth quarter and full year 1993, compared with 128 and 131 for the respective periods of 1992. Excluding the referenced adjustments, the combined ratios for the full year 1993 and 1992 were 128 and 126, respectively. 1994 Catastrophe Experience Relative to recent catastrophes, CIGNA's Property and Casualty segment's preliminary estimate of losses from the Los Angeles earthquake total approximately $60 million (after-tax) and for the severe January weather are approximately $25 million (after-tax). Losses from these catastrophes will be recorded in the first quarter of 1994. OTHER Other Operations, which includes unallocated investment income, expenses and taxes, as well as the results of CIGNA's investment and real estate subsidiaries and settlement annuity business, had an operating loss of $16 million in the fourth quarter of 1993. This compares with an operating loss of $27 million in the fourth quarter of 1992. For the full year 1993, operating losses were $84 million, compared with a loss of $73 million in 1992. For further financial information on the fourth quarter and year-end 1993 results, see attached. 6 CIGNA CORPORATION COMPARATIVE SUMMARY OF FINANCIAL RESULTS (Dollars in millions, except per share amounts)
- ----------------------------------------------------------------------------------------------------------------------- Three Months Ended Twelve Months Ended December 31, December 31, 1993 1992 1993 1992 - ----------------------------------------------------------------------------------------------------------------------- REVENUES Premiums and fees $ 3,660 $ 3,657 $ 13,712 $ 13,924 Net investment income 1,024 981 3,902 3,914 Other revenues 127 141 506 579 Realized investment gains 129 12 282 165 - ----------------------------------------------------------------------------------------------------------------------- Total $ 4,940 $ 4,791 $ 18,402 $ 18,582 - -------------------------------------------------------================================================================ INCOME (LOSS) BY SEGMENT Employee Life and Health Benefits $ 234 $ 129 $ 589 $ 483 Employee Retirement and Savings Benefits 43 44 159 216 Individual Financial Services 31 21 110 86 Property and Casualty (86) (120) (530) (374) Other Operations (28) (24) (94) (74) ------------ ------------ ------------ ------------ INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES 194 50 234 337 Cumulative effect of accounting changes - - - (26) - ----------------------------------------------------------------------------------------------------------------------- NET INCOME $ 194 $ 50 $ 234 $ 311 - -------------------------------------------------------================================================================ SHAREHOLDERS' EQUITY at December 31 $ 6,562 $ 5,744 - ----------------------------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE SHARES OUTSTANDING (thousands) 72,101 71,791 72,022 71,737 - -------------------------------------------------------================================================================ PER SHARE: Income before cumulative effect of accounting changes $ 2.70 $ 0.70 $ 3.25 $ 4.70 Cumulative effect of accounting changes - - - (0.36) - ----------------------------------------------------------------------------------------------------------------------- Net income $ 2.70 $ 0.70 $ 3.25 $ 4.34 - -------------------------------------------------------================================================================ Shareholders' Equity at December 31 $ 91.12 $ 80.09 - ----------------------------------------------------------------------------------------------------------------------- PROPERTY AND CASUALTY STATISTICS (GAAP) Net written premiums $ 1,076 $ 1,217 $ 4,229 $ 4,817 Earned premiums $ 1,112 $ 1,313 $ 4,358 $ 5,132 Underwriting ratios: Loss and loss adjustment expense 89.9% 97.0% 97.6% 99.5% Underwriting expense 37.5% 32.7% 36.8% 32.0% - ----------------------------------------------------------------------------------------------------------------------- Combined ratio 127.4% 129.7% 134.4% 131.5% - -------------------------------------------------------================================================================ Combined after policyholders' dividends 131.9% 128.3% 137.4% 131.3% - -------------------------------------------------------================================================================ Pre-tax catastrophe losses $ 11 $ 59 $ 145 $ 251 - -------------------------------------------------------================================================================
7 CIGNA CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION FINANCIAL DATA EXCLUDING SPECIFIC ADJUSTMENTS - RESULTS OF OPERATIONS (Dollars in millions, except per share amounts) For informational purposes, the following information presents the effects of the items noted below on published results of operations. The information presented in this manner does not conform with Generally Accepted Accounting Principles.
Employee Life & Health Benefits Indemnity HMOs Total 1993 1992 1993 1992 1993 1992 ------------------------------------------------------ Three Months Ended December 31, - ------------------------------- Operating income (loss) as published * $120 $87 $35 $24 $155 $111 After-tax realized investment gains (losses) 79 18 - - 79 18 - ------------------------------------------------------------------------------------------------------------------ Net income (loss) $199 $105 $35 $24 $234 $129 ================================================================================================================== Year Ended December 31, - ----------------------- Operating income (loss) before adjustments $315 $243 $149 $84 $464 $327 3rd qtr. asbestos / environ. litigation expenses - - - - - - Restructuring charges (5) (5) (5) (10) (10) (15) Federal income tax rate change ** 12 - 2 - 14 - London reinsurance exposures - - - - - - Tax audits (1) 114 (4) (6) (5) 108 ------------------------------------------------------ Operating income (loss) as published 321 352 142 68 463 420 ------------------------------------------------------ After-tax realized investment gains (losses) before adjustments 128 63 - - 128 63 Tax audits (2) - - - (2) - After-tax realized investment gains ------------------------------------------------------ (losses) as published 126 63 - - 126 63 - ------------------------------------------------------------------------------------------------------------------ Income (loss) before cumulative effect of accounting changes $447 $415 $142 $68 $589 $483 ==================================================================================================================
8
Employee Individual Retirement & Financial Property & Savings Benefits Services Casualty 1993 1992 1993 1992 1993 1992 ------------------------------------------------------- Three Months Ended December 31, - ------------------------------- Operating income (loss) as published * $44 $44 $33 $24 ($124) ($121) After-tax realized investment gains (losses) (1) - (2) (3) 38 1 - ------------------------------------------------------------------------------------------------------------------ Net income (loss) $43 $44 $31 $21 ($86) ($120) ================================================================================================================== Year Ended December 31, - ----------------------- Operating income (loss) before adjustments $175 $173 $115 $82 ($350) ($351) 3rd qtr. asbestos / environ. litigation expenses - - - - (244) - Restructuring charges - - - - (97) (16) Federal income tax rate change ** 1 - 3 - 24 - London reinsurance exposures - - - - (16) (140) Tax audits 6 27 5 4 3 22 -------------------------------------------------------- Operating income (loss) as published 182 200 123 86 (680) (485) -------------------------------------------------------- After-tax realized investment gains (losses) before adjustments (20) 2 (12) (10) 150 111 Tax audits (3) 14 (1) 10 - - After-tax realized investment gains -------------------------------------------------------- (losses) as published (23) 16 (13) - 150 111 - ------------------------------------------------------------------------------------------------------------------ Income (loss) before cumulative effect of accounting changes $159 $216 $110 $86 ($530) ($374) ==================================================================================================================
9
Earnings Other Consolidated Per Share 1993 1992 1993 1992 1993 1992 ------------------------------------------------------ Three Months Ended December 31, - ------------------------------- Operating income (loss) as published * ($16) ($27) $92 $31 $1.28 $0.43 After-tax realized investment gains (losses) (12) 3 102 19 1.42 0.27 - ------------------------------------------------------------------------------------------------------------------ Net income (loss) ($28) ($24) $194 $50 $2.70 $0.70 ================================================================================================================== Year Ended December 31, - ----------------------- Operating income (loss) before adjustments ($84) ($73) $320 $158 $4.45 $2.20 3rd qtr. asbestos / environ. litigation expenses - - (244) - (3.39) - Restructuring charges - - (107) (31) (1.49) (0.43) Federal income tax rate change ** 6 - 48 - 0.67 - London reinsurance exposures - - (16) (140) (0.22) (1.95) Tax audits - (3) 9 158 0.12 2.20 ------------------------------------------------------- Operating income (loss) as published (78) (76) 10 145 0.14 2.02 ------------------------------------------------------- After-tax realized investment gains (losses) before adjustments (16) 2 230 168 3.19 2.34 Tax audits - - (6) 24 (0.08) 0.34 After-tax realized investment gains ------------------------------------------------------- (losses) as published (16) 2 224 192 3.11 2.68 - ------------------------------------------------------------------------------------------------------------------ Income (loss) before cumulative effect of accounting changes ($94) ($74) $234 $337 $3.25 $4.70 ==================================================================================================================
* Amounts for 1992 include a restructuring charge of $10 million after-tax ($4 million for HMOs and $6 million for Property and Casualty). ** As a result of the increase in the federal corporate income tax rate to 35%, during the third quarter, CIGNA recorded a $48 million tax benefit reflecting the effect of the tax rate increase on its net deferred tax asset (DTA). -----END PRIVACY-ENHANCED MESSAGE-----