-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NHhXeJDO9qPEZWTPA0P6LCV2AOQFMpGXxX4xBsWy9NKB7IH+FDuOUivlSojjmyD+ UaJYrpGg17R5ceLDOuqAUA== 0000950159-97-000250.txt : 19971103 0000950159-97-000250.hdr.sgml : 19971103 ACCESSION NUMBER: 0000950159-97-000250 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971030 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971031 SROS: NYSE SROS: PHLX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIGNA CORP CENTRAL INDEX KEY: 0000701221 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 061059331 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08323 FILM NUMBER: 97705271 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 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) October 30, 1997 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) Item 5. Other Events. On October 30, 1997, the registrant issued a news release, a copy of which is filed as Exhibit 20 hereto and is incorporated herein by reference. Item 7. Financial Statements and Exhibits. (c) The exhibit accompanying this report is 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: October 31, 1997 By: /s/ Gary A.Swords -------------------- Gary A. Swords Vice President and Chief Accounting Officer Index to Exhibits Number Description Method of Filing 20 CIGNA Corporation Filed herewith news release dated October 30, 1997 EX-20 2 EXHIBIT 20 [CIGNA LOGO] Immediate Albert D. Ciavardelli, Investor Relations - (215) 761-6128 Michael J. Monroe, Media Relations - (215) 761-6133 CIGNA REPORTS OPERATING INCOME OF $3.49 FOR THIRD QUARTER AND ANNOUNCES ADDITIONAL $500 MILLION SHARE REPURCHASE AUTHORIZATION PHILADELPHIA, October 30, 1997 -- CIGNA Corporation (NYSE:CI) today reported third quarter 1997 operating income* of $262 million, or $3.49 per share, versus $270 million, or $3.55 per share, reported in the third quarter of 1996. Results for 1997 include approximately $17 million after-tax associated with costs to finance the recent acquisition of Healthsource. For the nine months of 1997, operating income was $792 million, or $10.59 per share, versus $741 million, or $9.68 per share, for 1996. "We continue to be pleased with the solid contributions of each of our operating divisions and anticipate full year results will be ahead of last year," said Wilson H. Taylor, CIGNA's Chief Executive Officer. "The integration of Healthsource is proceeding according to our expectations," Taylor added. * Operating income (loss) is defined as net income (loss) excluding after-tax realized investment results. - 2 - SEGMENT RESULTS: Employee Life and Health Benefits This segment includes CIGNA's HMO and indemnity operations as well as Healthsource results subsequent to the acquisition date of June 25, 1997. The segment had operating income of $128 million in the third quarter of 1997, compared with $127 million for the third quarter of 1996. For the nine months of 1997, operating income was $371 million, compared with $360 million for the same period last year. HMO membership, including the addition of 1.2 million Healthsource members, is now at 5.8 million members, up 9 percent over third quarter 1996, on a comparable basis. Employee Retirement and Savings Benefits This segment, which operates in the defined contribution and defined benefit markets, had operating income of $53 million in the third quarter of 1997. This compares with operating income of $52 million for the same period last year. For the nine months of 1997, operating income was $160 million, compared with $147 million for the nine months of 1996. Assets under management at September 30, 1997 were $45.4 billion, an increase of 16 percent from $39.1 billion as of September 30, 1996. - 3 - Individual Financial Services This segment, which currently includes individual and corporate-owned life insurance; life, accident and health reinsurance; and annuity businesses, had operating income of $51 million in the third quarter of 1997. This compares with operating income of $47 million in the third quarter of 1996. For the nine months of 1997, operating income was $146 million, compared with $121 million in 1996. The individual life insurance and annuity businesses, which -- subject to regulatory approval -- will be sold to Lincoln National Corporation, represent $70 million, or 48 percent, of this segment's operating income in the nine months of 1997. The corporate-owned life insurance and reinsurance businesses, with operating income of $76 million in the nine months of 1997, will be retained by CIGNA. Property and Casualty The property and casualty (P&C) segment includes the Ongoing operations (International and Domestic) and Run-off. Ongoing operations had operating income of $59 million for the third quarter of 1997. This compares with operating income of $57 million for the same period last year. The GAAP combined ratio after policyholders' dividends was 100 for the third quarters of 1997 and 1996. For the nine months of 1997, operating income was $174 million, compared with $154 million for 1996. - 4 - The Ongoing operations had $1 million of after-tax catastrophe losses for the third quarter of 1997, compared with $18 million for the same period last year, which included $13 million for Hurricane Fran. After-tax catastrophe losses for the nine months of 1997 were $10 million, compared with $38 million for 1996. Within the Ongoing operations, International had operating income of $33 million for the third quarter of 1997, compared with $37 million in 1996. The GAAP combined ratio after policyholders' dividends was 95 for the third quarter of 1997, compared with 92 for the same period of 1996. Domestic had operating income of $26 million for the third quarter of 1997, compared with $20 million in 1996. Its GAAP combined ratio after policyholders' dividends for the third quarter of 1997 was 105, compared with 108 for the third quarter of 1996. Run-off operations were breakeven in the third quarter of 1997, compared with operating income of $1 million for the same period in 1996. Other Other Operations includes unallocated investment income, expenses (including debt service) and taxes, and the results of CIGNA's settlement annuity business, investment and real estate subsidiaries and certain new business initiatives. Other Operations had an operating loss of $29 million in the third quarter of 1997, compared with an operating loss of $14 million in the third quarter of 1996. - 5 - For the nine months of 1997, the operating loss was $60 million, compared with a loss of $46 million in 1996. NET INCOME Consolidated net income for the quarter was $279 million, or $3.72 per share, compared with $281 million, or $3.69 per share, a year ago (total weighted average shares were 75.0 million in 1997 and 76.1 million in 1996). For the nine months of 1997, consolidated net income was $846 million, or $11.31 per share, compared with $750 million, or $9.80 per share a year ago. The 1997 third quarter consolidated net income included after-tax realized investment gains of $17 million, or $0.23 per share, compared with gains of $11 million, or $0.14 per share, for the same period of 1996. Consolidated net income for the nine months of 1997 included after-tax realized investment gains of $54 million, or $0.72 per share, compared with gains of $9 million, or $0.12 per share, for the same period of 1996. REVENUES Consolidated revenues for the third quarter and nine months of 1997 were $5.2 billion and $14.5 billion, respectively, compared with $4.7 billion and $14.1 billion for the same periods last year. - 6 - ASSETS/SHAREHOLDERS' EQUITY Assets at September 30, 1997 were $106.4 billion, compared with $98.9 billion at year-end 1996. Shareholders' equity was $8.0 billion ($107.90 per share) at September 30, 1997, compared with $7.2 billion ($97.15 per share) at December 31, 1996. SHARE REPURCHASE CIGNA's Board of Directors today authorized the purchase of up to an additional $500 million of its common stock, depending on prevailing market conditions and alternative uses of capital. This brings total available share repurchase authority to approximately $565 million. Earlier this month, CIGNA resumed repurchase activity and bought 517,000 shares for $89 million, bringing the total shares repurchased in 1997 to 857,000. Quarterly earnings are available on CIGNA's home page on the Internet (http://www.cigna.com). Statements not dealing with historical results are forward-looking and are based on estimates, assumptions and projections. CIGNA cautions the reader that actual results could differ materially from those expected by CIGNA, depending on the outcome of certain factors including: 1) adverse catastrophe experience in CIGNA's property and casualty businesses; 2) adverse property and casualty loss development for events that CIGNA insured in prior years; 3) an increase in medical costs in CIGNA's health care operations, including increases in utilization and costs of medical services; 4) heightened competition, particularly price competition, reducing product margins and constraining growth in CIGNA's businesses; 5) significant changes in interest rates; and 6) charges associated with the Healthsource acquisition. [CIGNA LOGO] CIGNA CORPORATION COMPARATIVE SUMMARY OF FINANCIAL RESULTS (Dollars in millions, except per share amounts)
======================================================================================================== Three Months Ended Nine Months Ended September 30, September 30, 1997 1996 1997 1996 - -------------------------------------------------------------------------------------------------------- REVENUES Premiums and fees $3,925 $3,444 $10,795 $10,333 Net investment income 1,057 1,069 3,172 3,263 Other revenues 175 154 498 448 Realized investment gains 25 18 81 17 -------- -------- -------- -------- Total $5,182 $4,685 $14,546 $14,061 ======== ======== ======== ======== OPERATING INCOME (LOSS) BY SEGMENT (1) Employee Life and Health Benefits: Indemnity operations $76 $73 $202 $198 HMO operations 52 54 169 162 -------- -------- -------- -------- Total Employee Life and Health Benefits 128 127 371 360 Employee Retirement and Savings Benefits 53 52 160 147 Individual Financial Services 51 47 146 121 Property and Casualty: International 33 37 102 102 Domestic 26 20 72 52 -------- -------- -------- -------- Ongoing operations 59 57 174 154 Run-off operations -- 1 1 5 -------- -------- -------- -------- Total Property and Casualty 59 58 175 159 Other Operations (29) (14) (60) (46) -------- -------- -------- -------- Total $262 $270 $792 $741 ======== ======== ======== ======== NET INCOME (LOSS) BY SEGMENT Employee Life and Health Benefits: Indemnity operations $72 $76 $204 $195 HMO operations 52 54 169 162 -------- -------- -------- -------- Total Employee Life and Health Benefits 124 130 373 357 Employee Retirement and Savings Benefits 51 57 167 158 Individual Financial Services 49 47 151 121 Property and Casualty: International 44 39 127 114 Domestic 39 20 86 53 -------- -------- -------- -------- Ongoing operations 83 59 213 167 Run-off operations (1) -- -- (7) -------- -------- -------- -------- Total Property and Casualty 82 59 213 160 Other Operations (27) (12) (58) (46) -------- -------- -------- -------- Total $279 $281 $846 $750 ======== ======== ======== ======== WEIGHTED AVERAGE SHARES OUTSTANDING (thousands) 75,041 76,055 74,791 76,585 ======== ======== ======== ======== EARNINGS PER SHARE: Operating income (1) $3.49 $3.55 $10.59 $9.68 After-tax realized investment gains 0.23 0.14 0.72 0.12 -------- -------- -------- -------- Net income $3.72 $3.69 $11.31 $9.80 ======== ======== ======== ======== SHAREHOLDERS' EQUITY at September 30 $7,991 $7,008 ======== ======== SHAREHOLDERS' EQUITY PER SHARE at September 30 $107.90 $93.22 ======================================================================================================== (1) Operating income (loss) is defined as net income (loss) excluding after-tax realized investment results.
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