-----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, RlCm5kv9wvMX59B5Bn8+3uIWFml7svGkiDXe8sTrCfC25ggkTyo44KuUJM9i+ntC W6D/p0T/L8CEIKqTKw9r8Q== 0000950159-98-000196.txt : 19980803 0000950159-98-000196.hdr.sgml : 19980803 ACCESSION NUMBER: 0000950159-98-000196 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980730 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980731 SROS: NYSE SROS: PHLX SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIGNA CORP CENTRAL INDEX KEY: 0000701221 STANDARD INDUSTRIAL CLASSIFICATION: ACCIDENT & HEALTH INSURANCE [6321] 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: 98675449 BUSINESS ADDRESS: STREET 1: ONE LIBERTY PLACE 1650 MARKET ST STREET 2: PO BOX 7716 CITY: PHILADELPHIA STATE: PA ZIP: 19192-1550 BUSINESS PHONE: 2157616211 MAIL ADDRESS: STREET 1: TWO LIBERTY PLACE 48TH FLOOR STREET 2: 1601 CHESTNUT STREET CITY: PHILADELPHIA STATE: PA ZIP: 19192 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) July 30, 1998 ------------- 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 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. ------------- A. On July 30, 1998, the registrant issued a news release, a copy of which is filed as Exhibit 20 hereto and is incorporated herein by reference. CAUTIONARY STATEMENT FOR PURPOSES OF THE 'SAFE HARBOR' PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Oral statements made by individuals authorized to speak on behalf of CIGNA Corporation ("CIGNA") that do not deal with historical results are forward-looking and are based on estimates, assumptions and projections. CIGNA cautions 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) the effect on CIGNA's international operations and investments from further significant deterioration in Asian economies. 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: July 31, 1998 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 July 30, 1998 EX-20 2 NEWS RELEASE Exhibit 20 [CIGNA LOGO] For Release: Immediate Contact: Albert D. Ciavardelli, Investor Relations - (215) 761-6128 Michael J. Monroe, Media Relations - (215) 761-6133 CIGNA REPORTS SECOND QUARTER 1998 RESULTS OPERATING EARNINGS PER SHARE UP 5% ON SOLID RESULTS FROM EMPLOYEE LIFE & HEALTH AND RETIREMENT SAVINGS BENEFITS SEGMENTS PHILADELPHIA, July 30, 1998 -- CIGNA Corporation (NYSE:CI) today reported second quarter 1998 operating income* of $276 million, or $1.27 per share, compared with operating income of $270 million, or $1.21 per share, for the same period last year. For the first half of 1998, operating income was $531 million, or $2.45 per share, excluding an after-tax gain of $202 million from the first quarter sale of CIGNA's individual life insurance and annuity businesses. Including the gain on sale, operating income was $733 million, or $3.38 per share. For the first half of 1997, operating income was $530 million, or $2.38 per share. ____________________________ * Operating income (loss) is defined as net income (loss) excluding after-tax realized investment results. All earnings per share amounts are on a diluted basis. - 2 - SEGMENT RESULTS: Employee Life and Health Benefits - --------------------------------- This segment includes CIGNA's HMO and indemnity operations as well as Healthsource results since the acquisition date of June 25, 1997. The segment had operating income of $142 million in the second quarter of 1998, compared with $126 million for the same period last year. For the first half of 1998, operating income was $273 million, compared with $243 million for the same period last year. HMO medical membership at June 30, 1998 was 6.4 million members, an increase of 518,000 members, or 9 percent, from December 31, 1997, and up 12 percent over second quarter 1997 on a pro forma basis. Employee Retirement and Savings Benefits - ---------------------------------------- This segment, which operates in the defined contribution and defined benefit markets, had operating income of $56 million in the second quarter of 1998, compared with $53 million for the same period last year. For the first half of 1998 and 1997, operating income was $112 million and $107 million, respectively. Assets under management at June 30, 1998 were $48.3 billion, an increase of 10 percent from $43.9 billion as of June 30, 1997. - 3 - Individual Financial Services - ----------------------------- CIGNA sold its individual life insurance and annuity businesses effective January 1, 1998 to Lincoln National Corporation. Following the sale, the segment includes the results of CIGNA's corporate-owned life insurance, and life, accident and health reinsurance businesses, as well as the recognition of a portion of the deferred gain from the sale of the individual life insurance and annuity businesses. Operating income for the second quarter of 1998 was $37 million, including $16 million of deferred gain from the sale, compared with operating income of $48 million for the second quarter of 1997. The segment's operating income for the first half of 1998, excluding the $202 million gain on the sale that was recognized at closing, was $78 million, compared with $95 million for the same period last year. Property and Casualty - --------------------- Ongoing operations (Domestic and International operations combined) had operating income of $55 million and a GAAP combined ratio after policyholders' dividends ("combined ratio") of 100 for the second quarter of 1998. This compares with operating income of $59 million and a combined ratio of 100 for the same period last year. For the first half of 1998, operating income was $105 million, compared with $115 million for the first half of 1997. - 4 - Domestic had operating income of $27 million and a combined ratio of 103 for the second quarter of 1998. This compares with operating income of $23 million and a combined ratio of 106 for the second quarter of 1997. International had operating income of $28 million and a combined ratio of 97 for the second quarter of 1998. This compares with operating income of $36 million and a combined ratio of 94 for the second quarter of 1997. Other - ----- Other Operations includes unallocated investment income, interest expense (including debt service associated with the Healthsource acquisition) 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 $14 million in the second quarter of 1998, compared with an operating loss of $16 million for the same period last year. For the first half of 1998, operating losses totaled $37 million, compared with $31 million in the same period of 1997. NET INCOME - ---------- Consolidated net income for the second quarter of 1998 was $308 million, or $1.42 per share, compared with $279 million, or $1.25 per share, for the same period last year. Consolidated net income for the first half of 1998 was $803 million, or $3.70 per share, including an after-tax gain of $202 million from the sale of certain businesses. Consolidated net income for the same period last year was $567 million, or $2.55 per share. - 5 - REVENUES - -------- Consolidated revenues for the second quarter of 1998 were $5.3 billion, compared with $4.7 billion for the same period last year. For the first half of 1998, revenues were $10.7 billion, compared with $9.4 billion for the same period last year. ASSETS/SHAREHOLDERS' EQUITY - --------------------------- Assets at June 30, 1998 were $111 billion, compared with $108 billion at December 31, 1997. Shareholders' equity was $8.3 billion, or $39.29 per share, at June 30, 1998, compared with $7.9 billion, or $36.55 per share, at December 31, 1997. SHARE REPURCHASE - ---------------- During the second quarter of 1998, CIGNA repurchased 3,745,100 shares of its common stock for $260 million, which is in addition to the 1,763,400 shares repurchased in the first quarter for $111 million. In 1998, through July 30, CIGNA has repurchased a total of 6,343,500 shares for $432 million. # # # # Quarterly earnings are available on CIGNA's home page on the Internet (http://www.cigna.com). [N:\CORPFINA\2Q98.REL] CIGNA CORPORATION COMPARATIVE SUMMARY OF FINANCIAL RESULTS (Dollars in millions, except per share amounts)
[CIGNA LOGO] ================================================================================================================================== Three Months Ended Six Months Ended June 30, June 30, 1998 1997 1998 1997 - ---------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums and fees $ 4,115 $ 3,482 $ 8,016 $ 6,870 Net investment income 942 1,062 1,879 2,115 Other revenues 217 163 415 323 Gain on sale of businesses (1) - - 316 - Realized investment gains 47 12 106 56 - ---------------------------------------------------------------------------------------------------------------------------------- Total $ 5,321 $ 4,719 $ 10,732 $ 9,364 - -----------------------------------------------------------======================================================================= OPERATING INCOME (LOSS) BY SEGMENT (1)(2) Employee Life and Health Benefits: Indemnity operations $ 72 $ 68 $ 141 $ 126 HMO operations 70 58 132 117 ----------- ----------- ---------- ----------- Total Employee Life and Health Benefits 142 126 273 243 Employee Retirement and Savings Benefits 56 53 112 107 Individual Financial Services 37 48 280 95 Property and Casualty: International 28 36 59 69 Domestic 27 23 46 46 ----------- ----------- ---------- ----------- Ongoing operations 55 59 105 115 Run-off operations - - - 1 ----------- ----------- ---------- ----------- Total Property and Casualty 55 59 105 116 Other Operations (14) (16) (37) (31) - ---------------------------------------------------------------------------------------------------------------------------------- Total $ 276 $ 270 $ 733 $ 530 - -----------------------------------------------------------======================================================================= NET INCOME (LOSS) BY SEGMENT (1) Employee Life and Health Benefits: Indemnity operations $ 90 $ 70 $ 177 $ 132 HMO operations 70 58 132 117 ----------- ----------- ---------- ----------- Total Employee Life and Health Benefits 160 128 309 249 Employee Retirement and Savings Benefits 64 54 123 116 Individual Financial Services 37 47 285 102 Property and Casualty: International 20 42 56 83 Domestic 32 25 51 47 ----------- ----------- ---------- ----------- Ongoing operations 52 67 107 130 Run-off operations 4 (1) 11 1 ----------- ----------- ---------- ----------- Total Property and Casualty 56 66 118 131 Other Operations (9) (16) (32) (31) - ---------------------------------------------------------------------------------------------------------------------------------- Total $ 308 $ 279 $ 803 $ 567 - -----------------------------------------------------------======================================================================= DILUTED EARNINGS PER SHARE: Operating income $ 1.27 $ 1.21 $ 3.38 $ 2.38 After-tax realized investment gains 0.15 0.04 0.32 0.17 - ---------------------------------------------------------------------------------------------------------------------------------- Net income $ 1.42 $ 1.25 $ 3.70 $ 2.55 - -----------------------------------------------------------======================================================================= Weighted average shares (in thousands) 216,546 222,773 217,145 222,528 - -----------------------------------------------------------======================================================================= SHAREHOLDERS' EQUITY at June 30 $ 8,340 $ 7,548 - ------------------------------------------------------------------------------------------------------============================ SHAREHOLDERS' EQUITY PER SHARE at June 30: $ 39.29 $ 33.99 - ------------------------------------------------------------------------------------------------------============================ (1) Reflects the pre-tax gain of $316 million ($202 million after-tax) recognized as of January 1, 1998 in connection with the sale of the individual life insurance and annuity businesses. (2) Operating income (loss) is defined as net income (loss) excluding after-tax realized investment results.
-----END PRIVACY-ENHANCED MESSAGE-----