-----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, GMgYDzOldTckCJ7kySUWLMM2y7fhkGvI6+QWp1wfatcEAmcWzNfmpv3og76tGsKm hofDLYDiGgMLpk4QhGNbwA== 0000950159-98-000244.txt : 19981104 0000950159-98-000244.hdr.sgml : 19981104 ACCESSION NUMBER: 0000950159-98-000244 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981102 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981103 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: 98736791 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) November 2, 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 November 2, 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 and Latin American 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: November 3, 1998 By:/s/ Carol J. Ward ----------------- Carol J. Ward Corporate Secretary Index to Exhibits ----------------- Number Description Method of Filing - ------ ----------- ---------------- 20 CIGNA Corporation Filed herewith news release dated November 2, 1998 EX-20 2 EXHIBIT 20 [CIGNA LOGO] NEWS RELEASE For Release: Immediate Contact: Ted Detrick, Financial Relations - (215) 761-6130 Michael J. Monroe, Media Relations - (215) 761-6133 CIGNA REPORTS THIRD QUARTER 1998 RESULTS EMPLOYEE LIFE & HEALTH AND RETIREMENT SAVINGS POST STRONG RESULTS; PROPERTY AND CASUALTY REFLECTS HURRICANE LOSSES PHILADELPHIA, November 2, 1998 -- CIGNA Corporation (NYSE: CI) today reported third quarter 1998 operating income* of $241 million, or $1.14 per share, compared with operating income of $262 million, or $1.17 per share, for the same period last year. The third quarter of 1998 includes $44 million of after-tax catastrophe losses, $42 million of which were associated with damages from Hurricane Georges, principally in Puerto Rico. For the nine months of 1998, operating income was $772 million, or $3.59 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 $974 million, or $4.53 per share. For the nine months of 1997, operating income was $792 million, or $3.55 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 $159 million in the third quarter of 1998, up 24 percent, compared with $128 million for the same period last year. For the nine months of 1998, operating income was $432 million, compared with $371 million for the same period last year. HMO medical membership at September 30, 1998 was 6.5 million members, an increase of 593,000 members, or 10 percent, from December 31, 1997, and up 11 percent over third quarter 1997. Employee Retirement and Savings Benefits - ---------------------------------------- This segment, which operates in the defined contribution and defined benefit markets, had operating income of $59 million in the third quarter of 1998, compared with $53 million for the same period last year. For the nine months of 1998 and 1997, operating income was $171 million and $160 million, respectively. Assets under management at September 30, 1998 were $46.9 billion, an increase of 3 percent from $45.5 billion as of September 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 recognition of a portion of the deferred gain from the sale as well as the results of CIGNA's corporate-owned life insurance, and life, accident and health reinsurance businesses. Operating income for the third quarter of 1998 was $40 million, including $17 million of deferred gain from the sale, compared with operating income of $51 million for the third quarter of 1997. The segment's operating income for the nine months of 1998, excluding the $202 million gain on the sale that was recognized at closing, was $118 million, compared with $146 million for the same period last year. Property and Casualty - --------------------- Ongoing operations (Domestic and International operations combined) had operating income of $13 million and a GAAP combined ratio after policyholders' dividends ("combined ratio") of 109 for the third quarter of 1998. These results include after-tax catastrophe losses of $44 million, primarily associated with Hurricane Georges ($42 million). This compares with operating income of $59 million and a combined ratio of 100 for the same period last year. For the nine months of 1998, operating income was $118 million, compared with $174 million for the nine months of 1997. -4- Domestic had operating income of $26 million for the third quarters of 1998 and 1997. The combined ratio was 106 for the third quarter of 1998, compared with a combined ratio of 105 for the third quarter of 1997. International had an operating loss of $13 million and a combined ratio of 112 for the third quarter of 1998. This compares with operating income of $33 million and a combined ratio of 95 for the third quarter of 1997. The $44 million of after-tax catastrophe losses for the third quarter of 1998 compares with $1 million for the same period last year. After-tax catastrophe losses for the nine months of 1998 were $63 million, compared with $10 million for 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 $30 million in the third quarter of 1998, compared with an operating loss of $29 million for the same period last year. For the nine months of 1998, operating losses totaled $67 million, compared with $60 million in the same period of 1997. NET INCOME - ---------- Consolidated net income for the third quarter of 1998 was $251 million, or $1.19 per share, compared with $279 million, or $1.25 per share, for the same period last year. Consolidated net income for the nine months of 1998 was $1.1 billion, or $4.90 per share, including an after-tax gain -5- of $202 million from the sale of certain businesses. Consolidated net income for the same period last year was $846 million, or $3.79 per share. REVENUES - -------- Consolidated revenues for the third quarters of 1998 and 1997 were $5.2 billion. For the nine months of 1998, revenues were $16.0 billion, compared with $14.5 billion for the same period last year. ASSETS/SHAREHOLDERS'EQUITY - --------------------------- Assets at September 30, 1998 were $109 billion, compared with $108 billion at December 31, 1997. Shareholders' equity was $8.2 billion, or $39.50 per share, at September 30, 1998, compared with $7.9 billion, or $36.55 per share, at December 31, 1997. SHARE REPURCHASE - ---------------- During the third quarter of 1998, CIGNA repurchased 5,893,400 shares of its common stock for $385 million, which is in addition to the 5,508,500 shares repurchased in the first half of 1998 for $371 million. In 1998, through October 30, CIGNA has repurchased a total of 12,400,600 shares for $822 million. # # # # Quarterly earnings are available on CIGNA's home page on the Internet (http://www.cigna.com).
CIGNA CORPORATION [CIGNA LOGO} COMPARATIVE SUMMARY OF FINANCIAL RESULTS (Dollars in millions, except per share amounts) ============================================================================================================================= Three Months Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 - ----------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums and fees $ 4,093 $ 3,925 $ 12,109 $ 10,795 Net investment income 911 1,057 2,790 3,172 Other revenues 205 175 620 498 Gain on sale of businesses (1) - - 316 - Realized investment gains 17 25 123 81 - ----------------------------------------------------------------------------------------------------------------------------- Total $ 5,226 $ 5,182 $ 15,958 $ 14,546 - ----------------------------------------------------========================================================================= OPERATING INCOME (LOSS) BY SEGMENT (1)(2) Employee Life and Health Benefits: Indemnity operations $ 77 $ 76 $ 218 $ 202 HMO operations 82 52 214 169 ------------ ----------- ------------ ------------- Total Employee Life and Health Benefits 159 128 432 371 Employee Retirement and Savings Benefits 59 53 171 160 Individual Financial Services 40 51 320 146 Property and Casualty: International (13) 33 46 102 Domestic 26 26 72 72 ------------ ----------- ------------ ------------- Ongoing operations 13 59 118 174 Run-off operations - - - 1 ------------ ----------- ------------ ------------- Total Property and Casualty 13 59 118 175 Other Operations (30) (29) (67) (60) - ----------------------------------------------------------------------------------------------------------------------------- Total $ 241 $ 262 $ 974 $ 792 - ----------------------------------------------------========================================================================= NET INCOME (LOSS) BY SEGMENT (1) Employee Life and Health Benefits: Indemnity operations $ 96 $ 72 $ 273 $ 204 HMO operations 82 52 214 169 ------------ ----------- ------------ ------------- Total Employee Life and Health Benefits 178 124 487 373 Employee Retirement and Savings Benefits 64 51 187 167 Individual Financial Services 43 49 328 151 Property and Casualty: International (30) 44 26 127 Domestic 25 39 76 86 ------------ ----------- ------------ ------------- Ongoing operations (5) 83 102 213 Run-off operations 1 (1) 12 - ------------ ----------- ------------ ------------- Total Property and Casualty (4) 82 114 213 Other Operations (30) (27) (62) (58) - ----------------------------------------------------------------------------------------------------------------------------- Total $ 251 $ 279 $ 1,054 $ 846 - ----------------------------------------------------========================================================================= DILUTED EARNINGS PER SHARE: Operating income $ 1.14 $ 1.17 $ 4.53 $ 3.55 After-tax realized investment gains 0.05 0.08 0.37 0.24 - ----------------------------------------------------------------------------------------------------------------------------- Net income $ 1.19 $ 1.25 $ 4.90 $ 3.79 - ----------------------------------------------------========================================================================= Weighted average shares (in thousands) 211,512 223,572 215,247 223,175 - ----------------------------------------------------========================================================================= SHAREHOLDERS' EQUITY at September 30: $ 8,156 $ 7,991 - --------------------------------------------------------------------------------------------================================= SHAREHOLDERS' EQUITY PER SHARE at September 30: $ 39.50 $ 35.97 - --------------------------------------------------------------------------------------------================================= (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.
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