-----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, EDgpJ7P/kPeOKR3Jm+c5U3TfkoLSOg2x7x7TNdwtg30kJCWJxxpUkHrHl32+Ob/0 6h7Nv6b+Ejs89BLaTEtQAA== 0000950159-00-000162.txt : 20000503 0000950159-00-000162.hdr.sgml : 20000503 ACCESSION NUMBER: 0000950159-00-000162 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000501 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIGNA CORP CENTRAL INDEX KEY: 0000701221 STANDARD INDUSTRIAL CLASSIFICATION: HOSPITAL & MEDICAL SERVICE PLANS [6324] 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: 616616 BUSINESS ADDRESS: STREET 1: ONE LIBERTY PLACE STREET 2: 1650 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19192-1550 BUSINESS PHONE: 2157611000 MAIL ADDRESS: STREET 1: TWO LIBERTY PLACE 48TH FLOOR 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 May 1, 2000 ----------- 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. ------------ On May 1, 2000, 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 CIGNA and its representatives may from time to time make written and oral forward-looking statements, including statements contained in CIGNA's filings with the Securities and Exchange Commission and in its reports to shareholders. These statements may contain information about financial prospects, economic conditions, trends and known uncertainties. CIGNA cautions the reader that actual results could differ materially from those that management expects, depending on the outcome of certain factors. In some cases, CIGNA describes uncertainties when offering a forward-looking statement. Some factors that could cause CIGNA's actual results to differ materially from the forward-looking statements include: 1. increases in medical costs in CIGNA's health care operations, including increased use and costs of medical services; 2. increased medical, administrative or other costs resulting from legislative, regulatory and litigation challenges to CIGNA's health care business; 3. heightened competition, particularly price competition, which could reduce product margins and constrain growth in CIGNA's businesses; 4. significant changes in interest rates; 5. significant stock market declines resulting in payments contingent on certain variable annuity account values; 6. significant deterioration in economic conditions, which could have an adverse effect on CIGNA's investments; and 7. proposals to change federal income taxes. This list of important factors may not be complete. CIGNA will not update any forward-looking statement that may be made by or on behalf of CIGNA prior to the next required filing with the Securities and Exchange Commission. Item 7. Financial Statements and Exhibits. ---------------------------------- (c) The exhibit accompanying this report is listed in the Index to Exhibits. 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: May 2, 2000 By: /s/ James A. Sears ------------------------ James A. Sears Vice President and Chief Accounting Officer Index to Exhibits ----------------- Number Description Method of Filing - ------ ----------- ---------------- 20 CIGNA Corporation Filed herewith news release dated May 1, 2000 EX-20 2 NEWS RELEASE EXHIBIT 20 [Logo] - -------------------------------------------------------------------------------- For Release: Immediate Contact: Edwin J. Detrick, Investor Relations - (215) 761-6130 Wendell Potter, Media Relations - (215) 761-6133 CIGNA REPORTS FIRST QUARTER RESULTS PHILADELPHIA, May 1, 2000 -- CIGNA Corporation (NYSE:CI) today reported first quarter 2000 operating income* from continuing operations of $265 million, or $1.57 per share. This compares with operating income from continuing operations of $229 million, or $1.10 per share for the first quarter of 1999. "We continued to see good growth in revenues and profits, particularly for our health businesses," said H. Edward Hanway, CIGNA's chief executive officer. SEGMENT RESULTS: Employee Health Care, Life and Disability Benefits - -------------------------------------------------- This segment includes CIGNA's HMO, medical and dental indemnity, disability, specialty health care and group life insurance operations. The segment had operating income of $175 million in the first quarter of 2000, compared with $153 million for the same period last year. - -------------------------------- * Operating income (loss) is defined as net income (loss) excluding after-tax realized investment results and the cumulative effect of an accounting change in 1999. All earnings per share amounts are on a diluted basis. CIGNA made certain segment reclassifications, effective 1/1/2000. See Exhibit 1 for additional information. -2- Revenues for the first quarter were $3.6 billion, compared with $3.3 billion for the same period last year. Total covered medical lives were approximately 14.0 million at March 31, 2000. HMO medical membership was 7.1 million members, up 6% from March 31, 1999. Medical indemnity lives were 6.9 million, up 9% from March 31, 1999. Employee Retirement Benefits and Investment Services - ---------------------------------------------------- This segment, which operates in the defined contribution, defined benefit and corporate life insurance markets, had operating income of $65 million in the first quarter of 2000, compared with $63 million for the same period last year. Assets under management at March 31, 2000 were $57 billion, an increase of 8% from $53 billion as of March 31, 1999. International Life, Health and Employee Benefits - ------------------------------------------------ This segment, which includes CIGNA's life insurance and employee benefits businesses operating in international markets, had operating income of $8 million in the first quarter of 2000, compared with operating income of $3 million for the same period last year. -3- Other Operations - ---------------- Other Operations includes gain recognition related to the sale of the individual life insurance and annuity business, and the results of the leveraged corporate life insurance operation, the life and health reinsurance business, the settlement annuity business and investment and real estate subsidiaries. Other Operations had operating income of $28 million in the first quarter of 2000, compared with $34 million for the same period last year. Corporate - --------- Corporate includes unallocated investment income and parent company expenses, primarily debt service. Corporate had a loss of $11 million in the first quarter of 2000, compared with a loss of $24 million for the same period last year. NET INCOME - ---------- Consolidated net income for the first quarter of 2000 was $271 million, or $1.60 per share. Consolidated net income for the same period last year was $188 million, or $0.91 per share, which included a $91 million after-tax charge for the cumulative effect of adopting a new accounting standard for guaranty fund and other insurance-related assessments, primarily related to the P&C business sold on July 2, 1999. -4- REVENUES - -------- Consolidated revenues for the first quarter of 2000 were $4.9 billion, compared with $4.5 billion for the first quarter of 1999. ASSETS/SHAREHOLDERS' EQUITY - --------------------------- Assets at March 31, 2000 were $97.0 billion, compared with $95.3 billion at December 31, 1999. Shareholders' equity was $5.8 billion ($35.85 per share) at March 31, 2000, compared with $6.1 billion ($36.24 per share) at December 31, 1999. SHARE REPURCHASE - ---------------- In the first quarter of 2000, CIGNA repurchased 7.2 million shares of its common stock for $521 million. In April, CIGNA repurchased 1.6 million shares for $126 million. Total available repurchase authority was approximately $1.1 billion at May 1, 2000. Quarterly earnings and conference call information is available on CIGNA's home page on the Internet (http://www.cigna.com).
CIGNA CORPORATION Exhibit 1 COMPARATIVE SUMMARY OF FINANCIAL RESULTS (Dollars in millions, except per share amounts) [CIGNA LOGO] - --------------------------------------------------------------------------------------------------------------- Three Months Ended March 31, 2000 1999 - --------------------------------------------------------------------------------------------------------------- REVENUES (Excluding discontinued operations) Premiums and fees $ 3,989 $ 3,600 Net investment income 716 721 Other revenues 177 178 Realized investment gains 9 11 - --------------------------------------------------------------------------------------------------------------- Total $ 4,891 $ 4,510 - -----------------------------------------------------------------------------------============================ OPERATING INCOME (LOSS) BY SEGMENT (1) (2) (Excluding discontinued operations) Employee Health Care, Life and Disability Benefits: Indemnity operations (3) $ 61 $ 59 HMO operations 114 94 ---------- ---------- Total Employee Health Care, Life and Disability Benefits 175 153 Employee Retirement Benefits and Investment Services 65 63 International Life, Health and Employee Benefits 8 3 Other Operations (3) 28 34 Corporate (11) (24) - --------------------------------------------------------------------------------------------------------------- Total $ 265 $ 229 - -----------------------------------------------------------------------------------============================ INCOME (LOSS) FROM CONTINUING OPERATIONS (2) Employee Health Care, Life and Disability Benefits: Indemnity operations (3) $ 69 $ 65 HMO operations 113 94 ---------- ---------- Total Employee Health Care, Life and Disability Benefits 182 159 Employee Retirement Benefits and Investment Services 63 64 International Life, Health and Employee Benefits 8 3 Other Operations (3) 29 34 Corporate (11) (24) - --------------------------------------------------------------------------------------------------------------- Total $ 271 $ 236 - -----------------------------------------------------------------------------------============================ DILUTED EARNINGS PER SHARE: Operating income (Excluding discontinued operations) $ 1.57 $ 1.10 After-tax realized investment gains (excluding discontinued operations) 0.03 0.04 - --------------------------------------------------------------------------------------------------------------- Income from continuing operations 1.60 1.14 Income from discontinued operations -- 0.20 - --------------------------------------------------------------------------------------------------------------- Income before cumulative effect of accounting change 1.60 1.34 Cumulative effect of accounting change, net of taxes -- (0.43) - --------------------------------------------------------------------------------------------------------------- Net income $ 1.60 $ 0.91 - -----------------------------------------------------------------------------------============================ Weighted average shares (in thousands) 169,310 207,708 - -----------------------------------------------------------------------------------============================ SHAREHOLDERS' EQUITY at March 31: $ 5,838 $ 7,869 - -----------------------------------------------------------------------------------============================ SHAREHOLDERS' EQUITY PER SHARE at March 31: $ 35.85 $ 38.68 - -----------------------------------------------------------------------------------============================ (1) Operating income (loss) is defined as net income (loss) excluding after-tax realized investment results, and, in 1999, the cumulative effect of adopting a new accounting pronouncement. (2) In 1999, corporate overhead which would have been allocated to the P&C segment had the sale to ACE Limited not occurred was reported in Corporate (other operating expenses). Effective January 1, 2000, this overhead was allocated to the operating segments. See Exhibit 2 for additional information. (3) Effective January 1, 2000, CIGNA combined the operations of one of its new business initiatives (Integrated Care, the results of which had been previously reported in Other Operations) with a business reported in the Employee Health Care, Life and Disability Benefits segment. Integrated Care's first quarter 1999 after-tax operating loss of $4 million was reclassified to conform with this new presentation. See Exhibit 2 for additional information.
CIGNA Corporation Exhibit 2 Supplemental Financial Information Financial Data Excluding Specific Adjustments - Results of Operations (Dollars in millions, except per share amounts) Employee Health Care, Life & Disability Benefits Employee Retirement Benefits Indemnity HMOs Total & Investment Svcs. Three months ended March 31, 2000 1999 2000 1999 2000 1999 2000 1999 ----------------------------------------------------------------------------- Operating income (loss) prior to reclassification $ 61 $ 63 $ 114 $ 94 $ 175 $ 157 $ 65 $ 63 Reclassification for Integrated Care -- (4) -- -- -- (4) -- -- ----------------------------------------------------------------------------- Operating income (loss) as published 61 59 114 94 175 153 65 63 Pro forma overhead costs previously allocated to Corporate* -- (3) -- (3) -- (6) -- -- ----------------------------------------------------------------------------- Operating income (loss) as adjusted for pro forma allocation of corporate overhead $ 61 $ 56 $ 114 $ 91 $ 175 $ 147 $ 65 $ 63 =============================================================================
International Life, Health & Other Emp. Benefits Operations Corporate Consolidated Three months ended March 31, 2000 1999 2000 1999 2000 1999 2000 1999 ---------------------------------------------------------------------------- Operating income (loss) prior to reclassification $ 8 $ 3 $ 28 $ 30 $ (11) $ (24) $ 265 $ 229 Reclassification for Integrated Care -- -- -- 4 -- -- -- -- ---------------------------------------------------------------------------- Operating income (loss) as published 8 3 28 34 (11) (24) 265 229 Pro forma overhead costs previously allocated to Corporate* -- (1) -- -- -- 7 -- -- ---------------------------------------------------------------------------- Operating income (loss) as adjusted for pro forma allocation of corporate overhead $ 8 $ 2 $ 28 $ 34 $ (11) $ (17) $ 265 $ 229 ============================================================================
Diluted Earnings Per Share Three months ended March 31, 2000 1999 -------------------- Operating income (loss) prior to reclassification $ 1.57 $ 1.10 Reclassification for Integrated Care -- -- -------------------- Operating income (loss) as published 1.57 1.10 Pro forma overhead costs previously allocated to Corporate* -- -- -------------------- Operating income (loss) as adjusted for pro forma allocation of corporate overhead $ 1.57 $ 1.10 ==================== * In 1999, corporate overhead which would have been allocated to the P&C segment had the sale to ACE Limited not occurred was reported in Corporate (other operating expenses). Effective January 1, 2000, this overhead was allocated to the operating segments. Prior period amounts have not been restated to reflect this change but are illustrated above on a pro forma basis.
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