Delaware
(State or other jurisdiction of incorporation)
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1-08323
(Commission File Number)
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06-1059331
(IRS Employer
Identification No.)
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CIGNA CORPORATION
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Date: May 2, 2013
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By:
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/s/ Ralph J. Nicoletti
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Ralph J. Nicoletti
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Executive Vice President and
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Chief Financial Officer
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(Principal Financial Officer)
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NEWS RELEASE |
Contact:
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Ted Detrick, Investor Relations – (215) 761-1414
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o
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Consolidated revenues increased 21% to $8.2 billion in the first quarter.
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o
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Adjusted income from operations1 was $497 million, or $1.72 per share, which represents per share growth of 39% over first quarter 2012.
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o
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Shareholders’ net income was $57 million, or $0.20 per share, which includes an after-tax charge of $507 million related to the previously announced exit of the Run-off Reinsurance business.
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o
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Cigna grew its global medical customer base by 277,000 people in the first quarter.
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o
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Three Months Ended
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||||||||||||
March 31,
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December 31,
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|||||||||||
2013
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2012
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2012
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||||||||||
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||||||||||
Total Revenues
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$ | 8,183 | $ | 6,754 | $ | 7,620 | ||||||
Consolidated Earnings
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||||||||||||
Adjusted income from operations1
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$ | 497 | $ | 359 | $ | 452 | ||||||
Net realized investment gains, net of taxes
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93 | 12 | 15 | |||||||||
GMIB results, net of taxes2
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25 | 41 | 7 | |||||||||
Special items, net of taxes4
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(558 | ) | (41 | ) | (68 | ) | ||||||
Shareholders' net income1
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$ | 57 | $ | 371 | $ | 406 | ||||||
Adjusted income from operations1, per share
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$ | 1.72 | $ | 1.24 | $ | 1.57 | ||||||
Shareholders' net income1, per share
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$ | 0.20 | $ | 1.28 | $ | 1.41 | ||||||
As of the Periods Ended | ||||||||||||
March 31,
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December 31,
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|||||||||||
2013 | 2012 | 2012 | ||||||||||
Global Medical Customers
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14,322 | 13,865 | 14,045 |
·
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Cash and short term investments at the parent company were approximately $620 million at March 31, 2013 and $700 million at December 31, 2012.
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·
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As of May 2, 2013, the Company repurchased5 approximately 3.9 million shares of stock for approximately $250 million.
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Three Months Ended
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||||||||||||
March 31,
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December 31,
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|||||||||||
2013
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2012
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2012
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||||||||||
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||||||||||
Premiums and Fees
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$ | 5,824 | $ | 4,869 | $ | 5,399 | ||||||
Adjusted Income from Operations1
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$ | 427 | $ | 296 | $ | 397 | ||||||
Adjusted Margin, After-Tax6
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6.7 | % | 5.5 | % | 6.7 | % | ||||||
Customers:
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Commercial
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13,848 | 13,431 | 13,596 | |||||||||
Medicare and Medicaid
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474 | 434 | 449 | |||||||||
Medical
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14,322 | 13,865 | 14,045 | |||||||||
Behavioral Care
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21,977 | 19,803 | 21,750 | |||||||||
Dental
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12,125 | 11,279 | 11,392 | |||||||||
Pharmacy
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6,922 | 6,584 | 6,772 | |||||||||
Medicare Part D
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1,213 | 1,268 | 1,264 |
·
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Overall, Global Health Care results reflect continued growth in our targeted customer segments.
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·
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First quarter premiums and fees increased approximately 20% relative to first quarter 2012, due to an additional month of HealthSpring premium reflecting the timing of the acquisition on January 31, 2012, business growth, rate increases, and increased specialty penetration, partially offset by current medical business mix, reflecting a continued shift by clients to our Administrative Services Only (“ASO”) solutions.
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·
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First quarter 2013 adjusted income from operations1 reflects continued growth in targeted medical and specialty businesses, favorable prior year reserve development of approximately $48 million after-tax, compared to $41 million after-tax of favorable development in first quarter 2012, and improvement in the operating expense ratio. First quarter 2013 results also reflect elevated medical and pharmacy costs for flu-related illness primarily impacting the Seniors business.
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·
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First quarter 2013 segment margins6 are higher than first quarter 2012 primarily as a result of continued growth in targeted medical and specialty businesses, as well as improvement in the operating expense ratio.
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·
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Global Health Care medical claims payable7 was approximately $1.8 billion at March 31, 2013 and $1.6 billion at December 31, 2012.
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Three Months Ended
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||||||||||||
March 31,
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December 31,
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|||||||||||
2013
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2012
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2012
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||||||||||
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||||||||||
Premiums and Fees
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$ | 604 | $ | 444 | $ | 592 | ||||||
Adjusted Income from Operations1
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$ | 55 | $ | 43 | $ | 38 | ||||||
Adjusted Margin, After-Tax6
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8.6 | % | 9.1 | % | 6.1 | % | ||||||
As of the Periods Ended:
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||||||||||||
March 31,
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December 31,
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|||||||||||
2013 | 2012 | 2012 | ||||||||||
Policies (excluding China joint venture)
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11,586 | 8,847 | 11,436 |
·
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First quarter 2013 premiums and fees grew 36% relative to first quarter 2012, reflecting recent acquisitions and attractive customer retention and business growth, primarily South Korea.
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·
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First quarter 2013 adjusted income from operations1 reflects the impact of strong customer retention and business growth as well as favorable claim experience and improvement in the operating expense ratio.
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·
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First quarter 2013 segment margins6 are higher than fourth quarter 2012 due to lower operating expenses.
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·
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First quarter 2012 adjusted income from operations1 also includes an after-tax benefit of $8 million related to the implementation of a capital management strategy.
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·
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The quarter over quarter increase in policies as of March 31, 2013 reflects the acquisitions of the Turkey joint venture and Great American Supplemental Benefits as well as business growth.
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Three Months Ended
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||||||||||||
March 31,
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December 31,
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|||||||||||
2013
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2012
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2012
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||||||||||
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||||||||||
Premiums and Fees
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$ | 858 | $ | 763 | $ | 804 | ||||||
Adjusted Income from Operations1
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$ | 49 | $ | 68 | $ | 56 | ||||||
Adjusted Margin, After-Tax6
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5.2 | % | 8.1 | % | 6.4 | % |
·
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First quarter 2013 results benefited from premium and fee growth of 12%.
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·
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Three Months Ended
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||||||||||||
March 31,
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December 31,
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|||||||||||
2013
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2012
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2012
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||||||||||
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||||||||||
Run-off Reinsurance 2
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$ | (1 | ) | $ | (11 | ) | $ | - | ||||
Other Operations
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$ | 21 | $ | 20 | $ | 19 | ||||||
Corporate
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$ | (54 | ) | $ | (57 | ) | $ | (58 | ) |
·
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During the first quarter of 2013, Cigna entered into a definitive agreement with Berkshire Hathaway to exit the Run-off Reinsurance businesses4.
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·
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(dollars in millions, except per share amounts)
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Full-Year Ended
December 31, 2013
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Global Health Care
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$
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1,465 to 1,555
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Global Supplemental Benefits
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160 to 180
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Group Disability and Life
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270 to 290
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Ongoing Businesses
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$
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1,895 to 2,025
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Corporate and other
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(160)
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Consolidated
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$
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1,735 to 1,865
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$
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6.00 to 6.45
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Global medical customer growth
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1% to 2%
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·
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Cigna’s outlook excludes the potential effects of additional prior year reserve development and future capital deployment5.
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1.
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Cigna measures the financial results of its segments using segment earnings (loss), which is defined as shareholders’ net income (loss) before net realized investment results. Adjusted income (loss) from operations is defined as segment earnings (loss) excluding special items (which are identified and quantified in Note 4) and the results of Cigna's GMIB business. Adjusted income (loss) from operations is a measure of profitability used by Cigna’s management because it presents the underlying results of operations of Cigna’s businesses and permits analysis of trends in underlying revenue, expenses and shareholders’ net income. This measure is not determined in accordance with generally accepted accounting principles (GAAP) and should not be viewed as a substitute for the most directly comparable GAAP measures, which are segment earnings (loss) and shareholders’ net income; see Exhibits 1 and 2 for reconciliations of the non-GAAP measure to the most directly comparable GAAP measures.
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2.
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The Guaranteed Minimum Income Benefits (GMIB) business and Guaranteed Minimum Death Benefits business, also known as Variable Annuity Death Benefits (VADBe), are included in our Run-off Reinsurance operations. These businesses have been in run-off since 2000.
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3.
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Information is not available for management to reasonably estimate (1) future net realized investment gains (losses) or (2) fair value changes in GMIB assets and liabilities; therefore, it is not possible to provide a forward-looking reconciliation of adjusted income from operations to shareholders’ income from continuing operations. We expect that special items for 2013 may include potential adjustments associated with litigation and other items. Information is not available for management to identify, or reasonably estimate additional 2013 special items.
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4.
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Special items included in shareholders’ net income and segment earnings (loss), but excluded from adjusted income (loss) from operations, and the calculation of adjusted margins include:
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·
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After-tax loss of $507 million related to the exit of the Run-off Reinsurance businesses.
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·
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After-tax loss of $51 million related to a regulatory matter within the Disability business.
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·
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After-tax loss of $68 million related to litigation matters.
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·
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After-tax loss of $28 million related to transaction costs for the 2012 acquisition of HealthSpring.
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·
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After-tax loss of $13 million related to a litigation matter.
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5.
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Share repurchases may from time to time be made pursuant to written trading plans under Rule 10b5-1, which permit shares to be repurchased when Cigna might otherwise be precluded from doing so under insider trading laws or because of self-employed trading blackout periods.
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6.
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Adjusted margins in this press release are calculated by dividing adjusted income from operations1 by segment revenues. Segment margins including special items were (0.2%) for Group Disability and Life for the three months ended March 31, 2013, and 5.1% for Global Health Care for the three months ended March 31, 2012.
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7.
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Global Health Care medical claims payable are presented net of reinsurance and other recoverables. The gross Global Health Care medical claims payable balance was $2,000 million as of March 31, 2013 and $1,856 million as of December 31, 2012.
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1.
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health care reform legislation, as well as additional changes in state or federal regulation, that could, among other items, affect the way the Company does business, increase costs, limit the ability to effectively estimate, price for and manage medical costs, and affect the Company’s products, services, market segments, technology and processes;
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2.
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adverse changes in state, federal and international laws and regulations, including increased medical, administrative, technology or other costs resulting from new legislative and regulatory requirements imposed on the Company’s businesses;
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3.
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risks associated with pending and potential state and federal class action lawsuits, disputes regarding reinsurance arrangements, other litigation and regulatory actions challenging the Company’s businesses, including disputes related to payments to health care professionals, government investigations and proceedings, tax audits and related litigation, and regulatory market conduct and other reviews, audits and investigations, including the possibility that the acquired HealthSpring business may be adversely affected by potential changes in risk adjustment data validation audit and payment adjustment methodology;
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4.
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challenges and risks associated with implementing improvement initiatives and strategic actions in the ongoing operations of the businesses, including those related to: (i) growth in targeted geographies, product lines, buying segments and distribution channels, (ii) offering products that meet emerging market needs, (iii) strengthening underwriting and pricing effectiveness, (iv) strengthening medical cost results and a growing medical customer base, (v) delivering quality service to members and health care professionals using effective technology solutions, and (vi) lowering administrative costs;
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5.
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the unique political, legal, operational, regulatory and other challenges associated with expanding our business globally;
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6.
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challenges and risks associated with the successful management of the Company’s outsourcing projects or key vendors;
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7.
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the ability of the Company to execute its growth plans by successfully leveraging capabilities and integrating acquired businesses, including the HealthSpring businesses by, among other things, operating Medicare Advantage plans and HealthSpring’s prescription drug plan, retaining and growing the customer base, realizing revenue, expense and other synergies, renewing contracts on competitive terms or maintaining performance under Medicare contracts, successfully leveraging the information technology platform of the acquired businesses, and retaining key personnel;
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8.
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risks associated with security or interruption of information systems, that could, among other things, cause operational disruption;
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9.
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risks associated with the Company’s information technology strategy, including that the failure to make effective investments or execute improvements may impede the Company’s ability to deliver services efficiently;
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10.
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the failure to maintain effective prevention, detection and control systems for regulatory compliance and detection of fraud and abuse;
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11.
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risks associated with the Company’s mail order pharmacy business that, among other things, includes any potential operational deficiencies or service issues as well as loss or suspension of state pharmacy licenses;
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12.
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liability associated with the Company’s operations of onsite clinics and medical facilities, including the health care centers operated by the HealthSpring business;
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13.
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heightened competition, particularly price competition, that could reduce product margins and constrain growth in the Company’s businesses, primarily the Global Health Care business;
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14.
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significant stock market declines, that could, among other things, impact the Company’s pension plans in future periods as well as the recognition of additional pension obligations;
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15.
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significant changes in market interest rates or sustained deterioration in the commercial real estate markets that could reduce the value of the Company’s investment assets;
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16.
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downgrades in the financial strength ratings of the Company’s insurance subsidiaries, that could, among other things, adversely affect new sales and retention of current business or limit the subsidiaries’ ability to dividend capital to the parent company, resulting in changes in statutory reserve or capital requirements or other financial constraints;
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17.
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significant deterioration in global market economic conditions and market volatility, that could have an adverse effect on the Company’s investments, liquidity and access to capital markets;
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18.
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unfavorable developments in economic conditions, that could, among other things, have an adverse effect on the impact on the businesses of our customers (including the amount and type of health care services provided to their workforce, loss in workforce and ability to pay their obligations), the businesses of hospitals and other providers (including increased medical costs) or state and federal budgets for programs, such as Medicare or social security, resulting in a negative impact to the Company’s revenues or results of operations;
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19.
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risks associated with the Company’s reinsurance arrangements for the run-off retirement benefits, life insurance and annuity business, variable annuity death benefits and guaranteed minimum income benefits businesses, including but not limited to, failure by the reinsurer to meet its reinsurance obligations or that the reinsurance does not otherwise provide adequate protection; or
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20.
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potential public health epidemics, pandemics, natural disasters and bio-terrorist activity, that could, among other things, cause the Company’s covered medical and disability expenses, pharmacy costs and mortality experience to rise significantly, and cause operational disruption, depending on the severity of the event and number of individuals affected.
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CIGNA CORPORATION
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||||||||
COMPARATIVE SUMMARY OF FINANCIAL RESULTS (unaudited)
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Exhibit 1
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|||||||
(Dollars in millions, except per share amounts)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2013
|
2012
|
|||||||
REVENUES
|
||||||||
Premiums and fees
|
$ | 7,314 | $ | 6,107 | ||||
Net investment income
|
287 | 288 | ||||||
Mail order pharmacy revenues
|
425 | 386 | ||||||
Other revenues
|
57 | 55 | ||||||
Total operating revenues
|
8,083 | 6,836 | ||||||
Run-off Reinsurance hedge loss (1)
|
(39 | ) | (95 | ) | ||||
Net realized investment gains
|
139 | 13 | ||||||
Total
|
$ | 8,183 | $ | 6,754 | ||||
ADJUSTED INCOME (LOSS) FROM OPERATIONS (2)
|
||||||||
Global Health Care
|
$ | 427 | $ | 296 | ||||
Global Supplemental Benefits
|
55 | 43 | ||||||
Group Disability and Life
|
49 | 68 | ||||||
Run-off Reinsurance
|
(1 | ) | (11 | ) | ||||
Other Operations
|
21 | 20 | ||||||
Corporate
|
(54 | ) | (57 | ) | ||||
Total
|
$ | 497 | $ | 359 | ||||
SHAREHOLDERS' NET INCOME
|
||||||||
Segment Earnings (Loss)
|
||||||||
$ | 427 | $ | 276 | |||||
Global Supplemental Benefits
|
55 | 43 | ||||||
Group Disability and Life (4)
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(2 | ) | 68 | |||||
Run-off Reinsurance (3)
|
(483 | ) | 30 | |||||
Other Operations
|
21 | 20 | ||||||
Corporate (6)
|
(54 | ) | (78 | ) | ||||
Total
|
(36 | ) | 359 | |||||
Net realized investment gains, net of taxes
|
93 | 12 | ||||||
Shareholders' net income
|
$ | 57 | $ | 371 | ||||
DILUTED EARNINGS PER SHARE:
|
||||||||
Adjusted income from operations (2)
|
$ | 1.72 | $ | 1.24 | ||||
Results of guaranteed minimum income benefits business, after-tax
|
0.09 | 0.14 | ||||||
Net realized investment gains, net of taxes
|
0.32 | 0.04 | ||||||
(1.93 | ) | (0.14 | ) | |||||
Shareholders' net income
|
$ | 0.20 | $ | 1.28 | ||||
Weighted average shares (in thousands)
|
289,258 | 288,999 | ||||||
SHAREHOLDERS' EQUITY at March 31,
|
$ | 9,660 | $ | 8,561 | ||||
SHAREHOLDERS' EQUITY PER SHARE at March 31,
|
$ | 33.79 | $ | 29.69 | ||||
Effective December 31, 2012, Cigna changed its external reporting segments. The primary change was that the two businesses that comprised the former International segment (international health care and supplemental health, life and accident) are now reported as follows: 1) substantially all of the international health care business (comprised primarily of the global health benefits business) is now combined with the former Health Care segment and renamed Global Health Care; and 2) the supplemental health, life and accident business is now a separate reporting segment named Global Supplemental Benefits. In addition, certain disability and life products previously reported in the former Health Care segment are now reported in the Group Disability and Life segment. Prior period segment information has been conformed to the current reporting segments. Please refer to Cigna's Form 8-K filed on January 24, 2013 for additional information.
|
||||||||
(1) Includes pre-tax futures and swaps contracts entered into prior to February 4, 2013 as part of a dynamic hedge program to manage equity and growth interest rate risks in Cigna's Run-off Reinsurance operations. Cigna recorded related offsets in Benefits and Expenses to adjust liabilities for reinsured guaranteed minimum death benefit and guaranteed minimum income benefit contracts. These hedge programs were terminated after February 4, 2013 as a result of Cigna's agreement with Berkshire Hathaway in which Cigna effectively exited the Run-off Reinsurance business. For more information, please refer to Cigna's Form 10-Q for the period ended March 31, 2013, which is expected to be filed on May 2, 2013.
|
||||||||
(2) Adjusted income (loss) from operations is segment earnings (loss) (shareholders' net income (loss) before net realized investment gains (losses)) and excludes results of Cigna's guaranteed minimum income benefits business and special items. See Exhibit 2 for a detailed reconciliation of adjusted income (loss) from operations to segment earnings (loss) and shareholders' net income presented in accordance with generally accepted accounting principles.
|
||||||||
(3) The three months ended March 31, 2013 includes a pre-tax charge of $781 million ($507 million after-tax) in Run-off Reinsurance related to the transaction with Berkshire Hathaway in which Cigna effectively exited the run-off reinsurance business.
|
||||||||
(4) The three months ended March 31, 2013 includes a pre-tax charge of $77 million ($51 million after-tax) related to a disability claims regulatory matter in the Group Disability & Life segment.
|
||||||||
(5) The three months ended March 31, 2012 includes pre-tax charges of $20 million ($13 million after-tax) resulting from a litigation matter in Global Health Care.
|
||||||||
(6) The three months ended March 31, 2012 includes pre-tax charges of $41 million ($28 million after-tax) for costs associated with the 2012 acquisition of HealthSpring: $30 million pre-tax ($21 million after-tax) in Corporate and $11 million pre-tax ($7 million after-tax) in Global Health Care.
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CIGNA CORPORATION
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SUPPLEMENTAL FINANCIAL INFORMATION (unaudited)
|
Exhibit 2
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RECONCILIATION OF ADJUSTED INCOME (LOSS) FROM OPERATIONS TO SHAREHOLDERS' NET INCOME
|
|||
(Dollars in millions, except per share amounts)
|
Diluted
Earnings
Per Share
|
Consolidated
|
Global Health Care
|
Global Supplemental
Benefits
|
|||||||||||||||||||||||||||||
Three Months Ended March 31,
|
2013
|
2012
|
2013
|
2012
|
2013
|
2012
|
2013
|
2012
|
||||||||||||||||||||||||
Adjusted income (loss) from operations (1)
|
$ | 1.72 | $ | 1.24 | $ | 497 | $ | 359 | $ | 427 | $ | 296 | $ | 55 | $ | 43 | ||||||||||||||||
Results of guaranteed minimum income benefits business (2) | 0.09 | 0.14 | 25 | 41 | - | - | - | - | ||||||||||||||||||||||||
Special item(s), after-tax:
|
||||||||||||||||||||||||||||||||
Charge related to reinsurance transaction (3)
|
(1.75 | ) | - | (507 | ) | - | - | - | - | - | ||||||||||||||||||||||
Charge associated with disability claims regulatory matter (4)
|
(0.18 | ) | - | (51 | ) | - | - | - | - | - | ||||||||||||||||||||||
Costs associated with acquisitions (5)
|
- | (0.10 | ) | - | (28 | ) | - | (7 | ) | - | - | |||||||||||||||||||||
Litigation matters (6)
|
- | (0.04 | ) | - | (13 | ) | - | (13 | ) | - | - | |||||||||||||||||||||
Segment earnings (loss)
|
(0.12 | ) | 1.24 | (36 | ) | 359 | $ | 427 | $ | 276 | $ | 55 | $ | 43 | ||||||||||||||||||
Net realized investment gains, net of taxes
|
0.32 | 0.04 | 93 | 12 | ||||||||||||||||||||||||||||
Shareholders' net income
|
$ | 0.20 | $ | 1.28 | $ | 57 | $ | 371 | ||||||||||||||||||||||||
Group Disability
and Life |
Run-off
Reinsurance |
Other
Operations
|
Corporate
|
|||||||||||||||||||||||||||||
Three Months Ended March 31,
|
2013
|
2012
|
2013
|
2012
|
2013
|
2012
|
2013
|
2012
|
||||||||||||||||||||||||
Adjusted income (loss) from operations (1)
|
$ | 49 | $ | 68 | $ | (1 | ) | $ | (11 | ) | $ | 21 | $ | 20 | $ | (54 | ) | $ | (57 | ) | ||||||||||||
Results of guaranteed minimum income benefits business (2)
|
- | - | 25 | 41 | - | - | - | - | ||||||||||||||||||||||||
Special item(s), after-tax:
|
||||||||||||||||||||||||||||||||
Charge related to reinsurance transaction (3)
|
- | - | (507 | ) | - | - | - | - | - | |||||||||||||||||||||||
Charge associated with disability claims regulatory matter (4)
|
(51 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||
Costs associated with acquisitions (5)
|
- | - | - | - | - | - | - | (21 | ) | |||||||||||||||||||||||
Litigation matters (6)
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Segment earnings (loss)
|
$ | (2 | ) | $ | 68 | $ | (483 | ) | $ | 30 | $ | 21 | $ | 20 | $ | (54 | ) | $ | (78 | ) |
Diluted
|
||||||||||||||||||||||||||||||||
Earnings
|
Global Supplemental
|
|||||||||||||||||||||||||||||||
Per Share
|
Consolidated
|
Global Health Care
|
Benefits
|
|||||||||||||||||||||||||||||
Three Months Ended December 31, 2012
|
||||||||||||||||||||||||||||||||
Adjusted income (loss) from operations (1)
|
$ | 1.57 | $ | 452 | $ | 397 | $ | 38 | ||||||||||||||||||||||||
Results of guaranteed minimum income benefits business (2) | 0.02 | 7 | - | - | ||||||||||||||||||||||||||||
Special item(s), after-tax:
|
||||||||||||||||||||||||||||||||
Costs associated with litigation matters (7)
|
(0.24 | ) | (68 | ) | - | - | ||||||||||||||||||||||||||
Segment earnings (loss)
|
1.35 | 391 | $ | 397 | $ | 38 | ||||||||||||||||||||||||||
Net realized investment gains, net of taxes
|
0.06 | 15 | ||||||||||||||||||||||||||||||
Shareholders' net income
|
$ | 1.41 | $ | 406 |
Group Disability
|
Run-off
|
Other
|
||||||||||||||||||||||||||||||
and Life
|
Reinsurance
|
Operations
|
Corporate
|
|||||||||||||||||||||||||||||
Three Months Ended December 31, 2012
|
||||||||||||||||||||||||||||||||
Adjusted income (loss) from operations (1)
|
$ | 56 | $ | - | $ | 19 | $ | (58 | ) | |||||||||||||||||||||||
Results of guaranteed minimum income benefits business (2)
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- | 7 | - | - | ||||||||||||||||||||||||||||
Special item(s), after-tax:
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Costs associated with litigation matters (7)
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- | - | - | (68 | ) | |||||||||||||||||||||||||||
Segment earnings (loss)
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$ | 56 | $ | 7 | $ | 19 | $ | (126 | ) |
(1) Cigna measures the financial results of its segments using "segment earnings (loss)", which is defined as shareholders' net income (loss) before net realized investment gains (losses). Adjusted income (loss) from operations is defined as segment earnings excluding special items and results of Cigna's guaranteed minimum income benefits business.
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(2) Results of guaranteed minimum income benefits business on a pre-tax basis for:
- three months ended March 31, 2013 and 2012 were gains of $39 million and $63 million, respectively;
- three months ended December 31, 2012 were gains of $10 million.
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(3) The three months ended March 31, 2013 includes a pre-tax charge of $781 million ($507 million after-tax) in Run-Off Reinsurance related to the transaction with Berkshire Hathaway in which Cigna effectively exited the run-off reinsurance business.
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(4) The three months ended March 31, 2013 includes a pre-tax charge of $77 million ($51 million after-tax) related to a disability claims regulatory matter in the Group Disability & Life segment.
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(5) The three months ended March 31, 2012 includes pre-tax charges of $41 million ($28 million after-tax) for costs associated with the 2012 acquisition of HealthSpring: $30 million pre-tax ($21 million after-tax) in Corporate and $11 million pre-tax ($7 million after-tax) in Global Health Care.
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(6) The three months ended March 31, 2012 includes pre-tax charges of $20 million ($13 million after-tax) resulting from a litigation matter in Global Health Care.
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(7) The three months ended December 31, 2012 includes pre-tax charges of $104 million ($68 million after-tax) resulting from litigation matters in Corporate.
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