Delaware
(State or other jurisdiction of incorporation)
|
1-08323
(Commission File Number)
|
06-1059331
(IRS Employer
Identification No.)
|
[ ]
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
[ ]
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
[ ]
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
[ ]
|
Pre-commencement communication pursuant to Rule 13e-49(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Item 9.01
|
Financial Statements and Exhibits.
|
(d)
|
Exhibits.
|
Exhibit No.
|
Description
|
99.1
|
Cigna Corporation | |
Date: February 7, 2014
|
By: /s/ Thomas A. McCarthy
|
|
Thomas A. McCarthy
|
Executive Vice President and
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
NEWS RELEASE
|
![]() |
Contact:
|
Ted Detrick, Investor Relations – (215) 761-1414
|
|
Matt Asensio, Media Relations – (860) 226-2599
|
|
o
|
Consolidated revenues for 2013 increased 11% to $32.4 billion.
|
|
o
|
Adjusted income from operations1 for 2013 increased 11% to $1.93 billion, or $6.79 on a per share basis, which was a 13% increase over 2012.
|
|
o
|
Shareholders’ net income for 2013 was $1.48 billion, or $5.18 per share.
|
|
o
|
|
||||||||||||||||
Three Months Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
September 30,
|
December 31,
|
||||||||||||||
2013
|
2012
|
2013
|
2013
|
|||||||||||||
|
|
|
|
|||||||||||||
Total Revenues
|
$ | 8,151 | $ | 7,620 | $ | 8,066 | $ | 32,380 | ||||||||
Consolidated Earnings
|
||||||||||||||||
Adjusted income from operations1
|
$ | 387 | $ | 452 | $ | 536 | $ | 1,932 | ||||||||
Net realized investment gains, net of taxes
|
14 | 15 | 17 | 141 | ||||||||||||
GMIB results, net of taxes2
|
- | 7 | - | 25 | ||||||||||||
Special items, net of taxes4
|
(40 | ) | (68 | ) | - | (622 | ) | |||||||||
Shareholders' net income
|
$ | 361 | $ | 406 | $ | 553 | $ | 1,476 | ||||||||
Adjusted income from operations1, per share
|
$ | 1.39 | $ | 1.57 | $ | 1.89 | $ | 6.79 | ||||||||
Shareholders' net income, per share
|
$ | 1.29 | $ | 1.41 | $ | 1.95 | $ | 5.18 | ||||||||
As of the Periods Ended
|
||||||||||||||||
December 31,
|
September 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
||||||||||||||
Global Medical Customers
|
14,217
|
14,045
|
14,300
|
·
|
Cash and short term investments at the parent company were approximately $760 million at December 31, 2013 and approximately $700 million at December 31, 2012.
|
·
|
·
|
In the fourth quarter of 2013, the Company initiated a series of actions to improve its organizational efficiency, resulting in a $40 million after-tax charge which is reported as a special item. The Company expects the impact of these actions to reduce annualized operating expenses by approximately $45 million after-tax.
|
Three Months Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
September 30,
|
December 31,
|
||||||||||||||
2013
|
2012
|
2013
|
2013 | |||||||||||||
|
|
|
|
|||||||||||||
Premiums and Fees
|
$ | 5,723 | $ | 5,399 | $ | 5,699 | $ | 22,933 | ||||||||
Adjusted Income from Operations1
|
$ | 318 | $ | 397 | $ | 424 | $ | 1,572 | ||||||||
Adjusted Margin, After-Tax6
|
5.0 | % | 6.7 | % | 6.7 | % | 6.2 | % | ||||||||
As of the Periods Ended
|
||||||||||||||||
December 31,
|
September 30,
|
|||||||||||||||
Customers:
|
2013
|
2012
|
2013
|
|||||||||||||
Commercial
|
13,725 | 13,596 | 13,812 | |||||||||||||
Medicare and Medicaid
|
492 | 449 | 488 | |||||||||||||
Medical
|
14,217 | 14,045 | 14,300 | |||||||||||||
Behavioral Care
|
22,515 | 21,750 | 22,564 | |||||||||||||
Dental
|
12,074 | 11,392 | 12,091 | |||||||||||||
Pharmacy
|
7,095 | 6,772 | 7,000 | |||||||||||||
Medicare Part D
|
1,190 | 1,264 | 1,195 |
·
|
Overall, Global Health Care results for 2013 reflect continued growth in the Company’s targeted customer segments.
|
·
|
Fourth quarter premiums and fees increased approximately 6% relative to fourth quarter 2012, driven by customer growth, specialty contributions, and renewal rate increases.
|
·
|
·
|
Adjusted income from operations1 included favorable prior year reserve development on an after-tax basis of approximately $77 million for full year 2013, compared to $66 million for full year 2012.
|
·
|
Global Health Care net medical claims payable7 was approximately $1.9 billion at December 31, 2013 and $1.6 billion at December 31, 2012.
|
Three Months Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
September 30,
|
December 31,
|
||||||||||||||
2013
|
2012
|
2013
|
2013
|
|||||||||||||
|
|
|
|
|||||||||||||
Premiums and Fees8
|
$ | 662 | $ | 592 | $ | 634 | $ | 2,513 | ||||||||
Adjusted Income from Operations1
|
$ | 40 | $ | 38 | $ | 39 | $ | 183 | ||||||||
Adjusted Margin, After-Tax6
|
5.8 | % | 6.1 | % | 5.9 | % | 6.9 | % | ||||||||
As of the Periods Ended
|
||||||||||||||||
December 31,
|
September 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
||||||||||||||
Policies8
|
11,869 | 11,436 | 11,823 |
·
|
Fourth quarter 2013 premiums and fees grew 12% relative to fourth quarter 2012, reflecting customer growth, primarily in South Korea, as well as the acquisition of our Cigna Finansbank joint venture in Turkey.
|
·
|
Three Months Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
September 30,
|
December 31,
|
||||||||||||||
2013
|
2012
|
2013
|
2013
|
|||||||||||||
|
|
|
|
|||||||||||||
Premiums and Fees
|
$ | 873 | $ | 804 | $ | 848 | $ | 3,425 | ||||||||
Adjusted Income from Operations1
|
$ | 66 | $ | 56 | $ | 92 | $ | 311 | ||||||||
Adjusted Margin, After-Tax6
|
6.9 | % | 6.4 | % | 9.9 | % | 8.3 | % |
·
|
Fourth quarter 2013 results benefited from premium and fee growth of 9%, relative to fourth quarter 2012, due to growth in both disability and life businesses.
|
·
|
·
|
Third quarter adjusted income from operations1 includes a $26 million favorable after-tax impact related to a reserve study.
|
Three Months Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
September 30,
|
December 31,
|
||||||||||||||
2013
|
2012
|
2013
|
2013
|
|||||||||||||
|
|
|
|
|||||||||||||
Run-off Reinsurance 2
|
$ | (2 | ) | $ | - | $ | - | $ | (6 | ) | ||||||
Other Operations
|
$ | 20 | $ | 19 | $ | 35 | $ | 94 | ||||||||
Corporate
|
$ | (55 | ) | $ | (58 | ) | $ | (54 | ) | $ | (222 | ) |
·
|
Third quarter 2013 Other Operations results include a $14 million after-tax benefit related to an IRS examination.
|
·
|
(dollars in millions, except where noted and per share amounts)
|
|
|
Full-Year Ended
December 31, 2014
|
|
|
|
|
Global Health Care
|
$
|
1,575 to 1,635
|
|
Global Supplemental Benefits
|
195 to 215
|
||
Group Disability and Life
|
305 to 325
|
||
Ongoing Businesses
|
$
|
2,075 to 2,175
|
|
Corporate and other
|
$
|
(175)
|
|
Consolidated
|
$
|
1,900 to 2,000
|
|
$
|
6.80 to 7.20
|
||
Projected Global Medical Customer Growth (ex-Limited benefits)9
|
1 to 2%
|
||
|
1.
|
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 accounting principles generally accepted in the United States of America (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 Exhibit 2 for reconciliations of the non-GAAP measure to the most directly comparable GAAP measures.
|
|
2.
|
During the first quarter of 2013, Cigna entered into a definitive agreement with Berkshire Hathaway to exit the GMIB and VADBe businesses, effective February 4, 2013.
|
CIGNA CORPORATION
|
||||||||||||||||
COMPARATIVE SUMMARY OF FINANCIAL RESULTS (unaudited)
|
Exhibit 1
|
|||||||||||||||
(Dollars in millions, except per share amounts)
|
||||||||||||||||
Three Months Ended
|
Year Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
REVENUES
|
||||||||||||||||
Premiums and fees
|
$ | 7,284 | $ | 6,827 | $ | 28,976 | $ | 26,187 | ||||||||
Net investment income
|
291 | 290 | 1,164 | 1,144 | ||||||||||||
Mail order pharmacy revenues
|
494 | 434 | 1,827 | 1,623 | ||||||||||||
Other revenues
|
61 | 58 | 239 | 240 | ||||||||||||
Total operating revenues
|
8,130 | 7,609 | 32,206 | 29,194 | ||||||||||||
Run-off Reinsurance hedge loss (1)
|
- | (13 | ) | (39 | ) | (119 | ) | |||||||||
Net realized investment gains
|
21 | 24 | 213 | 44 | ||||||||||||
Total
|
$ | 8,151 | $ | 7,620 | $ | 32,380 | $ | 29,119 | ||||||||
ADJUSTED INCOME (LOSS) FROM OPERATIONS (2)
|
||||||||||||||||
Global Health Care
|
$ | 318 | $ | 397 | $ | 1,572 | $ | 1,480 | ||||||||
Global Supplemental Benefits
|
40 | 38 | 183 | 148 | ||||||||||||
Group Disability and Life
|
66 | 56 | 311 | 281 | ||||||||||||
Run-off Reinsurance
|
(2 | ) | - | (6 | ) | (29 | ) | |||||||||
Other Operations
|
20 | 19 | 94 | 82 | ||||||||||||
Corporate
|
(55 | ) | (58 | ) | (222 | ) | (228 | ) | ||||||||
Total
|
$ | 387 | $ | 452 | $ | 1,932 | $ | 1,734 | ||||||||
SHAREHOLDERS' NET INCOME
|
||||||||||||||||
Segment Earnings (Loss)
|
||||||||||||||||
$ | 287 | $ | 397 | $ | 1,517 | $ | 1,418 | |||||||||
32 | 38 | 175 | 142 | |||||||||||||
65 | 56 | 259 | 279 | |||||||||||||
Run-off Reinsurance (5)
|
(2 | ) | 7 | (488 | ) | - | ||||||||||
Other Operations
|
20 | 19 | 94 | 82 | ||||||||||||
(55 | ) | (126 | ) | (222 | ) | (329 | ) | |||||||||
Total
|
347 | 391 | 1,335 | 1,592 | ||||||||||||
Net realized investment gains, net of taxes
|
14 | 15 | 141 | 31 | ||||||||||||
Shareholders' net income
|
$ | 361 | $ | 406 | $ | 1,476 | $ | 1,623 | ||||||||
DILUTED EARNINGS PER SHARE
|
||||||||||||||||
Adjusted income from operations (2)
|
$ | 1.39 | $ | 1.57 | $ | 6.79 | $ | 5.99 | ||||||||
Results of guaranteed minimum income benefits business, after-tax
|
- | 0.02 | 0.09 | 0.10 | ||||||||||||
Net realized investment gains, net of taxes
|
0.05 | 0.06 | 0.49 | 0.11 | ||||||||||||
(0.15 | ) | (0.24 | ) | (2.19 | ) | (0.59 | ) | |||||||||
Shareholders' net income
|
$ | 1.29 | $ | 1.41 | $ | 5.18 | $ | 5.61 | ||||||||
Weighted average shares (in thousands)
|
278,960 | 288,710 | 284,685 | 289,530 | ||||||||||||
SHAREHOLDERS' EQUITY at December 31,
|
$ | 10,567 | $ | 9,769 | ||||||||||||
SHAREHOLDERS' EQUITY PER SHARE at December 31,
|
$ | 38.35 | $ | 34.18 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
|
||||||||||||||||
|
||||||||||||||||
|
||||||||||||||||
|
||||||||||||||||
|
||||||||||||||||
|
||||||||||||||||
|
||||||||||||||||
CIGNA CORPORATION
|
||||||||||||||||||||||||||||||
SUPPLEMENTAL FINANCIAL INFORMATION (unaudited)
|
Exhibit 2 | |||||||||||||||||||||||||||||
RECONCILIATION OF ADJUSTED INCOME (LOSS) FROM OPERATIONS TO SHAREHOLDERS' NET INCOME
|
||||||||||||||||||||||||||||||
(Dollars in millions, except per share amounts)
|
Diluted
|
Global
|
Global Supplemental
|
||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share
|
Consolidated
|
Health Care
|
Benefits
|
|||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended,
|
4Q13 | 4Q12 | 3Q13 | 4Q13 | 4Q12 | 3Q13 | 4Q13 | 4Q12 | 3Q13 | 4Q13 | 4Q12 | 3Q13 | ||||||||||||||||||||||||||||||||||||
Adjusted income (loss) from operations (1)
|
$ | 1.39 | $ | 1.57 | $ | 1.89 | $ | 387 | $ | 452 | $ | 536 | $ | 318 | $ | 397 | $ | 424 | $ | 40 | $ | 38 | $ | 39 | ||||||||||||||||||||||||
Results of guaranteed minimum income benefits business (2)
|
- | 0.02 | - | - | 7 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Special items, after-tax:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Charges associated with litigation matters (7)
|
- | (0.24 | ) | - | - | (68 | ) | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
Charges for organizational efficiency plan (3)
|
(0.15 | ) | - | - | (40 | ) | - | - | (31 | ) | - | - | (8 | ) | - | - | ||||||||||||||||||||||||||||||||
Segment earnings (loss)
|
1.24 | 1.35 | 1.89 | 347 | 391 | 536 | $ | 287 | $ | 397 | $ | 424 | $ | 32 | $ | 38 | $ | 39 | ||||||||||||||||||||||||||||||
Net realized investment gains, net of taxes
|
0.05 | 0.06 | 0.06 | 14 | 15 | 17 | ||||||||||||||||||||||||||||||||||||||||||
Shareholders' net income
|
$ | 1.29 | $ | 1.41 | $ | 1.95 | $ | 361 | $ | 406 | $ | 553 |
Diluted
|
Global
|
Global Supplemental
|
||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share
|
Consolidated
|
Health Care
|
Benefits
|
|||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31,
|
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||
Adjusted income (loss) from operations (1)
|
$ | 6.79 | $ | 5.99 | $ | 1,932 | $ | 1,734 | $ | 1,572 | $ | 1,480 | $ | 183 | $ | 148 | ||||||||||||||||||||||||||||||||
Results of guaranteed minimum income benefits business (2)
|
0.09 | 0.10 | 25 | 29 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Special items, after-tax:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Cost associated with PBM services agreement (4)
|
(0.08 | ) | - | (24 | ) | - | (24 | ) | - | - | - | |||||||||||||||||||||||||||||||||||||
Charge related to reinsurance transaction (5)
|
(1.78 | ) | - | (507 | ) | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
Charge for disability claims regulatory matter (6)
|
(0.18 | ) | - | (51 | ) | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
(0.15 | ) | (0.17 | ) | (40 | ) | (50 | ) | (31 | ) | (42 | ) | (8 | ) | (6 | ) | |||||||||||||||||||||||||||||||||
Costs associated with acquisitions (9)
|
- | (0.14 | ) | - | (40 | ) | - | (7 | ) | - | - | |||||||||||||||||||||||||||||||||||||
Litigation matters (10)
|
- | (0.28 | ) | - | (81 | ) | - | (13 | ) | - | - | |||||||||||||||||||||||||||||||||||||
Segment earnings (loss)
|
4.69 | 5.50 | 1,335 | 1,592 | $ | 1,517 | $ | 1,418 | $ | 175 | $ | 142 | ||||||||||||||||||||||||||||||||||||
Net realized investment gains, net of taxes
|
0.49 | 0.11 | 141 | 31 | ||||||||||||||||||||||||||||||||||||||||||||
Shareholders' net income
|
$ | 5.18 | $ | 5.61 | $ | 1,476 | $ | 1,623 |
CIGNA CORPORATION
|
||||||||||||||||||||||||||||||
SUPPLEMENTAL FINANCIAL INFORMATION (unaudited)
|
Exhibit 2 | |||||||||||||||||||||||||||||
RECONCILIATION OF ADJUSTED INCOME (LOSS) FROM OPERATIONS TO SHAREHOLDERS' NET INCOME
|
||||||||||||||||||||||||||||||
(Dollars in millions, except per share amounts)
|
Group Disability
|
Run-off
|
Other
|
||||||||||||||||||||||||||||||||||||||||||||||
and Life
|
Reinsurance
|
Operations
|
Corporate
|
|||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended,
|
4Q13 | 4Q12 | 3Q13 | 4Q13 | 4Q12 | 3Q13 | 4Q13 | 4Q12 | 3Q13 | 4Q13 | 4Q12 | 3Q13 | ||||||||||||||||||||||||||||||||||||
Adjusted income (loss) from operations (1)
|
$ | 66 | $ | 56 | $ | 92 | $ | (2 | ) | $ | - | $ | - | $ | 20 | $ | 19 | $ | 35 | $ | (55 | ) | $ | (58 | ) | $ | (54 | ) | ||||||||||||||||||||
Results of guaranteed minimum income benefits business (2)
|
- | - | - | - | 7 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Special items, after-tax:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Charges associated with litigation matters (7)
|
- | - | - | - | - | - | - | - | - | - | (68 | ) | - | |||||||||||||||||||||||||||||||||||
Charges for organizational efficiency plan (3)
|
(1 | ) | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
Segment earnings (loss)
|
$ | 65 | $ | 56 | $ | 92 | $ | (2 | ) | $ | 7 | $ | - | $ | 20 | $ | 19 | $ | 35 | $ | (55 | ) | $ | (126 | ) | $ | (54 | ) |
Group Disability
|
Run-off
|
Other
|
||||||||||||||||||||||||||||||||||||||||||||||
and Life
|
Reinsurance
|
Operations
|
Corporate | |||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31,
|
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||
Adjusted income (loss) from operations (1)
|
$ | 311 | $ | 281 | $ | (6 | ) | $ | (29 | ) | $ | 94 | $ | 82 | $ | (222 | ) | $ | (228 | ) | ||||||||||||||||||||||||||||
Results of guaranteed minimum income benefits business (2)
|
- | - | 25 | 29 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Special items, after-tax:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Cost associated with PBM services agreement (4)
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Charge related to reinsurance transaction (5)
|
- | - | (507 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
Charge for disability claims regulatory matter (6)
|
(51 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
(1 | ) | (2 | ) | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
Costs associated with acquisitions (9)
|
- | - | - | - | - | - | - | (33 | ) | |||||||||||||||||||||||||||||||||||||||
Litigation matters (10)
|
- | - | - | - | - | - | - | (68 | ) | |||||||||||||||||||||||||||||||||||||||
Segment earnings (loss)
|
$ | 259 | $ | 279 | $ | (488 | ) | $ | - | $ | 94 | $ | 82 | $ | (222 | ) | $ | (329 | ) |
|
||||||||||||
- three months and year ended December 31, 2013 were $0 million and gains $39 million, respectively;
- three months and year ended December 31, 2012 were gains of $10 million and $44 million, respectively; and
- three months ended September 30, 2013 were $0 million.
|
||||||||||||
|
||||||||||||
|
||||||||||||
|
||||||||||||
|
||||||||||||
|
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|
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|
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