-----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, TohXhgDiDH3AYN8UgTsG1er88kh8s2agHBQzfjtaVTeKJQztq9BiUI9ci7wUWbNJ 6BY2xUfjRCSU7Myka4HZXA== 0000950159-98-000109.txt : 19980504 0000950159-98-000109.hdr.sgml : 19980504 ACCESSION NUMBER: 0000950159-98-000109 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980401 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980501 SROS: NYSE SROS: PHLX SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIGNA CORP CENTRAL INDEX KEY: 0000701221 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] 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: 98608293 BUSINESS ADDRESS: STREET 1: TWO LIBERTY PLACE 48TH FLOOR STREET 2: 1601 CHESTNUT STREET CITY: PHILADELPHIA STATE: PA ZIP: 19192 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) April 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, P.O. Box 7716 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 April 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 Statements not dealing 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. B. As a result of CIGNA's three-for-one stock split, which was approved by shareholders at the April 22, 1998 Annual Meeting of Shareholders, and pursuant to Rule 416(b) of the Securities Act of 1933, the 1,500,000 shares of CIGNA Common Stock, par value $1.00 per share, registered under Registration Statement No. 33-51791 on Form S-8, are proportionately adjusted to 4,500,000 shares of Common Stock, par value $.25 per share. 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: May 1, 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 April 30, 1998 EX-20 2 NEWS RELEASE Exhibit 20 [CIGNA LOGO] Immediate Albert D. Ciavardelli, Investor Relations - (215) 761-6128 Michael J. Monroe, Media Relations - (215) 761-6133 CIGNA REPORTS FIRST QUARTER RESULTS EARNINGS UP FOR EMPLOYEE HEALTH AND PENSION BENEFITS SEGMENTS PHILADELPHIA, April 30, 1998 -- CIGNA Corporation (NYSE:CI) today reported first quarter 1998 operating income* of $255 million, or $3.51 per share, excluding an after-tax gain from the sale of certain businesses and before giving effect to CIGNA's three-for-one stock split**. On a post-split basis, operating income per share would be $1.17. This compares with operating income of $260 million, or $3.51 per share ($1.17 per share post-split) for the first quarter of 1997. Operating income for the first quarter of 1998, including an after-tax gain of $202 million associated with the sale of CIGNA's individual life insurance and annuity businesses, was $457 million, or $6.30 per share ($2.10 per share post-split). 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 $131 million in the first quarter of 1998, compared with $117 million for the same period last year. ______________________ * 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. ** On April 22, 1998 CIGNA's shareholders approved a three-for-one stock split. The record date for the stock split is May 4, the distribution date for the split shares is May 15 and CIGNA expects its shares to begin trading on a split-adjusted basis on May 18. - 2 - HMO medical membership at March 31, 1998 was 6.3 million members, an increase of 400,000 members, or 7 percent, from December 31, 1997, and up 11 percent over first 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 first quarter of 1998. This compares with operating income of $54 million for the same period last year. Assets under management at March 31, 1998 were $48.4 billion, an increase of 18 percent from $41.1 billion as of March 31, 1997. Individual Financial Services - ----------------------------- CIGNA sold its individual life insurance and annuity businesses effective January 1, 1998 to Lincoln National Corporation and received $1.4 billion in cash and retained approximately $225 million of capital previously committed to the businesses that were sold. The sale resulted in an after-tax gain of $773 million. Because the sale was principally in the form of an indemnity reinsurance arrangement, $202 million was recognized at closing and $571 million was deferred and will be recognized in future periods, beginning with $17 million after-tax in the first quarter of 1998. - 3 - 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 the deferred gain from the sale of the individual life insurance and annuity businesses. The segment's operating income, excluding the $202 million gain on the sale, was $41 million in the first quarter of 1998, compared with $47 million for the same period last year. Property and Casualty - --------------------- Ongoing operations had operating income of $50 million and a GAAP combined ratio after policyholders' dividends ("combined ratio") of 101 for the first quarter of 1998. This compares with operating income of $56 million and a combined ratio of 100 for the same period last year. Within the Ongoing operations, International had operating income of $31 million and a combined ratio of 95 for the first quarter of 1998. This compares with operating income of $33 million and a combined ratio of 94 for the first quarter of 1997. Domestic had operating income of $19 million and a combined ratio of 109 for the first quarter of 1998. This compares with operating income of $23 million and a combined ratio of 108 for the first quarter of 1997. - 4 - 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 $23 million in the first quarter of 1998, compared with an operating loss of $15 million for the same period last year. NET INCOME - ---------- Consolidated net income for the first quarter of 1998 was $495 million, or $6.82 per share ($2.27 per share post-split), including an after-tax gain of $202 million from the sale of certain businesses. Consolidated net income for the same period last year was $288 million, or $3.89 per share ($1.30 per share post-split). REVENUES - -------- Consolidated revenues for the first quarter of 1998 were $5.4 billion, compared with $4.6 billion for the same period last year. ASSETS/SHAREHOLDERS' EQUITY - --------------------------- Assets at March 31, 1998 were $111 billion, compared with $108 billion at December 31, 1997. Shareholders' equity was $8.3 billion, or $115.73 per share ($38.58 per share post-split), at March 31, 1998, compared with $7.9 billion, or $109.66 per share ($36.55 per share post-split), at December 31, 1997. - 5 - SHARE REPURCHASE - ---------------- CIGNA's share repurchase authority was increased by $750 million at the April Board of Directors meeting, which brings total available share repurchase authority to approximately $1 billion at April 30, 1998. During 1998, CIGNA has repurchased 797,000 shares of its common stock for $154 million (588,000 shares repurchased in the first quarter for $111 million). Quarterly earnings are available on CIGNA's home page on the Internet (http://www.cigna.com). CIGNA CORPORATION COMPARATIVE SUMMARY OF FINANCIAL RESULTS (Dollars in millions, except per share amounts)
[CIGNA LOGO] ================================================================================================================================== Three Months Ended March 31, 1998 1997 - ---------------------------------------------------------------------------------------------------------------------------------- REVENUES Premiums and fees $ 3,901 $ 3,388 Net investment income 937 1,053 Other revenues 198 160 Gain on sale of businesses (1) 316 - Realized investment gains 59 44 - ---------------------------------------------------------------------------------------------------------------------------------- Total $ 5,411 $ 4,645 - ------------------------------------------------------------------------------------------------------============================ OPERATING INCOME (LOSS) BY SEGMENT (1)(2) Employee Life and Health Benefits: Indemnity operations $ 69 $ 58 HMO operations 62 59 ---------- ----------- Total Employee Life and Health Benefits 131 117 Employee Retirement and Savings Benefits 56 54 Individual Financial Services 243 47 Property and Casualty: International 31 33 Domestic 19 23 ---------- ----------- Ongoing operations 50 56 Run-off operations - 1 ---------- ----------- Total Property and Casualty 50 57 Other Operations (23) (15) - ---------------------------------------------------------------------------------------------------------------------------------- Total $ 457 $ 260 - ------------------------------------------------------------------------------------------------------============================ NET INCOME (LOSS) BY SEGMENT (1) Employee Life and Health Benefits: Indemnity operations $ 87 $ 62 HMO operations 62 59 ---------- ----------- Total Employee Life and Health Benefits 149 121 Employee Retirement and Savings Benefits 59 62 Individual Financial Services 248 55 Property and Casualty: International 36 41 Domestic 19 22 ---------- ----------- Ongoing operations 55 63 Run-off operations 7 2 ---------- ----------- Total Property and Casualty 62 65 Other Operations (23) (15) - ---------------------------------------------------------------------------------------------------------------------------------- Total $ 495 $ 288 - ------------------------------------------------------------------------------------------------------============================ DILUTED EARNINGS PER SHARE PRE-SPLIT (3): Operating income $ 6.30 $ 3.51 After-tax realized investment gains 0.52 0.38 - ---------------------------------------------------------------------------------------------------------------------------------- Net income $ 6.82 $ 3.89 - ------------------------------------------------------------------------------------------------------============================ Weighted average shares (in thousands) 72,585 74,105 - ------------------------------------------------------------------------------------------------------============================ DILUTED EARNINGS PER SHARE POST-SPLIT (3): Operating income $ 2.10 $ 1.17 After-tax realized investment gains 0.17 0.13 - ---------------------------------------------------------------------------------------------------------------------------------- Net income $ 2.27 $ 1.30 - ------------------------------------------------------------------------------------------------------============================ Weighted average shares (in thousands) 217,755 222,315 - ------------------------------------------------------------------------------------------------------============================ SHAREHOLDERS' EQUITY at March 31 $ 8,325 $ 7,117 - ------------------------------------------------------------------------------------------------------============================ SHAREHOLDERS' EQUITY PER SHARE at March 31 (Pre-Split) (3): $ 115.73 $ 96.18 - ------------------------------------------------------------------------------------------------------============================ SHAREHOLDERS' EQUITY PER SHARE at March 31 (Post-Split) (3): $ 38.58 $ 32.06 - ------------------------------------------------------------------------------------------------------============================ (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. (3) On April 22, 1998, CIGNA's shareholders approved a three-for-one common stock split.
-----END PRIVACY-ENHANCED MESSAGE-----