-----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, A1pt3CspB8eMiJSDaBB8VMZLRTJbE5F90Anhjft8lEUVFINZyc2aPoFFBzOQ/J4p 5BI+1/Uz4jLkbAQkw4E/qw== 0000950159-99-000118.txt : 19990505 0000950159-99-000118.hdr.sgml : 19990505 ACCESSION NUMBER: 0000950159-99-000118 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990503 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990504 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: 99609698 BUSINESS ADDRESS: STREET 1: TWO LIBERTY PLACE 48TH FLOOR STREET 2: 1601 CHESTNUT STREET 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) May 3, 1999 ----------- 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 May 3, 1999, 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; 6) significant stock market declines resulting in payments contingent on certain variable annuity account values; 7) the effect on CIGNA's international operations and investments from further significant deterioration in Latin American and Asian economies; and 8) proposals to change federal corporate income taxes. 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 4, 1999 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 3, 1999
CIGNA CORPORATION COMPARATIVE SUMMARY OF FINANCIAL RESULTS (Dollars in millions, except per share amounts) [CIGNA LOGO] - -------------------------------------------------------------------------------------------------- Three Months Ended March 31, 1999 1998 - -------------------------------------------------------------------------------------------------- REVENUES Premiums and fees $ 4,263 $ 3,901 Net investment income 858 937 Other revenues 237 198 Gain on sale of business (1) 0 316 Realized investment gains 42 59 - -------------------------------------------------------------------------------------------------- Total $ 5,400 $ 5,411 - -----------------------------------------------------------------------=========================== OPERATING INCOME (LOSS) BY SEGMENT (1)(2) Employee Health Care, Life and Disability Benefits: Indemnity operations $ 63 $ 69 HMO operations 94 62 --------- --------- Total Employee Health Care, Life and Disability Benefits 157 131 Employee Retirement Benefits and Investment Services 63 61 International Life, Health and Employee Benefits 3 9 Other Operations 30 233 Corporate (20) (18) --------- --------- Employee Benefits Businesses and Other 233 416 Property and Casualty: International 3 22 Domestic 15 19 --------- --------- Ongoing operations 18 41 Run-off operations 0 0 --------- --------- Total Property and Casualty 18 41 - -------------------------------------------------------------------------------------------------- Total $ 251 $ 457 - -----------------------------------------------------------------------=========================== INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE Employee Health Care, Life and Disability Benefits: Indemnity operations $ 69 $ 87 HMO operations 94 62 --------- --------- Total Employee Health Care, Life and Disability Benefits 163 149 Employee Retirement Benefits and Investment Services 64 67 International Life, Health and Employee Benefits 3 9 Other Operations 30 235 Corporate (19) (18) --------- --------- Employee Benefits Businesses and Other 241 442 Property and Casualty: International 17 27 Domestic 17 19 --------- --------- Ongoing operations 34 46 Run-off operations 4 7 --------- --------- Total Property and Casualty 38 53 - -------------------------------------------------------------------------------------------------- Total $ 279 $ 495 - -----------------------------------------------------------------------=========================== DILUTED EARNINGS PER SHARE: Operating income $ 1.21 $ 2.10 After-tax realized investment gains 0.13 0.17 - -------------------------------------------------------------------------------------------------- Income before cumulative effect of accounting change 1.34 2.27 Cumulative effect of accounting change, net of tax (0.43) (0.00) - -------------------------------------------------------------------------------------------------- Net income $ 0.91 $ 2.27 - -----------------------------------------------------------------------=========================== Weighted average shares (in thousands) 207,708 217,755 - -----------------------------------------------------------------------=========================== SHAREHOLDERS' EQUITY at March 31: $ 7,869 $ 8,325 - -----------------------------------------------------------------------=========================== SHAREHOLDERS' EQUITY PER SHARE at March 31: $ 38.68 $ 38.58 - -----------------------------------------------------------------------=========================== (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 business. (2) Operating income (loss) is defined as net income (loss) excluding after-tax realized investment results. Operating income in 1999 also excludes the cumulative effect of adopting a new accounting pronouncement for insurance-related assessments.
EX-20 2 NEWS RELEASE EXHIBIT 20 [CIGNA LOGO] For Release: Immediate Contact: Edwin J. Detrick, Investor Relations - (215) 761-6130 Michael J. Monroe, Media Relations - (215) 761-6133 CIGNA REPORTS FIRST QUARTER RESULTS EARNINGS UP 20% FOR HEALTH CARE SEGMENT PHILADELPHIA, May 3, 1999 -- CIGNA Corporation (NYSE:CI) today reported first quarter 1999 operating income* of $251 million, or $1.21 per share. This compares with operating income of $255 million, or $1.17 per share for the first quarter of 1998, adjusted to exclude an after-tax gain of $202 million associated with the sale of CIGNA's individual life insurance and annuity business. These results include the property and casualty operations that are to be sold to ACE Limited**, which is expected to be finalized by mid-1999. Excluding the operations to be sold, CIGNA's operating income for the first quarter of 1999 was $233 million, compared with operating income of $214 million for the same period in 1998 or $1.12 per share vs. $0.98 per share, a 14% increase. "Our employee benefits businesses continued to perform well in the quarter and we are particularly pleased with the underlying strength of the health businesses," said Wilson H. Taylor, CIGNA's chief executive. "The sale of the property and casualty businesses to ACE Limited remains on schedule for a mid-year closing," Taylor added. - -------------------------------- * Operating income (loss) is defined as net income (loss) excluding after-tax realized investment results and the cumulative effect of an accounting change. All earnings per share amounts are on a diluted basis. ** Sale is subject to regulatory approvals and other closing conditions. -2- SEGMENT RESULTS: Employee Health Care, Life and Disability Benefits - -------------------------------------------------- This segment includes CIGNA's HMO and indemnity operations. The segment had operating income of $157 million in the first quarter of 1999, up 20% compared with $131 million for the same period last year. The increase in operating income over the first quarter of 1998 is attributable to significant improvement in HMO results. Revenues for the first quarter were $3.3 billion, compared with $3.0 billion for the same period last year. Total covered lives were approximately 13 million at March 31, 1999. HMO medical membership was 6.7 million members, up 6% from March 31, 1998. Medical indemnity lives were 6.4 million, up 8% from March 31, 1998. 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 $63 million in the first quarter of 1999. This compares with operating income of $61 million for the same period last year. Assets under management at March 31, 1999 were $53 billion, an increase of 4% from $51 billion as of March 31, 1998. -3- 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 $3 million in the first quarter of 1999. This compares with operating income of $9 million for the same period last year. Other Operations - ---------------- Other Operations includes gain recognition related to the sale of the individual life insurance and annuity business, the leveraged corporate life insurance operation, the life and health reinsurance business and certain new business initiatives, as well as the results of the settlement annuity business and investment and real estate subsidiaries. Other Operations had operating income of $30 million in the first quarter of 1999, compared with operating income of $31 million for the same period last year, excluding the $202 million after-tax gain from the sale of the individual life insurance and annuity business. Corporate - --------- Corporate includes unallocated investment income and parent company expenses, primarily debt service. Corporate had a loss of $20 million in the first quarter of 1999, compared with a loss of $18 million for the same period last year. -4- Property and Casualty (P&C) - --------------------------- The P&C operations, which are under agreement of sale to ACE Limited, reported operating income of $18 million in the first quarter of 1999, compared with $41 million in the same period last year. The current quarter was impacted by after-tax catastrophe losses of $15 million, primarily for additional charges for Hurricanes Georges and Mitch. NET INCOME - ---------- Consolidated net income for the first quarter of 1999 was $188 million, or $0.91 per share, which includes 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. Consolidated net income for the same period last year was $293 million, or $1.34 per share, excluding the after-tax gain of $202 million from the sale of CIGNA's individual life insurance and annuity business. REVENUES - -------- Consolidated revenues for the first quarter of 1999 were $5.4 billion, compared with $5.1 billion for the first quarter of 1998, excluding the gain on the sale of the individual life insurance and annuity business. -5- ASSETS/SHAREHOLDERS' EQUITY - --------------------------- Assets at March 31, 1999 were $112.5 billion, compared with $114.6 billion at December 31, 1998. Shareholders' equity was $7.9 billion ($38.68 per share) at March 31, 1999, compared with $8.3 billion ($40.25 per share) at December 31, 1998. SHARE REPURCHASE - ---------------- In the first quarter of 1999, CIGNA repurchased 2.9 million shares of its common stock for $230 million. In April, CIGNA repurchased 1 million shares for $85 million. CIGNA's share repurchase authority was increased by $500 million at the January 1999 Board of Directors meeting. Total available repurchase authority was approximately $475 million at May 3, 1999. Quarterly earnings are available on CIGNA's home page on the Internet (http://www.cigna.com). -----END PRIVACY-ENHANCED MESSAGE-----