Cigna Reports Strong Second Quarter 2017 Results, Raises Outlook
- Total revenues increased 4% to $10.3 billion in the second quarter
- Shareholders’ net income for the second quarter was $813 million, or $3.15 per share
- Adjusted income from operations 1 in the second quarter was $750
million, or $2.91 per share
- Global medical customer base 2 is projected to grow in the range of
500,000 to 600,000 lives in 2017
- Adjusted income from operations 1,3 is now projected to be in the
range of $2.50 billion to $2.58 billion in 2017, or $9.75 to $10.05 per share 4 , which represents
per share growth of 20% to 24% over 2016
Cigna Corporation (NYSE: CI) today reported second quarter 2017 results with strong performance across the company’s Global
Health Care, Global Supplemental Benefits and Group Disability & Life segments.
“Our strong second quarter results and significant growth across our diversified portfolio of businesses demonstrate the focused
execution of our strategy,” said David M. Cordani, President and Chief Executive Officer. “We continue to drive differentiated
value for our customers, clients and partners, and innovate in a rapidly changing and dynamic environment.”
Total revenues in the quarter were $10.3 billion, an increase of 4% over second quarter 2016, driven by continued growth in
Cigna's targeted customer segments.
For the second quarter of 2017, shareholders’ net income was $813 million, or $3.15 per share, compared with $510 million, or
$1.97 per share, for the second quarter of 2016.
Cigna's adjusted income from operations1 for the second quarter of 2017 was $750 million, or $2.91 per share,
compared with $515 million, or $1.98 per share, for the second quarter of 2016. This reflects significantly increased earnings
contributions from each of our business segments.
Reconciliations of shareholders’ net income to adjusted income from operations1 are provided on the following page,
and on Exhibit 2 of this earnings release.
CONSOLIDATED HIGHLIGHTS
The following table includes highlights of results and reconciliations of consolidated operating revenues5 to total
revenues and adjusted income from operations1 to shareholders’ net income:
|
|
|
|
| Consolidated Financial Results (dollars in millions, customers in
thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months |
|
|
Three Months Ended |
|
Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Revenues |
|
$ |
10,318 |
|
$ |
9,960 |
|
$ |
10,385 |
|
$ |
20,703 |
| Net Realized Investment Gains |
|
|
(51) |
|
|
(67) |
|
|
(46) |
|
|
(97) |
| Consolidated Operating Revenues5 |
|
$ |
10,267 |
|
$ |
9,893 |
|
$ |
10,339 |
|
$ |
20,606 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated Earnings, net of taxes |
|
|
|
|
|
|
|
|
|
|
|
|
| Shareholders’ Net Income |
|
$ |
813 |
|
$ |
510 |
|
$ |
598 |
|
$ |
1,411 |
| Net Realized Investment Gains |
|
|
(34) |
|
|
(44) |
|
|
(31) |
|
|
(65) |
| Amortization of Other Acquired Intangible Assets |
|
|
18 |
|
|
23 |
|
|
20 |
|
|
38 |
| Special Items1 |
|
|
(47) |
|
|
26 |
|
|
132 |
|
|
85 |
| Adjusted Income from Operations1 |
|
$ |
750 |
|
$ |
515 |
|
$ |
719 |
|
$ |
1,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shareholders’ Net Income, per share |
|
$ |
3.15 |
|
$ |
1.97 |
|
$ |
2.30 |
|
$ |
5.45 |
| Adjusted Income from Operations1, per share |
|
$ |
2.91 |
|
$ |
1.98 |
|
$ |
2.77 |
|
$ |
5.67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Second quarter 2017 shareholders’ net income included a special item1 benefit of $47
million after-tax, or $0.18 per share, associated with the terminated merger agreement with Anthem, compared with a special
item1 charge in second quarter 2016 of $26 million after-tax, or $0.10 per share, for merger-related transaction
costs. The second quarter 2017 special item benefit1 was driven by a merger-related income tax benefit, net of
transaction costs.
- Cash and marketable investments at the parent company were $2.2 billion at June 30, 2017 and $2.8
billion at December 31, 2016.
- Year to date, as of August 3, 2017, the Company repurchased 7.7 million shares of common stock for
approximately $1.25 billion.
HIGHLIGHTS OF SEGMENT RESULTS
See Exhibit 2 for a reconciliation of adjusted income (loss) from operations1 to shareholders’ net income.
Global Health Care
This segment includes Cigna’s Commercial and Government businesses that deliver medical and specialty health care products and
services to domestic and multi-national clients and customers using guaranteed cost, retrospectively experience-rated and
administrative services only (“ASO”) funding arrangements. Specialty health care includes behavioral, dental, disease and medical
management, stop loss and pharmacy-related products and services.
|
|
|
|
|
|
| Financial Results (dollars in millions, customers in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months |
|
|
Three Months Ended |
|
Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Premiums and Fees |
|
$ |
7,179 |
|
$ |
6,943 |
|
$ |
7,339 |
|
$ |
14,518 |
| Adjusted Income from Operations1 |
|
$ |
591 |
|
$ |
486 |
|
$ |
610 |
|
$ |
1,201 |
| Adjusted Margin, After-Tax6 |
|
|
7.3% |
|
|
6.2% |
|
|
7.4% |
|
|
7.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of the Periods Ended |
|
|
|
|
|
|
June 30, |
|
March 31, |
|
December 31, |
|
Customers:
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Commercial |
|
|
15,163 |
|
|
14,543 |
|
|
15,232 |
|
|
14,631 |
| Government |
|
|
491 |
|
|
598 |
|
|
502 |
|
|
566 |
| Medical2 |
|
|
15,654 |
|
|
15,141 |
|
|
15,734 |
|
|
15,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Behavioral Care7 |
|
|
26,014 |
|
|
25,312 |
|
|
26,006 |
|
|
25,790 |
| Dental |
|
|
15,760 |
|
|
14,880 |
|
|
15,788 |
|
|
14,981 |
| Pharmacy |
|
|
8,902 |
|
|
8,302 |
|
|
8,910 |
|
|
8,461 |
| Medicare Part D |
|
|
823 |
|
|
1,037 |
|
|
853 |
|
|
972 |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Global Health Care delivered strong results in the second quarter, reflecting consistent performance
in well-positioned growth businesses.
- Second quarter 2017 premiums and fees increased 3% relative to second quarter 2016, driven by
customer growth and specialty contributions in our Commercial business, partially offset by enrollment reductions as expected in
our Government business.
- The medical customer base2 at the end of the second quarter 2017 totaled 15.7 million, an
increase of 457,000 customers year to date, driven by organic growth in all of our Commercial market segments.
- Second quarter 2017 adjusted income from operations1 and adjusted margin,
after-tax6 reflect strong medical and specialty results, continued effective medical cost management, favorable prior
year reserve development and operating expense discipline.
- Adjusted income from operations1 for second quarter 2017 and first quarter 2017 included
favorable prior year reserve development on an after-tax basis of $36 million and $61 million, respectively. Second quarter of
2016 did not have a meaningful amount of net prior year development.
- The Total Commercial medical care ratio8 (“MCR”) of 78.7% for second quarter 2017 reflects
strong performance and effective medical cost management, as well as favorable prior year development, and the impact of the
health insurance tax moratorium.
- The Total Government MCR8 of 86.1% for second quarter 2017 reflects solid performance in
our Medicare Advantage and Medicare Part D businesses.
- The second quarter 2017 Global Health Care operating expense ratio8 of 19.9% reflects the
impact of the health insurance tax moratorium, business mix changes and continued effective expense management.
- Global Health Care net medical costs payable9 was approximately $2.59 billion at June 30,
2017 and $2.26 billion at December 31, 2016.
Global Supplemental Benefits
This segment includes Cigna’s global individual supplemental health, life and accident insurance business, primarily in Asia,
and Medicare supplement coverage in the United States.
| |
|
Financial Results (dollars in millions, policies in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months |
|
|
Three Months Ended |
|
Ended |
|
|
June 30, |
March 31, |
|
June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Premiums and Fees10 |
|
$ |
914 |
|
$ |
800 |
|
$ |
869 |
|
$ |
1,783 |
| Adjusted Income from Operations1 |
|
$ |
105 |
|
$ |
83 |
|
$ |
74 |
|
$ |
179 |
| Adjusted Margin, After-Tax6 |
|
|
11.0% |
|
|
9.9% |
|
|
8.1% |
|
|
9.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of the Periods Ended |
|
|
|
|
|
|
June 30, |
March 31, |
|
December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Policies10 |
|
|
13,058 |
|
|
11,965 |
|
|
12,611 |
|
|
12,151 |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Global Supplemental Benefits results continue to reflect the value created by affordable and
personalized solutions delivered directly to individual consumers through a diversified set of distribution channels.
- Second quarter 2017 premiums and fees10 grew 14% over second quarter 2016, reflecting
continued business growth.
- Second quarter 2017 adjusted income from operations1 and adjusted margin,
after-tax6 reflect business growth, favorable claims experience, particularly in South Korea, and effective operating
expense management.
Group Disability and Life
This segment includes Cigna’s group disability, life and accident insurance operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Results (dollars in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months |
|
|
Three Months Ended |
|
Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Premiums and Fees |
|
$ |
1,022 |
|
$ |
1,012 |
|
$ |
1,031 |
|
$ |
2,053 |
| Adjusted Income (Loss) from Operations1 |
|
$ |
83 |
|
$ |
(12) |
|
$ |
68 |
|
$ |
151 |
| Adjusted Margin, After-Tax6 |
|
|
7.5% |
|
|
(1.1%) |
|
|
6.1% |
|
|
6.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Group Disability and Life results reflect the value created for our customers and clients through
differentiated solutions that enhance health, productivity and sense of security.
- Second quarter 2017 premiums and fees are generally in-line with second quarter 2016.
- Second quarter 2017 adjusted income from operations1 and adjusted margin,
after-tax6 reflect further improvement in disability performance and continued stable life results.
Corporate & Other Operations
Adjusted loss from operations1 for Cigna's remaining operations is presented below:
|
|
|
|
|
|
|
|
Financial Results (dollars in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months |
|
|
Three Months Ended |
|
Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2017 |
|
2016 |
|
|
2017 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Corporate & Other Operations |
|
$ |
(29) |
|
$ |
(42) |
|
$ |
(33) |
|
$ |
(62) |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Second quarter 2017 adjusted loss from operations1 improved relative to second quarter
2016 primarily due to favorability in corporate income taxes.
2017 OUTLOOK
Cigna's outlook for full year 2017 consolidated adjusted income from operations1,3 is in the range of $2.50 billion
to $2.58 billion, or $9.75 to $10.05 per share. Cigna’s outlook excludes the impact of additional prior year reserve development
and potential effects of any future capital deployment.4
|
|
|
|
(dollars in millions, except where noted and per share amounts)
|
|
Projection for Full-Year Ending |
|
|
December 31, 2017 |
|
|
|
|
| Adjusted Income (Loss) from Operations 1,3 |
|
|
|
| Global Health Care |
|
$ |
2,100 to 2,140 |
| Global Supplemental Benefits |
|
$ |
310 to 330 |
| Group Disability and Life |
|
$ |
260 to 280 |
| Ongoing Businesses |
|
$ |
2,670 to 2,750 |
|
|
|
|
| Corporate & Other Operations |
|
$ |
(170) |
| Consolidated Adjusted Income from Operations1,3 |
|
$ |
2,500 to 2,580 |
|
|
|
|
| Consolidated Adjusted Income from Operations, per share1,3,4 |
|
$ |
9.75 to 10.05 |
|
|
|
|
|
|
|
|
2017 Operating Metrics and Ratios Outlook
|
|
|
|
|
|
|
Total Revenue Growth
|
|
3% to 4%
|
|
|
|
| Full Year Total Commercial Medical Care Ratio 8 |
|
80.5% to 81.5% |
|
|
|
|
Full Year Total Government Medical Care Ratio 8
|
|
84.5% to 85.5% |
|
|
|
|
Full Year Global Health Care Operating Expense Ratio 8
|
|
20.5% to 21.5% |
|
|
|
|
Global Medical Customer Growth 2
|
|
500,000 to 600,000 customers
|
|
|
|
The foregoing statements represent the Company’s current estimates of Cigna's 2017 consolidated and segment adjusted income from
operations1,3 and other key metrics as of the date of this release. Actual results may differ materially depending on a
number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release.
Management does not assume any obligation to update these estimates.
This quarterly earnings release and the Quarterly Financial Supplement are available on Cigna’s website in the Investor
Relations section (http://www.cigna.com/aboutcigna/investors). Management will be hosting a conference call to review second
quarter 2017 results and discuss full year 2017 outlook beginning today at 8:00 a.m. EDT. A link to the conference call is
available in the Investor Relations section of Cigna's website located at http://www.cigna.com/cignadotcom/aboutcigna/investors/events/index.page.
The call-in numbers for the conference call are as follows:
Live Call
(888) 324-8113 (Domestic)
(517) 308-9070 (International)
Passcode: 8042017
Replay
(800) 839-1117 (Domestic)
(203) 369-3355 (International)
It is strongly suggested you dial in to the conference call by 7:45 a.m. EDT.
| |
|
Notes:
|
| |
|
1.
|
|
Adjusted income (loss) from operations is defined as shareholders’ net income (loss) excluding
the following after-tax adjustments: net realized investment results, net amortization of other acquired intangible assets
and special items. Special items are identified in Exhibit 2 of this earnings release.
|
| |
|
|
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 consolidated measure is not determined in accordance with accounting
principles generally accepted in the United States (GAAP) and should not be viewed as a substitute for the most directly
comparable GAAP measure, shareholders’ net income. See Exhibits 1 and 2 for a reconciliation of adjusted income from
operations to shareholders’ net income.
|
| |
|
2.
|
|
Global medical customers include individuals who meet any one of the following criteria: are
covered under a medical insurance policy, managed care arrangement, or service agreement issued by Cigna; have access to
Cigna's provider network for covered services under their medical plan; or have medical claims and services that are
administered by Cigna.
|
| |
|
3.
|
|
Management is not able to provide a reconciliation to shareholders’ net income (loss) on a
forward-looking basis because we are unable to predict, without unreasonable effort, certain components thereof including (i)
future net realized investment results and (ii) future special items. These items are inherently uncertain and depend on
various factors, many of which are beyond our control. As such, any associated estimate and its impact on shareholders’ net
income could vary materially.
|
| |
|
4.
|
|
The Company’s outlook excludes the potential effects of any share repurchases or business
combinations that may occur after the date of this earnings release.
|
| |
|
5.
|
|
The measure “consolidated operating revenues” is not determined in accordance with GAAP and
should not be viewed as a substitute for the most directly comparable GAAP measure, “total revenues.” We define consolidated
operating revenues as total revenues excluding realized investment results. We exclude realized investment results from this
measure because our portfolio managers may sell investments based on factors largely unrelated to the underlying business
purposes of each segment. As a result, gains or losses created in this process may not be indicative of past or future
underlying performance of the business. See Exhibit 1 for a reconciliation of consolidated operating revenues to total
revenues.
|
| |
|
6.
|
|
Adjusted margin, after-tax, is calculated by dividing adjusted income (loss) from operations by
operating revenues for each segment.
|
| |
|
7.
|
|
Prior period behavioral care customers have been revised to conform to current
presentation.
|
| |
|
8.
|
|
Operating ratios are defined as follows:
|
|
|
•
|
|
Total Commercial medical care ratio represents medical costs as a percentage of premiums for all
commercial risk products, including medical, pharmacy, dental, stop loss and behavioral products provided through guaranteed
cost or experience-rated funding arrangements in both the United States and internationally.
|
|
|
•
|
|
Total Government medical care ratio represents medical costs as a percentage of premiums for
Medicare Advantage, Medicare Part D, and Medicaid products.
|
|
|
•
|
|
Global Health Care operating expense ratio represents operating expenses excluding acquisition
related amortization expense as a percentage of operating revenue in the Global Health Care segment.
|
|
|
|
|
|
|
9.
|
|
Global Health Care medical costs payable are presented net of reinsurance and other recoverables.
The gross Global Health Care medical costs payable balance was $2.85 billion as of June 30, 2017 and $2.53 billion as of
December 31, 2016.
|
| |
|
10.
|
|
Cigna owns a 50% noncontrolling interest in its China joint venture. Cigna's 50% share of the
joint venture’s earnings is reported in Other Revenues using the equity method of accounting under GAAP. As such, the
premiums and fees and policy counts for the Global Supplemental Benefits segment do not include the China joint
venture.
|
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|
|
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release, and oral statements made with respect to information contained in this release, may contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on
Cigna's current expectations and projections about future trends, events and uncertainties. These statements are not historical
facts. Forward-looking statements may include, among others, statements concerning our projected adjusted income (loss) from
operations outlook for 2017, on both a consolidated and segment basis; projected total revenue growth and global medical customer
growth, each over year end 2016; projected growth beyond 2017; projected medical care and operating expense ratios and medical cost
trends; future financial or operating performance, including our ability to deliver personalized and innovative solutions for our
customers and clients; future growth, business strategy, strategic or operational initiatives; economic, regulatory or competitive
environments, particularly with respect to the pace and extent of change in these areas; financing or capital deployment plans and
amounts available for future deployment; our prospects for growth in the coming years; and other statements regarding Cigna's
future beliefs, expectations, plans, intentions, financial condition or performance. You may identify forward-looking statements by
the use of words such as “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “may,” “should,”
“will” or other words or expressions of similar meaning, although not all forward-looking statements contain such terms.
Forward-looking statements are subject to risks and uncertainties, both known and unknown, that could cause actual results to
differ materially from those expressed or implied in forward-looking statements. Such risks and uncertainties include, but are not
limited to: our ability to achieve our financial, strategic and operational plans or initiatives; our ability to predict and manage
medical costs and price effectively and develop and maintain good relationships with physicians, hospitals and other health care
providers; the impact of modifications to our operations and processes, including those in our disability business; our ability to
identify potential strategic acquisitions or transactions and realize the expected benefits of such transactions; the substantial
level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws
or regulations; the outcome of litigation, regulatory audits, investigations, actions and/or guaranty fund assessments;
uncertainties surrounding participation in government-sponsored programs such as Medicare; the effectiveness and security of our
information technology and other business systems; unfavorable industry, economic or political conditions including foreign
currency movements; acts of war, terrorism, natural disasters or pandemics; uncertainty as to the outcome of the litigation between
Cigna and Anthem, Inc. with respect to the termination of the merger agreement, the reverse termination fee and/or contract and
non-contract damages for claims each party has filed against the other, including the risk that a court finds that Cigna has not
complied with its obligations under the merger agreement, is not entitled to receive the reverse termination fee or is liable for
breach of the merger agreement; as well as more specific risks and uncertainties discussed in our most recent report on Form 10-K
and subsequent reports on Forms 10-Q and 8-K available on the Investor Relations section of www.cigna.com. You should not place undue reliance on forward-looking statements, which speak only as of the
date they are made, are not guarantees of future performance or results, and are subject to risks, uncertainties and assumptions
that are difficult to predict or quantify. Cigna undertakes no obligation to update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise, except as may be required by law.
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| CIGNA CORPORATION |
|
|
|
|
|
| COMPARATIVE SUMMARY OF FINANCIAL RESULTS (unaudited) |
|
|
Exhibit 1 |
| (Dollars in millions, except per share amounts) |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
June 30, |
|
|
|
June 30, |
| |
|
2017 |
|
2016 |
|
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
| REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Premiums |
|
$ |
8,010 |
|
$ |
7,654 |
|
|
|
$ |
16,113 |
|
$ |
15,400 |
| Fees |
|
|
1,124 |
|
|
1,127 |
|
|
|
|
2,280 |
|
|
2,260 |
| Net investment income |
|
|
308 |
|
|
294 |
|
|
|
|
611 |
|
|
566 |
| Mail order pharmacy revenues |
|
|
757 |
|
|
748 |
|
|
|
|
1,467 |
|
|
1,445 |
| Other revenues |
|
|
68 |
|
|
70 |
|
|
|
|
135 |
|
|
138 |
| Consolidated operating revenues |
|
|
10,267 |
|
|
9,893 |
|
|
|
|
20,606 |
|
|
19,809 |
| Net realized investment gains (losses) |
|
|
51 |
|
|
67 |
|
|
|
|
97 |
|
|
35 |
| |
|
|
|
|
|
|
|
|
|
|
| Total revenues |
|
$ |
10,318 |
|
$ |
9,960 |
|
|
|
$ |
20,703 |
|
$ |
19,844 |
|
|
|
|
|
|
|
|
|
|
|
| SHAREHOLDERS' NET INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shareholders' net income |
|
$ |
813 |
|
$ |
510 |
|
|
|
$ |
1,411 |
|
$ |
1,029 |
| After-tax adjustments to reconcile to adjusted income from operations: |
|
|
|
|
|
|
|
|
|
| Realized investment (gains) losses |
|
|
(34) |
|
|
(44) |
|
|
|
|
(65) |
|
|
(23) |
| Amortization of other acquired intangible assets, net |
|
|
18 |
|
|
23 |
|
|
|
|
38 |
|
|
48 |
| Special items |
|
|
(47) |
|
|
26 |
|
|
|
|
85 |
|
|
62 |
| |
|
|
|
|
|
|
|
|
|
|
| Adjusted income from operations (1) |
|
$
|
750 |
|
$
|
515 |
|
|
|
$ |
1,469 |
|
$ |
1,116 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income (loss) from operations by segment
|
|
|
|
|
|
|
|
|
|
|
| Global Health Care |
|
$ |
591 |
|
$ |
486 |
|
|
|
$ |
1,201 |
|
$ |
1,030 |
| Global Supplemental Benefits |
|
|
105 |
|
|
83 |
|
|
|
|
179 |
|
|
150 |
| Group Disability and Life |
|
|
83 |
|
|
(12) |
|
|
|
|
151 |
|
|
3 |
| Ongoing Operations |
|
|
779 |
|
|
557 |
|
|
|
|
1,531 |
|
|
1,183 |
| Corporate and Other |
|
|
(29) |
|
|
(42) |
|
|
|
|
(62) |
|
|
(67) |
| |
|
|
|
|
|
|
|
|
|
|
| Total adjusted income from operations |
|
$ |
750 |
|
$ |
515 |
|
|
|
$ |
1,469 |
|
$ |
1,116 |
|
|
|
|
|
|
|
|
|
|
|
| DILUTED EARNINGS PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shareholders' net income |
|
$ |
3.15 |
|
$ |
1.97 |
|
|
|
$ |
5.45 |
|
$ |
3.97 |
| After-tax adjustments to reconcile to adjusted income from operations: |
|
|
|
|
|
|
|
|
|
| Realized investment (gains) losses |
|
|
(0.13) |
|
|
(0.18) |
|
|
|
|
(0.25) |
|
|
(0.09) |
| Amortization of other acquired intangible assets, net |
|
|
0.07 |
|
|
0.09 |
|
|
|
|
0.15 |
|
|
0.18 |
| Special items |
|
|
(0.18) |
|
|
0.10 |
|
|
|
|
0.32 |
|
|
0.24 |
| |
|
|
|
|
|
|
|
|
|
|
| Adjusted income from operations (1) |
|
$ |
2.91 |
|
$ |
1.98 |
|
|
|
$ |
5.67 |
|
$ |
4.30 |
| Weighted average shares (in thousands) |
|
|
258,061 |
|
|
259,500 |
|
|
|
|
258,913 |
|
|
259,473 |
| Common shares outstanding (in thousands) |
|
|
|
|
|
|
|
|
252,859 |
|
|
256,558 |
|
|
|
|
|
|
|
|
|
|
|
| SHAREHOLDERS' EQUITY at June 30, |
|
|
|
|
|
|
|
$ |
14,546 |
|
$ |
13,356 |
|
|
|
|
|
|
|
|
|
|
|
| SHAREHOLDERS' EQUITY PER SHARE at June 30, |
|
|
|
|
|
|
|
$ |
57.53 |
|
$ |
52.06 |
| |
| (1) Adjusted income (loss) from operations is defined as shareholders' net income
(loss) excluding the following after-tax adjustments: realized investment results; net amortization of other acquired
intangible assets; and special items (identified and quantified on Exhibit 2). |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| CIGNA CORPORATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| RECONCILIATION OF SHAREHOLDERS' NET INCOME (LOSS) TO
ADJUSTED INCOME (LOSS) FROM OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Dollars in millions, except per share amounts) |
|
Diluted |
|
|
|
|
|
Global |
|
Group |
|
Corporate |
|
|
Earnings |
|
|
|
Global |
|
Supplemental |
|
Disability |
|
and |
|
|
Per Share |
|
Consolidated |
|
Health Care |
|
Benefits |
|
and Life |
|
Other |
| Three Months Ended, |
|
2Q17 |
|
2Q16 |
|
1Q17 |
|
2Q17 |
|
2Q16 |
|
1Q17 |
|
2Q17 |
|
2Q16 |
|
1Q17 |
|
2Q17 |
|
2Q16 |
|
1Q17 |
|
2Q17 |
|
2Q16 |
|
1Q17 |
|
2Q17 |
|
2Q16 |
|
1Q17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shareholders' net income (loss) |
|
$ |
3.15 |
|
|
$ |
1.97 |
|
|
$ |
2.30 |
|
|
$ |
813 |
|
|
$ |
510 |
|
|
$ |
598 |
|
|
$ |
599 |
|
|
$ |
487 |
|
|
$ |
544 |
|
|
$ |
101 |
|
|
$ |
78 |
|
$ |
77 |
|
|
$ |
97 |
|
|
$ |
3 |
|
|
$ |
59 |
|
|
$ |
16 |
|
|
$ |
(58 |
) |
|
$ |
(82 |
) |
| After-tax adjustments to reconcile to adjusted income (loss) from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized investment (gains) losses |
|
|
(0.13 |
) |
|
|
(0.18 |
) |
|
|
(0.12 |
) |
|
|
(34 |
) |
|
|
(44 |
) |
|
|
(31 |
) |
|
|
(22 |
) |
|
|
(19 |
) |
|
|
(16 |
) |
|
|
- |
|
|
|
- |
|
|
(9 |
) |
|
|
(14 |
) |
|
|
(15 |
) |
|
|
(6 |
) |
|
|
2 |
|
|
|
(10 |
) |
|
|
- |
|
| Amortization of other acquired intangible assets, net |
|
|
0.07 |
|
|
|
0.09 |
|
|
|
0.08 |
|
|
|
18 |
|
|
|
23 |
|
|
|
20 |
|
|
|
14 |
|
|
|
18 |
|
|
|
14 |
|
|
|
4 |
|
|
|
5 |
|
|
6 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Special items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term care guaranty fund assessment
|
|
|
- |
|
|
|
- |
|
|
|
0.32
|
|
|
|
- |
|
|
|
- |
|
|
|
83
|
|
|
|
- |
|
|
|
- |
|
|
|
68
|
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
15
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Merger-related transaction costs (1) |
|
|
(0.18 |
) |
|
|
0.10 |
|
|
|
0.19 |
|
|
|
(47 |
) |
|
|
26 |
|
|
|
49 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(47 |
) |
|
|
26 |
|
|
|
49 |
|
| Adjusted income (loss) from operations |
|
$ |
2.91 |
|
|
$ |
1.98 |
|
|
$ |
2.77 |
|
|
$ |
750 |
|
|
$ |
515 |
|
|
$ |
719 |
|
|
$ |
591 |
|
|
$ |
486 |
|
|
$ |
610 |
|
|
$ |
105 |
|
|
$ |
83 |
|
$ |
74 |
|
|
$ |
83 |
|
|
$ |
(12 |
) |
|
$ |
68 |
|
|
$ |
(29 |
) |
|
$ |
(42 |
) |
|
$ |
(33 |
) |
| Weighted average shares (in thousands) |
|
|
258,061 |
|
|
|
259,500 |
|
|
|
259,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Special items, pre-tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term care guaranty fund assessment
|
|
|
|
|
|
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
129 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
106 |
|
|
$ |
- |
|
|
$ |
- |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
23 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
| Merger-related transaction costs (1) |
|
|
|
|
|
|
|
|
16 |
|
|
|
34 |
|
|
|
63 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
16 |
|
|
|
34 |
|
|
|
63 |
|
| Total |
|
|
|
|
|
|
|
$ |
16 |
|
|
$ |
34 |
|
|
$ |
192 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
106 |
|
|
$ |
- |
|
|
$ |
- |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
23 |
|
|
$ |
16 |
|
|
$ |
34 |
|
|
$ |
63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Dollars in millions, except per share amounts) |
|
Diluted |
|
|
|
|
|
Global |
|
Group |
|
Corporate |
|
|
Earnings |
|
|
|
Global |
|
Supplemental |
|
Disability |
|
and |
| Six Months Ended June 30, |
|
Per Share |
|
Consolidated |
|
Health Care |
|
Benefits |
|
and Life |
|
Other |
|
|
2017 |
|
|
|
2016 |
|
2017 |
|
|
|
2016 |
|
2017 |
|
|
|
2016 |
|
2017 |
|
|
|
2016 |
|
2017 |
|
|
|
2016 |
|
2017 |
|
|
|
2016 |
| Shareholders' net income (loss) |
|
$
|
5.45
|
|
|
|
|
$
|
3.97
|
|
|
$
|
1,411
|
|
|
|
|
$
|
1,029
|
|
|
$
|
1,143
|
|
|
|
|
$
|
1,001
|
|
|
$
|
178
|
|
|
|
|
$
|
137
|
|
|
$
|
156
|
|
|
|
|
$
|
16
|
|
|
$
|
(66
|
)
|
|
|
|
$
|
(125
|
)
|
| After-tax adjustments to reconcile to adjusted income (loss) from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized investment (gains) losses |
|
|
(0.25 |
) |
|
|
|
|
(0.09 |
) |
|
|
(65 |
) |
|
|
|
|
(23 |
) |
|
|
(38 |
) |
|
|
|
|
(7 |
) |
|
|
(9 |
) |
|
|
|
|
1 |
|
|
|
(20 |
) |
|
|
|
|
(13 |
) |
|
|
2 |
|
|
|
|
|
(4 |
) |
| Amortization of other acquired intangible assets, net |
|
|
0.15 |
|
|
|
|
|
0.18 |
|
|
|
38 |
|
|
|
|
|
48 |
|
|
|
28 |
|
|
|
|
|
36 |
|
|
|
10 |
|
|
|
|
|
12 |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
| Special items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Long-term care guaranty fund assessment |
|
|
0.32 |
|
|
|
|
|
- |
|
|
|
83 |
|
|
|
|
|
- |
|
|
|
68 |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
15 |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
| Merger-related transaction costs (1) |
|
|
- |
|
|
|
|
|
0.24 |
|
|
|
2 |
|
|
|
|
|
62 |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
2 |
|
|
|
|
|
62 |
|
| Adjusted income (loss) from operations |
|
$ |
5.67 |
|
|
|
|
$ |
4.30 |
|
|
$ |
1,469 |
|
|
|
|
$ |
1,116 |
|
|
$ |
1,201 |
|
|
|
|
$ |
1,030 |
|
|
$ |
179 |
|
|
|
|
$ |
150 |
|
|
$ |
151 |
|
|
|
|
$ |
3 |
|
|
$ |
(62 |
) |
|
|
|
$ |
(67 |
) |
| Weighted average shares (in thousands) |
|
|
258,913 |
|
|
|
|
|
259,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common shares outstanding as of June 30, (in thousands) |
|
|
252,859 |
|
|
|
|
|
256,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Special items, pre-tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Long-term care guaranty fund assessment |
|
|
|
|
|
|
|
$ |
129 |
|
|
|
|
$ |
- |
|
|
$ |
106 |
|
|
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
$ |
- |
|
|
$ |
23 |
|
|
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
$ |
- |
|
| Merger-related transaction costs (1) |
|
|
|
|
|
|
|
|
79 |
|
|
|
|
|
74 |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
-
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
- |
|
|
|
79 |
|
|
|
|
|
74 |
|
| Total |
|
|
|
|
|
|
|
$ |
208 |
|
|
|
|
$ |
74 |
|
|
$ |
106 |
|
|
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
$ |
- |
|
|
$ |
23 |
|
|
|
|
$ |
- |
|
|
$ |
79 |
|
|
|
|
$ |
74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
For additional information related to a one-time tax benefit of approximately $60 million
recorded in the second quarter of 2017, please refer to Note 3 to the Consolidated Financial Statements in Cigna's Form 10-Q
for the period ended June 30, 2017 expected to be filed on August 4, 2017.
|
|
|
|
Cigna Corporation
Investor Relations
Will McDowell, 215-761-4198
or
Media Relations
Matt Asensio, 860-226-2599
View source version on businesswire.com: http://www.businesswire.com/news/home/20170804005123/en/