BLOOMFIELD, Conn., Nov. 5, 2020 /PRNewswire/ --
- Total revenues in the third quarter were $41.0 billion. Adjusted
revenues1 were $40.8
billion.
- Shareholders' net income for the third quarter was
$1.4 billion, or $3.78 per share
- Adjusted income from operations2 for
the third quarter was $1.6 billion,
or $4.41 per
share
- Adjusted income from operations2,3 is
projected to be in the range of $18.30 to $18.60
per share in 20203
Global health services company Cigna Corporation (NYSE: CI)
today reported solid third quarter 2020 performance led by strong
execution by its Evernorth segment.
"In these dynamic and challenging times, we at Cigna continue to
act as champions for our customers, clients, and communities as we
deliver on our promises to make health care more affordable,
predictable and simple," said David M.
Cordani, President and Chief Executive Officer. "We
delivered attractive revenue growth and strong earnings, while
further improving our capital position, driving strategic
flexibility. Additionally, our launch of Evernorth
accelerates our strategy, broadens our reach and expands our
opportunities for growth, further enhancing the value we deliver to
the marketplace each and every day."
Total revenues for third quarter 2020 were $41.0 billion. Adjusted
revenues1 were $40.8
billion and reflect strong contributions from each of
Cigna's ongoing businesses.
Shareholders' net income for third quarter 2020 was $1.4 billion, or $3.78 per share, compared with $1.4 billion, or $3.57 per share, for third quarter 2019.
Cigna's adjusted income from operations2 for third
quarter 2020 was $1.6 billion, or
$4.41 per share, compared with
$1.7 billion, or $4.54 per share, for third quarter 2019
reflecting strong fundamental performance across our businesses as
well as the return of medical utilization to more typical levels
and COVID-19 related impacts.
Reconciliations of total revenues to adjusted
revenues1 and of shareholders' net income to adjusted
income from operations2 are provided on the following
page and on Exhibit 1 of this earnings release.
CONSOLIDATED HIGHLIGHTS
The following table includes highlights of results
and reconciliations of total revenues to adjusted
revenues1 and shareholders' net income to adjusted
income from operations2:
Consolidated
Financial Results (dollars in millions):
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
June
30,
|
September
30,
|
|
2020
|
2019
|
2020
|
2020
|
|
|
|
|
|
Total
Revenues
|
$
|
40,955
|
|
$
|
38,556
|
|
$
|
39,265
|
|
$
|
118,689
|
|
Net Realized Investment
(Gains) Losses from Equity Method
Investments1
|
(37)
|
|
(5)
|
|
(60)
|
|
(87)
|
|
Special
Items1
|
(117)
|
|
—
|
|
—
|
|
(204)
|
|
Transitioning Client
Contributions1
|
—
|
|
(2,718)
|
|
—
|
|
—
|
|
Adjusted
Revenues1
|
$
|
40,801
|
|
$
|
35,833
|
|
$
|
39,205
|
|
$
|
118,398
|
|
|
|
|
|
|
Consolidated
Earnings, net of taxes
|
|
|
|
|
Shareholders' Net
Income
|
$
|
1,388
|
|
$
|
1,351
|
|
$
|
1,754
|
|
$
|
4,323
|
|
Net Realized Investment
(Gains) Losses2
|
(64)
|
|
(49)
|
|
(88)
|
|
(75)
|
|
Amortization of Other
Acquired Intangible Assets2
|
376
|
|
558
|
|
376
|
|
1,061
|
|
Special
Items2
|
(82)
|
|
65
|
|
110
|
|
219
|
|
Transitioning Client
Contributions1,2
|
—
|
|
(207)
|
|
—
|
|
—
|
|
Adjusted Income from
Operations2
|
$
|
1,618
|
|
$
|
1,718
|
|
$
|
2,152
|
|
$
|
5,528
|
|
|
|
|
|
|
Shareholders' Net
Income, per share
|
$
|
3.78
|
|
$
|
3.57
|
|
$
|
4.73
|
|
$
|
11.66
|
|
Adjusted Income from
Operations2, per share
|
$
|
4.41
|
|
$
|
4.54
|
|
$
|
5.81
|
|
$
|
14.91
|
|
- Cigna's third quarter results reflect revenue growth driven by
strong fundamental performance across our businesses led by our
Evernorth segment. Third quarter earnings reflect the return of
medical utilization to more typical levels and COVID-19 related
impacts, as well as focused execution in our businesses.
- Year to date through November 4,
2020, the Company repurchased 16.0 million shares of common
stock for approximately $2.9
billion.
- The debt to capitalization ratio decreased to 42.8% at
September 30, 2020 from 45.2% at
December 31, 2019.
- The SG&A expense ratio4 was 8.1% for third
quarter 2020, a decrease from 9.2% for third quarter 2019, driven
by significant revenue growth and continued expense
efficiency.
CUSTOMER RELATIONSHIPS
The following table summarizes Cigna's medical customers and
overall customer relationships:
Customer
Relationships (in thousands):
|
|
As of the Periods
Ended
|
|
September
30,
|
June
30,
|
December
31,
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
Total Customer
Relationships
|
189,702
|
|
169,712
|
|
188,211
|
|
171,760
|
|
|
|
|
|
|
Total Pharmacy
Customers5
|
86,604
|
|
75,663
|
|
84,919
|
|
75,903
|
|
|
|
|
|
|
U.S. Commercial6
|
13,901
|
|
14,121
|
|
14,000
|
|
14,187
|
|
U.S. Government6
|
1,413
|
|
1,374
|
|
1,415
|
|
1,361
|
|
International
Markets
|
1,668
|
|
1,576
|
|
1,668
|
|
1,597
|
|
Total Medical
Customers5
|
16,982
|
|
17,071
|
|
17,083
|
|
17,145
|
|
|
|
|
|
|
Behavioral
Care
|
37,236
|
|
28,744
|
|
37,061
|
|
30,361
|
|
Dental
|
17,671
|
|
17,079
|
|
17,850
|
|
17,231
|
|
Medicare Part
D
|
3,296
|
|
3,269
|
|
3,300
|
|
3,276
|
|
International Markets
Supplemental Policies5,7
|
12,013
|
|
12,486
|
|
12,098
|
|
12,444
|
|
Group Disability and
Life Covered Lives5
|
15,900
|
|
15,400
|
|
15,900
|
|
15,400
|
|
- The pharmacy customer base5 at third quarter 2020
grew to 86.6 million, an organic increase of 10.7 million customers
year to date, driven by strong new health plan sales.
- The total medical customer base5 at third quarter
2020 was 17.0 million, a decrease of 163,000 customers year to
date, driven by a decline in National Accounts, partially offset by
growth in the Select and International Markets segments and in
Medicare Advantage.
HIGHLIGHTS OF SEGMENT RESULTS
See Exhibit 1 for a reconciliation of adjusted income (loss)
from operations2 to shareholders' net income.
Evernorth6
This segment includes a broad range of coordinated and point
solution health services, including pharmacy services, benefits
management, care solutions and data and analytics, which are
provided to health plans, employers, government organizations, and
health care providers.
Financial Results
(dollars in millions):
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
June
30,
|
September
30,
|
|
2020
|
2019
|
2020
|
2020
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
29,827
|
$
|
24,880
|
$
|
28,602
|
$
|
85,597
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
1,443
|
$
|
1,399
|
$
|
1,249
|
$
|
3,774
|
Adjusted Margin,
Pre-Tax8
|
4.8%
|
5.6%
|
4.4%
|
4.4%
|
- Third quarter 2020 adjusted revenues1 increased 20%
relative to third quarter 2019 driven by the insourcing of U.S.
Medical pharmacy volumes and strong organic growth, including
growth in retail network and specialty pharmacy services.
- Third quarter adjusted income from operations,
pre-tax2 increased 3% relative to third quarter 2019,
reflecting customer growth, higher adjusted pharmacy scripts
volumes, benefits from the effective management of the supply
chain, and continued strong performance in specialty pharmacy
services, partially offset by increased operating expenses to
support growth.
- Evernorth fulfilled 381 million adjusted pharmacy
scripts9 in third quarter 2020, an increase of 22% over
third quarter 2019 driven by the insourcing of U.S. Medical
pharmacy volumes and strong organic growth.
U.S. Medical6
This segment includes Cigna's U.S. Commercial and U.S.
Government businesses that provide comprehensive medical and
coordinated solutions to clients and customers. U.S.
Commercial products and services include medical, pharmacy,
behavioral health, dental, vision, health advocacy programs and
other products and services for insured and self-insured
customers. U.S. Government solutions include Medicare
Advantage, Medicare Supplement, and Medicare Part D plans for
seniors, Medicaid plans, and individual health insurance plans both
on and off the public exchanges.
Financial
Results (dollars in millions):
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
June
30,
|
September
30,
|
|
2020
|
2019
|
2020
|
2020
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
9,629
|
$
|
9,148
|
$
|
9,237
|
$
|
28,726
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
757
|
$
|
953
|
$
|
1,523
|
$
|
3,479
|
Adjusted Margin,
Pre-Tax8
|
7.9%
|
10.4%
|
16.5%
|
12.1%
|
- Third quarter 2020 adjusted revenues1 grew 5% over
third quarter 2019, reflecting customer growth in the Select
segment and Medicare Advantage, as well as premium increases.
- Third quarter 2020 adjusted income from operations, pre-tax²
and adjusted margin, pre-tax8 reflect unfavorable prior
period development primarily related to second quarter 2020,
COVID-19 related impacts, and the return of the health insurance
tax. COVID-19 related impacts include the net impact of the return
of medical utilization to more typical levels and direct COVID-19
costs as well as the costs of actions we have taken to support
customers and providers, decreased specialty contributions, and
lower net investment income.
- The medical care ratio4 ("MCR") of 82.6% for third
quarter 2020 reflects continued effective execution in our U.S.
Commercial and U.S. Government segments. The third quarter 2020 MCR
increased relative to third quarter 2019 due to unfavorable prior
period development primarily related to second quarter 2020 and
COVID-19 related impacts, partially offset by the pricing effect of
the health insurance tax.
- U.S. Medical net medical costs payable10 was
$2.97 billion at September 30, 2020, $2.73
billion at September 30, 2019,
and $2.59 billion at December 31, 2019. Favorable prior year reserve
development on a gross pre-tax basis was $126 million and $159
million through third quarter 2020 and 2019,
respectively.
International Markets
This segment includes supplemental health, life and accident
insurance products and health care coverage in Cigna's
international markets, as well as health care benefits for globally
mobile individuals and employees of multinational
organizations.
Financial Results
(dollars in millions):
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
June
30,
|
September
30,
|
|
2020
|
2019
|
2020
|
2020
|
|
|
|
|
|
Adjusted
Revenues1,7
|
$
|
1,440
|
$
|
1,402
|
$
|
1,432
|
$
|
4,342
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
208
|
$
|
194
|
$
|
319
|
$
|
809
|
Adjusted Margin,
Pre-Tax8
|
14.4%
|
13.8%
|
22.3%
|
18.6%
|
- Third quarter 2020 adjusted revenues1,7 grew 3% over
third quarter 2019, reflecting continued business growth.
- Third quarter 2020 adjusted income from operations,
pre-tax2 and adjusted margin, pre-tax8
reflect continued operational efficiency, lower claim levels driven
by the effects of the COVID-19 pandemic, and business growth.
Group Disability and Other Operations
This segment includes Cigna's Group Disability and Life business
which offers group long-term and short-term disability, and group
life, accident, voluntary and specialty insurance products and
services. Additionally, this segment includes Corporate Owned
Life Insurance ("COLI") and the Company's run-off operations.
Financial Results
(dollars in millions):
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
June
30,
|
September
30,
|
|
2020
|
2019
|
2020
|
2020
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
1,314
|
$
|
1,284
|
$
|
1,328
|
$
|
3,981
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
70
|
$
|
143
|
$
|
132
|
$
|
279
|
Adjusted Margin,
Pre-Tax8
|
5.3%
|
11.1%
|
9.9%
|
7.0%
|
- Third quarter 2020 adjusted income from operations,
pre-tax2 and adjusted margin, pre-tax8
reflect elevated claims in Cigna's Life business primarily related
to the COVID-19 pandemic.
- On December 18, 2019, Cigna
announced a definitive agreement whereby New York Life will acquire
Cigna's Group Disability and Life business for $6.3 billion. Cigna continues to expect the
transaction to close in the fourth quarter of 2020, subject to
applicable regulatory approvals and other customary closing
conditions.
Corporate
Corporate reflects interest expense, as well as amounts not
allocated to operating segments and includes intersegment
eliminations.
Financial Results
(dollars in millions):
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
June
30,
|
September
30,
|
|
2020
|
2019
|
2020
|
2020
|
|
|
|
|
|
Adjusted (Loss) from
Operations, Pre-Tax2
|
$
|
(366)
|
$
|
(442)
|
$
|
(400)
|
$
|
(1,171)
|
- Third quarter 2020 adjusted loss from operations,
pre-tax2 decreased relative to third quarter 2019 as a
result of lower interest expense.
2020 OUTLOOK
Cigna's outlook for full year 2020 adjusted
revenues1,3 is approximately $158
billion. Cigna's outlook for full year 2020 consolidated
adjusted income from operations2,3 on a per share basis
is in the range of $18.30 to
$18.60 per share. Cigna's
outlook excludes potential effects of any future share
repurchase3. Also, while Cigna continues to expect
to close the sale of Cigna's Group Disability and Life business in
the fourth quarter of 2020, Cigna's outlook assumes a full year of
contributions from the Group Disability and Life
business.
The foregoing statements represent the Company's current
estimates of Cigna's 2020 consolidated adjusted
revenues1,3 and adjusted income from
operations2,3 on a per share basis 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
(https://www.cigna.com/aboutcigna/investors). Management will
be hosting a conference call to review third quarter 2020 results
and discuss full year 2020 outlook beginning today at 8:30 a.m. ET. A link to the conference call
is available in the Investor Relations section of Cigna's website
located at
https://www.cigna.com/aboutcigna/investors/events/index.page.
The call-in numbers for the conference call are as follows:
Live Call
(800) 857-1657 (Domestic)
(773) 799-3811 (International)
Passcode: 1152020
Replay
(800) 839-8789 (Domestic)
(203) 369-3037 (International)
It is strongly suggested you dial in to the conference call by
8:15 a.m. ET.
About Cigna
Cigna Corporation (NYSE: CI) is a global health service company
dedicated to improving the health, well-being and peace of mind of
those we serve. Cigna delivers choice, predictability,
affordability and access to quality care through integrated
capabilities and connected, personalized solutions that advance
whole person health. All products and services are provided
exclusively by or through operating subsidiaries of Cigna
Corporation, including Cigna Health and Life Insurance Company,
Cigna Life Insurance Company of New
York, Connecticut General Life Insurance Company, Evernorth
companies or their affiliates, Express Scripts companies or their
affiliates, and Life Insurance Company of North America. Such products and services
include an integrated suite of health services, such as medical,
dental, behavioral health, pharmacy, vision, supplemental benefits,
and other related products including group life, accident and
disability insurance.
Cigna maintains sales capability in over 30 countries and
jurisdictions, and has approximately 190 million customer
relationships throughout the world. To learn more about
Cigna®, including links to follow us on Facebook or
Twitter, visit www.cigna.com.
Notes:
|
|
|
1.
|
At the
consolidated level, the measure "adjusted revenues" 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, "total
revenues." Cigna defines adjusted revenues as total revenues
excluding net realized investment results from equity method
investments and special items. Special items are identified
in Exhibit 1 of this earnings release. For periods prior to
2020, Cigna also excludes revenue contributions from transitioning
pharmacy benefit management clients, Anthem Inc. and Coventry
Health Care, Inc. (the "transitioning clients"). Cigna
excludes these items from this measure because they are not
indicative of past or future underlying performance of the
business. See Exhibit 1 for a reconciliation of consolidated
adjusted revenues to total revenues.
|
|
|
|
|
2.
|
Adjusted income
(loss) from operations is defined as shareholders' net income
(loss) excluding the following adjustments: net realized investment
results, amortization of acquired intangible assets, and special
items. For periods prior to 2020, Cigna also excludes
earnings contributions from transitioning clients. Adjusted income
(loss) from operations is measured on an after-tax basis for
consolidated results and on a pre-tax basis for segment
results.
|
|
|
|
|
|
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 GAAP
and should not be viewed as a substitute for the most directly
comparable GAAP measure, shareholders' net income. See Exhibit 1
for a reconciliation of consolidated adjusted income from
operations to shareholders' net income.
|
|
|
|
|
3.
|
Certain adjusted
metrics presented for 2019 exclude contributions from transitioning
clients. As previously disclosed, beginning in 2020, Cigna no
longer excludes contributions from transitioning clients from its
adjusted metrics, as the transition for those clients was
substantially complete as of December 31,
2019.
|
|
|
|
|
|
Management is not
able to provide a reconciliation of adjusted income from operations
to shareholders' net income (loss) or adjusted revenues to total
revenues on a forward-looking basis because it is unable to
predict, without unreasonable effort, certain components thereof
including (i) future net realized investment results (from
equity method investments with respect to adjusted revenues) and
(ii) future special items. These items are inherently
uncertain and depend on various factors, many of which are beyond
Cigna's control. As such, any associated estimate and its impact on
shareholders' net income and total revenues could vary
materially.
|
|
|
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. Additionally, the Company's outlook assumes
a full year of contributions from Cigna's Group Disability and Life
business.
|
|
|
|
|
4.
|
Operating ratios
are defined as follows:
|
|
|
|
|
|
|
•
|
Medical care ratio
represents medical costs as a percentage of premiums for all U.S.
commercial risk products, including medical, pharmacy, dental, stop
loss and behavioral products provided through guaranteed cost or
experience-rated funding arrangements, as well as Medicare
Advantage, Medicare Part D, Medicare Supplement, Medicaid, and
individual on and off-exchange products, within Cigna's U.S.
Medical segment.
|
|
|
•
|
SG&A expense
ratio represents enterprise selling, general and administrative
expenses excluding special items and, prior to 2020, expenses from
transitioning clients, as a percentage of adjusted revenue at a
consolidated level.
|
|
|
|
|
5.
|
Customer
relationships are defined as follows:
|
|
|
|
|
|
|
•
|
Total medical
customers includes individuals in Cigna's U.S. Medical and
International Markets segments 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.
|
|
|
•
|
Pharmacy customer
relationships for periods prior to 2020 excludes transitioning
clients.
|
|
|
•
|
International
Markets medical customers excludes medical customers served by less
than 100% owned subsidiaries.
|
|
|
•
|
International
Markets supplemental policies exclude International Markets medical
customers included in total medical customers.
|
|
|
•
|
Group Disability
and Life covered lives are estimated.
|
|
|
|
|
6.
|
As of the third
quarter 2020, the segment previously reported as "Health Services"
is reported as "Evernorth", and the segment previously reported as
"Integrated Medical" is reported as "U.S. Medical".
Additionally, U.S. Medical's two operating segments previously
reported as "Commercial" and "Government" are now reported as "U.S.
Commercial" and "U.S. Government". There are no changes to
the underlying businesses reported in any of these
segments.
|
|
|
|
|
7.
|
Cigna owns a 50%
non-controlling interest in its China joint venture. Cigna's
50% share of the joint venture's earnings is reported in Fees and
Other Revenues using the equity method of accounting under
GAAP. As such, the adjusted revenues and policy counts for
the International Markets segment do not include the China joint
venture.
|
|
|
|
|
8.
|
Adjusted margin,
pre-tax, is calculated by dividing adjusted income (loss) from
operations, pre-tax by adjusted revenues for each
segment.
|
|
|
Adjusted margin,
after-tax, is calculated by dividing consolidated adjusted income
(loss) from operations by consolidated adjusted revenues.
Adjusted income (loss) from operations is measured on an after-tax
basis for consolidated results.
|
|
|
|
|
9.
|
For Evernorth
adjusted pharmacy scripts, non-specialty network scripts filled
through 90-day programs and home delivery scripts are multiplied by
three. All other network and specialty scripts are counted as
one script.
|
|
|
|
|
10.
|
Medical costs
payable within the U.S. Medical segment are presented net of
reinsurance and other recoverables. The gross medical costs
payable balance was $3.20 billion as of September 30, 2020,
$2.89 billion as of December 31, 2019, and $3.06 billion as of
September 30, 2019.
|
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This press release, and oral statements made in connection with
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 consolidated adjusted income from
operations outlook for 2020 on a per share basis; projected
adjusted revenue outlook for 2020; future financial or operating
performance, including our ability to deliver affordable,
personalized and innovative solutions for our customers and
clients, in light of the challenges presented by the COVID-19
pandemic; future growth, business strategy, strategic or
operational initiatives, including our organizational efficiency
plan; 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; strategic transactions, including the merger (the "Merger")
with Express Scripts Holding Company and the sale of our U.S. Group
Disability and Life business; our ongoing operational response to
the COVID-19 pandemic; 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 and pharmacy costs and price
effectively; our ability to adapt to changes or trends in an
evolving and rapidly changing industry; our ability to effectively
differentiate our products and services from those of our
competitors and maintain or increase market share; our ability to
develop and maintain good relationships with physicians, hospitals,
other health care providers, producers, consultants, and
pharmaceutical manufacturers; changes in the pharmacy provider
marketplace or pharmacy networks; changes in drug pricing; the
impact of modifications to our operations and processes; our
ability to identify potential strategic transactions and realize
the expected benefits (including anticipated synergies) of such
transactions in full or within the anticipated time frame,
including with respect to the Merger and the sale of our Group
Disability and Life business, as well as our ability to integrate
or separate operations, resources and systems; 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 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 and those of our key
suppliers or other third parties; the impact of our debt service
obligations on the availability of funds for other business
purposes; unfavorable industry, economic or political conditions,
including foreign currency movements; acts of civil unrest, war,
terrorism, natural disasters or pandemics; reinsurance credit risk;
the scale and scope of the COVID-19 pandemic and its potential
impact on our business, operating results, cash flows and financial
condition, as well as on our employees, clients, customers,
suppliers and partners and on the U.S. and global economies; as
well as more specific risks and uncertainties discussed in our most
recent report on Form 10-K, as supplemented by our Form 10-Q for
the quarter ended March 31, 2020, and
subsequent reports on Forms 10-Q and 8-K available through 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.
CIGNA
CORPORATION
|
Exhibit
1
|
COMPARATIVE
SUMMARY OF FINANCIAL RESULTS (unaudited)
|
(Dollars in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
Three Months
Ended
|
|
September
30,
|
September
30,
|
June
30,
|
|
2020
|
2019
|
2020
|
2019
|
2020
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
Pharmacy
revenues
|
$
|
27,802
|
|
$
|
25,987
|
|
$
|
79,464
|
|
$
|
77,454
|
|
$
|
26,564
|
|
Premiums
|
10,682
|
|
9,935
|
|
31,928
|
|
29,709
|
|
10,406
|
|
Fees and other
revenues
|
2,174
|
|
2,285
|
|
6,424
|
|
7,123
|
|
2,072
|
|
Net investment
income
|
297
|
|
349
|
|
873
|
|
1,035
|
|
223
|
|
Total
Revenues
|
40,955
|
|
38,556
|
|
118,689
|
|
115,321
|
|
39,265
|
|
Revenue contributions
from transitioning clients
|
—
|
|
(2,718)
|
|
—
|
|
(11,657)
|
|
—
|
|
Net realized
investment results from certain equity method
investments
|
(37)
|
|
(5)
|
|
(87)
|
|
(27)
|
|
(60)
|
|
Special item related
to contractual adjustment for a former client
|
(117)
|
|
—
|
|
(204)
|
|
—
|
|
—
|
|
Adjusted revenues
(1)
|
$
|
40,801
|
|
$
|
35,833
|
|
$
|
118,398
|
|
$
|
103,637
|
|
$
|
39,205
|
|
|
|
|
|
|
|
SHAREHOLDERS' NET
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' net
income
|
$
|
1,388
|
|
$
|
1,351
|
|
$
|
4,323
|
|
$
|
4,127
|
|
$
|
1,754
|
|
After-tax adjustments
to reconcile adjusted income from operations
|
|
|
|
|
|
Net realized
investment (gains) losses
|
(64)
|
|
(49)
|
|
(75)
|
|
(100)
|
|
(88)
|
|
Amortization of
acquired intangible assets
|
376
|
|
558
|
|
1,061
|
|
1,694
|
|
376
|
|
Adjustment for
transitioning clients
|
—
|
|
(207)
|
|
—
|
|
(1,217)
|
|
—
|
|
Special
Items
|
|
|
|
|
|
Integration and
transaction-related costs
|
83
|
|
88
|
|
256
|
|
311
|
|
99
|
|
Debt extinguishment
costs
|
—
|
|
—
|
|
151
|
|
—
|
|
11
|
|
Charge for
organizational efficiency plan
|
—
|
|
—
|
|
24
|
|
—
|
|
—
|
|
(Benefits) charges
associated with litigation matters
|
—
|
|
(23)
|
|
19
|
|
41
|
|
—
|
|
Risk corridors
recovery
|
(76)
|
|
—
|
|
(76)
|
|
—
|
|
—
|
|
Contractual adjustment
for a former client
|
(89)
|
|
—
|
|
(155)
|
|
—
|
|
—
|
|
Adjusted income from
operations
|
$
|
1,618
|
|
$
|
1,718
|
|
$
|
5,528
|
|
$
|
4,856
|
|
$
|
2,152
|
|
|
|
|
|
|
|
Pre-tax adjusted
income (loss) from operations by segment
|
|
|
|
|
|
Evernorth
|
$
|
1,443
|
|
$
|
1,399
|
|
$
|
3,774
|
|
$
|
3,555
|
|
$
|
1,249
|
|
U.S. Medical
|
757
|
|
953
|
|
3,479
|
|
3,113
|
|
1,523
|
|
International
Markets
|
208
|
|
194
|
|
809
|
|
607
|
|
319
|
|
Group Disability and
Other
|
70
|
|
143
|
|
279
|
|
376
|
|
132
|
|
Corporate
|
(366)
|
|
(442)
|
|
(1,171)
|
|
(1,385)
|
|
(400)
|
|
Consolidated pre-tax
adjusted income from operations
|
2,112
|
|
2,247
|
|
7,170
|
|
6,266
|
|
2,823
|
|
Adjusted income tax expense
|
(494)
|
|
(529)
|
|
(1,642)
|
|
(1,410)
|
|
(671)
|
|
Consolidated after-tax
adjusted income from operations
|
$
|
1,618
|
|
$
|
1,718
|
|
$
|
5,528
|
|
$
|
4,856
|
|
$
|
2,152
|
|
|
|
|
|
|
|
DILUTED EARNINGS
PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' net
income
|
$
|
3.78
|
|
$
|
3.57
|
|
$
|
11.66
|
|
$
|
10.83
|
|
$
|
4.73
|
|
After-tax adjustments
to reconcile to adjusted income from operations
|
|
|
|
|
|
Net realized
investment (gains) losses
|
(0.17)
|
|
(0.13)
|
|
(0.20)
|
|
(0.26)
|
|
(0.24)
|
|
Amortization of
acquired intangible assets
|
1.02
|
|
1.47
|
|
2.86
|
|
4.43
|
|
1.02
|
|
Adjustment for
transitioning clients
|
—
|
|
(0.55)
|
|
—
|
|
(3.19)
|
|
—
|
|
Special
items
|
|
|
|
|
|
Integration and
transaction-related costs
|
0.23
|
|
0.24
|
|
0.69
|
|
0.82
|
|
0.27
|
|
Debt extinguishment
costs
|
—
|
|
—
|
|
0.41
|
|
—
|
|
0.03
|
|
Charge for
organizational efficiency plan
|
—
|
|
—
|
|
0.06
|
|
—
|
|
—
|
|
(Benefits) charges
associated with litigation matters
|
—
|
|
(0.06)
|
|
0.05
|
|
0.11
|
|
—
|
|
Risk corridors
recovery
|
(0.21)
|
|
—
|
|
(0.20)
|
|
—
|
|
—
|
|
Contractual adjustment
for a former client
|
(0.24)
|
|
—
|
|
(0.42)
|
|
—
|
|
—
|
|
Adjusted income from
operations(2)
|
$
|
4.41
|
|
$
|
4.54
|
|
$
|
14.91
|
|
$
|
12.74
|
|
$
|
5.81
|
|
Weighted average
shares (in thousands)
|
367,190
|
|
378,321
|
|
370,831
|
|
381,091
|
|
370,697
|
|
Common shares
outstanding (in thousands)
|
|
|
362,403
|
|
373,978
|
|
368,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY at September 30,
|
|
|
$
|
48,032
|
|
$
|
44,696
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY PER SHARE at September 30,
|
|
|
$
|
132.54
|
|
$
|
119.52
|
|
|
|
|
(1)
|
Adjusted revenues
is defined as total revenues excluding the following adjustments:
special items and Cigna's share of certain realized investment
results of its joint ventures reported using the equity
method. For periods prior to 2020, we also excluded revenue
contributions from transitioning clients. These items are excluded
because they are not indicative of past or future underlying
performance of our businesses.
|
(2)
|
Adjusted income
(loss) from operations is defined as shareholders' net income
(loss) excluding the following after-tax adjustments: realized
investment results, amortization of acquired intangible assets and
special items. For periods prior to 2020, we also excluded earnings
contributions from transitioning clients.
|
INVESTOR RELATIONS CONTACT:
Alexis Jones
215-761-3637
alexis.jones@cigna.com
MEDIA CONTACT:
Ellie Polack
860-902-4906
elinor.polack@cigna.com
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SOURCE Cigna