BLOOMFIELD, Conn., Feb. 6, 2020 /PRNewswire/ --
- Total revenues were $153.6
billion. Adjusted revenues1 were $140.2 billion in 2019.
- Shareholders' net income for 2019 was $5.1 billion, or $13.44 per share, representing per share growth
of 28% over 2018
- Adjusted income from operations2 for 2019 was
$6.5 billion, or $17.05 per share, representing per share growth
of 20% over 2018
- Adjusted revenues1,3 are projected to be in the
range of $154 billion to $156 billion in 2020, representing growth of 10%
to 11% over 2019
- Adjusted income from operations2,3 is projected
to be in the range of $6.8 billion to
$7.0 billion in 2020, or $18.00 to $18.60
per share3
Global health service company Cigna Corporation (NYSE: CI) today
reported strong 2019 results driven by focused execution across its
businesses.
"In the first year of our combination, as a result of our focus
on execution, partnering, and ongoing innovation, Cigna delivered
on our commitments to customers, clients, and shareholders," said
David M. Cordani, President and
Chief Executive Officer. "Our strong momentum going into 2020
positions us for continued growth, and to deliver sustained value
for our customers and clients, as we create greater affordability,
predictability and simplicity for their benefit."
Total revenues for 2019 were $153.6
billion. Adjusted revenues1 were
$140.2 billion and reflect strong
contributions from each of Cigna's ongoing businesses.
Shareholders' net income for 2019 was $5.1 billion, or $13.44 per share, compared with $2.6 billion, or $10.54 per share, for 2018.
Cigna's adjusted income from operations2 for 2019 was
$6.5 billion, or $17.05 per share, compared with $3.6 billion, or $14.22 per share, for 2018. This represents
per share growth of 20% and reflects strong earnings contributions
led by the Health Services and Integrated Medical segments.
Cigna's cash flow from operations for 2019 was $9.5 billion, compared with $3.8 billion for 2018.
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
|
|
Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
$
|
38,245
|
|
$
|
14,300
|
|
$
|
38,556
|
|
$
|
153,566
|
|
Net Realized
Investment (Gains) Losses from Equity Method
Investments1
|
|
(17)
|
|
|
20
|
|
|
(5)
|
|
|
(44)
|
|
Special Items and
Transitioning Client Contributions1
|
|
(1,690)
|
|
|
(569)
|
|
|
(2,718)
|
|
|
(13,347)
|
|
Adjusted
Revenues1
|
$
|
36,538
|
|
$
|
13,751
|
|
$
|
35,833
|
|
$
|
140,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Earnings, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Net
Income
|
$
|
977
|
|
$
|
144
|
|
$
|
1,351
|
|
$
|
5,104
|
|
Net Realized
Investment (Gains) Losses2
|
|
(90)
|
|
|
58
|
|
|
(49)
|
|
|
(190)
|
|
Amortization of Other
Acquired Intangible Assets2
|
|
554
|
|
|
103
|
|
|
558
|
|
|
2,248
|
|
Special Items and
Transitioning Client Contributions1,2
|
|
179
|
|
|
342
|
|
|
(142)
|
|
|
(686)
|
|
Adjusted Income from
Operations2
|
$
|
1,620
|
|
$
|
647
|
|
$
|
1,718
|
|
$
|
6,476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Net
Income, per share
|
$
|
2.60
|
|
$
|
0.55
|
|
$
|
3.57
|
|
$
|
13.44
|
|
Adjusted Income from
Operations2, per share
|
$
|
4.31
|
|
$
|
2.46
|
|
$
|
4.54
|
|
$
|
17.05
|
- Cigna's 2019 results reflect strong revenue and earnings
growth, as we delivered strong medical and pharmacy cost
performance, and created meaningful value in the first year of the
Cigna and Express Scripts combination.
- In 2019, the Company repurchased 11.8 million shares of common
stock for $2.0 billion. Year to date
through February 5, 2020, the Company
repurchased 1.2 million shares of common stock for approximately
$245 million.
- The debt to capitalization ratio decreased to 45.2% at
December 31, 2019, from 50.9% at
December 31, 2018.
- The SG&A expense ratio4 was 9.3% for full year
2019, a significant decrease from 23.2% for full year 2018, driven
by business mix changes resulting from the Express Scripts
combination and the health insurance tax suspension.
CUSTOMER RELATIONSHIPS
The following table summarizes our medical customers and overall
customer relationships:
|
Customer
Relationships (in thousands):
|
|
|
|
|
|
|
|
As of the Periods
Ended
|
|
|
|
December
31,
|
September
30,
|
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
Commercial
|
|
14,187
|
|
|
13,982
|
|
|
14,121
|
|
|
Government
|
|
1,361
|
|
|
1,407
|
|
|
1,374
|
|
|
International
Markets
|
|
1,597
|
|
|
1,572
|
|
|
1,576
|
|
|
Total Medical
Customers5
|
|
17,145
|
|
|
16,961
|
|
|
17,071
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmacy5
|
|
75,903
|
|
|
73,230
|
|
|
75,663
|
|
|
Behavioral
Care
|
|
30,361
|
|
|
27,215
|
|
|
28,744
|
|
|
Dental
|
|
17,231
|
|
|
16,544
|
|
|
17,079
|
|
|
Medicare Part
D
|
|
3,276
|
|
|
3,295
|
|
|
3,269
|
|
|
International Markets
Supplemental Policies5,6
|
|
12,444
|
|
|
12,569
|
|
|
12,486
|
|
|
Group Disability and
Life Covered Lives5
|
|
15,400
|
|
|
14,800
|
|
|
15,400
|
|
|
Total Customer
Relationships
|
|
171,760
|
|
|
164,614
|
|
|
169,712
|
|
- The total medical customer base5 at the end of 2019
grew to 17.1 million, an organic increase of 184,000 customers over
the end of 2018 driven by growth in the Select and Middle Market
segments, partially offset by a decline in National Accounts and
U.S. Individual.
- The pharmacy customer base5 at the end of 2019 grew
to 75.9 million, an organic increase of 2.7 million customers
compared to year-end 2018, driven by strong new commercial
sales.
HIGHLIGHTS OF SEGMENT RESULTS
See Exhibit 1 for a reconciliation of adjusted income (loss)
from operations2 to shareholders' net income.
Health Services
This segment includes a broad range of pharmacy services,
including benefits management, specialty pharmacy services,
clinical solutions, home delivery, and health management
services.
|
Financial Results
(dollars in millions):
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December 31,
|
|
September
30,
|
|
December
31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
25,570
|
|
$
|
3,313
|
|
$
|
24,880
|
|
$
|
96,447
|
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
1,537
|
|
$
|
153
|
|
$
|
1,399
|
|
$
|
5,092
|
|
Adjusted Margin,
Pre-Tax7
|
|
6.0%
|
|
|
4.6%
|
|
|
5.6%
|
|
|
5.3%
|
- Cigna completed the combination with Express Scripts on
December 20, 2018. Accordingly,
contributions from the Express Scripts business are reflected in
the Health Services segment results for 2019, and are reflected for
eleven days of contributions for fourth quarter 2018 results.
- Growth in full year 2019 adjusted revenues1 and
adjusted income from operations, pre-tax2 over 2018 was
driven by the combination with Express Scripts.
- Full year 2019 adjusted income from operations,
pre-tax2 and adjusted margin, pre-tax7
reflect organic growth in adjusted pharmacy script volumes, strong
performance in specialty pharmacy services and effective execution
of supply chain initiatives.
- Health Services fulfilled 1.22 billion adjusted pharmacy
scripts8 in full year 2019, with 326 million adjusted
pharmacy scripts8 fulfilled in fourth quarter 2019.
Integrated Medical
This segment includes Cigna's U.S. Commercial and Government
businesses that provide comprehensive medical 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 to insured and
self-insured customers. Government solutions include Medicare
Advantage, Medicare Supplement, and Medicare Part D plans for
seniors, Medicaid plans, and individual health insurance coverage
both on and off the public exchanges.
|
Financial Results
(dollars in millions):
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December 31,
|
|
September
30,
|
|
December
31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
9,208
|
|
$
|
8,297
|
|
$
|
9,148
|
|
$
|
36,519
|
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
718
|
|
$
|
643
|
|
$
|
953
|
|
$
|
3,831
|
|
Adjusted Margin,
Pre-Tax7
|
|
7.8%
|
|
|
7.7%
|
|
|
10.4%
|
|
|
10.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
- Fourth quarter 2019 adjusted revenues1 increased 11%
relative to fourth quarter 2018, driven by Commercial customer
growth and deepening of relationships, as well as premium increases
consistent with underlying cost trends.
- Fourth quarter 2019 adjusted income from operations,
pre-tax2 and adjusted margin, pre-tax7
reflect strong medical and specialty contributions, continued
effective medical cost management, as well as investments to drive
long-term growth.
- Adjusted income from operations, pre-tax2 for full
year 2019 and full year 2018 included favorable net prior year
reserve development on a pre-tax basis of $85 million and $97
million, respectively.
- The medical care ratio4 ("MCR") of 80.8% for full
year 2019 and 82.3% for fourth quarter 2019 reflects continued
effective execution in our commercial and government businesses.
The fourth quarter 2019 MCR increased relative to fourth quarter
2018, as expected, driven by the pricing effect of the health
insurance tax suspension and a higher MCR in our individual medical
business.
- Integrated Medical net medical costs payable9 was
approximately $2.59 billion at
December 31, 2019, $2.73 billion at September
30, 2019, and $2.43 billion at
December 31, 2018.
International Markets
This segment includes supplemental health, life and accident
insurance products and health care coverage in our international
markets, as well as health care benefits for globally mobile
individuals and employees of multinational organizations.
|
Financial Results
(dollars in millions, policies and customers in
thousands):
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Revenues1,6
|
$
|
1,430
|
|
$
|
1,355
|
|
$
|
1,402
|
|
$
|
5,615
|
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
155
|
|
$
|
120
|
|
$
|
194
|
|
$
|
762
|
|
Adjusted Margin,
Pre-Tax7
|
|
10.8%
|
|
|
8.9%
|
|
|
13.8%
|
|
|
13.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of the Periods
Ended
|
|
|
|
|
December
31,
|
|
September
30,
|
|
|
|
|
2019
|
|
|
2018
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Markets
Supplemental Policies5,6
|
|
12,444
|
|
|
12,569
|
|
12,486
|
|
|
|
|
International Markets
Medical Customers5
|
|
1,597
|
|
|
1,572
|
|
1,576
|
|
|
|
- Fourth quarter 2019 adjusted revenues1,6 grew 6%
over fourth quarter 2018, reflecting continued business
growth.
- Fourth quarter 2019 adjusted income from operations,
pre-tax2 and adjusted margin, pre-tax7
reflect continued business growth and operational efficiency.
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
|
|
Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
1,293
|
|
$
|
1,246
|
|
$
|
1,284
|
|
$
|
5,182
|
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
125
|
|
$
|
109
|
|
$
|
143
|
|
$
|
501
|
|
Adjusted Margin,
Pre-Tax7
|
|
9.7%
|
|
|
8.7%
|
|
|
11.1%
|
|
|
9.7%
|
- Fourth quarter 2019 adjusted income from operations,
pre-tax2 and adjusted margin, pre-tax7
reflect claims favorability in our Life business.
- On December 18, 2019, we
announced a definitive agreement whereby New York Life will acquire
Cigna's Group Disability and Life business for $6.3 billion. We expect the transaction to close
in the third 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
|
|
Year
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted (Loss) from
Operations, Pre-Tax2
|
$
|
(439)
|
|
$
|
(148)
|
|
$
|
(442)
|
|
$
|
(1,824)
|
|
|
|
|
|
|
|
|
|
|
|
|
- Fourth quarter 2019 adjusted loss from operations,
pre-tax2 increased relative to fourth quarter 2018 as a
result of higher interest expense associated with the financing of
the combination with Express Scripts.
2020 OUTLOOK
Cigna's outlook for full year 2020 consolidated adjusted income
from operations2,3 is in the range of $6.8 billion to $7.0
billion, or $18.00 to
$18.60 per share. Cigna's
outlook excludes the impact of prior year reserve development of
medical costs and potential effects of any future share
repurchase3. Also, while we continue to expect to
close the sale of Cigna's Group Disability and Life business in the
third quarter of 2020, Cigna's outlook assumes a full year of
contributions from the Group Disability and Life
business.
|
(dollars in millions,
except where noted and per share amounts)
|
|
Projection for
Full-Year Ending
|
|
|
December 31,
2020
|
|
|
|
|
|
2020 Consolidated
Metrics
|
|
|
|
|
Adjusted
Revenues1,3
|
|
$
|
154,000 to
156,000
|
|
Adjusted Income
from Operations2,3
|
|
$
|
6,800 to
7,000
|
|
Adjusted Income
from Operations, per share2,3
|
|
$
|
18.00 to
18.60
|
|
SG&A Expense
Ratio3,4
|
|
|
8.6% to
9.1%
|
|
Adjusted Tax
Rate3,10
|
|
|
23% to 24%
|
|
Interest
Expense
|
|
$
|
~1,600
|
|
Adjusted Margin,
After-Tax3,7
|
|
|
4.4% to
4.5%
|
|
Cash Flow from
Operations3
|
|
$
|
>7,500
|
|
Debt
Repayment3
|
|
$
|
4,500 to
5,000
|
|
Capital
Expenditures3
|
|
$
|
~1,000
|
|
2020 Health
Services Segment Metrics
|
|
|
|
|
Adjusted Income
from Operations, Pre-Tax2,3
|
|
$
|
5,300 to
5,450
|
|
Adjusted Pharmacy
Scripts – Health Services3,8
|
|
|
1.47 to 1.50
billion
|
|
2020 Integrated
Medical Segment Metrics
|
|
|
|
|
Adjusted Income
from Operations, Pre-Tax2,3
|
|
$
|
4,000 to
4,100
|
|
Medical Care
Ratio4
|
|
|
80.2% to
81.2%
|
|
Medical Cost
Trend11
|
|
|
3.5% to
4.5%
|
|
Global Medical
Customer Growth (lives)
|
|
|
|
|
Commercial
|
|
|
180,000 to
230,000
|
|
Government
|
|
|
|
|
Medicare
Advantage
|
|
|
60,000 to
70,000
|
|
U.S.
Individual5
|
|
|
(40,000)
|
|
Medicaid
|
|
|
(50,000)
|
|
Medicare
Supplement
|
|
|
(20,000) to
0
|
|
International
Markets
|
|
|
20,000 to
40,000
|
|
Total Global
Medical Customer Growth5
|
|
|
150,000 to
250,000
|
The foregoing statements represent the Company's current
estimates of Cigna's 2020 consolidated and segment adjusted income
from operations2,3 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 fourth quarter 2019 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
(888) 324-7575 (Domestic)
(210) 234-0013 (International)
Passcode: 2062020
Replay
(800) 867-1930 (Domestic)
(203) 369-3371 (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, 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 more than 170 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." We define adjusted revenues as total revenues
excluding revenue contributions from transitioning pharmacy benefit
management clients, Anthem Inc. and Coventry Health Care, Inc. (the
"transitioning clients"), net realized investment results from
equity method investments, and special items. We exclude
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: earnings contributions
from transitioning clients, net realized investment results,
amortization of acquired intangible assets, and special
items. Special items are identified in Exhibit 1 of this
earnings release. 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.
|
|
|
|
Effective in the
fourth quarter of 2018, Cigna updated its segments. Refer to
our Current Report on Form 8-K filed with the Securities and
Exchange Commission on January 23, 2019 and our Annual Report on
Form 10-K for the year ended December 31, 2018 for additional
information and prior period results on the historic and new
segment bases.
|
|
|
|
3.
|
Certain adjusted
metrics presented for 2019 exclude contributions from transitioning
clients. As previously disclosed, beginning in 2020, Cigna will no
longer exclude 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 we are 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
our 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 impact of prior year reserve development of
medical costs and 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 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 our Integrated
Medical segment.
- SG&A expense
ratio represents enterprise selling, general and administrative
expenses excluding special items and 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 our Integrated 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.
- U.S. Individual
includes on-exchange Patient Protection and Affordable Care and
Education Reconciliation Act ("ACA") business, off-exchange ACA
business and off-exchange non-ACA business.
- Pharmacy
customer relationships excludes transitioning
clients.
- International
Markets supplemental policies exclude International Markets medical
customers included in total medical customers.
- Group Disability
and Life covered lives are estimated.
|
|
|
|
|
|
6.
|
Cigna owns a 50%
noncontrolling 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.
|
|
|
|
7.
|
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.
|
|
|
|
8.
|
For Health
Services 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. Adjusted pharmacy scripts guidance
does not include script volumes associated with transitioning
clients.
|
|
|
|
9.
|
Medical costs
payable within the Integrated Medical segment are presented net of
reinsurance and other recoverables. The gross medical costs
payable balance was $2.89 billion as of December 31, 2019, $3.06
billion as of September 30, 2019, and $2.70 billion as of December
31, 2018.
|
|
|
|
10.
|
The measure
"adjusted tax rate" is not determined in accordance with GAAP and
should not be viewed as a substitute for the most directly
comparable GAAP measure, "consolidated effective tax rate."
We define adjusted tax rate as the consolidated income tax rate
applicable to the Company's pre-tax income excluding net realized
investment results, amortization of acquired intangible assets,
special items, and transitioning clients. Management is not
able to provide a reconciliation to the consolidated effective tax
rate 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.
|
|
|
|
11.
|
Medical cost trend
includes all U.S. commercial employer funding
arrangements.
|
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 adjusted income (loss) from operations
outlook for 2020, on a consolidated, per share, and segment basis;
projected adjusted revenue outlook for 2020; projected adjusted
margin outlook for 2020; projected global medical customer
growth over year end 2019; projected client retention; projected
growth beyond 2020; statements concerning our long-term projected
adjusted income (loss) from operations outlook; projected medical
care and SG&A expense ratios and medical cost trends; projected
adjusted pharmacy scripts; our projected consolidated adjusted tax
rate; projected debt to capitalization ratio; projected cash flow
from operations; projected interest expense; future financial or
operating performance, including our ability to deliver affordable,
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; strategic transactions, including the merger (the "Merger")
with Express Scripts Holding Company ("Express Scripts") and the
sale of our Group Disability and Life business; 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 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 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; 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.
|
CIGNA
CORPORATION
|
|
|
|
|
|
Exhibit
1
|
|
COMPARATIVE
SUMMARY OF FINANCIAL RESULTS (unaudited)
|
|
|
|
|
|
(Dollars in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
Three Months
Ended
|
|
|
December
31,
|
|
December
31,
|
September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmacy revenues
|
$
|
25,645
|
$
|
3,257
|
$
|
103,099
|
$
|
5,479
|
$
|
25,987
|
|
Premiums
|
|
10,005
|
|
9,108
|
|
39,714
|
|
36,113
|
|
9,935
|
|
Fees and other revenues
|
|
2,240
|
|
1,491
|
|
9,363
|
|
5,578
|
|
2,285
|
|
Net investment income
|
|
355
|
|
444
|
|
1,390
|
|
1,480
|
|
349
|
|
Total revenues
|
|
38,245
|
|
14,300
|
|
153,566
|
|
48,650
|
|
38,556
|
|
Revenue contributions from transitioning clients
|
|
(1,690)
|
|
(459)
|
|
(13,347)
|
|
(459)
|
|
(2,718)
|
|
Net
realized investment results from certain equity method
subsidiaries
|
(17)
|
|
20
|
|
(44)
|
|
43
|
|
(5)
|
|
Special items included in integration and transaction-related
costs
|
|
-
|
|
(110)
|
|
-
|
|
(123)
|
|
-
|
|
Adjusted revenues(1)
|
$
|
36,538
|
$
|
13,751
|
$
|
140,175
|
$
|
48,111
|
$
|
35,833
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' NET
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' net
income
|
$
|
977
|
$
|
144
|
$
|
5,104
|
$
|
2,637
|
$
|
1,351
|
|
After-tax adjustments
to reconcile to adjusted income from operations:
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for transitioning clients
|
|
(99)
|
|
(47)
|
|
(1,316)
|
|
(47)
|
|
(207)
|
|
Net
realized investment (gains) losses
|
|
(90)
|
|
58
|
|
(190)
|
|
104
|
|
(49)
|
|
Amortization of acquired intangible assets
|
|
554
|
|
103
|
|
2,248
|
|
177
|
|
558
|
|
Special items
|
|
|
|
|
|
|
|
|
|
|
|
Integration and
transaction-related costs
|
|
116
|
|
402
|
|
427
|
|
669
|
|
88
|
|
Charge for
organizational efficiency plan
|
|
162
|
|
-
|
|
162
|
|
-
|
|
-
|
|
Charges associated
with litigation matters
|
|
-
|
|
(16)
|
|
41
|
|
19
|
|
(23)
|
|
U.S. tax
reform
|
|
-
|
|
3
|
|
-
|
|
(2)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income from
operations(2)
|
$
|
1,620
|
$
|
647
|
$
|
6,476
|
$
|
3,557
|
$
|
1,718
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax adjusted
income (loss) from operations by segment
|
|
|
|
|
|
|
|
|
|
|
|
Health
Services
|
$
|
1,537
|
$
|
153
|
$
|
5,092
|
$
|
380
|
$
|
1,399
|
|
Integrated
Medical
|
|
718
|
|
643
|
|
3,831
|
|
3,502
|
|
953
|
|
International
Markets
|
|
155
|
|
120
|
|
762
|
|
735
|
|
194
|
|
Group Disability and
Other
|
|
125
|
|
109
|
|
501
|
|
529
|
|
143
|
|
Corporate
|
|
(439)
|
|
(148)
|
|
(1,824)
|
|
(403)
|
|
(442)
|
|
Consolidated pre-tax
adjusted income from operations(2)
|
|
2,096
|
|
877
|
|
8,362
|
|
4,743
|
|
2,247
|
|
Adjusted income tax
expense
|
|
(476)
|
|
(230)
|
|
(1,886)
|
|
(1,186)
|
|
(529)
|
|
Consolidated
after-tax adjusted income from operations(2)
|
$
|
1,620
|
$
|
647
|
$
|
6,476
|
$
|
3,557
|
$
|
1,718
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS
PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' net
income
|
$
|
2.60
|
$
|
0.55
|
$
|
13.44
|
$
|
10.54
|
$
|
3.57
|
|
After-tax adjustments
to reconcile to adjusted income from operations:
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for
transitioning clients
|
|
(0.26)
|
|
(0.18)
|
|
(3.46)
|
|
(0.19)
|
|
(0.55)
|
|
Net realized
investment (gains) losses
|
|
(0.24)
|
|
0.22
|
|
(0.50)
|
|
0.42
|
|
(0.13)
|
|
Amortization of
acquired intangible assets
|
|
1.47
|
|
0.39
|
|
5.92
|
|
0.71
|
|
1.47
|
|
Special
items
|
|
|
|
|
|
|
|
|
|
|
|
Integration and
transaction-related costs
|
|
0.31
|
|
1.53
|
|
1.11
|
|
2.67
|
|
0.24
|
|
Charge for
organizational efficiency plan
|
|
0.43
|
|
-
|
|
0.43
|
|
-
|
|
-
|
|
Charges associated
with litigation matters
|
|
-
|
|
(0.06)
|
|
0.11
|
|
0.08
|
|
(0.06)
|
|
U.S. tax
reform
|
|
-
|
|
0.01
|
|
-
|
|
(0.01)
|
|
-
|
|
Adjusted income from
operations(2)
|
$
|
4.31
|
$
|
2.46
|
$
|
17.05
|
$
|
14.22
|
$
|
4.54
|
|
Weighted average
shares(in thousands)
|
|
376,045
|
|
263,521
|
|
379,817
|
|
250,225
|
|
378,321
|
|
Common shares
outstanding (in thousands)
|
|
|
|
|
|
372,531
|
|
380,924
|
|
373,978
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY at December 31,
|
|
|
|
|
$
|
45,338
|
$
|
41,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY PER SHARE at December 31,
|
|
|
|
|
$
|
121.70
|
$
|
107.71
|
|
|
|
|
(1) Adjusted
revenues is defined as total revenues excluding the following
adjustments: revenue contributions from transitioning
clients, special items and Cigna's share of certain realized
investment results of its joint ventures reported using the equity
method. 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, special items and earnings contributions from transitioning
clients.
|
INVESTOR RELATIONS
CONTACT:
Will McDowell
215-761-4198
william.mcdowell2@cigna.com
MEDIA
CONTACT:
Ellie Polack
860-902-4906
elinor.polack@cigna.com
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