BLOOMFIELD, Conn., Feb. 4, 2021 /PRNewswire/ --
- Total revenues for 2020 were $160.4
billion, and adjusted revenues1 for 2020 were
$160.1 billion
- Shareholders' net income for 2020 was $8.5 billion, or $22.96 per share
- Adjusted income from operations2 for 2020 was
$6.8 billion, or $18.45 per share
- Adjusted revenues1,3 are projected to be at least
$165 billion in 2021
- Adjusted income from operations2,3 is projected
to be at least $6.95 billion in 2021,
or at least $20.00 per
share3
Global health services company Cigna Corporation (NYSE: CI)
today reported strong 2020 results driven by focused execution
through the ongoing COVID-19 pandemic.
"I'm extremely proud of the ways in which our 70,000-plus Cigna
employees delivered for our customers, our clients, our providers,
our partners, and our shareholders amid the ongoing COVID-19
pandemic," said David M. Cordani,
president and chief executive officer. "Our fourth quarter results
were in line with expectations, as we continued to make investments
in our customers, capabilities, and co-workers — all while covering
elevated COVID-related costs. As a result, we have entered 2021
with great momentum, and our health services portfolio, fueled by
the launch of Evernorth, is well-positioned for sustained long-term
growth."
Total revenues for 2020 were $160.4
billion. Adjusted revenues1 were
$160.1 billion and reflect strong
contributions from each of Cigna's ongoing
businesses.
Shareholders' net income for 2020 of $8.5
billion, or $22.96 per share,
includes an after tax gain of $3.2 billion, or $8.73 per share, from the sale of the Group
Disability and Life business, and compares with $5.1 billion, or $13.44 per share, for 2019.
Cigna's adjusted income from operations2 for 2020 was
$6.8 billion, or $18.45 per share, compared with $6.5 billion, or $17.05 per share, for 2019 reflecting focused
execution across the ongoing businesses, led by Evernorth.
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,
|
|
2020
|
2019
|
2020
|
2020
|
|
|
|
|
|
Total
Revenues
|
$
|
41,712
|
|
$
|
38,245
|
|
$
|
40,955
|
|
$
|
160,401
|
|
Net Realized Investment
(Gains) Losses from Equity Method
Investments1
|
(43)
|
|
(17)
|
|
(37)
|
|
(130)
|
|
Special
Items1
|
—
|
|
—
|
|
(117)
|
|
(204)
|
|
Transitioning Client
Contributions1
|
—
|
|
(1,690)
|
|
—
|
|
—
|
|
Adjusted
Revenues1
|
$
|
41,669
|
|
$
|
36,538
|
|
$
|
40,801
|
|
$
|
160,067
|
|
|
|
|
|
|
Consolidated
Earnings, net of taxes
|
|
|
|
|
Shareholders' Net
Income
|
$
|
4,135
|
|
$
|
977
|
|
$
|
1,388
|
|
$
|
8,458
|
|
Net Realized Investment
(Gains) Losses2
|
(169)
|
|
(90)
|
|
(64)
|
|
(244)
|
|
Amortization of Other
Acquired Intangible Assets2
|
370
|
|
554
|
|
376
|
|
1,431
|
|
Special
Items2
|
(3,069)
|
|
278
|
|
(82)
|
|
(2,850)
|
|
Transitioning Client
Contributions1,2
|
—
|
|
(99)
|
|
—
|
|
—
|
|
Adjusted Income from
Operations2
|
$
|
1,267
|
|
$
|
1,620
|
|
$
|
1,618
|
|
$
|
6,795
|
|
|
|
|
|
|
Shareholders' Net
Income, per share
|
$
|
11.45
|
|
$
|
2.60
|
|
$
|
3.78
|
|
$
|
22.96
|
|
Adjusted Income from
Operations2, per share
|
$
|
3.51
|
|
$
|
4.31
|
|
$
|
4.41
|
|
$
|
18.45
|
|
- Cigna's 2020 results reflect revenue and earnings growth in a
dynamic, rapidly changing environment, driven by focused execution
across the ongoing businesses, as well as actions taken to support
customers, providers, and employees through the ongoing
pandemic.
- In 2020, the company repurchased 21.9 million shares of common
stock for $4.1 billion. Year to date
through February 3, 2021, the Company
repurchased 4.2 million shares of common stock for approximately
$0.9 billion.
- The debt-to-capitalization ratio of 39.5% at December 31, 2020 represents a decrease from
45.2% at December 31, 2019 and is in
line with the deleveraging target of less than 40% by year end
2020.
- The SG&A expense ratio4 was 8.5% for full year
2020, a decrease from 9.3% for full year 2019, driven by
significant revenue growth, continued expense efficiency, and the
realization of administrative synergies.
CUSTOMER RELATIONSHIPS
The following table summarizes Cigna's medical customers and
overall customer relationships:
Customer Relationships (in thousands):
|
As of the Periods
Ended
|
|
December
31,
|
September
30,
|
|
2020
|
2019
|
2020
|
|
|
|
|
Total Customer
Relationships, ex Group Disability and Life
|
175,709
|
|
156,360
|
|
173,802
|
|
Total Customer
Relationships
|
175,709
|
|
171,760
|
|
189,702
|
|
|
|
|
|
Total Pharmacy
Customers5
|
89,184
|
|
75,903
|
|
86,604
|
|
|
|
|
|
U.S. Commercial6
|
13,626
|
|
14,187
|
|
13,901
|
|
U.S. Government6
|
1,387
|
|
1,361
|
|
1,413
|
|
International
Markets
|
1,660
|
|
1,597
|
|
1,668
|
|
Total Medical
Customers5
|
16,673
|
|
17,145
|
|
16,982
|
|
|
|
|
|
Behavioral
Care
|
36,908
|
|
30,361
|
|
37,236
|
|
Dental
|
17,542
|
|
17,231
|
|
17,671
|
|
Medicare Part
D
|
3,291
|
|
3,276
|
|
3,296
|
|
International Markets
Supplemental Policies5,7
|
12,111
|
|
12,444
|
|
12,013
|
|
Group Disability and
Life Covered Lives5
|
—
|
|
15,400
|
|
15,900
|
|
- The pharmacy customer base5 at the end of 2020 grew
to 89.2 million, an organic increase of 13.2 million from year end
2019, driven by strong new health plan sales.
- The total medical customer base5 at the end of 2020
was 16.7 million, a decrease of 472,000 customers from year end
2019, reflecting increased disenrollment resulting from the
economic impacts of the COVID-19 pandemic, and in the fourth
quarter, the loss of approximately 240,000 customers associated
with one client, as expected. These declines were partially offset
by growth in the Select segment and 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
|
Year
Ended
|
|
December
31,
|
September
30,
|
December
31,
|
|
2020
|
2019
|
2020
|
2020
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
30,533
|
|
$
|
25,570
|
|
$
|
29,827
|
|
$
|
116,130
|
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
1,589
|
|
$
|
1,537
|
|
$
|
1,443
|
|
$
|
5,363
|
|
Adjusted Margin,
Pre-Tax8
|
5.2%
|
|
6.0%
|
|
4.8%
|
|
4.6%
|
|
- Fourth quarter 2020 adjusted revenues1 increased 19%
relative to fourth 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.
- Fourth quarter 2020 adjusted income from operations,
pre-tax2 increased 3% relative to fourth 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 388 million adjusted pharmacy
scripts9 in fourth quarter 2020, an increase of 19% over
fourth 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
|
Year
Ended
|
|
December
31,
|
September
30,
|
December
31,
|
|
2020
|
2019
|
2020
|
2020
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
9,725
|
|
$
|
9,208
|
|
$
|
9,629
|
|
$
|
38,451
|
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
328
|
|
$
|
718
|
|
$
|
757
|
|
$
|
3,807
|
|
Adjusted Margin,
Pre-Tax8
|
3.4%
|
|
7.8%
|
|
7.9%
|
|
9.9%
|
|
- Fourth quarter 2020 adjusted revenues1 grew 6% over
fourth quarter 2019, reflecting customer growth in Medicare
Advantage and the Select Segment, as well as premium
increases.
- Fourth quarter 2020 adjusted income from operations, pre-tax²
and adjusted margin, pre-tax8 decreased relative to
fourth quarter 2019 reflecting COVID-19 related impacts and the
return of the health insurance tax. COVID-19 related impacts
include the direct costs of COVID-19 testing and treatment, the
costs of proactive actions taken to support customers, providers,
and employees, and decreased specialty contributions, partially
offset by a reduction in non-COVID utilization.
- The medical care ratio4 ("MCR") of 79.4% for full
year 2020 compares to 80.8% for full year 2019 and reflects a
reduction in non-COVID utilization and the pricing effect of the
health insurance tax, partially offset by direct COVID-19 costs and
the costs of actions we have taken to support customers. The fourth
quarter 2020 MCR of 85.8% increased relative to the fourth quarter
2019 MCR of 82.3% due to COVID-19 related impacts, partially offset
by the pricing effect of the health insurance tax.
- U.S. Medical net medical costs payable10 was
$2.96 billion at December 31, 2020, $2.97
billion at September 30, 2020,
and $2.59 billion at December 31, 2019. Favorable prior year reserve
development on a gross pre-tax basis was $115 million and $165
million through full year 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
|
Year
Ended
|
|
December
31,
|
September
30,
|
December
31,
|
|
2020
|
2019
|
2020
|
2020
|
|
|
|
|
|
Adjusted
Revenues1,7
|
$
|
1,535
|
|
$
|
1,430
|
|
$
|
1,440
|
|
$
|
5,877
|
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
91
|
|
$
|
155
|
|
$
|
208
|
|
$
|
900
|
|
Adjusted Margin,
Pre-Tax8
|
5.9%
|
|
10.8%
|
|
14.4%
|
|
15.3%
|
|
- Fourth quarter 2020 adjusted revenues1,7 grew 7%
over fourth quarter 2019, reflecting continued business
growth.
- Fourth quarter 2020 adjusted income from operations,
pre-tax2 and adjusted margin, pre-tax8
decreased relative to fourth quarter 2019 reflecting the costs of
actions taken to support customers and employees, and investments
in the business for future growth.
Group Disability and Other
Operations6
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,
|
|
2020
|
2019
|
2020
|
2020
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
1,283
|
|
$
|
1,293
|
|
$
|
1,314
|
|
$
|
5,264
|
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
11
|
|
$
|
125
|
|
$
|
70
|
|
$
|
290
|
|
Adjusted Margin,
Pre-Tax8
|
0.9%
|
|
9.7%
|
|
5.3%
|
|
5.5%
|
|
- Fourth quarter 2020 adjusted income from operations,
pre-tax2 and adjusted margin, pre-tax8
decreased relative to fourth quarter 2019 reflecting elevated life
claims primarily related to the COVID-19 pandemic and unfavorable
disability claims.
- On December 31, 2020, Cigna
completed the sale of its Group Disability and Life business to New
York Life for $6.2 billion.
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,
|
|
2020
|
2019
|
2020
|
2020
|
|
|
|
|
|
Adjusted (Loss) from
Operations, Pre-Tax2
|
$
|
(381)
|
|
$
|
(439)
|
|
$
|
(366)
|
|
$
|
(1,552)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Fourth quarter 2020 adjusted loss from operations,
pre-tax2 decreased relative to fourth quarter 2019 as a
result of lower interest expense due to a lower level of
outstanding debt.
2021 OUTLOOK
Cigna's outlook for full year 2021 adjusted
revenues1,3 is projected to be at least $165 billion. Cigna's outlook for full year 2021
consolidated adjusted income from operations2,3 is at
least $6.95 billion, or at least
$20.00 per share. This outlook
includes approximately $1.25 per
share in net unfavorable impacts of COVID-19. Additionally, this
outlook includes the impact of future share repurchases and
anticipated 2021 dividends.
(dollars in
millions, except where noted and per share amounts)
|
2021 Consolidated
Metrics
|
Projection for
Full Year Ending
December 31,
2021
|
Adjusted
Revenues1,3
|
at least
$165,000
|
Adjusted Income from
Operations2,3
|
at least
$6,950
|
Adjusted Income from
Operations, per share2,3
|
at least
$20.00
|
SG&A Expense
Ratio3,4
|
7.5% to
8.0%
|
Adjusted Tax
Rate3,11
|
22.5% to
23.5%
|
Interest
Expense
|
~$1,300
|
Adjusted Margin,
After-Tax3,8
|
~4.2%
|
Cash Flow from
Operations3
|
at least
$7,500
|
Capital
Expenditures3
|
~$1,000
|
Shareholder
Dividends3
|
~$1,400
|
Weighted Average
Shares Outstanding (millions)3
|
346 to
349
|
|
|
2021 Evernorth
Metrics
|
|
Adjusted Income from
Operations, Pre-Tax2,3
|
at least
$5,600
|
Adjusted Pharmacy
Scripts3,9
|
at least 1.55
billion
|
|
|
2021 U.S. Medical
Metrics
|
|
Adjusted Income from
Operations, Pre-Tax2,3
|
at least
$3,800
|
Medical Care
Ratio4
|
81.0% to
82.0%
|
|
|
Total Medical
Customer Growth (lives)5
|
at least
325,000
|
The foregoing statements represent the Company's current
estimates of Cigna's 2021 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
(https://www.cigna.com/aboutcigna/investors). Management will
be hosting a conference call to review full year 2020 results and
discuss full year 2021 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: 242021
Replay
(866) 451-8962 (Domestic)
(203) 369-1203 (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,
Connecticut General Life Insurance Company, Evernorth companies or
their affiliates, and Express Scripts companies or their
affiliates. 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.
Cigna maintains sales capability in over 30 countries and
jurisdictions, and has more than 175 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 business combinations
that may occur after the date of this earnings release. The
Company's outlook includes the potential effects of future share
repurchases and anticipated 2021 dividends.
|
|
|
|
On January 6,
2021, Cigna announced that its Board of Directors had instituted a
quarterly cash dividend and declared the first quarterly cash
dividend of $1.00 per share of common stock to be paid on March 25,
2021 to shareholders of record as of the close of trading on March
10, 2021. Cigna currently intends to pay regular quarterly
dividends, with future declarations subject to approval by its
Board of Directors and the Board's determination that the
declaration of dividends remains in the best interests of Cigna and
its shareholders. The decision of whether to pay future dividends
and the amount of any such dividends will be based on the Company's
financial position, results of operations, cash flows, capital
requirements, the requirements of applicable law and any other
factors the Board of Directors may deem relevant.
|
|
|
|
The timing and
actual number of shares repurchased will depend on a variety of
factors, including price, general business and market conditions,
and alternate uses of capital. The share repurchase program may be
effected through open market purchases in compliance with Rule
10b-18 under the Securities Exchange Act of 1934, as amended,
including through Rule 10b5-1 trading plans, or privately
negotiated transactions. The program may be suspended or
discontinued at any time.
|
|
|
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.
|
|
|
|
Beginning first
quarter 2021, in our earnings release and quarterly financial
supplement the "Group Disability and Other" segment will be
combined with "Corporate" and called "Corporate and Other
Operations". This change to simplify reporting was enabled by the
sale of the Group Disability and Life business.
|
|
|
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 $3.18 billion as of December 31, 2020,
$3.20 billion as of September 30, 2020, and $2.89 billion as
of December 31, 2019.
|
|
|
11.
|
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 include (i) future
net realized investment results and (ii) future special
items.
|
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 from operations outlook
for 2021 on a consolidated per share, and segment basis; projected
adjusted revenue outlook for 2021; projected total medical customer
growth over year end 2020; projected adjusted pharmacy scripts for
2021; projected medical care and SG&A expense ratios; projected
consolidated adjusted tax rate; projected interest expense;
projected adjusted margin; projected cash flow from operations;
projected capital expenditures; future dividends; projected
weighted average shares outstanding; future financial or operating
performance, including our ability to deliver affordable,
personalized and innovative solutions for our customers and
clients, including in light of the challenges presented by the
COVID-19 pandemic; 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; and other statements
regarding Cigna's future beliefs, expectations, plans, intentions,
liquidity, cash flows, 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 strategic and
operational initiatives; our ability to adapt to changes in an
evolving and rapidly changing industry; the scale, scope and
duration of the COVID-19 pandemic and its potential impact on our
business, operating results, cash flows or financial condition, our
ability to compete effectively, differentiate our products and
services from those of our competitors and maintain or increase
market share; price competition and other pressures that could
compress our margins or result in premiums that are insufficient to
cover the cost of services delivered to our customers; the
potential for actual claims to exceed our estimates related to
expected medical claims; our ability to develop and maintain
satisfactory relationships with physicians, hospitals, other health
service providers and with producers and consultants; our ability
to maintain relationships with one or more key pharmaceutical
manufacturers or if payments made or discounts provided decline;
changes in the pharmacy provider marketplace or pharmacy networks;
changes in drug pricing or industry pricing benchmarks; political,
legal, operational, regulatory, economic and other risks that could
affect our multinational operations; risks related to strategic
transactions and realization of the expected benefits of such
transactions, as well as integration difficulties or
underperformance relative to expectations; dependence on success of
relationships with third parties; risk of significant disruption
within our operations or among key suppliers or third parties; our
ability to invest in and properly maintain our information
technology and other business systems; our ability to prevent or
contain effects of a potential cyberattack or other privacy or data
security incident; potential liability in connection with managing
medical practices and operating pharmacies, onsite clinics and
other types of medical facilities; 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; uncertainties surrounding participation in
government-sponsored programs such as Medicare; the outcome of
litigation, regulatory audits, investigations; compliance with
applicable privacy, security and data laws, regulations and
standards; potential failure of our prevention, detection and
control systems; unfavorable economic and market conditions, stock
market or interest rate declines, risks related to a downgrade in
financial strength ratings of our insurance subsidiaries; the
impact of our significant indebtedness and the potential for
further indebtedness in the future; unfavorable industry, economic
or political conditions; credit risk related to our reinsurers; 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-K, 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
|
Year
Ended
|
Three Months
Ended
|
|
December
31,
|
December
31,
|
September
30,
|
|
2020
|
2019
|
2020
|
2019
|
2020
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
Pharmacy
revenues
|
$
|
28,305
|
|
$
|
25,645
|
|
$
|
107,769
|
|
$
|
103,099
|
|
$
|
27,802
|
|
Premiums
|
10,699
|
|
10,005
|
|
42,627
|
|
39,714
|
|
10,682
|
|
Fees and other
revenues
|
2,337
|
|
2,240
|
|
8,761
|
|
9,363
|
|
2,174
|
|
Net investment
income
|
371
|
|
355
|
|
1,244
|
|
1,390
|
|
297
|
|
Total
Revenues
|
41,712
|
|
38,245
|
|
160,401
|
|
153,566
|
|
40,955
|
|
Revenue contributions
from transitioning clients
|
—
|
|
(1,690)
|
|
—
|
|
(13,347)
|
|
—
|
|
Net realized
investment results from certain equity method
investments
|
(43)
|
|
(17)
|
|
(130)
|
|
(44)
|
|
(37)
|
|
Special item related
to contractual adjustment for a former client
|
—
|
|
—
|
|
(204)
|
|
—
|
|
(117)
|
|
Adjusted revenues
(1)
|
$
|
41,669
|
|
$
|
36,538
|
|
$
|
160,067
|
|
$
|
140,175
|
|
$
|
40,801
|
|
|
|
|
|
|
|
SHAREHOLDERS' NET
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' net
income
|
$
|
4,135
|
|
$
|
977
|
|
$
|
8,458
|
|
$
|
5,104
|
|
$
|
1,388
|
|
After-tax adjustments
to reconcile adjusted income from operations
|
|
|
|
|
|
Net realized
investment (gains) losses
|
(169)
|
|
(90)
|
|
(244)
|
|
(190)
|
|
(64)
|
|
Amortization of
acquired intangible assets
|
370
|
|
554
|
|
1,431
|
|
2,248
|
|
376
|
|
Adjustment for
transitioning clients
|
—
|
|
(99)
|
|
—
|
|
(1,316)
|
|
—
|
|
Special
Items
|
|
|
|
|
|
Integration and
transaction-related costs
|
148
|
|
116
|
|
404
|
|
427
|
|
83
|
|
Debt extinguishment
costs
|
—
|
|
—
|
|
151
|
|
—
|
|
—
|
|
Charge for
organizational efficiency plan
|
—
|
|
162
|
|
24
|
|
162
|
|
—
|
|
Charges associated
with litigation matters
|
—
|
|
—
|
|
19
|
|
41
|
|
—
|
|
Risk corridors
recovery
|
—
|
|
—
|
|
(76)
|
|
—
|
|
(76)
|
|
Contractual adjustment
for a former client
|
—
|
|
—
|
|
(155)
|
|
—
|
|
(89)
|
|
(Gain) on sale of
business
|
(3,217)
|
|
—
|
|
(3,217)
|
|
—
|
|
—
|
|
Adjusted income from
operations
|
$
|
1,267
|
|
$
|
1,620
|
|
$
|
6,795
|
|
$
|
6,476
|
|
$
|
1,618
|
|
|
|
|
|
|
|
Pre-tax adjusted
income (loss) from operations by segment
|
|
|
|
|
|
Evernorth
|
$
|
1,589
|
|
$
|
1,537
|
|
$
|
5,363
|
|
$
|
5,092
|
|
$
|
1,443
|
|
U.S. Medical
|
328
|
|
718
|
|
3,807
|
|
3,831
|
|
757
|
|
International
Markets
|
91
|
|
155
|
|
900
|
|
762
|
|
208
|
|
Group Disability and
Other
|
11
|
|
125
|
|
290
|
|
501
|
|
70
|
|
Corporate
|
(381)
|
|
(439)
|
|
(1,552)
|
|
(1,824)
|
|
(366)
|
|
Consolidated pre-tax
adjusted income from operations
|
1,638
|
|
2,096
|
|
8,808
|
|
8,362
|
|
2,112
|
|
Adjusted income tax expense
|
(371)
|
|
(476)
|
|
(2,013)
|
|
(1,886)
|
|
(494)
|
|
Consolidated after-tax
adjusted income from operations
|
$
|
1,267
|
|
$
|
1,620
|
|
$
|
6,795
|
|
$
|
6,476
|
|
$
|
1,618
|
|
|
|
|
|
|
|
DILUTED EARNINGS
PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' net
income
|
$
|
11.45
|
|
$
|
2.60
|
|
$
|
22.96
|
|
$
|
13.44
|
|
$
|
3.78
|
|
After-tax adjustments
to reconcile to adjusted income from operations
|
|
|
|
|
|
Net realized
investment (gains) losses
|
(0.47)
|
|
(0.24)
|
|
(0.66)
|
|
(0.50)
|
|
(0.17)
|
|
Amortization of
acquired intangible assets
|
1.03
|
|
1.47
|
|
3.88
|
|
5.92
|
|
1.02
|
|
Adjustment for
transitioning clients
|
—
|
|
(0.26)
|
|
—
|
|
(3.46)
|
|
—
|
|
Special
items
|
|
|
|
|
|
Integration and
transaction-related costs
|
0.41
|
|
0.31
|
|
1.10
|
|
1.11
|
|
0.23
|
|
Debt extinguishment
costs
|
—
|
|
—
|
|
0.41
|
|
—
|
|
—
|
|
Charge for
organizational efficiency plan
|
—
|
|
0.43
|
|
0.07
|
|
0.43
|
|
—
|
|
Charges associated
with litigation matters
|
—
|
|
—
|
|
0.05
|
|
0.11
|
|
—
|
|
Risk corridors
recovery
|
—
|
|
—
|
|
(0.21)
|
|
—
|
|
(0.21)
|
|
Contractual adjustment
for a former client
|
—
|
|
—
|
|
(0.42)
|
|
—
|
|
(0.24)
|
|
(Gain) on sale of
business
|
(8.91)
|
|
—
|
|
(8.73)
|
|
—
|
|
—
|
|
Adjusted income from
operations(2)
|
$
|
3.51
|
|
$
|
4.31
|
|
$
|
18.45
|
|
$
|
17.05
|
|
$
|
4.41
|
|
Weighted average
shares (in thousands)
|
361,115
|
|
376,045
|
|
368,389
|
|
379,817
|
|
367,190
|
|
Common shares
outstanding (in thousands)
|
|
|
354,771
|
|
372,531
|
|
362,403
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY at December 31,
|
|
|
$
|
50,321
|
|
$
|
45,338
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY PER SHARE at December 31,
|
|
|
$
|
141.84
|
|
$
|
121.70
|
|
|
|
|
(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:
Jim Cohn
224-214-8781
James.Cohn@cigna.com
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SOURCE Cigna