Contact: INVESTOR RELATIONS CONTACT:
Will McDowell
215-761-4198
william.mcdowell2@cigna.com
Will McDowell
215-761-4198
william.mcdowell2@cigna.com
MEDIA CONTACT: Ellie Polack
860-902-4906
elinor.polack@cigna.com
860-902-4906
elinor.polack@cigna.com
02 May 2019
·
Total revenues in the first quarter were $37.9 billion. Adjusted
revenues 1 were $33.4 billion.
·
Shareholders’ net income for the first quarter was $1.37 billion, or
$3.56 per share
·
Adjusted income from operations 2 for the first quarter
was $1.5 billion, or $3.90 per share
·
Adjusted income from operations 2,3,4 is now projected to be
in the range of $6.24 billion to $6.4 billion in 2019, or $16.25 to $16.65 per
share 3 , which represents per share growth of 14% to 17% over 2018
BLOOMFIELD, Conn., 02 May, 2019 - Global health
service company Cigna Corporation (NYSE: CI) today reported strong first
quarter 2019 results led by the Health Services and Integrated Medical
segments.
“Cigna's first quarter performance reflects
focused execution of our proven growth strategy and positions us well to
achieve our increased outlook for 2019,” said David M. Cordani, President and
Chief Executive Officer. “Our combination with Express Scripts is fueling
additional innovative programs for the benefit of our customers and patients,
as we accelerate our efforts to improve the affordability of health care.”
Total revenues for first quarter 2019 were $37.9
billion. Adjusted revenues1 were $33.4 billion and reflect
strong contributions from each of Cigna's ongoing businesses.
Shareholders’ net income for first quarter 2019
was $1.37 billion, or $3.56 per share, compared with $0.9 billion, or $3.72 per
share, for first quarter 2018.
Cigna's adjusted income from operations2 for
first quarter 2019 was $1.5 billion, or $3.90 per share, compared with $1.0
billion, or $4.11 per share, for 2018. This reflects strong earnings
contributions led by the Health Services and Integrated Medical segments.
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
|
||||||||||||||||
|
March
31,
|
December
31,
|
|||||||||||||||
|
2019
|
|
2018
|
|
2018
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Total Revenues
|
$
|
37,946
|
$
|
11,413
|
$
|
14,300
|
||||||||||
|
Net Realized Investment Losses
(Gains) from Equity Method Investments1
|
(28)
|
2
|
20
|
|||||||||||||
|
Special Items and Transitioning
Client Contributions1
|
|
(4,489)
|
|
|
-
|
|
|
(569)
|
||||||||
|
Adjusted Revenues1
|
$
|
33,429
|
$
|
11,415
|
$
|
13,751
|
||||||||||
|
|
||||||||||||||||
|
Consolidated Earnings, net of
taxes
|
||||||||||||||||
|
Shareholders’ Net Income
|
$
|
1,368
|
$
|
915
|
$
|
144
|
||||||||||
|
Net Realized Investment Losses
(Gains)2
|
(38)
|
25
|
58
|
|||||||||||||
|
Amortization of Other Acquired
Intangible Assets2
|
564
|
20
|
103
|
|||||||||||||
|
Special Items and Transitioning
Client Contributions1,2
|
|
(396)
|
|
|
50
|
|
|
342
|
||||||||
|
Adjusted Income from Operations2
|
$
|
1,498
|
|
$
|
1,010
|
|
$
|
647
|
||||||||
|
|
||||||||||||||||
|
Shareholders’ Net Income, per
share
|
$
|
3.56
|
|
$
|
3.72
|
|
$
|
0.55
|
||||||||
|
Adjusted Income from Operations2,
per share
|
$
|
3.90
|
|
$
|
4.11
|
|
$
|
2.46
|
||||||||
|
|
||||||||||||||||
·
Year to date through May
1, 2019, the Company repurchased 3.1 million shares of common stock for
approximately $556 million.
·
The debt to
capitalization ratio improved to 48.8% at March 31, 2019 from 50.9% at December
31, 2018.
·
The SG&A expense
ratio5 was 9.3% for first quarter 2019, a significant decrease
from 23.5% for first quarter 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
|
|||||||
|
March
31,
|
|
|
December
31,
|
|||||
|
2019
|
|
|
2018
|
|
|
2018
|
||
|
Commercial
|
14,016
|
|
|
13,825
|
13,982
|
|||
|
Government
|
1,405
|
1,389
|
1,407
|
|||||
|
International Markets
|
1,572
|
|
|
1,555
|
|
|
1,572
|
|
|
Total Medical Customers 6
|
16,993
|
16,769
|
16,961
|
|||||
|
|
||||||||
|
Pharmacy6
|
74,935
|
8,796
|
73,230
|
|||||
|
Behavioral Care6
|
28,046
|
26,998
|
27,215
|
|||||
|
Dental
|
17,122
|
16,521
|
16,544
|
|||||
|
Medicare Part D
|
3,302
|
784
|
3,295
|
|||||
|
International Markets Supplemental
Policies6,7
|
12,576
|
12,061
|
12,569
|
|||||
|
Group Disability and Life Covered
Lives6
|
15,200
|
|
|
15,300
|
|
|
14,800
|
|
|
Total Customer Relationships
|
168,174
|
|
|
97,229
|
|
|
164,614
|
|
|
|
||||||||
·
The total medical
customer base6 at first quarter 2019 was 17 million, an organic
increase of 32,000 customers year to date and 224,000 over first quarter 2018
driven by growth in the Select and Middle Market segments, partially offset by
a decline in National Accounts.
·
The pharmacy customer
base6 at first quarter 2019 was 75 million, an organic increase
of 1.7 million customers year to date, driven by strong new commercial sales.
·
Pharmacy6 and
Medicare Part D customers in the first quarter 2019 and fourth quarter 2018
include customers gained through the completion of the Express Scripts
combination on December 20, 2018.
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
|
|||||||||
|
March
31,
|
December
31,
|
||||||||
|
2019
|
|
2018
|
|
|
2018
|
||||
|
|
|||||||||
|
Adjusted Revenues1
|
$
|
22,460
|
$
|
1,071
|
$
|
3,313
|
|||
|
Adjusted Income from Operations,
Pre-Tax2
|
$
|
994
|
$
|
83
|
$
|
153
|
|||
|
Adjusted Margin, Pre-Tax8
|
4.4%
|
7.7%
|
4.6%
|
||||||
|
|
|||||||||
·
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 the entire first quarter 2019, a portion of fourth
quarter 2018, and are not reflected in first quarter 2018 results.
·
Growth in first quarter
2019 adjusted revenues1 and adjusted income from operations,
pre-tax2 were driven by the combination with Express Scripts.
·
Health Services
fulfilled 292 million adjusted pharmacy scripts9 in first
quarter 2019, consistent with the company’s expectations.
·
Health Services
delivered solid results in first quarter 2019, driven by organic growth in
pharmacy customers since the start of the year, and strong adjusted pharmacy
script volumes and performance in specialty pharmacy care.
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
|
|||||||||
|
March
31,
|
December
31,
|
||||||||
|
2019
|
|
2018
|
|
2018
|
|||||
|
|
|||||||||
|
Adjusted Revenues1
|
$
|
9,195
|
$
|
8,150
|
$
|
8,297
|
|||
|
Adjusted Income from Operations,
Pre-Tax2
|
$
|
1,170
|
$
|
1,012
|
$
|
643
|
|||
|
Adjusted Margin, Pre-Tax8
|
12.7%
|
12.4%
|
7.7%
|
||||||
|
|
|||||||||
·
Integrated Medical
delivered strong results in first quarter 2019, led by organic growth and
strong margins in our Commercial and Government businesses.
·
First quarter 2019
adjusted revenues1 increased 13% relative to first quarter
2018, driven by Commercial customer growth and expansion of specialty relationships,
as well as premium increases consistent with underlying cost trends.
·
First quarter 2019
adjusted income from operations, pre-tax2 and adjusted margin,
pre-tax8 reflect strong medical and specialty contributions and
continued effective medical cost performance.
·
Adjusted income from
operations, pre-tax2 for first quarter 2019 and first quarter
2018 included favorable net prior year reserve development on a pre-tax basis
of $50 million and $51 million, respectively.
·
The medical care ratio5 (“MCR”)
of 78.9% for first quarter 2019 reflects strong performance and execution in
our commercial and government businesses and favorable prior year development,
partially offset by the addition of the Express Scripts Medicare Part D
business and the pricing effect of the health insurance tax suspension.
·
Integrated Medical net
medical costs payable10 was approximately $2.72 billion at
March 31, 2019, $2.41 billion at March 31, 2018 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 employees of
multinational organizations.
|
Financial Results (dollars in
millions, policies and customers in thousands):
|
|||||||||
|
|
|||||||||
|
Three
Months Ended
|
|||||||||
|
March
31,
|
|
December
31,
|
|||||||
|
2019
|
|
2018
|
|
2018
|
|||||
|
|
|||||||||
|
Adjusted Revenues1,7
|
$
|
1,394
|
$
|
1,341
|
$
|
1,355
|
|||
|
Adjusted Income from Operations,
Pre-Tax2
|
$
|
206
|
$
|
217
|
$
|
120
|
|||
|
Adjusted Margin, Pre-Tax8
|
14.8%
|
16.2%
|
8.9%
|
||||||
|
|
|||||||||
|
As
of the Periods Ended
|
|||||||||
|
March
31,
|
December
31,
|
||||||||
|
2019
|
|
2018
|
|
2018
|
|||||
|
|
|||||||||
|
International Markets Supplemental
Policies6,7
|
12,576
|
12,061
|
12,569
|
||||||
|
International Markets Medical
Customers6
|
1,572
|
1,555
|
1,572
|
||||||
|
|
|||||||||
·
First quarter 2019
adjusted revenues1,7 grew 4% over first quarter 2018,
reflecting continued business growth, partially offset by some impact from
unfavorable foreign currency movements.
·
First quarter 2019
adjusted income from operations, pre-tax2 and adjusted margin,
pre-tax8 reflect business growth, offset by unfavorable foreign
currency impacts and spending to strengthen our capabilities to further
long-term 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
|
|||||||||
|
March
31,
|
|
December
31,
|
|||||||
|
2019
|
|
2018
|
|
2018
|
|||||
|
|
|||||||||
|
Adjusted Revenues1
|
$
|
1,296
|
$
|
1,271
|
$
|
1,246
|
|||
|
Adjusted Income from Operations,
Pre-Tax2
|
$
|
84
|
$
|
116
|
$
|
109
|
|||
|
Adjusted Margin, Pre-Tax8
|
6.5%
|
9.1%
|
8.7%
|
||||||
|
|
|||||||||
·
First quarter 2019
adjusted income from operations, pre-tax2 and adjusted margin,
pre-tax8 reflect unfavorable disability claims partially offset
by strong life results.
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
|
||||||||||
|
March
31,
|
December
31,
|
|||||||||
|
2019
|
|
2018
|
|
2018
|
||||||
|
|
||||||||||
|
Adjusted (Loss) from Operations,
Pre-Tax2
|
$
|
(490)
|
$
|
(92)
|
$
|
(148)
|
||||
|
|
||||||||||
·
The first quarter 2019
adjusted loss from operations, pre-tax2 increased as a result
of higher interest expense associated with the financing of the combination
with Express Scripts.
2019 OUTLOOK
Cigna's outlook for full
year 2019 consolidated adjusted income from operations2,3,4 is
in the range of $6.24 billion to $6.4 billion, or $16.25 to $16.65 per share.
Cigna’s outlook excludes the impact of additional prior year reserve
development of medical costs and potential effects of any future share
repurchase4.
|
|
|
|||||
|
(dollars in millions, except where
noted and per share amounts)
|
Projection
for Full-
Year Ending |
Change
from
Prior
|
||||
|
December
31, 2019
|
|
Projection
|
||||
|
|
||||||
|
2019 Consolidated Operating
Metrics
|
||||||
|
Adjusted Income from Operations 2,3,4
|
$
|
6,240
to 6,400
|
$
|
+
0 to 40
|
||
|
Adjusted Income from Operations,
per share 2,3,4
|
$
|
16.25
to 16.65
|
$
|
+
0.15 to + 0.25
|
||
|
Adjusted Revenues 1,3
|
$
|
132,500
to 134,500
|
$
|
+
1,000
|
||
|
SG&A Expense Ratio 5
|
10.0%
to 10.5%
|
|||||
|
Adjusted Tax Rate 11
|
23.5%
to 24.5%
|
|||||
|
2019 Segment-Level Operating
Metrics
|
||||||
|
Adjusted Income from Operations,
Pre-Tax 2,3,4
|
||||||
|
Health Services
|
$
|
5,050
to 5,200
|
||||
|
Integrated Medical
|
$
|
3,700
to 3,800
|
$
|
+
0 to 50
|
||
|
Adjusted Pharmacy Scripts – Health
Services 9
|
1.17
to 1.19 billion
|
|||||
|
Medical Customer Growth 6
|
300,000
to 400,000 customers
|
|||||
|
Medical Care Ratio 5
|
80.5%
to 81.5%
|
|||||
|
Medical Cost Trend 12
|
3.5%
to 4.5%
|
|||||
|
|
||||||
2020 OUTLOOK
Health Services’ projected 2020 retention rate
for the 2019 selling season for pharmacy services is in the range of 96% to
98%.
The foregoing statements represent the Company’s
current estimates of Cigna's 2019 consolidated and segment adjusted income from
operations2,3,4 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 first quarter 2019
results and discuss full year 2019 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: 5022019
|
||||
|
Replay
|
||||
|
(800) 839-5571 (Domestic)
|
||||
|
(402) 220-2073 (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 160
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 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
accounting principles generally accepted in the United States (GAAP) and
should not be viewed as a substitute for the most directly comparable GAAP
measure, shareholders’ net income. See Exhibit 1 for a reconciliation of
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.
|
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 could vary materially.
|
|||
|
4.
|
The Company’s outlook excludes the
potential effects of any share repurchases or business combinations that may
occur after the date of this earnings release.
|
|||
|
5.
|
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.
|
|||
|
6.
|
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.
|
|||
|
•
|
Pharmacy customer relationships excludes
transitioning clients.
|
|||
|
•
|
International Markets policies
exclude International Markets medical customers included in total medical
customers.
|
|||
|
•
|
Group Disability and Life covered
lives are estimated.
|
|||
|
7.
|
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.
|
|||
|
8.
|
Adjusted margin, pre-tax, is
calculated by dividing adjusted income (loss) from operations, pre-tax by
adjusted revenues for each segment.
|
|||
|
9.
|
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, nor volumes expected to be insourced from OptumRx under the terms of
the transition services agreement.
|
|||
|
10.
|
Medical costs payable within the
Integrated Medical segment are presented net of reinsurance and other
recoverables. The gross medical costs payable balance was $2.96 billion as of
March 31, 2019, $2.70 billion as of December 31, 2018, and $2.64 billion as
of March 31, 2018. The Integrated Medical days claims payable was 40.9 days
at March 31, 2019, 40.7 days at December 31, 2018 and 41.9 days at March 31,
2018.
|
|||
|
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 including (i) future net realized investment results and
(ii) future special items.
|
|||
|
12.
|
Medical cost trend includes all
U.S. commercial employer funding arrangements.
|
|||
|
|
||||
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This press release, and oral statements made
with respect to information contained in this release, may contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are based on Cigna's
current expectations and projections about future trends, events and uncertainties.
These statements are not historical facts. Forward-looking statements may
include, among others, statements concerning our projected adjusted income
(loss) from operations outlook for 2019, on both a consolidated and segment
basis; projected adjusted revenue outlook for 2019; projected global medical
customer growth over year end 2018; projected growth beyond 2019; 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; 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; the merger (the
“Merger”) with Express Scripts Holding Company (“Express Scripts”) 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 and pharmaceutical
manufacturers; changes in drug pricing; the impact of modifications to our
operations and processes; our ability to identify potential strategic
acquisitions or 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, as well as our ability to
integrate 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; 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 war, terrorism, natural disasters or pandemics; 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
|
Three
Months Ended
|
||||||||
|
March
31,
|
December
31,
|
||||||||
|
|
|
|
2019
|
|
|
2018
|
|
2018
|
|
|
|
|||||||||
|
REVENUES
|
|||||||||
|
|
|||||||||
|
Pharmacy revenues
|
$
|
25,179
|
$
|
717
|
$
|
3,257
|
|||
|
Premiums
|
9,971
|
8,999
|
9,108
|
||||||
|
Fees and other revenues
|
2,450
|
1,368
|
1,491
|
||||||
|
Net investment income including
special items
|
|
|
346
|
|
|
329
|
|
|
444
|
|
Total revenues
|
|
|
37,946
|
|
|
11,413
|
|
|
14,300
|
|
Revenue contributions from
transitioning clients
|
(4,489)
|
-
|
(459)
|
||||||
|
Net realized investment (gains)
losses from equity method subsidiaries
|
(28)
|
2
|
20
|
||||||
|
Special items reported in
integration and transaction-related costs
|
|
|
-
|
|
|
-
|
|
|
(110)
|
|
Adjusted revenues (1)
|
|
$
|
33,429
|
|
$
|
11,415
|
|
$
|
13,751
|
|
|
|||||||||
|
SHAREHOLDERS' NET INCOME
|
|||||||||
|
|
|||||||||
|
Shareholders' net income
|
$
|
1,368
|
$
|
915
|
$
|
144
|
|||
|
After-tax adjustments to reconcile
to adjusted income from operations:
|
|||||||||
|
Adjustment for transitioning
clients
|
(504)
|
-
|
(47)
|
||||||
|
Net realized investment (gains)
losses
|
(38)
|
25
|
58
|
||||||
|
Amortization of acquired
intangible assets
|
564
|
20
|
103
|
||||||
|
Special items
|
|||||||||
|
Integration and
transaction-related costs
|
108
|
50
|
402
|
||||||
|
Charges associated with litigation
matters
|
-
|
-
|
(16)
|
||||||
|
U.S. tax reform
|
|
|
-
|
|
|
-
|
|
|
3
|
|
Adjusted income from operations (2)
|
|
$
|
1,498
|
|
$
|
1,010
|
|
$
|
647
|
|
|
|||||||||
|
Pre-tax adjusted income (loss)
from operations by segment
|
|||||||||
|
Health Services
|
$
|
994
|
$
|
83
|
$
|
153
|
|||
|
Integrated Medical
|
1,170
|
1,012
|
643
|
||||||
|
International Markets
|
206
|
217
|
120
|
||||||
|
Group Disability and Other
|
84
|
116
|
109
|
||||||
|
Corporate
|
|
|
(490)
|
|
|
(92)
|
|
|
(148)
|
|
Consolidated pre-tax adjusted
income from operations (2)
|
|
|
1,964
|
|
|
1,336
|
|
|
877
|
|
Adjusted income tax expense
|
|
|
(466)
|
|
|
(326)
|
|
|
(230)
|
|
Consolidated after-tax adjusted
income from operations (2)
|
|
$
|
1,498
|
|
$
|
1,010
|
|
$
|
647
|
|
|
|||||||||
|
DILUTED EARNINGS PER SHARE
|
|||||||||
|
|
|||||||||
|
Shareholders' net income
|
$
|
3.56
|
$
|
3.72
|
$
|
0.55
|
|||
|
After-tax adjustments to reconcile
to adjusted income from operations:
|
|||||||||
|
Adjustment for transitioning
clients
|
(1.31)
|
-
|
(0.18)
|
||||||
|
Net realized investment (gains)
losses
|
(0.10)
|
0.10
|
0.22
|
||||||
|
Amortization of other acquired
intangible assets
|
1.47
|
0.08
|
0.39
|
||||||
|
Special items
|
|||||||||
|
Integration and
transaction-related costs
|
0.28
|
0.21
|
1.53
|
||||||
|
Charges associated with litigation
matters
|
-
|
-
|
(0.06)
|
||||||
|
U.S. tax reform
|
|
|
-
|
|
|
-
|
|
|
0.01
|
|
Adjusted income from operations (2)
|
|
$
|
3.90
|
|
$
|
4.11
|
|
$
|
2.46
|
|
Weighted average shares (in
thousands)
|
|
|
384,024
|
|
|
245,788
|
|
|
263,521
|
|
Common shares outstanding (in
thousands)
|
|
|
380,270
|
|
|
243,250
|
|
|
380,924
|
|
|
|||||||||
|
SHAREHOLDERS' EQUITY at March 31,
|
|
$
|
42,408
|
|
$
|
14,195
|
|
|
|
|
|
|||||||||
|
|
|||||||||
|
SHAREHOLDERS' EQUITY PER SHARE at
March 31,
|
|
$
|
111.52
|
|
$
|
58.36
|
|
|
|
|
|
|||||||||
|
(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.
|
View source version on businesswire.com: https://cigna.newshq.businesswire.com/press-release/cigna-delivers-strong-first-quarter-2019-results-raises-outlook
https://www.cigna.com/newsroom/news-releases/2019/cigna-delivers-strong-first-quarter-2019-results-raises-outlook
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