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Cigna Group — Regulatory Filings 2019
Jan 23, 2019
29918_rns_2019-01-23_69b53212-6702-4e82-a286-83fdcbaf0ebe.zip
Regulatory Filings
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8-K 1 cigna8k.htm CIGNA FORM 8-K Licensed to: The Scullin Group Document created using EDGARfilings PROfile 5.0.0.0 Copyright 1995 - 2019 Broadridge PROfilePageNumberReset%Num%1%%%
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 23, 2019
Cigna Corporation
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation) 001-38769 (Commission File Number) 82-4991898 (IRS Employer Identification No.)
900 Cottage Grove Road
Bloomfield, Connecticut 06002
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code:
(860) 226-6000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
1
Item 7.01 Regulation FD Disclosure.
As previously disclosed, on March 8, 2018, Cigna Corporation (“Cigna”) entered into a merger agreement with Express Scripts Holding Company (“Express Scripts”). Following entry into the merger agreement and throughout the pendency of the transaction, Cigna and Express Scripts designed integration plans to ensure implementation of the management and business reporting structure of the combined company immediately upon closing. On December 20, 2018, Cigna completed the acquisition of Express Scripts. As a result, effective in the fourth quarter of 2018, our segments have changed as described more fully below. Prior period results for the first three quarters and nine months ended September 30, 2018 and the four quarters and full year ended December 31, 2017 and full year December 31, 2016 are presented on the historic and new segment basis in the following tables. Prior period results do not include results attributable to Express Scripts.
Cigna's segments effective in the fourth quarter 2018 are:
Integrated Medical offers a variety of medical solutions to employers and individuals.
● The U.S. Commercial operating segment serves employers (also referred to as “clients”) and their employees (also referred to as “customers”) and other groups. Products and services include medical, pharmacy, dental, behavioral health and vision, health advocacy programs and other products and services to insured and self-insured customers. Products and services are generally integrated with a Cigna-administered health plan or can be provided on a standalone basis.
● The Government operating segment offers Medicare Advantage, Medicare Supplement, Medicare Part D plans to seniors as well as Medicaid plans. This operating segment also offers health insurance coverage to individual customers both on and off the public exchanges. Beginning in fourth quarter 2018, results for this segment will include the acquired Express Scripts’ Medicare Part D business.
Health Services includes pharmacy benefits management, pharmacy home delivery, and certain medical management services. This includes the acquired Express Scripts business with the exception of Express Scripts’ Medicare Part D business, which is reported in the Government operating segment.
International Markets includes supplemental health, life and accident insurance products and health care coverage in select international markets as well as health care benefits to globally mobile employees of multinational organizations.
The remainder of our operations are aggregated and reported in Group Disability and Other , consisting of the following businesses:
● Group Disability and Life provides group long-term and short-term disability, and group life, accident, voluntary and specialty insurance products and related services.
● Corporate-Owned Life Insurance (“COLI”) offers permanent insurance contracts sold to corporations to provide coverage on the lives of certain employees for the purpose of financing employer-paid future benefit obligations.
● Run-off businesses:
o Reinsurance
o Settlement Annuity
o Individual Life Insurance and Annuity and Retirement Benefits Businesses
o Certain international run-off businesses
Corporate reflects amounts not allocated to the businesses and includes intersegment eliminations.
Cigna's Investor Relations Department will be hosting a conference call this morning, January 23, 2019, beginning at 9:00 a.m. ET to describe the segment reporting changes and answer questions on this topic. The call-in numbers for the conference call are as follows:
| Live Call: | Toll Free Dial-In Number: | 1-888-324-7575 |
|---|---|---|
| Toll Dial-In Number | 1-210-234-0013 | |
| Participant Passcode: | 1232019 | |
| Replay: | Toll Free Dial-In Number: | 1-866-490-5935 |
| Toll Dial-In Number | 1-203-369-1711 |
It is strongly suggested you dial in to the conference call by 8:45 a.m. ET. The operator will periodically provide instructions regarding the call.
2
This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act whether made before or after the date of this report, except as shall be expressly set forth by specific reference in such a filing.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K, and oral statements made with respect to information contained on this website, 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 future financial or operating performance, including our ability to deliver personalized and innovative solutions for our customers and clients; future growth, business strategy, strategic or operational initiatives; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas; financing or capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; the merger (the “Merger”) with 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 costs and price effectively and develop and maintain good relationships with physicians, hospitals and other health care providers; the impact of modifications to our operations and processes; our ability to identify potential strategic acquisitions or transactions and realize the expected benefits of such transactions, including with respect to the Merger; the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws or regulations; the outcome of litigation, regulatory audits, investigations, actions and/or guaranty fund assessments; uncertainties surrounding participation in government-sponsored programs such as Medicare; the effectiveness and security of our information technology and other business systems; unfavorable industry, economic or political conditions, including foreign currency movements; acts of war, terrorism, natural disasters or pandemics; the possibility that the anticipated benefits (including anticipated synergies) from the Merger cannot be realized in full, or at all or may take longer to realize than expected; problems regarding the successful integration of the businesses of Express Scripts and Cigna; unexpected costs regarding the Merger; the ability to retain key personnel; 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 as well as on Express Scripts’ 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.express-scripts.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.
3
TABLE OF CONTENTS
| Title | Page |
|---|---|
| Basis of Presentation | 5 |
| Financial Schedules – Consolidated results: | |
| Years ended December 31, 2017 and 2016 | 6 |
| Consolidating Statement of Income – Nine Months Ended September 30, 2018 | 7 |
| Consolidating Statement of Income – Year Ended December 31, 2017 | 8 |
| Financial Schedules – Segment results: | |
| Years Ended December 31, 2017 and 2016 | |
| Integrated Medical | 9 |
| Health Services | 10 |
| International Markets | 11 |
| Group Disability and Other | 12 |
| Corporate | 13 |
| Integrated Medical | |
| Third Quarter and Nine Months Ended September 30, 2018 | 14 |
| First and Second Quarters of 2018 | 15 |
| Third and Fourth Quarters of 2017 | 16 |
| First and Second Quarters of 2017 | 17 |
| Health Services | |
| First Three Quarters and Nine Months Ended September 30, 2018 | 18 |
| Four Quarters of 2017 | 18 |
| International Markets | |
| Third Quarter and Nine Months Ended September 30, 2018 | 19 |
| First and Second Quarters of 2018 | 20 |
| Third and Fourth Quarters of 2017 | 21 |
| First and Second Quarters of 2017 | 22 |
| Group Disability and Other | |
| Third Quarter and Nine Months Ended September 30, 2018 | 23 |
| First and Second Quarters of 2018 | 24 |
| Third and Fourth Quarters of 2017 | 25 |
| First and Second Quarters of 2017 | 26 |
| Corporate | |
| Third Quarter and Nine Months Ended September 30, 2018 | 27 |
| First and Second Quarters of 2018 | 28 |
| Third and Fourth Quarters of 2017 | 29 |
| First and Second Quarters of 2017 | 30 |
4
Basis of presentation
All dollar amounts are in millions, unless otherwise noted.
Cigna measures its financial results on a consolidated basis using adjusted income from operations and adjusted revenues. Adjusted income from operations and adjusted revenues on a consolidated basis are not determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and should not be viewed as a substitute for the most directly comparable GAAP measures which are shareholders’ net income and total revenues. Cigna also uses adjusted income from operations to measure the results of its segments, however the segment metric is determined before income taxes.
For the periods presented in this Form 8-K, adjusted income from operations is defined as shareholders’ net income (or income before income taxes for the segment metric) excluding: net realized investment results, amortization of acquired intangible assets and special items. Beginning in 2018, the net realized investment result adjustment includes Cigna's share of certain realized investment results of its joint ventures reported using the equity method. Beginning with the fourth quarter of 2018, earnings contributions from Anthem Inc. and Coventry Health Care, Inc. (“transitioning PBM clients”) will also be excluded from shareholders’ net income when determining adjusted income from operations. Adjusted income from operations is used as our principle financial measure of operating performance because management believes it best presents the underlying results of operations of Cigna's businesses and permits analysis of trends in underlying revenue, expenses and profitability.
For the periods presented in this Form 8-K, adjusted revenues is defined as total revenues excluding: special items and, beginning in 2018, Cigna's share of certain realized investment results of its joint ventures reported using the equity method. Beginning with the fourth quarter of 2018, revenue contributions from transitioning PBM clients will also be excluded from total revenues when determining adjusted revenues. These items are excluded because they are not indicative of past or future underlying performance of our businesses.
Cigna adopted the new GAAP revenue recognition guidance (Accounting Standards Update (“ASU”) 2014-09 and related amendments) on a retrospective basis effective January 1, 2018. In addition, Cigna adopted Article 5 of Regulation S-X issued by the Securities and Exchange Commission effective December 31, 2018 in conjunction with the acquisition of Express Scripts on December 20, 2018. As a result, Cigna reclassified realized investment gains and (losses) previously reported in revenue and now reports this item below “Income from operations” along with interest expense and debt extinguishment charges in the Statements of Income, in conformity with Article 5. Prior year information has been reclassified to conform to this new presentation. Prior period results do not include results attributable to Express Scripts.
5
| Cigna Corporation | ||
|---|---|---|
| Consolidated Results - Article 5 | ||
| Years Ended December 31, 2017 and 2016 | ||
| (unaudited) | ||
| Consolidated | ||
| Year ended | ||
| (in millions) | December 31, 2017 | December 31, 2016 |
| Revenues | ||
| Premiums | $ 32,491 | $ 30,824 |
| Fees and other revenues | 5,110 | 4,901 |
| Pharmacy revenues | 2,979 | 2,966 |
| Net investment income | 1,226 | 1,147 |
| Total revenues | 41,806 | 39,838 |
| Adjusted revenues (1) | 41,806 | 39,838 |
| Benefits and expenses | ||
| Medical costs and other benefit expenses | 25,263 | 24,341 |
| Pharmacy and other service costs | 2,456 | 2,468 |
| Selling, general and administrative expenses | 9,831 | 9,460 |
| Special items excluding debt extinguishment costs | 199 | 330 |
| Amortization of acquired intangible assets | 115 | 151 |
| Total operating expenses | 37,864 | 36,750 |
| Income from operations | 3,942 | 3,088 |
| Interest expense and other | (252) | (278) |
| Debt extinguishment costs | (321) | - |
| Net realized investment gains | 237 | 169 |
| Income before income taxes | 3,606 | 2,979 |
| Total income taxes | 1,374 | 1,136 |
| Net income | 2,232 | 1,843 |
| Less: income (loss) attributable to noncontrolling interests | (5) | (24) |
| Shareholders' net income | 2,237 | 1,867 |
| After-tax adjustments required to reconcile to adjusted income from operations | ||
| Net realized investment (gains) | (156) | (109) |
| Amortization of acquired intangible assets | 66 | 94 |
| Special items | ||
| U.S. tax reform | 196 | - |
| Debt extinguishment costs | 209 | - |
| Long-term guaranty fund assessment | 83 | - |
| Transaction-related costs | 33 | 147 |
| Risk corridor allowance | - | 80 |
| Charges associated with litigation matters | - | 25 |
| Adjusted income from operations | $ 2,668 | $ 2,104 |
| Effective January 1, 2018, Cigna adopted amended accounting guidance for revenue recognition. Prior | ||
| year results have been restated on the new basis. | ||
| (1) There are no differences between total revenues and adjusted revenues in the period presented. |
6
| Cigna Corporation | ||||||
|---|---|---|---|---|---|---|
| Consolidating Statement of Income - New Segment Basis | ||||||
| Nine Months Ended September 30, 2018 | ||||||
| (unaudited) | ||||||
| (in millions) | Integrated Medical | Health Services | International Markets | Group Disability and Other Operations | Corporate | Cigna Total |
| Revenues | ||||||
| Premiums | $ 20,054 | $ - | $ 3,767 | $ 3,194 | $ (10) | $ 27,005 |
| Fees and other revenues | 4,092 | - | 108 | 83 | (196) | 4,087 |
| Pharmacy revenues | - | 3,288 | - | - | (1,066) | 2,222 |
| Net investment income including special items | 348 | 5 | 113 | 538 | 32 | 1,036 |
| Total revenues | 24,494 | 3,293 | 3,988 | 3,815 | (1,240) | 34,350 |
| Net realized investment (losses) from equity method subsidiaries (1) | - | - | 23 | - | - | 23 |
| Special item reported in transaction-related costs (2) | - | - | - | - | (13) | (13) |
| Adjusted revenues | 24,494 | 3,293 | 4,011 | 3,815 | (1,253) | 34,360 |
| Benefits and expenses | ||||||
| Medical costs and other benefit expenses | 15,696 | - | 2,136 | 2,598 | (10) | 20,420 |
| Pharmacy and other service costs | - | 3,002 | - | - | (1,226) | 1,776 |
| Selling general and administrative expenses | 5,939 | 64 | 1,250 | 797 | 69 | 8,119 |
| Special items excluding debt extinguishment costs | 45 | - | - | 2 | 331 | 378 |
| Amortization of acquired intangible assets | 82 | - | 13 | 4 | - | 99 |
| Total operating expenses | 21,762 | 3,066 | 3,399 | 3,401 | (836) | 30,792 |
| Income from operations | 2,732 | 227 | 589 | 414 | (404) | 3,558 |
| Interest expense and other | - | - | - | - | (169) | (169) |
| Net realized investment gains (losses) | (12) | - | (9) | (14) | (1) | (36) |
| Income before income taxes | $ 2,720 | $ 227 | $ 580 | $ 400 | $ (574) | 3,353 |
| Total income taxes | 854 | |||||
| Net income | 2,499 | |||||
| Less: Income (loss) attributable to noncontrolling interests | 6 | |||||
| Shareholders' net income | 2,493 | |||||
| After-tax adjustments required to reconcile to adjusted income from operations | ||||||
| Net realized investment (gains) losses (1) | 46 | |||||
| Amortization of acquired intangible assets | 74 | |||||
| Special items | ||||||
| Transaction-related costs | 267 | |||||
| Charges associated with litigation matters | 35 | |||||
| U.S. tax reform | (5) | |||||
| Adjusted income from operations | $ 2,910 | |||||
| Effective January 1, 2018, Cigna adopted amended accounting guidance for revenue recognition. Prior | ||||||
| year results have been restated on the new basis. | ||||||
| (1) Beginning in 2018, Cigna's share of certain realized investment results of its joint ventures | ||||||
| reported using the equity method in fees and other revenues is excluded from adjusted revenues and pre-tax adjusted income from operations. | ||||||
| (2) For additional information related to net investment income included in transaction-related | ||||||
| costs, please refer to Note 3 to the Consolidated Financial Statements in Cigna's Form 10-Q for the period ended September 30, 2018 filed on November 1, 2018. |
7
| Cigna Corporation | ||||||
|---|---|---|---|---|---|---|
| Consolidating Statement of Income - New Segment Basis | ||||||
| Twelve Months Ended December 31, 2017 | ||||||
| (unaudited) | ||||||
| (in millions) | Integrated Medical | Health Services | International Markets | Group Disability and Other Operations | Corporate | Cigna Total |
| Revenues | ||||||
| Premiums | $ 23,631 | $ - | $ 4,619 | $ 4,253 | $ (12) | $ 32,491 |
| Fees and other revenues | 5,038 | - | 155 | 122 | (205) | 5,110 |
| Pharmacy revenues | - | 4,238 | - | - | (1,259) | 2,979 |
| Net investment income | 366 | 3 | 127 | 700 | 30 | 1,226 |
| Total revenues | 29,035 | 4,241 | 4,901 | 5,075 | (1,446) | 41,806 |
| Adjusted revenues (1) | 29,035 | 4,241 | 4,901 | 5,075 | (1,446) | 41,806 |
| Benefits and expenses | ||||||
| Medical costs and other benefit expenses | 19,131 | - | 2,658 | 3,486 | (12) | 25,263 |
| Pharmacy and other service costs | - | 3,870 | - | - | (1,414) | 2,456 |
| Selling, general and administrative expenses | 6,983 | 83 | 1,590 | 1,072 | 103 | 9,831 |
| Special items excluding debt extinguishment costs | 106 | - | - | (33) | 126 | 199 |
| Amortization of acquired intangible assets | 93 | - | 17 | 5 | - | 115 |
| Total operating expenses | 26,313 | 3,953 | 4,265 | 4,530 | (1,197) | 37,864 |
| Income from operations | 2,722 | 288 | 636 | 545 | (249) | 3,942 |
| Interest expense and other | - | - | - | - | (252) | (252) |
| Debt extinguishment costs | - | - | - | - | (321) | (321) |
| Net realized investment gains (losses) | 137 | - | 31 | 69 | - | 237 |
| Income before income taxes | $ 2,859 | $ 288 | $ 667 | $ 614 | $ (822) | 3,606 |
| Total income taxes | 1,374 | |||||
| Net income | 2,232 | |||||
| Income (loss) attributable to noncontrolling interests | (5) | |||||
| Shareholders' net income | 2,237 | |||||
| After-tax adjustments required to reconcile to adjusted income from operations | ||||||
| Net realized investment (gains) losses | (156) | |||||
| Amortization of acquired intangible assets | 66 | |||||
| Special items | ||||||
| U.S. tax reform | 196 | |||||
| Debt extinguishment costs | 209 | |||||
| Long-term guaranty fund assessment | 83 | |||||
| Transaction-related costs | 33 | |||||
| Adjusted income from operations | $ 2,668 | |||||
| Effective January 1, 2018, Cigna adopted amended accounting guidance for revenue recognition. Prior | ||||||
| year results have been restated on the new basis. | ||||||
| (1) There are no differences between total revenues and adjusted revenues in the period presented. |
8
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – Integrated Medical | ||||
| Years Ended December 31, 2017 and 2016 | ||||
| (unaudited) | ||||
| Integrated Medical, compared with | ||||
| Amounts previously reported in Global Health Care ("GHC") | ||||
| Year ended | ||||
| December 31, 2017 | December 31, 2016 | |||
| (in millions) | GHC as Previously Reported | Integrated Medical | GHC as Previously Reported | Integrated Medical |
| Revenues | ||||
| Premiums | $ 24,722 | $ 23,631 | $ 23,493 | $ 22,262 |
| Fees and other revenues | 4,965 | 5,038 | 4,764 | 4,828 |
| Pharmacy revenues | 2,979 | - | 2,966 | - |
| Net investment income | 378 | 366 | 315 | 305 |
| Total revenues | 33,044 | 29,035 | 31,538 | 27,395 |
| Adjusted revenues (1) | 33,044 | 29,035 | 31,538 | 27,395 |
| Benefits and expenses | ||||
| Medical costs | 19,824 | 19,131 | 18,864 | 18,005 |
| Pharmacy and other service costs | 2,456 | - | 2,468 | - |
| Selling, general and administrative expenses | 7,395 | 6,983 | 7,192 | 6,800 |
| Special items | 106 | 106 | 164 | 164 |
| Amortization of acquired intangible assets | 86 | 93 | 118 | 125 |
| Total operating expenses | 29,867 | 26,313 | 28,806 | 25,094 |
| Income from operations | 3,177 | 2,722 | 2,732 | 2,301 |
| Net realized investment gains (losses) | 136 | 137 | 119 | 116 |
| Income before income taxes | 3,313 | 2,859 | 2,851 | 2,417 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| Loss attributable to noncontrolling interests | 2 | 1 | 3 | 2 |
| Net realized investment (gains) losses | (136) | (137) | (119) | (116) |
| Amortization of acquired intangible assets | 86 | 93 | 118 | 125 |
| Special items | 106 | 106 | 164 | 164 |
| Pre-tax adjusted income from operations | $ 3,371 | $ 2,922 | $ 3,017 | $ 2,592 |
| Effective January 1, 2018, Cigna adopted amended accounting guidance for revenue recognition. Prior | ||||
| year results have been restated on the new basis. | ||||
| (1) There are no revenue adjustments in the Integrated Medical segment for the periods presented. |
9
| Cigna Corporation | ||
|---|---|---|
| Segment Results – Health Services | ||
| Years Ended December 31, 2017 and 2016 | ||
| (unaudited) | ||
| Health Services | ||
| Year ended | ||
| (in millions) | December 31, 2017 | December 31, 2016 |
| Revenues | ||
| Pharmacy revenues | $ 4,238 | $ 4,063 |
| Net investment income | 3 | 3 |
| Total revenues | 4,241 | 4,066 |
| Adjusted revenues (1) | 4,241 | 4,066 |
| Benefits and expenses | ||
| Pharmacy and other service costs | 3,870 | 3,722 |
| Gross profit | 371 | 344 |
| Selling, general and administrative expenses | 83 | 76 |
| Income before income taxes | 288 | 268 |
| Pre-tax adjusted income from operations (1) | $ 288 | $ 268 |
| (1) There are no revenue or pre-tax adjusted income from operations adjustments in the Health | ||
| Services segment for the periods presented. |
10
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – International Markets | ||||
| Years Ended December 31, 2017 and 2016 | ||||
| (unaudited) | ||||
| International Markets, compared with | ||||
| Amounts previously reported in Global Supplemental Benefits ("GSB") | ||||
| Year Ended | ||||
| 2017 | 2016 | |||
| (in millions) | GSB as Previously Reported | International Markets | GSB as Previously Reported | International Markets |
| Revenues | ||||
| Premiums | $ 3,684 | $ 4,619 | $ 3,226 | $ 4,273 |
| Fees and other revenues | 66 | 155 | 49 | 151 |
| Net investment income | 122 | 127 | 110 | 113 |
| Total revenues | 3,872 | 4,901 | 3,385 | 4,537 |
| Adjusted revenues (1) | 3,872 | 4,901 | 3,385 | 4,537 |
| Benefits and expenses | ||||
| Medical costs and other benefit expenses | 2,033 | 2,658 | 1,784 | 2,562 |
| Selling, general and administrative expenses | 1,345 | 1,590 | 1,235 | 1,455 |
| Amortization of acquired intangible assets | 29 | 17 | 33 | 21 |
| Total operating expenses | 3,407 | 4,265 | 3,052 | 4,038 |
| Income from operations | 465 | 636 | 333 | 499 |
| Net realized investment gains (losses) | 32 | 31 | (5) | (2) |
| Income before income taxes | 497 | 667 | 328 | 497 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| Loss attributable to noncontrolling interests | - | 1 | 17 | 18 |
| Net realized investment (gains) losses | (32) | (31) | 5 | 2 |
| Amortization of acquired intangible assets | 29 | 17 | 33 | 21 |
| Pre-tax adjusted income from operations | $ 494 | $ 654 | $ 383 | $ 538 |
| (1) There are no revenue adjustments in the International Markets segment for the periods presented. |
11
| Cigna Corporation | ||||||
|---|---|---|---|---|---|---|
| Segment Results – Group Disability and Other | ||||||
| Years Ended December 31, 2017 and 2016 | ||||||
| (unaudited) | ||||||
| Group Disability and Other, compared with | ||||||
| Amounts previously reported in Other Operations | ||||||
| And Group Disability and Life | ||||||
| Year Ended | ||||||
| 2017 | 2016 | |||||
| (in millions) | Other Ops as Previously Reported | Group Disability and Life as Previously Reported | Group Disability and Other (1) | Other Ops as Previously Reported | Group Disability and Life as Previously Reported | Group Disability and Other (1) |
| Revenues | ||||||
| Premiums | $ 112 | $ 3,985 | $ 4,253 | $ 103 | $ 4,002 | $ 4,289 |
| Fees and other revenues | 10 | 106 | 122 | 11 | 98 | 114 |
| Net investment income | 346 | 350 | 700 | 358 | 343 | 705 |
| Total revenues | 468 | 4,441 | 5,075 | 472 | 4,443 | 5,108 |
| Adjusted revenues (2) | 468 | 4,441 | 5,075 | 472 | 4,443 | 5,108 |
| Benefits and expenses | ||||||
| Benefit expenses | 342 | 3,076 | 3,486 | 339 | 3,354 | 3,774 |
| Selling, general and administrative expenses | 30 | 945 | 1,072 | 30 | 919 | 1,059 |
| Special items | (56) | 23 | (33) | - | - | - |
| Amortization of acquired intangible assets | - | - | 5 | - | - | 5 |
| Total operating expenses | 316 | 4,044 | 4,530 | 369 | 4,273 | 4,838 |
| Income from operations | 152 | 397 | 545 | 103 | 170 | 270 |
| Net realized investment gains (losses) | (5) | 74 | 69 | (5) | 59 | 54 |
| Income before income taxes | 147 | 471 | 614 | 98 | 229 | 324 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||||
| Net realized investment (gains) losses | 5 | (74) | (69) | 5 | (59) | (54) |
| Amortization of acquired intangible assets | - | - | 5 | - | - | 5 |
| Special items | (56) | 23 | (33) | - | - | - |
| Pre-tax adjusted income from operations | $ 96 | $ 420 | $ 517 | $ 103 | $ 170 | $ 275 |
| (1) Includes the results of certain international run-off businesses. | ||||||
| (2) There are no revenue adjustments in the Group Disability and Other segment for the periods | ||||||
| presented. |
12
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – Corporate | ||||
| Years Ended December 31, 2017 and 2016 | ||||
| (unaudited) | ||||
| Corporate (restated), compared with | ||||
| Amounts previously reported in Corporate | ||||
| Year Ended | ||||
| 2017 | 2016 | |||
| (in millions) | Corporate as Previously Reported | Corporate as Restated | Corporate as Previously Reported | Corporate as Restated |
| Revenues | ||||
| Premiums (1) | $ (12) | $ (12) | $ - | $ - |
| Fees and other revenues (1) | (37) | (205) | (21) | (192) |
| Pharmacy revenue eliminations (1) | - | (1,259) | - | (1,097) |
| Net investment income | 30 | 30 | 21 | 21 |
| Total revenues | (19) | (1,446) | - | (1,268) |
| Adjusted revenues (2) | (19) | (1,446) | - | (1,268) |
| Benefits and expenses | ||||
| Benefit expenses (1) | (12) | (12) | - | - |
| Pharmacy and other service cost eliminations (1) | - | (1,414) | - | (1,254) |
| Selling, general and administrative expenses (1) | 125 | 103 | 111 | 70 |
| Special items excluding debt extinguishment costs | 126 | 126 | 166 | 166 |
| Total operating expenses | 239 | (1,197) | 277 | (1,018) |
| Income from operations | (258) | (249) | (277) | (250) |
| Interest expense and other | (243) | (252) | (251) | (278) |
| Debt extinguishment costs | (321) | (321) | - | - |
| Net realized investment gains | - | - | 1 | 1 |
| Income before income taxes | (822) | (822) | (527) | (527) |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| Net realized investment (gains) | - | - | (1) | (1) |
| Special items | 447 | 447 | 166 | 166 |
| Pre-tax adjusted income from operations | $ (375) | $ (375) | $ (362) | $ (362) |
| (1) Includes amounts for elimination of intersegment revenues and expenses. | ||||
| (2) There are no revenue adjustments in Corporate for the periods presented. |
13
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – Integrated Medical | ||||
| Third Quarter and Nine Months Ended September 30, 2018 | ||||
| (unaudited) | ||||
| Integrated Medical, compared with | ||||
| Amounts previously reported in Global Health Care ("GHC") | ||||
| 3 Months Ended Sep 30, 2018 | 9 Months Ended Sep 30, 2018 | |||
| (in millions) | GHC as Previously Reported | Integrated Medical | GHC as Previously Reported | Integrated Medical |
| Revenues | ||||
| Premiums | $ 6,919 | $ 6,693 | $ 20,772 | $ 20,054 |
| Fees and other revenues | 1,329 | 1,364 | 4,000 | 4,092 |
| Pharmacy revenues | 747 | - | 2,222 | - |
| Net investment income | 122 | 117 | 362 | 348 |
| Total revenues | 9,117 | 8,174 | 27,356 | 24,494 |
| Adjusted revenues (1) | 9,117 | 8,174 | 27,356 | 24,494 |
| Benefits and expenses | ||||
| Medical costs | 5,360 | 5,239 | 16,098 | 15,696 |
| Pharmacy and other service costs | 602 | - | 1,776 | - |
| Selling, general and administrative expenses | 2,098 | 2,003 | 6,239 | 5,939 |
| Special items | 45 | 45 | 45 | 45 |
| Amortization of acquired intangible assets | 42 | 42 | 78 | 82 |
| Total operating expenses | 8,147 | 7,329 | 24,236 | 21,762 |
| Income from operations | 970 | 845 | 3,120 | 2,732 |
| Net realized investment gains (losses) | 4 | 3 | (11) | (12) |
| Income before income taxes | 974 | 848 | 3,109 | 2,720 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| Net realized investment (gains) losses | (4) | (3) | 11 | 12 |
| Amortization of acquired intangible assets | 42 | 42 | 78 | 82 |
| Special items | 45 | 45 | 45 | 45 |
| Pre-tax adjusted income from operations | $ 1,057 | $ 932 | $ 3,243 | $ 2,859 |
| (1) There are no revenue adjustments in the Integrated Medical segment for the periods presented. |
14
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – Integrated Medical | ||||
| First and Second Quarters of 2018 | ||||
| (unaudited) | ||||
| Integrated Medical, compared with | ||||
| Amounts previously reported in Global Health Care ("GHC") | ||||
| 3 Months Ended March 31, 2018 | 3 Months Ended June 30, 2018 | |||
| (in millions) | GHC as Previously Reported | Integrated Medical | GHC as Previously Reported | Integrated Medical |
| Revenues | ||||
| Premiums | $ 6,929 | $ 6,676 | $ 6,924 | $ 6,685 |
| Fees and other revenues | 1,328 | 1,363 | 1,343 | 1,365 |
| Pharmacy revenues | 717 | - | 758 | - |
| Net investment income | 115 | 111 | 125 | 120 |
| Total revenues | 9,089 | 8,150 | 9,150 | 8,170 |
| Adjusted revenues (1) | 9,089 | 8,150 | 9,150 | 8,170 |
| Benefits and expenses | ||||
| Medical costs | 5,317 | 5,174 | 5,421 | 5,283 |
| Pharmacy and other service costs | 561 | - | 613 | - |
| Selling, general and administrative expenses | 2,060 | 1,964 | 2,081 | 1,972 |
| Amortization of acquired intangible assets | 19 | 22 | 17 | 18 |
| Total operating expenses | 7,957 | 7,160 | 8,132 | 7,273 |
| Income from operations | 1,132 | 990 | 1,018 | 897 |
| Net realized investment gains (losses) | (20) | (18) | 5 | 3 |
| Income before income taxes | 1,112 | 972 | 1,023 | 900 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| Net realized investment (gains) losses | 20 | 18 | (5) | (3) |
| Amortization of acquired intangible assets | 19 | 22 | 17 | 18 |
| Pre-tax adjusted income from operations | $ 1,151 | $ 1,012 | $ 1,035 | $ 915 |
| (1) There are no revenue adjustments in the Integrated Medical segment for the periods presented. |
15
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – Integrated Medical | ||||
| Third and Fourth Quarters of 2017 | ||||
| (unaudited) | ||||
| Integrated Medical, compared with | ||||
| Amounts previously reported in Global Health Care ("GHC") | ||||
| 3 Months Ended Sep 30, 2017 | 3 Months Ended Dec 31, 2017 | |||
| (in millions) | GHC as Previously Reported (1) | Integrated Medical | GHC as Previously Reported (1) | Integrated Medical |
| Revenues | ||||
| Premiums | $ 6,131 | $ 5,864 | $ 6,204 | $ 5,941 |
| Fees and other revenues | 1,223 | 1,242 | 1,301 | 1,323 |
| Pharmacy revenues | 733 | - | 779 | - |
| Net investment income | 89 | 86 | 105 | 102 |
| Total revenues | 8,176 | 7,192 | 8,389 | 7,366 |
| Adjusted revenues (2) | 8,176 | 7,192 | 8,389 | 7,366 |
| Benefits and expenses | ||||
| Medical costs | 4,845 | 4,674 | 5,140 | 4,962 |
| Pharmacy and other service costs | 612 | - | 637 | - |
| Selling, general and administrative expenses | 1,842 | 1,740 | 1,993 | 1,884 |
| Amortization of acquired intangible assets | 21 | 22 | 21 | 22 |
| Total operating expenses | 7,320 | 6,436 | 7,791 | 6,868 |
| Income from operations | 856 | 756 | 598 | 498 |
| Net realized investment gains | 75 | 74 | 3 | 5 |
| Income before income taxes | 931 | 830 | 601 | 503 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| Net realized investment (gains) | (75) | (74) | (3) | (5) |
| Amortization of acquired intangible assets | 21 | 22 | 21 | 22 |
| Pre-tax adjusted income from operations | $ 877 | $ 778 | $ 619 | $ 520 |
| (1) Effective January 1, 2018, Cigna adopted amended accounting guidance for revenue recognition. | ||||
| Prior year results have been restated on the new basis. | ||||
| (2) There are no revenue adjustments in the Integrated Medical segment for the periods presented. |
16
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – Integrated Medical | ||||
| First and Second Quarters of 2017 | ||||
| (unaudited) | ||||
| Integrated Medical, compared with | ||||
| Amounts previously reported in Global Health Care ("GHC") | ||||
| 3 Months Ended March 31, 2017 | 3 Months Ended June 30, 2017 | |||
| (in millions) | GHC as Previously Reported (1) | Integrated Medical | GHC as Previously Reported (1) | Integrated Medical |
| Revenues | ||||
| Premiums | $ 6,259 | $ 5,974 | $ 6,128 | $ 5,852 |
| Fees and other revenues | 1,226 | 1,238 | 1,215 | 1,235 |
| Pharmacy revenues | 710 | - | 757 | - |
| Net investment income | 92 | 89 | 92 | 89 |
| Total revenues | 8,287 | 7,301 | 8,192 | 7,176 |
| Adjusted revenues (2) | 8,287 | 7,301 | 8,192 | 7,176 |
| Benefits and expenses | ||||
| Medical costs | 4,949 | 4,789 | 4,890 | 4,706 |
| Pharmacy and other service costs | 581 | - | 626 | - |
| Selling, general and administrative expenses | 1,807 | 1,707 | 1,753 | 1,652 |
| Special items | 106 | 106 | - | - |
| Amortization of acquired intangible assets | 23 | 26 | 21 | 23 |
| Total operating expenses | 7,466 | 6,628 | 7,290 | 6,381 |
| Income from operations | 821 | 673 | 902 | 795 |
| Net realized investment gains | 26 | 26 | 32 | 32 |
| Income before income taxes | 847 | 699 | 934 | 827 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| (Income) loss attributable to noncontrolling interests | 1 | 1 | 1 | - |
| Net realized investment (gains) | (26) | (26) | (32) | (32) |
| Amortization of acquired intangible assets | 23 | 26 | 21 | 23 |
| Special items | 106 | 106 | - | - |
| Pre-tax adjusted income from operations | $ 951 | $ 806 | $ 924 | $ 818 |
| (1) Effective January 1, 2018, Cigna adopted amended accounting guidance for revenue recognition. | ||||
| Prior year results have been restated on the new basis. | ||||
| (2) There are no revenue adjustments in the Integrated Medical segment for the periods presented. |
17
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – Health Services | ||||
| First Three Quarters and Nine Months Ended September 30, 2018 | ||||
| (unaudited) | ||||
| Health Services | ||||
| 3 Months Ended | 9 Months Ended | |||
| (in millions) | March 31, 2018 | June 30, 2018 | Sep 30, 2018 | Sep 30, 2018 |
| Revenues | ||||
| Pharmacy revenues | $ 1,070 | $ 1,111 | $ 1,107 | $ 3,288 |
| Net investment income | 1 | 2 | 2 | 5 |
| Total revenues | 1,071 | 1,113 | 1,109 | 3,293 |
| Adjusted revenues (1) | 1,071 | 1,113 | 1,109 | 3,293 |
| Benefits and expenses | ||||
| Pharmacy and other service costs | 968 | 1,015 | 1,019 | 3,002 |
| Gross profit | 103 | 98 | 90 | 291 |
| Selling, general and administrative expenses | 20 | 21 | 23 | 64 |
| Income before income taxes | 83 | 77 | 67 | 227 |
| Pre-tax adjusted income from operations (1) | $ 83 | $ 77 | $ 67 | $ 227 |
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – Health Services | ||||
| Four Quarters of 2017 | ||||
| (unaudited) | ||||
| Health Services | ||||
| 3 Months Ended | ||||
| (in millions) | March 31, 2017 | June 30, 2017 | Sep 30, 2017 | Dec 31, 2017 |
| Revenues | ||||
| Pharmacy revenues | $ 997 | $ 1,077 | $ 1,045 | $ 1,119 |
| Net investment income | 1 | - | 1 | 1 |
| Total revenues | 998 | 1,077 | 1,046 | 1,120 |
| Adjusted revenues (1) | 998 | 1,077 | 1,046 | 1,120 |
| Benefits and expenses | ||||
| Pharmacy and other service costs | 903 | 983 | 963 | 1,021 |
| Gross profit | 95 | 94 | 83 | 99 |
| Selling, general and administrative expenses | 21 | 19 | 20 | 23 |
| Income before income taxes | 74 | 75 | 63 | 76 |
| Pre-tax adjusted income from operations (1) | $ 74 | $ 75 | $ 63 | $ 76 |
| (1) There are no revenue or pre-tax adjusted income from operations adjustments in the Health | ||||
| Services segment for the periods presented. |
18
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – International Markets | ||||
| Third Quarter and Nine Months Ended September 30, 2018 | ||||
| (unaudited) | ||||
| International Markets, compared with | ||||
| Amounts previously reported in Global Supplemental Benefits ("GSB") | ||||
| 3 Months Ended September 30, 2018 | 9 Months Ended September 30, 2018 | |||
| (in millions) | GSB as Previously Reported | International Markets | GSB as Previously Reported | International Markets |
| Revenues | ||||
| Premiums | $ 1,039 | $ 1,245 | $ 3,136 | $ 3,767 |
| Fees and other revenues | 16 | 40 | 35 | 108 |
| Net investment income | 37 | 40 | 107 | 113 |
| Total revenues | 1,092 | 1,325 | 3,278 | 3,988 |
| Net realized investment losses from equity method subsidiaries (1) | 1 | 1 | 23 | 23 |
| Adjusted revenues | 1,093 | 1,326 | 3,301 | 4,011 |
| Benefits and expenses | ||||
| Medical costs and other benefit expenses | 598 | 711 | 1,770 | 2,136 |
| Selling, general and administrative expenses | 357 | 417 | 1,056 | 1,250 |
| Amortization of acquired intangible assets | 6 | 5 | 21 | 13 |
| Total operating expenses | 961 | 1,133 | 2,847 | 3,399 |
| Income from operations | 131 | 192 | 431 | 589 |
| Net realized investment gains (losses) | 1 | 2 | (10) | (9) |
| Income before income taxes | 132 | 194 | 421 | 580 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| (Income) attributable to noncontrolling interests | (3) | (3) | (10) | (10) |
| Net realized investment (gains) losses (1) | - | (1) | 33 | 32 |
| Amortization of acquired intangible assets | 6 | 5 | 21 | 13 |
| Pre-tax adjusted income from operations | $ 135 | $ 195 | $ 465 | $ 615 |
| (1) Beginning in 2018, Cigna's share of certain realized investment results of its joint ventures | ||||
| reported using the equity method in fees and other revenues is excluded from adjusted revenues and pre-tax adjusted income from operations. |
19
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – International Markets | ||||
| First and Second Quarters of 2018 | ||||
| (unaudited) | ||||
| International Markets, compared with | ||||
| Amounts previously reported in Global Supplemental Benefits ("GSB") | ||||
| 3 Months Ended March 31, 2018 | 3 Months Ended June 30, 2018 | |||
| (in millions) | GSB as Previously Reported | International Markets | GSB as Previously Reported | International Markets |
| Revenues | ||||
| Premiums | $ 1,044 | $ 1,260 | $ 1,053 | $ 1,262 |
| Fees and other revenues | 22 | 42 | (3) | 26 |
| Net investment income | 34 | 37 | 36 | 36 |
| Total revenues | 1,100 | 1,339 | 1,086 | 1,324 |
| Net realized investment losses from equity method subsidiaries (1) | 2 | 2 | 20 | 20 |
| Adjusted revenues | 1,102 | 1,341 | 1,106 | 1,344 |
| Benefits and expenses | ||||
| Medical costs and other benefit expenses | 587 | 710 | 585 | 715 |
| Selling, general and administrative expenses | 349 | 410 | 350 | 423 |
| Amortization of acquired intangible assets | 8 | 4 | 7 | 4 |
| Total operating expenses | 944 | 1,124 | 942 | 1,142 |
| Income from operations | 156 | 215 | 144 | 182 |
| Net realized investment (losses) | - | (2) | (11) | (9) |
| Income before income taxes | 156 | 213 | 133 | 173 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| (Income) attributable to noncontrolling interests | (4) | (4) | (3) | (3) |
| Net realized investment losses (1) | 2 | 4 | 31 | 29 |
| Amortization of acquired intangible assets | 8 | 4 | 7 | 4 |
| Pre-tax adjusted income from operations | $ 162 | $ 217 | $ 168 | $ 203 |
| (1) Beginning in 2018, Cigna's share of certain realized investment results of its joint ventures | ||||
| reported using the equity method in fees and other revenues is excluded from adjusted revenues and pre-tax adjusted income from operations. |
20
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – International Markets | ||||
| Third and Fourth Quarters of 2017 | ||||
| (unaudited) | ||||
| International Markets, compared with | ||||
| Amounts previously reported in Global Supplemental Benefits ("GSB") | ||||
| 3 Months Ended September 30, 2017 | 3 Months Ended December 31, 2017 | |||
| (in millions) | GSB as Previously Reported | International Markets | GSB as Previously Reported | International Markets |
| Revenues | ||||
| Premiums | $ 931 | $ 1,158 | $ 982 | $ 1,205 |
| Fees and other revenues | 23 | 45 | 9 | 31 |
| Net investment income | 31 | 33 | 32 | 32 |
| Total revenues | 985 | 1,236 | 1,023 | 1,268 |
| Adjusted revenues (1) | 985 | 1,236 | 1,023 | 1,268 |
| Benefits and expenses | ||||
| Medical costs and other benefit expenses | 506 | 660 | 530 | 693 |
| Selling, general and administrative expenses | 331 | 392 | 376 | 435 |
| Amortization of acquired intangible assets | 7 | 4 | 6 | 4 |
| Total operating expenses | 844 | 1,056 | 912 | 1,132 |
| Income from operations | 141 | 180 | 111 | 136 |
| Net realized investment gains | - | 1 | 20 | 18 |
| Income before income taxes | 141 | 181 | 131 | 154 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| (Income) attributable to noncontrolling interests | (4) | (4) | (1) | (1) |
| Net realized investment (gains) | - | (1) | (20) | (18) |
| Amortization of acquired intangible assets | 7 | 4 | 6 | 4 |
| Pre-tax adjusted income from operations | $ 144 | $ 180 | $ 116 | $ 139 |
| (1) There are no revenue adjustments in the International Markets segment for the periods presented. |
21
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – International Markets | ||||
| First and Second Quarters of 2017 | ||||
| (unaudited) | ||||
| International Markets, compared with | ||||
| Amounts previously reported in Global Supplemental Benefits ("GSB") | ||||
| 3 Months Ended March 31, 2017 | 3 Months Ended June 30, 2017 | |||
| (in millions) | GSB as Previously Reported | International Markets | GSB as Previously Reported | International Markets |
| Revenues | ||||
| Premiums | $ 864 | $ 1,112 | $ 907 | $ 1,144 |
| Fees and other revenues | 17 | 42 | 17 | 37 |
| Net investment income | 28 | 30 | 31 | 32 |
| Total revenues | 909 | 1,184 | 955 | 1,213 |
| Adjusted revenues (1) | 909 | 1,184 | 955 | 1,213 |
| Benefits and expenses | ||||
| Medical expenses and other benefit costs | 505 | 649 | 492 | 656 |
| Selling, general and administrative expenses | 312 | 374 | 326 | 389 |
| Amortization of acquired intangible assets | 9 | 5 | 7 | 4 |
| Total operating expenses | 826 | 1,028 | 825 | 1,049 |
| Income from operations | 83 | 156 | 130 | 164 |
| Net realized investment gains (losses) | 13 | 13 | (1) | (1) |
| Income before income taxes | 96 | 169 | 129 | 163 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| Loss attributable to noncontrolling interests | 4 | 4 | 1 | 2 |
| Net realized investment (gains) losses | (13) | (13) | 1 | 1 |
| Amortization of acquired intangible assets | 9 | 5 | 7 | 4 |
| Pre-tax adjusted income from operations | $ 96 | $ 165 | $ 138 | $ 170 |
| (1) There are no revenue adjustments in the International Markets segment for the periods presented. |
22
| Cigna Corporation | ||||||
|---|---|---|---|---|---|---|
| Segment Results – Group Disability and Other | ||||||
| Third Quarter and Nine Months Ended September 30, 2018 | ||||||
| (unaudited) | ||||||
| Group Disability and Other, compared with | ||||||
| Amounts previously reported in Other Operations | ||||||
| And Group Disability and Life | ||||||
| 3 Months Ended September 30, 2018 | 9 Months Ended September 30, 2018 | |||||
| (in millions) | Other Operations as Previously Reported | Group Disability and Life as Previously Reported | Group Disability and Other (1) | Other Operations as Previously Reported | Group Disability and Life as Previously Reported | Group Disability and Other (1) |
| Revenues | ||||||
| Premiums | $ 33 | $ 1,007 | $ 1,060 | $ 92 | $ 3,015 | $ 3,194 |
| Fees and other revenues | - | 25 | 26 | 5 | 74 | 83 |
| Net investment income | 87 | 89 | 176 | 260 | 275 | 538 |
| Total revenues | 120 | 1,121 | 1,262 | 357 | 3,364 | 3,815 |
| Adjusted revenues (2) | 120 | 1,121 | 1,262 | 357 | 3,364 | 3,815 |
| Benefits and expenses | ||||||
| Benefit expenses | 95 | 754 | 857 | 263 | 2,299 | 2,598 |
| Selling, general and administrative expenses | 6 | 241 | 262 | 19 | 727 | 797 |
| Special items | 2 | - | 2 | 2 | - | 2 |
| Amortization of acquired intangible assets | - | - | 1 | - | - | 4 |
| Total operating expenses | 103 | 995 | 1,122 | 284 | 3,026 | 3,401 |
| Income from operations | 17 | 126 | 140 | 73 | 338 | 414 |
| Net realized investment gains (losses) | (8) | 3 | (5) | (6) | (8) | (14) |
| Income before income taxes | 9 | 129 | 135 | 67 | 330 | 400 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||||
| Net realized investment (gains) losses | 8 | (3) | 5 | 6 | 8 | 14 |
| Amortization of acquired intangible assets | - | - | 1 | - | - | 4 |
| Special items | 2 | - | 2 | 2 | - | 2 |
| Pre-tax adjusted income from operations | $ 19 | $ 126 | $ 143 | $ 75 | $ 338 | $ 420 |
| (1) Includes the results of certain international run-off businesses. | ||||||
| (2) There are no revenue adjustments in the Group Disability and Other segment for the periods | ||||||
| presented. |
23
| Cigna Corporation | ||||||
|---|---|---|---|---|---|---|
| Segment Results – Group Disability and Other | ||||||
| First and Second Quarters of 2018 | ||||||
| (unaudited) | ||||||
| Group Disability and Other, compared with | ||||||
| Amounts previously reported in Other Operations | ||||||
| And Group Disability and Life | ||||||
| 3 Months Ended March 31, 2018 | 3 Months Ended June 30, 2018 | |||||
| (in millions) | Other Operations as Previously Reported | Group Disability and Life as Previously Reported | Group Disability and Other (1) | Other Operations as Previously Reported | Group Disability and Life as Previously Reported | Group Disability and Other (1) |
| Revenues | ||||||
| Premiums | $ 29 | $ 1,000 | $ 1,066 | $ 30 | $ 1,008 | $ 1,068 |
| Fees and other revenues | 2 | 26 | 30 | 3 | 23 | 27 |
| Net investment income | 85 | 90 | 175 | 88 | 96 | 187 |
| Total revenues | 116 | 1,116 | 1,271 | 121 | 1,127 | 1,282 |
| Adjusted revenues (2) | 116 | 1,116 | 1,271 | 121 | 1,127 | 1,282 |
| Benefits and expenses | ||||||
| Benefit expenses | 80 | 791 | 891 | 88 | 754 | 850 |
| Selling, general and administrative expenses | 5 | 241 | 264 | 8 | 245 | 271 |
| Amortization of acquired intangible assets | - | - | 1 | - | - | 2 |
| Total operating expenses | 85 | 1,032 | 1,156 | 96 | 999 | 1,123 |
| Income from operations | 31 | 84 | 115 | 25 | 128 | 159 |
| Net realized investment gains (losses) | 4 | (16) | (12) | (2) | 5 | 3 |
| Income before income taxes | 35 | 68 | 103 | 23 | 133 | 162 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||||
| Net realized investment (gains) losses | (4) | 16 | 12 | 2 | (5) | (3) |
| Amortization of acquired intangible assets | - | - | 1 | - | - | 2 |
| Pre-tax adjusted income from operations | $ 31 | $ 84 | $ 116 | $ 25 | $ 128 | $ 161 |
| (1) Includes the results of certain international run-off businesses. | ||||||
| (2) There are no revenue adjustments in the Group Disability and Other segment for the periods | ||||||
| presented. |
24
| Cigna Corporation | ||||||
|---|---|---|---|---|---|---|
| Segment Results – Group Disability and Other | ||||||
| Third and Fourth Quarters of 2017 | ||||||
| (unaudited) | ||||||
| Group Disability and Other, compared with | ||||||
| Amounts previously reported in Other Operations | ||||||
| And Group Disability and Life | ||||||
| 3 Months Ended September 30, 2017 | 3 Months Ended December 31, 2017 | |||||
| (in millions) | Other Operations as Previously Reported | Group Disability and Life as Previously Reported | Group Disability and Other (1) | Other Operations as Previously Reported | Group Disability and Life as Previously Reported | Group Disability and Other (1) |
| Revenues | ||||||
| Premiums | $ 26 | $ 990 | $ 1,056 | $ 31 | $ 994 | $ 1,065 |
| Fees and other revenues | 3 | 25 | 29 | 2 | 27 | 32 |
| Net investment income | 86 | 84 | 170 | 86 | 88 | 176 |
| Total revenues | 115 | 1,099 | 1,255 | 119 | 1,109 | 1,273 |
| Adjusted revenues (2) | 115 | 1,099 | 1,255 | 119 | 1,109 | 1,273 |
| Benefits and expenses | ||||||
| Benefit expenses | 84 | 755 | 856 | 93 | 775 | 883 |
| Selling, general and administrative expenses | 9 | 236 | 269 | 8 | 245 | 283 |
| Special items | - | - | - | (56) | - | (56) |
| Amortization of acquired intangible assets | - | - | 2 | - | - | 1 |
| Total operating expenses | 93 | 991 | 1,127 | 45 | 1,020 | 1,111 |
| Income from operations | 22 | 108 | 128 | 74 | 89 | 162 |
| Net realized investment gains (losses) | 5 | 37 | 42 | (7) | 7 | - |
| Income before income taxes | 27 | 145 | 170 | 67 | 96 | 162 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||||
| Net realized investment (gains) losses | (5) | (37) | (42) | 7 | (7) | - |
| Amortization of acquired intangible assets | - | - | 2 | - | - | 1 |
| Special items | - | - | - | (56) | - | (56) |
| Pre-tax adjusted income from operations | $ 22 | $ 108 | $ 130 | $ 18 | $ 89 | $ 107 |
| (1) Includes the results of certain international run-off businesses. | ||||||
| (2) There are no revenue adjustments in the Group Disability and Other segment for the periods | ||||||
| presented. |
25
| Cigna Corporation | ||||||
|---|---|---|---|---|---|---|
| Segment Results – Group Disability and Other | ||||||
| First and Second Quarters of 2017 | ||||||
| (unaudited) | ||||||
| Group Disability and Other, compared with | ||||||
| Amounts previously reported in Other Operations | ||||||
| And Group Disability and Life | ||||||
| 3 Months Ended March 31, 2017 | 3 Months Ended June 30, 2017 | |||||
| (in millions) | Other Operations as Previously Reported | Group Disability and Life as Previously Reported | Group Disability and Other (1) | Other Operations as Previously Reported | Group Disability and Life as Previously Reported | Group Disability and Other (1) |
| Revenues | ||||||
| Premiums | $ 27 | $ 1,004 | $ 1,068 | $ 28 | $ 997 | $ 1,064 |
| Fees and other revenues | 3 | 28 | 32 | 2 | 26 | 29 |
| Net investment income | 86 | 89 | 175 | 88 | 89 | 179 |
| Total revenues | 116 | 1,121 | 1,275 | 118 | 1,112 | 1,272 |
| Adjusted revenues (2) | 116 | 1,121 | 1,275 | 118 | 1,112 | 1,272 |
| Benefits and expenses | ||||||
| Benefit expenses | 80 | 785 | 881 | 85 | 761 | 866 |
| Selling, general and administrative expenses | 7 | 234 | 261 | 6 | 230 | 259 |
| Special items | - | 23 | 23 | - | - | - |
| Amortization of acquired intangible assets | - | - | 1 | - | - | 1 |
| Total operating expenses | 87 | 1,042 | 1,166 | 91 | 991 | 1,126 |
| Income from operations | 29 | 79 | 109 | 27 | 121 | 146 |
| Net realized investment gains (losses) | (1) | 8 | 7 | (2) | 22 | 20 |
| Income before income taxes | 28 | 87 | 116 | 25 | 143 | 166 |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||||
| Net realized investment (gains) losses | 1 | (8) | (7) | 2 | (22) | (20) |
| Amortization of acquired intangible assets | - | - | 1 | - | - | 1 |
| Special items | - | 23 | 23 | - | - | - |
| Pre-tax adjusted income from operations | $ 29 | $ 102 | $ 133 | $ 27 | $ 121 | $ 147 |
| (1) Includes the results of certain international run-off businesses. | ||||||
| (2) There are no revenue adjustments in the Group Disability and Other segment for the periods | ||||||
| presented. |
26
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – Corporate | ||||
| Third Quarter and Nine Months Ended September 30, 2018 | ||||
| (unaudited) | ||||
| Corporate (restated), compared with | ||||
| Amounts previously reported in Corporate | ||||
| 3 Months Ended Sep. 30, 2018 | 9 Months Ended Sep. 30, 2018 | |||
| (in millions) | Corporate as Previously Reported | Corporate as Restated | Corporate as Previously Reported | Corporate as Restated |
| Revenues | ||||
| Premiums (1) | $ (4) | $ (4) | $ (10) | $ (10) |
| Fees and other revenues (1) | (9) | (69) | (27) | (196) |
| Pharmacy revenue eliminations (1) | - | (360) | - | (1,066) |
| Net investment income including special items (1) | 20 | 20 | 32 | 32 |
| Total revenues | 7 | (413) | (5) | (1,240) |
| Special items reported in transaction-related costs | (13) | (13) | (13) | (13) |
| Adjusted revenues | (6) | (426) | (18) | (1,253) |
| Benefits and expenses | ||||
| Benefit expenses (1) | (4) | (4) | (10) | (10) |
| Pharmacy and other service cost eliminations (1) | - | (417) | - | (1,226) |
| Selling, general and administrative expenses (1) | 24 | 22 | 72 | 69 |
| Special items | 141 | 141 | 331 | 331 |
| Total operating expenses | 161 | (258) | 393 | (836) |
| Income from operations | (154) | (155) | (398) | (404) |
| Interest expense and other | (57) | (56) | (175) | (169) |
| Net realized investment (losses) | - | - | (1) | (1) |
| Income before income taxes | (211) | (211) | (574) | (574) |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| Net realized investment losses | - | - | 1 | 1 |
| Special items | 128 | 128 | 318 | 318 |
| Pre-tax adjusted income from operations | $ (83) | $ (83) | $ (255) | $ (255) |
| (1) Includes amounts for elimination of intersegment revenues and expenses. |
27
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – Corporate | ||||
| First and Second Quarters of 2018 | ||||
| (unaudited) | ||||
| Corporate (restated), compared with | ||||
| Amounts previously reported in Corporate | ||||
| 3 Months Ended March 31, 2018 | 3 Months Ended June 30, 2018 | |||
| (in millions) | Corporate as Previously Reported | Corporate as Restated | Corporate as Previously Reported | Corporate as Restated |
| Revenues | ||||
| Premiums (1) | $ (3) | $ (3) | $ (3) | $ (3) |
| Fees and other revenues (1) | (10) | (67) | (8) | (60) |
| Pharmacy revenue eliminations (1) | - | (353) | - | (353) |
| Net investment income (1) | 5 | 5 | 7 | 7 |
| Total revenues | (8) | (418) | (4) | (409) |
| Adjusted revenues (2) | (8) | (418) | (4) | (409) |
| Benefits and expenses | ||||
| Benefit expenses (1) | (3) | (3) | (3) | (3) |
| Pharmacy and other service cost eliminations (1) | - | (407) | - | (402) |
| Selling, general and administrative expenses (1) | 28 | 27 | 20 | 20 |
| Special items | 60 | 60 | 130 | 130 |
| Total operating expenses | 85 | (323) | 147 | (255) |
| Income from operations | (93) | (95) | (151) | (154) |
| Interest expense and other | (59) | (57) | (59) | (56) |
| Net realized investment (losses) | (1) | (1) | - | - |
| Income before income taxes | (153) | (153) | (210) | (210) |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| Net realized investment losses | 1 | 1 | - | - |
| Special items | 60 | 60 | 130 | 130 |
| Pre-tax adjusted income from operations | $ (92) | $ (92) | $ (80) | $ (80) |
| (1) Includes amounts for elimination of intersegment revenues and expenses. | ||||
| (2) There are no revenue adjustments in Corporate for the periods presented. |
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| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – Corporate | ||||
| Third Quarter and Fourth Quarters of 2017 | ||||
| (unaudited) | ||||
| Corporate (restated), compared with | ||||
| Amounts previously reported in Corporate | ||||
| 3 Months Ended Sep. 30, 2017 | 3 Months Ended Dec. 31, 2017 | |||
| (in millions) | Corporate as Previously Reported | Corporate as Restated | Corporate as Previously Reported | Corporate as Restated |
| Revenues | ||||
| Premiums (1) | $ (3) | $ (3) | $ (3) | $ (3) |
| Fees and other revenues (1) | (8) | (50) | (11) | (58) |
| Pharmacy revenue eliminations (1) | - | (312) | - | (340) |
| Net investment income (1) | 8 | 8 | 6 | 6 |
| Total revenues | (3) | (357) | (8) | (395) |
| Adjusted revenues (2) | (3) | (357) | (8) | (395) |
| Benefits and expenses | ||||
| Benefit expenses (1) | (3) | (3) | (3) | (3) |
| Pharmacy and other service cost eliminations (1) | - | (351) | - | (384) |
| Selling, general and administrative expenses (1) | 29 | 27 | 34 | 29 |
| Special items excluding debt extinguishment costs | 9 | 9 | 38 | 38 |
| Total operating expenses | 35 | (318) | 69 | (320) |
| Income from operations | (38) | (39) | (77) | (75) |
| Interest expense and other | (61) | (60) | (60) | (62) |
| Debt extinguishment costs | (321) | (321) | - | - |
| Income before income taxes | (420) | (420) | (137) | (137) |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| Special items including debt extinguishment costs | 330 | 330 | 38 | 38 |
| Pre-tax adjusted income from operations | $ (90) | $ (90) | $ (99) | $ (99) |
| (1) Includes amounts for elimination of intersegment revenues and expenses. | ||||
| (2) There are no revenue adjustments in Corporate for the periods presented. |
29
| Cigna Corporation | ||||
|---|---|---|---|---|
| Segment Results – Corporate | ||||
| First and Second Quarters of 2017 | ||||
| (unaudited) | ||||
| Corporate (restated), compared with | ||||
| Amounts previously reported in Corporate | ||||
| 3 Months Ended March 31, 2017 | 3 Months Ended June 30, 2017 | |||
| (in millions) | Corporate as Previously Reported | Corporate as Restated | Corporate as Previously Reported | Corporate as Restated |
| Revenues | ||||
| Premiums (1) | $ (3) | $ (3) | $ (3) | $ (3) |
| Fees and other revenues (1) | (10) | (48) | (8) | (49) |
| Pharmacy revenue eliminations (1) | - | (287) | - | (320) |
| Net investment income (1) | 8 | 8 | 8 | 8 |
| Total revenues | (5) | (330) | (3) | (364) |
| Adjusted revenues (2) | (5) | (330) | (3) | (364) |
| Benefits and expenses | ||||
| Benefit expenses (1) | (3) | (3) | (3) | (3) |
| Pharmacy and other service cost eliminations (1) | - | (322) | - | (357) |
| Selling, general and administrative expenses (1) | 41 | 31 | 21 | 16 |
| Special items | 63 | 63 | 16 | 16 |
| Total operating expenses | 101 | (231) | 34 | (328) |
| Income from operations | (106) | (99) | (37) | (36) |
| Interest expense and other | (62) | (69) | (60) | (61) |
| Income before income taxes | (168) | (168) | (97) | (97) |
| Pre-tax adjustments required to reconcile to adjusted income from operations | ||||
| Special items | 63 | 63 | 16 | 16 |
| Pre-tax adjusted income from operations | $ (105) | $ (105) | $ (81) | $ (81) |
| (1) Includes amounts for elimination of intersegment revenues and expenses. | ||||
| (2) There are no revenue adjustments in Corporate for the periods presented. |
30
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| /s/ Eric P. Palmer |
|---|
| Eric P. Palmer |
| Executive Vice President and |
| Chief Financial Officer |
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