BLOOMFIELD, Conn., July 30, 2020 /PRNewswire/ --
- Total revenues in the second quarter were $39.3 billion. Adjusted revenues1 were
$39.2 billion.
- Shareholders' net income for second quarter was $1.8 billion, or $4.73 per share
- Adjusted income from operations2 for the second
quarter was $2.2 billion, or
$5.81 per share
- Adjusted income from operations2,3 is projected
to be in the range of $18.00 to
$18.60 per share in
20203
Global health service company Cigna Corporation (NYSE: CI)
continues to expand stakeholder and community support and today
reported second quarter 2020 performance.
"Cigna's mission to improve the health, well-being and peace of
mind of those we serve continues to guide us as we remain
relentlessly focused on supporting the needs of our customers,
clients, and communities," said David M.
Cordani, President and Chief Executive Officer. "Our
stakeholders are facing unprecedented challenges from the pandemic,
uncertainty of a disrupted economy, and pain of racial tensions and
inequality. We are proud of the actions we have taken to
provide innovative programs and services and expanded financial
support, all while delivering sustained, attractive financial
performance and generating substantial cash flows that fuel our
offerings for the benefit of all we serve."
Total revenues for second quarter 2020 were $39.3 billion. Adjusted
revenues1 were $39.2
billion and reflect strong contributions from each of
Cigna's ongoing businesses.
Shareholders' net income for second quarter 2020 was
$1.8 billion, or $4.73 per share, compared with $1.4 billion, or $3.70 per share, for second quarter 2019.
Cigna's adjusted income from operations2 for second
quarter 2020 was $2.2 billion, or
$5.81 per share, compared with
$1.6 billion, or $4.30 per share, for second quarter 2019
reflecting the impact of deferred medical utilization due to the
COVID-19 pandemic as well as ongoing focused execution across our
businesses.
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
|
Six Months
Ended
|
|
June
30,
|
March
31,
|
|
|
June
30,
|
|
2020
|
2019
|
2020
|
|
|
2020
|
|
|
|
|
|
Total
Revenues
|
$
|
39,265
|
|
$
|
38,819
|
|
$
|
38,469
|
|
$
|
77,734
|
Net Realized Investment
(Gains) Losses from
Equity Method Investments1
|
(60)
|
|
6
|
|
10
|
|
(50)
|
Special
Items1
|
—
|
|
—
|
|
(87)
|
|
(87)
|
Transitioning Client
Contributions1
|
—
|
|
(4,450)
|
|
—
|
|
—
|
Adjusted
Revenues1
|
$
|
39,205
|
|
$
|
34,375
|
|
$
|
38,392
|
|
$
|
77,597
|
|
|
|
|
|
Consolidated
Earnings, net of taxes
|
|
|
|
|
Shareholders' Net
Income
|
$
|
1,754
|
|
$
|
1,408
|
|
$
|
1,181
|
|
$
|
2,935
|
Net Realized Investment
(Gains) Losses2
|
(88)
|
|
(13)
|
|
77
|
|
(11)
|
Amortization of Other
Acquired Intangible Assets2
|
376
|
|
572
|
|
309
|
|
685
|
Special
Items2
|
110
|
|
179
|
|
191
|
|
301
|
Transitioning Client
Contributions1,2
|
—
|
|
(506)
|
|
—
|
|
—
|
Adjusted Income from
Operations2
|
$
|
2,152
|
|
$
|
1,640
|
|
$
|
1,758
|
|
$
|
3,910
|
|
|
|
|
|
Shareholders' Net
Income, per share
|
$
|
4.73
|
|
$
|
3.70
|
|
$
|
3.15
|
|
$
|
7.88
|
Adjusted Income from
Operations2, per share
|
$
|
5.81
|
|
$
|
4.30
|
|
$
|
4.69
|
|
$
|
10.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Cigna's second quarter results reflect revenue and earnings
growth due to strong fundamental performance and lower medical
costs from deferred care related to the COVID-19 pandemic.
- Year to date through July 29,
2020, the Company repurchased 8.3 million shares of common
stock for approximately $1.5
billion.
- The debt to capitalization ratio decreased to 43.5% at
June 30, 2020 from 45.2% at
December 31, 2019.
- The SG&A expense ratio4 was 8.4% for second
quarter 2020, a decrease from 9.0% for second quarter 2019, driven
by significant revenue growth and continued expense
efficiency.
CUSTOMER RELATIONSHIPS
The following table summarizes Cigna's medical customers and
overall customer relationships:
Customer
Relationships (in thousands):
|
|
As of the Periods
Ended
|
|
|
June
30,
|
March
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
Total Pharmacy
Customers5
|
84,919
|
|
75,171
|
|
78,804
|
|
75,903
|
|
|
|
|
|
Commercial
|
14,000
|
|
14,026
|
|
14,140
|
|
14,187
|
Government
|
1,415
|
|
1,382
|
|
1,412
|
|
1,361
|
International
Markets
|
1,668
|
|
1,589
|
|
1,666
|
|
1,597
|
Total Medical
Customers5
|
17,083
|
|
16,997
|
|
17,218
|
|
17,145
|
|
|
|
|
|
Behavioral
Care
|
37,061
|
|
28,577
|
|
37,231
|
|
30,361
|
Dental
|
17,850
|
|
17,077
|
|
18,018
|
|
17,231
|
Medicare Part
D
|
3,300
|
|
3,266
|
|
3,295
|
|
3,276
|
International Markets
Supplemental Policies5,6
|
12,098
|
|
12,500
|
|
12,453
|
|
12,444
|
Group Disability and
Life Covered Lives5
|
15,900
|
|
15,400
|
|
15,900
|
|
15,400
|
Total Customer
Relationships
|
188,211
|
|
168,988
|
|
182,919
|
|
171,760
|
|
|
|
|
|
- The pharmacy customer base5 at second quarter 2020
grew to 84.9 million, an organic increase of 9.0 million customers
year to date, driven by strong new health plan sales.
- The total medical customer base5 at second quarter
2020 was 17.1 million, a decrease of 62,000 customers year to date,
driven by a decline in National Accounts, partially offset by
growth in Medicare Advantage and the Select and International
Markets segments.
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 services, including
benefits management, specialty pharmacy services, clinical
solutions, home delivery, and health management services.
Financial Results
(dollars in millions):
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Six
Months
Ended
|
|
June
30,
|
March
31,
|
|
June
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
28,602
|
|
$
|
23,537
|
|
$
|
27,168
|
|
$
|
55,770
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
1,249
|
|
$
|
1,162
|
|
$
|
1,082
|
|
$
|
2,331
|
Adjusted Margin,
Pre-Tax7
|
4.4%
|
|
4.9%
|
|
4.0%
|
|
4.2%
|
- Second quarter 2020 adjusted revenues1 increased 22%
relative to second quarter 2019 driven by the insourcing of
Integrated Medical pharmacy volumes and strong organic growth,
including continued growth in specialty pharmacy services,
partially offset by reduced retail script volumes due to the
COVID-19 pandemic.
- Second quarter adjusted income from operations,
pre-tax2 increased 7% relative to second quarter 2019,
reflecting customer growth, higher adjusted pharmacy scripts
volumes, benefits from the effective management of the supply
chain, and continued strong performance in specialty pharmacy
services, partially offset by an increase in operating expenses to
support growth.
- Health Services fulfilled 364 million adjusted pharmacy
scripts8 in second quarter 2020, an increase of 24% over
second quarter 2019 driven by the insourcing of Integrated Medical
pharmacy volumes and strong organic growth, partially offset by
reduced retail script volumes.
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
|
Six
Months
Ended
|
|
June
30,
|
March
31,
|
|
June
30,
|
|
2020
|
2019
|
2020
|
|
2020
|
|
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
9,237
|
|
$
|
8,968
|
|
$
|
9,860
|
|
$
|
19,097
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
1,523
|
|
$
|
990
|
|
$
|
1,199
|
|
$
|
2,722
|
Adjusted Margin,
Pre-Tax7
|
16.5%
|
|
11.0%
|
|
12.2%
|
|
14.3%
|
- Second quarter 2020 adjusted revenues1 grew 3% over
second quarter 2019, reflecting customer growth in Medicare
Advantage and in the Select segment, as well as premium increases,
partially offset by premium relief programs for clients that were
delivered in response to the COVID-19 pandemic. The sequential
decline in adjusted revenues1 was primarily due to
premium relief programs for clients, lower net investment income,
and a modest decline in medical customers.
- Second quarter 2020 adjusted income from operations, pre-tax²
and adjusted margin, pre-tax7 reflect significantly
lower medical utilization in both the Commercial and Government
segments compared to historic patterns, as individuals deferred
care due to the COVID-19 pandemic, partially offset by premium
relief programs for clients and cost share waivers for
customers.
- The medical care ratio4 ("MCR") of 70.5% for second
quarter 2020 reflects significantly lower medical utilization in
both the Commercial and Government segments compared to historic
patterns, as individuals deferred care due to the COVID-19
pandemic, partially offset by premium relief programs for clients
and cost share waivers for customers.
- Integrated Medical net medical costs payable9 was
$2.80 billion at June 30, 2020, $2.64
billion at June 30, 2019, and
$2.59 billion at December 31, 2019. Year to date, favorable prior
year reserve development on a gross pre-tax basis was $130 million and $149
million through second quarter 2020 and 2019,
respectively.
International Markets
This segment includes supplemental health, life and accident
insurance products and health care coverage in Cigna's
international markets, as well as health care benefits for globally
mobile individuals and employees of multinational
organizations.
Financial Results
(dollars in millions):
|
|
|
|
|
Three Months
Ended
|
Six
Months
Ended
|
|
June
30,
|
March
31,
|
|
June
30,
|
|
2020
|
2019
|
2020
|
|
2020
|
|
|
|
|
|
Adjusted
Revenues1,6
|
$
|
1,432
|
|
$
|
1,389
|
|
$
|
1,470
|
|
$
|
2,902
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
319
|
|
$
|
207
|
|
$
|
282
|
|
$
|
601
|
Adjusted Margin,
Pre-Tax7
|
22.3%
|
|
14.9%
|
|
19.2%
|
|
20.7%
|
- Second quarter 2020 adjusted revenues1,6 grew 3%
over second quarter 2019, reflecting continued business growth,
partially offset by adverse foreign currency movement.
- Second quarter 2020 adjusted income from operations,
pre-tax2 and adjusted margin, pre-tax7
reflect lower claim levels driven by the COVID-19 pandemic,
continued business growth and operational efficiency.
Group Disability and Other Operations
This segment includes Cigna's Group Disability and Life business
which offers group long-term and short-term disability, and group
life, accident, voluntary and specialty insurance products and
services. Additionally, this segment includes Corporate Owned
Life Insurance ("COLI") and the Company's run-off operations.
Financial Results
(dollars in millions):
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
June
30,
|
March
31,
|
|
June
30,
|
|
2020
|
2019
|
2020
|
|
2020
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
1,328
|
|
$
|
1,309
|
|
$
|
1,339
|
|
$
|
2,667
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
132
|
|
$
|
149
|
|
$
|
77
|
|
$
|
209
|
Adjusted Margin,
Pre-Tax7
|
9.9%
|
|
11.4%
|
|
5.8%
|
|
7.8%
|
- Second quarter 2020 adjusted income from operations,
pre-tax2 and adjusted margin, pre-tax7
reflect elevated claims in Cigna's Life business primarily related
to the COVID-19 pandemic, partially offset by favorable performance
within the Disability business.
- On December 18, 2019, Cigna
announced a definitive agreement whereby New York Life will acquire
Cigna's Group Disability and Life business for $6.3 billion. Cigna expects the transaction to
close in the third quarter of 2020, subject to applicable
regulatory approvals and other customary closing conditions.
Corporate
Corporate reflects interest expense, as well as amounts not
allocated to operating segments and includes intersegment
eliminations.
Financial Results
(dollars in millions):
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
June
30,
|
March
31,
|
|
June
30,
|
|
2020
|
2019
|
2020
|
|
2020
|
|
|
|
|
|
Adjusted (Loss) from
Operations, Pre-Tax2
|
$
|
(400)
|
|
$
|
(453)
|
|
$
|
(405)
|
|
$
|
(805)
|
|
|
|
|
|
|
|
|
|
|
|
|
- Second quarter 2020 adjusted loss from operations,
pre-tax2 decreased relative to second quarter 2019 as a
result of lower interest expense.
COVID-19 Response
From the onset of the COVID-19 pandemic, Cigna has focused on
delivering peace of mind for the people and businesses we serve,
and our employees and their families. We've taken bold actions
to drive affordability, remove uncertainty, and make health care
easier. To date, these actions include:
Making Health Care Affordable
- Waived customer out-of-pocket costs for COVID-19 related
visits, testing and treatment delivered by any in-network
provider anywhere – whether at an office, an urgent care center,
emergency room or through virtual care.10
- Protecting customers from surprise bills by
out-of-network providers through the Customer Protection
Program.
- Customers can utilize free standard shipping for home
delivery of maintenance medications.
- Helping people temporarily without coverage access
prescription savings through Parachute Rx.
- Employers can provide tax-free financial assistance to
employees for qualified disaster relief payments, such as
medical payments, groceries, child care, and wellness services with
the Cigna Care Card.
- Expanding financial assistance to Cigna group dental clients by
issuing one-month premium credits.
- Offering financial relief to clients through its
Guaranteed Cost Client Relief Program.
Making Health Care Predictable
- Helping customers get COVID-19 care in the safety of their
home from Medocity.
- Protecting prescription medication supply through
quantity limits as needed.
- 24/7 customer access to pharmacists.
- Waived prior authorizations for patient transfers, emergency
department visits and home health care services.
- Customers can utilize virtual care for non-COVID-19
issues at the standard in-office benefit.
- Acute and advanced illness care offered at home.
Making Health Care Simple
- Encouraged use of virtual care, and have seen 132K+
visits through telehealth partners MDLIVE and Amwell.
- Cigna Dental customers can utilize Cigna Dental Virtual
Care powered by The TeleDentists.
- Buoy Health (U.S.) and Infermedica (international) tools
provide COVID-19 symptom checkers. To date, 100K+ customers
have used Buoy.
- Digital mental health care tools available include
Happify, iPrevail and Talkspace, and SilverCloud Health.
- Expanded Employee Assistance Programs for customers and
households, and have seen a significant increase in
consultations.
Supporting Communities
- Cigna and the Cigna Foundation11launched the Brave
of Heart Fund with a $25M grant to
provide financial assistance to survivors of frontline U.S.
workers who gave their lives in COVID-19 fight. The Fund
was created in partnership with the New York Life Foundation. Cigna
will also provide emotional support services at no cost.
- Providing free on-demand supportive resources for
customers and the general public, such as online articles,
podcasts, and webinars.
- 24/7 free mental health support line for the
public.
- Cigna has not requested or retained any proceeds under the
CARES Act.
Supporting Our Workforce
- In less than one month's time, enabled nearly 100% of employees
who could work from home to do so, globally.
- Lifted restriction on paid time off use before accrual.
- Employees have 10 paid Emergency Time Off days for COVID-19
related absences.
- 20% pay premium for U.S. worksite-essential employees.
- Enhanced employee recognition program.
- Introduced the Cigna COVID-19 Employee Assistance Fund to help
offset extraordinary financial hardships.
- Launched Employees Helping Employees: Cloth Face Coverings
campaign for employees to make masks for worksite essential
coworkers.
- Ensuring workplace health through enhanced safety protocols,
including PPE for frontline staff.
2020 OUTLOOK
Cigna's outlook for full year 2020 adjusted
revenues1,3 is $154
billion to $156 billion.
Cigna's outlook for full year 2020 consolidated adjusted income
from operations2,3 on a per share basis is in the range
of $18.00 to $18.60 per share. Cigna's outlook excludes
potential effects of any future share repurchase3.
Also, while Cigna continues to expect to close the sale of Cigna's
Group Disability and Life business in the third quarter of 2020,
Cigna's outlook assumes a full year of contributions from the Group
Disability and Life business.
The foregoing statements represent the Company's current
estimates of Cigna's 2020 consolidated adjusted
revenues1,3 and adjusted income from
operations2,3 on a per share basis as of the date of
this release. Actual results may differ materially depending
on a number of factors. Investors are urged to read the
Cautionary Note Regarding Forward-Looking Statements included in
this release. Management does not assume any obligation to
update these estimates.
This quarterly earnings release and the Quarterly Financial
Supplement are available on Cigna's website in the Investor
Relations section
(https://www.cigna.com/aboutcigna/investors). Management will
be hosting a conference call to review second quarter 2020 results
and discuss full year 2020 outlook beginning today at 8:30 a.m. ET. A link to the conference call
is available in the Investor Relations section of Cigna's website
located at
https://www.cigna.com/aboutcigna/investors/events/index.page.
The call-in numbers for the conference call are as follows:
Live Call
(888) 324-7575 (Domestic)
(210) 234-0013 (International)
Passcode: 7302020
Replay
(800) 839-1171 (Domestic)
(203) 369-3030 (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 185 million customer
relationships throughout the world. To learn more about
Cigna®, including links to follow us on Facebook or
Twitter, visit www.cigna.com.
Notes:
|
|
|
1.
|
At the
consolidated level, the measure "adjusted revenues" is not
determined in accordance with accounting principles generally
accepted in the United States (GAAP) and should not be viewed as a
substitute for the most directly comparable GAAP measure, "total
revenues." Cigna defines adjusted revenues as total revenues
excluding net realized investment results from equity method
investments and special items. Special items are identified
in Exhibit 1 of this earnings release. For periods prior to
2020, Cigna also excludes revenue contributions from transitioning
pharmacy benefit management clients, Anthem Inc. and Coventry
Health Care, Inc. (the "transitioning clients"). Cigna
excludes these items from this measure because they are not
indicative of past or future underlying performance of the
business. See Exhibit 1 for a reconciliation of consolidated
adjusted revenues to total revenues.
|
|
|
2.
|
Adjusted income
(loss) from operations is defined as shareholders' net income
(loss) excluding the following adjustments: net realized investment
results, amortization of acquired intangible assets, and special
items. For periods prior to 2020, Cigna also excludes
earnings contributions from transitioning clients. Adjusted income
(loss) from operations is measured on an after-tax basis for
consolidated results and on a pre-tax basis for segment
results.
|
|
|
|
Adjusted income
(loss) from operations is a measure of profitability used by
Cigna's management because it presents the underlying results of
operations of Cigna's businesses and permits analysis of trends in
underlying revenue, expenses and shareholders' net income.
This consolidated measure is not determined in accordance with GAAP
and should not be viewed as a substitute for the most directly
comparable GAAP measure, shareholders' net income. See Exhibit 1
for a reconciliation of consolidated adjusted income from
operations to shareholders' net income.
|
|
|
3.
|
Certain adjusted
metrics presented for 2019 exclude contributions from transitioning
clients. As previously disclosed, beginning in 2020, Cigna no
longer excludes contributions from transitioning clients from its
adjusted metrics, as the transition for those clients was
substantially complete as of December 31,
2019.
|
|
|
|
Management is not
able to provide a reconciliation of adjusted income from operations
to shareholders' net income (loss) or adjusted revenues to total
revenues on a forward-looking basis because it is unable to
predict, without unreasonable effort, certain components thereof
including (i) future net realized investment results (from
equity method investments with respect to adjusted revenues) and
(ii) future special items. These items are inherently
uncertain and depend on various factors, many of which are beyond
Cigna's control. As such, any associated estimate and its impact on
shareholders' net income and total revenues could vary
materially.
|
|
|
|
The Company's
outlook excludes the potential effects of any share repurchases or
business combinations that may occur after the date of this
earnings release. Additionally, the Company's outlook assumes
a full year of contributions from Cigna's Group Disability and Life
business.
|
|
|
4.
|
Operating ratios
are defined as follows:
- Medical care
ratio represents medical costs as a percentage of premiums for all
U.S. commercial risk products, including medical, pharmacy, dental,
stop loss and behavioral products provided through guaranteed cost
or experience-rated funding arrangements, as well as Medicare
Advantage, Medicare Part D, Medicare Supplement, Medicaid, and
individual on and off-exchange products, within Cigna's Integrated
Medical segment.
- SG&A expense
ratio represents enterprise selling, general and administrative
expenses excluding special items and, prior to 2020, expenses from
transitioning clients, as a percentage of adjusted revenue at a
consolidated level.
|
5.
|
Customer
relationships are defined as follows:
- Total medical
customers includes individuals in Cigna's Integrated Medical and
International Markets segments who meet any one of the following
criteria: are covered under a medical insurance policy, managed
care arrangement, or service agreement issued by Cigna; have access
to Cigna's provider network for covered services under their
medical plan; or have medical claims and services that are
administered by Cigna.
- U.S. Individual
includes on-exchange Patient Protection and Affordable Care and
Education Reconciliation Act ("ACA") business, off-exchange ACA
business and off-exchange non-ACA business.
- Pharmacy
customer relationships for periods prior to 2020 excludes
transitioning clients.
- International
Markets supplemental policies exclude International Markets medical
customers included in total medical customers.
- Group Disability
and Life covered lives are estimated.
|
6.
|
Cigna owns a 50%
non-controlling interest in its China joint venture. Cigna's
50% share of the joint venture's earnings is reported in Fees and
Other Revenues using the equity method of accounting under
GAAP. As such, the adjusted revenues and policy counts for
the International Markets segment do not include the China joint
venture.
|
|
|
7.
|
Adjusted margin,
pre-tax, is calculated by dividing adjusted income (loss) from
operations, pre-tax by adjusted revenues for each
segment.
|
|
|
|
Adjusted margin,
after-tax, is calculated by dividing consolidated adjusted income
(loss) from operations by consolidated adjusted revenues.
Adjusted income (loss) from operations is measured on an after-tax
basis for consolidated results.
|
|
|
8.
|
For Health
Services adjusted pharmacy scripts, non-specialty network scripts
filled through 90-day programs and home delivery scripts are
multiplied by three. All other network and specialty scripts
are counted as one script.
|
|
|
9.
|
Medical costs
payable within the Integrated Medical segment are presented net of
reinsurance and other recoverables. The gross medical costs
payable balance was $2.96 billion as of June 30, 2020, $2.89
billion as of December 31, 2019, and $2.88 billion as of
June 30, 2019.
|
|
|
10.
|
Enhanced coverage
for COVID-19 related services applies to customers in the United
States who are covered under Cigna's employer/union sponsored
insured group health plans, insured plans for globally mobile
individuals, Medicare Advantage, Medicaid, and the Individual and
Family insurance plans. Self-insured group health plans
administered by Cigna have an opportunity to opt out of these
benefits. Treatments covered include those covered under Medicare
and other applicable state regulations.
|
|
|
11.
|
The Cigna
Foundation is a private foundation funded by contributions from
Cigna Corporation and its subsidiaries.
|
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This press release, and oral statements made in connection with
this release, may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on Cigna's current
expectations and projections about future trends, events and
uncertainties. These statements are not historical facts.
Forward-looking statements may include, among others, statements
concerning our projected consolidated adjusted income from
operations outlook for 2020 on a per share basis; projected
adjusted revenue outlook for 2020; future financial or operating
performance, including our ability to deliver affordable,
personalized and innovative solutions for our customers and
clients, in light of the challenges presented by the COVID-19
pandemic; future growth, business strategy, strategic or
operational initiatives, including our organizational efficiency
plan; economic, regulatory or competitive environments,
particularly with respect to the pace and extent of change in these
areas; financing or capital deployment plans and amounts available
for future deployment; our prospects for growth in the coming
years; strategic transactions, including the merger (the "Merger")
with Express Scripts Holding Company and the sale of our U.S. Group
Disability and Life business; our ongoing operational response to
the COVID-19 pandemic; and other statements regarding Cigna's
future beliefs, expectations, plans, intentions, financial
condition or performance. You may identify forward-looking
statements by the use of words such as "believe," "expect," "plan,"
"intend," "anticipate," "estimate," "predict," "potential," "may,"
"should," "will" or other words or expressions of similar meaning,
although not all forward-looking statements contain such terms.
Forward-looking statements are subject to risks and
uncertainties, both known and unknown, that could cause actual
results to differ materially from those expressed or implied in
forward-looking statements. Such risks and uncertainties include,
but are not limited to: our ability to achieve our financial,
strategic and operational plans or initiatives; our ability to
predict and manage medical and pharmacy costs and price
effectively; our ability to adapt to changes or trends in an
evolving and rapidly changing industry; our ability to effectively
differentiate our products and services from those of our
competitors and maintain or increase market share; our ability to
develop and maintain good relationships with physicians, hospitals,
other health care providers, producers, consultants, and
pharmaceutical manufacturers; changes in the pharmacy provider
marketplace or pharmacy networks; changes in drug pricing; the
impact of modifications to our operations and processes; our
ability to identify potential strategic transactions and realize
the expected benefits (including anticipated synergies) of such
transactions in full or within the anticipated time frame,
including with respect to the Merger and the sale of our Group
Disability and Life business, as well as our ability to integrate
or separate operations, resources and systems; the substantial
level of government regulation over our business and the potential
effects of new laws or regulations or changes in existing laws or
regulations; the outcome of litigation, regulatory audits,
investigations, actions or guaranty fund assessments; uncertainties
surrounding participation in government-sponsored programs such as
Medicare; the effectiveness and security of our information
technology and other business systems and those of our key
suppliers or other third parties; the impact of our debt service
obligations on the availability of funds for other business
purposes; unfavorable industry, economic or political conditions,
including foreign currency movements; acts of civil unrest, war,
terrorism, natural disasters or pandemics; reinsurance credit risk;
the scale and scope of the COVID-19 pandemic and its potential
impact on our business, operating results, cash flows and financial
condition, as well as on our employees, clients, customers,
suppliers and partners and on the U.S. and global economies; as
well as more specific risks and uncertainties discussed in our most
recent report on Form 10-K, our Form 10-Q for the quarter ended
March 31, 2020 and subsequent reports
on Forms 10-Q and 8-K available through the Investor Relations
section of www.cigna.com. You should not place undue reliance on
forward-looking statements, which speak only as of the date they
are made, are not guarantees of future performance or results, and
are subject to risks, uncertainties and assumptions that are
difficult to predict or quantify. Cigna undertakes no obligation to
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise, except as may be
required by law.
CIGNA
CORPORATION
|
|
|
|
|
Exhibit
1
|
COMPARATIVE
SUMMARY OF FINANCIAL RESULTS (unaudited)
|
|
|
|
|
(Dollars in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
Three Months
Ended
|
|
June
30,
|
June
30,
|
March
31,
|
|
2020
|
2019
|
2020
|
2019
|
2020
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
Pharmacy
revenues
|
$
|
26,564
|
|
$
|
26,288
|
|
$
|
51,662
|
|
$
|
51,467
|
|
$
|
25,098
|
|
Premiums
|
10,406
|
|
9,803
|
|
21,246
|
|
19,774
|
|
10,840
|
|
Fees and other
revenues
|
2,072
|
|
2,388
|
|
4,250
|
|
4,838
|
|
2,178
|
|
Net investment
income
|
223
|
|
340
|
|
576
|
|
686
|
|
353
|
|
Total
revenues
|
39,265
|
|
38,819
|
|
77,734
|
|
76,765
|
|
38,469
|
|
Revenue contributions
from transitioning clients
|
—
|
|
(4,450)
|
|
—
|
|
(8,939)
|
|
—
|
|
Net realized
investment results from certain equity method
investments
|
(60)
|
|
6
|
|
(50)
|
|
(22)
|
|
10
|
|
Special item related
to contractual adjustment for a former client
|
—
|
|
—
|
|
(87)
|
|
—
|
|
(87)
|
|
Adjusted revenues
(1)
|
$
|
39,205
|
|
$
|
34,375
|
|
$
|
77,597
|
|
$
|
67,804
|
|
$
|
38,392
|
|
|
|
|
|
|
|
SHAREHOLDERS' NET
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' net
income
|
$
|
1,754
|
|
$
|
1,408
|
|
$
|
2,935
|
|
$
|
2,776
|
|
$
|
1,181
|
|
After-tax adjustments
to reconcile to adjusted income from operations
|
|
|
|
|
|
Net realized
investment (gains) losses
|
(88)
|
|
(13)
|
|
(11)
|
|
(51)
|
|
77
|
|
Amortization of
acquired intangible assets
|
376
|
|
572
|
|
685
|
|
1,136
|
|
309
|
|
Adjustment for
transitioning clients
|
—
|
|
(506)
|
|
—
|
|
(1,010)
|
|
—
|
|
Special
Items
|
|
|
|
|
|
Debt extinguishment
costs
|
11
|
|
—
|
|
151
|
|
—
|
|
140
|
|
Integration and
transaction-related costs
|
99
|
|
115
|
|
173
|
|
223
|
|
74
|
|
Charge for
organizational efficiency plan
|
—
|
|
—
|
|
24
|
|
—
|
|
24
|
|
Charges associated
with litigation matters
|
—
|
|
64
|
|
19
|
|
64
|
|
19
|
|
Contractual adjustment
for a former client
|
—
|
|
—
|
|
(66)
|
|
—
|
|
(66)
|
|
Adjusted income from
operations
|
$
|
2,152
|
|
$
|
1,640
|
|
$
|
3,910
|
|
$
|
3,138
|
|
$
|
1,758
|
|
|
|
|
|
|
|
Pre-tax adjusted
income (loss) from operations by segment
|
|
|
|
|
|
Health
Services
|
$
|
1,249
|
|
$
|
1,162
|
|
$
|
2,331
|
|
$
|
2,156
|
|
$
|
1,082
|
|
Integrated
Medical
|
1,523
|
|
990
|
|
2,722
|
|
2,160
|
|
1,199
|
|
International
Markets
|
319
|
|
207
|
|
601
|
|
413
|
|
282
|
|
Group Disability and
Other
|
132
|
|
149
|
|
209
|
|
233
|
|
77
|
|
Corporate
|
(400)
|
|
(453)
|
|
(805)
|
|
(943)
|
|
(405)
|
|
Consolidated
pre-tax adjusted income from operations(2)
|
2,823
|
|
2,055
|
|
5,058
|
|
4,019
|
|
2,235
|
|
Adjusted
income tax expense
|
(671)
|
|
(415)
|
|
(1,148)
|
|
(881)
|
|
(477)
|
|
Consolidated after-tax
adjusted income from operations(2)
|
$
|
2,152
|
|
$
|
1,640
|
|
$
|
3,910
|
|
$
|
3,138
|
|
$
|
1,758
|
|
|
|
|
|
|
|
DILUTED EARNINGS
PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' net
income
|
$
|
4.73
|
|
$
|
3.70
|
|
$
|
7.88
|
|
$
|
7.26
|
|
$
|
3.15
|
|
After-tax adjustments
to reconcile to adjusted income from operations
|
|
|
|
|
|
Net realized
investment (gains) losses
|
(0.24)
|
|
(0.03)
|
|
(0.03)
|
|
(0.13)
|
|
0.21
|
|
Amortization of
acquired intangible assets
|
1.02
|
|
1.49
|
|
1.84
|
|
2.96
|
|
0.82
|
|
Adjustment for
transitioning clients
|
—
|
|
(1.33)
|
|
—
|
|
(2.64)
|
|
—
|
|
Special
Items
|
|
|
|
|
|
Debt extinguishment
costs
|
0.03
|
|
—
|
|
0.41
|
|
—
|
|
0.38
|
|
Integration and
transaction-related costs
|
0.27
|
|
0.30
|
|
0.46
|
|
0.58
|
|
0.20
|
|
Charge for
organizational efficiency plan
|
—
|
|
—
|
|
0.06
|
|
—
|
|
0.06
|
|
Charges associated
with litigation matters
|
—
|
|
0.17
|
|
0.05
|
|
0.17
|
|
0.05
|
|
Contractual adjustment
for a former client
|
—
|
|
—
|
|
(0.18)
|
|
—
|
|
(0.18)
|
|
Adjusted income from
operations(2)
|
$
|
5.81
|
|
$
|
4.30
|
|
$
|
10.49
|
|
$
|
8.20
|
|
$
|
4.69
|
|
Weighted average
shares (in thousands)
|
370,697
|
|
380,969
|
|
372,668
|
|
382,496
|
|
374,639
|
|
Common shares
outstanding (in thousands)
|
|
|
368,258
|
|
377,883
|
|
369,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY at June 30,
|
|
|
$
|
47,366
|
|
$
|
43,815
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY PER SHARE at June 30,
|
|
|
$
|
128.62
|
|
$
|
115.95
|
|
|
|
|
(1) Adjusted
revenues is defined as total revenues excluding the following
adjustments: special items and Cigna's share of certain
realized investment results of its joint ventures reported using
the equity method. For periods prior to 2020, we also
excluded revenue contributions from transitioning clients. These
items are excluded because they are not indicative of past or
future underlying performance of our businesses.
|
|
(2) Adjusted
income (loss) from operations is defined as shareholders' net
income (loss) excluding the following after-tax adjustments:
realized investment results, amortization of acquired intangible
assets and special items. For periods prior to 2020, we also
excluded earnings contributions from transitioning
clients.
|
INVESTOR RELATIONS CONTACT:
Will McDowell
215-761-4198
william.mcdowell2@cigna.com
MEDIA CONTACT:
Ellie Polack
860-902-4906
elinor.polack@cigna.com
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SOURCE Cigna