Cigna Reports Fourth Quarter and Full Year 2020 Results, Expects Continued Revenue and Earnings Growth in 2021
BLOOMFIELD, Conn., Feb. 4, 2021 /PRNewswire/ --
-- Total revenues for 2020 were $160.4 billion, and adjusted revenues(1)
for 2020 were $160.1 billion
-- Shareholders' net income for 2020 was $8.5 billion, or $22.96 per share
-- Adjusted income from operations(2) for 2020 was $6.8 billion, or $18.45
per share
-- Adjusted revenues(1,3) are projected to be at least $165 billion in 2021
-- Adjusted income from operations(2,3) is projected to be at least $6.95
billion in 2021, or at least $20.00 per share(3)
Global health services company Cigna Corporation (NYSE: CI) today reported strong 2020 results driven by focused execution through the ongoing COVID-19 pandemic.
"I'm extremely proud of the ways in which our 70,000-plus Cigna employees delivered for our customers, our clients, our providers, our partners, and our shareholders amid the ongoing COVID-19 pandemic," said David M. Cordani, president and chief executive officer. "Our fourth quarter results were in line with expectations, as we continued to make investments in our customers, capabilities, and co-workers -- all while covering elevated COVID-related costs. As a result, we have entered 2021 with great momentum, and our health services portfolio, fueled by the launch of Evernorth, is well-positioned for sustained long-term growth."
Total revenues for 2020 were $160.4 billion. Adjusted revenues(1) were $160.1 billion and reflect strong contributions from each of Cigna's ongoing businesses.
Shareholders' net income for 2020 of $8.5 billion, or $22.96 per share, includes an after tax gain of $3.2 billion, or $8.73 per share, from the sale of the Group Disability and Life business, and compares with $5.1 billion, or $13.44 per share, for 2019.
Cigna's adjusted income from operations(2) for 2020 was $6.8 billion, or $18.45 per share, compared with $6.5 billion, or $17.05 per share, for 2019 reflecting focused execution across the ongoing businesses, led by Evernorth.
Reconciliations of total revenues to adjusted revenues(1) and of shareholders' net income to adjusted income from operations(2) 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 revenues(1) and shareholders' net income to adjusted income from operations(2):
Consolidated Financial Results (dollars in millions):
Three Months Ended Year Ended
December 31, September 30, December 31,
2020 2019 2020 2020
Total Revenues $
41,712 $
38,245 $
40,955 $
160,401
Net Realized Investment (Gains) Losses from Equity Method Investments(1) (43) (17) (37) (130)
Special Items(1) (117) (204)
Transitioning Client Contributions(1) (1,690)
Adjusted Revenues(1) $
41,669 $
36,538 $
40,801 $
160,067
Consolidated Earnings, net of taxes
Shareholders' Net Income $
4,135 $
977 $
1,388 $
8,458
Net Realized Investment (Gains) Losses(2) (169) (90) (64) (244)
Amortization of Other Acquired Intangible Assets(2) 370 554 376 1,431
Special Items(2) (3,069) 278 (82) (2,850)
Transitioning Client Contributions1,2 (99)
Adjusted Income from Operations(2) $
1,267 $
1,620 $
1,618 $
6,795
Shareholders' Net Income, per share $
11.45 $
2.60 $
3.78 $
22.96
Adjusted Income from Operations(2), per share $
3.51 $
4.31 $
4.41 $
18.45
-- Cigna's 2020 results reflect revenue and earnings growth in a dynamic,
rapidly changing environment, driven by focused execution across the
ongoing businesses, as well as actions taken to support customers,
providers, and employees through the ongoing pandemic.
-- In 2020, the company repurchased 21.9 million shares of common stock for
$4.1 billion. Year to date through February 3, 2021, the Company
repurchased 4.2 million shares of common stock for approximately $0.9
billion.
-- The debt-to-capitalization ratio of 39.5% at December 31, 2020
represents a decrease from 45.2% at December 31, 2019 and is in line
with the deleveraging target of less than 40% by year end 2020.
-- The SG&A expense ratio(4) was 8.5% for full year 2020, a decrease from
9.3% for full year 2019, driven by significant revenue growth, continued
expense efficiency, and the realization of administrative synergies.
CUSTOMER RELATIONSHIPS
The following table summarizes Cigna's medical customers and overall customer relationships:
Customer Relationships (in thousands):
As of the Periods Ended
December 31, September 30,
2020 2019 2020
Total Customer Relationships, ex Group Disability and Life 175,709 156,360 173,802
Total Customer Relationships 175,709 171,760 189,702
Total Pharmacy Customers5 89,184 75,903 86,604
U.S. Commercial6 13,626 14,187 13,901
U.S. Government6 1,387 1,361 1,413
International Markets 1,660 1,597 1,668
Total Medical Customers5 16,673 17,145 16,982
Behavioral Care 36,908 30,361 37,236
Dental 17,542 17,231 17,671
Medicare Part D 3,291 3,276 3,296
International Markets Supplemental Policies5,7 12,111 12,444 12,013
Group Disability and Life Covered Lives5 15,400 15,900
-- The pharmacy customer base(5) at the end of 2020 grew to 89.2 million,
an organic increase of 13.2 million from year end 2019, driven by strong
new health plan sales.
-- The total medical customer base(5) at the end of 2020 was 16.7 million,
a decrease of 472,000 customers from year end 2019, reflecting increased
disenrollment resulting from the economic impacts of the COVID-19
pandemic, and in the fourth quarter, the loss of approximately 240,000
customers associated with one client, as expected. These declines were
partially offset by growth in the Select segment and Medicare Advantage.
HIGHLIGHTS OF SEGMENT RESULTS
See Exhibit 1 for a reconciliation of adjusted income (loss) from operations(2) to shareholders' net income.
Evernorth(6)
This segment includes a broad range of coordinated and point solution health services, including pharmacy services, benefits management, care solutions and data and analytics, which are provided to health plans, employers, government organizations, and health care providers.
Financial Results (dollars in millions):
Three Months Ended Year Ended
December 31, September 30, December 31,
2020 2019 2020 2020
Adjusted Revenues1 $
30,533 $
25,570 $
29,827 $
116,130
Adjusted Income from Operations, Pre-Tax2 $
1,589 $
1,537 $
1,443 $
5,363
Adjusted Margin, Pre-Tax8 5.2% 6.0% 4.8% 4.6%
-- Fourth quarter 2020 adjusted revenues(1) increased 19% relative to
fourth quarter 2019 driven by the insourcing of U.S. Medical pharmacy
volumes and strong organic growth, including growth in retail network
and specialty pharmacy services.
-- Fourth quarter 2020 adjusted income from operations, pre-tax(2)
increased 3% relative to fourth quarter 2019, reflecting customer
growth, higher adjusted pharmacy scripts volumes, benefits from the
effective management of the supply chain, and continued strong
performance in specialty pharmacy services, partially offset by
increased operating expenses to support growth.
-- Evernorth fulfilled 388 million adjusted pharmacy scripts(9) in fourth
quarter 2020, an increase of 19% over fourth quarter 2019 driven by the
insourcing of U.S. Medical pharmacy volumes and strong organic growth.
U.S. Medical(6)
This segment includes Cigna's U.S. Commercial and U.S. Government businesses that provide comprehensive medical and coordinated solutions to clients and customers. U.S. Commercial products and services include medical, pharmacy, behavioral health, dental, vision, health advocacy programs and other products and services for insured and self-insured customers. U.S. Government solutions include Medicare Advantage, Medicare Supplement, and Medicare Part D plans for seniors, Medicaid plans, and individual health insurance plans both on and off the public exchanges.
Financial Results (dollars in millions):
Three Months Ended Year Ended
December 31, September 30, December 31,
2020 2019 2020 2020
Adjusted Revenues(1) $
9,725 $
9,208 $
9,629 $
38,451
Adjusted Income from Operations, Pre-Tax(2) $
328 $
718 $
757 $
3,807
Adjusted Margin, Pre-Tax8 3.4% 7.8% 7.9% 9.9%
-- Fourth quarter 2020 adjusted revenues(1) grew 6% over fourth quarter
2019, reflecting customer growth in Medicare Advantage and the Select
Segment, as well as premium increases.
-- Fourth quarter 2020 adjusted income from operations, pre-tax² and
adjusted margin, pre-tax(8) decreased relative to fourth quarter 2019
reflecting COVID-19 related impacts and the return of the health
insurance tax. COVID-19 related impacts include the direct costs of
COVID-19 testing and treatment, the costs of proactive actions taken to
support customers, providers, and employees, and decreased specialty
contributions, partially offset by a reduction in non-COVID utilization.
-- The medical care ratio(4 )("MCR") of 79.4% for full year 2020 compares
to 80.8% for full year 2019 and reflects a reduction in non-COVID
utilization and the pricing effect of the health insurance tax,
partially offset by direct COVID-19 costs and the costs of actions we
have taken to support customers. The fourth quarter 2020 MCR of 85.8%
increased relative to the fourth quarter 2019 MCR of 82.3% due to
COVID-19 related impacts, partially offset by the pricing effect of the
health insurance tax.
-- U.S. Medical net medical costs payable(10) was $2.96 billion at December
31, 2020, $2.97 billion at September 30, 2020, and $2.59 billion at
December 31, 2019. Favorable prior year reserve development on a gross
pre-tax basis was $115 million and $165 million through full year 2020
and 2019, respectively.
International Markets
This segment includes supplemental health, life and accident insurance products and health care coverage in Cigna's international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations.
Financial Results (dollars in millions):
Three Months Ended Year Ended
December 31, September 30, December 31,
2020 2019 2020 2020
Adjusted Revenues1,7 $
1,535 $
1,430 $
1,440 $
5,877
Adjusted Income from Operations, Pre-Tax(2) $
91 $
155 $
208 $
900
Adjusted Margin, Pre-Tax8 5.9% 10.8% 14.4% 15.3%
-- Fourth quarter 2020 adjusted revenues(1,7) grew 7% over fourth quarter
2019, reflecting continued business growth.
-- Fourth quarter 2020 adjusted income from operations, pre-tax(2) and
adjusted margin, pre-tax(8) decreased relative to fourth quarter 2019
reflecting the costs of actions taken to support customers and
employees, and investments in the business for future growth.
Group Disability and Other Operations(6)
This segment includes Cigna's Group Disability and Life business which offers group long-term and short-term disability, and group life, accident, voluntary and specialty insurance products and services. Additionally, this segment includes Corporate Owned Life Insurance ("COLI") and the Company's run-off operations.
Financial Results (dollars in millions):
Three Months Ended Year Ended
December 31, September 30, December 31,
2020 2019 2020 2020
Adjusted Revenues(1) $
1,283 $
1,293 $
1,314 $
5,264
Adjusted Income from Operations, Pre-Tax2 $
11 $
125 $
70 $
290
Adjusted Margin, Pre-Tax8 0.9% 9.7% 5.3% 5.5%
-- Fourth quarter 2020 adjusted income from operations, pre-tax(2) and
adjusted margin, pre-tax(8) decreased relative to fourth quarter 2019
reflecting elevated life claims primarily related to the COVID-19
pandemic and unfavorable disability claims.
-- On December 31, 2020, Cigna completed the sale of its Group Disability
and Life business to New York Life for $6.2 billion.
Corporate
Corporate reflects interest expense, as well as amounts not allocated to operating segments and includes intersegment eliminations.
Financial Results (dollars in millions):
Three Months Ended Year Ended
December 31, September 30, December 31,
2020 2019 2020 2020
Adjusted (Loss) from Operations, Pre-Tax(2) $
(381) $
(439) $
(366) $
(1,552)
-- Fourth quarter 2020 adjusted loss from operations, pre-tax(2) decreased
relative to fourth quarter 2019 as a result of lower interest expense
due to a lower level of outstanding debt.
2021 OUTLOOK
Cigna's outlook for full year 2021 adjusted revenues(1,3) is projected to be at least $165 billion. Cigna's outlook for full year 2021 consolidated adjusted income from operations(2,3) is at least $6.95 billion, or at least $20.00 per share. This outlook includes approximately $1.25 per share in net unfavorable impacts of COVID-19. Additionally, this outlook includes the impact of future share repurchases and anticipated 2021 dividends.
(dollars in millions, except where noted and per share amounts)
2021 Consolidated Metrics
Projection for Full Year Ending
December 31, 2021
---
Adjusted Revenues1,3
at least $165,000
Adjusted Income from Operations2,3
at least $6,950
Adjusted Income from Operations, per share2,3
at least $20.00
SG&A Expense Ratio3,4 7.5% to 8.0%
Adjusted Tax Rate3,11 22.5% to 23.5%
Interest Expense
~$1,300
Adjusted Margin, After-Tax3,8 ~4.2%
Cash Flow from Operations(3)
at least $7,500
Capital Expenditures(3)
~$1,000
Shareholder Dividends(3)
~$1,400
Weighted Average Shares Outstanding (millions)(3)
346 to 349
2021 Evernorth Metrics
---
Adjusted Income from Operations, Pre-Tax2,3
at least $5,600
Adjusted Pharmacy Scripts3,9
at least 1.55 billion
2021 U.S. Medical Metrics
---
Adjusted Income from Operations, Pre-Tax2,3
at least $3,800
Medical Care Ratio4 81.0% to 82.0%
Total Medical Customer Growth (lives)
5
at least 325,000
---
The foregoing statements represent the Company's current estimates of Cigna's 2021 consolidated and segment adjusted income from operations(2,3) and other key metrics as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.
This quarterly earnings release and the Quarterly Financial Supplement are available on Cigna's website in the Investor Relations section (https://www.cigna.com/aboutcigna/investors). Management will be hosting a conference call to review full year 2020 results and discuss full year 2021 outlook beginning today at 8:30 a.m. ET. A link to the conference call is available in the Investor Relations section of Cigna's website located at https://www.cigna.com/aboutcigna/investors/events/index.page.
The call-in numbers for the conference call are as follows:
Live Call
(800) 857-1657 (Domestic)
(773) 799-3811 (International)
Passcode: 242021
Replay
(866) 451-8962 (Domestic)
(203) 369-1203 (International)
It is strongly suggested you dial in to the conference call by 8:15 a.m. ET.
About Cigna
Cigna Corporation (NYSE: CI) is a global health service company dedicated to improving the health, well-being and peace of mind of those we serve. Cigna delivers choice, predictability, affordability and access to quality care through integrated capabilities and connected, personalized solutions that advance whole person health. All products and services are provided exclusively by or through operating subsidiaries of Cigna Corporation, including Cigna Health and Life Insurance Company, Connecticut General Life Insurance Company, Evernorth companies or their affiliates, and Express Scripts companies or their affiliates. Such products and services include an integrated suite of health services, such as medical, dental, behavioral health, pharmacy, vision, supplemental benefits, and other related products.
Cigna maintains sales capability in over 30 countries and jurisdictions, and has more than 175 million customer relationships throughout the world. To learn more about Cigna(®), including links to follow us on Facebook or Twitter, visit www.cigna.com.
Notes:
1. At the consolidated level, the measure
"adjusted revenues" is not determined in
accordance with accounting principles
generally accepted in the United States
(GAAP) and should not be viewed as a
substitute for the most directly comparable
GAAP measure, "total revenues." Cigna
defines adjusted revenues as total revenues
excluding net realized investment results
from equity method investments and special
items. Special items are identified in
Exhibit 1 of this earnings release. For
periods prior to 2020, Cigna also excludes
revenue contributions from transitioning
pharmacy benefit management clients, Anthem
Inc. and Coventry Health Care, Inc. (the
"transitioning clients"). Cigna excludes
these items from this measure because they
are not indicative of past or future
underlying performance of the business. See
Exhibit 1 for a reconciliation of
consolidated adjusted revenues to total
revenues.
2. Adjusted income (loss) from operations is
defined as shareholders' net income (loss)
excluding the following adjustments: net
realized investment results, amortization of
acquired intangible assets, and special
items. For periods prior to 2020, Cigna
also excludes earnings contributions from
transitioning clients. Adjusted income
(loss) from operations is measured on an
after-tax basis for consolidated results
and on a pre-tax basis for segment results.
Adjusted income (loss) from operations is a
measure of profitability used by Cigna's
management because it presents the
underlying results of operations of Cigna's
businesses and permits analysis of trends in
underlying revenue, expenses and
shareholders' net income. This consolidated
measure is not determined in accordance with
GAAP and should not be viewed as a
substitute for the most directly comparable
GAAP measure, shareholders' net income. See
Exhibit 1 for a reconciliation of
consolidated adjusted income from operations
to shareholders' net income.
3. Certain adjusted metrics presented for 2019
exclude contributions from transitioning
clients. As previously disclosed, beginning
in 2020, Cigna no longer excludes
contributions from transitioning clients
from its adjusted metrics, as the transition
for those clients was substantially complete
as of December 31, 2019.
Management is not able to provide a
reconciliation of adjusted income from
operations to shareholders' net income
(loss) or adjusted revenues to total
revenues on a forward-looking basis because
it is unable to predict, without
unreasonable effort, certain components
thereof including (i) future net realized
investment results (from equity method
investments with respect to adjusted
revenues) and (ii) future special items.
These items are inherently uncertain and
depend on various factors, many of which are
beyond Cigna's control. As such, any
associated estimate and its impact on
shareholders' net income and total revenues
could vary materially.
The Company's outlook excludes the potential
effects of any business combinations that
may occur after the date of this earnings
release. The Company's outlook includes the
potential effects of future share
repurchases and anticipated 2021 dividends.
On January 6, 2021, Cigna announced that its
Board of Directors had instituted a
quarterly cash dividend and declared the
first quarterly cash dividend of $1.00 per
share of common stock to be paid on March
25, 2021 to shareholders of record as of the
close of trading on March 10, 2021. Cigna
currently intends to pay regular quarterly
dividends, with future declarations subject
to approval by its Board of Directors and
the Board's determination that the
declaration of dividends remains in the best
interests of Cigna and its shareholders. The
decision of whether to pay future dividends
and the amount of any such dividends will be
based on the Company's financial position,
results of operations, cash flows, capital
requirements, the requirements of applicable
law and any other factors the Board of
Directors may deem relevant.
The timing and actual number of shares
repurchased will depend on a variety of
factors, including price, general business
and market conditions, and alternate uses of
capital. The share repurchase program may be
effected through open market purchases in
compliance with Rule 10b-18 under the
Securities Exchange Act of 1934, as amended,
including through Rule 10b5-1 trading
plans, or privately negotiated transactions.
The program may be suspended or discontinued
at any time.
4. Operating ratios are defined as follows:
-- Medical care ratio represents medical
costs as a percentage of premiums for
all U.S. commercial risk products,
including medical, pharmacy, dental,
stop loss and behavioral products
provided through guaranteed cost or
experience-rated funding arrangements,
as well as Medicare Advantage, Medicare
Part D, Medicare Supplement, Medicaid,
and individual on and off-exchange
products, within Cigna's U.S. Medical
segment.
-- SG&A expense ratio represents enterprise
selling, general and administrative
expenses excluding special items and,
prior to 2020, expenses from
transitioning clients, as a percentage
of adjusted revenue at a consolidated
level.
5. Customer relationships are defined as
follows:
-- Total medical customers includes
individuals in Cigna's U.S. Medical and
International Markets segments who meet
any one of the following criteria: are
covered under a medical insurance
policy, managed care arrangement, or
service agreement issued by Cigna; have
access to Cigna's provider network for
covered services under their medical
plan; or have medical claims and
services that are administered by Cigna.
-- Pharmacy customer relationships for
periods prior to 2020 excludes
transitioning clients.
-- International Markets medical customers
excludes medical customers served by
less than 100% owned subsidiaries.
-- International Markets supplemental
policies exclude International Markets
medical customers included in total
medical customers.
-- Group Disability and Life covered lives
are estimated.
6. As of the third quarter 2020, the segment
previously reported as "Health Services" is
reported as "Evernorth", and the segment
previously reported as "Integrated Medical"
is reported as "U.S. Medical".
Additionally, U.S. Medical's two operating
segments previously reported as "Commercial"
and "Government" are now reported as "U.S.
Commercial" and "U.S. Government". There
are no changes to the underlying businesses
reported in any of these segments.
Beginning first quarter 2021, in our earnings
release and quarterly financial supplement
the "Group Disability and Other" segment
will be combined with "Corporate" and called
"Corporate and Other Operations". This
change to simplify reporting was enabled by
the sale of the Group Disability and Life
business.
7. Cigna owns a 50% non-controlling interest in
its China joint venture. Cigna's 50% share
of the joint venture's earnings is reported
in Fees and Other Revenues using the equity
method of accounting under GAAP. As such,
the adjusted revenues and policy counts for
the International Markets segment do not
include the China joint venture.
8. Adjusted margin, pre-tax, is calculated by
dividing adjusted income (loss) from
operations, pre-tax by adjusted revenues
for each segment.
Adjusted margin, after-tax, is calculated by
dividing consolidated adjusted income (loss)
from operations by consolidated adjusted
revenues. Adjusted income (loss) from
operations is measured on an after-tax
basis for consolidated results.
9. For Evernorth adjusted pharmacy scripts, non-
specialty network scripts filled through 90-
day programs and home delivery scripts are
multiplied by three. All other network and
specialty scripts are counted as one script.
10. Medical costs payable within the U.S. Medical
segment are presented net of reinsurance and
other recoverables. The gross medical costs
payable balance was $3.18 billion as of
December 31, 2020, $3.20 billion as of
September 30, 2020, and $2.89 billion as of
December 31, 2019.
11. The measure "adjusted tax rate" is not
determined in accordance with GAAP and
should not be viewed as a substitute for the
most directly comparable GAAP measure,
"consolidated effective tax rate". We define
adjusted tax rate as the consolidated income
tax rate applicable to the Company's pre-
tax income excluding net realized investment
results, amortization of acquired intangible
assets, special items, and transitioning
clients. Management is not able to provide a
reconciliation to the consolidated effective
tax rate on a forward-looking basis because
we are unable to predict, without
unreasonable effort, certain components
thereof include (i) future net realized
investment results and (ii) future special
items.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release, and oral statements made in connection with this release, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on Cigna's current expectations and projections about future trends, events and uncertainties. These statements are not historical facts. Forward-looking statements may include, among others, statements concerning our projected adjusted income from operations outlook for 2021 on a consolidated per share, and segment basis; projected adjusted revenue outlook for 2021; projected total medical customer growth over year end 2020; projected adjusted pharmacy scripts for 2021; projected medical care and SG&A expense ratios; projected consolidated adjusted tax rate; projected interest expense; projected adjusted margin; projected cash flow from operations; projected capital expenditures; future dividends; projected weighted average shares outstanding; future financial or operating performance, including our ability to deliver affordable, personalized and innovative solutions for our customers and clients, including in light of the challenges presented by the COVID-19 pandemic; future growth, business strategy, strategic or operational initiatives; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas; financing or capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; strategic transactions; and other statements regarding Cigna's future beliefs, expectations, plans, intentions, liquidity, cash flows, financial condition or performance. You may identify forward-looking statements by the use of words such as "believe," "expect," "plan," "intend," "anticipate," "estimate," "predict," "potential," "may," "should," "will" or other words or expressions of similar meaning, although not all forward-looking statements contain such terms.
Forward-looking statements are subject to risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those expressed or implied in forward-looking statements. Such risks and uncertainties include, but are not limited to: our ability to achieve our strategic and operational initiatives; our ability to adapt to changes in an evolving and rapidly changing industry; the scale, scope and duration of the COVID-19 pandemic and its potential impact on our business, operating results, cash flows or financial condition, our ability to compete effectively, differentiate our products and services from those of our competitors and maintain or increase market share; price competition and other pressures that could compress our margins or result in premiums that are insufficient to cover the cost of services delivered to our customers; the potential for actual claims to exceed our estimates related to expected medical claims; our ability to develop and maintain satisfactory relationships with physicians, hospitals, other health service providers and with producers and consultants; our ability to maintain relationships with one or more key pharmaceutical manufacturers or if payments made or discounts provided decline; changes in the pharmacy provider marketplace or pharmacy networks; changes in drug pricing or industry pricing benchmarks; political, legal, operational, regulatory, economic and other risks that could affect our multinational operations; risks related to strategic transactions and realization of the expected benefits of such transactions, as well as integration difficulties or underperformance relative to expectations; dependence on success of relationships with third parties; risk of significant disruption within our operations or among key suppliers or third parties; our ability to invest in and properly maintain our information technology and other business systems; our ability to prevent or contain effects of a potential cyberattack or other privacy or data security incident; potential liability in connection with managing medical practices and operating pharmacies, onsite clinics and other types of medical facilities; the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws or regulations; uncertainties surrounding participation in government-sponsored programs such as Medicare; the outcome of litigation, regulatory audits, investigations; compliance with applicable privacy, security and data laws, regulations and standards; potential failure of our prevention, detection and control systems; unfavorable economic and market conditions, stock market or interest rate declines, risks related to a downgrade in financial strength ratings of our insurance subsidiaries; the impact of our significant indebtedness and the potential for further indebtedness in the future; unfavorable industry, economic or political conditions; credit risk related to our reinsurers; as well as more specific risks and uncertainties discussed in our most recent report on Form 10-K, as supplemented by our Form 10-Q for the quarter ended March 31, 2020, and subsequent reports on Forms 10-K, 10-Q and 8-K available through the Investor Relations section of www.cigna.com. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance or results, and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Cigna undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law.
CIGNA CORPORATION Exhibit 1
COMPARATIVE SUMMARY OF FINANCIAL RESULTS (unaudited)
(Dollars in millions, except per share amounts)
Three Months Ended
Year Ended Three Months
Ended
December 31, December 31, September 30,
2020 2019 2020 2019 2020
---
REVENUES
Pharmacy revenues $
28,305 $
25,645 $
107,769 $
103,099 $
27,802
Premiums 10,699 10,005 42,627 39,714 10,682
Fees and other revenues 2,337 2,240 8,761 9,363 2,174
Net investment income 371 355 1,244 1,390 297
---
Total Revenues 41,712 38,245 160,401 153,566 40,955
---
Revenue contributions from transitioning clients - (1,690) (13,347)
Net realized investment results from certain equity method investments (43) (17) (130) (44) (37)
Special item related to contractual adjustment for a former client - (204) (117)
---
Adjusted revenues (1) $
41,669 $
36,538 $
160,067 $
140,175 $
40,801
---
SHAREHOLDERS' NET INCOME
Shareholders' net income $
4,135 $
977 $
8,458 $
5,104 $
1,388
After-tax adjustments to reconcile adjusted income from operations
Net realized investment (gains) losses (169) (90) (244) (190) (64)
Amortization of acquired intangible assets 370 554 1,431 2,248 376
Adjustment for transitioning clients - (99) (1,316)
Special Items
Integration and transaction-related costs 148 116 404 427 83
Debt extinguishment costs - 151
Charge for organizational efficiency plan - 162 24 162
Charges associated with litigation matters - 19 41
Risk corridors recovery - (76) (76)
Contractual adjustment for a former client - (155) (89)
(Gain) on sale of business (3,217) (3,217)
---
Adjusted income from operations $
1,267 $
1,620 $
6,795 $
6,476 $
1,618
---
Pre-tax adjusted income (loss) from operations by segment
---
Evernorth $
1,589 $
1,537 $
5,363 $
5,092 $
1,443
U.S. Medical 328 718 3,807 3,831 757
International Markets 91 155 900 762 208
Group Disability and Other 11 125 290 501 70
Corporate (381) (439) (1,552) (1,824) (366)
---
Consolidated pre-tax adjusted income from operations 1,638 2,096 8,808 8,362 2,112
---
Adjusted income tax expense (371) (476) (2,013) (1,886) (494)
---
Consolidated after-tax adjusted income from operations $
1,267 $
1,620 $
6,795 $
6,476 $
1,618
---
DILUTED EARNINGS PER SHARE
Shareholders' net income $
11.45 $
2.60 $
22.96 $
13.44 $
3.78
After-tax adjustments to reconcile to adjusted income from operations
Net realized investment (gains) losses (0.47) (0.24) (0.66) (0.50) (0.17)
Amortization of acquired intangible assets 1.03 1.47 3.88 5.92 1.02
Adjustment for transitioning clients - (0.26) (3.46)
Special items
Integration and transaction-related costs 0.41 0.31 1.10 1.11 0.23
Debt extinguishment costs - 0.41
Charge for organizational efficiency plan - 0.43 0.07 0.43
Charges associated with litigation matters - 0.05 0.11
Risk corridors recovery - (0.21) (0.21)
Contractual adjustment for a former client - (0.42) (0.24)
(Gain) on sale of business (8.91) (8.73)
---
Adjusted income from operations(2) $
3.51 $
4.31 $
18.45 $
17.05 $
4.41
---
Weighted average shares (in thousands) 361,115 376,045 368,389 379,817 367,190
---
Common shares outstanding (in thousands) 354,771 372,531 362,403
---
SHAREHOLDERS' EQUITY at December 31, $
50,321 $
45,338
---
SHAREHOLDERS' EQUITY PER SHARE at December 31, $
141.84 $
121.70
---
(1) Adjusted revenues is defined as
total revenues excluding the
following adjustments: special
items and Cigna's share of
certain realized investment
results of its joint ventures
reported using the equity method.
For periods prior to 2020, we
also excluded revenue
contributions from transitioning
clients. These items are excluded
because they are not indicative
of past or future underlying
performance of our businesses.
(2) Adjusted income (loss) from
operations is defined as
shareholders' net income (loss)
excluding the following after-
tax adjustments: realized
investment results, amortization
of acquired intangible assets and
special items. For periods prior
to 2020, we also excluded
earnings contributions from
transitioning clients.
INVESTOR RELATIONS CONTACT:
Alexis Jones
215-761-3637
Alexis.Jones@cigna.com
MEDIA CONTACT:
Jim Cohn
224-214-8781
James.Cohn@cigna.com
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SOURCE Cigna
