BLOOMFIELD, Conn.,
April 30, 2020 /PRNewswire/
--
- Total revenues in
the first quarter were $38.5 billion.
Adjusted revenues1 were $38.4
billion.
- Shareholders' net
income for the first quarter was $1.2
billion, or $3.15 per
share
- Adjusted income
from operations2 for the first quarter was $1.8 billion, or $4.69 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 lead a rapid response to the challenges presented by
COVID-19 and today reported strong first quarter 2020 results
driven by focused execution across its businesses.
"The world is facing an unprecedented health crisis from
COVID-19, and Cigna recognizes the many challenges that our
customers, clients, health care partners, and communities are
facing. We have always tackled the most complex health issues
and are well prepared to continue meeting the needs of our
customers and clients for greater affordability, predictability and
simplicity, even in the most difficult times," said David M. Cordani, President and Chief Executive
Officer. "Cigna entered 2020 with a long track record of
growth, fueled by innovation and customer service. We
delivered first quarter results that build on that foundation, and
we remain confident in the strength of our four well-positioned
growth platforms."
Total revenues for first quarter 2020 were $38.5 billion. Adjusted
revenues1 were $38.4
billion and reflect strong contributions from each of
Cigna's ongoing businesses.
Shareholders' net income for first quarter 2020 was
$1.2 billion, or $3.15 per share, compared with $1.4 billion, or $3.56 per share, for first quarter
2019.
Cigna's adjusted income from operations2 for
first quarter 2020 was $1.8 billion,
or $4.69 per share, compared with
$1.5 billion, or $3.90 per share, for first quarter 2019.
This represents per share growth of 20% and reflects strong
earnings contributions led by the Health Services, Integrated
Medical, and International Markets segments.
Reconciliations of total revenues to adjusted
revenues1 and of shareholders' net income to adjusted
income from operations2 are provided on the following
page, and on Exhibit 1 of this earnings
release.
CONSOLIDATED HIGHLIGHTS
The following table includes highlights of results
and reconciliations of total revenues to adjusted
revenues1 and shareholders' net income to adjusted
income from operations2:
Consolidated Financial Results (dollars in
millions):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
December 31,
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
$
|
38,469
|
|
$
|
37,946
|
|
$
|
38,245
|
Net Realized
Investment Losses (Gains) from Equity Method
Investments1
|
|
10
|
|
|
(28)
|
|
|
(17)
|
Special
Items1
|
|
(87)
|
|
|
-
|
|
|
-
|
Transitioning Client
Contributions1
|
|
-
|
|
|
(4,489)
|
|
|
(1,690)
|
Adjusted
Revenues1
|
$
|
38,392
|
|
$
|
33,429
|
|
$
|
36,538
|
|
|
|
|
|
|
|
|
|
Consolidated Earnings, net of
taxes
|
|
|
|
|
|
|
|
|
Shareholders' Net
Income
|
$
|
1,181
|
|
$
|
1,368
|
|
$
|
977
|
Net Realized
Investment Losses (Gains)2
|
|
77
|
|
|
(38)
|
|
|
(90)
|
Amortization of Other
Acquired Intangible Assets2
|
|
309
|
|
|
564
|
|
|
554
|
Special
Items2
|
|
191
|
|
|
108
|
|
|
278
|
Transitioning Client
Contributions1,2
|
|
-
|
|
|
(504)
|
|
|
(99)
|
Adjusted Income from
Operations2
|
$
|
1,758
|
|
$
|
1,498
|
|
$
|
1,620
|
|
|
|
|
|
|
|
|
|
Shareholders' Net
Income, per share
|
$
|
3.15
|
|
$
|
3.56
|
|
$
|
2.60
|
Adjusted Income from
Operations2, per share
|
$
|
4.69
|
|
$
|
3.90
|
|
$
|
4.31
|
- Cigna's first quarter results reflect strong revenue and
earnings growth, driven by customer growth, focused execution, and
ongoing innovation across our businesses. First quarter 2020
adjusted income from operations2
also included a $48 million
benefit from a favorable tax matter.
- Year to date through April 29,
2020, the Company repurchased 5.9 million shares of common
stock for approximately $1.1
billion.
- The debt to capitalization ratio decreased to 44.7% at
March 31, 2020, from 45.2% at
December 31, 2019.
- The SG&A expense ratio4 was 8.5% for first
quarter 2020, a decrease from 9.3% for first quarter 2019, driven
by significant revenue growth and continued expense
efficiency.
CUSTOMER
RELATIONSHIPS
The following table summarizes our medical customers and
overall customer relationships:
Customer Relationships (in
thousands):
|
|
|
|
As of the Periods Ended
|
|
|
March 31,
|
December 31,
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
Total
Pharmacy Customers5
|
|
78,804
|
|
|
74,935
|
|
|
75,903
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
14,140
|
|
|
14,016
|
|
|
14,187
|
Government
|
|
1,412
|
|
|
1,405
|
|
|
1,361
|
International
Markets
|
|
1,666
|
|
|
1,572
|
|
|
1,597
|
Total
Medical Customers5
|
|
17,218
|
|
|
16,993
|
|
|
17,145
|
|
|
|
|
|
|
|
|
|
Behavioral
Care
|
|
37,231
|
|
|
28,046
|
|
|
30,361
|
Dental
|
|
18,018
|
|
|
17,122
|
|
|
17,231
|
Medicare Part
D
|
|
3,295
|
|
|
3,302
|
|
|
3,276
|
International Markets
Supplemental Policies5,6
|
|
12,453
|
|
|
12,576
|
|
|
12,444
|
Group Disability and
Life Covered Lives5
|
|
15,900
|
|
|
15,200
|
|
|
15,400
|
Total
Customer Relationships
|
|
182,919
|
|
|
168,174
|
|
|
171,760
|
- The pharmacy customer base5 at first quarter
2020 grew to 78.8 million, an organic increase of 2.9 million
customers year to date, driven by strong new health plan
sales.
- The total medical customer base5 at first
quarter 2020 grew to 17.2 million, an organic increase of 73,000
customers year to date and 225,000 over first quarter 2019 driven
by growth in Medicare Advantage and the Select and International
segments, partially offset by a decline in National
Accounts.
HIGHLIGHTS OF SEGMENT
RESULTS
See Exhibit 1 for a reconciliation of adjusted income
(loss) from operations2 to shareholders' net
income.
Health Services
This segment includes a broad range of pharmacy services,
including benefits management, specialty pharmacy services,
clinical solutions, home delivery, and health management
services.
Financial Results (dollars in
millions):
|
|
|
Three Months Ended
|
|
March
31,
|
December 31,
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
27,168
|
|
$
|
22,460
|
|
$
|
25,570
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
1,082
|
|
$
|
994
|
|
$
|
1,537
|
Adjusted Margin,
Pre-Tax7
|
|
4.0%
|
|
|
4.4%
|
|
|
6.0%
|
- First quarter 2020 adjusted
revenues1 increased 21%
relative to first quarter 2019, driven by growth in adjusted
pharmacy script volumes, including the insourcing of Integrated
Medical pharmacy volumes, as well as strong performance in
specialty pharmacy services.
- First quarter 2020 adjusted income from operations,
pre-tax2 increased 9% relative to first quarter 2019,
reflecting growth in adjusted pharmacy script volumes, strong
performance in specialty pharmacy services, and continued progress
in integration and expense efficiency initiatives, partially offset
by start-up costs associated with the Prime Therapeutics
collaboration.
- Health Services fulfilled 360 million adjusted pharmacy
scripts8 in first quarter 2020, an increase of 23% over
first quarter 2019 driven by the insourcing of Integrated Medical
pharmacy volumes and strong organic volume growth.
Integrated Medical
This segment includes Cigna's U.S. Commercial and
Government businesses that provide comprehensive medical solutions
to clients and customers. U.S. Commercial products and
services include medical, pharmacy, behavioral health, dental,
vision, health advocacy programs and other products and services to
insured and self-insured customers. Government solutions
include Medicare Advantage, Medicare Supplement, and Medicare Part
D plans for seniors, Medicaid plans, and individual health
insurance coverage both on and off the public exchanges.
Financial Results (dollars in
millions):
|
|
|
Three Months Ended
|
|
March 31,
|
December 31,
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
9,860
|
|
$
|
9,195
|
|
$
|
9,208
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
1,199
|
|
$
|
1,170
|
|
$
|
718
|
Adjusted Margin,
Pre-Tax7
|
|
12.2%
|
|
|
12.7%
|
|
|
7.8%
|
- First quarter 2020 adjusted
revenues1
increased 7% relative to first quarter 2019, reflecting
customer growth in Medicare Advantage and in the Select segment and
further deepening of relationships, as well as premium increases
consistent with underlying cost trends.
- First quarter 2020 adjusted income from operations,
pre-tax2 and adjusted margin, pre-tax7
reflect strong medical and specialty contributions,
disciplined operating expense management, and continued effective
medical cost management, partially offset by the resumption of the
health insurance tax.
- Adjusted income from operations, pre-tax2 for
first quarter 2020 and first quarter 2019 included favorable prior
year reserve development on a net pre-tax basis of $78 million and $50
million, respectively. On a gross pre-tax basis, favorable
prior year development for the same periods was $152 million and $117
million, respectively.
- The medical care ratio4 ("MCR") of 78.3% for
first quarter 2020 reflects continued effective execution in our
commercial and government businesses. The first quarter 2020 MCR
decreased relative to first quarter 2019 driven by the pricing
effect of the health insurance tax and ongoing effective execution,
partially offset by the impact of the additional calendar day in
the quarter.
- Integrated Medical net medical costs payable9
was $2.80 billion at March 31, 2020, $2.72
billion at March 31, 2019, and
$2.59 billion at December 31, 2019.
International Markets
This segment includes supplemental health, life and
accident insurance products and health care coverage in our
international markets, as well as health care benefits for globally
mobile individuals and employees of multinational
organizations.
Financial Results
(dollars in millions, policies and customers in
thousands):
|
|
|
Three Months Ended
|
|
|
March 31,
|
December 31,
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
Adjusted
Revenues1,6
|
$
|
1,470
|
|
$
|
1,394
|
|
$
|
1,430
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
282
|
|
$
|
206
|
|
$
|
155
|
Adjusted Margin,
Pre-Tax7
|
|
19.2%
|
|
|
14.8%
|
|
|
10.8%
|
|
|
|
|
|
|
|
|
|
|
|
As of the Periods Ended
|
|
|
March 31,
|
December 31,
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
International Markets
Supplemental Policies5,6
|
|
12,453
|
|
|
12,576
|
|
|
12,444
|
International Markets
Medical Customers5
|
|
1,666
|
|
|
1,572
|
|
|
1,597
|
- First quarter 2020 adjusted
revenues1,6 grew 5% over first quarter
2019, reflecting continued business growth.
- First quarter 2020 adjusted income from operations,
pre-tax2 and adjusted margin, pre-tax7
reflect the impact of an update to our deferral processes for
acquisition costs as well as 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
|
|
|
March 31,
|
December 31,
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
Adjusted
Revenues1
|
$
|
1,339
|
|
$
|
1,296
|
|
$
|
1,293
|
Adjusted Income from
Operations, Pre-Tax2
|
$
|
77
|
|
$
|
84
|
|
$
|
125
|
Adjusted Margin,
Pre-Tax7
|
|
5.8%
|
|
|
6.5%
|
|
|
9.7%
|
- First quarter 2020 adjusted income from operations,
pre-tax2 and
adjusted margin,
pre-tax7 reflect
unfavorable claims in our Disability business and the impact of a
low interest rate environment.
- On December 18, 2019,
we announced a definitive agreement whereby New York
Life will acquire Cigna's Group Disability and Life business for
$6.3 billion. We continue to expect
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
|
|
|
March 31,
|
December 31,
|
|
|
2020
|
|
|
2019
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
Adjusted (Loss) from
Operations, Pre-Tax2
|
$
|
(405)
|
|
$
|
(490)
|
|
$
|
(439)
|
- First quarter 2020 adjusted loss from operations,
pre-tax2 decreased relative to
first quarter 2019 primarily as a result of lower interest
expense.
COVID-19
Response
As the world fights the Coronavirus (COVID-19) pandemic,
Cigna remains focused on delivering peace of mind during these
unprecedented times. We've taken several actions to drive
affordability and remove uncertainty for our customers, increase
flexibility for providers, support mental health in our
communities, and care for our colleagues around the world. To date,
these actions include:
Answering the Call for Affordability
- Waived customer out-of-pockets costs, through May 31, 2020, for COVID-19 related:
-
- Diagnostic testing
- Office visits for testing
- Telehealth screenings (medical and dental)
- Treatment10
- Cigna has not requested or retained any proceeds under the
CARES Act.
Ensuring Access to Care
- Offered free standard shipping of up to 90-day supplies for
prescription maintenance medications and 24/7 access to
pharmacists.
- Implemented protective quantity limits on select medications to
guarantee access and protect supply.
- Deployed hundreds of Cigna clinicians to telehealth provider
MDLIVE to increase capacity.
- Provided Buoy Health symptom checker for U.S. Cigna customers
and Express Scripts members and the multi-language symptom checker
Infermedica for international customers.
- Maintained in-home medication infusions by Accredo nurses so
vulnerable patients can avoid travel.
- Expanded our Employee Assistance Program services for Cigna
customers and household members.
- Added a new furlough package that offers a prescription savings
program (Inside Rx), a dental savings card, and more for
customers.
Supporting the Medical Community
- Made it easier for hospitals to transfer patients to long-term
acute care hospitals and subacute facilities.
- Waived prior authorizations for patient transfers, emergency
department visits, and home health care services.
- Donated medications to Washington
University for a clinical trial on COVID-19 treatment.
Advocating Whole Person Health
- Launched a social connector initiative for Medicare Advantage
customers to help mitigate feelings of loneliness.
- Offered free on-demand webinars and other resources to the
public to help manage fear and anxiety while building
resiliency.
- Created a 24/7 toll-free help line to the public to speak with
behavior health clinicians.
- Established partnership with SilverCloud Health, a digital
mental health platform for Express Scripts clients and
members.
- Sent 5,000+ greeting cards to seniors from our employees and
their families.
Taking Care of Our Workforce
- All U.S. employees able to do so are working from home until
further notice.
- Allotted 10 Emergency Time Off (ETO) days (80 hours) for our
U.S. colleagues to use for COVID-19 related absences through
2020.
- Lifted the restriction on Paid Time Off (PTO) being used before
it is accrued, until further notice.
- U.S.-based employees with worksite-essential roles receive a
20% pay premium.
- Created an employee-focused COVID-19 resource site on our
company's Intranet.
- Enhanced our employee recognition program, Cigna Standout, to
strengthen recognition for our employees during this time.
Assisting Our Communities
- Cigna and the Cigna Foundation11 have:
-
- Launched the Brave of Heart Fund with a $25 million grant to provide financial assistance
to survivors of front-line U.S. healthcare workers who gave their
lives in the fight against COVID-19. The Fund was created in
partnership with the New York Life Foundation. Cigna will also
provide emotional support services to their families.
- Committed over $1 million to
nonprofits addressing food insecurity and health care support needs
in the U.S.
- Donated $250K towards relief
efforts in China during the
earliest days of the outbreak.
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
the impact of additional prior year reserve development of medical
costs and potential effects of any future share
repurchase3. Also, while we continue 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
(http://www.cigna.com/aboutcigna/investors). Management will
be hosting a conference call to review first 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: 4302020
Replay
(866) 358-4539
(Domestic)
(203)
369-0140 (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 180 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." We define adjusted revenues as total revenues
excluding net realized investment results from equity method
investments and special items. For periods prior to 2020, we
also exclude revenue contributions from transitioning pharmacy benefit management clients,
Anthem Inc. and Coventry Health Care, Inc. (the
"transitioning clients"). We exclude these items from this
measure because they are not indicative of past or future
underlying performance of the business. See Exhibit 1 for a
reconciliation of consolidated adjusted revenues to total
revenues.
|
|
|
2.
|
Adjusted
income (loss) from operations is defined as shareholders' net
income (loss) excluding the following adjustments: net realized
investment results, amortization of acquired intangible assets, and
special items. Special items are identified in Exhibit 1 of
this earnings release. For periods prior to 2020, we also
exclude 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 we are unable to
predict, without unreasonable effort, certain components thereof
including (i) future net realized investment results (from
equity method investments with respect to adjusted revenues) and
(ii) future special items. These items are inherently
uncertain and depend on various factors, many of which are beyond
our control. As such, any associated estimate and its impact on
shareholders' net income and total revenues could vary
materially.
|
|
|
|
The Company's
outlook excludes the impact of additional prior year reserve
development of medical costs and the potential effects of any
future 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 our
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 our Integrated Medical
and International Markets segments who meet any one of the
following criteria: are covered under a medical insurance policy,
managed care arrangement, or service agreement issued by Cigna;
have access to Cigna's provider network for covered services under
their medical plan; or have medical claims and services that are
administered by Cigna.
|
|
•
|
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% noncontrolling interest in its China joint venture.
Cigna's 50% share of the joint venture's earnings is reported in
Fees and Other Revenues using the equity method of accounting under
GAAP. As such, the adjusted revenues and policy counts for
the International Markets segment do not include the China joint
venture.
|
|
|
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 $3.00 billion as of March 31, 2020, $2.89
billion as of December 31, 2019, $2.96 billion as of March 31,
2019.
|
|
|
10.
|
Enhanced
coverage for COVID-19 diagnostic testing, office exams, telehealth
screenings and virtual care 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.
|
|
|
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 ("Express Scripts") and the
sale of our 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, which
may heighten the potential adverse impact of each of the risks and
uncertainties described above and result in additional risks and
uncertainties, including decreased worker productivity, reductions
in revenue or increased costs, and prioritization of COVID-19
matters resulting in delays in responsiveness by regulatory
agencies and other third parties; 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 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
|
Three Months
Ended
|
|
March
31,
|
December
31,
|
|
2020
|
2019
|
2019
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
Pharmacy
revenues
|
$
|
25,098
|
|
$
|
25,179
|
|
$
|
25,645
|
|
Premiums
|
10,840
|
|
9,971
|
|
10,005
|
|
Fees and other
revenues
|
2,178
|
|
2,450
|
|
2,240
|
|
Net investment
income
|
353
|
|
346
|
|
355
|
|
Total
revenues
|
38,469
|
|
37,946
|
|
38,245
|
|
Revenue contributions
from transitioning clients
|
—
|
|
(4,489)
|
|
(1,690)
|
|
Net realized
investment results from certain equity method
investments
|
10
|
|
(28)
|
|
(17)
|
|
Special item related
to contractual adjustment for a former client
|
(87)
|
|
—
|
|
—
|
|
Adjusted revenues
(1)
|
$
|
38,392
|
|
$
|
33,429
|
|
$
|
36,538
|
|
|
|
|
|
SHAREHOLDERS' NET
INCOME
|
|
|
|
|
|
|
|
Shareholders' net
income
|
$
|
1,181
|
|
$
|
1,368
|
|
$
|
977
|
|
After-tax adjustments
to reconcile to adjusted income from operations
|
|
|
|
Net realized
investment losses (gains)
|
77
|
|
(38)
|
|
(90)
|
|
Amortization of
acquired intangible assets
|
309
|
|
564
|
|
554
|
|
Adjustment for
transitioning clients
|
—
|
|
(504)
|
|
(99)
|
|
Special
Items
|
|
|
|
Debt extinguishment
costs
|
140
|
|
—
|
|
—
|
|
Integration and
transaction-related costs
|
74
|
|
108
|
|
116
|
|
Charge for
organizational efficiency plan
|
24
|
|
—
|
|
162
|
|
Charges associated
with litigation matters
|
19
|
|
—
|
|
—
|
|
Contractual adjustment
for a former client
|
(66)
|
|
—
|
|
—
|
|
Adjusted income from
operations
|
$
|
1,758
|
|
$
|
1,498
|
|
$
|
1,620
|
|
|
|
|
|
Pre-tax adjusted
income (loss) from operations by segment
|
|
|
|
Health
Services
|
$
|
1,082
|
|
$
|
994
|
|
$
|
1,537
|
|
Integrated
Medical
|
1,199
|
|
1,170
|
|
718
|
|
International
Markets
|
282
|
|
206
|
|
155
|
|
Group Disability and
Other
|
77
|
|
84
|
|
125
|
|
Corporate
|
(405)
|
|
(490)
|
|
(439)
|
|
Consolidated pre-tax
adjusted income from operations(2)
|
2,235
|
|
1,964
|
|
2,096
|
|
Adjusted income tax expense
|
(477)
|
|
(466)
|
|
(476)
|
|
Consolidated after-tax
adjusted income from operations(2)
|
$
|
1,758
|
|
$
|
1,498
|
|
$
|
1,620
|
|
|
|
|
|
DILUTED EARNINGS
PER SHARE
|
|
|
|
|
|
|
|
Shareholders' net
income
|
$
|
3.15
|
|
$
|
3.56
|
|
$
|
2.60
|
|
After-tax adjustments
to reconcile to adjusted income from operations
|
|
|
|
Net realized
investment losses (gains)
|
0.21
|
|
(0.10)
|
|
(0.24)
|
|
Amortization of
acquired intangible assets
|
0.82
|
|
1.47
|
|
1.47
|
|
Adjustment for
transitioning clients
|
—
|
|
(1.31)
|
|
(0.26)
|
|
Special
Items
|
|
|
|
Debt extinguishment
costs
|
0.38
|
|
—
|
|
—
|
|
Integration and
transaction-related costs
|
0.20
|
|
0.28
|
|
0.31
|
|
Charge for
organizational efficiency plan
|
0.06
|
|
—
|
|
0.43
|
|
Charges associated
with litigation matters
|
0.05
|
|
—
|
|
—
|
|
Contractual adjustment
for a former client
|
(0.18)
|
|
—
|
|
—
|
|
Adjusted income from
operations(2)
|
$
|
4.69
|
|
$
|
3.90
|
|
$
|
4.31
|
|
Weighted average
shares (in thousands)
|
374,639
|
|
384,024
|
|
376,045
|
|
Common shares
outstanding (in thousands)
|
369,317
|
|
380,270
|
|
372,531
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY at March 31,
|
$
|
45,079
|
|
$
|
42,408
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY PER SHARE at March 31,
|
$
|
122.06
|
|
$
|
111.52
|
|
|
|
|
(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