SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 24, 2013
Cigna Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
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1-08323
(Commission File Number)
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06-1059331
(IRS Employer
Identification No.)
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900 Cottage Grove Road
Bloomfield, Connecticut 06002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(860) 226-6000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
Title
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Page
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Item 7.01
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Regulation FD
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1
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Financial Schedules – Segment results:
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Years Ended December 31, 2011 and 2010:
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Global Health Care and Global Supplemental Benefits
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3
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Group Disability and Life and Updated Consolidated Income Statement
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4
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Global Health Care:
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First Three Quarters and Nine Months Ended September 30, 2012
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5
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Four Quarters of 2011
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6
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Global Supplemental Benefits:
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First Three Quarters and Nine Months Ended September 30, 2012
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7
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Four Quarters of 2011
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8
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Group Disability and Life:
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First Three Quarters and Nine Months Ended September 30, 2012
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9
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Four Quarters of 2011
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10
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Consolidating Statement of Income – Nine Months Ended September 30, 2012
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11
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Consolidating Statement of Income – Year Ended December 31, 2011
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12
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Signature
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14
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Basis of Presentation:
All dollar amounts are in millions, unless otherwise noted. Certain reclassifications have been made to conform prior period results to the current presentation.
Cigna measures the financial results of its segments using "segment earnings (loss)," which is defined as shareholders' income (loss) before net realized investment gains (losses). Adjusted income (loss) from operations is defined as segment earnings excluding special items and results of Cigna's guaranteed minimum income benefit business. 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 trend analysis. These measures are not determined in accordance with generally accepted accounting principles (GAAP) and should not be viewed as a substitute for shareholders’ net income determined in accordance with GAAP.
ITEM 7.01 Regulation FD Disclosure.
Cigna is a global health services organization that provides medical, dental, disability, life and accident insurance and related products and services to customers in the United States and selected international markets. This Current Report on Form 8-K (“Form 8-K”) announces certain changes to the Company’s reporting segments, commencing with the earnings release for the fourth quarter of 2012 that is scheduled to be issued on February 7, 2013. The information contained in this Form 8-K is being furnished to assist investors in understanding how Cigna's business segment results would have been presented in previously filed reports had such results been reported to reflect the realignment described below.
The primary segment reporting change is that the two businesses that comprised the former International segment (international health care and supplemental health, life and accident) are now reported as follows:
·
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substantially all of the international health care business (comprised primarily of the global health benefits business) is now combined with the former Health Care segment and renamed Global Health Care; and
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·
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the supplemental health, life and accident business becomes a separate reporting segment named Global Supplemental Benefits.
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The segment reporting changes reflect the Company’s realignment of its businesses to better leverage distribution and service delivery capabilities for the benefit of our global clients and customers. Management believes the realignment of its businesses will enable the Company to more effectively address global health services challenges by leveraging best practices across geographies to improve the health, well being and sense of security of the global customers that the Company serves. The changes in the Company’s internal financial reporting structure to support this realignment took effect on December 31, 2012 and result in changes to our external reporting segments. The Company’s results are now aggregated based on the nature of the Company’s products and services, rather than its geographies.
While reclassifications within certain captions in the consolidated statements of income and consolidated balance sheets have occurred primarily as a result of these segment changes, there is no change to historically reported consolidated shareholders’ net income, earnings per share, adjusted income from operations or shareholders’ equity. Beginning with the fourth quarter of 2012, the Company will report its results in the reporting segments as described below.
Global Health Care includes the aggregation of the following two operating segments:
·
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The Commercial operating segment offers insured and self-insured medical, dental, behavioral health, vision, and prescription drug benefit plans, health advocacy programs and other products and services that may be integrated to provide comprehensive global health care benefit programs to employers and their employees, including expatriates and other globally mobile individuals. Cigna offers these products and services in all 50 states, the District of Columbia, the U.S. Virgin Islands, Canada, Europe, the Middle East, and Asia. Cigna services its expatriate and globally mobile customers virtually everywhere in the world.
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·
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The Government operating segment primarily offers Medicare Advantage plans to seniors in 13 states and the District of Columbia, Medicare Part D plans in all 50 states and the District of Columbia and Medicaid plans and includes the business associated with the January 2012 acquisition of HealthSpring, Inc.
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Global Supplemental Benefits includes supplemental health, life and accident insurance products offered in the U.S. and foreign markets, primarily in Asia as well as Medicare supplemental coverage following the 2012 acquisition of Great American Supplemental Benefits.
Group Disability and Life represents group disability, life and accident insurance products, including certain disability and life insurance business previously reported in the former Health Care segment.
In addition, the Company continues to report results in three other categories (Run-off Reinsurance, Other Operations and Corporate) that were not impacted by the segment reporting changes described above.
For those segments impacted by these changes, prior period results for the first three quarters and nine months of 2012, the four quarters and full year 2011, and full year 2010 are presented on the old and new segment basis in the following tables.
1
Cigna's Investor Relations Department will be hosting a conference call this morning, beginning at 9:00 a.m. ET to describe the segment reporting changes and answer questions on this topic. The call-in numbers for the conference call are as follows:
Live Call:
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Toll Free Dial-In Number:
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1-800-619-9569
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Toll Dial-In Number:
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1-517-623-4948
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Participant Passcode:
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999363
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Replay:
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Toll Free Number:
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1-866-418-8382
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Toll Dial-In Number:
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1-203-369-0752
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It is strongly suggested you dial in to the conference call by 8:45 a.m. ET. The operator will periodically provide instructions regarding the call.
2
Cigna Corporation
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||||||||||||||||
Segment results - Global Health Care and Global Supplemental Benefits
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||||||||||||||||
Years Ended December 31, 2011 and 2010
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(unaudited)
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Years Ended
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December 31, 2011
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December 31, 2010
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Global Health Care, compared with
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Health Care
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Health Care
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Amounts previously reported in Health Care
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As previously
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Global
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As previously |
Global
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(Dollars in millions)
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Reported
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Health Care
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Reported |
Health Care
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Revenues:
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Premiums and fees
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$ | 13,181 | $ | 14,443 | $ | 13,319 | $ | 14,134 | ||||||||
Net investment income
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274 | 263 | 243 | 230 | ||||||||||||
Mail order pharmacy revenues
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1,447 | 1,447 | 1,420 | 1,420 | ||||||||||||
Other revenues
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234 | 236 | 266 | 269 | ||||||||||||
Segment revenues
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15,136 | 16,389 | 15,248 | 16,053 | ||||||||||||
Benefits and Expenses:
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Global Health Care medical claims expense
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8,182 | 9,125 | 8,570 | 9,222 | ||||||||||||
Other benefit expenses
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83 | - | 100 | - | ||||||||||||
Mail order pharmacy cost of goods sold
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1,203 | 1,203 | 1,169 | 1,169 | ||||||||||||
Operating expenses
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4,121 | 4,340 | 4,072 | 4,202 | ||||||||||||
Benefits and expenses
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13,589 | 14,668 | 13,911 | 14,593 | ||||||||||||
Income before income taxes
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1,547 | 1,721 | 1,337 | 1,460 | ||||||||||||
Income taxes
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556 | 616 | 476 | 520 | ||||||||||||
Segment earnings
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991 | 1,105 | 861 | 940 | ||||||||||||
Less: Special item(s), after-tax
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1 | 1 | - | - | ||||||||||||
Adjusted income from operations
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$ | 990 | $ | 1,104 | $ | 861 | $ | 940 | ||||||||
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Years Ended
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December 31, 2011
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December 31, 2010
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Global Supplemental Benefits, compared with
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International
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Global
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International
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Global
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Amounts previously reported in International
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As previously
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Supplemental
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As previously
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Supplemental
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(Dollars in millions)
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Reported
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Benefits
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Reported
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Benefits
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Revenues:
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Premiums and fees
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$ | 2,990 | $ | 1,528 | $ | 2,268 | $ | 1,231 | ||||||||
Net investment income
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96 | 83 | 82 | 69 | ||||||||||||
Other revenues
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17 | 15 | 25 | 22 | ||||||||||||
Segment revenues
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3,103 | 1,626 | 2,375 | 1,322 | ||||||||||||
Benefits and Expenses:
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Other benefit expenses
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1,697 | 754 | 1,255 | 603 | ||||||||||||
Operating expenses excluding special item(s)
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1,082 | 734 | 846 | 589 | ||||||||||||
Special item(s)
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4 | 4 | - | - | ||||||||||||
Benefits and expenses
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2,783 | 1,492 | 2,101 | 1,192 | ||||||||||||
Income before income taxes
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320 | 134 | 274 | 130 | ||||||||||||
Income taxes
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100 | 36 | 93 | 42 | ||||||||||||
Income attributable to noncontrolling interest
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1 | 1 | 4 | 4 | ||||||||||||
Segment earnings
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219 | 97 | 177 | 84 | ||||||||||||
Less: Special item(s), after-tax
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(3 | ) | (3 | ) | - | - | ||||||||||
Adjusted income from operations
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$ | 222 | $ | 100 | $ | 177 | $ | 84 |
3
Cigna Corporation
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Segment results - Group Disability and Life, and Updated Consolidated Income Statement
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Years Ended December 31, 2011 and 2010
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(unaudited)
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Years Ended
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|||||||||||||||
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December 31, 2011
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December 31, 2010
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As
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As
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Group Disability and Life
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Previously
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Previously
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(Dollars in millions)
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Reported
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As revised
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Reported
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As revised
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||||||||||||
Revenues:
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Premiums and fees
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$ | 2,780 | $ | 2,857 | $ | 2,667 | $ | 2,770 | ||||||||
Net investment income
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267 | 291 | 261 | 287 | ||||||||||||
Other revenues
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- | - | 123 | 123 | ||||||||||||
Segment revenues
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3,047 | 3,148 | 3,051 | 3,180 | ||||||||||||
Benefits and Expenses:
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Other benefit expenses
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2,003 | 2,086 | 1,935 | 2,035 | ||||||||||||
Operating expenses
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648 | 654 | 705 | 713 | ||||||||||||
Benefits and expenses
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2,651 | 2,740 | 2,640 | 2,748 | ||||||||||||
Income before income taxes
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396 | 408 | 411 | 432 | ||||||||||||
Income taxes
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109 | 113 | 120 | 127 | ||||||||||||
Segment earnings
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287 | 295 | 291 | 305 | ||||||||||||
Less: Special item(s), after-tax
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5 | 5 | - | - | ||||||||||||
Adjusted income from operations
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$ | 282 | $ | 290 | $ | 291 | $ | 305 | ||||||||
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Years Ended
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|||||||||||||||
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December 31, 2011
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December 31, 2010
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Consolidated
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As
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As
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||||||||||||||
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Previously
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Previously
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||||||||||||||
(Dollars in millions)
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Reported
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As revised
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Reported
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As revised
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||||||||||||
Revenues:
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Premiums and fees
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$ | 19,089 | $ | 18,966 | $ | 18,393 | $ | 18,274 | ||||||||
Net investment income
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1,146 | 1,146 | 1,105 | 1,105 | ||||||||||||
Mail order pharmacy revenues
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1,447 | 1,447 | 1,420 | 1,420 | ||||||||||||
Other revenues, including run-off reinsurance hedge results
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244 | 244 | 254 | 254 | ||||||||||||
Net realized investment gains
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62 | 62 | 75 | 75 | ||||||||||||
Total revenues
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21,988 | 21,865 | 21,247 | 21,128 | ||||||||||||
Benefits and Expenses:
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Global Health Care medical claims expense
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8,182 | 9,125 | 8,570 | 9,222 | ||||||||||||
Other benefit expenses
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4,308 | 3,365 | 3,663 | 3,011 | ||||||||||||
Mail order pharmacy cost of goods sold
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1,203 | 1,203 | 1,169 | 1,169 | ||||||||||||
Guaranteed minimum income benefits (income) expense
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234 | 234 | 55 | 55 | ||||||||||||
Operating expenses excluding special item(s)
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6,137 | 6,014 | 5,898 | 5,779 | ||||||||||||
Special item(s)
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48 | 48 | 90 | 90 | ||||||||||||
Benefits and expenses
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20,112 | 19,989 | 19,445 | 19,326 | ||||||||||||
Income before income taxes
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1,876 | 1,876 | 1,802 | 1,802 | ||||||||||||
Income taxes
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615 | 615 | 519 | 519 | ||||||||||||
Net income
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1,261 | 1,261 | 1,283 | 1,283 | ||||||||||||
Less: Income attributable to noncontrolling interest
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1 | 1 | 4 | 4 | ||||||||||||
Shareholders' net income
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$ | 1,260 | $ | 1,260 | $ | 1,279 | $ | 1,279 |
4
Cigna Corporation
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Segment results - Global Health Care
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First Three Quarters and Nine Months Ended September 30, 2012
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(unaudited)
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Three Months Ended
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|||||||||||||||
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March 31, 2012
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June 30, 2012
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Global Health Care, compared with
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Health Care
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Health Care
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|
||||||||||||
Amounts previously reported in Health Care
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As previously
|
Global
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As previously
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Global
|
||||||||||||
(Dollars in millions)
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Reported
|
Health Care
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Reported
|
Health Care
|
||||||||||||
Revenues:
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|
||||||||||||
Premiums and fees
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$ | 4,501 | $ | 4,869 | $ | 5,008 | $ | 5,398 | ||||||||
Net investment income
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68 | 66 | 63 | 61 | ||||||||||||
Mail order pharmacy revenues
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386 | 386 | 402 | 402 | ||||||||||||
Other revenues
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50 | 51 | 56 | 59 | ||||||||||||
Segment revenues
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5,005 | 5,372 | 5,529 | 5,920 | ||||||||||||
Benefits and Expenses:
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||||||||||||||||
Global Health Care medical claims expense
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3,037 | 3,316 | 3,405 | 3,707 | ||||||||||||
Other benefit expenses
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19 | - | 17 | - | ||||||||||||
Mail order pharmacy cost of goods sold
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321 | 321 | 330 | 330 | ||||||||||||
Operating expenses excluding special item(s)
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1,216 | 1,271 | 1,252 | 1,302 | ||||||||||||
Special item(s)
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31 | 31 | ||||||||||||||
Benefits and expenses
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4,624 | 4,939 | 5,004 | 5,339 | ||||||||||||
Income before income taxes
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381 | 433 | 525 | 581 | ||||||||||||
Income taxes
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139 | 157 | 193 | 213 | ||||||||||||
Segment earnings
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242 | 276 | 332 | 368 | ||||||||||||
Less: Special item(s), after-tax
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(20 | ) | (20 | ) | - | - | ||||||||||
Adjusted income from operations
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$ | 262 | $ | 296 | $ | 332 | $ | 368 | ||||||||
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Three Months Ended
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Nine Months Ended
|
||||||||||||||
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September 30, 2012
|
September 30, 2012
|
||||||||||||||
Global Health Care, compared with
|
Health Care
|
Health Care
|
||||||||||||||
Amounts previously reported in Health Care
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As previously
|
Global
|
As previously
|
Global
|
||||||||||||
(Dollars in millions)
|
Reported
|
Health Care
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Reported
|
Health Care
|
||||||||||||
Revenues:
|
||||||||||||||||
Premiums and fees
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$ | 4,922 | $ | 5,307 | $ | 14,431 | $ | 15,574 | ||||||||
Net investment income
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66 | 64 | 197 | 191 | ||||||||||||
Mail order pharmacy revenues
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401 | 401 | 1,189 | 1,189 | ||||||||||||
Other revenues
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62 | 63 | 168 | 173 | ||||||||||||
Segment revenues
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5,451 | 5,835 | 15,985 | 17,127 | ||||||||||||
Benefits and Expenses:
|
||||||||||||||||
Global Health Care medical claims expense
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3,269 | 3,561 | 9,711 | 10,584 | ||||||||||||
Other benefit expenses
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15 | - | 51 | - | ||||||||||||
Mail order pharmacy cost of goods sold
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324 | 324 | 975 | 975 | ||||||||||||
Operating expenses excluding special item(s)
|
1,245 | 1,298 | 3,713 | 3,871 | ||||||||||||
Special item(s)
|
60 | 65 | 91 | 96 | ||||||||||||
Benefits and expenses
|
4,913 | 5,248 | 14,541 | 15,526 | ||||||||||||
Income before income taxes
|
538 | 587 | 1,444 | 1,601 | ||||||||||||
Income taxes
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193 | 210 | 525 | 580 | ||||||||||||
Segment earnings
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345 | 377 | 919 | 1,021 | ||||||||||||
Less: Special item(s), after-tax
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(39 | ) | (42 | ) | (59 | ) | (62 | ) | ||||||||
Adjusted income from operations
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$ | 384 | $ | 419 | $ | 978 | $ | 1,083 |
5
Cigna Corporation
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Segment results - Global Health Care
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Four Quarters of 2011
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(unaudited)
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||||||||||||
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||||||||||||
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Three Months Ended
|
|||||||||||||||
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March 31, 2011
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June 30, 2011
|
||||||||||||||
Global Health Care, compared with
|
Health Care
|
|
Health Care
|
|
||||||||||||
Amounts previously reported in Health Care
|
As previously
|
Global
|
As previously
|
Global
|
||||||||||||
(Dollars in millions)
|
Reported
|
Health Care
|
Reported
|
Health Care
|
||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Premiums and fees
|
$ | 3,311 | $ | 3,614 | $ | 3,295 | $ | 3,613 | ||||||||
Net investment income
|
67 | 63 | 67 | 65 | ||||||||||||
Mail order pharmacy revenues
|
339 | 339 | 349 | 349 | ||||||||||||
Other revenues
|
69 | 70 | 67 | 66 | ||||||||||||
Segment revenues
|
3,786 | 4,086 | 3,778 | 4,093 | ||||||||||||
Benefits and Expenses:
|
||||||||||||||||
Global Health Care medical claims expense
|
2,077 | 2,301 | 2,034 | 2,269 | ||||||||||||
Other benefit expenses
|
24 | - | 21 | - | ||||||||||||
Mail order pharmacy cost of goods sold
|
276 | 276 | 289 | 289 | ||||||||||||
Operating expenses
|
1,025 | 1,081 | 996 | 1,050 | ||||||||||||
Benefits and expenses
|
3,402 | 3,658 | 3,340 | 3,608 | ||||||||||||
Income before income taxes
|
384 | 428 | 438 | 485 | ||||||||||||
Income taxes
|
137 | 152 | 158 | 175 | ||||||||||||
Segment earnings
|
247 | 276 | 280 | 310 | ||||||||||||
Less: Special item(s), after-tax
|
1 | 1 | - | - | ||||||||||||
Adjusted income from operations
|
$ | 246 | $ | 275 | $ | 280 | $ | 310 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
|
Three Months Ended
|
|||||||||||||||
|
September 30, 2011
|
December 31, 2011
|
||||||||||||||
Global Health Care, compared with
|
Health Care
|
Health Care
|
||||||||||||||
Amounts previously reported in Health Care
|
As previously
|
Global
|
As previously
|
Global
|
||||||||||||
(Dollars in millions)
|
Reported
|
Health Care
|
Reported
|
Health Care
|
||||||||||||
Revenues:
|
||||||||||||||||
Premiums and fees
|
$ | 3,255 | $ | 3,571 | $ | 3,320 | $ | 3,645 | ||||||||
Net investment income
|
74 | 71 | 66 | 64 | ||||||||||||
Mail order pharmacy revenues
|
368 | 368 | 391 | 391 | ||||||||||||
Other revenues
|
48 | 47 | 50 | 53 | ||||||||||||
Segment revenues
|
3,745 | 4,057 | 3,827 | 4,153 | ||||||||||||
Benefits and Expenses:
|
||||||||||||||||
Global Health Care medical claims expense
|
2,014 | 2,254 | 2,057 | 2,301 | ||||||||||||
Other benefit expenses
|
18 | - | 20 | - | ||||||||||||
Mail order pharmacy cost of goods sold
|
309 | 309 | 329 | 329 | ||||||||||||
Operating expenses
|
1,020 | 1,064 | 1,080 | 1,145 | ||||||||||||
Benefits and expenses
|
3,361 | 3,627 | 3,486 | 3,775 | ||||||||||||
Income before income taxes
|
384 | 430 | 341 | 378 | ||||||||||||
Income taxes
|
136 | 151 | 125 | 138 | ||||||||||||
Segment earnings
|
248 | 279 | 216 | 240 | ||||||||||||
Adjusted income from operations
|
$ | 248 | $ | 279 | $ | 216 | $ | 240 |
6
Cigna Corporation
|
||||||||||||||||
Segment results - Global Supplemental Benefits
|
||||||||||||||||
First Three Quarters and Nine Months Ended September 30, 2012
|
||||||||||||||||
(unaudited)
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
|
Three Months Ended
|
|||||||||||||||
|
March 31, 2012
|
June 30, 2012
|
||||||||||||||
Global Supplemental Benefits, compared with
|
International
|
Global
|
International
|
Global
|
||||||||||||
Amounts previously reported in International
|
As previously
|
Supplemental
|
As previously
|
Supplemental
|
||||||||||||
(Dollars in millions)
|
Reported
|
Benefits
|
Reported
|
Benefits
|
||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Premiums and fees
|
$ | 866 | $ | 444 | $ | 898 | $ | 455 | ||||||||
Net investment income
|
25 | 21 | 25 | 22 | ||||||||||||
Other revenues
|
9 | 8 | 6 | 3 | ||||||||||||
Segment revenues
|
900 | 473 | 929 | 480 | ||||||||||||
Benefits and Expenses:
|
||||||||||||||||
Other benefit expenses
|
497 | 218 | 532 | 230 | ||||||||||||
Operating expenses excluding special item(s)
|
300 | 209 | 300 | 212 | ||||||||||||
Benefits and expenses
|
797 | 427 | 832 | 442 | ||||||||||||
Income before income taxes
|
103 | 46 | 97 | 38 | ||||||||||||
Income taxes
|
23 | 3 | 32 | 11 | ||||||||||||
Segment earnings
|
80 | 43 | 65 | 27 | ||||||||||||
Adjusted income from operations
|
$ | 80 | $ | 43 | $ | 65 | $ | 27 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
September 30, 2012
|
September 30, 2012
|
||||||||||||||
Global Supplemental Benefits, compared with
|
International
|
Global
|
International
|
Global
|
||||||||||||
Amounts previously reported in International
|
As previously
|
Supplemental
|
As previously
|
Supplemental
|
||||||||||||
(Dollars in millions)
|
Reported
|
Benefits
|
Reported
|
Benefits
|
||||||||||||
Revenues:
|
||||||||||||||||
Premiums and fees
|
$ | 930 | $ | 493 | $ | 2,694 | $ | 1,392 | ||||||||
Net investment income
|
25 | 22 | 75 | 65 | ||||||||||||
Other revenues
|
8 | 7 | 23 | 18 | ||||||||||||
Segment revenues
|
963 | 522 | 2,792 | 1,475 | ||||||||||||
Benefits and Expenses:
|
||||||||||||||||
Other benefit expenses
|
543 | 251 | 1,572 | 699 | ||||||||||||
Operating expenses excluding special item(s)
|
306 | 217 | 906 | 638 | ||||||||||||
Special item(s)
|
14 | 9 | 14 | 9 | ||||||||||||
Benefits and expenses
|
863 | 477 | 2,492 | 1,346 | ||||||||||||
Income before income taxes
|
100 | 45 | 300 | 129 | ||||||||||||
Income taxes
|
30 | 11 | 85 | 25 | ||||||||||||
Segment earnings
|
70 | 34 | 215 | 104 | ||||||||||||
Less: Special item(s), after-tax
|
(9 | ) | (6 | ) | (9 | ) | (6 | ) | ||||||||
Adjusted income from operations
|
$ | 79 | $ | 40 | $ | 224 | $ | 110 |
7
Cigna Corporation
|
||||||||||||||||
Segment results - Global Supplemental Benefits
|
||||||||||||||||
Four Quarters of 2011
|
||||||||||||||||
(unaudited)
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
|
Three Months Ended
|
|||||||||||||||
|
March 31, 2011
|
June 30, 2011
|
||||||||||||||
Global Supplemental Benefits, compared with
|
International
|
Global
|
International
|
Global
|
||||||||||||
Amounts previously reported in International
|
As previously
|
Supplemental
|
As previously
|
Supplemental
|
||||||||||||
(Dollars in millions)
|
Reported
|
Benefits
|
Reported
|
Benefits
|
||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Premiums and fees
|
$ | 698 | $ | 351 | $ | 737 | $ | 375 | ||||||||
Net investment income
|
23 | 20 | 24 | 20 | ||||||||||||
Other revenues
|
6 | 5 | 3 | 4 | ||||||||||||
Segment revenues
|
727 | 376 | 764 | 399 | ||||||||||||
Benefits and Expenses:
|
||||||||||||||||
Other benefit expenses
|
397 | 173 | 420 | 185 | ||||||||||||
Operating expenses excluding special item(s)
|
243 | 162 | 262 | 178 | ||||||||||||
Benefits and expenses
|
640 | 335 | 682 | 363 | ||||||||||||
Income before income taxes
|
87 | 41 | 82 | 36 | ||||||||||||
Income taxes
|
25 | 9 | 25 | 9 | ||||||||||||
Income attributable to noncontrolling interest
|
1 | 1 | - | - | ||||||||||||
Segment earnings
|
61 | 31 | 57 | 27 | ||||||||||||
Less: Special item(s), after-tax
|
- | - | - | - | ||||||||||||
Adjusted income from operations
|
$ | 61 | $ | 31 | $ | 57 | $ | 27 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
|
Three Months Ended
|
|||||||||||||||
|
September 30, 2011
|
December 31, 2011
|
||||||||||||||
Global Supplemental Benefits, compared with
|
International
|
Global
|
International
|
Global
|
||||||||||||
Amounts previously reported in International
|
As previously
|
Supplemental
|
As previously
|
Supplemental
|
||||||||||||
(Dollars in millions)
|
Reported
|
Benefits
|
Reported
|
Benefits
|
||||||||||||
Revenues:
|
||||||||||||||||
Premiums and fees
|
$ | 765 | $ | 392 | $ | 790 | $ | 410 | ||||||||
Net investment income
|
24 | 21 | 25 | 22 | ||||||||||||
Other revenues
|
3 | 4 | 5 | 2 | ||||||||||||
Segment revenues
|
792 | 417 | 820 | 434 | ||||||||||||
Benefits and Expenses:
|
||||||||||||||||
Other benefit expenses
|
435 | 195 | 445 | 201 | ||||||||||||
Operating expenses excluding special item(s)
|
271 | 188 | 306 | 206 | ||||||||||||
Special item(s)
|
- | - | 4 | 4 | ||||||||||||
Benefits and expenses
|
706 | 383 | 755 | 411 | ||||||||||||
Income before income taxes
|
86 | 34 | 65 | 23 | ||||||||||||
Income taxes
|
24 | 7 | 26 | 11 | ||||||||||||
Segment earnings
|
62 | 27 | 39 | 12 | ||||||||||||
Less: Special item(s), after-tax
|
- | - | (3 | ) | (3 | ) | ||||||||||
Adjusted income from operations
|
$ | 62 | $ | 27 | $ | 42 | $ | 15 |
8
Cigna Corporation
|
||||||||||||||||
Segment results - Group Disability and Life
|
||||||||||||||||
First Three Quarters and Nine Months Ended September 30, 2012
|
||||||||||||||||
(unaudited)
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
|
Three Months Ended
|
|||||||||||||||
|
March 31, 2012
|
June 30, 2012
|
||||||||||||||
Group Disability and Life
|
As
|
|
As
|
|
||||||||||||
|
Previously
|
|
Previously
|
|
||||||||||||
(Dollars in millions)
|
Reported
|
As revised
|
Reported
|
As revised
|
||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Premiums and fees
|
$ | 743 | $ | 763 | $ | 749 | $ | 767 | ||||||||
Net investment income
|
70 | 76 | 68 | 73 | ||||||||||||
Segment revenues
|
813 | 839 | 817 | 840 | ||||||||||||
Benefits and Expenses:
|
||||||||||||||||
Other benefit expenses
|
546 | 565 | 512 | 529 | ||||||||||||
Operating expenses excluding special item(s)
|
175 | 177 | 179 | 182 | ||||||||||||
Benefits and expenses
|
721 | 742 | 691 | 711 | ||||||||||||
Income before income taxes
|
92 | 97 | 126 | 129 | ||||||||||||
Income taxes
|
27 | 29 | 37 | 38 | ||||||||||||
Segment earnings
|
65 | 68 | 89 | 91 | ||||||||||||
Adjusted income from operations
|
$ | 65 | $ | 68 | $ | 89 | $ | 91 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
September 30, 2012
|
September 30, 2012
|
||||||||||||||
Group Disability and Life
|
As
|
As
|
||||||||||||||
|
Previously
|
Previously
|
||||||||||||||
(Dollars in millions)
|
Reported
|
As revised
|
Reported
|
As revised
|
||||||||||||
Revenues:
|
||||||||||||||||
Premiums and fees
|
$ | 758 | $ | 775 | $ | 2,250 | $ | 2,305 | ||||||||
Net investment income
|
69 | 74 | 207 | 223 | ||||||||||||
Segment revenues
|
827 | 849 | 2,457 | 2,528 | ||||||||||||
Benefits and Expenses:
|
||||||||||||||||
Other benefit expenses
|
563 | 578 | 1,621 | 1,672 | ||||||||||||
Operating expenses excluding special item(s)
|
176 | 177 | 530 | 536 | ||||||||||||
Special item(s)
|
3 | 3 | 3 | 3 | ||||||||||||
Benefits and expenses
|
742 | 758 | 2,154 | 2,211 | ||||||||||||
Income before income taxes
|
85 | 91 | 303 | 317 | ||||||||||||
Income taxes
|
25 | 27 | 89 | 94 | ||||||||||||
Segment earnings
|
60 | 64 | 214 | 223 | ||||||||||||
Less: Special item(s), after-tax
|
(2 | ) | (2 | ) | (2 | ) | (2 | ) | ||||||||
Adjusted income from operations
|
$ | 62 | $ | 66 | $ | 216 | $ | 225 |
9
Cigna Corporation
|
||||||||||||||||
Segment results - Group Disability and Life
|
||||||||||||||||
Four Quarters of 2011
|
||||||||||||||||
(unaudited)
|
|
|
|
|
||||||||||||
|
|
|
|
|
||||||||||||
|
Three Months Ended
|
|||||||||||||||
|
March 31, 2011
|
June 30, 2011
|
||||||||||||||
Group Disability and Life
|
As
|
|
As
|
|
||||||||||||
|
Previously
|
|
Previously
|
|
||||||||||||
(Dollars in millions)
|
Reported
|
As revised
|
Reported
|
As revised
|
||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Premiums and fees
|
$ | 688 | $ | 708 | $ | 717 | $ | 733 | ||||||||
Net investment income
|
65 | 72 | 67 | 73 | ||||||||||||
Segment revenues
|
753 | 780 | 784 | 806 | ||||||||||||
Benefits and Expenses:
|
||||||||||||||||
Other benefit expenses
|
492 | 516 | 496 | 517 | ||||||||||||
Operating expenses
|
155 | 156 | 164 | 166 | ||||||||||||
Benefits and expenses
|
647 | 672 | 660 | 683 | ||||||||||||
Income before income taxes
|
106 | 108 | 124 | 123 | ||||||||||||
Income taxes
|
24 | 25 | 36 | 35 | ||||||||||||
Segment earnings
|
82 | 83 | 88 | 88 | ||||||||||||
Less: Special item(s), after-tax
|
5 | 5 | - | - | ||||||||||||
Adjusted income from operations
|
$ | 77 | $ | 78 | $ | 88 | $ | 88 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
|
Three Months Ended
|
|||||||||||||||
|
September 30, 2011
|
December 31, 2011
|
||||||||||||||
Group Disability and Life
|
As
|
As
|
||||||||||||||
|
Previously
|
Previously
|
||||||||||||||
(Dollars in millions)
|
Reported
|
As revised
|
Reported
|
As revised
|
||||||||||||
Revenues:
|
||||||||||||||||
Premiums and fees
|
$ | 698 | $ | 719 | $ | 677 | $ | 697 | ||||||||
Net investment income
|
67 | 73 | 68 | 73 | ||||||||||||
Segment revenues
|
765 | 792 | 745 | 770 | ||||||||||||
Benefits and Expenses:
|
||||||||||||||||
Other benefit expenses
|
517 | 535 | 498 | 518 | ||||||||||||
Operating expenses
|
159 | 162 | 170 | 170 | ||||||||||||
Benefits and expenses
|
676 | 697 | 668 | 688 | ||||||||||||
Income before income taxes
|
89 | 95 | 77 | 82 | ||||||||||||
Income taxes
|
27 | 29 | 22 | 24 | ||||||||||||
Segment earnings
|
62 | 66 | 55 | 58 | ||||||||||||
Adjusted income from operations
|
$ | 62 | $ | 66 | $ | 55 | $ | 58 |
10
Cigna Corporation | ||||||||||||||||||||||||
Consolidating Statement of Income - New Segment Basis | ||||||||||||||||||||||||
Nine Months Ended September 30, 2012 | ||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Nine Months Ended
|
||||||||||||||||||||||||
September 30, 2012 | ||||||||||||||||||||||||
|
Global
|
Global
|
Group
|
|
Realized
|
|
||||||||||||||||||
|
Health
|
Supplemental
|
Disability
|
|
investment
|
|
||||||||||||||||||
(Dollars in millions)
|
Care
|
Benefits
|
and Life
|
Other (a)
|
gains
|
Consolidated
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
||||||||||||||||||
Premiums and fees
|
$ | 15,574 | $ | 1,392 | $ | 2,305 | $ | 89 | $ | $ | 19,360 | |||||||||||||
Net investment income
|
191 | 65 | 223 | 375 | 854 | |||||||||||||||||||
Mail order pharmacy revenues
|
1,189 | - | - | - | 1,189 | |||||||||||||||||||
Other revenues, including run-off reinsurance hedge results
|
173 | 18 | - | (115 | ) | 76 | ||||||||||||||||||
Realized investment gains
|
20 | 20 | ||||||||||||||||||||||
Total revenues
|
17,127 | 1,475 | 2,528 | 349 | 20 | 21,499 | ||||||||||||||||||
Benefits and Expenses:
|
||||||||||||||||||||||||
Global Health Care medical claims expense
|
10,584 | - | - | - | 10,584 | |||||||||||||||||||
Other benefit expenses
|
- | 699 | 1,672 | 277 | 2,648 | |||||||||||||||||||
Mail order pharmacy cost of goods sold
|
975 | - | - | - | 975 | |||||||||||||||||||
Guaranteed minimum income benefits expense
|
- | - | - | (33 | ) | (33 | ) | |||||||||||||||||
Operating expenses (excluding special items)
|
3,871 | 638 | 536 | 272 | 5,317 | |||||||||||||||||||
Special items
|
96 | 9 | 3 | 42 | 150 | |||||||||||||||||||
Total benefits and expenses
|
15,526 | 1,346 | 2,211 | 558 | - | 19,641 | ||||||||||||||||||
Income (loss) before income taxes
|
1,601 | 129 | 317 | (209 | ) | 20 | 1,858 | |||||||||||||||||
Income taxes (benefits)
|
580 | 25 | 94 | (62 | ) | 4 | 641 | |||||||||||||||||
Net income (loss)
|
1,021 | 104 | 223 | (147 | ) | 16 | 1,217 | |||||||||||||||||
Shareholders' net income (loss)
|
1,021 | 104 | 223 | (147 | ) | 16 | 1,217 | |||||||||||||||||
Less: realized investment gains, net of taxes
|
16 | 16 | ||||||||||||||||||||||
Segment earnings (loss)
|
1,021 | 104 | 223 | (147 | ) | - | 1,201 | |||||||||||||||||
Less: adjustments to reconcile to adjusted income from operations:
|
||||||||||||||||||||||||
Results of GMIB business (after-tax)
|
22 | 22 | ||||||||||||||||||||||
Special items (after-tax)
|
(62 | ) | (6 | ) | (2 | ) | (33 | ) | (103 | ) | ||||||||||||||
Adjusted income (loss) from operations
|
$ | 1,083 | $ | 110 | $ | 225 | $ | (136 | ) | $ | - | $ | 1,282 | |||||||||||
|
(a) Other includes Run-off Reinsurance, Other Operations and Corporate.
|
11
Cigna Corporation
|
||||||||||||||||||||||||
Consolidating Statement of Income - New Segment Basis
|
||||||||||||||||||||||||
Year Ended December 31, 2011
|
||||||||||||||||||||||||
(unaudited)
|
|
|
|
|
|
|
||||||||||||||||||
|
Year Ended
|
|||||||||||||||||||||||
|
December 31, 2011
|
|||||||||||||||||||||||
|
Global
|
Global
|
Group
|
|
Realized
|
|
||||||||||||||||||
|
Health
|
Supplemental
|
Disability
|
|
investment
|
|
||||||||||||||||||
(Dollars in millions)
|
Care
|
Benefits
|
and Life
|
Other (a)
|
gains
|
Consolidated
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
||||||||||||||||||
Premiums and fees
|
$ | 14,443 | $ | 1,528 | $ | 2,857 | $ | 138 | $ | $ | 18,966 | |||||||||||||
Net investment income
|
263 | 83 | 291 | 509 | 1,146 | |||||||||||||||||||
Mail order pharmacy revenues
|
1,447 | - | - | - | 1,447 | |||||||||||||||||||
Other revenues
|
236 | 15 | - | (7 | ) | 244 | ||||||||||||||||||
Realized investment gains
|
62 | 62 | ||||||||||||||||||||||
Total revenues
|
16,389 | 1,626 | 3,148 | 640 | 62 | 21,865 | ||||||||||||||||||
Benefits and Expenses:
|
||||||||||||||||||||||||
Global Health Care medical claims expense
|
9,125 | - | - | - | 9,125 | |||||||||||||||||||
Other benefit expenses
|
- | 754 | 2,086 | 525 | 3,365 | |||||||||||||||||||
Mail order pharmacy cost of goods sold
|
1,203 | - | - | - | 1,203 | |||||||||||||||||||
Guaranteed minimum income benefits expense
|
- | - | - | 234 | 234 | |||||||||||||||||||
Operating expenses (excluding special items)
|
4,340 | 734 | 654 | 286 | 6,014 | |||||||||||||||||||
Special items
|
- | 4 | - | 44 | 48 | |||||||||||||||||||
Total benefits and expenses
|
14,668 | 1,492 | 2,740 | 1,089 | - | 19,989 | ||||||||||||||||||
Income (loss) before income taxes
|
1,721 | 134 | 408 | (449 | ) | 62 | 1,876 | |||||||||||||||||
Income taxes (benefits)
|
616 | 36 | 113 | (171 | ) | 21 | 615 | |||||||||||||||||
Net income (loss)
|
1,105 | 98 | 295 | (278 | ) | 41 | 1,261 | |||||||||||||||||
Less: Income attributable to noncontrolling interest
|
- | 1 | - | - | 1 | |||||||||||||||||||
Shareholders' net income (loss)
|
1,105 | 97 | 295 | (278 | ) | 41 | 1,260 | |||||||||||||||||
Less: realized investment gains, net of taxes
|
41 | 41 | ||||||||||||||||||||||
Segment earnings (loss)
|
1,105 | 97 | 295 | (278 | ) | - | 1,219 | |||||||||||||||||
Less: adjustments to reconcile to adjusted income from operations:
|
||||||||||||||||||||||||
Results of GMIB business (after-tax)
|
- | - | - | (135 | ) | (135 | ) | |||||||||||||||||
Special items (after-tax)
|
1 | (3 | ) | 5 | (10 | ) | (7 | ) | ||||||||||||||||
Adjusted income (loss) from operations
|
$ | 1,104 | $ | 100 | $ | 290 | $ | (133 | ) | $ | - | $ | 1,361 | |||||||||||
|
||||||||||||||||||||||||
(a) Other includes Run-off Reinsurance, Other Operations and Corporate.
|
12
As used in this document, “Cigna” or “the Company” may refer to Cigna Corporation itself, one or more of its subsidiaries, or Cigna Corporation and its consolidated subsidiaries.
CAUTIONARY STATEMENT FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The Company and its representatives may from time to time make written and oral forward-looking statements, including statements contained in press releases, filings with the Securities and Exchange Commission (the “SEC”), reports to shareholders and meetings with analysts and investors. Forward-looking statements may contain information about financial prospects, economic conditions, trends and other uncertainties. These forward-looking statements are based on management’s beliefs and assumptions and on information available to management at the time the statements are or were made. Forward-looking statements include, but are not limited to, information concerning possible or assumed business strategies, financing plans, competitive position, growth opportunities, operating performance improvements, trends and, in particular, strategic or operational improvement initiatives, including in health care operations, litigation and other legal matters, and outlooks for full year 2012, 2013 and beyond results. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe”, “expect”, “plan”, “intend”, “anticipate”, “estimate”, “predict”, “potential”, “may”, “should” or similar expressions. By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are not guarantees of future performance or results, and (iii) are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from forward-looking statements as a result of a variety of factors, including but not limited to, increases to medical costs or other costs or adverse changes due to legislative and regulatory requirements such as health care reform, risks related to implementing operational and strategic initiatives, competition risk, risks related to the run-off reinsurance book and risk associated with litigation and regulatory action. This list of important factors is not intended to be exhaustive. The Company’s most recent Annual Report on Form 10-K, including the “Risk Factors” section, as updated by the Current Report on Form 8-K filed on August 8, 2012, most recent Quarterly Reports on Form 10-Q, and other documents filed with the SEC include both expanded discussion of these factors and additional risk factors and uncertainties that could preclude the Company from realizing the forward-looking statements. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CIGNA CORPORATION
|
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Date: January 24, 2013
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By: /s/ Ralph J. Nicoletti
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Ralph J. Nicoletti
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Executive Vice President
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and Chief Financial Officer
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