Cigna Reports Strong Third Quarter Results and Raises 2012 Outlook
Cigna Corporation (NYSE: CI) today reported third quarter 2012 consolidated revenues of $7.4 billion, an increase of 31% over the third quarter of 2011. Revenues reflect growth in premiums and fees of 51% in Health Care, 22% in International and 9% in Disability and Life, primarily driven by contributions from the HealthSpring acquisition and continued organic growth in our targeted customer segments.
Cigna’s adjusted income from operations for the third quarter of 2012 was $496 million, or $1.71 per share, excluding the after-tax loss of $7 million, or $0.02 per share, from results of the VADBe business. This result compares with $353 million, or $1.29 per share, excluding the after-tax loss of $45 million, or $0.16 per share, from results of the VADBe business, for the third quarter of 2011.
Cigna reported shareholders’ net income of $466 million, or $1.61 per share, for the third quarter of 2012, compared with shareholders’ net income of $183 million, or $0.67 per share, for the third quarter of 2011. Shareholders’ net income included income of $0.11 per share in the third quarter of 2012 and a loss of $0.50 per share for the same period last year related to the Guaranteed Minimum Income Benefits (GMIB) business. Shareholders’ net income also included special items which generated a loss of $62 million, or $0.21 per share, in the third quarter of 2012.
“Our differentiated approach to understanding and helping our global clients and customers as well as partnering with physicians continues to deliver real value. Our third quarter 2012 results were strong, driven by consistent and disciplined execution of our strategy," said David M. Cordani, President and Chief Executive Officer. “We continue to make strategic investments to position Cigna to deliver long-term value for the benefit of our customers and shareholders."
The following table includes highlights of results anda reconciliation of adjusted income from operations to shareholders’ net income (dollars in millions, except per share amounts; customers in thousands):
See Exhibit 2 for a reconciliation of adjusted income (loss) from operations to segment earnings (loss).
This segment includes medical and specialty health care products and services provided on guaranteed cost, retrospectively experience-rated and service-only funding bases. Specialty health care includes behavioral, dental, disease and medical management, stop-loss, and pharmacy-related products and services.
This segment includes Cigna’s supplemental health, life, and accident insurance and global health expatriate benefits businesses operating in international markets as well as the U.S.
This segment includes Cigna’s group disability, life, and accident insurance operations that are managed separately from the Health Care business.
Adjusted income (loss) from operations for Cigna's remaining operations is presented below (dollars in millions):
The foregoing statements represent management’s current estimate of Cigna’s 2012 consolidated and segment adjusted income from operations as of the date of this release. Actual results may differ materially depending on a number of factors, and investors are urged to read the Cautionary Statement included in this release for a description of those factors. 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 (). A link to the conference call, during which management will review third quarter 2012 results and discuss full year 2012 outlook is available in the Investor Relations section of Cigna’s website ().
Cigna Corporation and its subsidiaries (the “Company”) and its representatives may from time to time make written and oral forward-looking statements, including statements contained in press releases, in the Company’s filings with the Securities and Exchange Commission, in its reports to shareholders and in 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, the information concerning possible or assumed future business strategies, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, trends and, in particular, the Company’s strategic initiatives, litigation and other legal matters, operational improvement initiatives in the Health Care operations, and the outlook for the Company’s full year 2012 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 those forward-looking statements as a result of a variety of factors. Some factors that could cause actual results to differ materially from the forward-looking statements include:
This list of important factors is not intended to be exhaustive. Other sections of the Company’s most recent Annual Report on Form 10-K, including the “Risk Factors” section, the Quarterly Report on Form 10-Q for the quarters ended March 31 and June 30, 2012, the Current Report on Form 8-K filed on August 8, 2012, and other documents filed with the Securities and Exchange Commission 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.