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 Cigna Delivers Strong 2017 Results, Expects Continued Revenue and Earnings Growth in 2018
   Thursday, February 01, 2018 6:00:57 AM ET

--Shareholders’ net income for 2017 was $2.2 billion, or $8.77 per share

--Adjusted income from operations(1) for 2017 was $2.7 billion, or $10.46 per share

--Total revenues are expected to grow 7% to 8% in 2018, with projected growth of 300,000 to 500,000 global medical customers(2)

--Adjusted income from operations(1,3) is projected to be in the range of $3.08 billion to $3.20 billion in 2018, or $12.40 to $12.90 per share(4), which represents per share growth of 19% to 23% over 2017

Cigna Corporation (CI ) today reported strong 2017 results with growth across the Company’s Global Health Care, Global Supplemental Benefits and Group Disability & Life segments.

"Cigna’s exceptionally strong 2017 performance reflects our team’s dedication to delivering innovative solutions aligned to the evolving needs of our customers and clients around the world," said David M. Cordani, President and Chief Executive Officer. "We’ve entered 2018 with considerable momentum for growth in each of our businesses, as we continue to invest in market-leading capabilities to create differentiated value for our stakeholders."

Total revenues for 2017 were $41.6 billion, an increase of 5% over 2016, driven by continued growth in Cigna’s targeted customer segments.

Shareholders’ net income for 2017 was $2.2 billion, or $8.77 per share, compared with $1.9 billion, or $7.19 per share, for 2016.

Cigna’s adjusted income from operations(1) for 2017 was $2.7 billion, or $10.46 per share, compared with $2.1 billion, or $8.10 per share, for 2016. This reflects significantly increased earnings contributions from each of our business segments.

Reconciliations of shareholders’ net income to adjusted income from operations(1) are provided on the following page, and on Exhibit 2 of this earnings release.

CONSOLIDATED HIGHLIGHTS

The following table includes highlights of results and reconciliations of consolidated operating revenues(5) to total revenues and adjusted income from operations(1) to shareholders’ net income:

 
Consolidated Financial Results (dollars in millions, customers in
thousands):
                                                                                                                                                                                                                                       Year
                                                                                                                                                              Three Months Ended                                                                                                               Ended
                                                                                                                                         December 31,                                                September 30,                                                   December 31,
                                                                                                                                2017                         2016                          2017                                        2017
                                                                                                         ------------------------------------------------ ----------------------------------------------- ------------------------------------------------ ------------------------------------------
                                                                                                                                      
Total Revenues                                                                                                              $ 10,531                                         $ 9,944                                         $ 10,382                                         $               41,616
Net Realized Investment (Gains)                                                                              (23)      (59)      (117)                    (237)
                                                                                                         -------------------- ------ -------------------- -------------------- ----- -------------------- -------------------- ------ -------------------- -------------------- --------------------
Consolidated Operating Revenues(5)                                                                                          $ 10,508                                         $ 9,885                                         $ 10,265                                         $               41,379
                                                                                                                                                                                                                                                            
Consolidated Earnings, net of taxes
Shareholders’ Net Income                                                                         $    266                                         $   382                                         $    560                                         $                2,237
Net Realized Investment (Gains)                                                                                                 (16)                                            (38)                                             (75)                                                          (156)
Amortization of Other Acquired Intangible Assets                                                                                  12                                              22                                               16                                                             66
Special Items(1)                                                                                              221       119        215                      521
                                                                                                         -------------------- ------ -------------------- -------------------- ----- -------------------- -------------------- ------ -------------------- -------------------- --------------------
Adjusted Income from Operations(1)                                                                                          $    483                      $   485                      $    716                      $                2,668
                                                                                                         ==================== ====== ==================== ==================== ===== ==================== ==================== ====== ==================== ==================== ====================
                                                                                                                                                                                                                                                            
Shareholders’ Net Income, per share                                                              $   1.07                      $  1.47                      $   2.21                      $                 8.77
                                                                                                         ==================== ====== ==================== ==================== ===== ==================== ==================== ====== ==================== ==================== ====================
Adjusted Income from Operations(1), per share                                                                               $   1.94                      $  1.87                      $   2.83                      $                10.46
                                                                                                         ==================== ====== ==================== ==================== ===== ==================== ==================== ====== ==================== ==================== ====================
                                                                                                                                                                                                                                                                                 

-- Cash and marketable investments at the parent company were $1.2 billion at December 31, 2017 and $2.8 billion at December 31, 2016.

-- In 2017, the Company repurchased 15.7 million shares of stock for $2.8 billion. In January 2018, the Company repurchased 1.2 million shares of common stock for approximately $260 million.

HIGHLIGHTS OF SEGMENT RESULTS

See Exhibit 2 for a reconciliation of adjusted income (loss) from operations(1) to shareholders’ net income.

Global Health Care

This segment includes Cigna’s Commercial and Government businesses that deliver medical and specialty health care products and services to domestic and multi-national clients and customers using guaranteed cost, retrospectively experience-rated and administrative services only ("ASO") funding arrangements. Specialty health care includes behavioral, dental, disease and medical management, stop loss and pharmacy-related products and services.

                                                                                                                                                                                             
Financial Results (dollars in millions, customers in thousands):
                                                                                                                                                                                            Year
                                                                                                                                     Three Months Ended                                                                                             Ended
                                                                                                               December 31,                                                                      September 30,                               December 31,
                                                                                                      2017                            2016                          2017                    2017
                                                                             -------------------------------------------------- -------------------------------------------------- ------------------------------------------------ ----------------------
                                                                                                                                                                                                                                     
Premiums and Fees                                                                               $    7,326                                         $    6,857                                         $  7,197                               $     29,041
Adjusted Income from Operations(1)                                                              $      397                                         $      406                                         $    575                               $      2,173
Adjusted Margin, After-Tax(6)                                                                         4.8%                                               5.2%                                             7.1%                                       6.7%
                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                     
                                                                                                                                   As of the Periods Ended
                                                                                                               December 31,                                                                      September 30,
Customers:                                                                                            2017                            2016                          2017
----------------------------------                                           ----------------------------  -------------------- ----------------------------  -------------------- --------------------------
Commercial                                                                                          15,420                                             14,631                                           15,332
Government                                                                          487          566        484
                                                                             -------------------- -------- -------------------- -------------------- -------- -------------------- -------------------- ------
Medical(2)                                                                                          15,907                                             15,197                                           15,816
                                                                                                                                                                                                                                     
Behavioral Care(7)                                                                                  26,849                                             25,790                                           26,636
Dental                                                                                              15,801                                             14,981                                           15,776
Pharmacy                                                                                             8,960                                              8,461                                            8,959
Medicare Part D                                                                                        821                                                972                                              812
                                                                                                                                                                                                                                     

-- Global Health Care delivered attractive results in 2017, led by organic growth and strong margins in our Commercial business.

-- The medical customer base(2) at the end of 2017 totaled 15.9 million, an organic increase of more than 700,000 customers during the year, driven by strong growth across our Commercial market segments.

-- Fourth quarter 2017 premiums and fees increased 7% relative to fourth quarter 2016, driven by Commercial customer growth and specialty contributions, partially offset by lower enrollment in our Government business, as expected.

-- Fourth quarter 2017 adjusted income from operations(1) and adjusted margin, after-tax(6) reflect strong medical and specialty contributions, continued effective medical cost management, strategic investments for long-term growth, and expected seasonally higher medical costs.

-- Adjusted income from operations(1) for full year 2017 and 2016 included favorable prior year reserve development on an after-tax basis of $112 million and $7 million, respectively.

-- The Total Commercial medical care ratio(8) ("MCR") of 79.9% for full year 2017 and 84.3% for fourth quarter 2017 reflect strong performance and effective medical cost management in our employer business, the impact of the health insurance tax moratorium, and expected seasonally higher fourth quarter medical costs.

-- The Total Government MCR(8) of 84.9% for full year 2017 and 83.4% for fourth quarter 2017 reflect solid performance in our Medicare Advantage and Medicare Part D businesses.

-- The Global Health Care operating expense ratio(8) of 20.9% for full year 2017 and 22.2% for fourth quarter 2017 reflect the impact of the health insurance tax moratorium, business mix changes and continued investments in strategic initiatives.

-- Global Health Care net medical costs payable(9) was approximately $2.45 billion at December 31, 2017 and $2.26 billion at December 31, 2016.

Global Supplemental Benefits

This segment includes Cigna’s global individual supplemental health, life and accident insurance business, primarily in Asia, and Medicare supplement coverage in the United States.

 
Financial Results (dollars in millions, policies in thousands):
                                                                                                  Year
                                                                                       Three Months Ended                                                                    Ended
                                                                        December 31,                                      September 30,                               December 31,
                                                               2017          2016            2017                    2017
                                                        -------------------------------- -------------------------------- ---------------------------------- ----------------------
                                                                                                                                                              
Premiums and Fees(10)                                      $    987                         $    842                           $    937                               $      3,707
Adjusted Income from Operations(1)                         $     81                         $     63                           $    109                               $        369
Adjusted Margin, After-Tax(6)                                  7.9%                             7.2%                              11.1%                                       9.5%
                                                                                                                                                              
                                                                                     As of the Periods Ended
                                                                        December 31,                                      September 30,
                                                               2017          2016            2017
                                                        -------------------------------- -------------------------------- --------------
                                                                                                                                                              
Policies(10)                                                 13,138                           12,151                             13,087
                                                                                                                                                              

-- Global Supplemental Benefits delivered outstanding results in 2017, reflecting the value of our differentiated health and life solutions for individual consumers provided through diversified distribution channels.

-- Fourth quarter 2017 premiums and fees(10) grew 17% over fourth quarter 2016, reflecting continued business growth.

-- Fourth quarter 2017 adjusted income from operations(1) and adjusted margin, after-tax(6) reflect business growth and favorable claims experience, particularly in South Korea.

Group Disability and Life

This segment includes Cigna’s group disability, life and accident insurance operations.

                                                                                   
Financial Results (dollars in millions):
                                                                                                                                                                                           Year
                                                                          Three Months Ended                                                                                              Ended
                                                                             December 31,                                    September 30,                                         December 31,
                                                                    2017        2016            2017                              2017
                                                               ------------------------------ ------------------------------ ---------------------------------- --------------------------------
                                                                                                                                                                 
Premiums and Fees                                                $ 1,020                        $ 1,035                           $  1,015                               $                4,088
Adjusted Income (Loss) from Operations(1)                        $    61                        $    69                           $     73                               $                  285
Adjusted Margin, After-Tax(6)                                       5.5%                           6.1%                               6.6%                                                 6.4%
                                                                                                                                                                            

-- Group Disability and Life results reflect the value created for our customers and clients through differentiated solutions that enhance health, productivity and sense of security.

-- Fourth quarter 2017 adjusted income from operations(1) and adjusted margin, after-tax(6) reflect disability and life results consistent with our expectations, as well as targeted investments to support long-term growth.

Corporate & Other Operations

Adjusted loss from operations(1) for Cigna’s remaining operations is presented below:

 
Financial Results (dollars in millions):
                                                                                      Year
                                                                                                  Three Months Ended                                                                Ended
                                                                                   December 31,                                  September 30,                               December 31,
                                                                          2017      2016            2017                    2017
                                                                       ---------------------------- ---------------------------- ---------------------------------- ----------------------
                                                                                                                                                                     
Corporate & Other Operations                                            $ (56)                       $ (53)                           $   (41)                               $      (159)
                                                                                                                                                                     

2018 OUTLOOK

Cigna’s outlook for full year 2018 consolidated adjusted income from operations(1,3) is in the range of $3.08 billion to $3.20 billion, or $12.40 to $12.90 per share. Cigna’s outlook excludes the impact of additional prior year reserve development and potential effects of any future capital deployment, and reflects the impact of the Company’s adoption of the new revenue accounting standard effective January 1, 2018.(4)

                                                                   
(dollars in millions, except where noted and per share amounts)                                              Projection for Full-Year Ending
                                                                                                                December 31, 2018 (1,3,4)
                                                                                                          -------------------------------------
                                                                                                                           
Adjusted Income (Loss) from Operations
    Global Health Care                                                                                                  $    2,600 to 2,680
    Global Supplemental Benefits                                                                                        $      380 to 400
    Group Disability and Life                                                                                           $      330 to 350
                                                                                                          --------------- --------------------
Ongoing Businesses                                                                                                      $    3,310 to 3,430
                                                                                                          =============== ====================
                                                                                                                           
Corporate & Other Operations                                                                                            $         (230)
                                                                                                          =============== ====================
Consolidated Adjusted Income from Operations                                                                            $    3,080 to 3,200
                                                                                                          =============== ====================
                                                                                                                           
Consolidated Adjusted Income from Operations, per share                                                                 $    12.40 to 12.90
                                                                                                          =============== ====================
                                                                                                                           
2018 Operating Metrics and Ratios Outlook
---------------------------------------------------------------
                                                                                                           
Total Revenue Growth                                                                                                    7% to 8%
                                                                                                           
Full Year Total Commercial Medical Care Ratio(8)                                                                     77.5% to 78.5%
                                                                                                           
Full Year Total Government Medical Care Ratio(8)                                                                       84% to 85%
                                                                                                           
Full Year Global Health Care Operating Expense Ratio(8)                                                              22.5% to 23.5%
                                                                                                           
Global Medical Customer Growth(2)                                                                             300,000 to 500,000 customers
                                                                                                           
Consolidated Adjusted Tax Rate(11)                                                                                     24% to 25%
                                                                                                           
                                                                      
Consolidated Projected Adjusted Income from Operations(1,3,4)
Outlook Roll-forward
                                                                                                              
(dollars in millions)
                                                                                                              
2017 Result                                                                                                         $2,668
                                                                                                              
- 2017 prior year reserve development                                                                               ($112)
                                                                                                              
+ 2018 core growth                                                                                               $100 to $220
                                                                                                              
+ 2018 gross impact of U.S. corporate tax reform                                                                     $575
                                                                                                              
- 2018 additional investments enabled by U.S. corporate tax reform                                                  ($150)
                                                     
------------------------------------------------------------------ -------------------- -------------------- --------------------
2018 Outlook                                                             $3,080 to $3,200
------------------------------------------------------------------ -------------------- -------------------- --------------------
                                                                                                              

The foregoing statements represent the Company’s current estimates of Cigna’s 2018 consolidated and segment adjusted income from operations(1,3) and other key metrics as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.

This quarterly earnings release and the Quarterly Financial Supplement are available on Cigna’s website in the Investor Relations section (http://www.cigna.com/aboutcigna/investors) . Management will be hosting a conference call to review fourth quarter 2017 results and discuss full year 2018 outlook beginning today at 8:30 a.m. EST. A link to the conference call is available in the Investor Relations section of Cigna’s website located at http://www.cigna.com/cignadotcom/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: 2012018

Replay (888) 566-0596 (Domestic) (203) 369-3072 (International)

It is strongly suggested you dial in to the conference call by 8:15 a.m. EST.

 
Notes:
 
1.    Adjusted income (loss) from operations is defined as
                         shareholders’ net income (loss) excluding the following after-tax
                         adjustments: net realized investment results, net amortization of
                         other acquired intangible assets and special items. Special items
                         are identified in Exhibit 2 of this earnings release.
                          
                         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 accounting principles generally
                         accepted in the United States (GAAP) and should not be viewed as a
                         substitute for the most directly comparable GAAP measure,
                         shareholders’ net income. See Exhibits 1 and 2 for a
                         reconciliation of adjusted income from operations to shareholders’
                         net income.
                          
2.                       Global medical customers include individuals 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.
                          
3.                       Management is not able to provide a reconciliation to
                         shareholders’ net income (loss) on a forward-looking basis because
                         we are unable to predict, without unreasonable effort, certain
                         components thereof including (i) future net realized investment
                         results 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 could vary materially.
                          
4.                       The Company’s outlook excludes the potential effects of any
                         share repurchases or business combinations that may occur after
                         the date of this earnings release. Also, the Company’s outlook
                         reflects the impact of the adoption of the new revenue accounting
                         standard (ASU 2014-09) effective January 1, 2018. The Company’s
                         fourth quarter 2017 financial supplement dated February 1, 2018
                         includes a comparison of 2017 and 2016 key income statement line
                         items and ratios as reported, and as revised under the new
                         standard. Additional information regarding the Company’s adoption
                         of the standard will be available in the Company’s 10-K expected
                         to filed on February 28, 2018.
                          
5.                       The measure "consolidated operating revenues" is not determined
                         in accordance with GAAP and should not be viewed as a substitute
                         for the most directly comparable GAAP measure, "total revenues."
                         We define consolidated operating revenues as total revenues
                         excluding realized investment results. We exclude realized
                         investment results from this measure because our portfolio
                         managers may sell investments based on factors largely unrelated
                         to the underlying business purposes of each segment. As a result,
                         gains or losses created in this process may not be indicative of
                         past or future underlying performance of the business. See Exhibit
                         1 for a reconciliation of consolidated operating revenues to total
                         revenues.
                          
6.                       Adjusted margin, after-tax, is calculated by dividing adjusted
                         income (loss) from operations by operating revenues for each
                         segment.
                          
7.                       Prior period behavioral care customers have been revised to
                         conform to current presentation.
                          
8.                       Operating ratios are defined as follows:
                                    ?                           Total Commercial medical care ratio represents medical costs as
                                                                                                                   a percentage of premiums for all commercial risk products,
                                                                                                                   including medical, pharmacy, dental, stop loss and behavioral
                                                                                                                   products provided through guaranteed cost or experience-rated
                                                                                                                   funding arrangements in both the United States and internationally.
                                                       ?                                              Total Government medical care ratio represents medical costs as
                                                                                                                   a percentage of premiums for Medicare Advantage, Medicare Part D,
                                                                                                                   and Medicaid products.
                                                       ?                                              Global Health Care operating expense ratio represents operating
                                                                                                                   expenses excluding acquisition related amortization expense as a
                                                                                                                   percentage of operating revenue in the Global Health Care segment.
                          
9.                       Global Health Care medical costs payable are presented net of
                         reinsurance and other recoverables. The gross Global Health Care
                         medical costs payable balance was $2.72 billion as of December 31,
                         2017 and $2.53 billion as of December 31, 2016.
                          
10.                      Cigna owns a 50% noncontrolling interest in its China joint
                         venture. Cigna’s 50% share of the joint venture’s earnings is
                         reported in Other Revenues using the equity method of accounting
                         under GAAP. As such, the premiums and fees and policy counts for
                         the Global Supplemental Benefits segment do not include the China
                         joint venture.
                          
11.                      The measure "consolidated adjusted tax rate" is not determined
                         in accordance with GAAP and should not be viewed as a substitute
                         for the most directly comparable GAAP measure, "consolidated
                         effective tax rate." We define consolidated adjusted tax rate as
                         the income tax rate applicable to the Company’s pre-tax income
                         excluding net realized investment results, net amortization of
                         other acquired intangible assets and special items. Management is
                         not able to provide a reconciliation to the consolidated effective
                         tax rate on a forward-looking basis because we are unable to
                         predict, without unreasonable effort, certain components thereof
                         including (i) future net realized investment results and (ii)
                         future special items.
                          

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release, and oral statements made with respect to information contained in this release, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on Cigna’s current expectations and projections about future trends, events and uncertainties. These statements are not historical facts. Forward-looking statements may include, among others, statements concerning our projected adjusted income (loss) from operations outlook for 2018, on both a consolidated and segment basis; projected total revenue growth and global medical customer growth, each over year end 2017; projected growth beyond 2018; projected medical care and operating expense ratios and medical cost trends; the anticipated effects of U.S. tax reform and our projected consolidated adjusted tax rate; future financial or operating performance, including our ability to deliver personalized and innovative solutions for our customers and clients; future growth, business strategy, strategic or operational initiatives; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas; financing or capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; 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 costs and price effectively and develop and maintain good relationships with physicians, hospitals and other health care providers; the impact of modifications to our operations and processes; our ability to identify potential strategic acquisitions or transactions and realize the expected benefits of such transactions; 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 and/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; unfavorable industry, economic or political conditions, including foreign currency movements; acts of war, terrorism, natural disasters or pandemics; uncertainty as to the outcome of the litigation between Cigna and Anthem, Inc. with respect to the termination of the merger agreement, the reverse termination fee and/or contract and non-contract damages for claims each party has filed against the other, including the risk that a court finds that Cigna has not complied with its obligations under the merger agreement, is not entitled to receive the reverse termination fee or is liable for breach of the merger agreement; 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 on 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
COMPARATIVE SUMMARY OF FINANCIAL RESULTS (unaudited)                                                                                                                                                                                 Exhibit 1
(Dollars in millions, except per share amounts)
 
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Three Months Ended                                                                                                                 Year Ended
                                                                                                                                          December 31,                                                                                                                   December 31,
                                                           2017                              2016                                2017                              2016
----------------------------------------------------------- -------------------- -------------------- ---------------------------------------------------- ---------------------------------------------------- -------------------- ---------------------------------------------------- --------------------------------
                                                                                                                                                                                                                                                   
REVENUES
                                                                                                                                                                                                                                                                                           
   Premiums                                                                                                              $      8,164                                         $      7,621                                                              $     32,307                                         $     30,626
   Fees                                                                                                                         1,191                                                1,139                                                                     4,608                                                4,485
   Net investment income                                                                                                          317                                                  299                                                                     1,226                                                1,147
   Mail order pharmacy revenues                                                                                                   779                                                  759                                                                     2,979                                                2,966
   Other revenues                                                                                               57                                67                                                    259                               275
                                                                                                      -------------------- ----------                      -------------------- ----------                                           -------------------- ----------                      -------------------- ----------
      Consolidated operating revenues                                                                                          10,508                                                9,885                                                                    41,379                                               39,499
   Net realized investment gains                                                                                                   23                                                   59                                                                       237                                                  169
                                                                                             
----------------------------------------------------------- -------------------- -------------------- ---------------------------------------------------- ---------------------------------------------------- -------------------- ---------------------------------------------------- --------------------------------
      Total revenues                                                               $     10,531                      $      9,944                        $     41,616                      $     39,668
----------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                                                                                                                                                                                                                                           
SHAREHOLDERS’ NET INCOME (LOSS)
                                                                                                                                                                                                                                                                                           
Shareholders’ net income                                                                                                 $        266                                         $        382                                                              $      2,237                                         $      1,867
After-tax adjustments to reconcile to adjusted income from
operations:
      Realized investment (gains)                                                                                                (16)                                                 (38)                                                                     (156)                                                (109)
      Amortization of other acquired intangible assets, net                                                                        12                                                   22                                                                        66                                                   94
      Special items                                                                                                               221                                                  119                                                                       521                                                  252
                                                                                             
----------------------------------------------------------- -------------------- -------------------- ---------------------------------------------------- ---------------------------------------------------- -------------------- ---------------------------------------------------- --------------------------------
Adjusted income from operations (1)                                                $        483                      $        485                        $      2,668                      $      2,104
----------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                                                                                                                                                                                                                                           
Adjusted income (loss) from operations by
segment
-----------------------------------------------------------
   Global Health Care                                                                                                    $        397                                         $        406                                                              $      2,173                                         $      1,852
   Global Supplemental Benefits                                                                                                    81                                                   63                                                                       369                                                  294
   Group Disability and Life                                                                                    61                                69                                                    285                               125
                                                                                                      -------------------- ----------                      -------------------- ----------                                           -------------------- ----------                      -------------------- ----------
      Ongoing Operations                                                                                                          539                                                  538                                                                     2,827                                                2,271
   Corporate and Other                                                                                                           (56)                                                 (53)                                                                     (159)                                                (167)
                                                                                             
----------------------------------------------------------- -------------------- -------------------- ---------------------------------------------------- ---------------------------------------------------- -------------------- ---------------------------------------------------- --------------------------------
      Total adjusted income from operations                                        $        483                      $        485                        $      2,668                      $      2,104
----------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                                                                                                                                                                                                                                           
DILUTED EARNINGS PER SHARE
                                                                                                                                                                                                                                                                                           
Shareholders’ net income                                                                                                 $       1.07                                         $       1.47                                                              $       8.77                                         $       7.19
After-tax adjustments to reconcile to adjusted income from
operations:
      Realized investment (gains)                                                                                              (0.06)                                               (0.14)                                                                    (0.61)                                               (0.42)
      Amortization of other acquired intangible assets, net                                                                      0.05                                                 0.08                                                                      0.26                                                 0.36
      Special items                                                     0.88           0.46             2.04           0.97
----------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Adjusted income from operations (1)                                                $       1.94                      $       1.87                        $      10.46                      $       8.10
----------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Weighted average shares (in thousands)                               249,181        259,882          255,072        259,647
----------------------------------------------------------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ---------- -------------------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
Common shares outstanding (in thousands)                                                             243,967        256,869
----------------------------------------------------------- -------------------- -------------------- ---------------------------------------------------- ---------------------------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                                                                                                                                                                                                                                           
SHAREHOLDERS’ EQUITY at December 31,                                                                               $     13,735                      $     13,723
----------------------------------------------------------- -------------------- -------------------- ---------------------------------------------------- ---------------------------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                           
SHAREHOLDERS’ EQUITY PER SHARE at December 31,                                                                     $      56.30                      $      53.42
----------------------------------------------------------- -------------------- -------------------- ---------------------------------------------------- ---------------------------------------------------- -------------------- -------------------- ---------- -------------------- -------------------- ----------
                                                                                                                                                                                                                                                                                           
(1) Adjusted income (loss) from operations is defined as
shareholders’ net income (loss) excluding the following after-tax
adjustments: realized investment results; net amortization of
other acquired intangible assets; and special items (identified
and quantified on Exhibit 2).
 
                                                                                                                                                                                                                                                                                                     
CIGNA CORPORATION
RECONCILIATION OF SHAREHOLDERS’ NET INCOME (LOSS) TO ADJUSTED                                                                                                                                                                                                                                       Exhibit 2
INCOME FROM OPERATIONS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                              -------------------- ---------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
(Dollars in millions, except per share amounts)                                                                                                       Diluted                                                                                                                                                                                                                                                                                                                                                                                                                                                    Global                                                                                                                                          Group                                                                                                                                                    Corporate
                                                                                                                                                     Earnings                                                                                                                                                                                                                                                                                                     Global                                                                                                                                      Supplemental                                                                                                                                    Disability                                                                                                                                                     and
                                                                                                                                                     Per Share                                                                                                                                            Consolidated                                                                                                                                          Health Care                                                                                                                                     Benefits                                                                                                                                       and Life                                                                                                                                                     Other
Three Months Ended,                                                                                            4Q17                              4Q16                           3Q17                         4Q17                              4Q16                         3Q17                         4Q17                              4Q16                         3Q17                        4Q17                      4Q16                       3Q17                        4Q17                              4Q16                        3Q17                         4Q17                              4Q16                                        3Q17
                                                                                       ------------------------------------------------- ---------------------------------------------------- ------------------------------------------------- ----------------------------------------------- ---------------------------------------------------- ----------------------------------------------- ----------------------------------------------- ---------------------------------------------------- ----------------------------------------------- ---------------------------------------------- -------------------------------------------- --------------------------------------------- ---------------------------------------------- ---------------------------------------------------- ---------------------------------------------- ----------------------------------------------- ---------------------------------------------------- ------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Shareholders’ net income (loss)                                                                           $    1.07                                         $       1.47                                         $    2.21                                         $   266                                         $        382                                         $   560                                         $   529                                         $        337                                         $   610                                         $   19                                         $ 54                                         $ 105                                         $  105                                         $         83                                         $   97                                         $ (387)                                         $       (92)                                         $                (252)
After-tax adjustments to reconcile to adjusted income (loss) from
operations:
   Realized investment (gains) losses                                                                        (0.06)                                               (0.14)                                            (0.29)                                            (16)                                                 (38)                                            (75)                                             (3)                                                 (29)                                            (47)                                           (15)                                            5                                             -                                            (5)                                                 (14)                                           (24)                                               7                                                    -                                                            (4)
   Amortization of other acquired intangible assets, net                                                       0.05                                                 0.08                                              0.06                                              12                                                   22                                              16                                               8                                                   18                                              12                                              4                                            4                                             4                                              -                                                    -                                              -                                               -                                                    -                                                              -
   Special items:
      U.S. tax reform                                                                                          0.78                                                    -                                                 -                                             196                                                    -                                               -                                           (137)                                                    -                                               -                                             73                                            -                                             -                                           (39)                                                    -                                              -                                             299                                                    -                                                              -
      Transaction-related costs                                                                                0.10                                                 0.15                                              0.03                                              25                                                   39                                               6                                               -                                                    -                                               -                                              -                                            -                                             -                                              -                                                    -                                              -                                              25                                                   39                                                              6
      Risk corridor allowance                                                                                     -                                                 0.31                                                 -                                               -                                                   80                                               -                                               -                                                   80                                               -                                              -                                            -                                             -                                              -                                                    -                                              -                                               -                                                    -                                                              -
      Debt extinguishment costs                                                                -              -        0.82         -              -       209         -              -         -        -      -       -        -              -        -         -              -                      209
                                                                                       -------------------- ------- -------------------- -------------------- ---------- -------------------- -------------------- ------- -------------------- -------------------- ----- -------------------- -------------------- ---------- -------------------- -------------------- ----- -------------------- -------------------- ----- -------------------- -------------------- ---------- -------------------- -------------------- ----- -------------------- -------------------- ---- -------------------- -------------------- -- -------------------- -------------------- --- -------------------- -------------------- ---- -------------------- -------------------- ---------- -------------------- -------------------- ---- -------------------- -------------------- ----- -------------------- -------------------- ---------- -------------------- -------------------- --------------------
Adjusted income (loss) from operations                                                                    $    1.94                      $       1.87                      $    2.83                      $   483                      $        485                      $   716                      $   397                      $        406                      $   575                      $   81                      $ 63                      $ 109                      $   61                      $         69                      $   73                      $  (56)                      $       (53)                      $                 (41)
                                                                                       ==================== ======= ==================== ==================== ========== ==================== ==================== ======= ==================== ==================== ===== ==================== ==================== ========== ==================== ==================== ===== ==================== ==================== ===== ==================== ==================== ========== ==================== ==================== ===== ==================== ==================== ==== ==================== ==================== == ==================== ==================== === ==================== ==================== ==== ==================== ==================== ========== ==================== ==================== ==== ==================== ==================== ===== ==================== ==================== ========== ==================== ==================== ====================
Weighted average shares (in thousands)                                                                      249,181                                              259,882                                           253,410
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Special items, pre-tax:
      U.S. tax reform                                                                                                                                                                                                                                              $  (56)                                         $          -                                         $     -                                         $     -                                         $          -                                         $     -                                         $    -                                         $  -                                         $   -                                         $    -                                         $          -                                         $    -                                         $  (56)                                         $          -                                         $                    -
      Transaction-related costs                                                                                                                                                                                                                                         38                                                   43                                               9                                               -                                                    -                                               -                                              -                                            -                                             -                                              -                                                    -                                              -                                              38                                                   43                                                              9
      Risk corridor allowance                                                                                                                                                                                                                                            -                                                  124                                               -                                               -                                                  124                                               -                                              -                                            -                                             -                                              -                                                    -                                              -                                               -                                                    -                                                              -
      Debt extinguishment costs                                                                                                                                                                                                                       -              -       321         -              -         -        -      -       -        -              -        -         -              -                      321
                                                                                                                                                                                                                                                -------------------- ----- -------------------- -------------------- ---------- -------------------- -------------------- ----- -------------------- -------------------- ----- -------------------- -------------------- ---------- -------------------- -------------------- ----- -------------------- -------------------- ---- -------------------- -------------------- -- -------------------- -------------------- --- -------------------- -------------------- ---- -------------------- -------------------- ---------- -------------------- -------------------- ---- -------------------- -------------------- ----- -------------------- -------------------- ---------- -------------------- -------------------- --------------------
         Total                                                                                                                                                                                                                                                     $  (18)                      $        167                      $   330                      $     -                      $        124                      $     -                      $    -                      $  -                      $   -                      $    -                      $          -                      $    -                      $  (18)                      $         43                      $                  330
                                                                                                                                                                                                                                                ==================== ===== ==================== ==================== ========== ==================== ==================== ===== ==================== ==================== ===== ==================== ==================== ========== ==================== ==================== ===== ==================== ==================== ==== ==================== ==================== == ==================== ==================== === ==================== ==================== ==== ==================== ==================== ========== ==================== ==================== ==== ==================== ==================== ===== ==================== ==================== ========== ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
(Dollars in millions, except per share amounts)                                                                                                       Diluted                                                                                                                                                                                                                                                                                                                                                                                                                                                    Global                                                                                                                                          Group                                                                                                                                                    Corporate
                                                                                                                                                     Earnings                                                                                                                                                                                                                                                                                                     Global                                                                                                                                      Supplemental                                                                                                                                    Disability                                                                                                                                                     and
                                                                                                                                                     Per Share                                                                                                                                            Consolidated                                                                                                                                          Health Care                                                                                                                                     Benefits                                                                                                                                       and Life                                                                                                                                                     Other
Year Ended December 31,                                                                                        2017                                          2016                         2017                                        2016                         2017                                        2016                        2017                              2016                        2017                                       2016                         2017                                                       2016
                                                                                       ------------------------------------------------- ---------------------------------------------------- ------------------------------------------------- ----------------------------------------------- ---------------------------------------------------- ----------------------------------------------- ----------------------------------------------- ---------------------------------------------------- ----------------------------------------------- ---------------------------------------------- -------------------------------------------- --------------------------------------------- ---------------------------------------------- ---------------------------------------------------- ---------------------------------------------- ----------------------------------------------- ---------------------------------------------------- ------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Shareholders’ net income (loss)                                                                           $    8.77                                                                                              $    7.19                                         $ 2,237                                                                                              $ 1,867                                         $ 2,282                                                                                              $ 1,751                                         $  302                                                                                      $ 268                                         $  358                                                                                              $  164                                         $ (705)                                                                                              $                (316)
After-tax adjustments to reconcile to adjusted income (loss) from
operations:
   Realized investment (gains) losses                                                                        (0.61)                                                                                                 (0.42)                                           (156)                                                                                                (109)                                            (88)                                                                                                 (78)                                           (24)                                                                                          6                                           (49)                                                                                                (39)                                               5                                                                                                                   2
   Amortization of other acquired intangible assets, net                                                       0.26                                                                                                   0.36                                              66                                                                                                   94                                              48                                                                                                   74                                             18                                                                                         20                                              -                                                                                                   -                                               -                                                                                                                   -
   Special items:
      U.S. tax reform                                                                                          0.77                                                                                                      -                                             196                                                                                                    -                                           (137)                                                                                                    -                                             73                                                                                          -                                           (39)                                                                                                   -                                             299                                                                                                                   -
      Debt extinguishment costs                                                                                0.82                                                                                                      -                                             209                                                                                                    -                                               -                                                                                                    -                                              -                                                                                          -                                              -                                                                                                   -                                             209                                                                                                                   -
      Long-term care guaranty fund assessment                                                                  0.32                                                                                                      -                                              83                                                                                                    -                                              68                                                                                                    -                                              -                                                                                          -                                             15                                                                                                   -                                               -                                                                                                                   -
      Transaction-related costs(1)                                                                             0.13                                                                                                   0.56                                              33                                                                                                  147                                               -                                                                                                    -                                              -                                                                                          -                                              -                                                                                                   -                                              33                                                                                                                 147
      Risk corridor allowance                                                                                     -                                                                                                   0.31                                               -                                                                                                   80                                               -                                                                                                   80                                              -                                                                                          -                                              -                                                                                                   -                                               -                                                                                                                   -
      Charges associated with litigation matters                                               -                       0.10         -                       25         -                       25        -              -        -                       -         -                                       -
                                                                                       -------------------- ------- -------------------- ---------------------------------------------------- -------------------- ------- -------------------- -------------------- ----- -------------------- ---------------------------------------------------- -------------------- ----- -------------------- -------------------- ----- -------------------- ---------------------------------------------------- -------------------- ----- -------------------- -------------------- ---- -------------------- -------------------------------------------- -------------------- --- -------------------- -------------------- ---- -------------------- ---------------------------------------------------- -------------------- ---- -------------------- -------------------- ----- -------------------- ---------------------------------------------------- -------------------- --------------------
Adjusted income (loss) from operations                                                                    $   10.46                                     $    8.10                      $ 2,668                                     $ 2,104                      $ 2,173                                     $ 1,852                      $  369                             $ 294                      $  285                                     $  125                      $ (159)                                     $                (167)
                                                                                       ==================== ======= ==================== ==================================================== ==================== ======= ==================== ==================== ===== ==================== ==================================================== ==================== ===== ==================== ==================== ===== ==================== ==================================================== ==================== ===== ==================== ==================== ==== ==================== ============================================ ==================== === ==================== ==================== ==== ==================== ==================================================== ==================== ==== ==================== ==================== ===== ==================== ==================================================== ==================== ====================
Weighted average shares (in thousands)                                                                      255,072                                                                                                259,647
Common shares outstanding as of December 31, (in thousands)                                                 243,967                                                                                                256,869
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Special items, pre-tax:
      U.S. tax reform                                                                                                                                                                                                                                              $  (56)                                                                                              $     -                                         $     -                                                                                              $     -                                         $    -                                                                                      $   -                                         $    -                                                                                              $    -                                         $  (56)                                                                                              $                    -
      Debt extinguishment costs                                                                                                                                                                                                                                        321                                                                                                    -                                               -                                                                                                    -                                              -                                                                                          -                                              -                                                                                                   -                                             321                                                                                                                   -
      Long-term care guaranty fund assessment                                                                                                                                                                                                                          129                                                                                                    -                                             106                                                                                                    -                                              -                                                                                          -                                             23                                                                                                   -                                               -                                                                                                                   -
      Transaction-related costs(1)                                                                                                                                                                                                                                     126                                                                                                  166                                               -                                                                                                    -                                              -                                                                                          -                                              -                                                                                                   -                                             126                                                                                                                 166
      Risk corridor allowance                                                                                                                                                                                                                                            -                                                                                                  124                                               -                                                                                                  124                                              -                                                                                          -                                              -                                                                                                   -                                               -                                                                                                                   -
      Charges associated with litigation matters                                                                                                                                                                                                      -                       40         -                       40        -              -        -                       -         -                                       -
                                                                                                                                                                                                                                                -------------------- ----- -------------------- ---------------------------------------------------- -------------------- ----- -------------------- -------------------- ----- -------------------- ---------------------------------------------------- -------------------- ----- -------------------- -------------------- ---- -------------------- -------------------------------------------- -------------------- --- -------------------- -------------------- ---- -------------------- ---------------------------------------------------- -------------------- ---- -------------------- -------------------- ----- -------------------- ---------------------------------------------------- -------------------- --------------------
         Total                                                                                                                                                                                                                                                     $   520                                     $   330                      $   106                                     $   164                      $    -                             $   -                      $   23                                     $    -                      $   391                                     $                  166
                                                                                                                                                                                                                                                ==================== ===== ==================== ==================================================== ==================== ===== ==================== ==================== ===== ==================== ==================================================== ==================== ===== ==================== ==================== ==== ==================== ============================================ ==================== === ==================== ==================== ==== ==================== ==================================================== ==================== ==== ==================== ==================== ===== ==================== ==================================================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
(1) For additional information related to a one-time tax
benefit of approximately $60 million recorded in the second
quarter of 2017, please refer to Note 3 to the Consolidated
Financial Statements in Cigna’s Form 10-K for the period ended
December 31, 2017 expected to be filed on February 28, 2018.
 

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180201005310r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20180201005310/en/

SOURCE: Cigna Corporation

Cigna Corporation 
Will McDowell, Investor Relations - 215-761-4198 
Matt Asensio, Media Relations - 860-226-2599


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