- Total revenues in the third quarter were $49.0 billion
- Shareholders' net income for the third quarter was
$1.4 billion, or $4.74 per share
- Adjusted income from operations1 for the third
quarter was $2.0 billion, or
$6.77 per share
- 2023 outlook2 for adjusted income from
operations1,2 increased to at least $24.75 per share2
BLOOMFIELD, Conn., Nov. 2, 2023
/PRNewswire/ -- Global health company The Cigna Group (NYSE:
CI) today reported strong third quarter results reflecting revenue
and earnings growth across its diversified portfolio of
businesses.
"We continued to drive growth in the third quarter by harnessing
our deep clinical expertise and service capabilities across our
company, supporting high-quality care, improved affordability and
better outcomes," said David M.
Cordani, chairman and chief executive officer. "With
disciplined execution and continued innovation across Evernorth
Health Services and Cigna Healthcare, we're meeting the evolving
needs of those we serve."
Shareholders' net income for the third quarter 2023 was
$1.4 billion, or $4.74 per share, compared with $2.8 billion, or $8.97 per share, for the third quarter
20223, which included an after-tax gain of $1.4 billion, or $4.52 per share, from the Chubb
Transaction4.
The Cigna Group's adjusted income from operations1
for the third quarter 2023 was $2.0
billion, or $6.77 per share,
compared with $1.9 billion, or
$6.05 per share, for the third
quarter 20223, reflecting strong contributions from both
Evernorth Health Services and Cigna Healthcare.
A reconciliation of shareholders' net income to adjusted income
from operations1 is provided on the following page and
on Exhibit 1 of this earnings release.
CONSOLIDATED HIGHLIGHTS
The following table includes highlights of results
and reconciliations of total revenues to adjusted
revenues5 and shareholders' net income to adjusted
income from operations1:
Consolidated
Financial Results (dollars in millions):
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
June
30,
|
September
30,
|
|
2023
|
20223
|
2023
|
2023
|
|
|
|
|
|
Total
Revenues
|
$
49,048
|
$
45,281
|
$
48,586
|
$
144,151
|
Net Realized Investment
Losses from Equity
Method Investments5
|
30
|
80
|
30
|
22
|
Adjusted
Revenues5
|
$
49,078
|
$
45,361
|
$
48,616
|
$
144,173
|
|
|
|
|
|
Consolidated
Earnings, net of taxes
|
|
|
|
|
Shareholders' Net
Income
|
$
1,408
|
$
2,757
|
$
1,460
|
$
4,135
|
Net Realized Investment
Losses1
|
41
|
145
|
9
|
56
|
Amortization of
Acquired Intangible Assets1
|
363
|
322
|
346
|
1,053
|
Special
Items1
|
199
|
(1,365)
|
5
|
205
|
Adjusted Income from
Operations1
|
$
2,011
|
$
1,859
|
$
1,820
|
$
5,449
|
|
|
|
|
|
Shareholders' Net
Income, per share
|
$
4.74
|
$
8.97
|
$
4.92
|
$
13.89
|
Adjusted Income from
Operations1, per share
|
$
6.77
|
$
6.05
|
$
6.13
|
$
18.31
|
- Total revenues and adjusted revenues5 for the third
quarter 2023 each increased 8% from the third quarter 2022,
reflecting strong growth across Evernorth Health Services and Cigna
Healthcare.
- Shareholders' net income for the third quarter 2023 was
$1.4 billion, or $4.74 per share, compared with $2.8 billion, or $8.97 per share, for the third quarter
20223, which included an after-tax gain of $1.4 billion, or $4.52 per share, from the Chubb
Transaction4.
- Adjusted income from operations1 for the third
quarter 2023 increased 8% from the third quarter 2022, reflecting
strong contributions from Evernorth Health Services and Cigna
Healthcare.
- The SG&A expense ratio6 and adjusted SG&A
expense ratio6 were 7.7% and 7.3%, respectively, for the
third quarter 2023 compared to 7.0% and 6.9%, respectively, for the
third quarter 2022, reflecting increased investments to support
business growth and expand our capabilities.
- The debt-to-capitalization ratio was 40.5% at September 30, 2023 compared to 41.9% at
June 30, 2023.
- Year to date through November 1,
2023, the Company repurchased 7.7 million shares of common
stock for approximately $2.2
billion.
CUSTOMER RELATIONSHIPS
The following table summarizes The Cigna Group's medical
customers and overall customer relationships:
Customer Relationships (in thousands):
|
As of the Periods
Ended
|
|
September
30,
|
June
30,
|
December
31,
|
|
2023
|
2022
|
2023
|
2022
|
|
|
|
|
|
Total Pharmacy
Customers7
|
98,325
|
94,846
|
98,638
|
93,905
|
|
|
|
|
|
U.S.
Commercial
|
16,009
|
14,761
|
15,999
|
14,852
|
U.S.
Government
|
1,970
|
1,381
|
1,883
|
1,354
|
International
Health
|
1,628
|
1,812
|
1,624
|
1,798
|
Total Medical
Customers7
|
19,607
|
17,954
|
19,506
|
18,004
|
|
|
|
|
|
Behavioral
Care
|
25,100
|
44,522
|
26,383
|
44,841
|
Dental
|
18,593
|
18,380
|
18,634
|
18,397
|
Medicare Part
D
|
2,544
|
2,902
|
2,542
|
2,874
|
|
|
|
|
|
Total Customer
Relationships7
|
164,169
|
178,604
|
165,703
|
178,021
|
- Total pharmacy customers7 at September 30, 2023 increased 5% from December 31, 2022 to 98.3 million due to new
sales and the continued expansion of relationships.
- Total medical customers7 at September 30, 2023 grew 9% from December 31, 2022 to 19.6 million, an increase of
1.6 million customers, primarily driven by growth in U.S.
Commercial fee-based customers as well as in Individual and
Medicare Advantage customers.
- Customer relationships7 were impacted by the
non-renewal of a supplemental behavioral coverage contract with New
York Life, which was insignificant to total revenues and adjusted
income from operations1. Excluding the impact of this
contract7, behavioral care and total customer
relationships7 at September 30,
2023 increased 2% and 4%, respectively, from December 31, 2022.
HIGHLIGHTS OF SEGMENT RESULTS
See Exhibit 1 for a reconciliation of adjusted income (loss)
from operations1 to shareholders' net income.
Evernorth Health Services
This segment offers a broad range of coordinated and point
solution health services and capabilities, as well as those from
partners across the health care system, in Pharmacy Benefits, Home
Delivery Pharmacy, Specialty Pharmacy, Distribution and Care
Delivery and Management Solutions to health plans, employers,
government organizations and health care providers.
Financial Results
(dollars in millions):
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
June
30,
|
September
30,
|
|
2023
|
2022
|
2023
|
2023
|
|
|
|
|
|
Adjusted
Revenues5
|
$
38,596
|
$
35,698
|
$
38,205
|
$
112,980
|
Adjusted Income from
Operations, Pre-Tax1
|
$
1,716
|
$
1,625
|
$
1,516
|
$
4,552
|
Adjusted Margin,
Pre-Tax8
|
4.4 %
|
4.6 %
|
4.0 %
|
4.0 %
|
- Third quarter 2023 adjusted revenues5 increased 8%
relative to third quarter 2022, reflecting strong organic growth in
specialty and care delivery and management solutions.
- Third quarter 2023 adjusted income from operations,
pre-tax1, increased 6% relative to third quarter 2022,
reflecting growth in specialty and continued affordability
improvements, partially offset by increased strategic investments
in technology to support the onboarding of new clients and
continued advancement of our digital capabilities and care
solutions.
- Third quarter 2023 adjusted margin, pre-tax8, was
4.4% compared to 4.6% for third quarter 2022, reflecting continued
strategic investments in technology to support the onboarding of
new clients and expansion of existing client relationships.
Cigna Healthcare
This segment includes U.S. Commercial, U.S. Government and
International Health businesses, which provide comprehensive
medical benefits and coordinated solutions to clients and
customers. U.S. Commercial products and services include medical,
pharmacy, behavioral health, dental, and other products and
services for insured and self-insured clients. U.S. Government
solutions include Medicare Advantage, Medicare Supplement and
Medicare Part D plans for seniors, and individual health insurance
plans. International Health solutions include health care coverage
in our international markets, as well as health care benefits for
globally mobile individuals and employees of multinational
organizations.
Financial Results
(dollars in millions):
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
June
30,
|
September
30,
|
|
2023
|
20223
|
2023
|
2023
|
|
|
|
|
|
Adjusted
Revenues5,9
|
$
12,768
|
$
11,177
|
$
12,714
|
$
38,200
|
Adjusted Income from
Operations, Pre-Tax1
|
$
1,222
|
$
1,050
|
$
1,172
|
$
3,509
|
Adjusted Margin,
Pre-Tax8
|
9.6 %
|
9.4 %
|
9.2 %
|
9.2 %
|
- Third quarter 2023 adjusted revenues5,9 grew 14%
over third quarter 2022, reflecting customer growth and premium
rate increases to cover underlying medical cost trends.
- Third quarter 2023 adjusted income from operations,
pre-tax1 increased 16% relative to third quarter 2022,
primarily driven by a lower U.S. Commercial MCR6 and
higher net investment income.
- The Cigna Healthcare MCR6 was 80.5% for third
quarter 2023 compared to 80.8% for third quarter 2022, reflecting
continued strong performance in our U.S. Commercial business driven
by affordability initiatives and effective pricing execution,
partially offset by business mix, reflecting higher customer growth
in U.S. Government.
- Cigna Healthcare net medical costs payable10 was
$5.09 billion at September 30, 2023, $4.05
billion at September 30, 2022,
and $3.96 billion at December 31, 2022. The increases are primarily
driven by customer growth and business mix. Favorable prior year
reserve development on a gross pre-tax basis was $237 million and $278
million for the nine months ended September 30, 2023 and September 30, 2022, respectively.
Corporate and Other Operations
Corporate reflects interest expense, amounts not allocated to
operating segments and includes intersegment eliminations.
Additionally, this discussion includes items reported in Other
Operations, which is comprised of Corporate Owned Life Insurance
("COLI") and the Company's run-off operations.
Financial Results
(dollars in millions):
|
|
|
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
June
30,
|
September
30,
|
|
2023
|
20223
|
2023
|
2023
|
|
|
|
|
|
Adjusted (Loss) from
Operations, Pre-Tax1
|
$
(409)
|
$
(295)
|
$
(394)
|
$
(1,202)
|
- Third quarter 2023 adjusted loss from operations,
pre-tax1, was $409
million compared to $295
million for third quarter 2022, primarily reflecting the
impact of higher interest rates on interest expense and pension
costs.
2023 OUTLOOK2
The Cigna Group's outlook2 for full year 2023
adjusted revenues2,5 increased to at least $192.0 billion. The Cigna Group's
outlook2 for full year 2023 consolidated adjusted income
from operations1,2 is at least $7.36 billion, or at least $24.75 per share2. Additionally, this
outlook includes the impact of expected future share repurchases
and anticipated 2023 dividends.
(dollars in
millions, except where noted and per share amounts)
|
|
2023 Consolidated
Metrics
|
Projection for Full
Year Ending
December 31,
2023
|
Change
from
Prior
Projection
|
Adjusted
Revenues2,5
|
at least
$192,000
|
+$2,000
|
Adjusted Income from
Operations1,2
|
at least
$7,360
|
|
Adjusted Income from
Operations, per share1,2
|
at least
$24.75
|
+$0.05
|
Adjusted SG&A
Expense Ratio2,6
|
~7.4%
|
+10
bps
|
Adjusted Effective Tax
Rate2,11
|
20.5% to
21.0%
|
-50 bps at the
midpoint
|
Cash Flow from
Operations2
|
at least
$10,500
|
+$1,000
|
Weighted Average Shares
Outstanding (millions)2
|
296 to
298
|
-1 at the
midpoint
|
|
|
|
2023 Evernorth
Metrics
|
|
|
Adjusted Income from
Operations, Pre-Tax1,2
|
at least
$6,400
|
|
|
|
|
2023 Cigna
Healthcare Metrics
|
|
|
Adjusted Income from
Operations, Pre-Tax1,2
|
at least
$4,425
|
|
Medical Care
Ratio2,6
|
81.5% to
82.0%
|
-15 bps at the
midpoint
|
Total Medical Customer
Growth2,7
|
at least
1,600,000
|
+200,000
|
The foregoing statements represent the Company's current
estimates of The Cigna Group's 2023 consolidated and segment
adjusted income from operations1,2 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 The Cigna Group's website in the
Investor Relations section
(https://investors.thecignagroup.com/overview/default.aspx).
Management will be hosting a conference call to review third
quarter 2023 results and discuss full year 2023 outlook beginning
today at 8:30 a.m. ET. A link
to the conference call is available in the Investor Relations
section of The Cigna Group's website located at
https://investors.thecignagroup.com/events-and-presentations/default.aspx.
The call-in numbers for the conference call are as follows:
Live Call
(888) 566-1889 (Domestic)
(773) 799-3989 (International)
Passcode: 11022023
Replay
(800) 839-1171 (Domestic)
(203) 369-3030 (International)
It is strongly suggested you dial in to the conference call by
8:15 a.m. ET.
About The Cigna Group
The Cigna Group (NYSE: CI) is a global health company committed
to creating a better future built on the vitality of every
individual and every community. We relentlessly challenge ourselves
to partner and innovate solutions for better health. The Cigna
Group includes products and services marketed under Evernorth
Health Services, Cigna Healthcare, or its subsidiaries. The Cigna
Group maintains sales capabilities in more than 30 countries and
jurisdictions, and has approximately 165 million customer
relationships around the world. Learn more at
thecignagroup.com.
Notes:
1.
|
Adjusted income
(loss) from operations is a principal financial measure of
profitability used by The Cigna Group's management because it
presents the underlying results of operations of the Company's
businesses and permits analysis of trends in underlying revenue,
expenses and shareholders' net income. Adjusted income from
operations is defined as shareholders' net income (or income before
income taxes less pre-tax income (loss) attributable to
noncontrolling interests for the segment metric) excluding net
realized investment results, amortization of acquired intangible
assets and special items. The Cigna Group's share of certain
realized investment results of its joint ventures reported in the
Cigna Healthcare segment using the equity method of accounting are
also excluded. Special items are matters that management believes
are not representative of the underlying results of operations due
to their nature or size. Adjusted income (loss) from operations is
measured on an after-tax basis for consolidated results and on a
pre-tax basis for segment results. Consolidated adjusted income
(loss) from operations is not determined in accordance with GAAP
and should not be viewed as a substitute for the most directly
comparable GAAP measure, shareholders' net income. See Exhibit 1
for a reconciliation of consolidated adjusted income from
operations to shareholders' net income.
|
|
|
2.
|
Management is not
able to provide a reconciliation of adjusted income from operations
to shareholders' net income (loss) or adjusted revenues to total
revenues on a forward-looking basis because it is unable to
predict, without unreasonable effort, certain components thereof
including (i) future net realized investment results (from
equity method investments with respect to adjusted revenues) and
(ii) future special items. These items are inherently
uncertain and depend on various factors, many of which are beyond
The Cigna Group's control. As such, any associated estimate and its
impact on shareholders' net income and total revenues could vary
materially.
|
|
|
|
The Company's
outlook excludes the potential effects of any other business
combinations that may occur after the date of this earnings
release. The Company's outlook includes the potential effects of
expected future share repurchases and anticipated 2023
dividends.
|
|
|
|
As announced in
January 2021, The Cigna Group currently intends to pay
regular quarterly dividends, with future declarations subject to
approval by its Board of Directors and the Board's determination
that the declaration of dividends remains in the best interests of
The Cigna Group and its shareholders. The decision of
whether to pay future dividends and the amount of any such
dividends will be based on the Company's financial position,
results of operations, cash flows, capital requirements, the
requirements of applicable law and any other factors the Board of
Directors may deem relevant.
|
|
|
|
The timing and
actual number of shares repurchased will depend on a variety of
factors, including price, general business and market conditions,
and alternate uses of capital. The share repurchase program may be
effected through open market purchases in compliance with Rule
10b-18 under the Securities Exchange Act of 1934, as amended,
including through Rule 10b5-1 trading plans, or privately
negotiated transactions. The program may be suspended or
discontinued at any time.
|
|
|
3.
|
Effective January 1,
2023, The Cigna Group adopted ASU 2018-12, Targeted Improvements to
the Accounting for Long-Duration Contracts, and related amendments.
Prior year results have been restated to reflect the adoption of
the new accounting guidance.
|
|
|
4.
|
On July 1, 2022, the
Company completed the sale of its life, accident and supplemental
benefits businesses in six countries (Hong Kong, Indonesia, New
Zealand, South Korea, Taiwan and Thailand) to Chubb INA Holdings,
Inc. ("Chubb") for approximately $5.4 billion in cash (the "Chubb
transaction"). In December 2022, the Company divested its ownership
interest in a joint venture in Türkiye.
|
|
|
5.
|
Adjusted revenues is
used by The Cigna Group's management because it permits analysis of
trends in underlying revenue. The Company defines adjusted revenues
as total revenues excluding the following adjustments: special
items and The Cigna Group's share of certain realized investment
results of its joint ventures reported in the Cigna Healthcare
segment using the equity method of accounting. Special items are
matters that management believes are not representative of the
underlying results of operations due to their nature or size. We
exclude these items from this measure because management believes
they are not indicative of past or future underlying performance of
the business. Adjusted 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. See Exhibit 1 for
a reconciliation of consolidated adjusted revenues to total
revenues.
|
|
|
6.
|
Operating ratios are defined as
follows:
|
|
- The Cigna
Healthcare medical care ratio ("MCR") represents medical costs as a
percentage of premiums for all U.S. Commercial risk products,
including medical, pharmacy, dental, stop loss and behavioral
products provided through guaranteed cost or experience-rated
funding arrangements, as well as Medicare Advantage, Medicare Part
D, Medicare Supplement, individual on and off-exchange products,
and health care products within our International Health business,
within the Cigna Healthcare segment.
- SG&A expense ratio on a GAAP basis for
the third quarter 2023 represents enterprise selling, general and
administrative expenses of $3,788 million as a percentage of Total
revenue of $49.0 billion at a consolidated level. SG&A expense
ratio on a GAAP basis for the third quarter 2022 represents
enterprise selling, general and administrative expenses of $3,151
million as a percentage of Total revenue of $45.3 billion at a
consolidated level.
- Adjusted SG&A expense ratio for
the third quarter 2023 represents enterprise selling, general and
administrative expenses of $3,574 million excluding special items
of $214 million as a percentage of adjusted revenue at a
consolidated level. Adjusted SG&A expense ratio for the third
quarter 2022 represents enterprise selling, general and
administrative expenses of $3,127 million excluding special items
of $24 million as a percentage of adjusted revenue at a
consolidated level.
|
7.
|
Customer relationships are defined as
follows:
|
|
- Total medical
customers includes individuals in the Cigna Healthcare segment
who meet any one of the following criteria: are covered under a
medical insurance policy, managed care arrangement, or service
agreement issued by Cigna Healthcare; have access to Cigna
Healthcare's provider network for covered services under their
medical plan; or have medical claims and services that are
administered by Cigna Healthcare.
- International
Health medical customers excludes medical customers
served by less than 100% owned subsidiaries, as well as certain
customers served by our third-party administrator. International
Health customers as of September 30, 2023 reflect the transition of
certain runoff business to Other Operations beginning January 1,
2023.
- Effective
January 1, 2023, total pharmacy customers have been updated to
reflect customer filled prescriptions through Inside Rx. Previously
these customers had been estimated based on active customers over a
period of time. Total pharmacy customers for prior periods have
been restated to reflect this change.
- Behavioral care
and total customer relationships as of December 31, 2022 excluding
the impact of the supplemental behavioral coverage contract with
New York Life were 24,696 thousand and 157,876 thousand,
respectively.
|
8.
|
Adjusted margin, pre-tax, is calculated by dividing
adjusted income (loss) from operations, pre-tax by adjusted
revenues for each segment.
|
|
|
9.
|
The Cigna Group owns noncontrolling interests in
certain operating joint ventures. As such, the adjusted revenues
for the Cigna Healthcare segment only include the Company's share
of the joint ventures' earnings reported in Fees and Other Revenues
using the equity method of accounting under
GAAP.
|
|
|
10.
|
Medical costs payable within the Cigna Healthcare
segment are presented net of reinsurance and other recoverables.
The gross medical costs payable balance was $5.32 billion as of
September 30, 2023, $4.18 billion as of December 31,
2022, and $4.25 billion as of September 30,
2022.
|
|
|
11.
|
The measure "adjusted effective tax rate" is not
determined in accordance with GAAP and should not be viewed as a
substitute for the most directly comparable GAAP measure,
"consolidated effective tax rate". We define adjusted effective tax
rate as the consolidated income tax rate applicable to the
Company's pre-tax income excluding pre-tax income (loss)
attributable to noncontrolling interests, net realized investment
results, amortization of acquired intangible assets, and special
items. The Cigna Group's share of certain realized investment
results of its joint ventures reported in the Cigna Healthcare
segment using the equity method of accounting are also excluded.
Management is not able to provide a reconciliation to the
consolidated effective tax rate on a forward-looking basis because
we are unable to predict, without unreasonable effort, certain
components thereof include (i) future net realized investment
results and (ii) future special items.
|
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This press release, and oral statements made in connection with
this release, may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on The Cigna Group's current
expectations and projections about future trends, events and
uncertainties. These statements are not historical facts.
Forward-looking statements may include, among others, statements
concerning our projected adjusted income from operations outlook
for 2023 on a consolidated, per share, and segment basis; projected
adjusted revenue outlook for 2023; projected total medical customer
growth over year end 2022; projected medical care and adjusted
SG&A expense ratios; projected consolidated adjusted effective
tax rate; projected cash flow from operations; future dividends;
projected weighted average shares outstanding; future financial or
operating performance, including our ability to deliver affordable,
predictable and simple solutions for our customers and clients;
future growth, business strategy and strategic or operational
initiatives; economic, regulatory or competitive environments,
particularly with respect to the pace and extent of change in these
areas and the impact of the developing inflationary and interest
rate pressures; capital deployment plans and amounts available for
future deployment; our prospects for growth in the coming years;
the impact of revised accounting rules related to accounting for
long-duration contracts; and other statements regarding The Cigna
Group's future beliefs, expectations, plans, intentions, liquidity,
cash flows, financial condition or performance. You may identify
forward-looking statements by the use of words such as "believe,"
"expect," "project," "plan," "intend," "anticipate," "estimate,"
"predict," "potential," "may," "should," "will" or other words or
expressions of similar meaning, although not all forward-looking
statements contain such terms.
Forward-looking statements are subject to risks and
uncertainties, both known and unknown, that could cause actual
results to differ materially from those expressed or implied in
forward-looking statements. Such risks and uncertainties include,
but are not limited to: our ability to achieve our strategic and
operational initiatives; our ability to adapt to changes in an
evolving and rapidly changing industry; our ability to compete
effectively, differentiate our products and services from those of
our competitors and maintain or increase market share; price
competition, inflation and other pressures that could compress our
margins or result in premiums that are insufficient to cover the
cost of services delivered to our customers; the potential for
actual claims to exceed our estimates related to expected medical
claims; our ability to develop and maintain satisfactory
relationships with physicians, hospitals, other health service
providers and with producers and consultants; our ability to
maintain relationships with one or more key pharmaceutical
manufacturers or if payments made or discounts provided decline;
changes in the pharmacy provider marketplace or pharmacy networks;
changes in drug pricing or industry pricing benchmarks; our ability
to invest in and properly maintain our information technology and
other business systems; our ability to prevent or contain effects
of potential cyberattack or other privacy or data security
incidents; political, legal, operational, regulatory, economic and
other risks that could affect our multinational operations,
including currency exchange rates; risks related to strategic
transactions and realization of the expected benefits of such
transactions, as well as integration or separation difficulties or
underperformance relative to expectations; dependence on success of
relationships with third parties; risk of significant disruption
within our operations or among key suppliers or third parties;
potential liability in connection with managing medical practices
and operating pharmacies, onsite clinics and other types of medical
facilities; the substantial level of government regulation over our
business and the potential effects of new laws or regulations or
changes in existing laws or regulations; uncertainties surrounding
participation in government-sponsored programs such as Medicare;
the outcome of litigation, regulatory audits and investigations;
compliance with applicable privacy, security and data laws,
regulations and standards; potential failure of our prevention,
detection and control systems; unfavorable economic and market
conditions, the risk of a recession or other economic downturn and
resulting impact on employment metrics, stock market or changes in
interest rates and risks related to a downgrade in financial
strength ratings of our insurance subsidiaries; the impact of our
significant indebtedness and the potential for further indebtedness
in the future; credit risk related to our reinsurers; as well as
more specific risks and uncertainties discussed in our most recent
report on Form 10-K and subsequent reports on Forms 10-Q and 8-K
available through the Investor Relations section of
www.thecignagroup.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. The Cigna Group 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.
THE CIGNA
GROUP
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Exhibit
1
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COMPARATIVE SUMMARY
OF FINANCIAL RESULTS (unaudited)
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Three Months
Ended
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Nine Months
Ended
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Three Months
Ended
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September
30,
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September
30,
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June
30,
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(Dollars in
millions, except per share amounts)
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2023
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2022 (1)
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2023
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2022 (1)
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2023
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REVENUES
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Pharmacy
revenues
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$ 34,531
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$ 32,762
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$
100,639
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$ 95,431
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$ 33,964
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Premiums
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10,998
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9,586
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33,062
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30,368
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11,039
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Fees and other
revenues
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3,198
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2,729
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9,574
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8,023
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3,305
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Net investment
income
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321
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|
|
204
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|
|
876
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|
|
943
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|
|
278
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Total
Revenues
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49,048
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45,281
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144,151
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134,765
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48,586
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Net realized
investment results from certain equity method
investments
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30
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80
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22
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134
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30
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Adjusted revenues
(2)
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$ 49,078
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$ 45,361
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$
144,173
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$
134,899
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$ 48,616
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Shareholders' net
income
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$
1,408
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$
2,757
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$
4,135
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$
5,511
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$
1,460
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Pre-tax adjusted income
(loss) from operations by segment
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|
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Evernorth Health
Services
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$
1,716
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$
1,625
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$
4,552
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$
4,402
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$
1,516
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Cigna
Healthcare
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1,222
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1,050
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3,509
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3,582
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1,172
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Corporate and Other
Operations
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(409)
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(295)
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(1,202)
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(582)
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(394)
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Consolidated pre-tax
adjusted income from operations
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2,529
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2,380
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6,859
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7,402
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2,294
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Adjusted income tax expense
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(518)
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(521)
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(1,410)
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(1,622)
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(474)
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Consolidated after-tax
adjusted income from operations
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$
2,011
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$
1,859
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$
5,449
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$
5,780
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$
1,820
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Weighted average shares
(in thousands)
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297,131
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307,517
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297,663
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315,647
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296,879
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Common shares
outstanding (in thousands)
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293,764
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305,564
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295,830
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SHAREHOLDERS' EQUITY
at September 30,
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$ 45,691
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$ 44,764
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SHAREHOLDERS' EQUITY
PER SHARE at September 30,
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$ 155.54
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$ 146.50
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Three Months
Ended
|
|
Nine Months
Ended
|
|
Three Months
Ended
|
|
September
30,
|
|
September
30,
|
|
June
30,
|
|
2023
|
|
2022 (1)
|
|
2023
|
|
2022 (1)
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|
2023
|
(Dollars in
millions, except per share amounts)
|
Pre-tax
|
After-
tax
|
|
Pre-tax
|
After-
tax
|
|
Pre-tax
|
After-
tax
|
|
Pre-tax
|
After-
tax
|
|
Pre-tax
|
After-
tax
|
|
|
|
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|
SHAREHOLDERS' NET
INCOME
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Shareholders' net
income
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$
1,408
|
|
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$
2,757
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$
4,135
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$
5,511
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$
1,460
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Adjustments to
reconcile adjusted income from operations
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|
|
|
|
|
|
|
|
|
|
|
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Net realized
investment losses (3)
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$ 44
|
41
|
|
$ 162
|
145
|
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$ 66
|
56
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$ 627
|
513
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$
4
|
9
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Amortization of
acquired intangible assets
|
454
|
363
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|
460
|
322
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1,368
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1,053
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1,419
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1,061
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|
455
|
346
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Special
Items
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Charges (benefits)
associated with litigation matters
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201
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171
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|
—
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—
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201
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171
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(28)
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(20)
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|
—
|
—
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Loss (gain) on sale of
businesses
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21
|
19
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(1,735)
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(1,388)
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21
|
19
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(1,735)
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(1,388)
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|
—
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—
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Integration and
transaction-related costs
|
13
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9
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|
24
|
23
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|
20
|
15
|
|
112
|
86
|
|
6
|
5
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Charge for
organizational efficiency plan
|
—
|
—
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|
—
|
—
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|
—
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—
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|
22
|
17
|
|
—
|
—
|
Adjusted income from
operations (4)
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|
$
2,011
|
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|
$
1,859
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$
5,449
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$
5,780
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$
1,820
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|
|
|
|
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|
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DILUTED EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
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|
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Shareholders' net
income
|
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$
4.74
|
|
|
$
8.97
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$
13.89
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$
17.46
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$
4.92
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Adjustments to
reconcile to adjusted income from
operations
|
|
|
|
|
|
|
|
|
|
|
|
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Net realized
investment losses (3)
|
$
0.15
|
0.14
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|
$
0.53
|
0.48
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$
0.22
|
0.19
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$
1.99
|
1.62
|
|
$
0.01
|
0.03
|
Amortization of
acquired intangible assets
|
1.53
|
1.22
|
|
1.50
|
1.05
|
|
4.60
|
3.54
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|
4.50
|
3.36
|
|
1.53
|
1.17
|
Special
Items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charges (benefits)
associated with litigation matters
|
0.68
|
0.58
|
|
—
|
—
|
|
0.67
|
0.58
|
|
(0.09)
|
(0.06)
|
|
—
|
—
|
Loss (gain) on sale of
businesses
|
0.07
|
0.06
|
|
(5.64)
|
(4.52)
|
|
0.07
|
0.06
|
|
(5.49)
|
(4.39)
|
|
—
|
—
|
Integration and
transaction-related costs
|
0.04
|
0.03
|
|
0.08
|
0.07
|
|
0.07
|
0.05
|
|
0.35
|
0.27
|
|
0.02
|
0.01
|
Charge for
organizational efficiency plan
|
—
|
—
|
|
—
|
—
|
|
—
|
—
|
|
0.07
|
0.05
|
|
—
|
—
|
Adjusted income from
operations (4)
|
|
$
6.77
|
|
|
$
6.05
|
|
|
$
18.31
|
|
|
$
18.31
|
|
|
$
6.13
|
(1) Effective
January 1, 2023, The Cigna Group
adopted ASU 2018-12, Targeted Improvements to the
Accounting for Long-Duration Contracts, and related amendments.
Prior year results have been restated to reflect the adoption of
the new accounting guidance. Please refer to the Summary of
Significant Accounting Policies footnote in
The Cigna Group's Form 10-Q for the period ended
September 30, 2023, expected to be filed on November 2,
2023, for additional details.
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(2) Adjusted
revenues is defined as total revenues excluding the following
adjustments: special items and The Cigna Group's share of
certain realized investment results of its joint ventures reported
in the Cigna Healthcare segment using the equity method
of accounting. These items are excluded because they are not
indicative of past or future underlying performance of our
businesses.
|
(3) Includes
The Cigna Group's share of certain realized investments
results of its joint ventures reported in
the Cigna Healthcare segment using the equity method of
accounting.
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(4) Adjusted income
(loss) from operations is defined as shareholders' net income (or
income before income taxes less pre-tax income (loss) attributable
to noncontrolling interests for the segment metric) excluding the
following adjustments: net realized investment results,
amortization of acquired intangible assets and special items.
The Cigna Group's share of certain realized investment
results of its joint ventures reported in
the Cigna Healthcare segment using the equity method of
accounting are also excluded.
|
INVESTOR RELATIONS CONTACT:
Ralph Giacobbe
860-787-7968
Ralph.Giacobbe@TheCignaGroup.com
MEDIA CONTACT:
Justine Sessions
860-810-6523
Justine.Sessions@cigna.com
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SOURCE The Cigna Group