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Cigna Reports Strong Full Year 2012 Results, Expects Continued Positive Momentum For 2013

Cigna Corporation (NYSE: CI) today reported full year 2012 consolidated revenues of $29.1 billion, an increase of 33% over 2011. Revenues reflect growth in premiums and fees of 38% from ongoing operations, primarily driven by contributions from the HealthSpring acquisition and continued organic growth in targeted customer segments.

“Cigna's operating performance in 2012 was strong, driven by effective execution of our strategy and a consistent focus on delivering value for our customers,” said David M. Cordani, President and Chief Executive Officer. “This focus on our global customers and the disciplined management of our differentiated businesses continues to drive our growth and positions Cigna well for attractive performance in 2013 and beyond.”

Cigna’s adjusted income from operations 1 for full year 2012 was $1.73 billion, or $5.99 per share, compared with $1.36 billion, or $4.96 per share, for full year 2011 which represents per share growth of 21% over 2011. For the fourth quarter of 2012, adjusted income from operations 1 was $452 million, or $1.57 per share, compared to $293 million, or $1.05 per share, for the fourth quarter of 2011.

Cigna reported full year 2012 shareholders’ net income 1 of $1.62 billion, or $5.61 per share, compared with $1.26 billion, or $4.59 per share, for full year 2011. Shareholders’ net income 1 included income of $29 million, or $0.10 per share, in 2012 and losses of $135 million, or $0.49 per share, in 2011 related to the Guaranteed Minimum Income Benefits (GMIB) 2,5 business within our Run-off Reinsurance segment. Shareholders’ net income 1 also included special items 4 which resulted in losses of $171 million, or $0.59 per share, in 2012 compared to losses of $7 million, or $0.03 per share, in 2011.

Cigna also reported fourth quarter 2012 shareholders’ net income 1 of $406 million, or $1.41 per share, compared with $273 million, or $0.98 per share, for the fourth quarter of 2011. Shareholders’ net income 1 included income of $7 million, or $0.02 per share, in the fourth quarter of 2012 and income of $7 million, or $0.03 per share, in the same period of 2011 related to the Run-off GMIB 2,5 business. Shareholders’ net income 1 in the fourth quarter of 2012 also included special items 4 which resulted in losses of $68 million, or $0.24 per share, related to litigation matters, compared to losses of $31 million, or $0.11 per share, in the fourth quarter of 2011.

CONSOLIDATED HIGHLIGHTS

The following table includes highlights of results and a reconciliation of adjusted income from operations 1 to shareholders’ net income 1 (dollars in millions, except per share amounts; customers in thousands):

   
Year
Three Months Ended Ended
December 31,   September 30, December 31,
  2012       2011       2012     2012  
Total Revenues $ 7,620   $ 5,425 $ 7,323 $ 29,119
 
Consolidated Earnings
Adjusted income from operations 1 $ 452 $ 293 $ 489 $ 1,734
Net realized investment gains (losses), net of taxes 15 4 7 31
GMIB results, net of taxes 2,5 7 7 32 29
Special items, net of taxes 4   (68 )     (31 )     (62 )   (171 )
Shareholders’ net income 1 $ 406     $ 273     $ 466   $ 1,623  
 
Adjusted income from operations 1, per share $ 1.57     $ 1.05     $ 1.69   $ 5.99  
Shareholders’ net income 1, per share $ 1.41     $ 0.98     $ 1.61   $ 5.61  
 
As of the Periods Ended
December 31, September 30,
  2012       2011       2012  
Global Medical Customers 14,045 12,680 13,971
 
  • Cash and short term investments at the parent company were approximately $700 million at December 31, 2012 and $3.8 billion at December 31, 2011. The 2011 balance included amounts held at year-end to fund the HealthSpring acquisition that closed on January 31, 2012.
  • The Company repurchased 6 approximately 4.4 million shares of stock for approximately $210 million in 2012.
  • Effective in the fourth quarter of 2012, Cigna realigned its businesses to better leverage distribution and service capabilities for the benefit of our global clients and customers, which resulted in a change to Cigna's external reporting segments. Results for all periods presented are now aggregated based on the nature of the products and services delivered, rather than the geographies in which we operate.

HIGHLIGHTS OF SEGMENT RESULTS

See Exhibit 2 for a reconciliation of adjusted income (loss) from operations 1 to segment earnings (loss) 1.

Global Health Care

This segment includes Cigna’s Commercial and Government businesses which deliver medical and specialty health care products and services provided to clients and customers on guaranteed cost, retrospectively experience-rated and service-only funding bases. Specialty health care includes behavioral, dental, disease and medical management, stop-loss, and pharmacy-related products and services. The Global Health Care segment includes the business results previously reported in the Health Care segment and Cigna’s international health care businesses, primarily consisting of the expatriate benefits business, which was previously included in the former International segment.

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