In our remarks today, David will begin by briefly commenting on CIGNA's third quarter results in the context of our growth strategy. In addition, David will discuss our pending acquisition of HealthSpring, and how this further positions us for continued growth and long-term shareholder value. Next, Ralph will review the financial results for the third quarter and provide an update on CIGNA's financial outlook for full year 2011. Finally, David will explain how the continued effective execution of our focus strategy, coupled with our diversified portfolio of businesses, provide CIGNA with momentum as we enter 2012. We will then open the lines for your questions. And following our question-and-answer session, David will provide some brief closing remarks before we end the call.Now as noted in our earnings release, CIGNA uses certain non-GAAP financial measures when describing its financial results. A reconciliation of these measures to the most directly comparable GAAP measure is contained in today's earnings release, which was filed this morning on Form 8-K with the Securities and Exchange Commission and is posted in the Investor Relations section of cigna.com. In our remarks today, we will be making some forward-looking comments. We would remind you that there are risk factors that could cause actual results to differ materially from our current expectations. And those risk factors are discussed in today's earnings release. Now before turning the call over to David, I will review a couple of items that we discussed on our call earlier this week and disclosed in a Form 8-K filed on October 24. Relative to our Run-off Reinsurance operations, our third quarter shareholders net income included an after-tax noncash loss of $134 million or $0.50 per share related to the Guaranteed Minimum Income Benefits business, otherwise known as GMIB. I would remind you that the impact of the Financial Accounting Standards Board fair value disclosure and measurement guidance on our GMIB results is for GAAP accounting purposes only. We believe that the application of this guidance is not reflective of the underlying economics as it does not represent management's expectation of the ultimate liability payout. Because of application of this accounting guidance, CIGNA's future results for the GMIB business will be volatile as any future change in the exit value of GMIB's assets and liabilities will be recorded in shareholders net income.
Because of this, CIGNA's 2011 earnings outlook, which we will discuss in a few moments, excludes the results of the GMIB business, and therefore, any potential volatility related to the prospective application of this accounting guidance.Also, as we previously disclosed, effective January 1, 2012, CIGNA will adopt new guidance regarding the accounting for the deferral of certain costs related to the acquisition of new or renewal insurance contracts. This accounting change restricts the amount of cost that can be capitalized and accelerates the recognition of certain acquisition costs that previously would have been deferred. CIGNA will adopt this accounting change on a retrospective basis in the first quarter of 2012, recasting prior periods and recording a one-time noncash charge of approximately $250 million to $300 million directly to shareholder's equity. We estimate that the impact to full year 2011 of adopting this new guidance would be to reduce earnings for our International business in the range of $60 million to $70 million after-tax. We remind you that this accounting change has no impact on the fundamentals of this business. That is, there is no effect on revenues, future cash flows, our statutory capital position or delays on profitability of our policies. This accounting change will not take effect until January 1, 2012. Therefore, the impact of this change is not reflected in the full year 2011 outlook that Ralph will discuss in a few moments. However, when David provides commentary on 2012, it will be on a basis that assumes retrospective adoption of this accounting change with both 2011 and 2012 recast on a comparable basis. In addition, when we discuss our full year 2011 outlook and provide commentary for 2012, it will be on a basis which excludes the pending acquisition of HealthSpring and any additional future capital employment and assumes break-even results for our run-off Guaranteed Minimum Death Benefits business, known as VADBe, for all future periods. And with that, I will turn it over to David.
David M. CordaniThanks, Ted, and good morning. This quarter marks another strong performance from our ongoing businesses. And the announcement of the acquisitions of FirstAssist in the U.K. and HealthSpring here in the U.S. I'll briefly touch on our meaningful move into the seniors in Medicare segments with the combination of HealthSpring with you today. And if you have additional questions, we'll cover them during the Q&A period. In a few moments, Ralph will take you through our results and provide you with an update on our full year 2011 outlook. Before he does this, I'll briefly comment on our quarter's performance and share with you how our business strategy continues to build the value for our clients, health care professionals and customers, all were generating sustainable profitable growth for the benefit of our shareholders. Then we will review how CIGNA will maintain this momentum in 2012. Let's jump in. The headline is we delivered another strong quarter from our ongoing businesses. Our operating results demonstrated top line and bottom line growth as a result of effectively executing our strategy and delivering on our fundamentals of pricing discipline, and clinical and service excellence. Read the rest of this transcript for free on seekingalpha.com