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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) AUGUST 1, 1994
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CIGNA CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE 1-8323 06-1059331
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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ONE LIBERTY PLACE, 1650 MARKET STREET, P.O. BOX 7716
PHILADELPHIA, PENNSYLVANIA 19192-1550
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(215) 761-1000
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On August 1, 1994, the registrant issued a news release, a
copy of which is filed as Exhibit 20 hereto and is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits.
(c) The exhibit accompanying this report is listed in the
Index to Exhibits below.
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CIGNA CORPORATION
Date: August 1, 1994 By: /s/ Gary A. Swords
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Gary A. Swords
Vice President and
Chief Accounting Officer
Index to Exhibits
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Method of
Number Description Filing
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20 CIGNA Corporation Filed herewith.
news release dated
August 1, 1994
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(CIGNA PRESS RELEASE LETTERHEAD)
EXHIBIT 20
For Release:
IMMEDIATE
Contact: ROBERT W. SULLIVAN, FINANCIAL RELATIONS - (215) 761-6130
MICHAEL J. MONROE, MEDIA RELATIONS - (215) 761-6133
CIGNA'S SECOND QUARTER 1994 RESULTS
PHILADELPHIA, AUGUST 1, 1994 -- CIGNA Corporation (NYSE:CI) today reported
second quarter 1994 consolidated net income of $135 million ($1.86 per share),
compared with $88 million ($1.22 per share) a year ago. For the first half of
1994, consolidated net income was $249 million ($3.44 per share), compared with
$134 million ($1.86 per share) a year ago.
OPERATING INCOME*
Operating income for the second quarter of 1994 was $120 million, an
improvement of $51 million over the $69 million reported for the comparable
period of 1993. For the first six months of 1994, operating income was $220
million versus $85 million in 1993.
"We are pleased with the continued strong performance of our health, pension
and life businesses. While property and casualty results remain weak, I expect
recent initiatives to produce future improvements," said Wilson H. Taylor,
CIGNA's Chief Executive Officer.
* Operating income is defined as net income excluding realized investment gains
and losses.
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REALIZED GAINS/LOSSES
The 1994 second quarter consolidated net income includes after-tax realized
investment gains of $15 million ($0.21 per share), compared with gains of $19
million ($0.26 per share) for the same period of 1993. For the first six
months of 1994, consolidated net income included after-tax investment gains of
$29 million ($0.40 per share), compared with gains of $49 million ($0.68 per
share) for the same period of 1993.
REVENUES
Consolidated revenues for the second quarter of 1994 were $4.5 billion,
compared with $4.6 billion for 1993. For the first six months of 1994,
consolidated revenues were $9.1 billion, versus $8.9 billion in 1993.
ASSETS/SHAREHOLDERS' EQUITY
Assets at June 30, 1994 were $84.3 billion, compared with $85.0 billion at
year-end 1993. Shareholders' equity was $5.9 billion ($80.98 per share) at
June 30, 1994, compared with $6.6 billion ($91.30 per share) at December 31,
1993. During the first six months of 1994, shareholders' equity decreased
approximately $700 million due to upward movement in interest rates, which
reduced the unrealized appreciation of securities carried at fair value. The
new mark to market SFAS 115 requirement will result in fluctuations in
shareholders' equity.
SEGMENT RESULTS:
EMPLOYEE LIFE AND HEALTH BENEFITS
This segment, which includes CIGNA's indemnity and HMO operations, had
operating income of $130 million in the second quarter of 1994. This compares
with operating income of $104
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million in the second quarter of 1993. For the first six months of 1994,
operating income was $249 million, compared with $175 million in 1993.
For the second quarter of 1994, the operating income increase reflects
improvements in both the indemnity and HMO operations. Indemnity improvements
were primarily from favorable claim experience, reflecting lower medical cost
inflation and improved group life insurance results. The HMO improvements were
attributable to good membership growth and favorable medical cost experience.
HMO medical membership grew by 64,000 to approximately 3.1 million enrollees in
the second quarter of 1994, a 21% increase over second quarter 1993 levels.
Year to date membership has grown by 427,000 enrollees.
EMPLOYEE RETIREMENT AND SAVINGS BENEFITS
This segment, which operates in the Defined Benefit and Defined Contribution
retirement markets, had operating income of $44 million in the second quarter
of both 1994 and 1993. For the first six months of 1994, operating income was
$92 million, compared with $88 million in 1993.
This operation continues to produce strong results.
Assets under management at June 30, 1994 were $33.4 billion, an increase of 2
percent from $32.8 billion as of June 30, 1993.
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INDIVIDUAL FINANCIAL SERVICES
This segment, which includes individual and corporate-owned life insurance,
life and health reinsurance, and annuity businesses, had operating income of
$37 million in the second quarter of 1994. This compares with operating income
of $26 million in the second quarter of 1993. For the first six months of
1994, operating income was $63 million, compared with $53 million in 1993.
The second quarter 1994 improvement was principally attributable to improved
interest margins and favorable mortality.
PROPERTY AND CASUALTY
This segment, which includes Domestic, International and Reinsurance
operations, had an operating loss of $67 million in the second quarter of 1994,
compared with an operating loss of $79 million for the same period in 1993.
For the first six months of 1994, the operating loss was $161 million, compared
with $182 million in 1993.
The second quarter 1994 moderation in losses was primarily attributable to
improved International results and lower catastrophe losses.
The second quarter and six months of 1994 included after-tax catastrophe losses
of $3 million and $88 million, respectively. This compares with losses of $10
million and $64 million for the respective periods of 1993.
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The GAAP combined operating ratio after policyholders' dividends was 123 and
128 for the second quarter and six months of 1994, compared with 125 and 128
for the comparable periods of 1993.
OTHER
Other Operations, which includes unallocated investment income, expenses and
taxes, as well as the results of CIGNA's investment and real estate
subsidiaries and settlement annuity business, had an operating loss of $24
million in the second quarter of 1994. This compares with an operating loss of
$26 million in the second quarter of 1993.
For the first six months of 1994, the operating loss was $23 million, compared
with a loss of $49 million in 1993. The first quarter of 1994 included a $20
million after-tax gain from the sale of CIGNA's California personal automobile
and homeowners businesses.
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CIGNA CORPORATION
COMPARATIVE SUMMARY OF FINANCIAL RESULTS
(Dollars in millions, except per share amounts)
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1994 1993 1994 1993
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REVENUES
Premiums and fees $ 3,444 $ 3,493 $ 6,810 $ 6,754
Net investment income 968 949 1,960 1,907
Other revenues 103 109 255 233
Realized investment gains 23 12 44 43
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Total $ 4,538 $ 4,563 $ 9,069 $ 8,937
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NET INCOME (LOSS) BY SEGMENT
Employee Life and Health Benefits $ 136 $ 111 $ 261 $ 203
Employee Retirement and Savings Benefits 49 36 95 72
Individual Financial Services 41 18 69 40
Property and Casualty:
Operations (35) (21) (71) (52)
Asbestos and Environmental Losses (32) (24) (76) (72)
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Total Property and Casualty (67) (45) (147) (124)
Other Operations (24) (32) (29) (57)
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NET INCOME $ 135 $ 88 $ 249 $ 134
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SHAREHOLDERS' EQUITY at June 30 $ 5,850 $ 5,805
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WEIGHTED AVERAGE SHARES
OUTSTANDING (thousands) 72,398 72,040 72,299 71,965
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PER SHARE:
Net income $ 1.86 $ 1.22 $ 3.44 $ 1.86
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Shareholders' Equity at June 30 $ 80.98 $ 80.66
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PROPERTY AND CASUALTY
STATISTICS (GAAP)
Net written premiums $ 936 $ 1,026 $ 1,907 $ 2,099
Earned premiums $ 1,028 $ 1,118 $ 2,002 $ 2,176
Underwriting ratios:
Loss and loss adjustment expense 86.0% 84.5% 90.3% 88.6%
Underwriting expense 35.7% 38.0% 36.2% 37.2%
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Combined ratio 121.7% 122.5% 126.5% 125.8%
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Combined after policyholders' dividends 122.6% 124.6% 127.5% 128.4%
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Pre-tax catastrophe losses $ 5 $ 15 $ 135 $ 98
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CIGNA CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
(Dollars in millions, except per share amounts)
For informational purposes, the following information presents operating
income, which is defined as net income excluding after-tax realized investment
results. The information presented in this manner does not conform with
Generally Accepted Accounting Principles.
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1994 1993 1994 1993
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OPERATING INCOME (LOSS) BY SEGMENT
Employee Life and Health Benefits:
Indemnity $ 80 $ 72 $ 140 $ 107
HMOs 50 32 109 68
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130 104 249 175
Employee Retirement and Savings Benefits 44 44 92 88
Individual Financial Services 37 26 63 53
Property and Casualty
Operations (35) (55) (85) (110)
Asbestos and Environmental Losses (32) (24) (76) (72)
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Total Property and Casualty (67) (79) (161) (182)
Other Operations (24) (26) (23) (49)
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Total $ 120 $ 69 $ 220 $ 85
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AFTER-TAX REALIZED INVESTMENT
GAINS (LOSSES) BY SEGMENT
Employee Life and Health Benefits $ 6 $ 7 $ 12 $ 28
Employee Retirement and Savings Benefits 5 (8) 3 (16)
Individual Financial Services 4 (8) 6 (13)
Property and Casualty - 34 14 58
Other Operations - (6) (6) (8)
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Total 15 19 29 49
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NET INCOME $ 135 $ 88 $ 249 $ 134
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PER SHARE:
Operating income $ 1.65 $ 0.96 $ 3.04 $ 1.18
After-tax realized investment gains 0.21 0.26 0.40 0.68
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Net income $ 1.86 $ 1.22 $ 3.44 $ 1.86
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