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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) OCTOBER 31, 1994
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CIGNA CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-8323 06-1059331
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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 October 31, 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: October 31, 1994 By: /s/ Gary A. Swords
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Gary A. Swords
Vice President and
Chief Accounting Officer
<TABLE>
<CAPTION>
Index to Exhibits
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Method of
Number Description Filing
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<S> <C> <C>
20 CIGNA Corporation Filed herewith.
news release dated
October 31, 1994
</TABLE>
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EXHIBIT 20
[CIGNA NEWS RELEASE LETTERHEAD]
For Release: IMMEDIATE
Contact: ROBERT W. SULLIVAN, FINANCIAL RELATIONS - (215) 761-6130
MICHAEL J. MONROE, MEDIA RELATIONS - (215) 761-6133
CIGNA'S THIRD QUARTER 1994 RESULTS
PHILADELPHIA, OCTOBER 31, 1994 -- CIGNA Corporation (NYSE:CI) today reported
third quarter 1994 consolidated net income of $123 million ($1.70 per share),
compared with a loss of $94 million ($1.31 per share) a year ago. For the nine
months of 1994, consolidated net income was $372 million ($5.14 per share),
compared with $40 million ($0.55 per share) a year ago.
OPERATING INCOME*
- -----------------
Operating results for the third quarter and nine months of 1994 improved over
comparable periods of 1993. The third quarter operating results were $122
million of income versus a loss of $167 million in 1993. For the nine months
of 1993 operating income was $342 million versus a loss of $82 million in 1993.
"Our health, pension and life insurance businesses continue to produce strong
earnings and returns. The Property and Casualty fundamentals are beginning to
show improvement. The decision to exit the property and casualty reinsurance
business underscores our commitment to focus on those businesses that can
improve shareholder returns," 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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The third quarter and nine months of 1994 reflect a $9 million after-tax charge
for CIGNA's substantial withdrawal from the property and casualty reinsurance
business and a $26 million after-tax charge for property and casualty
reinsurance reserve strengthening. The third quarter and nine months of 1993
reflect a $244 million after-tax charge for asbestos and environmental
litigation expenses, a $107 million after-tax restructuring charge and a
benefit of $48 million from the federal income tax rate change.
The 1994 third quarter operating income, adjusted to eliminate the items
discussed above and shown on the supplemental financial information page, was
$149 million versus $143 million in 1993. For the nine months of 1994,
operating income excluding those items was $369 million versus $228 million in
1993.
REALIZED GAINS/LOSSES
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The 1994 third quarter consolidated net income includes after-tax realized
investment gains of $1 million ($0.01 per share), compared with gains of $73
million ($1.01 per share) for the same period of 1993. For the nine months of
1994, consolidated net income included after-tax realized investment gains of
$30 million ($0.41 per share), compared with gains of $122 million ($1.69 per
share) for the same period of 1993.
REVENUES
- --------
Consolidated revenues for the third quarter of 1994 were $4.6 billion, compared
with $4.5 billion for 1993. For the first nine months of 1994, consolidated
revenues were $13.7 billion, versus $13.5 billion in 1993.
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ASSETS/SHAREHOLDERS' EQUITY
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Assets at September 30, 1994 were $86.0 billion, compared with $85.0 billion at
year-end 1993. Shareholders' equity was $5.9 billion ($81.68 per share) at
September 30, 1994, compared with $6.6 billion ($91.30 per share) at December
31, 1993. During the nine 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:
Segment results are discussed excluding the previously referenced adjustments:
EMPLOYEE LIFE AND HEALTH BENEFITS
- ---------------------------------
This segment, which includes CIGNA's HMO and Indemnity operations, had
operating income of $132 million in the third quarter of 1994. This compares
with operating income of $134 million in the third quarter of 1993. For the
nine months of 1994, operating income was $381 million, compared with $309
million in 1993.
Indemnity results declined in the third quarter from $88 million to $81
million. Year-to-date 1994 results remain strong at $221 million compared with
$195 million for 1993. HMO operations had operating income of $51 million for
the third quarter of 1994, compared with $46 million for the same period of
last year. For the nine months of 1994, HMO operating income was $160 million,
compared with $114 million in 1993. These HMO improvements are attributable to
good membership growth and favorable medical cost experience.
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HMO medical membership grew by 122,000 to approximately 3.2 million enrollees
in the third quarter of 1994, a 24% increase over third quarter 1993 levels.
Year to date membership has grown by 549,000 enrollees.
EMPLOYEE RETIREMENT AND SAVINGS BENEFITS
- ----------------------------------------
This segment, which operates in the defined benefit and defined contribution
markets, had operating income of $46 million in the third quarter of 1994.
This compares with operating income of $43 million in the third quarter of
1993. For the nine months of 1994, operating income was $138 million, compared
with $131 million in 1993.
The third quarter 1994 increase reflects improved interest margins on defined
contribution business and higher earnings from an increased asset base.
Assets under management at September 30, 1994 were $34.3 billion, an increase
of 2 percent from $33.6 billion as of September 30, 1993.
INDIVIDUAL FINANCIAL SERVICES
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This segment, which includes individual and corporate-owned life insurance,
life and health reinsurance, and annuity businesses, had operating income of
$33 million in the third quarter of 1994. This compares with operating income
of $29 million in the third quarter of 1993. For the nine months of 1994,
operating income was $96 million, compared with $82 million in 1993. The third
quarter 1994 results reflect improved earnings on interest-sensitive business.
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PROPERTY AND CASUALTY
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This segment, which includes Domestic, International and Reinsurance
operations, had an operating loss of $45 million in the third quarter of 1994,
compared with an operating loss of $44 million for the same period in 1993.
For the nine months of 1994, the operating loss was $206 million, compared with
$226 million in 1993.
The third quarter and nine months of 1994 included after-tax catastrophe losses
of $7 million and $95 million, respectively. This compares with losses of $23
million and $87 million for the respective periods of 1993.
The GAAP combined operating ratio after policyholders' dividends was 122 and
126 for the third quarter and nine months of 1994, compared with 162 and 139
for the comparable periods of 1993. Excluding the referenced adjustments,
combined ratios were 119 and 124 for the third quarter and nine months of 1994,
compared with 124 and 127 for the comparable periods of 1993.
OTHER
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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 $17
million in the third quarter of 1994. This compares with an operating loss of
$19 million in the third quarter of 1993.
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For the nine months of 1994, the operating loss was $40 million, compared with
a loss of $68 million in 1993. The first quarter of 1994 included a $20
million after-tax gain from the sale of a business.
###
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CIGNA CORPORATION
COMPARATIVE SUMMARY OF FINANCIAL RESULTS
(Dollars in millions, except per share amounts) [CIGNA LOGO]
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<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
========================================================================================================
<S> <C> <C> <C> <C>
REVENUES
Premiums and fees $ 3,497 $ 3,298 $ 10,307 $ 10,052
Net investment income 980 971 2,940 2,878
Other revenues 117 146 372 379
Realized investment gains 6 110 50 153
- --------------------------------------------------------------------------------------------------------
Total $ 4,600 $ 4,525 $ 13,669 $ 13,462
- -----------------------------------------------------===================================================
NET INCOME (LOSS) BY SEGMENT
Employee Life and Health Benefits $ 126 $ 152 $ 387 $ 355
Employee Retirement and Savings Benefits 47 44 142 116
Individual Financial Services 31 39 100 79
Property and Casualty:
Operations (27) (69) (98) (121)
Asbestos and Environmental Losses (42) (251) (118) (323)
------- ------ -------- --------
Total Property and Casualty (69) (320) (216) (444)
Other Operations (12) (9) (41) (66)
- --------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 123 $ (94) $ 372 $ 40
- -----------------------------------------------------===================================================
SHAREHOLDERS' EQUITY at September 30 $ 5,900 $ 5,632
- ---------------------------------------------------------------------------------=======================
WEIGHTED AVERAGE SHARES
OUTSTANDING (thousands) 72,354 72,056 72,318 71,995
- -----------------------------------------------------===================================================
PER SHARE:
Net income (loss) $ 1.70 $ (1.31) $ 5.14 $ 0.55
- -----------------------------------------------------===================================================
Shareholders' Equity at September 30 $ 81.68 $ 78.23
- ---------------------------------------------------------------------------------=======================
PROPERTY AND CASUALTY
STATISTICS (GAAP)
Net written premiums $ 1,056 $ 1,054 $ 2,963 $ 3,153
Earned premiums $ 1,090 $ 1,070 $ 3,092 $ 3,246
Underwriting ratios:
Loss and loss adjustment expense 86.1% 123.9% 88.8% 100.2%
Underwriting expense 34.9% 35.4% 35.7% 36.6%
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Combined ratio 121.0% 159.3% 124.5% 136.8%
- -----------------------------------------------------===================================================
Combined after policyholders' dividends 122.4% 161.6% 125.7% 139.3%
- -----------------------------------------------------===================================================
Pre-tax catastrophe losses $ 11 $ 36 $ 146 $ 134
- -----------------------------------------------------===================================================
</TABLE>
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CIGNA CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
FINANCIAL DATA EXCLUDING SPECIFIC ADJUSTMENTS - RESULTS OF OPERATIONS
(Dollars in millions, except per share amounts)
[CIGNA LOGO]
- --------------------------------------------------------------------------------
For informational purposes, the following information presents the effects of
the items noted below on published results of operations. The information
presented in this manner does not conform with Generally Accepted Accounting
Principles.
<TABLE>
<CAPTION>
Employee Life & Health Benefits Employee Individual
Retirement & Financial
Indemnity HMOs Total Savings Benefits Services
Three months ended September 30, 1994 1993 1994 1993 1994 1993 1994 1993 1994 1993
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating income (loss) before adjustments $81 $88 $51 $46 $132 $134 $46 $43 $33 $29
Asbestos/environmental litigation charge - - - - - - - - - -
Restructuring charges - (5) - (5) - (10) - - - -
Reinsurance exposures charge - - - - - - - - - -
Federal income tax rate change - 12 - 2 - 14 - 1 - 3
Tax audits 1 (1) (1) (4) - (5) (2) 6 - 5
-----------------------------------------------------------------------------
Operating income (loss) as published 82 94 50 39 132 133 44 50 33 37
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After-tax realized investment gains (losses)
before adjustments (6) 21 - - (6) 21 4 (3) (2) 3
Tax audits - (2) - - - (2) (1) (3) - (1)
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After-tax realized investment gains (losses)
as published (6) 19 - - (6) 19 3 (6) (2) 2
- -----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $76 $113 $50 $39 $126 $152 $47 $44 $31 $39
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Property & Earnings
Casualty Other Consolidated Per Share
Three months ended September 30, 1994 1993 1994 1993 1994 1993 1994 1993
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating income (loss) before adjustments ($45)* ($44)* ($17) ($19) $149 $143 $2.06 $1.99
Asbestos/environmental litigation charge - (244) - - - (244) - (3.39)
Restructuring charges (9) (97) - - (9) (107) (0.12) (1.49)
Reinsurance exposures charge (26) (16) - - (26) (16) (0.36) (0.22)
Federal income tax rate change - 24 - 6 - 48 - 0.67
Tax audits 8 3 2 - 8 9 0.11 0.12
--------------------------------------------------------------------------------
Operating income (loss) as published (72) (374) (15) (13) 122 (167) 1.69 (2.32)
--------------------------------------------------------------------------------
After-tax realized investment gains (losses)
before adjustments 3 54 3 4 2 79 0.02 1.10
Tax audits - - - - (1) (6) (0.01) (0.09)
--------------------------------------------------------------------------------
After-tax realized investment gains (losses)
as published 3 54 3 4 1 73 0.01 1.01
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Net income (loss) ($69) ($320) ($12) ($9) $123 ($94) $1.70 ($1.31)
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Employee Life & Health Benefits Employee Individual
Retirement & Financial
Indemnity HMOs Total Savings Benefits Services
Nine months ended September 30, 1994 1993 1994 1993 1994 1993 1994 1993 1994 1993
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating income (loss) before adjustments $221 $195 $160 $114 $381 $309 $138 $131 $96 $82
Asbestos/environmental litigation charge - - - - - - - - - -
Restructuring charges - (5) - (5) - (10) - - - -
Reinsurance exposures charge - - - - - - - - - -
Federal income tax rate change - 12 - 2 - 14 - 1 - 3
Tax audits 1 (1) (1) (4) - (5) (2) 6 - 5
-----------------------------------------------------------------------------
Operating income (loss) as published 222 201 159 107 381 308 136 138 96 90
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After-tax realized investment gains (losses)
before adjustments 6 49 - - 6 49 7 (19) 4 (10)
Tax audits - (2) - - - (2) (1) (3) - (1)
-----------------------------------------------------------------------------
After-tax realized investment gains (losses)
as published 6 47 - - 6 47 6 (22) 4 (11)
- --------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $228 $248 $159 $107 $387 $355 $142 $116 $100 $79
================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Property & Earnings
Casualty Other Consolidated Per Share
Nine months ended September 30, 1994 1993 1994 1993 1994 1993 1994 1993
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating income (loss) before adjustments ($206)* ($226)* ($40) ($68) $369 $228 $5.10 $3.17
Asbestos/environmental litigation charge - (244) - - - (244) - (3.39)
Restructuring charges (9) (97) - - (9) (107) (0.12) (1.49)
Reinsurance exposures charge (26) (16) - - (26) (16) (0.36) (0.22)
Federal income tax rate change - 24 - 6 - 48 - 0.67
Tax audits 8 3 2 - 8 9 0.11 0.12
---------------------------------------------------------------------------------
Operating income (loss) as published (233) (556) (38) (62) 342 (82) 4.73 (1.14)
---------------------------------------------------------------------------------
After-tax realized investment gains (losses)
before adjustments 17 112 (3) (4) 31 128 0.42 1.78
Tax audits - - - - (1) (6) (0.01) (0.09)
---------------------------------------------------------------------------------
After-tax realized investment gains (losses)
as published 17 112 (3) (4) 30 122 0.41 1.69
- ---------------------------------------------------------------------------------------------------------------------------------
Net income (loss) ($216) ($444) ($41) ($66) $372 $40 $5.14 $0.55
=================================================================================================================================
</TABLE>
* Amounts include asbestos and environmental losses (other than the 1993
asbestos/environmental litigation charge noted in the adjustments) of
$42 million and $118 million for the quarter and nine months of 1994,
respectively, compared with $30 million and $102 million for the same
periods of 1993.
