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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) JULY 30, 1996
CIGNA CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-8323 06-1059331
(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
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(215) 761-1000
NOT APPLICABLE
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On July 30, 1996, 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: July 30, 1996 By: /s/ Gary A. Swords
--------------------------
Gary A. Swords
Vice President and
Chief Accounting Officer
Index to Exhibits
-----------------
Number Description Method of Filing
- ------ ----------- ----------------
20 CIGNA Corporation Filed herewith.
news release dated
July 30, 1996
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NEWS RELEASE [CIGNA LOGO]
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 1996 RESULTS
PHILADELPHIA, JULY 30, 1996 -- CIGNA Corporation (NYSE:CI) today reported second
quarter 1996 operating income* of $252 million, or $3.28 on a primary earnings
per share basis, versus $189 million, or $2.60 per share, reported in the second
quarter of 1995. For the first half of 1996, operating income was $471 million
or $6.13 per share, versus $335 million, or $4.62 per share, for 1995.
SEGMENT RESULTS:
EMPLOYEE LIFE AND HEALTH BENEFITS
This segment, which includes CIGNA's HMO and Indemnity operations, had operating
income of $121 million in the second quarter of 1996. This compares with
operating income of $129 million in the second quarter of 1995. For both the
first six months of 1996 and 1995, operating income was $233 million.
The second quarter 1996 operating income from the Indemnity business was $69
million as compared to $79 million in the second quarter of 1995, while the HMO
business reported $52 million in the second quarter of 1996 versus $50 million
for the same period in 1995.
* OPERATING INCOME IS DEFINED AS NET INCOME EXCLUDING AFTER-TAX REALIZED
INVESTMENT RESULTS.
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HMO medical membership grew by 447,000 covered lives or 12% since June 30, 1995.
EMPLOYEE RETIREMENT AND SAVINGS BENEFITS
This segment, which operates in the defined contribution and defined benefit
markets, had operating income of $44 million in the second quarter of 1996. This
compares with operating income of $46 million in the second quarter of 1995. For
both the first six months of 1996 and 1995, operating income was $95 million.
Assets under management at June 30, 1996 were $38.4 billion, an increase of 6%
from $36.2 billion as of June 30, 1995.
INDIVIDUAL FINANCIAL SERVICES
This segment, which includes individual and corporate-owned life insurance,
life, accident and health reinsurance, and annuity businesses, had operating
income of $42 million in the second quarter of 1996. This compares with
operating income of $45 million in the second quarter of 1995. For the first six
months of 1996, operating income was $74 million compared with $76 million in
1995.
PROPERTY AND CASUALTY
The property and casualty (P&C) segment had operating income of $59 million for
the second quarter of 1996. This compares with an operating loss of $12 million
for the second quarter of 1995. For the first six months of 1996, operating
income was $101 million, compared with a loss of $31 million in 1995.
The P&C segment consists of the Ongoing operations, International and Domestic,
and the Run-off operations.
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Amounts for 1995 are reported on a pro forma basis as though the Domestic P&C
restructuring, which was effective as of December 31, 1995, was in place at the
beginning of 1995. These pro forma results are not necessarily indicative of the
results that would have been reported had the restructuring actually occurred as
of January 1, 1995. Consolidated P&C segment amounts for 1995 did not change.
International had operating income for the second quarter of 1996 of $36
million, compared with $30 million in 1995. The GAAP combined ratio after
policyholders' dividends was 93.2% for the second quarter of 1996, compared with
94.4% for the comparable period of 1995.
Domestic had operating income of $20 million for the second quarter of 1996,
compared with a loss of $2 million in 1995. The GAAP combined ratio after
policyholders' dividends for the second quarter of 1996 was 109.1%, compared
with 114.6% for the comparable period of 1995.
Pre-tax catastrophe losses for the Ongoing operations were $8 million and $27
million for the second quarter of 1996 and 1995, respectively. Six month pre-tax
catastrophe losses for the Ongoing operations for 1996 were $31 million compared
with $41 million in 1995.
Run-off had operating income of $3 million in the second quarter of 1996,
compared with a loss of $40 million for the same period in 1995.
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 $14 million in the
second quarter of 1996. This compares with an
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operating loss of $19 million in the second quarter of 1995. For the first six
months of 1996, the operating loss was $32 million, compared with a loss of $38
million in 1995.
NET INCOME
Consolidated net income for the quarter was $231 million ($3.00 primary earnings
per share), compared with $205 million ($2.82 per share) a year ago. For the
first half of 1996, consolidated net income was $469 million ($6.10 per share),
compared with $495 million ($6.82 per share) a year ago.
The 1996 second quarter consolidated net income included after-tax realized
investment losses of $21 million ($0.28 per share), compared with gains of $16
million ($0.22 per share) for the same period of 1995. Consolidated net income
for the first half of 1996 included after-tax realized investment losses of $2
million ($.03 per share), compared with gains of $160 million ($2.20 per share)
for the same period of 1995. The significant investment gains in the first half
of 1995 reflect the effects of restructuring the equity portfolio.
REVENUES
Consolidated revenues for the second quarter of 1996 were $4.7 billion, compared
with $4.8 billion for the same period in 1995. For the first six months of 1996,
consolidated revenues were $9.4 billion versus $9.5 billion in 1995.
ASSETS/SHAREHOLDERS' EQUITY
Assets at June 30, 1996 and year-end 1995 were approximately $95.9 billion.
Shareholders' equity was $6.9 billion ($90.40 per share) at June 30, 1996,
compared with $7.2 billion ($93.76 per share) at December 31, 1995.
###
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CIGNA CORPORATION [CIGNA LOGO]
COMPARATIVE SUMMARY OF FINANCIAL RESULTS
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
================================================================================================================
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
--------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
Premiums and fees $ 3,499 $ 3,514 $ 6,889 $ 6,932
Net investment income 1,111 1,085 2,194 2,112
Other revenues 152 130 294 257
Realized investment gains (losses) (31) 24 (1) 206
--------------------------------------------------------
Total $ 4,731 $ 4,753 $ 9,376 $ 9,507
========================================================
OPERATING INCOME (LOSS) BY SEGMENT (1)
Employee Life and Health Benefits:
Indemnity operations $ 69 $ 79 $ 125 $ 126
HMO operations 52 50 108 107
-------- -------- -------- --------
Total Employee Life and Health Benefits 121 129 233 233
Employee Retirement and Savings Benefits 44 46 95 95
Individual Financial Services 42 45 74 76
Property and Casualty (2):
Domestic 20 (2) 32 (16)
International 36 30 65 48
-------- -------- -------- --------
Ongoing operations 56 28 97 32
Run-off operations 3 (40) 4 (63)
-------- -------- -------- --------
Total Property and Casualty 59 (12) 101 (31)
Other Operations (14) (19) (32) (38)
--------------------------------------------------------
Total $ 252 $ 189 $ 471 $ 335
========================================================
NET INCOME (LOSS) BY SEGMENT
Employee Life and Health Benefits:
Indemnity operations $ 65 $ 98 $ 119 $ 226
HMO operations 52 50 108 107
-------- -------- -------- --------
Total Employee Life and Health Benefits 117 148 227 333
Employee Retirement and Savings Benefits 40 46 101 97
Individual Financial Services 40 42 74 75
Property and Casualty (2):
Domestic 16 (3) 33 34
International 39 31 75 47
-------- -------- -------- --------
Ongoing operations 55 28 108 81
Run-off operations (4) (38) (7) (65)
-------- -------- -------- --------
Total Property and Casualty 51 (10) 101 16
Other Operations (17) (21) (34) (26)
--------------------------------------------------------
Total $ 231 $ 205 $ 469 $ 495
========================================================
WEIGHTED AVERAGE SHARES
OUTSTANDING (thousands) 76,821 72,616 76,854 72,529
========================================================
PRIMARY EARNINGS PER SHARE:
Operating income (1) $ 3.28 $ 2.60 $ 6.13 $ 4.62
After-tax realized investment gains (losses) (0.28) 0.22 (0.03) 2.20
--------------------------------------------------------
Net income $ 3.00 $ 2.82 $ 6.10 $ 6.82
========================================================
SHAREHOLDERS' EQUITY at June 30 $ 6,885 $ 6,829
========================
SHAREHOLDERS' EQUITY PER SHARE at June 30 $ 90.40 $ 94.16
========================
</TABLE>
(1) Operating income is defined as net income excluding after-tax realized
investment results.
(2) Amounts for the Property and Casualty segment's Domestic and Run-off
operations for 1995 are reported on a pro forma basis as though the
Property and Casualty restructuring, which was effective as of December
31, 1995, was in place at the beginning of 1995. These pro forma results
are not necessarily indicative of the results that would have been
reported had the restructuring actually occurred as of January 1, 1995.
Consolidated Property and Casualty segment amounts for 1995 did not
change.
