01—Abstract
Summary
Summary of the 10-K filed February 27, 2020. Cited figures are marked; the original filing is the authoritative source.
Cigna Group (CI) reported strong financial performance for the fiscal year ended December 31, 2019, driven by the acquisition of Express Scripts and growth in its Integrated Medical segment.
Total revenues surged by 216% to $153.6 billiona, largely due to the inclusion of Express Scripts' pharmacy benefit management and health services. Shareholders' net income increased by 94% to $5.1 billion, with diluted earnings per share rising to $13.44. The company's strategic focus remains on improving health, well-being, and peace of mind through its Go Deeper, Go Local, Go Beyond strategy.
Key business segments include Health Services, Integrated Medical, International Markets, and Group Disability and Other. Cigna also announced its intent to sell its Group Disability and Life business in December 2019, a transaction expected to close in the third quarter of 2020.
Looking ahead, Cigna is focused on continued integration of Express Scripts, driving innovation in health solutions, and managing costs effectively amidst a dynamic healthcare landscape. The company maintains a strong liquidity position and is actively managing its capital resources.
02—Key points
Key Highlights
- Total revenues increased by 216% to $153.6 billion in 2019, primarily driven by the Express Scripts acquisition.
- Shareholders' net income grew by 94% to $5.1 billion in 2019.
- Diluted earnings per share increased to $13.44 in 2019 from $10.54 in 2018.
- The Health Services segment, including Express Scripts, reported adjusted revenues of $96.4 billion.
- The Integrated Medical segment saw adjusted revenues of $36.5 billion, with growth in both Commercial and Government offerings.
- Cigna entered into an agreement to sell its Group Disability and Life business for $6.3 billion, expected to close in Q3 2020.
- The company is focused on realizing synergies from the Express Scripts integration and driving innovation in its health services.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Cigna Group kept $0.03.
- Revenue$153.57B100.0%
- Cost of revenue−$97.67B63.6%
- Gross profit$55.90B36.4%
- Operating costs−$47.82B31.1%
- Operating income$8.08B5.3%
- Interest, other & tax−$2.97B1.9%
- Net income$5.10B3.3%
Where FY2019 revenue went
$153.57B- Cost of revenue: $97.67B, 64% of revenue
- Other operating costs: $33.77B, 22% of revenue
- Net income: $5.10B, 3.3% of revenue
- SG&A: $14.05B, 9.2% of revenue
- Interest, other & tax: $2.97B, 1.9% of revenue
Kept 3.3% as net incomeNet income $5.10B · 3.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 27, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $153.57B$48.65B | +215.7% |
| Cost of Revenue | $97.67B$4.79B | +1937.7% |
| Gross Profit | $55.90B$43.86B | +27.5% |
| SG&A Expenses | $14.05B$11.93B | +17.8% |
| Operating Income | $8.08B$4.16B | +94.2% |
| Interest Expense | $1.60B$507.00M | +215.6% |
| Net Income | $5.10B$2.64B | +93.6% |
| EPS (Basic) | $13.58$10.69 | +27.0% |
| EPS (Diluted) | $13.44$10.54 | +27.5% |
| Shares Outstanding (Diluted) | 379.82M250.22M | +51.8% |
05—Questions
Frequently Asked Questions
What were the main drivers of Cigna's revenue growth in 2019?
Cigna's revenue growth in 2019 was primarily driven by the full-year inclusion of Express Scripts' operations following its acquisition in December 2018. The Integrated Medical segment also contributed positively with customer growth and premium rate increases.
How did the Express Scripts acquisition impact Cigna's financial performance?
The acquisition of Express Scripts significantly boosted Cigna's total revenues, contributing substantially to the Health Services segment. While the acquisition increased debt and related interest expenses, the overall financial performance, including net income and earnings per share, showed substantial improvement in 2019 compared to 2018.
What is Cigna's strategy for future growth and operations?
Cigna's strategy revolves around 'Go Deeper, Go Local, Go Beyond' to improve health, well-being, and peace of mind. This includes expanding and deepening customer relationships, tailoring solutions to local market needs, and innovating to differentiate its offerings. The company is also focused on leveraging advanced analytics and technology to enhance customer experience and health outcomes.
What significant divestitures did Cigna announce in 2019?
In December 2019, Cigna announced a definitive agreement to sell its Group Disability and Life business to New York Life Insurance Company for $6.3 billion. This sale is expected to be completed in the third quarter of 2020, subject to regulatory approvals. The net proceeds are intended to be used for share repurchases and debt repayment.
06—Continue