01—Abstract
Summary
Summary of the 10-K filed February 24, 2022. Cited figures are marked; the original filing is the authoritative source.
Cigna Group (CI) reported strong performance in its 2021 10-K filing, driven by its Evernorth health services segment which saw adjusted revenues increase by 14% year-over-year to $131.9 billiona.
The Cigna Healthcare segment also showed growth, with adjusted revenues up 9% to $44.7 billionb, supported by an expanding customer base in Medicare Advantage and individual plans. The company completed significant strategic actions, including the acquisition of MDLIVE to enhance its virtual care capabilities and the agreement to sell its international life, accident, and supplemental benefits businesses to Chubb. These moves underscore Cigna's strategy to focus on its core health services offerings.
Financially, the company demonstrated robust cash flow from operations, which supported significant capital deployment through share repurchases totaling $7.7 billionc in 2021 and an increased quarterly dividend. While the company faced some headwinds, such as the ongoing impacts of COVID-19 on healthcare utilization and costs, it maintained effective cost management and operational efficiencies, leading to a 3% increase in adjusted income from operations. Investors can look to Cigna's continued focus on integrating digital capabilities, expanding its Evernorth platform, and disciplined capital allocation as key drivers for future value.
02—Key points
Key Highlights
- Evernorth segment delivered strong growth with adjusted revenues up 14% to $131.9 billion, driven by pharmacy and benefits management solutions.
- Cigna Healthcare segment saw adjusted revenues increase by 9% to $44.7 billion, benefiting from customer growth in U.S. Government (Medicare Advantage) and Individual segments.
- Completed the acquisition of MDLIVE to expand virtual care offerings, integrating it into the Evernorth segment.
- Entered into a definitive agreement to sell its international life, accident, and supplemental benefits businesses for $5.75 billion, subject to regulatory approvals.
- Generated $7.19 billion in cash from operating activities in 2021.
- Returned $7.7 billion to shareholders through share repurchases and initiated/increased quarterly dividends.
- Announced and began executing an organizational efficiency plan expected to yield annualized after-tax savings of approximately $180 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Cigna Group kept $0.03.
- Revenue$174.07B100.0%
- Cost of revenue−$117.55B67.5%
- Gross profit$56.52B32.5%
- Operating costs−$48.58B27.9%
- Operating income$7.94B4.6%
- Interest, other & tax−$2.57B1.5%
- Net income$5.37B3.1%
Where FY2021 revenue went
$174.07B- Cost of revenue: $117.55B, 68% of revenue
- Other operating costs: $35.56B, 20% of revenue
- Net income: $5.37B, 3.1% of revenue
- SG&A: $13.01B, 7.5% of revenue
- Interest, other & tax: $2.57B, 1.5% of revenue
Kept 3.1% as net incomeNet income $5.37B · 3.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 24, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $174.07B$160.40B | +8.5% |
| Cost of Revenue | $117.55B$103.48B | +13.6% |
| Gross Profit | $56.52B$56.92B | −0.7% |
| SG&A Expenses | $13.01B$14.07B | −7.5% |
| Operating Income | $7.94B$8.15B | −2.6% |
| Interest Expense | $1.30B$1.40B | −7.1% |
| Net Income | $5.37B$8.46B | −36.5% |
| EPS (Basic) | $15.89$23.17 | −31.4% |
| EPS (Diluted) | $15.75$22.96 | −31.4% |
| Shares Outstanding (Diluted) | 340.97M368.39M | −7.4% |
05—Questions
Frequently Asked Questions
What were the key drivers of Cigna's financial performance in 2021?
Cigna's financial performance in 2021 was primarily driven by the strong growth of its Evernorth segment, which experienced a 14% increase in adjusted revenues, and the Cigna Healthcare segment, which saw a 9% increase in adjusted revenues. This growth was supported by expanding customer bases, particularly in Medicare Advantage, and the strategic acquisition of MDLIVE. Robust cash flow from operations allowed for significant shareholder returns through share repurchases and dividends.
What major strategic initiatives did Cigna undertake in 2021?
Cigna undertook several key strategic initiatives in 2021. These included the acquisition of MDLIVE to bolster its virtual care capabilities, the agreement to divest its international life, accident, and supplemental benefits businesses to Chubb, and the implementation of an organizational efficiency plan aimed at driving operational improvements. These actions reflect a strategic focus on core health services and efficiency.
How did COVID-19 impact Cigna's results in 2021?
The impacts of COVID-19 continued in 2021, with net unfavorable effects seen in the Cigna Healthcare segment due to increased direct costs for testing, treatment, and vaccines, as well as the deferral of care in the prior year. These were partially offset by the absence of premium relief programs implemented in 2020. Management continues to monitor the pandemic's evolving impact and associated uncertainties.
How is Cigna managing its capital and returning value to shareholders?
Cigna demonstrated strong capital management in 2021. The company generated significant cash flow from operations and deployed capital effectively through substantial share repurchases totaling $7.7 billion. Additionally, Cigna initiated and subsequently increased its quarterly cash dividend, indicating a commitment to returning value to shareholders.
06—Continue