8-KRegulation FD

Cigna Group 8-K Report, Regulation FD Disclosure (Dec 30, 2019)

Filed December 30, 2019For Securities:CI

Summary

Cigna Group (CI) filed an 8-K on December 30, 2019, primarily to reaffirm its projected full-year 2019 consolidated adjusted income from operations. Management expects this figure to remain within the previously announced range of $6.38 billion to $6.46 billion. This reaffirmation comes as company officials are scheduled to participate in investor and analyst meetings over the upcoming weeks. The filing also provides a detailed, though non-GAAP, definition of "adjusted income from operations" and reiterates the importance of this metric for understanding the underlying business performance, while also cautioning that it is not a direct substitute for GAAP measures and cannot be reconciled on a forward-looking basis due to inherent uncertainties in predicting investment results and special items.

Key Highlights

  • 1Cigna reaffirmed its projected full-year 2019 consolidated adjusted income from operations to be in the range of $6.38 billion to $6.46 billion.
  • 2The company's management will be participating in investor and analyst meetings over the next several weeks.
  • 3The filing includes a detailed explanation of "adjusted income from operations," a non-GAAP profitability measure used by management.
  • 4This adjusted income metric excludes net realized investment results, amortization of acquired intangible assets, special items, and earnings from transitioning PBM clients.
  • 5Management uses adjusted income from operations to assess underlying business results and operational trends.
  • 6Cigna cautions that adjusted income from operations is not a GAAP measure and should not be viewed as a substitute for GAAP net income.
  • 7Reconciliation of forward-looking adjusted income to GAAP net income is not provided due to the unpredictability of certain excluded items.

Frequently Asked Questions

The primary purpose of this 8-K filing is for Cigna Group to reaffirm its projected full-year 2019 consolidated adjusted income from operations, indicating that management expects results to remain within the previously communicated range of $6.38 billion to $6.46 billion, ahead of upcoming investor meetings.

Adjusted income from operations is a non-GAAP financial measure used by Cigna's management. It represents shareholders' net income excluding after-tax impacts of net realized investment results, amortization of acquired intangible assets, special items, and earnings from transitioning pharmacy benefit management clients. Management uses this metric to present and analyze the underlying operational performance and trends of the company's businesses.

No, investors should not view 'adjusted income from operations' as a substitute for GAAP net income. While it provides insight into underlying operations, it is a non-GAAP measure and differs from GAAP net income. Cigna is unable to provide a forward-looking reconciliation between the two measures due to the inherent uncertainty and variability of certain excluded items, such as future net realized investment results and special items, which are beyond the company's control.

Beyond reaffirming the 2019 adjusted income from operations, the filing contains various forward-looking statements related to Cigna's projected outlook for 2019 and beyond. These include expectations for adjusted revenue, global medical customer growth, client retention, medical cost trends, pharmacy operations, tax rates, cash flow, business strategy, and the integration of the Express Scripts merger. However, these statements are subject to significant risks and uncertainties.