Cigna Corp [CI] Filings

10-Q 1 ci-20210930.htm 10-Q ci-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 1-38769

Cigna Corporation

(Exact name of registrant as specified in its charter)


Delaware			82-4991898
(State or other jurisdiction			(I.R.S. Employer
of incorporation or organization)			Identification No.)

900 Cottage Grove Road

Bloomfield, Connecticut 06002

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (860) 226-6000

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.01	CI	New York Stock Exchange, Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No _

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No _

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Yes _

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of October 29, 2021, 331,427,775 shares of the issuer’s common stock were outstanding.

Cigna Corporation

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION

	Item 1. Financial Statements (Unaudited)	3
	Consolidated Statements of Income	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Balance Sheets	5
	Consolidated Statements of Changes in Total Equity	6
	Consolidated Statements of Cash Flows	8
	Notes to the Consolidated Financial Statements	9

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	55

	Item 4. Controls and Procedures	55

PART II	OTHER INFORMATION

	Item 1. Legal Proceedings	55

	Item 1.A. Risk Factors	56

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	56

	Item 5. Other Information	56

	Item 6. Exhibits	58
SIGNATURE		59

As used herein, “Cigna” or the “Company” refers to one or more of Cigna Corporation and its consolidated

subsidiaries.

Part I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS


Cigna Corporation Consolidated Statements of Income
	Unaudited				Unaudited
	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share amounts)	2021		2020		2021		2020
Revenues
Pharmacy revenues	$	31,013	$	27,802	$	89,085	$	79,464
Premiums	10,275		10,682		30,812		31,928
Fees and other revenues	2,532		2,174		7,324		6,424
Net investment income	468		297		1,169		873
TOTAL REVENUES	44,288		40,955		128,390		118,689
Benefits and expenses
Pharmacy and other service costs	30,070		26,624		86,306		76,425
Medical costs and other benefit expenses	8,330		8,429		24,819		23,863
Selling, general and administrative expenses	3,093		3,301		9,368		10,106
Amortization of acquired intangible assets	501		493		1,499		1,487
TOTAL BENEFITS AND EXPENSES	41,994		38,847		121,992		111,881
Income from operations	2,294		2,108		6,398		6,808
Interest expense and other	(303)		(336)		(915)		(1,101)
Debt extinguishment costs	—		—		(141)		(199)

Net realized investment gains (losses)	68		32		128		(18)
Income before income taxes	2,059		1,804		5,470		5,490
TOTAL INCOME TAXES	424		406		1,188		1,143
Net income	1,635		1,398		4,282		4,347
Less: Net income attributable to noncontrolling interests	14		10		33		24
SHAREHOLDERS' NET INCOME	$	1,621	$	1,388	$	4,249	$	4,323
Shareholders’ net income per share
Basic	$	4.84	$	3.81	$	12.44	$	11.77
Diluted	$	4.80	$	3.78	$	12.32	$	11.66

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.


Cigna Corporation Consolidated Statements of Comprehensive Income
	Unaudited				Unaudited
	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Net income	$	1,635	$	1,398	$	4,282	$	4,347
Other comprehensive income (loss), net of tax
Net unrealized appreciation (depreciation) on securities and derivatives	32		120		(119)		401
Net translation gains (losses) on foreign currencies	(125)		109		(228)		4
Postretirement benefits liability adjustment	16		14		49		(15)
Other comprehensive income (loss), net of tax	(77)		243		(298)		390
Total comprehensive income	1,558		1,641		3,984		4,737

Comprehensive income (loss) attributable to noncontrolling interests
Net income attributable to redeemable noncontrolling interest	4		4		12		12
Net income attributable to other noncontrolling interests	10		6		21		12
Other comprehensive (loss) attributable to redeemable noncontrolling interest	(1)		(4)		(6)		(10)
Total comprehensive income attributable to noncontrolling interests	13		6		27		14
SHAREHOLDERS' COMPREHENSIVE INCOME	$	1,545	$	1,635	$	3,957	$	4,723

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.


Cigna Corporation Consolidated Balance Sheets
	Unaudited
	As of September 30,		As of December 31,

(In millions)	2021		2020
Assets
Cash and cash equivalents	$	3,483	$	10,182
Investments	1,374		1,331
Accounts receivable, net	16,250		12,191
Inventories	3,020		3,165
Other current assets	1,360		930
Total current assets	25,487		27,799
Long-term investments	23,756		23,262
Reinsurance recoverables	5,035		5,200
Deferred policy acquisition costs	3,367		3,385
Property and equipment	4,070		4,205
Goodwill	46,056		44,648
Other intangible assets	34,615		35,179
Other assets	2,715		2,687
Separate account assets	9,150		9,086
TOTAL ASSETS	$	154,251	$	155,451
Liabilities
Current insurance and contractholder liabilities	$	5,917	$	5,308
Pharmacy and other service costs payable	14,705		13,347
Accounts payable	5,659		5,478
Accrued expenses and other liabilities	7,356		8,515
Short-term debt	2,703		3,374
Total current liabilities	36,340		36,022
Non-current insurance and contractholder liabilities	16,576		16,844
Deferred tax liabilities, net	8,832		8,939
Other non-current liabilities	4,261		4,629
Long-term debt	31,609		29,545
Separate account liabilities	9,150		9,086
TOTAL LIABILITIES	106,768		105,065
Contingencies — Note 15
Redeemable noncontrolling interests	56		58
Shareholders’ equity
Common stock (1)	4		4
Additional paid-in capital	29,077		28,975
Accumulated other comprehensive loss	(1,153)		(861)
Retained earnings	31,803		28,575
Less: Treasury stock, at cost	(12,316)		(6,372)
TOTAL SHAREHOLDERS’ EQUITY	47,415		50,321
Other noncontrolling interests	12		7
Total equity	47,427		50,328
Total liabilities and equity	$	154,251	$	155,451

(1)Par value per share, $0.01; shares issued, 394 million as of September 30, 2021 and 390 million as of December 31, 2020; authorized shares, 600 million.

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.


Cigna Corporation
Consolidated Statements of Changes in Total Equity
Unaudited
Three Months Ended September 30, 2021
(In millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss)		Retained Earnings		Treasury Stock		Shareholders’ Equity		Other Non- controlling Interests		Total Equity		Redeemable Noncontrolling Interests
Balance at June 30, 2021	$	4	$	29,403	$	(1,077)	$	30,513	$	(10,134)	$	48,709	$	7	$	48,716	$	51
Effects of issuing stock for employee benefits plans			76						(1)		75				75
Other comprehensive (loss)					(76)						(76)				(76)		(1)
Net income							1,621				1,621		10		1,631		4
Common dividends declared (per share: $1.00)							(331)				(331)				(331)
Repurchase of common stock			(400)						(2,181)		(2,581)				(2,581)
Other transactions impacting noncontrolling interests			(2)								(2)		(5)		(7)		2
Balance at September 30, 2021	$	4	$	29,077	$	(1,153)	$	31,803	$	(12,316)	$	47,415	$	12	$	47,427	$	56


Three Months Ended September 30, 2020
(In millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss)		Retained Earnings		Treasury Stock		Shareholders’ Equity		Other Non- controlling Interests		Total Equity		Redeemable Noncontrolling Interests
Balance at June 30, 2020	$	4	$	28,699	$	(788)	$	23,052	$	(3,601)	$	47,366	$	5	$	47,371	$	34

Effect of issuing stock for employee benefit plans			78						(2)		76				76
Other comprehensive income (loss)					247						247				247		(4)
Net income							1,388				1,388		6		1,394		4

Repurchase of common stock									(1,045)		(1,045)				(1,045)
Other transactions impacting noncontrolling interests													(4)		(4)		25
Balance at September 30, 2020	$	4	$	28,777	$	(541)	$	24,440	$	(4,648)	$	48,032	$	7	$	48,039	$	59

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.


Cigna Corporation
Consolidated Statements of Changes in Total Equity
Unaudited
Nine Months Ended September 30, 2021
(In millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss)		Retained Earnings		Treasury Stock		Shareholders’ Equity		Other Non- controlling Interests		Total Equity		Redeemable Noncontrolling Interests
Balance at December 31, 2020	$	4	$	28,975	$	(861)	$	28,575	$	(6,372)	$	50,321	$	7	$	50,328	$	58

Effect of issuing stock for employee benefit plans			507						(90)		417				417
Other comprehensive (loss)					(292)						(292)				(292)		(6)
Net income							4,249				4,249		21		4,270		12
Common dividends declared (per share: $3.00)							(1,021)				(1,021)				(1,021)
Repurchase of common stock			(400)						(5,854)		(6,254)				(6,254)
Other transactions impacting noncontrolling interests			(5)								(5)		(16)		(21)		(8)
Balance at September 30, 2021	$	4	$	29,077	$	(1,153)	$	31,803	$	(12,316)	$	47,415	$	12	$	47,427	$	56

Nine Months Ended September 30, 2020
(In millions)	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive (Loss)		Retained Earnings		Treasury Stock		Shareholders’ Equity		Other Non- controlling Interests		Total Equity		Redeemable Noncontrolling Interests
Balance at December 31, 2019	$	4	$	28,306	$	(941)	$	20,162	$	(2,193)	$	45,338	$	6	$	45,344	$	35
Cumulative effect of adopting new credit loss guidance (ASU 2016-13)							(30)				(30)				(30)
Effect of issuing stock for employee benefit plans			471						(86)		385				385
Other comprehensive income (loss)					400						400				400		(10)
Net income							4,323				4,323		12		4,335		12
Common dividends declared (per share: $0.04)							(15)				(15)				(15)
Repurchase of common stock									(2,369)		(2,369)				(2,369)
Other transactions impacting noncontrolling interests													(11)		(11)		22
Balance at September 30, 2020	$	4	$	28,777	$	(541)	$	24,440	$	(4,648)	$	48,032	$	7	$	48,039	$	59

The accompanying Notes to the Consolidated Financial Statements (unaudited) are an integral part of these statements.

Cigna Corporation

Consolidated Statements of Cash Flows



	Unaudited
	Nine Months Ended September 30, 2021
(In millions)	2021		2020
Cash Flows from Operating Activities
Net income	$	4,282	$	4,347
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,180		2,089
Realized investment (gains) losses, net	(128)		18
Deferred income tax (benefit)	(104)		(340)

Debt extinguishment costs	141		199
Net changes in assets and liabilities, net of non-operating effects:
Accounts receivable	(4,039)		(2,810)
Inventories	145		5
Deferred policy acquisition costs	(182)		(244)
Reinsurance recoverable and Other assets	(281)		(468)
Insurance liabilities	863		740
Pharmacy and other service costs payable	1,357		2,084
Accounts payable and Accrued expenses and other liabilities	(1,411)		(32)
Other, net	93		468
NET CASH PROVIDED BY OPERATING ACTIVITIES	2,916		6,056
Cash Flows from Investing Activities
Proceeds from investments sold:
Debt securities and equity securities	1,052		2,038
Investment maturities and repayments:
Debt securities and equity securities	1,265		1,097
Commercial mortgage loans	127		14
Other sales, maturities and repayments (primarily short-term and other long-term investments)	1,261		1,086
Investments purchased or originated:
Debt securities and equity securities	(2,742)		(3,317)
Commercial mortgage loans	(233)		(55)
Other (primarily short-term and other long-term investments)	(1,768)		(1,434)
Property and equipment purchases, net	(850)		(775)
Acquisitions, net of cash acquired	(1,836)		(135)
Divestiture, net of cash sold	(61)		—
Other, net	51		37
NET CASH (USED IN) INVESTING ACTIVITIES	(3,734)		(1,444)
Cash Flows from Financing Activities
Deposits and interest credited to contractholder deposit funds	132		769
Withdrawals and benefit payments from contractholder deposit funds	(139)		(736)
Net change in short-term debt	1,633		592
Net proceeds on issuance of term loan	—		1,398

Payments for debt extinguishment	(136)		(212)
Repayment of long-term debt	(4,578)		(6,897)
Net proceeds on issuance of long-term debt	4,260		3,465
Repurchase of common stock	(6,321)		(2,352)
Issuance of common stock	301		239
Common stock dividend paid	(1,017)		(

Cigna Corp [CI] Filings
10-Q	[2021-11-04]
10-Q	[2021-08-05]
10-Q	[2021-05-07]
10-K	[2021-02-25]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-K	[2020-02-27]
10-Q	[2019-10-31]
10-Q	[2019-08-01]
10-Q	[2019-05-02]
10-K	[2019-02-28]