Cigna Corp [CI] Filings

10-Q 1 ci-20220930.htm 10-Q ci-20220930

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, 2022

☐ 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 001-38769

Cigna Corporation

(Exact name of registrant as specified in its charter)


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

900 Cottage Grove Road

Bloomfield, Connecticut 06002

(Address of principal executive offices) (Zip Code)

(860) 226-6000

(Registrant's telephone number, including area code)

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 ☐ 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 ☐ 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. ☐

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 31, 2022, 305,739,004 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	40

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	58

	Item 4. Controls and Procedures	58

PART II	OTHER INFORMATION

	Item 1. Legal Proceedings	58

	Item 1A. Risk Factors	58

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	59

	Item 5. Other Information	59

	Item 6. Exhibits	60
SIGNATURE		61

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)	2022		2021		2022		2021
Revenues
Pharmacy revenues	$	32,762	$	31,013	$	95,431	$	89,085
Premiums	9,586		10,275		30,368		30,812
Fees and other revenues	2,728		2,532		8,023		7,324
Net investment income	204		468		943		1,169
TOTAL REVENUES	45,280		44,288		134,765		128,390
Benefits and expenses
Pharmacy and other service costs	31,777		30,070		92,740		86,306
Medical costs and other benefit expenses	7,754		8,330		24,214		24,819
Selling, general and administrative expenses	3,148		3,093		9,703		9,368
Amortization of acquired intangible assets	460		501		1,419		1,499
TOTAL BENEFITS AND EXPENSES	43,139		41,994		128,076		121,992
Income from operations	2,141		2,294		6,689		6,398
Interest expense and other	(304)		(303)		(904)		(915)
Debt extinguishment costs	—		—		—		(141)
Gain on sale of businesses	1,735		—		1,735		—
Net realized investment (losses) gains	(81)		68		(495)		128
Income before income taxes	3,491		2,059		7,025		5,470
TOTAL INCOME TAXES	713		424		1,477		1,188
Net income	2,778		1,635		5,548		4,282
Less: Net income attributable to noncontrolling interests	21		14		49		33
SHAREHOLDERS' NET INCOME	$	2,757	$	1,621	$	5,499	$	4,249
Shareholders' net income per share
Basic	$	9.07	$	4.84	$	17.60	$	12.44
Diluted	$	8.97	$	4.80	$	17.42	$	12.32

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)	2022		2021		2022		2021
Net income	$	2,778	$	1,635	$	5,548	$	4,282
Other comprehensive income (loss), net of tax
Net unrealized (depreciation) appreciation on securities and derivatives	(99)		32		(1,069)		(119)
Net translation gains (losses) on foreign currencies	161		(125)		(108)		(228)
Postretirement benefits liability adjustment	10		16		50		49
Other comprehensive income (loss), net of tax	72		(77)		(1,127)		(298)
Total comprehensive income	2,850		1,558		4,421		3,984

Comprehensive income (loss) attributable to noncontrolling interests
Net income attributable to redeemable noncontrolling interests	3		4		8		12
Net income attributable to other noncontrolling interests	18		10		41		21
Other comprehensive income (loss) attributable to redeemable noncontrolling interests	1		(1)		(2)		(6)
Total comprehensive income attributable to noncontrolling interests	22		13		47		27
SHAREHOLDERS' COMPREHENSIVE INCOME	$	2,828	$	1,545	$	4,374	$	3,957

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)	2022		2021
Assets
Cash and cash equivalents	$	7,079	$	5,081
Investments	783		920
Accounts receivable, net	17,275		15,071
Inventories	4,017		3,722
Other current assets	1,016		1,283
Assets of businesses held for sale	—		10,057
Total current assets	30,170		36,134
Long-term investments	16,273		18,438
Reinsurance recoverables	4,826		4,970
Deferred policy acquisition costs	764		677
Property and equipment	3,744		3,692
Goodwill	45,807		45,811
Other intangible assets	32,885		34,102
Other assets	2,480		2,728
Separate account assets	7,260		8,337
TOTAL ASSETS	$	144,209	$	154,889
Liabilities
Current insurance and contractholder liabilities	$	6,095	$	5,318
Pharmacy and other service costs payable	16,676		15,309
Accounts payable	6,870		6,655
Accrued expenses and other liabilities	7,986		7,322
Short-term debt	3,488		2,545
Liabilities of businesses held for sale	—		6,423
Total current liabilities	41,115		43,572
Non-current insurance and contractholder liabilities	11,655		12,563
Deferred tax liabilities, net	7,777		8,346
Other non-current liabilities	3,179		3,762
Long-term debt	28,090		31,125
Separate account liabilities	7,260		8,337
TOTAL LIABILITIES	99,076		107,705
Contingencies — Note 18
Redeemable noncontrolling interests	50		54
Shareholders' equity
Common stock (1)	4		4
Additional paid-in capital	29,395		29,574
Accumulated other comprehensive loss	(2,009)		(884)
Retained earnings	37,041		32,593
Less: Treasury stock, at cost	(19,390)		(14,175)
TOTAL SHAREHOLDERS' EQUITY	45,041		47,112
Other noncontrolling interests	42		18
Total equity	45,083		47,130
Total liabilities and equity	$	144,209	$	154,889

(1) Par value per share, $0.01; shares issued, 397 million as of September 30, 2022 and 394 million as of December 31, 2021; 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, 2022
(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, 2022	$	4	$	29,930	$	(2,080)	$	34,626	$	(16,588)	$	45,892	$	30	$	45,922	$	45
Effects of issuing stock for employee benefits plans			165						(2)		163				163
Other comprehensive income					71						71				71		1
Net income							2,757				2,757		18		2,775		3
Common dividends declared (per share: $1.12)							(342)				(342)				(342)
Repurchase of common stock			(700)						(2,800)		(3,500)				(3,500)
Other transactions impacting noncontrolling interests			—								—		(6)		(6)		1
Balance at September 30, 2022	$	4	$	29,395	$	(2,009)	$	37,041	$	(19,390)	$	45,041	$	42	$	45,083	$	50


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

Effect of issuing stock for employee benefit 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

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, 2022
(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, 2021	$	4	$	29,574	$	(884)	$	32,593	$	(14,175)	$	47,112	$	18	$	47,130	$	54

Effect of issuing stock for employee benefit plans			521						(75)		446				446
Other comprehensive loss					(1,125)						(1,125)				(1,125)		(2)
Net income							5,499				5,499		41		5,540		8
Common dividends declared (per share: $3.36)							(1,051)				(1,051)				(1,051)
Repurchase of common stock			(700)						(5,140)		(5,840)				(5,840)
Other transactions impacting noncontrolling interests			—								—		(17)		(17)		(10)
Balance at September 30, 2022	$	4	$	29,395	$	(2,009)	$	37,041	$	(19,390)	$	45,041	$	42	$	45,083	$	50

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

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,

(In millions)	2022		2021
Cash Flows from Operating Activities
Net income	$	5,548	$	4,282
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,202		2,180
Realized investment losses (gains), net	495		(128)
Deferred income tax benefit	(300)		(104)
Gain on sale of businesses	(1,735)		—
Debt extinguishment costs	—		141
Net changes in assets and liabilities, net of non-operating effects:
Accounts receivable, net	(2,339)		(4,039)
Inventories	(296)		145
Deferred policy acquisition costs	(127)		(182)
Reinsurance recoverable and Other assets	454		(281)
Insurance liabilities	981		863
Pharmacy and other service costs payable	1,368		1,357
Accounts payable and Accrued expenses and other liabilities	225		(1,411)
Other, net	81		93
NET CASH PROVIDED BY OPERATING ACTIVITIES	6,557		2,916
Cash Flows from Investing Activities
Proceeds from investments sold:
Debt securities and equity securities	1,406		1,052
Investment maturities and repayments:
Debt securities and equity securities	1,124		1,265
Commercial mortgage loans	73		127
Other sales, maturities and repayments (primarily short-term and other long-term investments)	906		1,261
Investments purchased or originated:
Debt securities and equity securities	(2,457)		(2,742)
Commercial mortgage loans	(84)		(233)
Other (primarily short-term and other long-term investments)	(1,109)		(1,768)
Property and equipment purchases, net	(950)		(850)
Acquisitions, net of cash acquired	—

Cigna Corp [CI] Filings
10-Q	[2022-11-03]
10-Q	[2022-08-04]
10-Q	[2022-05-06]
10-K	[2022-02-24]
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]