BLOOMFIELD, Conn., 01 August, 2019 - Global health service company Cigna Corporation (NYSE: CI) today reported strong second quarter 2019 results led by the Health Services and Integrated Medical segments.

“As Cigna accelerates our focus on whole person health, our strong second quarter results reflect the value we deliver to customers and clients, and our consistent execution in a dynamic environment,” said David M. Cordani, President and Chief Executive Officer. “We continue to invest in innovative, customer-centric solutions to improve affordability and personalization for those we serve.”

Total revenues for second quarter 2019 were $38.8 billion. Adjusted revenues1 were $34.4 billion and reflect strong contributions from each of Cigna's ongoing businesses.

Shareholders’ net income for second quarter 2019 was $1.41 billion, or $3.70 per share, compared with $0.81 billion, or $3.29 per share, for second quarter 2018.

Cigna's adjusted income from operations2 for second quarter 2019 was $1.64 billion, or $4.30 per share, compared with $0.96 billion, or $3.89 per share, for second quarter 2018. This reflects strong earnings contributions led by the Health Services and Integrated Medical segments.

Reconciliations of total revenues to adjusted revenues1 and of shareholders’ net income to adjusted income from operations2 are provided on the following page, and on Exhibit 1 of this earnings release.

CONSOLIDATED HIGHLIGHTS

The following table includes highlights of results and reconciliations of total revenues to adjusted revenues1 and shareholders’ net income to adjusted income from operations2:

• Cigna’s second quarter results reflect strong revenue and earnings growth, as we deepened customer relationships, delivered strong medical and pharmacy cost performance, and continued innovation across our businesses. Second quarter 2019 adjusted income from operations2 also included a $45 million benefit from the favorable resolution of a tax matter.
• Year to date through July 31, 2019, the Company repurchased 6.2 million shares of common stock for approximately $1.1 billion.
• The debt to capitalization ratio decreased to 47.2% at June 30, 2019, from 50.9% at December 31, 2018.
• The SG&A expense ratio5 was 9.0% for second quarter 2019, a significant decrease from 23.5% for second quarter 2018, driven by business mix changes resulting from the Express Scripts combination and the health insurance tax suspension.

CUSTOMER RELATIONSHIPS

The following table summarizes our medical customers and overall customer relationships:

• The total medical customer base6 at second quarter 2019 was 17 million, an organic increase of 36,000 customers year to date and 207,000 over second quarter 2018 driven by growth in the Select and Middle Market segments, partially offset by a decline in National Accounts.
• The pharmacy customer base6 at second quarter 2019 was 75 million, an organic increase of 1.9 million customers year to date, driven by strong new commercial sales.
• Pharmacy6 and Medicare Part D customers in the first and second quarter 2019 and fourth quarter 2018 include customers gained through the completion of the Express Scripts combination on December 20, 2018.

HIGHLIGHTS OF SEGMENT RESULTS

See Exhibit 1 for a reconciliation of adjusted income (loss) from operations2 to shareholders’ net income.

Health Services

This segment includes a broad range of pharmacy services, including benefits management, specialty pharmacy services, clinical solutions, home delivery, and health management services.

• Cigna completed the combination with Express Scripts on December 20, 2018. Accordingly, contributions from the Express Scripts business are reflected in the Health Services segment results for the first half of 2019, and are not reflected in second quarter 2018 results.
• Growth in second quarter 2019 adjusted revenues1 and adjusted income from operations, pre-tax2 over second quarter 2018 were driven by the combination with Express Scripts.
• Second quarter 2019 adjusted income from operations, pre-tax2 and adjusted margin, pre-tax8 reflect organic growth in adjusted pharmacy script volumes as well as strong performance in specialty pharmacy care.
• Health Services fulfilled 294 million adjusted pharmacy scripts9 in second quarter 2019, and 292 million adjusted pharmacy scripts9 in first quarter 2019.

Integrated Medical

This segment includes Cigna’s U.S. Commercial and Government businesses that provide comprehensive medical solutions to clients and customers. U.S. Commercial products and services include medical, pharmacy, behavioral health, dental, vision, health advocacy programs and other products and services to insured and self-insured customers. Government solutions include Medicare Advantage, Medicare Supplement, and Medicare Part D plans for seniors, Medicaid plans, and individual health insurance coverage both on and off the public exchanges.

• Second quarter 2019 adjusted revenues1 increased 10% relative to second quarter 2018, driven by Commercial customer growth and deepening of relationships, as well as premium increases consistent with underlying cost trends.
• Second quarter 2019 adjusted income from operations, pre-tax2 and adjusted margin, pre-tax8 reflect strong medical and specialty contributions and continued effective medical cost management.
• Adjusted income from operations, pre-tax2 for second quarter 2019, first quarter 2019, and second quarter 2018 included favorable net prior year reserve development on a pre-tax basis of $28 million, $50 million and $20 million, respectively.
• The medical care ratio5 (“MCR”) of 81.6% for second quarter 2019 reflects continued effective execution in our commercial and government businesses. The second quarter 2019 MCR increased relative to second quarter 2018, as expected, driven by the inclusion of the Express Scripts Medicare Part D business, the pricing effect of the health insurance tax suspension, and a higher MCR in our individual medical business.
• Integrated Medical net medical costs payable10 was approximately $2.64 billion at June 30, 2019, $2.51 billion at June 30, 2018 and $2.43 billion at December 31, 2018.

International Markets

This segment includes supplemental health, life and accident insurance products and health care coverage in our international markets, as well as health care benefits for globally mobile employees of multinational organizations.

• Excluding the impact of foreign currency movements, second quarter 2019 adjusted revenues1,7 grew 8% over second quarter 2018 reflecting continued business growth.
• Second quarter 2019 adjusted income from operations, pre-tax2 and adjusted margin, pre-tax8 reflect continued business growth and a favorable loss ratio, partially offset by unfavorable foreign currency impacts.

Group Disability and Other Operations

This segment includes Cigna’s Group Disability and Life business which offers group long-term and short-term disability, and group life, accident, voluntary and specialty insurance products and services. Additionally, this segment includes Corporate Owned Life Insurance (“COLI”) and the Company’s run-off operations.

• Second quarter 2019 adjusted income from operations, pre-tax2 and adjusted margin, pre-tax8 reflect solid disability and life performance as well as the impact of the run-off businesses.

Corporate

Corporate reflects interest expense, as well as amounts not allocated to operating segments and includes intersegment eliminations.

• Second quarter 2019 adjusted loss from operations, pre-tax2 increased relative to second quarter 2018 as a result of higher interest expense associated with the financing of the combination with Express Scripts.

2019 OUTLOOK

Cigna's outlook for full year 2019 consolidated adjusted income from operations2,3,4 is in the range of $6.34 billion to $6.46 billion, or $16.60 to $16.90 per share. Cigna’s outlook excludes the impact of additional prior year reserve development of medical costs and potential effects of any future share repurchase4.

2020 OUTLOOK

Health Services’ projected 2020 retention rate for the 2019 selling season for pharmacy services is now in the range of 97% to 98%, an increase of 50 bps from the midpoint of our previous expectations. Health Services’ adjusted pharmacy scripts 9 are expected to grow 25 to 35 million scripts organically in 2020.

The foregoing statements represent the Company’s current estimates of Cigna's 2019 consolidated and segment adjusted income from operations2,3,4 and other key metrics as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.

This quarterly earnings release and the Quarterly Financial Supplement are available on Cigna’s website in the Investor Relations section (http://www.cigna.com/aboutcigna/investors). Management will be hosting a conference call to review second quarter 2019 results and discuss full year 2019 outlook beginning today at 8:30 a.m. ET. A link to the conference call is available in the Investor Relations section of Cigna's website located at https://www.cigna.com/aboutcigna/investors/events/index.page.

The call-in numbers for the conference call are as follows:

Live Call
(888) 324-7575 (Domestic)
(210) 234-0013 (International)
Passcode: 8012019

Replay
(800) 272-5965 (Domestic)
(402) 220-9721 (International)

It is strongly suggested you dial in to the conference call by 8:15 a.m. ET.

About Cigna

Cigna Corporation (NYSE: CI) is a global health service company dedicated to improving the health, well-being and peace of mind of those we serve. Cigna delivers choice, predictability, affordability and access to quality care through integrated capabilities and connected, personalized solutions that advance whole person health. All products and services are provided exclusively by or through operating subsidiaries of Cigna Corporation, including Cigna Health and Life Insurance Company, Cigna Life Insurance Company of New York, Connecticut General Life Insurance Company, Express Scripts companies or their affiliates, and Life Insurance Company of North America. Such products and services include an integrated suite of health services, such as medical, dental, behavioral health, pharmacy, vision, supplemental benefits, and other related products including group life, accident and disability insurance.

Cigna maintains sales capability in over 30 countries and jurisdictions, and has more than 165 million customer relationships throughout the world. To learn more about Cigna®, including links to follow us on Facebook or Twitter, visit www.cigna.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release, and oral statements made with respect to information contained in this release, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on Cigna's current expectations and projections about future trends, events and uncertainties. These statements are not historical facts. Forward-looking statements may include, among others, statements concerning our projected adjusted income (loss) from operations outlook for 2019, on a consolidated, per share, and segment basis; projected adjusted revenue outlook for 2019; projected global medical customer growth over year end 2018; projected client retention; projected growth beyond 2019; statements concerning our long-term projected adjusted income (loss) from operations outlook; projected medical care and SG&A expense ratios and medical cost trends; projected adjusted pharmacy scripts; our projected consolidated adjusted tax rate; projected debt to capitalization ratio; projected cash flow from operations; future financial or operating performance, including our ability to deliver affordable, personalized and innovative solutions for our customers and clients; future growth, business strategy, strategic or operational initiatives; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas; financing or capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; the merger (the “Merger”) with Express Scripts Holding Company (“Express Scripts”) and other statements regarding Cigna's future beliefs, expectations, plans, intentions, financial condition or performance. You may identify forward-looking statements by the use of words such as “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “may,” “should,” “will” or other words or expressions of similar meaning, although not all forward-looking statements contain such terms.

Forward-looking statements are subject to risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those expressed or implied in forward-looking statements. Such risks and uncertainties include, but are not limited to: our ability to achieve our financial, strategic and operational plans or initiatives; our ability to predict and manage medical and pharmacy costs and price effectively; our ability to adapt to changes or trends in an evolving and rapidly changing industry; our ability to effectively differentiate our products and services from those of our competitors and maintain or increase market share; our ability to develop and maintain good relationships with physicians, hospitals, other health care providers and pharmaceutical manufacturers; changes in drug pricing; the impact of modifications to our operations and processes; our ability to identify potential strategic acquisitions or transactions and realize the expected benefits (including anticipated synergies) of such transactions in full or within the anticipated time frame, including with respect to the Merger, as well as our ability to integrate operations, resources and systems; the substantial level of government regulation over our business and the potential effects of new laws or regulations or changes in existing laws or regulations; the outcome of litigation, regulatory audits, investigations, actions and/or guaranty fund assessments; uncertainties surrounding participation in government-sponsored programs such as Medicare; the effectiveness and security of our information technology and other business systems; the impact of our debt service obligations on the availability of funds for other business purposes; unfavorable industry, economic or political conditions, including foreign currency movements; acts of war, terrorism, natural disasters or pandemics; as well as more specific risks and uncertainties discussed in our most recent report on Form 10-K and subsequent reports on Forms 10-Q and 8-K available on the Investor Relations section of www.cigna.com. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance or results, and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Cigna undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law.