- Total revenues were $153.6 billion. Adjusted revenues were $140.2 billion in 2019.
- Shareholders' net income for 2019 was $5.1 billion, or $13.44 per share, representing per share growth of 28% over 2018.
- Adjusted income from operations for 2019 was $6.5 billion, or $17.05 per share, representing per share growth of 20% over 2018
- Adjusted revenues1,3 are projected to be in the range of $154 billion to $156 billion in 2020, representing growth of 10% to 11% over 2019.
- Adjusted income from operations2,3 is projected to be in the range of $6.8 billion to $7.0 billion in 2020, or $18.00 to $18.60 per share.
Global health service company Cigna Corporation (NYSE: CI) today reported strong 2019 results driven by focused execution across its businesses.
"In the first year of our combination, as a result of our focus on execution, partnering, and ongoing innovation, Cigna delivered on our commitments to customers, clients, and shareholders," said David M. Cordani, President and Chief Executive Officer "Our strong momentum going into 2020 positions us for continued growth, and to deliver sustained value for our customers and clients, as we create greater affordability, predictability and simplicity for their benefit."
Total revenues for 2019 were $153.6 billion. Adjusted revenues1 were $140.2 billion and reflect strong contributions from each of Cigna's ongoing businesses.
Shareholders' net income for 2019 was $5.1 billion, or $13.44 per share, compared with $2.6 billion, or $10.54 per share, for 2018.
Cigna's adjusted income from operations2 for 2019 was $6.5 billion, or $17.05 per share, compared with $3.6 billion, or $14.22 per share, for 2018. This represents per share growth of 20% and reflects strong earnings contributions led by the Health Services and Integrated Medical segments. Cigna's cash flow from operations for 2019 was $9.5 billion, compared with $3.8 billion for 2018.
Cigna's 2019 results reflect strong revenue and earnings growth, as we delivered strong medical and pharmacy cost performance, and created meaningful value in the first year of the Cigna and Express Scripts combination.
In 2019, the Company repurchased 11.8 million shares of common stock for $2.0 billion. Year to date through February 5, 2020, the Company repurchased 1.2 million shares of common stock for approximately $245 million.
The debt to capitalization ratio decreased to 45.2% at December 31, 2019, from 50.9% at December 31, 2018.
The SG&A expense ratio was 9.3% for full year 2019, a significant decrease from 23.2% for full year 2018, driven by business mix changes resulting from the Express Scripts combination and the health insurance tax suspension.
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 individuals and employees of multinational organizations.
Fourth quarter 2019 adjusted revenues5 grew 6% over fourth quarter 2018, reflecting continued business growth.
Fourth quarter 2019 adjusted income from operations, pre-tax2 and adjusted margin, pre-tax6 reflect continued business growth and operational efficiency.
Operating ratios are defined as follows:
Medical care ratio represents medical costs as a percentage of premiums for all U.S. commercial risk products, including medical, pharmacy, dental, stop loss and behavioral products provided through guaranteed cost or experience-rated funding arrangements, as well as Medicare Advantage, Medicare Part D, Medicare Supplement, Medicaid, and individual on and off-exchange products, within our Integrated Medical segment.
SG&A expense ratio represents enterprise selling, general and administrative expenses excluding special items and expenses from transitioning clients, as a percentage of adjusted revenue at a consolidated level.
Cigna owns a 50% noncontrolling interest in its China joint venture. Cigna's 50% share of the joint venture's earnings is reported in Fees and Other Revenues using the equity method of accounting under GAAP. As such, the adjusted revenues and policy counts for the International Markets segment do not include the China joint venture.
Adjusted margin, pre-tax, is calculated by dividing adjusted income (loss) from operations, pre-tax by adjusted revenues for each segment. Adjusted margin, after-tax, is calculated by dividing consolidated adjusted income (loss) from operations by consolidated adjusted revenues. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results.
1At the consolidated level, the measure "adjusted revenues" is not determined in accordance with accounting principles generally accepted in the United States (GAAP) and should not be viewed as a substitute for the most directly comparable GAAP measure, "total revenues." We define adjusted revenues as total revenues excluding revenue contributions from transitioning pharmacy benefit management clients, Anthem Inc. and Coventry Health Care, Inc. (the "transitioning clients"), net realized investment results from equity method investments, and special items. We exclude these items from this measure because they are not indicative of past or future underlying performance of the business. See Exhibit 1 for a reconciliation of consolidated adjusted revenues to total revenues.
2Adjusted income (loss) from operations is defined as shareholders' net income (loss) excluding the following adjustments: earnings contributions from transitioning clients, net realized investment results, amortization of acquired intangible assets, and special items. Special items are identified in Exhibit 1 of this earnings release. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results and on a pre-tax basis for segment results. Adjusted income (loss) from operations is a measure of profitability used by Cigna's management because it presents the underlying results of operations of Cigna's businesses and permits analysis of trends in underlying revenue, expenses and shareholders' net income. This consolidated measure is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders' net income. See Exhibit 1 for a reconciliation of consolidated adjusted income from operations to shareholders' net income. Effective in the fourth quarter of 2018, Cigna updated its segments. Refer to our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2019 and our Annual Report on Form 10-K for the year ended December 31, 2018 for additional information and prior period results on the historic and new segment bases.
3Certain adjusted metrics presented for 2019 exclude contributions from transitioning clients. As previously disclosed, beginning in 2020, Cigna will no longer exclude contributions from transitioning clients from its adjusted metrics, as the transition for those clients was substantially complete as of December 31, 2019. Management is not able to provide a reconciliation of adjusted income from operations to shareholders' net income (loss) or adjusted revenues to total revenues on a forward-looking basis because we are unable to predict, without unreasonable effort, certain components thereof including (i) future net realized investment results (from equity method investments with respect to adjusted revenues) and (ii) future special items. These items are inherently uncertain and depend on various factors, many of which are beyond our control. As such, any associated estimate and its impact on shareholders' net income and total revenues could vary materially. The Company's outlook excludes the impact of prior year reserve development of medical costs and the potential effects of any share repurchases or business combinations that may occur after the date of this earnings release. Additionally, the Company's outlook assumes a full year of contributions from Cigna's Disability and Life business.
4Operating ratios are defined as follows: Medical care ratio represents medical costs as a percentage of premiums for all U.S. commercial risk products, including medical, pharmacy, dental, stop loss and behavioral products provided through guaranteed cost or experience-rated funding arrangements, as well as Medicare Advantage, Medicare Part D, Medicare Supplement, Medicaid, and individual on and off-exchange products, within our Integrated Medical segment. SG&A expense ratio represents enterprise selling, general and administrative expenses excluding special items and expenses from transitioning clients, as a percentage of adjusted revenue at a consolidated level.
5Cigna owns a 50% noncontrolling interest in its China joint venture. Cigna's 50% share of the joint venture's earnings is reported in Fees and Other Revenues using the equity method of accounting under GAAP. As such, the adjusted revenues and policy counts for the International Markets segment do not include the China joint venture.
6Adjusted margin, pre-tax, is calculated by dividing adjusted income (loss) from operations, pre-tax by adjusted revenues for each segment. Adjusted margin, after-tax, is calculated by dividing consolidated adjusted income (loss) from operations by consolidated adjusted revenues. Adjusted income (loss) from operations is measured on an after-tax basis for consolidated results.