CIGNA Corp. (NYSE:CI) filed Quarterly Report for the period ended 2011-09-30.
Cigna Corp. has a market cap of $12.8 billion; its shares were traded at around $47.37 with a P/E ratio of 9.2 and P/S ratio of 0.6. The dividend yield of Cigna Corp. stocks is 0.1%. Cigna Corp. had an annual average earning growth of 3% over the past 5 years.
Highlight of Business Operations:Other revenues included pre-tax gains of $133 million for the three months and $96 million for the nine months ended September 30, 2011, compared with losses of $119 million for the three months ended and $72 million for the nine months ended September 30, 2010 related to futures and swaps entered into as part of dynamic hedge programs to manage equity and growth interest rate risks in the Company’s run-off reinsurance operations. See the Run-off Reinsurance section of the MD&A beginning on page 63 for more information on this program. Excluding the impact of these swaps and futures contracts, other revenues declined 47% for the three months and 34% for the nine months ended September 30, 2011, compared with the same periods last year. The declines primarily reflect the absence of revenue in 2011 from the workers’ compensation and case management business, which was sold in the fourth quarter of 2010 as well as an absence of revenues in the third quarter of 2011 from Cigna Government Services, which was sold in the second quarter of 2011.
Premiums and fees. Excluding the effect of foreign currency movements, premiums and fees were $726 million for the third quarter of 2011, compared with reported premiums and fees of $574 million for the third quarter of 2010, an increase of 26%, and $2.1 billion for the nine months ended September 30, 2011 compared with reported premiums and fees of $1.6 billion for the nine months ended September 30, 2010, an increase of 28%. These increases are primarily attributable to higher membership from new sales and the acquisition of Vanbreda International in the expatriate employee benefits business and new sales growth in the supplemental health, life and accident business, particularly in South Korea and Taiwan.
Excluding the impact of foreign currency movements, benefits and expenses were $652 million for the third quarter of 2011, compared with reported benefits and expenses of $525 million for the third quarter of 2010, an increase of 24% and $1.9 billion for the nine months ended September 30, 2011, compared to reported benefits and expenses of $1.5 billion for the same period last year, an increase of 29%. These increases were primarily due to business growth, the acquisition of Vanbreda International and higher loss ratios, primarily in the expatriate employee benefits business.
At September 30, 2011, there was $925 million in cash and short-term investments available at the parent company level. For the remainder of 2011, the parent company’s cash requirements include scheduled interest payments of approximately $60 million on long-term debt of $3.2 billion outstanding at September 30, 2011 (including current maturities). In addition, $100 million of commercial paper will mature over the next three months and scheduled long-term debt repayments of $226 million are due in October of 2011. For the remainder of the year, the Company expects to fund the FirstAssist acquisition of approximately $110 million and make additional contributions to the pension plan of $19 million. The parent company expects to fund these cash requirements by using available cash, subsidiary dividends and by refinancing the maturing commercial paper borrowings with new commercial paper.
There are five loans with an aggregate carrying value exceeding the value of the underlying properties by $9 million. All of these loans have current debt service coverage of 1.0 or greater, along with significant borrower commitment. The mortgage portfolio contains approximately 165 loans, and all but four loans, totaling $85 million, continue to perform under their contractual terms with the actual aggregate default rate at 2.6%. The Company has $502 million of loans maturing in the next twelve months. Given the quality and diversity of the underlying real estate, positive debt service coverage and significant borrower cash investment averaging nearly 30%, the Company remains confident that the vast majority of borrowers will continue to perform as required.
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