CIGNA Corp. (NYSE:CI) filed Quarterly Report for the period ended 2012-09-30.
Cigna Corp has a market cap of $14.33 billion; its shares were traded at around $52.63 with a P/E ratio of 9.9 and P/S ratio of 0.7. The dividend yield of Cigna Corp stocks is 0.1%. Cigna Corp had an annual average earning growth of 9.2% over the past 5 years.
Highlight of Business Operations:Shareholders net income for the nine months ended September 30, 2012 increased by $29 million, that included $13 million attributable to the first quarter implementation of this method for the Companys China and Indonesia operations. Shareholders net income for the nine months ended September 30, 2011 increased by $22 million related to this method. Permanent investment of foreign operation earnings has resulted in cumulative unrecognized deferred tax liabilities of $98 million through September 30, 2012. The year-to-date change in the cumulative unrecognized deferred tax liability includes a $9 million reduction due to the transition in the accounting for deferred acquisition costs, that was adopted through retrospective adjustment on January 1, 2012. See Note 2 for additional information.
Other revenues included pre-tax losses of $42 million for the three months ended September 30, 2012, compared with pre-tax gains of $133 million for the three months ended September 30, 2011 and pre-tax losses of $106 million for the nine months ended September 30, 2012 compared with pre-tax gains of $96 million for the nine months ended September 30, 2011, related to futures and swaps entered into as part of a dynamic hedge program to manage equity and growth interest rate risks in the Companys run-off reinsurance operations. See the Run-off Reinsurance section of the MD&A beginning on page 68 for more information on this program.
International segment earnings increased 13% for the three months and 19% for the nine months ended September 30, 2012 compared to the same periods last year. Segment earnings for the three and nine months ended September 30, 2012 include an after-tax charge of $9 million (presented in the table above) associated with the realignment and efficiency plan. For the nine months ended September 30, 2012, results also include an $8 million favorable adjustment related to the first quarter 2012 expansion of a capital management strategy to permanently invest the earnings of its China and Indonesia operations overseas (see further discussion in the Liquidity and Capital Resources section of the MD&A beginning on page 73). Excluding these adjustments and the unfavorable impact of foreign currency movements (presented in the table above) adjusted income from operations increased 32% for the three months and 24% for the nine months ended September 30, 2012 compared with the same periods last year. These increases were primarily driven by significantly higher earnings in the supplemental health, life and accident business (primarily South Korea) reflecting higher margins and revenue growth. The margin improvement was largely attributable to disciplined management of solicitation spending. Excluding the first quarter 2012 implementation effect of the capital management strategy, the International segments effective tax rate for the nine months ended September 30, 2012 was 30.9%, compared with 29.0% for the same period last year.
For the Companys International segment, South Korea is the single largest geographic market. South Korea generated 30% of the segments revenues and 55% of the segments earnings for the three months ended September 30, 2012. South Korea generated 29% of the segments revenues and 49% of the segments earnings for the nine months ended September 30, 2012. Due to the concentration of business in South Korea, the International segment is exposed to potential losses resulting from economic, regulatory and geopolitical developments in that country, as well as foreign currency movements affecting the South Korean currency, which could have a significant impact on the segments results and the Companys consolidated financial results.
Segment earnings for the nine months ended September 30, 2012 decreased 8% compared with the same period in 2011 reflecting lower adjusted income from operations, a special item for a realignment and efficiency plan charge in 2012 as well as the absence of the 2011 special item related to the completion of the 2007 and 2008 IRS examination. Segment adjusted income from operations decreased 5%, primarily attributable to higher disability and accident loss ratios and a higher operating expense ratio offset by a lower life loss ratio (see Benefits and Expenses below). Results in 2012 include the $43 million after-tax favorable impact of reserve studies. Results in 2011 include the $39 million after-tax favorable impact of reserve studies offset by a $7 million after-tax litigation accrual.
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