Cigna : Third Quarter 2024 Earnings Release Press Release

Published: 2024-10-31 09:36:09 ET CI

Press Release

INVESTOR RELATIONS CONTACT: Ralph Giacobbe

MEDIA CONTACT:

Justine Sessions 860-810-6523 [email protected]

The Cigna Group Reports Strong Third Quarter 2024 Results, Reaffirms 2024 Adjusted EPS Outlook

BLOOMFIELD, CT, October 31, 2024 - Global health company The Cigna Group (NYSE: CI) today reported strong third quarter 2024 results demonstrating focused execution across Evernorth Health Services and Cigna Healthcare.

"Our strong performance this quarter is a testament to the leadership, stability and expertise of our team," said David M. Cordani, chairman and CEO of The Cigna Group. "Our disciplined execution of our strategic plan and our comprehensive health services ensure we remain well-positioned in a highly dynamic environment, while sustaining business growth in both the near- and long-term."

Shareholders' net income for third quarter 2024 was $0.7 billion, or $2.63 per share, including a non-cashafter-tax investment loss of $1.0 billion, or $3.69 per share related to VillageMD. This compares with $1.4 billion, or $4.74 per share, for third quarter 2023.

The Cigna Group's adjusted income from operations1 for third quarter 2024 was $2.1 billion, or $7.51 per share, compared with $2.0 billion, or $6.77 per share, for third quarter 2023, reflecting strong contributions from Evernorth Health Services, particularly within Specialty and Care Services.

A reconciliation of shareholders' net income to adjusted income from operations1 is 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 revenues3 and shareholders' net income (loss) to adjusted income from operations1:

Consolidated Financial Results (dollars in millions):

Three Months Ended

Nine Months

Ended

September 30,

June 30,

September 30,

2024

2023

2024

Total Revenues

63,694

49,048

60,523

181,472

Net Realized Investment Results from Equity

(177)

(53)

(238)

Method Investments3

Special Item related to Impairment of dividend

182

receivable3

Adjusted Revenues3

63,699

49,078

60,470

181,416

Consolidated Earnings, net of taxes

Shareholders' Net Income

739

1,408

1,548

2,010

Net Realized Investment (Gains) Losses1

740

(20)

2,547

Amortization of Acquired Intangible Assets1

333

363

317

972

Special Items1

300

199

367

Adjusted Income from Operations1

2,112

2,011

1,909

5,896

Shareholders' Net Income, per share

2.63

4.74

5.45

7.05

Adjusted Income from Operations1, per share

7.51

6.77

6.72

20.68

CUSTOMER RELATIONSHIPS

The following table summarizes The Cigna Group's medical customers and overall customer relationships:

Customer Relationships (in thousands):

As of the Periods Ended

September 30,

June 30,

December 31,

2024

2023

2024

2023

Total Pharmacy Customers5

119,996

98,325

122,470

98,570

U.S. Healthcare

17,406

17,979

17,404

18,170

International Health

1,642

1,628

1,639

1,610

Total Medical Customers5

19,048

19,607

19,043

19,780

Behavioral Care

23,662

25,100

23,816

24,956

Dental

18,251

18,593

18,339

18,543

Medicare Part D

2,557

2,544

2,564

2,550

Total Customer Relationships5

183,514

164,169

186,232

164,399

HIGHLIGHTS OF SEGMENT RESULTS

See Exhibit 1 for a reconciliation of adjusted income from operations1 to shareholders' net income.

Evernorth Health Services

This segment includes the Pharmacy Benefit Services and the Specialty and Care Services operating segments, which partner with health plans, employers, governmental organizations and health care providers to solve challenges in the areas of pharmacy benefits, home delivery pharmacy, specialty pharmacy, specialty distribution, and care delivery and management solutions.

Pharmacy Benefit Services drives high-quality,cost-effective pharmacy care through various services such as drug claim adjudication, retail pharmacy network administration, benefit design consultation, drug utilization review, drug formulary management and access to our home delivery pharmacy. Specialty and Care Services provides specialty drugs for the treatment of complex and rare diseases, specialty distribution of pharmaceuticals and medical supplies, as well as clinical programs to help our clients drive better whole-person health outcomes through care delivery and management solutions.

Financial Results (dollars in millions):

Three Months Ended

Nine Months

Ended

September 30,

June 30,

September 30,

2024

2023

2024

Total adjusted revenues

Pharmacy Benefit Services

28,785

19,158

26,612

81,492

Specialty and Care Services

23,812

19,375

22,871

66,755

Net investment income3

164

Adjusted Revenues3

52,637

38,596

49,548

148,411

Adjusted Income from Operations, Pre-Tax

Pharmacy Benefit Services

1,011

981

798

2,322

Specialty and Care Services

825

672

756

2,369

Net investment income3

164

Adjusted Income from Operations, Pre-Tax1

1,876

1,716

1,619

4,855

Adjusted Margin, Pre-Tax6

3.6%

4.4%

3.3%

Cigna Healthcare

This segment includes the U.S. Healthcare and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers. U.S. Healthcare provides commercial medical plans and specialty benefits and solutions for insured and self-insured clients, Medicare Advantage, Medicare Supplement and Medicare Part D plans for seniors and individual health insurance plans. International Health solutions include health care coverage in our international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations.

Financial Results (dollars in millions):

Three Months Ended

Nine Months

Ended

September 30,

June 30,

September 30,

2024

2023

2024

Adjusted Revenues3,7

13,163

12,768

13,143

39,583

Adjusted Income from Operations, Pre-Tax1

1,174

1,222

1,204

3,718

Adjusted Margin, Pre-Tax6

8.9%

9.6%

9.2%

9.4%

Corporate and Other Operations

Corporate reflects interest expense, amounts not allocated to operating segments and includes intersegment eliminations. Additionally, this discussion includes items reported in Other Operations, which is comprised of Corporate Owned Life Insurance ("COLI"), the Company's run-off operations and other non-strategic businesses.

Financial Results (dollars in millions):

Three Months Ended

Nine Months

Ended

September 30,

June 30,

September 30,

2024

2023

2024

Adjusted (Loss) from Operations, Pre-Tax1

(431) $

(409) $

(451)

(1,273)

2024 OUTLOOK2

The Cigna Group's outlook2 for full year 2024 consolidated adjusted income from operations1,2 share2. Additionally, this outlook includes the impact of expected future share repurchases dividends.

is at least $28.40 per and anticipated 2024

(dollars in millions, except where noted and per share amounts)

Projection for Full Year Ending

2024 Outlook

December 31, 2024

Adjusted Income from Operations, per share1,2 Evernorth Adjusted Income from Operations, Pre-Tax1,2 Cigna Healthcare Adjusted Income from Operations, Pre-Tax1,2 Cigna Healthcare Medical Care Ratio2,4

at least $28.40 at least $7,000 at least $4,775 81.7% to 82.5%

The foregoing statements represent the Company's current estimates of The Cigna Group's 2024 consolidated and segment adjusted income from operations1,2 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 The Cigna Group's website in the Investor Relations section (https://investors.thecignagroup.com/overview/default.aspx). Management will be hosting a conference call to review third quarter 2024 results and discuss full year 2024 outlook beginning today at 8:30 a.m. ET. A link to the conference call is available in the Investor Relations section of The Cigna Group's website located at https://investors.thecignagroup.com/events-and-presentations/default.aspx.

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

Live Call

Replay

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

About The Cigna Group

The Cigna Group (NYSE: CI) is a global health company committed to creating a better future built on the vitality of every individual and every community. We relentlessly challenge ourselves to partner and innovate solutions for better health. The Cigna Group includes products and services marketed under Evernorth Health Services, Cigna Healthcare, or its subsidiaries. The Cigna Group maintains sales capabilities in more than 30 markets and jurisdictions, and has approximately 184 million customer relationships around the world. Learn more at thecignagroup.com.

Notes:

1. Adjusted income (loss) from operations is a principal financial measure of profitability used by The

Cigna Group's management because it presents the underlying results of operations of the Company's businesses and facilitates analysis of trends in underlying revenue, expenses and shareholders' net income (loss). Adjusted income (loss) from operations is defined as shareholders' net income (loss) (or income (loss) before income taxes less pre-tax income (loss) attributable to noncontrolling interests for the segment metric) excluding net realized investment results, amortization of acquired intangible assets and special items. The Cigna Group's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting are also excluded. Special items are matters that management believes are not representative of the underlying results of operations due to their nature or size. Adjusted income (loss) from operations is measured on an after- tax basis for consolidated results and on a pre-tax basis for segment results. Consolidated adjusted income (loss) from operations 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 (loss). See Exhibit 1 for a reconciliation of consolidated adjusted income from operations to shareholders' net income (loss).

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release, and oral statements made in connection with 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 The Cigna Group'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 from operations outlook for 2024 on a per share, and segment basis; projected medical care ratio; future dividends, including projected shareholder dividends for 2024; projected weighted average shares outstanding; future financial or operating performance, including our ability to improve the health and vitality of those we serve; future growth, business strategy and strategic or operational initiatives; economic, regulatory or competitive environments, particularly with respect to the pace and extent of change in these areas and the impact of the developing inflationary and interest rate pressures; capital deployment plans and amounts available for future deployment; our prospects for growth in the coming years; and other statements regarding The Cigna Group's future beliefs, expectations, plans, intentions, liquidity, cash flows, financial condition or performance. You may identify forward-looking statements by the use of words such as "believe," "expect," "project," "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 strategic and operational initiatives; our ability to adapt to changes in an evolving and rapidly changing industry; our ability to compete effectively, differentiate our products and services from those of our competitors and maintain or increase market share; price competition, inflation and other pressures that could compress our margins or result in premiums that are insufficient to cover the cost of services delivered to our customers; the potential for actual claims to exceed our estimates related to expected medical claims; our ability to develop and maintain satisfactory relationships with physicians, hospitals, other health service providers and with producers and consultants; our ability to maintain relationships with one or more key pharmaceutical manufacturers or if payments made or discounts provided decline; changes in the pharmacy provider marketplace or pharmacy networks; changes in drug pricing or industry pricing benchmarks; our ability to invest in and properly maintain our information technology and other business systems; our ability to prevent or contain effects of potential cyberattack or other privacy or data security incidents; risks related to our use of artificial intelligence and machine learning; political, legal, operational, regulatory, economic and other risks that could affect our multinational operations, including currency exchange rates; risks related to an impairment of goodwill, intangible assets and/or investments (including as a result of the failure to realize the expected benefits of strategic transactions, as well as integration or separation difficulties or underperformance of such transactions relative to expectations); dependence on success of relationships with third parties; risk of significant disruption within our operations or among key suppliers or third parties; potential liability in connection with managing medical practices and operating pharmacies, onsite clinics and other types of medical facilities; 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; uncertainties surrounding participation in government-sponsored programs such as Medicare; the outcome of litigation, regulatory audits and investigations; compliance with applicable privacy, security and data laws, regulations and standards; potential failure of our prevention, detection and control systems; unfavorable economic and market conditions, the risk of a recession or other economic downturn and resulting impact on employment metrics, stock market or changes in interest rates and risks related to a downgrade in financial strength ratings of our insurance subsidiaries; the impact of our significant indebtedness and the potential for further indebtedness in the future; credit risk related to our reinsurers; 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 through the Investor Relations section of www.thecignagroup.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. The Cigna Group 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.

Disclaimer

CIGNA Corporation published this content on October 31, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 31, 2024 at 13:35:50.727.