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  Submission Type 10-Q
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  Submission Contact Alicia Ferri
  Submission Contact Phone Number 215-640-3330
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  Period of Report 06/30/08
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Documents
  10-Q cigna10q.htm
    CIGNA Corporation Form 10-Q
  EX-12 ex12.htm
    Exhibit 12
  EX-31.1 ex31-1.htm
    Exhibit 31.1
  EX-31.2 ex31-2.htm
    Exhibit 31.2
  EX-32.1 ex32-1.htm
    Exhibit 32.1
  EX-32.2 ex32-2.htm
    Exhibit 32.2
Module and Segment References
 
 


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2008

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from _____ to _____

Commission file number 1-08323

CIGNA Corporation
(Exact name of registrant as specified in its charter)

Delaware
06-1059331
(State or other jurisdiction
(I.R.S. Employer
of incorporation or organization)
Identification No.)

Two Liberty Place, 1601 Chestnut Street
Philadelphia, Pennsylvania 19192
 (Address of principal executive offices)      (Zip Code)

Registrant's telephone number, including area code (215) 761-1000

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No _

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [X]
  
Accelerated filer [   ]
  
Non-accelerated filer [   ]
  
Smaller Reporting  Company [   ]
  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  
Yes _   No x

      As of July 18, 2008, 274,856,896 shares of the issuer's common stock were outstanding.
 

 

 
 
 


CIGNA CORPORATION

INDEX


   
Page No.
PART I.
FINANCIAL INFORMATION
 
  
 
Item 1. Financial Statements
  
 
Consolidated Statements of Income
 
Consolidated Balance Sheets
 
Consolidated Statements of Comprehensive Income and Changes in Shareholders' Equity
 
Consolidated Statements of Cash Flows
 
Notes to the Consolidated Financial Statements
 
 
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
 
 
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk
 
 
Item 4. Controls and Procedures
     
PART II.
 
OTHER INFORMATION
  
 
Item 1. Legal Proceedings
 
 
Item 1A. Risk Factors
 
 
Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds
 
Item 4. Submission of Matters to a Vote of Security Holders
 
 
 
 
Item 6. Exhibits
 
SIGNATURE
 
EXHIBIT INDEX


As used herein, “CIGNA” or the “Company” refers to one or more of CIGNA Corporation and its consolidated subsidiaries.
 
 

 
 
 

Part I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

CIGNA Corporation
                        
Consolidated Statements of Income
                        
   
Unaudited
    
Unaudited
  
   
Three Months Ended
    
Six Months Ended
  
   
June 30,
    
June 30,
  
(In millions, except per share amounts)
  
2008
    
2007
    
2008
    
2007
  
Revenues
                        
Premiums and fees
   $ 4,202     $ 3,757     $ 8,053     $ 7,465  
Net investment income
     265       279       530       559  
Mail order pharmacy revenues
     286       277       582       548  
Other revenues
     129       79       272       173  
Realized investment gains (losses)
     (19 )     (11 )     (5 )     10  
   Total revenues
     4,863       4,381       9,432       8,755  
Benefits and Expenses
                                
Health Care medical claims expense
     1,900       1,729       3,644       3,448  
Other benefit expenses
     917       834       1,845       1,670  
Mail order pharmacy cost of goods sold
     227       225       466       444  
Guaranteed minimum income benefits (income) expense
     (49 )     96       255       120  
Other operating expenses
     1,455       1,169       2,736       2,332  
   Total benefits and expenses
     4,450       4,053       8,946       8,014  
Income from Continuing Operations
                                
   before Income Taxes
     413       328       486       741  
Income taxes (benefits):
                                
Current
     132       163       209       295  
Deferred
     8       (52 )     (51 )     (48 )
   Total taxes
     140       111       158       247  
Income from Continuing Operations
     273       217       328       494  
Income (Loss) from Discontinued Operations, Net of Taxes
     (1 )     (19 )     2       (7 )
Net Income
   $ 272     $ 198     $ 330     $ 487  
Earnings Per Share - Basic:
                                
   Income from continuing operations
   $ 0.98     $ 0.76     $ 1.18     $ 1.72  
   Income (loss) from discontinued operations
     -       (0.06 )     0.01       (0.03 )
Net income
   $ 0.98     $ 0.70     $ 1.19     $ 1.69  
Earnings Per Share - Diluted:
                                
   Income from continuing operations
   $ 0.98     $ 0.75     $ 1.17     $ 1.68  
   Income (loss) from discontinued operations
     (0.01 )     (0.07 )     -       (0.02 )
Net income
   $ 0.97     $ 0.68     $ 1.17     $ 1.66  
Dividends Declared Per Share
   $ -     $ 0.010     $ 0.040     $ 0.018  
                                 
The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.
                  

 
1
 
 
CIGNA Corporation
                        
Consolidated Balance Sheets
                        
         
Unaudited
As of June 30,
        
As of December 31,
(In millions, except per share amounts)
        
2008
          
2007
  
Assets
                        
Investments:
                        
   Fixed maturities, at fair value (amortized cost, $12,111; $11,409)
         $ 12,476           $ 12,081  
   Equity securities, at fair value (cost, $143; $127)
           145             132  
   Commercial mortgage loans
           3,456             3,277  
   Policy loans
           1,533             1,450  
   Real estate
           49             49  
   Other long-term investments
           557             520  
   Short-term investments
           39             21  
      Total investments
           18,255             17,530  
Cash and cash equivalents
           805             1,970  
Accrued investment income
           215             233  
Premiums, accounts and notes receivable
           1,642             1,405  
Reinsurance recoverables
           7,158             7,331  
Deferred policy acquisition costs
           848             816  
Property and equipment
           789             625  
Deferred income taxes, net
           917             794  
Goodwill
           2,837             1,783  
Other assets, including other intangibles
           963             536  
Separate account assets
           6,986             7,042  
   Total assets
         $ 41,415           $ 40,065  
Liabilities
                            
Contractholder deposit funds
         $ 8,627           $ 8,594  
Future policy benefits
           8,100             8,147  
Unpaid claims and claim expenses
           4,171             4,127  
Health Care medical claims payable
           1,096             975  
Unearned premiums and fees
           450             496  
   Total insurance and contractholder liabilities
           22,444             22,339  
Accounts payable, accrued expenses and other liabilities
           4,700             4,127  
Short-term debt
           428             3  
Long-term debt
           2,090             1,790  
Nonrecourse obligations
           13             16  
Separate account liabilities
           6,986             7,042  
   Total liabilities
           36,661             35,317  
Contingencies — Note 14
                            
Shareholders’ Equity
                            
Common stock (par value per share, $0.25; shares issued, 351)
           88             88  
Additional paid-in capital
           2,493             2,474  
Net unrealized appreciation, fixed maturities
   $ 26             $ 140          
Net unrealized appreciation, equity securities
     7               7          
Net unrealized depreciation, derivatives
     (30 )             (19 )        
Net translation of foreign currencies
     38               61          
Postretirement benefits liability adjustment
     (125 )             (138 )        
   Accumulated other comprehensive income (loss)
             (84 )             51  
Retained earnings
             7,412               7,113  
Less treasury stock, at cost
             (5,155 )             (4,978 )
   Total shareholders’ equity
             4,754               4,748  
   Total liabilities and shareholders’ equity
           $ 41,415             $ 40,065  
Shareholders’ Equity Per Share
           $ 17.26             $ 16.98  
                                 
The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.
  

 
2
 
 
CIGNA Corporation
                        
Consolidated Statements of Comprehensive Income and Changes in Shareholders’ Equity
                    
(In millions, except per share amounts)
                        
   
Unaudited
  
Three Months Ended June 30,
  
2008
    
2007
  
   
Compre-
    
Share-
    
Compre-
    
Share-
  
   
hensive
    
holders’
    
hensive
    
holders’
  
   
Income
    
Equity
    
Income
    
Equity
  
Common Stock, April 1
         $ 88           $ 40  
Effect of issuance of stock for stock split
           -             48  
Common Stock, June 30
           88             88  
Additional Paid-In Capital, April 1
           2,488             2,485  
Effect of issuance of stock for employee benefit plans
           5             23  
Effect of issuance of stock for stock split
           -             (48 )
Additional Paid-In Capital, June 30
           2,493             2,460  
Accumulated Other Comprehensive Income (Loss), April 1
           38             (171 )
Net unrealized depreciation, fixed maturities
   $ (111 )     (111 )   $ (118 )     (118 )
Net unrealized depreciation, equity securities
     (1 )     (1 )     -       -  
  Net unrealized depreciation on securities
     (112 )             (118 )        
Net unrealized depreciation, derivatives
     (3 )     (3 )     (9 )     (9 )
Net translation of foreign currencies
     (17 )     (17 )     5       5  
Postretirement benefits liability adjustment
     10       10       36       36  
  Other comprehensive loss
     (122 )             (86 )        
Accumulated Other Comprehensive Loss, June 30
             (84 )             (257 )
Retained Earnings, April 1
             7,142               6,375  
Net income
     272       272       198       198  
Effects of issuance of stock for employee benefit plans
             (2 )             (57 )
Common dividends declared
             -               (3 )
Retained Earnings, June 30
             7,412               6,513  
Treasury Stock, April 1
             (4,942 )             (4,577 )
Repurchase of common stock
             (222 )             (346 )
Other, primarily issuance of treasury stock for employee
                                
   benefit plans
             9               128  
Treasury Stock, June 30
             (5,155 )             (4,795 )
Total Comprehensive Income and Shareholders’ Equity
   $ 150     $ 4,754     $ 112     $ 4,009  
                                 
The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.
          

 
3
 
 
CIGNA Corporation
                        
Consolidated Statements of Comprehensive Income and Changes in Shareholders’ Equity
              
(In millions, except per share amounts)
                        
   
Unaudited
  
Six Months Ended June 30,
  
2008
    
2007
  
   
Compre-
    
Share-
    
Compre-
    
Share-
  
   
hensive
    
holders’
    
hensive
    
holders’
  
   
Income
    
Equity
    
Income
    
Equity
  
Common Stock, January 1
         $ 88           $ 40  
Effect of issuance of stock for stock split
           -             48  
Common Stock, June 30
           88             88  
Additional Paid-In Capital, January 1
           2,474             2,451  
Effect of issuance of stock for employee benefit plans
           19             57  
Effect of issuance of stock for stock split
           -             (48 )
Additional Paid-In Capital, June 30
           2,493             2,460  
Accumulated Other Comprehensive Income (Loss),
                            
   January 1 prior to implementation effect
           51             (169 )
Implementation effect of SFAS No.155
           -             (12 )
Accumulated Other Comprehensive Income (Loss),
                            
   January 1 as adjusted
           51             (181 )
Net unrealized depreciation, fixed maturities
   $ (114 )     (114 )   $ (124 )     (124 )
   Net unrealized depreciation on securities
     (114 )             (124 )        
Net unrealized depreciation, derivatives
     (11 )     (11 )     (10 )     (10 )
Net translation of foreign currencies
     (23 )     (23 )     5       5  
Postretirement benefits liability adjustment
     13       13       53       53  
   Other comprehensive loss
     (135 )             (76 )        
Accumulated Other Comprehensive Loss, June 30
             (84 )             (257 )
Retained Earnings, January 1 prior to
                                
    implementation effects
             7,113               6,177  
Implementation effect of SFAS No. 155
             -               12  
Implementation effect of FIN 48
             -               (29 )
Retained Earnings, January 1 as adjusted
             7,113               6,160  
Net income
     330       330       487       487  
Effects of issuance of stock for employee benefit plans
             (20 )             (129 )
Common dividends declared
             (11 )