Shareholder Value and Financial Outlook
NON-GAAP MEASURES AND
OTHER KEY FINANCIAL INFORMATION
Throughout this presentation, the term "adjusted earnings" means adjusted income (loss) from operations, and "adjusted earnings per share" or "adjusted EPS" means adjusted income (loss) from
operations on a diluted per share basis.
Adjusted income (loss) from operations is a principal financial 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. Adjusted income from operations is defined as shareholders' net income (or income before taxes less pre-tax
income (loss) attributable to non controlling interests for the segment metric) excluding net realized investment results, amortization of acquired intangible assets and special items. Cigna'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.
Adjusted revenuesis used by Cigna's management because it permits analysis of trends in underlying revenue. The Company defines adjusted revenues as total revenues excluding the following
adjustments: special items and Cigna's share of certain realized investment results of its joint ventures reported in the Cigna Healthcare segment using the equity method of accounting. Special items are
matters that management believes are not representative of the underlying results of operations due to their nature or size. We exclude these items from this measure because management believes
they are not indicative of past or future underlying performance of the business. Adjusted revenues is not determined in accordance with GAAP and should not be viewed as a substitute for the most
directly comparable GAAP measure, total revenues.
Additional definitions and relevant reconciliations of Cigna's non-GAAP measures to their most directly comparable GAAP measure are set forth in the appendix to these materials.
Note Regarding Outlook
The Company's long-term outlooks include future share repurchases and anticipated dividends, but does not indude the potential effects from other business combinations or divestitures that may occur
after the date of this presentation.
Management is not able to provide a reconciliation of adjusted income from operations to shareholders' net income (loss) (including on a per share basis) 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.
Note Regarding Share Repurchases and Dividends
The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital. The share repurchase
program may be effected through open market purchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, including through Rule 10b5-1 trading plans, or
privately negotiated transactions. The program may be suspended or discontinued at any time.
Cigna currently intends to pay regular quarterly dividends, with future declarations subject to approval by its Board of Directors and the Board's determination that the declaration of dividends remains in
the best interests of Cigna and its shareholders. The decision of whether to pay future dividends and the amount of any such dividends will be based on the Company's financial position, results of
operations, cash flows, capital requirements, the requirements of applicable law and any other factors the Board of Directors may deem relevant.
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