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CIGNA CORPORATION2010 Form 10K
58
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
could have a material adverse eff ect on the Company’s consolidated
results of operations and could have a material adverse eff ect on the
Company’s fi nancial condition.  e Company bears the risk of loss if
its payment obligations to cedents increase or if its retrocessionaires
are unable to meet, or successfully challenge, their reinsurance
obligations to the Company.
Other Operations Segment
Segment Description
CIGNA’s Other Operations segment includes the results of the
following businesses:
•corporate-owned life insurance (“COLI”);
•deferred gains recognized from the 1998 sale of the individual life
insurance and annuity business and the 2004 sale of the retirement
benefi ts business; and
•run-off settlement annuity business.
COLI has contributed the majority of earnings in Other Operations
for the periods presented and management expects this trend to
continue in future periods as deferred gain amortization continues to
decline from the sold businesses.  e COLI regulatory environment
continues to evolve, with various federal budget related proposals
recommending changes in policyholder tax treatment. In addition,
provisions of the Dodd-Frank fi nancial reform legislation may limit
the ability of some fi nancial institutions to hold certain types of
COLI contracts. Although regulatory and legislative activity could
adversely impact our business and policyholders, management does
not expect the impact to materially aff ect the Company’s results of
operations, liquidity or fi nancial condition.
Results of Operations
Financial Summary
(In millions)
2010 2009 2008
Premiums and fees $ 114 $ 112 $ 113
Net investment income 404 407 414
Other revenues 60 64 71
Segment revenues 578 583 598
Benefi ts and expenses 454 466 468
Income before taxes 124 117 130
Income taxes 39 31 43
SEGMENT EARNINGS 85 86 87
Completion of IRS examination (See Note 20 to the Consolidated Financial Statements) - 1 -
ADJUSTED INCOME FROM OPERATIONS $ 85 $ 85 $ 87
Realized investment gains (losses), net of taxes $ 5 $ (6) $ (27)
Adjusted income from operations for Other Operations was fl at in
2010 compared with 2009, refl ecting an increase in COLI earnings
driven by higher investment income and favorable mortality,
primarily off set by the continued decline in deferred gain amortization
associated with the sold businesses.
Adjusted income from operations for Other Operations declined
in 2009 compared with 2008, refl ecting a continued decline in
deferred gain amortization associated with the sold businesses off set
by increased COLI earnings driven by higher investment income and
improved operating expenses.
Revenues
Net investment income
Net investment income decreased 1% in 2010 compared with 2009,
primarily refl ecting lower yields, off set by higher average invested
assets of the COLI business and improved income from real estate
and security partnerships. Net investment income decreased 2% in
2009 compared with 2008 primarily refl ecting lower average invested
assets and lower real estate income.
Other revenues
Other revenues decreased 6% in 2010 compared with 2009 and
decreased 10% in 2009 compared with 2008 primarily due to lower
deferred gain amortization related to the sold retirement benefi ts and
individual life insurance and annuity businesses.
For more information regarding the sale of these businesses see Note 8
of the Consolidated Financial Statements beginning on page 89 of
this Form 10-K.
Corporate
Description
Corporate refl ects amounts not allocated to other segments, such
as net interest expense (defi ned as interest on corporate debt less
net investment income on investments not supporting segment
operations), interest on uncertain tax positions, certain litigation
matters, intersegment eliminations, compensation cost for stock
options and certain corporate overhead expenses such as directors’
expenses and, beginning in 2010, pension expense related to the
Company’s frozen pension plans.