Cigna 2014 Annual Report Download - page 64

PART II
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
Index
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Management’s Discussion and Analysis of Financial Condition and Results of Operations (‘‘MD&A’’) is intended to provide information to assist you in
better understanding and evaluating our financial condition and results of operations. We encourage you to read this MD&A in conjunction with our
Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K and the ‘‘Risk Factors’’ contained in Part I Item 1A of
this Annual Report on Form 10-K (‘‘Form 10-K’’).
Unless otherwise indicated, financial information in the MD&A is presented in accordance with accounting principles generally accepted in the United
States of America (‘‘GAAP’’). See Note 2 to the Consolidated Financial Statements for additional information regarding the Company’s significant
accounting policies. We measure the financial results of our segments using ‘‘segment earnings (loss)’’, defined as shareholders’ net income (loss) before
after-tax realized investment results. In this MD&A, we also present information using adjusted income from operations on both a consolidated and
segment basis. Adjusted income (loss) from operations is another measure of profitability used by our management because it presents the underlying results
of operations of our businesses and permits analysis of trends in underlying revenue, expenses and shareholders’ net income. Adjusted income (loss) from
operations is defined as segment earnings (loss) excluding special items (described in the table on page 36 of this Form 10-K) and results of the GMIB
business. This measure is not determined in accordance with GAAP and should not be viewed as a substitute for the most directly comparable GAAP
measures, which are shareholders’ net income on a consolidated basis and segment earnings (loss) on a segment basis. We exclude special items because
management does not believe they are representative of our underlying results of operations. We also exclude the results of the GMIB business because, prior
to February 4, 2013, the changes in the fair value of GMIB assets and liabilities were volatile and unpredictable. In some of our financial tables in this
MD&A, we present either percentage changes or ‘‘N/M’’ when those changes are so large as to become not meaningful, and changes in percentages are
expressed in basis points (‘‘bps’’).
Overview
Cigna Corporation, together with its subsidiaries (either individually
Our Segments
or collectively referred to as ‘‘Cigna,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘our’’ or
As explained in Note 22 to the Consolidated Financial Statements,
‘‘us’’) is a global health services organization dedicated to a mission of
effective with the first quarter of 2014, we began combining the
helping individuals improve their health, well-being and sense of
results of our run-off reinsurance business with other immaterial
security. To execute on our mission, Cigna’s strategy is to ‘‘Go Deep’’,
operating segments in Other Operations for segment reporting
‘‘Go Global’’ and ‘‘Go Individual’’ with a differentiated set of medical,
purposes. Prior year segment information has been conformed to the
dental, disability, life and accident insurance and related products and
current year presentation.
services offered by our subsidiaries.
For further information on our business and strategy, please see
Item 1, ‘‘Business’’ in this Form 10-K.
32 CIGNA CORPORATION - 2014 Form 10-K
ITEM 7.
Overview
Consolidated Results of Operations
Liquidity and Capital Resources
Critical Accounting Estimates
Segment Reporting
Global Health Care
Global Supplemental Benefits
Group Disability and Life
Other Operations
Corporate
Investment Assets