Cigna 2015 Annual Report Download - page 136

PART II
ITEM 8. Financial Statements and Supplementary Data
options, expense associated with frozen pension plans and certain new performance metrics. Income or expense amounts are excluded
costs for corporate projects, including overhead. from adjusted income from operations for the following reasons:
In the Company’s segment disclosures, we present ‘‘operating Realized investment results are excluded because, as noted above,
revenues,’’ defined as total revenues excluding realized investment our portfolio managers may sell investments based on factors largely
results. The Company excludes realized investment results from this unrelated to the underlying business purposes of each segment.
measure because its portfolio managers may sell investments based on Net amortization of other intangible assets is excluded because it
factors largely unrelated to the underlying business purposes of each relates to costs incurred for acquisitions and, as a result, it does not
segment. As a result, gains or losses created in this process may not be relate to the core performance of the Company’s business
indicative of past or future underlying performance of the business. operations. The amortization amount is net of one-time benefits of
The Company uses adjusted income (loss) from operations as its acquisitions in which the fair value of net assets acquired exceeds the
principal financial measure of segment operating performance because purchase price.
management believes it best reflects the underlying results of business Special items, if any, are excluded because management believes they
operations and permits analysis of trends in underlying revenue, are not representative of the underlying results of operations.
expenses and profitability. Beginning on January 1, 2015, adjusted In 2013, adjusted income from operations also excluded the results of
income from operations was newly defined as shareholders’ net the guaranteed minimum income benefit (‘‘GMIB’’) business prior to
income (loss) excluding after-tax realized investment gains and losses, the reinsurance transaction with Berkshire.
net amortization of other acquired intangible assets and special items.
Prior period segment information has been restated to reflect these
For the years ended December 31, 2015, 2014 and 2013, the Company reported the following special item charges:
(In millions)
Year
(1)
Description and Financial Statement Line Item(s) After-tax Before-tax
2015 Debt extinguishment costs (Other operating expenses, see Note 15 for details) $ 65 $ 100
2015 Merger related transaction costs (Other operating expenses, see Note 3 for details) $ 57 $ 66
2013 Charge related to a reinsurance transaction (see Note 7 for details) $ 507 $ 781
– Other benefit expenses 727
– Other operating expenses 54
2013 Charge for a disability claims regulatory matter (see Note 23 for details) $ 51 $ 77
– Other benefit expenses 75
– Other operating expenses 2
2013 Charge for an organizational efficiency plan (Other operating expenses, see Note 6 for details) $ 40 $ 60
2013 Costs associated with a pharmacy benefit management (‘‘PBM’’) services agreement (Other operating expenses)
(2)
$24 $ 37
(1) There were no special items recorded in 2014.
(2) Under this agreement, the Company utilizes a vendor’s technology and service platforms, retail network contracting and claims processing services.
106 CIGNA CORPORATION - 2015 Form 10-K
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