Intends to Repurchase at Least $5 Billion of Common Stock by End of First Half
of 2024,
with Portion Executed Via ASR in First Quarter 2024
Reaffirms Previously Provided Outlook for
Full-Year 2023
BLOOMFIELD, Conn., Dec. 10,
2023 /PRNewswire/ -- Global health
company The Cigna Group (NYSE: CI) today announced that its Board
of Directors has approved an aggregate increase of $10 billion in incremental share repurchase
authorization, bringing the company's total share repurchase
authority to $11.3 billion. The
company intends to use the majority of its discretionary cash flow
for share repurchase in 2024. The company expects this to include
repurchase of at least $5 billion of
common stock between now and the end of the first half of 2024,
with a portion of this repurchase to be executed via an accelerated
share repurchase program conducted in the first quarter of 2024.
"We believe Cigna's shares are significantly undervalued and
repurchases represent a value-enhancing deployment of capital as we
work to support high-quality care, improved affordability, and
better health outcomes," said David M.
Cordani, Chairman and Chief Executive Officer, The Cigna
Group. "As we look at the broader landscape and the strategic
opportunities before us, we will remain financially disciplined
with a clear focus on executing against our strategy, delivering
value for our shareholders, and investing in our future. In light
of the current environment, we will consider bolt-on acquisitions
aligned with our strategy, as well as value-enhancing
divestitures."
In connection with today's announcement, Cigna reaffirmed its
previously provided outlook of full-year 2023 consolidated adjusted
income from operations on a per share basis of at least
$24.75 per share. The company
continues to target consolidated adjusted income from operations on
a per share basis of at least $28 for
full-year 2024.
Added Cordani, "Over the past 10 years, our consistent execution
has resulted in EPS growth of more than 13 percent on an annualized
basis, demonstrating our ability to profitably evolve our business
and the services we provide. We are confident in the ongoing growth
and strength of Cigna's businesses and expect to carry significant
momentum forward into 2024. This conviction reinforces the
confidence we have in achieving our long-term annual adjusted EPS
growth target of 10-13% while maintaining an attractive
dividend."
The company's proposed repurchases under the updated share
repurchase program may be made from time to time on the open market
at prevailing market prices, through accelerated share repurchase
agreements, in privately negotiated transactions, in block trades,
and/or through other legally permissible means, depending on market
conditions and in accordance with applicable rules and regulations
and its insider trading policy.
Forward-Looking Statements
This press release, and oral statements made in connection with
this release, may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on The Cigna Group's current
expectations and projections about future trends, events and
uncertainties. These statements are not historical facts.
Forward-looking statements may include, among others, statements
concerning our projected adjusted income from operations outlook
for 2023 on a consolidated, per share, and segment basis; targeted
adjusted income from operations outlook for 2024 on a per share
basis; projected weighted average shares outstanding; future share
repurchase and future dividends; future financial or operating
performance, including our ability to improve the health and
vitality of those we serve; future growth, business strategy and
strategic or operational initiatives; economic, regulatory or
competitive environments, particularly with respect to the pace and
extent of change in these areas and the impact of developing
inflationary and interest rate pressures; financing or capital
deployment plans and amounts available for future deployment; our
prospects for growth in the coming years; strategic transactions;
expectations related to our Medicare Advantage Capitation Rates;
and other statements regarding The Cigna Group's future beliefs,
expectations, plans, intentions, liquidity, cash flows, financial
condition or performance. You may identify forward-looking
statements by the use of words such as "believe," "expect,"
"project," "plan," "intend," "anticipate," "estimate," "predict,"
"potential," "may," "should," "will" or other words or expressions
of similar meaning, although not all forward-looking statements
contain such terms.
Forward-looking statements are subject to risks and
uncertainties, both known and unknown, that could cause actual
results to differ materially from those expressed or implied in
forward-looking statements. Such risks and uncertainties include,
but are not limited to: our ability to achieve our strategic and
operational initiatives; our ability to execute the contemplated
share repurchases, including the contemplated accelerated share
repurchase program, on attractive terms, on the anticipated timing
or at all; our ability to adapt to changes in an evolving and
rapidly changing industry; our ability to compete effectively,
differentiate our products and services from those of our
competitors and maintain or increase market share; price
competition, inflation and other pressures that could compress our
margins or result in premiums that are insufficient to cover the
cost of services delivered to our customers; the potential for
actual claims to exceed our estimates related to expected medical
claims; our ability to develop and maintain satisfactory
relationships with physicians, hospitals, other health service
providers and with producers and consultants; our ability to
maintain relationships with one or more key pharmaceutical
manufacturers or if payments made or discounts provided decline;
changes in the pharmacy provider marketplace or pharmacy networks;
changes in drug pricing or industry pricing benchmarks; our ability
to invest in and properly maintain our information technology and
other business systems; our ability to prevent or contain effects
of a potential cyberattack or other privacy or data security
incident; political, legal, operational, regulatory, economic and
other risks that could affect our multinational operations,
including currency exchange rates; risks related to strategic
transactions and realization of the expected benefits of such
transactions, as well as integration or separation difficulties or
underperformance relative to expectations; dependence on success of
relationships with third parties; risk of significant disruption
within our operations or among key suppliers or third parties;
potential liability in connection with managing medical practices
and operating pharmacies, onsite clinics and other types of medical
facilities; the substantial level of government regulation over our
business and the potential effects of new laws or regulations or
changes in existing laws or regulations; uncertainties surrounding
participation in government-sponsored programs such as Medicare;
the outcome of litigation, regulatory audits and investigations;
compliance with applicable privacy, security and data laws,
regulations and standards; potential failure of our prevention,
detection and control systems; unfavorable economic and market
conditions, the risk of a recession or other economic downturn and
resulting impact on employment metrics, stock market or changes in
interest rates and risks related to a downgrade in financial
strength ratings of our insurance subsidiaries; the impact of our
significant indebtedness and the potential for further indebtedness
in the future; credit risk related to our reinsurers; as well as
more specific risks and uncertainties discussed in our most recent
report on Form 10-K and subsequent reports on Forms 10-Q and 8-K
available through the Investor Relations section of
www.thecignagroup.com. You should not place undue reliance on
forward-looking statements, which speak only as of the date they
are made, are not guarantees of future performance or results, and
are subject to risks, uncertainties and assumptions that are
difficult to predict or quantify. The Cigna Group undertakes no
obligation to update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise,
except as may be required by law.
Notes:
- Adjusted income (loss) from operations is a principal
financial measure of profitability used by The Cigna
Group's management because it presents the underlying results
of operations of the Company'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 noncontrolling interests for the segment metric)
excluding net realized investment results, amortization of acquired
intangible assets and special items. The Cigna Group'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.
- Management is not able to provide a reconciliation of adjusted
income from operations to shareholders' net income (including on a
per share basis (EPS)) 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 revenue could vary materially.
INVESTOR RELATIONS CONTACT:
Ralph Giacobbe
860-787-7968
Ralph.Giacobbe@TheCignaGroup.com
MEDIA CONTACT:
Justine Sessions
860-810-6523
Justine.Sessions@Evernorth.com
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SOURCE The Cigna Group