The Cigna Group · NYSE:CI
The Cigna — Cigna — Merger or Acquisition (July 2015)
24 slides from The Cigna's merger presentation, Jul 24, 2015
Slide 1: Anthem and Cigna: Combination Creates Premier Health Services Company
Filed by Anthem, Inc. (Commission File No. 001-16751) pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: Cigna Corporation Commission File No. 001-08323 Anthem and Cigna: Combination Creates Premie
Slide 2: Safe Harbor Statement (1 of 2)
Safe Harbor Statement (1 of 2) Safe Harbor Statement Under The Private Securities Litigation Reform Act of 1995: This document, and oral statements made with respect to information contained in this communication, contain certain forward- looking information about Anthem, Inc. (“Anthem”), Cigna Corp
Slide 3: Safe Harbor Statement (2 of 2)
Safe Harbor Statement (2 of 2) Safe Harbor Statement Under The Private Securities Litigation Reform Act of 1995 Continued: …our ability to repurchase shares of its common stock and pay dividends on its common stock due to the adequacy of its cash flow andearningsandother considerations;non- complian
Slide 4: Non-GAAP Measures
Non-GAAP Measures Non-GAAP Measures: This presentation includes certain non-GAAP financial measures. These non-GAAP measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of
Slide 5: Important Information for Investors and Shareholders
Important Information for Investors and Shareholders This communication does not constitute an offer to sell or a solicitation of an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdict
Slide 6: Participants
Participants Joseph Swedish Anthem President and Chief Executive Officer David Cordani Cigna President and Chief Executive Officer Wayne DeVeydt Anthem EVP and Chief Financial Officer Doug Simpson Anthem VP Investor Relations 6
Slide 7: Transaction Summary
Transaction Summary • $188.00 per share in the form of ~55% funded through cash and ~45% funded through Anthem stock • 38.4% premium to Cigna’s unaffected stock price* • Anthem shareholders to own ~67%and Cigna shareholders to own ~33%of the combined company • Cash portion financed through cash on h
Slide 8: Expanded Footprint Enhances Ability to Compete
Expanded Footprint Enhances Ability to Compete Combined Company Generates Over $115 Billion in Annual Revenue + International 1% FGS FGS Medicaid 11% 3% Commercial- Risk Leading Position 4% 15% Commercial- Medicaid 14% Risk Medicare 4% • Commercial Risk 17% Medicare 4% • Commercial ASO • Government
Slide 9: Innovative Solutions Driving Affordability & Choice
Innovative Solutions Driving Affordability & Choice Affordability Choice • Leadership position in advancing provider • Comprehensive product and funding offerings collaboration and new payment models • Serving employer-sponsored, individual, state • Proven health and wellness programs and federal go
Slide 10: Combination of Complementary Businesses
Combination of Complementary Businesses Anthem Cigna • Most recognizable brand • Strong Commercial player with broad geographic coverage • Local focus • Middle Market ASO/Stop Loss • A leading Commercial franchise solutions • Strong Public Exchange execution • A leading Specialty capability • A lead
Slide 11: Three Pillars to Benefit Combined Entity
Three Pillars to Benefit Combined Entity Managing Provider Consumer Affordability Total Cost of Collaboration Centricity Care Quality Data and Insights Choice/ Talent Personalization 11
Slide 12: Affordability Driven By Provider Collaboration and Connected Care
Affordability Driven By Provider Collaboration and Connected Care Select Models Realized Outcomes Fewer acute inpatient admissions Enhanced Personal CUSTOMER Health Care Program Decrease in outpatient surgery costs Fewer inpatient days per Provider 1,000 Collaboration Reduction in admission of high
Slide 13: Total Cost of Care Advantage
Total Cost of Care Advantage Broad and Proven Health, Wellness & Demonstrated ability to drive Engagement Capabilities Serving: medical cost savings for the nation's leading companies Company A Healthy • 150,000+ members • 6%+ in Year 1 savings Healthy at Risk Company B Chronic • 200,000+ members •
Slide 14: Consumer-centric Approach Caters to Member Needs
Consumer-centric Approach Caters to Member Needs Keys to a successful retail-oriented approach 1 2 3 4 Choice & Ease & Health & Leading Data Control Affordability Wellness Focus Analytics Extensive research has identified the primary drivers of great consumer experiences Confidence Clarity Ease in c
Slide 15: Compelling Financial Rationale
Compelling Financial Rationale Synergies Balance sheet Adjusted EPS • Confidence in ability to • Committed to retaining • Approaching 10% capture run-rate synergies investment grade debt accretion to Adjusted approaching $2 billion ratings Earnings per Share in first pre-tax within two years year po
Slide 16: Identifiable and Achievable Synergies
Identifiable and Achievable Synergies • Administrative structure • Operational efficiencies Confidence in ability to achieve • Network efficiencies and medical management annual synergies • Cross leverage best in class capabilities approaching • Leverage Cigna Specialty capabilities across Anthem $2
Slide 17: Value Creation for Both Sets of Shareholders
Value Creation for Both Sets of Shareholders + • Strong growth from Medicaid, Individual / Exchange, Medicare $17.00 + Advantage, Dual Eligible, $3.00 + and Specialty Greater than • Confidence in ability to $10.00 achieve annual run-rate synergies approaching $14.00+ $2 billion by year 2 2015* 2018
Slide 18: A Clearly Defined Financing Plan
A Clearly Defined Financing Plan Financing considerations Anticipated financing sources • Received committed financing for ($ in billions) the transaction Available cash $6 • Permanent financing anticipated to include combination of term loans, Term loans and public debt $22 public debt and equity p
Slide 19: Continues Anthem's and Cigna's Strong Track Records of Value Creation
Continues Anthem's and Cigna's Strong Track Records of Value Creation 250% 225% Anthem 109% 200% Cigna 175% 97% 150% 125% 100% 75% 05/13 09/13 01/14 05/14 09/14 01/15 05/15 Anthem Cigna Anthem and Cigna Management teams have delivered on their promises • Both Management teams have an established tra
Slide 20: Compelling Transaction for Cigna Shareholders
Compelling Transaction for Cigna Shareholders Acquisition Price: $188.00* 29.7% 38.4% 40.5% Premium Premium Premium $160 Median WS Target Price on 5/28/15: $145.00 $140 Unaffected Price on 5/28/15: $135.87 10-day Trading Average as of 5/28/15: $133.82 $120 $100 $80 05/14 07/14 09/14 10/14 12/14 02/1
Slide 21: Consideration Mix and Value Creation
Consideration Mix Total consideration and Value Creation $188.00 per share* Cash consideration $103.40 per share Given stock component, Cigna shareholders will share in Stock consideration the synergy value $84.60 per share* * Calculated as of Anthem’s closing stock price on May 28, 2015 21
Slide 22: Summary
Summary Diverse well positioned global growth platform with over $115 billion in combined annual revenue and 53 million medical members Enhances ability to advance health care access, affordability and quality for our customers Meaningful opportunities to improve operational efficiency and lower hea
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Slide 24: GAAP Reconciliation
GAAP Reconciliation We have referenced "Adjusted Net Income Per Diluted Share" (or “Adjusted EPS”), a non-GAAP measure, in this document. This non- GAAP measure is intended to aid investors and analysts when comparing our financial results among periods. Management also uses this measure as a basis