The Cigna Group · NYSE:CI
The Cigna — Cigna — Merger or Acquisition (July 2015)
25 slides from The Cigna's merger presentation, Jul 24, 2015
Slide 1: Filed by Cigna Corporation Pursuant to Rule 425
Filed by Cigna Corporation 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 The following slides were used during an investor call.
Slide 2: Anthem and Cigna: Combination Creates Premier Health Services Company
Anthem and Cigna: Combination Creates Premier Health Services Company 1
Slide 3: 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 4: 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 and earnings and other considerations; non- comp
Slide 5: 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 o
Slide 6: 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 7: 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 8: Transaction Summary
Transaction Summary • Committed to retaining investment grade debt ratings • Shareholder vote required for both companies * Calculated as of Anthem’s and Cigna’s closing stock price on May 28, 2015; stock consideration based on a fixed exchange ratio of 0.5152x 7
Slide 9: Expanded Footprint Enhances Ability to Compete
Expanded Footprint Enhances Ability to Compete Combined Company Generates Over $115 Billion in Annual Revenue + Leading Position • Commercial Risk • Commercial ASO • Government • Individual • Specialty 53.2M • International Members Source: Company Filings. Note: Medical membership data as of 1Q 2015
Slide 10: 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 government and international customers • Local focus a
Slide 11: 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 12: 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 13: Provider Collaboration: Select Models and Realized Outcomes
Select Models Realized Outcomes þ Fewer acute inpatient admissions Enhanced Personal CUSTOMER Health Care þ Decrease in outpatient Program surgery costs Provider þ Fewer 1,000 inpatient days per Collaboration þ Reduction of in admission high risk patients PROVIDER þ Reduction costs in ER visit þ Dec
Slide 14: 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 •15%+
Slide 15: 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 Confidence Clarity Ease in coverage in coverage of getting help Understanding your costs and Minimal interaction
Slide 16: 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 pre ratings Earnings per Share in first -tax within two years post-
Slide 17: 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 18: Value Creation for Both Sets of Shareholders
Value Creation for Both Sets of Shareholders • Strong growth from Medicaid, Individual / Exchange, Medicare + Advantage, Dual Eligible, + and Specialty Greater than • Confidence in ability to $10.00 achieve annual run-rate synergies approaching + $2 billion by year 2 Adjusted Earnings per Share $17.
Slide 19: A Clearly Defined Financing Plan
A Clearly Defined Financing Plan Financing considerations Anticipated financing sources • Received committed financing for ($ in billions) the transaction Available cash $6 • Permanent financing anticipated to Term loans and public include combination of term loans, debt $22 public debt and equity p
Slide 20: Share price performance prior to unaffected date
Source: FactSet data as of unaffected date of 5/28/15 Note: Share price performance over two years prior to unaffected date of 5/28/15 19
Slide 21: Compelling Transaction for Cigna Shareholders
Compelling Transaction for Cigna Shareholders Acquisition Price: 29.7% 38.4% 40.5% $188.00* Premium Premium Premium Median WS Target Price on 5/28/15: $145.00 Unaffected Price on 5/28/15: $135.87 10-day Trading Average as of 5/28/15: $133.82 Will participate in the significantly enhanced value of th
Slide 22: 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 Stock consideration will share in $84.60 per share* the synergy value * Calculated as of Anthem’s closing stock price on May 28, 2015 21
Slide 23: 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 25: 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