The Cigna Group · NYSE:CI
The Cigna — Cigna — Merger or Acquisition (June 2015)
23 slides from The Cigna's merger presentation, Jun 22, 2015
Slide 1: Anthem-Cigna: A Compelling Combination
Filed by Anthem, Inc. (Commission File No. 001-16751) pursuant to Rule 425 under the Securities Act of Anthem-Cigna: 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 A Compelling Subject Company: Cigna Corporation Commission File No. 001-08323 Combination Exhib
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 contains certain forward-looking information about us that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities L
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: … repurchase shares of our common stock and pay dividends on our common stock due to the adequacy of our cash flow and earnings and other considerations; non-compliance by any p
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: Additional Information and Participants in Solicitation
Additional Information and Participants in Solicitation Additional Information: This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates to a proposal which Anthem, Inc. (“Anthem”) has made for a business combination transa
Slide 6: Proposed Transaction Summary
Proposed Transaction Summary • $184 per sharein the form of 68.6% funded through cashand Consideration 31.4% funded through Anthem stock Premium • 35.4% premium to Cigna’s unaffected stock price* Ownership • ANTMshareholdersto own ~76.3% and Cignashareholdersto own ~23.7% of the combinedcompany • Fi
Slide 7: Leading Positions in Growth Markets
Leading Positions in Growth Markets Combined Company Generates Over $115 Billion in Revenue + International 1% Leading Position FGS Medicaid 3% Commercial- Risk • Commercial Risk FGS 11% 4% 15% Medicaid Commercial- Medicare • Commercial ASO 14% Risk 4% 17% Medicare • Government 4% • Individual ASO 6
Slide 8: Innovative Solutions Driving Affordability & Choice
Innovative Solutions Driving Affordability & Choice Affordability Choice • National scale drives administrative efficiency • Comprehensive product offerings • Serving employer-sponsored, individual, • Local focus advances cost of care position state and federal government and • Technology centric in
Slide 9: Combination of Complementary Businesses
Combination of Complementary Businesses Anthem Cigna • Local focus • Strong National Accounts platform • A leading Commercial franchise • Middle Market ASO/Stop Loss • Strong Public Exchange execution Solutions • A leading Medicaid franchise • A leading Specialty capability (Dental, Vision, Behavior
Slide 10: Three Pillars to Benefit Combined Entity
Three Pillars to Benefit Combined Entity 2015 Revenue Estimate Provider Collaboration ~$78.5 >$115 Managing billion billion Total Cost of Affordability and Choice Care Consumer Centricity Note: Revenue projection based on the most recent 2015 outlook publicly reported by both companies. 10
Slide 11: Three Pillars to Benefit Combined Entity
Three Pillars to Benefit Combined Entity Provider Managing Total Consumer Collaboration Cost of Care Centricity • Enhanced local presence in key • Increased breadth of • National scale drives geographies customer-facing solutions administrative expense efficiency • HealthSpringphysician-centric • Le
Slide 12: Compelling Financial Rationale
Compelling Financial Rationale Synergies Balance sheet Adjusted EPS • Confidence in ability to • Expect to maintain dividend • Greater than 10% capture run-rate synergies payout ratio policy accretive to Adjusted approaching $2 billion earnings per share in first pre-tax within two years • Pro forma
Slide 13: Membership Scale Supports Cost Efficiencies
Membership Scale Supports Cost Efficiencies (membership in 000s) 53,191 45,765 38,537 23,670 14,654 9,800 6,006 4,402 2,733 United* Aetna Humana HealthNet Centene WellCare + Source: Company filings. * United medical membership includes 4,160 International members 13
Slide 14: Identifiable and Achievable Synergies
Identifiable and Achievable Synergies Confidence in ability • Administrative structure to achieve annual • Operational efficiencies synergies approaching • Network efficiencies and medical management $2 billion • Leverage Cigna Specialty capabilities across Anthem • Unique capabilities to serve grow
Slide 15: Value Creation for Both Sets of Shareholders
Value Creation for Both Sets of Shareholders + • No change to Anthem’s 2015 Adjusted EPS outlook of “greater than $9.90”* $17.00 + • Strong growth from Greater than $3.00 + Medicaid, Individual / Exchange, Medicare $9.90 Advantage, Dual Eligible, and Specialty $14.00+ • Confidence in ability to achi
Slide 16: A Clearly Defined Financing Plan
A Clearly Defined Financing Plan Financing considerations Anticipated financing sources ($ in billions) • Highly confident in ability to obtain bridge financing Available cash $6 • Permanent financing anticipated to New bank debt and include combination of bank debt, unsecured notes $23 unsecured no
Slide 17: Continues Anthem and Cigna's Strong Track Record of Value Creation
Continues Anthem and Cigna’s Strong Track Record of Value Creation 300% Anthem 250% 156% Cigna 121% 200% 150% 100% 03/13 07/13 10/13 01/14 04/14 08/14 11/14 02/15 Anthem Management team delivers on promises • Anthem’s management team has established track record of execution in this dynamic environm
Slide 18: Compelling Transaction for Cigna Shareholders
Compelling Transaction for Cigna Shareholders Offer Price: $184.00 26.9% 35.4% 37.5% Premium Premium Premium $160 Median WS Target Price: $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 02/15 03/15 05/15 Cign
Slide 19: Consideration Mix and Value Creation
Consideration Mix Total consideration at close and Value Creation $184.00 per share Cash consideration at close $126.22 per share Given stock component, Cigna shareholders will share in Stock consideration at close the synergy value $57.78 per share 19
Slide 20: Anthem is Committed to the Transaction
Anthem is Committed to the Transaction • Both Anthem and Cigna have devoted substantial time and effort to understanding the merits of a transaction over a significant period of time • Anthem has made good faith efforts to engage in valuation and governance discussions with Cigna – Delivered initial
Slide 21: Next Steps
Next Steps Anthem encourages Cigna's board to accept Anthem's June 20 proposal Finalize due diligence Anthem Board unanimously supports the proposed transaction Anthem and its advisors are highly confident in the ability to finance and consummate the proposed transaction Anthem is committed to a com
Slide 22: Slide 22
Slide 23: 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