FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 4, 2018

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Item 7.01 Regulation FD Disclosure.

Cigna Corporation ("Cigna" or the "Company") officials expect to participate in meetings with investors over the next several days.  In connection with an offering of debt securities of Halfmoon Parent, Inc., a Delaware corporation and a direct wholly owned subsidiary of Cigna ("New Cigna"), Cigna officials expect to provide certain pro forma financial information with respect to the pending acquisition of Express Scripts Holding Company ("Express Scripts").  Cigna is disclosing this pro forma financial information under Item 7.01, which information is included in Exhibit 99.1 and is incorporated herein solely for purposes of this Item 7.01.

As previously announced, on March 8, 2018, Cigna entered into an Agreement and Plan of Merger (as amended by Amendment No. 1, dated as of June 27, 2018, and as it may be further amended from time to time, the "Merger Agreement") with Express Scripts, New Cigna, Halfmoon I, Inc., a Delaware corporation and a direct wholly owned subsidiary of New Cigna ("Merger Sub 1"), and Halfmoon II, Inc., a Delaware corporation and a direct wholly owned subsidiary of New Cigna ("Merger Sub 2").  Subject to the conditions of the Merger Agreement, Cigna will acquire Express Scripts in a cash and stock transaction through: (1) the merger of Merger Sub 1 with and into Cigna, with Cigna surviving such merger as a direct wholly owned subsidiary of New Cigna, and (2) the merger of Merger Sub 2 with and into Express Scripts, with Express Scripts surviving such merger as a direct wholly owned subsidiary of New Cigna (collectively, the "Merger").  Also as previously announced, Cigna and New Cigna intend to finance their obligations in connection with the acquisition, in part, with the proceeds of one or more offerings of debt securities.  Cigna currently anticipates that such debt securities will be issued prior to the consummation of the Merger, that all or a portion of the proceeds thereof will be retained by New Cigna pending consummation of the Merger and that Cigna will not be an obligor with respect to such securities until the consummation of the Merger or the occurrence of certain other events.  Upon the consummation of the Merger, Cigna expects that it and Express Scripts would guarantee any such debt securities issued by New Cigna and that New Cigna would guarantee the then-outstanding senior notes of Cigna and Express Scripts and those of two of Express Scripts' subsidiaries, Express Scripts, Inc. ("ESI") and Medco Health Solutions, Inc. ("Medco").  Also, in connection with the Merger and the transactions related thereto, Cigna expects that Express Scripts will repay or cause to be repaid its outstanding credit facilities, and that the guarantees by ESI and Medco of the then-outstanding senior notes of Express Scripts would be released.

The information furnished pursuant to Item 7.01 of this Current Report on Form 8-K (including Exhibit 99.1 hereto) is being furnished and shall not be deemed "filed" under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be incorporated by reference into future filings by the Company under the Securities Act of 1933, as amended (the "Securities Act"), or under the Exchange Act, except as expressly set forth by specific reference in such a filing.  The furnishing of information pursuant to this Item 7.01 will not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K that is required to be disclosed solely by Regulation FD.

FORWARD LOOKING STATEMENTS

Information included or incorporated by reference in this communication, and information which may be contained in other filings with the Securities and Exchange Commission (the "SEC") and press releases or other public statements, contains or may contain forward-looking statements. These forward-looking statements include, among other things, statements of plans, objectives, expectations (financial or otherwise) or intentions, including statements concerning the potential future performance of Cigna, Express Scripts, or the combined company, the potential for new laws or regulations, or any impact of any such new laws or regulations, including on the business of Cigna, Express Scripts or the combined company, the ability to achieve the anticipated benefits of the proposed merger, on the expected timeline or at all, the timeline for deleveraging the combined company, and the ability to consummate the proposed merger, on the anticipated timeline or at all, and other statements regarding the parties' future beliefs, expectations, plans, intentions, financial condition or performance.  You may identify forward-looking statements by the use of words such as "believe," "expect," "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, including as they relate to Express Scripts or Cigna, the management of either such company, the transaction or any expected benefits of the transaction, involve risks and uncertainties. Actual results may differ significantly from those projected or suggested in any forward-looking statements. Express Scripts and Cigna do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Any number of factors could cause actual results to differ materially from those contemplated by any forward-looking statements, including, but not limited to, the risks associated with the following:

·

the inability of Express Scripts and Cigna to obtain regulatory approvals required for the merger or the requirement to accept conditions that could reduce the anticipated benefits of the merger as a condition to obtaining regulatory approvals;

·

the possibility that the anticipated benefits from the merger (including anticipated synergies) cannot be realized in full, or at all or may take longer to realize than expected;

·

a longer time than anticipated to consummate the proposed merger;

·

problems regarding the successful integration of the businesses of Express Scripts and Cigna;

·

unexpected costs regarding the proposed merger;

·

diversion of management's attention from ongoing business operations and opportunities;

·

potential litigation associated with the proposed merger;

·

the ability to retain key personnel;

·

the availability of financing;

·

effects on the businesses as a result of uncertainty surrounding the proposed merger;

·

the ability of the combined company to achieve financial, strategic and operational plans and initiatives;

·

the ability of the combined company to predict and manage medical costs and price effectively and develop and maintain good relationships with physicians, hospitals and other health care providers;

·

the impact of modifications to the combined company's operations and processes;

·

the ability of the combined company to identify potential strategic acquisitions or transactions and realize the expected benefits of such transactions;

·

the substantial level of government regulation over the combined company's business and the potential effects of new laws or regulations or changes in existing laws or regulations;

·

the outcome of litigation relating to the businesses of Express Scripts and Cigna, regulatory audits, investigations, actions and/or guaranty fund assessments;

·

uncertainties surrounding participation in government-sponsored programs such as Medicare;

·

the effectiveness and security of the combined company's information technology and other business systems;

·

unfavorable industry, economic or political conditions, including foreign currency movements;

·

acts of war, terrorism, natural disasters or pandemics; and

·

the industry may be subject to future risks that are described in SEC reports filed by Express Scripts and Cigna.

 

 

 

You should carefully consider these and other relevant factors, including those risk factors in this communication and other risks and uncertainties that affect the businesses of Express Scripts and Cigna described in their respective filings with the SEC, when reviewing any forward-looking statement. These factors are noted for investors as permitted under the Private Securities Litigation Reform Act of 1995. Investors should understand it is impossible to predict or identify all such factors or risks. As such, you should not consider the foregoing list, or the risks identified in SEC filings, to be a complete discussion of all potential risks or uncertainties, and should not place undue reliance on forward-looking statements.

IMPORTANT INFORMATION ABOUT THE TRANSACTION AND WHERE TO FIND IT

This communication does not constitute an offer to sell or solicitation of an offer to buy any securities. In connection with the proposed transaction, the newly formed company which will become the holding company following the transaction ("New Cigna") filed with the SEC a registration statement on Form S-4.  The registration statement on Form S-4 includes a joint proxy statement of Cigna and Express Scripts that also constitutes a prospectus of New Cigna. These materials are not final and may be further amended. The registration statement was declared effective by the SEC on July 16, 2018, and Cigna and Express Scripts commenced mailing the definitive joint proxy statement/prospectus to the respective stockholders of Cigna and Express Scripts on or about July 17, 2018. Cigna and Express Scripts also plan to file other relevant documents with the SEC regarding the proposed transaction. This document is not a substitute for the registration statement or the joint proxy statement/prospectus or any other document which Cigna, Express Scripts or New Cigna may file with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of the registration statement on Form S-4 and the definitive joint proxy statement/prospectus and other relevant documents filed by New Cigna, Cigna and Express Scripts with the SEC at the SEC's website at www.sec.gov. Copies of documents filed with the SEC by Cigna will be available free of charge on Cigna's website at www.Cigna.com or by contacting Cigna's Investor Relations Department at (215) 761-4198. Copies of documents filed with the SEC by Express Scripts will be available free of charge on Express Scripts' website at www.express-scripts.com or by contacting Express Scripts' Investor Relations Department at (314) 810-3115.

NO OFFER OR SOLICITATION

This communication is for informational purposes only and not intended to and does not constitute an offer to subscribe for, buy or sell, the solicitation of an offer to subscribe for, buy or sell or an invitation to subscribe for, buy or sell any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.  No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

Item 9.01.        Financial Statements and Exhibits.

Exhibit No.	Description
99.1	Unaudited Pro Forma Financial Information*

 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Dated:  September 4, 2018

---

 

•

separate audited historical consolidated financial statements of Cigna as of, and for the year ended, December 31, 2017, and the related notes included in Cigna's Annual Report on Form 10-K for the year ended December 31, 2017;

•

separate audited historical consolidated financial statements of Express Scripts as of, and for the year ended, December 31, 2017, and the related notes included in Express Scripts' Annual Report on Form 10-K for the year ended December 31, 2017;

•

separate unaudited historical consolidated financial statements of Cigna as of, and for the six months ended, June 30, 2018, and the related notes included in Cigna's Quarterly Report on Form 10-Q for the six months ended June 30, 2018; and,

•

separate unaudited historical consolidated financial statements of Express Scripts as of, and for the six months ended, June 30, 2018, and the related notes included in Express Scripts' Quarterly Report on Form 10-Q for the six months ended June 30, 2018.

				Note 4		Note 7
(In millions, except per share amounts)		Cigna		Express Scripts		Pro Forma Acquisition Adjustments	Ref		Pro Forma Financing Adjustments	Ref		Pro Forma Combined
For the year ended December 31, 2017
Revenues
Premiums	$	32,307	$	1,796	$	-		$	-		$	34,103
Pharmacy revenues		2,979		96,272		222	A		-			99,473
Fees and other revenues		4,867		1,997		-			-			6,864
Net investment income		1,226		42		-			-			1,268
Net realized investment gains		237		-		-			-			237
TOTAL REVENUES		41,616		100,107		222			-			141,945
Benefits and expenses
Global Health Care medical costs		19,967		1,774		-			-			21,741
Other benefit expenses		5,439		-		-			-			5,439
Pharmacy costs		2,456		89,402		-			-			91,858
Other operating expenses		10,028		2,777		(220)	B		960	E		13,545
Amortization of other acquired intangible assets		115		1,240		2,573	C		-			3,928
TOTAL BENEFITS AND EXPENSES		38,005		95,193		2,353			960			136,511
Income before income taxes		3,611		4,914		(2,131)			(960)			5,434
TOTAL INCOME TAXES		1,374		397		(746)	D		(336)	F		689
SHAREHOLDERS' NET INCOME	$	2,237	$	4,517	$	(1,385)		$	(624)		$	4,745
Shareholders' net income per share
Basic	$	8.92									$	12.23
Diluted	$	8.77									$	12.05
Weighted average shares outstanding (Note 9)
Basic		250.9										388.0
Diluted		255.1										393.9

	Note 4					Note 8
		Cigna		Express Scripts		Pro Forma Acquisition Adjustments		Ref		Pro Forma Financing Adjustments		Ref		Pro Forma Combined
(In millions, except per share amounts)
As of June 30, 2018
Assets
Investments
Fixed maturities, at fair value	$	23,593	$	-	$	-			$	-			$	23,593
Equity securities		560		-		-				-				560
Commercial mortgage loans		1,866		-		-				-				1,866
Policy loans		1,422		-		-				-				1,422
Other long-term investments		1,678		-		-				-				1,678
Short-term investments		220		-		-				-				220
Total investments	$	29,339	$	-	$	-			$	-			$	29,339
Cash and cash equivalents		3,634		2,942		(27,470)		G		21,254		T		360
Premiums, accounts and notes receivable, net		3,412		7,338		-				-				10,750
Reinsurance recoverables		5,877		-		-				-				5,877
Deferred policy acquisition costs		2,163		-		-				-				2,163
Property and equipment		1,554		1,338		(833)		H		-				2,059
Goodwill		6,147		31,110		6,825		I		-				44,082
Other intangibles		433		8,829		34,666		J		-				43,928
Other assets		2,116		3,121		(7)		K		-				5,230
Separate account assets		8,287		-		-				-				8,287
TOTAL ASSETS	$	62,962	$	54,678	$	13,181			$	21,254			$	152,075
Liabilities
Total insurance and contractholder liabilities	$	27,323	$	295	$	-			$	-			$	27,618
Accounts payable, accrued expenses and other liabilities		7,445		17,596		359		L		-				25,400
Deferred tax liabilities, net		(140)		2,426		5,939		M		-				8,225
Short-term debt		109		1,533		-				-				1,642
Long-term debt		5,195		13,458		15		N		21,254		U		39,922
Separate account liabilities		8,287		-		-				-				8,287
TOTAL LIABILITIES	$	48,219	$	35,308	$	6,313			$	21,254			$	111,094
Shareholders' equity
Common stock	$	74	$	9	$	(79)		O	$	-			$	4
Additional paid-in capital		2,974		23,704		2,368		P		-				29,046
Accumulated other comprehensive loss		(1,843)		(8)		8		Q		-				(1,843)
Retained earnings		17,722		17,819		(21,767)		R		-				13,774
Less:  treasury stock, at cost		(4,184)		(22,154)		26,338		S		-				-
TOTAL SHAREHOLDERS' EQUITY	$	14,743	$	19,370	$	6,868			$	-			$	40,981
Total liabilities and equity	$	62,962	$	54,678	$	13,181			$	21,254			$	152,075

1.	Description of Transaction

2.	Basis of Presentation

3.	Accounting Policies

4.	Reclassification Adjustments

			Reclassification Adjustments
			for the six months ended June 30, 2018
(In millions)			Express Scripts Historical Presentation				Express Scripts Historical in Pro Forma Presentation
Express Scripts Revenues (as reported)			$	50,411
	Premiums						$	1,035
	Pharmacy revenues							47,319
	Fees and other revenues							2,057
		Total	$	50,411			$	50,411
Express Scripts Cost of Revenues (as reported)			$	46,327
	Pharmacy Costs						$	44,022
	Global Health Care medical costs							1,121
		Total	$	46,327			$	45,143		(1)
Express Scripts Other Operating Expense
Selling, general and administrative (as reported)			$	1,810
Interest expense and other (as reported)				305
Net income attributable to non-controlling interest (as reported)				4
	Other operating expense						$	2,607
	Amortization of other acquired intangible assets							696
		Total	$	2,119			$	3,303		(1)
			Reclassification Adjustments
			for the year ended December 31, 2017
(In millions)			Express Scripts Historical Presentation				Express Scripts Historical in Pro Forma Presentation
Express Scripts Revenues (as reported)			$	100,065
	Premiums						$	1,796
	Pharmacy revenues							96,272
	Fees and other revenues							1,997
		Total	$	100,065			$	100,065
Express Scripts Cost of Revenues (as reported)			$	91,303
	Pharmacy Costs						$	89,402
	Global Health Care medical costs							1,774
		Total	$	91,303			$	91,176		(1)
Express Scripts Other Operating Expense
Selling, general and administrative (as reported)			$	3,268
Interest expense and other (as reported)				608
Net income attributable to non-controlling interest (as reported)				14
	Other operating expense						$	2,777
	Amortization of other acquired intangible assets							1,240
		Total	$	3,890			$	4,017		(1)

			Reclassification Adjustments
			As of June 30, 2018
(In millions)				Cigna Historical Presentation				Cigna Pro Forma Presentation
Cigna Deferred Policy Acquisition Costs (as reported)			$	2,300
Cigna Other Assets, Including Other Intangibles (as reported)				2,412
Other intangibles							$	433
Deferred policy acquisition costs								2,163
Other assets								2,116
		Total	$	4,712			$	4,712
		`
Cigna Deferred Taxes
Deferred tax assets, net (as reported)			$	140
Deferred tax liabilities, net							$	(140)
		Total	$	140			$	(140)
Cigna Redeemable Noncontrolling Interests
Redeemable noncontrolling interests (as reported)			$	39
Accounts payable, accrued expenses and other liabilities (as reported)				7,406
Accounts payable, accrued expenses and other liabilities							$	7,445
		Total	$	7,445			$	7,445

			Reclassification Adjustments
			As of June 30, 2018
(In millions)				Express Scripts Historical Presentation				Express Scripts Historical in Pro Forma Presentation
Express Scripts Other Assets, Prepaid Expenses and Other Current Assets and Inventories
Inventories (as reported)			$	2,293
Prepaid expenses and other current assets (as reported)				597
Other assets (as reported)				231
	Other assets						$	3,121
		Total	$	3,121			$	3,121
Express Scripts Property and Equipment
Property and equipment, net (as reported)			$	505
Computer software, net (as reported)				833
	Property and equipment						$	1,338
		Total	$	1,338			$	1,338
Express Scripts Accounts Payable, Accrued Expenses and Other Liabilities
Accounts payable (as reported)			$	4,793
Accrued expenses (as reported)				2,369
Other liabilities (as reported)				832
Non-controlling interest (as reported)				5
Claims and rebates payable (as reported)				9,892
	Accounts payable, accrued expenses and other liabilities						$	17,596
	Total insurance and contractholder liabilities							295
		Total	$	17,891			$	17,891

				(Millions, except per common stock data)
Total consideration
		Cash consideration (as detailed below)	$	27,470
		Common stock consideration (as detailed below)		26,022
		Other stock award consideration - preliminary estimate of fair value of other stock-based awards - portion assigned to service period prior to the Merger(1)		523
	Preliminary estimated merger consideration		$	54,015
Cash consideration
		Express Scripts common stock outstanding		562.2
		Multiplied by Merger Agreement cash consideration per share paid to Express Scripts stockholders	$	48.75
		Preliminary estimate of cash consideration paid to Express Scripts stockholders	$	27,407
		Preliminary estimate of cash consideration paid to company performance share holders and other equity holders(2)		63
	Preliminary fair value estimate of total cash consideration		$	27,470
Stock consideration
		Express Scripts common stock outstanding		562.2
		Multiplied by Merger Agreement per share exchange ratio		0.2434
		Preliminary stock issued to Express Scripts stockholders		136.8
		Preliminary stock issued to Express Scripts company performance share holders(2)		0.3
	Total preliminary estimate of stock issued to Express Scripts stockholders			137.1
	Multiplied by per share price of Cigna common stock on August 30, 2018		$	189.80
	Preliminary fair value estimate of total stock consideration		$	26,022

6.	Estimate of Assets to be Acquired and Liabilities to be Assumed

(In millions)				As of June 30, 2018
Cash and cash equivalents(1)			$	2,942
Receivables(1)				7,338
Property and equipment(1)				505
Goodwill(2)				37,935
Other identifiable intangible assets(3)				43,495
Other assets acquired(1)				3,114
Long-term debt, including current portion(1)				(15,006)
Deferred income tax liabilities(4)				(8,417)
Other liabilities assumed(1)				(17,891)
Total			$	54,015

(Dollars in millions)			Estimated Fair Value		Estimated Useful Life (Years)	Amortization method
Customer relationships (a)		$	35,600		17	Straight Line
Trade Name			7,300		20	Straight Line
Technology			595		5	Straight Line
	Total identifiable intangible assets with finite lives	$	43,495

(In millions)				Deferred Tax Adjustments
Fair value adjustments of assets to be acquired and liabilities to be assumed
		Estimated fair value of identified intangible assets acquired	$	42,900
		Estimated fair value of internally developed software acquired		595
		Estimated fair value of debt to be assumed		80
		Total estimated fair value adjustment		43,575
Fair value of stock-based compensation included in merger consideration
		Total estimated fair value adjustment		(523)
Total fair value adjustment of assets and liabilities and stock based compensation				43,052
Applicable tax rate				21%
Net deferred tax liabilities			$	9,041

7.	Unaudited Pro Forma Condensed Combined Statement of Income Adjustments

						Ref		Increase (decrease) for the period ended June 30, 2018				Increase (decrease) for the year ended Dec. 31, 2017
Acquisition adjustments				(In millions)
	Revenues
		Pharmacy revenues
				To eliminate Express Scripts' amortization expense recorded as offset to revenues		A		$	111			$	222
	Expenses
		Other operating expenses
				To eliminate Express Scripts' capitalized software amortization expense				$	(123)			$	(205)
				To eliminate amortization of debt issuance costs and net debt discounts and premiums of assumed Express Scripts debt					(12)				(15)
				To eliminate actual transaction costs incurred by Cigna and Express Scripts in 2018					(201)				-
				Total adjustments to other operating expenses		B		$	(336)			$	(220)
		Amortization of other acquired intangible assets
				To eliminate Express Scripts' other intangible asset amortization expense				$	(696)			$	(1,240)
				To record estimated transaction-related other acquired intangible assets amortization					1,907				3,813
				Total adjustments to other amortization of other acquired intangible assets		C		$	1,211			$	2,573
		Total income taxes
				To reflect the income tax impact of acquisition adjustments at 21% in 2018 and 35% in 2017		D		$	(171)			$	(746)
Financing adjustments				(In millions)
	Expenses
		Other operating expenses
				To record estimated interest expense on newly issued debt*				$	473			$	946
				To record amortization of debt issuance costs on newly issued debt					7				14
				Total adjustments to other operating expenses		E		$	480			$	960
		Total income taxes
				To reflect the income tax impact of financing adjustments at 21% in 2018 and 35% in 2017		F		$	(101)			$	(336)

8.	Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments

						Ref		Increase (decrease) at June 30, 2018
Acquisition adjustments				(In millions)
	Assets
		Cash and cash equivalents
				To record the cash portion of the merger consideration		G	$	(27,470)
		Property and equipment
				To eliminate Express Scripts historical capitalized software		H	$	(833)
		Goodwill
				To eliminate Express Scripts historical goodwill			$	(31,110)
				To record estimated transaction goodwill				37,935
				Total adjustments to goodwill		I	$	6,825
		Other intangibles
				To eliminate Express Scripts historical intangible assets				(8,829)
				To record estimated fair value of intangible assets acquired				43,495
				Total adjustments to other intangibles		J	$	34,666
		Other assets
				To eliminate historical unamortized debt issuance costs of revolving line of credit		K	$	(7)
	Liabilities
		Accounts payable, accrued expenses and other liabilities
				To accrue estimated transaction costs for Cigna			$	265
				To accrue estimated transaction costs for Express Scripts				94
				Total adjustments to accounts payable, accrued expenses and other liabilities		L	$	359
		Deferred tax liabilities, net
				Total adjustments to deferred tax liabilities, net		M	$	5,939
		Long-term debt
				To eliminate historical unamortized debt issuance costs of outstanding debt			$	95
				To estimate the fair value of assumed Express Scripts debt				(80)
				Total adjustments to long-term debt		N	$	15
	Shareholders' equity
		Common Stock
				Total adjustments to common stock from elimination of Express Scripts historical common stock, elimination of Cigna historical treasury stock and issuance of new Cigna common stock		O	$	(79)
		Additional paid-in capital
				Total adjustments to additional paid-in capital from elimination of Express Scripts historical paid-in capital, elimination of Cigna historical treasury stock, issuance of new Cigna common stock and issuance of replacement common stock-based awards		P	$	2,368
		Accumulated other comprehensive loss
				To eliminate Express Scripts accumulated other comprehensive loss		Q	$	8
		Retained Earnings
				To eliminate Express Scripts historical retained earnings			$	(17,819)
				To record elimination of Cigna historical treasury stock canceled upon closing of Merger				(3,641)
				To record estimated transaction costs incurred, net of tax				(307)
				Total adjustments to retained earnings		R	$	(21,767)
		Treasury Stock
				Total adjustments to treasury stock from elimination of Express Scripts historical balance and elimination of Cigna historical treasury stock canceled upon closing of Merger		S	$	26,338

						Ref		Increase (decrease) at June 30, 2018
Financing adjustments				(In millions)
	Assets
		Cash and cash equivalents
				To establish incremental Cigna debt to effect the Merger			$	23,500
				To pay off outstanding Express Scripts' term loan				(2,146)
				To record estimated debt issuance costs incurred				(100)
				Total adjustments to cash and cash equivalents		T	$	21,254
	Liabilities
		Long-term debt
				To establish incremental Cigna debt to effect the Merger			$	23,500
				To pay off outstanding Express Scripts' term loan				(2,146)
				To record estimated debt issuance costs				(100)
				Total adjustments to long-term debt		U	$	21,254

9.	Combined Weighted-Average Basic and Diluted Shares

(In millions)		Six Months Ended June 30, 2018			Year Ended December 31, 2017
Cigna's weighted-average shares to compute basic EPS		242.3			250.9
Express Scripts' outstanding shares at July 31, 2018, converted at exchange ratio (562.2 * 0.2434)		136.8			136.8
Combined weighted average basic shares outstanding		379.1			387.7
Express Scripts' company performance shares		0.3			0.3
Pro forma weighted-average basic shares outstanding		379.4			388.0
Dilutive effect of Cigna's outstanding stock-based awards		3.3			4.2
Dilutive effect of Express Scripts' outstanding stock-based awards, converted at the exchange ratio		2.2			1.7
Pro forma weighted average diluted shares		384.9			393.9

15

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