Cigna Corporation (CI) Q3 2011 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by for CIGNA's Third Quarter 2011 Results Review. [Operator Instructions] As a reminder, ladies and gentlemen, this conference, including the Q&A session, are being recorded. We'll begin by turning the conference over to Mr. Ted Detrick. Mr. Detrick, please go ahead.

Good morning, everyone, and thank you for joining today's call. We appreciate you being with us at this earlier hour. I am Ted Detrick, Vice President of Investor Relations. And with me this morning are David Cordani, our President and Chief Executive Officer; and Ralph Nicoletti, CIGNA's Chief Financial Officer. In our remarks today, David will begin by briefly commenting on CIGNA's third quarter results in the context of our growth strategy. In addition, David will discuss our pending acquisition of HealthSpring, and how this further positions us for continued growth and long-term shareholder value. Next, Ralph will review the financial results for the third quarter and provide an update on CIGNA's financial outlook for full year 2011. Finally, David will explain how the continued effective execution of our focus strategy, coupled with our diversified portfolio of businesses, provide CIGNA with momentum as we enter 2012. We will then open the lines for your questions. And following our question-and-answer session, David will provide some brief closing remarks before we end the call. Now as noted in our earnings release, CIGNA uses certain non-GAAP financial measures when describing its financial results. A reconciliation of these measures to the most directly comparable GAAP measure is contained in today's earnings release, which was filed this morning on Form 8-K with the Securities and Exchange Commission and is posted in the Investor Relations section of cigna.com. In our remarks today, we will be making some forward-looking comments. We would remind you that there are risk factors that could cause actual results to differ materially from our current expectations. And those risk factors are discussed in today's earnings release. Now before turning the call over to David, I will review a couple of items that we discussed on our call earlier this week and disclosed in a Form 8-K filed on October 24. Relative to our Run-off Reinsurance operations, our third quarter shareholders net income included an after-tax noncash loss of $134 million or $0.50 per share related to the Guaranteed Minimum Income Benefits business, otherwise known as GMIB. I would remind you that the impact of the Financial Accounting Standards Board fair value disclosure and measurement guidance on our GMIB results is for GAAP accounting purposes only. We believe that the application of this guidance is not reflective of the underlying economics as it does not represent management's expectation of the ultimate liability payout. Because of application of this accounting guidance, CIGNA's future results for the GMIB business will be volatile as any future change in the exit value of GMIB's assets and liabilities will be recorded in shareholders net income. Because of this, CIGNA's 2011 earnings outlook, which we will discuss in a few moments, excludes the results of the GMIB business, and therefore, any potential volatility related to the prospective application of this accounting guidance. Also, as we previously disclosed, effective January 1, 2012, CIGNA will adopt new guidance regarding the accounting for the deferral of certain costs related to the acquisition of new or renewal insurance contracts. This accounting change restricts the amount of cost that can be capitalized and accelerates the recognition of certain acquisition costs that previously would have been deferred. CIGNA will adopt this accounting change on a retrospective basis in the first quarter of 2012, recasting prior periods and recording a one-time noncash charge of approximately $250 million to $300 million directly to shareholder's equity. We estimate that the impact to full year 2011 of adopting this new guidance would be to reduce earnings for our International business in the range of $60 million to $70 million after-tax. We remind you that this accounting change has no impact on the fundamentals of this business. That is, there is no effect on revenues, future cash flows, our statutory capital position or the [indiscernible] time profitability of our policies. This accounting change will not take effect until January 1, 2012. Therefore, the impact of this change is not reflected in the full year 2011 outlook that Ralph will discuss in a few moments. However, when David provides commentary on 2012, it will be on a basis that assumes retrospective adoption of this accounting change with both 2011 and 2012 recast on a comparable basis. In addition, when we discuss our full year 2011 outlook and provide commentary for 2012, it will be on a basis which excludes the pending acquisition of HealthSpring and any additional future capital employment and assumes break-even results for our run-off Guaranteed Minimum Death Benefits business, known as VADBe, for all future periods. And with that, I will turn it over to David.

Thanks, Ted, and good morning. This quarter marks another strong performance from our ongoing businesses. And the announcement of the acquisitions of FirstAssist in the U.K. and HealthSpring here in the U.S. I'll briefly touch on our meaningful move into the seniors in Medicare segments with the combination of HealthSpring with you today. And if you have additional questions, we'll cover them during the Q&A period. In a few moments, Ralph will take you through our results and provide you with an update on our full year 2011 outlook. Before he does this, I'll briefly comment on our quarter's performance and share with you how our business strategy continues to build the value for our clients, health care professionals and customers, all while generating sustainable profitable growth for the benefit of our shareholders. Then we will review how CIGNA will maintain this momentum in 2012. Let's jump in. The headline is we delivered another strong quarter from our ongoing businesses. Our operating results demonstrated top line and bottom line growth as a result of effectively executing on our strategy and delivering on our fundamentals of pricing discipline, and clinical and service excellence. In our third quarter of 2011, we reported consolidated adjusted income of $370 million or $1.36 per share, excluding the effect of VADBe, with consolidated revenue growth of 6.5% reflecting positive contributions from each of our ongoing businesses. As we all know, 2011 continues to be a dynamic year in the global economy. From a health care perspective, the aging populations, declining health status, unsustainable health care economics and the evolution to consumerism are all catalysts for change. Regardless of the outcome of the legislative reform back here in the United States, the future of health care will continue to evolve at an accelerated pace. This is a change that CIGNA has embraced on our strategy to Go Deep, Go Global and Go Individual, and in our continued focus on the customer. Our consultative selling approach continues to add differentiated value as it enables us to understand our clients' needs and anticipate their future needs so we can design highly personalized integrated solutions, combined with flexible funding options. Within our U.S. operations, our health and productivity programs continue to deliver compelling growth across each of our customer segments on a year-to-date basis. In our Select segment, which we defined as clients with 51 to 250 employees, we've grown our medical customer base by 14%, the majority of which is ASO. In our Middle Market segment, which we define as clients with 251 to 5,000 employees and single-site clients with more than 5,000 employees, we have grown our medical customer base by 4%. International segment, which we define as clients with more than 5,000 employees across multiple sites, we've experienced a decline as a result of repositioning this segment, yet we are expanding existing relationships and winning new clients whose strategies align with health and productivity improvement. With our physician partners, we continue to be an innovator with the emergence of Accountable Care Organizations. Our unique, collaborative approach creates the right engagement and offers quality-driven incentives to health care professionals, clients and customers. Last month, we launched our 15th patient-centered initiative. Our ACO programs today encompass more than 115,000 customers and over 1,800 physicians across 13 states. They're developing a track record of delivering measurable health improvements, greater customer satisfaction and quantifiable cost savings. And in our disability business, we delivered top line growth of 10% year-over-year as employers continue to value our leading return-to-work programs. In our international portfolio, we have delivered strong top line growth of 34% year-to-date, reflecting solid organic premium and fee growth. Today, we have well over 7 million individual Health, Life and Accident policies as we supplement the health incentive security solutions for our customers around the world. Our expertise in leveraging our direct-to-consumer distribution methods is driving our success here. We're also continuously evaluating opportunities to invest in new global markets where there is increasing demand for our services. Earlier this month, I was in Istanbul to celebrate the opening of our office in Turkey, which represents another attractive high-growth market for us. We also committed capital to acquire FirstAssist Insurance, a leading travel-and-protection company based in the U.K. The acquisition will enhance our International portfolio by expanding our presence in the U.K., increasing the number of affinity partners we have access to and providing new capability to offer travel insurance solutions across the world. In addition, there are exciting and strong cross-selling opportunities between the 2 organizations. We can now offer our existing customers protection against the unexpected medical and travel-related emergencies and extend our Health, Life and Accident products to FirstAssist's customer base. Now returning to our news about our HealthSpring acquisition. As expected, we have received great feedback from our customers, health care professional partners, employees in the investment community regarding the quality of this company. In fact, Monday after our call with you, HealthSpring's CEO, Herb Fritch, and I had the opportunity to spend the afternoon with almost a thousand of his employees in Nashville, Tennessee. These highly talented and passionate team members have great enthusiasm about how our combination together can fuel further growth. The addition of HealthSpring is well aligned with our strategy. As one of the largest and fastest-growing U.S. Medicare advantage plans, HealthSpring will provide CIGNA expertise and proven physician engagement models for sustainable growth in the future. While both companies are operating from a position of strength and have attractive growth prospects on a stand-alone basis, we believe that together, we will generate even greater value for customers and shareholders. Specifically, we have identified 5 main advantages this combination creates. First is accelerating growth for HealthSpring's existing business by providing a feeder pool into their Medicare Advantage solutions for 65 year-old retirees from CIGNA's employer-sponsored plans. Second, by leveraging our combined customer footprint to fuel HealthSpring's growth by expanding and deepening its presence in geographies, as well as entering new ones. Third, maximizing HealthSpring's highly effective physician-engagement modeling capabilities to accelerate our retail programs as we look toward a post-2014 exchange environment. Fourth is leveraging CIGNA's specialty in clinical capabilities for the benefit of HealthSpring customer base. And fifth is delivering on operating expense synergies of the combined company. As we begin to work closely with Herb and his leadership team, you can expect to hear more about our growth strategy in the senior segment. Now before I hand it over to Ralph, I want to reiterate a few key points about this quarter. Our third quarter results delivered strong top line and bottom line growth, reflecting our disciplined focus on executing our growth strategy. We are delivering differentiated solutions by engaging and incenting customers and effectively partnering with physicians, and we continue to invest for our future success. The examples include the pending acquisition of HealthSpring, the launch of our business in Turkey and the pending acquisition of FirstAssist, the launch of our new branding campaign, and ongoing smart innovation and technology. Based on the strength of our third quarter results, we feel confident in achieving our increased outlook for 2011, our full year strategic, financial and operating goals. With that, I'll turn the call over to Ralph to review our third quarter performance, and then I'll come back and provide some early insights into 2012. Ralph?

Thanks, David, and good morning, everyone. In my remarks, I will review CIGNA's third quarter 2011 results, link these results to our growth strategy and provide some additional comments on the updated full year 2011 outlook we shared with you earlier this week. In my review of consolidated and segment results, I will comment on adjusted income from operations. This is shareholders net income, excluding realized investment results, GMIB results and special items. This is also the basis on which I will provide our earnings outlook. Our third quarter consolidated revenues grew to $5.6 billion. This is an increase of 6.5% over the third quarter of 2010. Revenues reflect premium and fee increases of 4% in health care after excluding the impact of our planned exit from the individual Medicare private fee-for-service business; 5% in Group, Disability and Life; and 33% in International, driven by continued growth in our targeted customer segments. Our third quarter consolidated earnings were $370 million or $1.36 per share, excluding the impact of VADBe. That represents EPS growth of 11% over the third quarter of 2010. These results reflect strong earnings from each of our ongoing operations as we continue to leverage our global, diversified portfolio of businesses and capitalize on differentiated opportunities to deliver value to our customers and shareholders. Turning to health care. Third quarter 2011 premiums and fees grew 4% on a quarter-over-quarter basis, excluding the impact of the exited Medicare business, and earnings were $248 million. The premium and fee increase reflects solid growth from each of our ongoing lines of business. We also achieved year-to-date medical membership growth of 1.7%, adjusting for the planned nonstrategic exits. Third quarter earnings for health care reflect contributions from sustained growth in our medical and specialty businesses and the impact of favorable prior-period claim development. Turning to medical costs. Medical costs in the quarter include favorable prior-period claim development of $25 million after-tax across our risk book of business, primarily from lower-than-expected medical utilization trend. Of this amount, $5 million is related to the prior year. Specific to guaranteed costs, our medical care ratio in the quarter was 80.9% on a reported basis. Excluding prior-year claim development, the guaranteed cost medical care ratio for the first 9 months of 2011 was 80.4%, including the effect of recording our rebate accrual. Overall, we are pleased with the results in our medical risk businesses and they continue to reflect good pricing and underwriting discipline, as well as sustained clinical quality for our clients and customers. For the third quarter of 2011, total operating expense ratio is 27.2%, which is consistent with our expectations. Now I will discuss the results of our other segments. For Group Disability and Life, third quarter earnings were $62 million. This result was in line with our expectations as this business continues to deliver value to our market-leading Disability Management model, which focuses on early customer engagement and leverages CIGNA's proven clinical capabilities. Premiums and fees grew 5% quarter-over-quarter, including solid growth in our targeted disability business. Earnings include the impact of favorable Life and Accident claims, experience partially offset by higher disability claims incidence. CIGNA's international businesses continued to deliver very attractive growth and strong margins. The results reflect strong retention and further product penetration of existing customers, as well as targeted new sales. Premiums and fees grew 33% quarter-over-quarter, driven by improved customer retention and new sales within the Health, Life and Accident business, particularly in Korea and Taiwan, and the Expatriate Benefits businesses, including contributions from Vanbreda International. Our top line growth drove strong earnings of $79 million in the quarter. That represents earnings growth of 58% over the third quarter of 2010. The third quarter results also reflect continued strategic investments for future growth. The results for our remaining operations, including Run-off Reinsurance, Other Operations and Corporate, totaled to an after-tax loss of $64 million for the third quarter. As we previously mentioned, this includes a reserve strengthening of $45 million after-tax related to our run-off VADBe book of business. This loss is primarily related to the impacts of a continued low interest rate environment and volatile equity markets. This increase in reserves does not materially impact our capital position or outlook. Our third quarter results reflect continued strong revenue and earnings growth of each of our ongoing businesses. Now I will discuss our investment portfolio. Results in the quarter include solid net investment income and net realized investment gains of $9 million after-tax. Overall, we continue to be pleased with the quality and diversification of our investment portfolio. Our strong investment management capabilities and disciplined approach to risk management have consistently delivered attractive risk-adjusted returns for our clients and shareholders. Now turning to our outlook. Based on the strength of our third quarter results, we now expect full year 2011 consolidated adjusted income from operations of $1.385 billion to $1.445 billion. This range reflects an increase of $30 million to $50 million from our ongoing businesses, primarily reflecting the increase in our health care outlook. We now expect full year earnings per share to be in the range of $5.05 to $5.30 per share, which is an improvement of $0.05 to $0.10 per share over our previous expectations. This outlook includes the third quarter VADBe reserve strengthening of $0.16 per share and assumes break-even VADBe results in the fourth quarter of 2011. I will now discuss the components of our 2011 outlook, starting with health care. We now expect full year health care earnings in the range of $965 million to $995 million, which is an improvement of $35 million from our previous expectations. This increase reflects the impact of favorable prior-period claim development recognized in the third quarter and continued effective execution of our growth strategy. Relative to medical membership, we continue to expect full year 2011 membership growth of approximately 2%, excluding the planned market exits. And based on our current view of business mix, we expect to deliver a full year total health care operating expense ratio of approximately 27% as compared to 27.7% in the prior year. Turning to medical costs. For our guaranteed cost book of business, we now expect the full year medical cost ratio to be approximately 79.5%, which is 50 basis points lower than our previous expectation of 80%, and includes the benefit of the prior-year claim development. This improvement is net of our rebate accrual related to the minimum loss ratio requirements. We now expect our full year medical cost trend for our total book of business to be in the range of 5.5% to 6%, which is modestly lower than our previous outlook. Moving to other components of our outlook. Recognizing our performance to date in 2011, we have also slightly increased our expectation for full year earnings from the International and Disability and Life businesses. The outlook for our remaining operations, including Run-off Reinsurance, Other Operations and Corporate, is now expected to be a loss of $135 million to $145 million, which includes the third quarter VADBe reserve strengthening of $45 million after-tax. So all in, for full year 2011, we now expect consolidated earnings per share in the range of $5.05 to $5.30 per share. I will now cover our capital management position and outlook. We continue to have good financial flexibility as our subsidiaries are generating significant free cash flow to the parent, reflecting strong return on capital on each of our ongoing businesses. As we have indicated previously, a key component of our capital deployment strategy is strategic M&A with the focus on acquiring capabilities and scale to grow on our targeted areas of focus. HealthSpring clearly aligns to this strategy. We believe that the financing structure that we have put in place for HealthSpring for the HealthSpring acquisition allows us to maintain good financial flexibility. We plan to finance the acquisition with cash on hand of $850 million and a combination of debt and equity financing. Subsequent to the acquisition, we expect to maintain approximately $500 million of capital at the parent to meet short-term liquidity needs. We believe this financing structure will allow us to maintain a strong balance sheet and good liquidity. And our capital position has been affirmed this week by the rating agencies following our announced acquisition of HealthSpring. Regarding our pension plan, we will update our pension liability as of December 31, 2011. If the discount rates and asset returns remain at their September 30 levels, we would record an increase to the pension liability. However, this change does not have a material impact on either our annual pension funding amounts or pension expense. Overall, our capital position and outlook remain positive, our subsidiaries remain well capitalized, and we continue to evaluate each of these levers to ensure we deliver sustainable value for the benefit of our customers and shareholders over the long term. Now to recap, our third quarter 2011 consolidated results reflect the strength of our global diversified portfolio of businesses and continue to effective execution of our growth strategy, with strong revenue growth in our targeted customer segments. Our investment portfolio continues to deliver strong results. Finally, we are confident in our ability to achieve our increased full year 2011 earnings outlook and carry that momentum into 2012. With that, I will turn it over to David, who will provide you with insights into our expectations for 2012.

Thanks, Ralph. Turning to 2012. As Ted pointed out in his opening remarks, my comments around 2012 will exclude the impact of certain items, including most notably, the pending acquisition of HealthSpring. When we have more clarity on the timing of the HealthSpring close, we will provide specifics for our 2012 outlook. At this point, we expect to provide that guidance in early 2012. Having said that, I'll provide some early insights. To set the stage, we expect to maintain the momentum we have built over the last 2 years since implementing our Go Deep, Go Global and Go Individual strategy to deliver continued growth. We expect to see revenue growth in each of our ongoing businesses. This is driven by a continued expansion of our client and customer relationships as our value proposition continues to resonate very well in the marketplace. Focusing on health care membership. In the second quarter call, we noted a positive trajectory in the National Account business for 2012. We now expect growth in National Accounts in 2012 driven by strong client retention, expansion of existing relationships and the addition of new relationships. We expect to deliver continued growth in our middle market and select segments, driven by continued increased interest in our industry-leading clinical engagement programs and our differentiated funding arrangements. In total, we expect to grow by at least 400,000 health care customers in 2012, predominately in ASO relationships. Stepping back, we view the global economy and economic environment will continue to be dynamic. The economy will present challenges including employment levels and interest rate environment conditions. In the face of this environment, we expect to achieve solid earnings growth in each of our ongoing businesses through continued focus and strong execution of our strategy. More specifically, our results will reflect top line growth, operating expense efficiencies and strong fundamentals, including pricing discipline, clinical and service quality. All in, we expect consolidated earnings and EPS growth in 2012 versus 2011. And with that, we'll move to take your questions.

[Operator Instructions] And our first question will come from Charles Boorady with Crédit Suisse. Charles Andrew Boorady - Crédit Suisse AG, Research Division: It sounds like you're seeing an outlook for a terrific organic growth in your commercial business in 2012. I'm wondering if you can share a little bit more about any assumptions for -- in group attrition or in group growth if you're assuming employment growth. And also, a little bit more on where you're seeing those -- that growth, which end markets, what size employer, which geography or which specific products?

Charles, it's David. Specific to the first part of your question, at this point in time, we don't project and we're not projecting any major change in the economic outlook. So in group growth, if you think about the unemployment level as a major driver of change, at this point, our assumptions for the level of unemployment to be about equal to 2011, and therefore, no major swings in net, in group growth. To the macro part of your question, we look at 2012 as a continuation of few years of continued strong progress in our select and our middle market segments where our ASO value proposition resonates quite well. But more broadly, where we see the consumer and engagement capabilities and health improvement and productivity capabilities resonating, the changes we look into 2012 beyond the maintenance of that very strong performance is a meaningful uptick in our National Account segment. As you recall, we've gone through a couple of years of repositioning and seeking to focus on those employers who value incentive and engagement-base capabilities to improve health and productivity. And we're pleased to see the retention rates, the in-group growth there by selling additional sites for National Account customers, and then the addition of meaningful National Account customers. So a continuation of strong progress in select and middle market, and then a move to some momentum-building in the National Accounts is the way I'd position it. Charles Andrew Boorady - Crédit Suisse AG, Research Division: That's terrific. And just on geography, David?

Geography is reasonably balanced when you think about the national accounts. As you recall, stepping back, our select segment focus is a bit tighter geographical focus, so the Go Deep strategy really guides us into key geographies. Middle market is reasonably broad and national account is a much more of a national proposition. So I would not call out any geographies as the driving force of our growth.

We go next to Scott Fidel with Deutsche Bank.

I just wanted to follow up and ask a question on the HealthSpring, and maybe if you could talk a little bit about the margins that you're assuming that you think HealthSpring can generate in the long term. Clearly, the company has generated above-average margins and they've been able to sustain that. I'm just interested in your view on that. And maybe if you also can frame the expected EPS accretion that you expect from HS, excluding transaction costs, or at least give us some of the key swing factors that you think that we should be thinking about in terms of EPS accretion.

Scott, it's David. I'm going to start just macro on the margins and I'm going to ask Ralph to give you the direction on the accretion. But broadly speaking on the margins, at this point, obviously, we're not providing '12 guidance, I mean, it's a pending acquisition, so I'm going to leave you wanting for a little bit. I'd step back and suggest that if you look at HealthSpring, they've been able to generate very attractive margins on a relative basis, and that is a direct result of their ability to effectively partner with physicians, improve clinical quality outcomes as a result of lower costs and return those costs to individuals in terms of better quality, better service, and in many cases, more comprehensive benefit richness that goes along with it, and in part, or in meaningful margins. At this point, we would suggest that the overall margin profile within reason would not change materially as we look forward over the coming several years. I'm going to ask Ralph to frame the macro accretion view.

Scott, I think on accretion, there's a few ways to look at this. With all-in costs, that being integration costs, transition costs and ongoing amortization, we do expect the transaction to be accretive in the first full year. If you look at it on a full year basis, excluding the one-time integration and transaction costs, it will be highly accretive. And clearly, if you exclude the amortization, so you want a cash accretion basis, we would expect to see it very solidly accretive, approaching double digits. So again, highly strategic and financially attractive, both near term and long term.

Got it. So close to double-digit accretion x transaction costs. That's helpful.

On a cash basis.

On a cash basis. Okay, got it. Then just I have a follow-up question and just going back to that being -- clearly had $45 million to reserves in the third quarter. And over the course of the last 1.5 years or so, you've talked about trying to develop an exit strategy for VADBe. And just interested in terms of how I guess the HealthSpring acquisition could affect that strategy, if at all, and sort of just an update on sort of your efforts to try to minimize the volatility that we see every time the equity markets get volatile in the VADBe business.

Sure, sure. Well, yes, Scott, we accomplished a lot in addressing the Run-off business this year. We did create the separate structure with Arbor. We continue to refine our hedging strategies. We increased the level of capital in that business earlier part of 2011. And very committed to continue to explore different options for this business to manage those liabilities. We do have the capabilities to address any opportunities that do come about. We think the exposure is manageable and don't believe that the HealthSpring acquisition is going to necessarily impede us in any way of addressing that.

Okay. And just Ralph, what was your RBC ratio at the end of 3Q?

Over 300%. I don't have the exact number. On a company action level.

We'll go next to Josh Raskin with Barclays.

Question relates to hospital contracting. Two questions, I guess, related to that. One, maybe you could talk a little bit about what you're seeing in terms of rate increases to the hospitals? And maybe relative to that increase, that rate of increase, how that compares to previous years? And then do you think that's having any impact on your membership growth, it seems like you guys have kind of seen a little bit of inflection there in recent years, around the growth. And I understand the Go Deep and Go Individual strategy, but I'm just curious how the hospital contracting has played into the membership impact as well.

Josh, it's David. Appreciate your comment. Stepping back, if we look in benchmark over the past several years, we have seen in key geographies a meaningful progress in terms of our overall medical costs position, in large part aided by contracting improvement. As we've discussed in the past, some of that has come from just geographic focus. Some of it has come from partnering with the hospitals and collaborating around revenue management processes, working to ease some administrative burdens that go along with that and partnering out some clinical programs and protocols. To the first part of your question, my early look into 2012, hospital contracting and broader physician contracting is in line with our expectations, carrying into the year. On a national basis, we'd suggest no major change in the year-over-year pattern, slight movements here or there. But the headline is in line with our expectations and a good continuity of what we have seen over the last several years and we would appoint a lot of that back to more effective communication in partnering with the hospitals and physicians.

So David, does that mean similar rate increases in '12 for the hospitals relative or payment increases relative to what you're seeing this year?

Yes, Josh, if you take it on average nationally, yes.

Okay, that's great. And then just a follow-up question on HealthSpring. Could you talk a little bit about the timing of the acquisition? Just sort of why now? Is there some change in the Medicare world that's happened recently? Obviously, you guys, with the exception of private fee-for-service, haven't really get big in Medicare Advantage for a long time. So I'm just curious why now? And then if I could sneak in just a follow-up, maybe Radbe audits [ph] any expectation around that, did that play into the timing as well?

Josh, if we go back to our strategy which is, we laid out a little over 2 years ago. So latter part of 2009 when we walked it through with you all, we articulated 3 areas that we viewed were very attractive to growth for us on a go-forward basis and we'll largely pursue inorganically. To further our global profile, seniors including Medicare, and retail, including individual capabilities. So it's been an important part of our strategy. We also said that, that was a 3 to 5-year strategy, and that we would be patient within reason to find models and capabilities that we thought were truly differentiated and able to be sustained -- deliver sustained differentiation. So with HealthSpring, on strategy, for our book of business and our portfolio. And the most important part is, we view that HealthSpring brings a significantly differentiated proposition in the way it partners with physicians and view that it's an opportunity for a sustainable value for customers going forward. As it relates to Radbe, [ph] it did not factor in materially to our timing in any way, shape or form.

[Operator Instructions] We go next to Justin Lake with UBS.

Looking ahead, David, I appreciate the commentary on 2012, but I was hoping you might -- just in terms of how you think about the health care, the outlook, any reason for us or anything we should consider in terms of the typical growth rates for these businesses? I think you've talked about health care and group businesses being kind of mid-, single-digit growers, International being a double-digit grower. Anything there that we should consider as far as headwinds, tailwinds to that growth, or is that -- should we expect something typical to that in 2012?

Justin, again, we're not going to provide detailed guidance, and I appreciate your question in terms of trying to dig in another notch. Let me see if I could help out a little bit. First and foremost, over the long term, your macro conclusions are the right macro conclusions. As it relates to headwinds, tailwinds, I'm not going to go through by business unit, headwinds, tailwinds, I'd give you 2 or 3 items for consideration in terms of forming 2012. First and foremost, a strong momentum in 2011 and the objective to carry momentum in 2012, that was our objective last year, stepping into '11, it's our objective this year. As it relates to 2012, a consideration in terms of just the underlying patterns of medical costs and disability occurrence across our line of business. Secondly, consideration of the level of aggressiveness to the pricing environment. We have demonstrated and committed to demonstrating pricing discipline across all of our lines of business and we will seek to do so in 2012 as well. And third, as I mentioned in the prepared remarks, the overall economic environment, as we take that into consideration. So stepping back, relative to our prepared remarks, we indicated that we expect our ongoing businesses to grow earnings and we expect that to contribute to EPS growth on an overall basis. So your long-term assumptions are correct, some moving pieces may be in between but we feel good around the building momentum coming out of the year.

And just you mentioned a pricing environment, maybe you can just flush that out as far as what you're seeing there. And then maybe specifically, talk to Vanbreda and the contribution there next year. I think you had previously spiked that out as an expectation of about $35 million of accretion?

Justin, David. I'll take the pricing and the Vanbreda piece. First, as it relates to pricing, as we've noted in the past, for several years, we have indicated that the pricing environment is competitive. Having said that, we've seen some pockets recently of elevated competitiveness, especially noted in the risk business and we view that the diversity of our product portfolio helps us from that standpoint. I'd note that for our 2011 projection, the majority of our progress and success has been in ASO. And as I noted in the 2012, early projection and our estimate here, the vast majority of that 400,000 life growth is going to be ASO. So again, competitive pricing environment, we've seen some elevation of competitiveness in geographic pockets. As it relates to Vanbreda, again, at this point, we're not providing detailed 2012 guidance. I would suggest to you that for 2011, the Vanbreda results have played out well for us and it remind you the strategic rationale of why we pursued this. It positioned us by far in a way the leading player as it relates to ex-pats and the needs for the globally mobile. And very importantly, strategically positioned us in the new segment, which are the IGOs, inter-governmental organizations. When we provide more detail guidance for 2012, early part of the year, we'll talk about this in a little more specificity.

Okay. Great. If I could just sneak in one follow up on HealthSpring. You mentioned how positively the street [ph] views up and the entire probably managed health care community views [ph] HealthSpring's management team. I'd certainly second that. And so I was just hoping you might be willing to share with us how long the contractual lock-up here is among those kind of key managers, especially help press [ph].

Justin, you're sneaking a lot of questions. But the good ones, so I appreciate it. First off, relative to the HealthSpring leadership team, first, I want to reiterate, I said on the call before, I feel passionate about it. How I'm impressed I've been, our team has been, with Herb's specifically, and his leadership. The passion, coupled with capabilities, are extremely impressive. Secondly, well, you might take pause at this. I think the opportunity for our 2 organizations together, beyond contractual relationships, which I'll comment on in a moment, are going to be delineated in terms of our shared view of both the responsibility and opportunity to drive change in the health care marketplace. That's what motivates Herb, that's what motivates his leadership team. That's what's the driving force in terms of their effectiveness of partnering with the physicians. We share that passion. So our ability to continue the direction that they have, fuel further growth and fuel further innovation, that's the big opportunity. Having said that, in some of the filings, you'll be able to see that. Herb and key members of his team have signed on for a variety of level of years and that's a bit of a contractual formality that exists. We feel good about that as well, but what's most important is the philosophical alignment and collectively going around -- going out in building the next stage of what the marketplace needs.

We will go next to Christine Arnold with Cowen.

Two quick questions here. On HealthSpring, do you see an opportunity to apply the way that they're contracting with physicians and other providers to your commercial business, over time, and how does that dovetail with your ACO strategy? And then on these 400,000 members, could you speak to the specialty sell-through for those, particularly the smaller end of the market where it seems like that's a lot of the earnings opportunity?

Christine, it's David. On the first part, as we noted, one of the value creators we see for our 2 organizations is just what you said, expanding the focus and the ability to bring that physician partnership incentive and alignment model to the commercial space. And we see it 2 different ways. One, we see offering in capabilities to be brought forth for today's commercial employer market with a product and a choice alternative. And then secondly, we see an exciting set of opportunities to bring forward for what we'll call the evolving retailer individual market and you could use illustratively the 2014 exchanges and the ability to think about that. So point 1, we see that is a very important part of the opportunities in front of us. And Herb and his team share that, and early interaction that Herb's had with his physician partners, they see that and embrace that opportunity. As it relates to our ACO model, we see them as highly aligned. In some ways, Herb's model is more sophisticated and has driven the incentive alignment further and faster. But the overall ACO model we have, as I mentioned, we've entered our 15th very recently, shares the exact same framework. It's incentive alignment, it's the use of targeting the information to drive quality and service improvement, and it's care-coordination capabilities like case managers, nutritionists and the like. So philosophically, we align -- I would suggest that his model's a bit more sophisticated. As it relates to the 400,000 members, you should assume that our basic rule of thumb still holds. In the select segment, the level of specialty pullthrough is extraordinarily high. In the middle market, generally speaking, the level of specialty pullthrough is high, a little lesser than specialty. And then in the national accounts base, generally speaking, lower. The last comment I'll make is a string to pull throughout. Generally speaking, when we sell consumer-directed or high-engagement base capabilities, the level of specialty pullthrough is higher regardless of the segment because the employer understands the benefit of integration and the benefit of the overall program delivery, so it's a good trajectory there.

So can I assume that there's more specialty sellthrough in 2012 versus 2011 given that your selling more -- you're not shrinking national, but you're selling more select more mid, or is that reading too much?

No, Christine, I would not say that. On the positive, I would say there's a continuation of our progress in the select segment and the middle market and you should view that there's, therefore, a continuation of the specialty trajectory. Secondly, as I mentioned before, the increase in our outlook is driven by an improvement in our international account outlook, so within national accounts, as I referenced before, on average, there is less specialty pullthrough, but on overall portfolios, we lift this 400,000 covered [ph] lives, we'll have lift in our speciality portfolio as well.

We will go next to Carl McDonald with Citi.

I wanted to clarify the comment that you grow earnings in 2012. That's making the adjustment for the change in international accounting. So in other words, growth off of the 480 to 505 for 2011?

Correct. As Ted mentioned in his prepared remarks, the base will be reset. The trajectory, though, is what we're referencing.

Got it, okay. And then second, you talked last quarter about seeing increased interest from risk accounts, converting to ASO. Now that we're actually through a lot of the selling season, I'd be interested in the results there. Did the risk employers look at it and decide not to do it or did you see more conversions than are normal?

Carl, as I mentioned, if you think about the 2011 membership outlook, the majority of our membership performance in 2011 is ASO. As I referenced for 2012, within the 400,000 net growth of health care customers, we said the vast majority of that is ASO. So stepping back, I'd suggest, if you look at the pattern, what we've seen in the marketplace is continued increased demand for more transparent products, which ASO is the most transparent product in the portfolio, and we've seen an increase in demand as you go down market moving beyond the, I'll call it, the traditional middle-market account of 500 to 800 employees, down to the Select segment of 250 or 200 or 150 and beyond employees. So for CIGNA, ASO continues to be the largest portion of our traction and trajectory, and we see increasing demand in the marketplace, both in the traditional middle-market space, but also down market in the Select segment space.

We will go next to Ana Gupte with Sanford Bernstein. Ana Gupte - Sanford C. Bernstein & Co., LLC., Research Division: My question is again about the HealthSpring acquisition and to what extent the group retiree conversion's play into your strategic and financial rationale for doing the deal? And then specifically, as we think about 2013, or even 2012, what is the pipeline that you are seeing for this, and to what extent do you think the CIGNA-HealthSpring combination would be able to capture some of that? And then finally, around the type of employers that are doing this, given that you don't have a broad national footprint, is this more the national account guys, is it more state government? And if it is more about having a national footprint, how are you planning to build that out?

Ana, it's David. So a few questions there. First, I guess the first 2 are tied together, which are relative to the group retirees. Simple answer is yes. Did it factor into our strategic thinking? Yes and absolutely. And we think about it 2 ways. One, we think about the large cadre of emerging Medicare eligibles. So think about the pre-65 retirees and soon-to-be retirees, and beginning to position to coordinate and having continuity of service as best you can as they age into Medicare eligible status. In addition, yes, a large pipeline of Medicare eligible, current Medicare eligible retirees and an opportunity to systematically have a set of offerings and a pipeline from that standpoint. As it relates to the marketplace looking forward, we think over time, as I mentioned in our prepared remarks, that having the HealthSpring solution and solutions that will continue to evolve will bode very well for both the existing marketplace, the HealthSpring targets, as well as bringing additional pipeline of opportunities off of our book of business. Your question then goes to the type of employers. I first step back and go and merge this up against our Go Deep strategy. Everything we've been focused on over the last 2.5 years has been around Go Deep. HealthSpring as well understands, knows and has done an extraordinary a good job with Go Deep. So Herb's team and our team talks the same language. So this will be about focus, focus, focus. And then as we indicated in our prepared remarks, we will talk about expanding their platform in key geographies where we see the highest need for our clients and customers, and the highest opportunity going forward. Ana Gupte - Sanford C. Bernstein & Co., LLC., Research Division: Okay. One question that's unrelated. After doing this deal, would you be more open to considering a sale of your cap to PBM? And then have you totally ruled out the vitality retype transactions? Did they not apply to your book as the way to fill some capital and just improve your balance sheet?

Ana, first, relative to our PBM, we continue to believe that our PBM is performing very well, and as we've noted before, is an important part of our clinical value proposition. Two, as we've indicated before, we built a lot of structural flexibility into our PBM because that space continues to grow from, I'll call it the more traditional aspects of retail and mail-order to putting in place the specialty programs, et cetera. At the end of the day, relative to the opportunities that present themself with HealthSpring coming into the fold, we see further opportunity to add value through the PBM space, and over time, we're going to seek meaningful opportunities to add value over that space. We're cognizant that HealthSpring has a different relationship. We'll make sure we have a detailed understanding of that relationship and make sure that whatever we're doing, first and foremost, puts their customers or soon-to-be our customers first. And then evolve our PBM strategy. But most importantly, there's several significant opportunities for further value creation there. As it relates to your broad question on capital, you should view that we continue to look at a variety of mechanisms for, I'll call it, capital flexibility. And as Ralph noted in his prepared remarks and his follow-up relative to VADBe, we believe we do and we'll continue to have a good capital flexibility on a go-forward basis. So we would not rule out that as a concrete example but we also would not limit to that as a sole example of how to get additional capital flexibility.

We go next to Peter Costa with Wells Fargo.

I like to expand a little bit on like the capital question. Suppose the HealthSpring closing, a couple of questions about what your capital, sort of priorities will be? First, on Arbor, and a couple of things to specifically address. First, on Arbor, will you sort of replace the $150 million in capital, it's now sort of used up here by the $170 million or arguably used up? And then will cash be coming out of HealthSpring or we have to put more cash into HealthSpring in terms of refinancing some of the debt or whatever? And then on share repurchases going forward and further international acquisitions, is that something to expect to see? And then just finally, paying down your acquisition debt, where will that be in terms of priorities?

Sure. Peter, it's Ralph. A couple of points within your question. First, our capital deployment priorities really remain unchanged. We want to support the internal business, pursue acquisitions that are both strategic and financially attractive, and then look at opportunities beyond that to return value to shareholders. Regarding HealthSpring's specifically and the capital there, as we look at the capital levels of the business today, what we have modeled is that we will, over time, increase that capital level, but that could be done within the cash generation of the business, so we would not envision infusing additional capital from the parent level into the business to bring up the capital ratio from where it is. So we have looked at that and we certainly believe that there's sufficient cash flow within that operation to step that up. Regarding overall capital and deployment, as we set up the equity and debt financing going forward, our plan would be, as I mentioned in the call earlier this week, to bring our debt to capitalization ratio down to more of our historic target levels in that 25% to 30% range, in a reasonable period of time. And then with that, as we do that, that becomes a near-term priority to bring some of that level down. But that also enables us to have enough flexibility to look at other opportunities, both in and outside the U.S., consistent with our strategies. And I think, importantly, throughout all this, both businesses generate very strong cash flows so we would expect to be seeing cash moving up to the parent from the subsidiaries of both companies.

How long do you think it will take before the cash moves up from HealthSpring?

It's hard to say with the rate and pace exactly. But we would think certainly over the next 24 months, we're going to see -- we'll see movement. Certainly, movement up in the RBC ratio, but in that time frame, we would also expect to see some generation up to the parent as well.

Okay. And then can you talk a little bit about -- you sort of touched on it before about the sort of market overlaps between yourselves and HealthSpring and then what you do outside of HealthSpring's markets. Will you continue to use the Humana JV or will that go away altogether? And then what else will you do in terms of acquisitions? Will M&A be something that you'll pursue in Medicare?

Relative to the market overlap, first, to be clear, I think as you very well know, we do not have overlap relative to CIGNA and HealthSpring as it relates to Medicare solutions and geographies. So from a regulatory standpoint, that should aid us in the process. From a geographic-focus standpoint and understanding which markets are most important to their growth and our growth, we have a shared alignment around that and a way to approach the market. As it relates to M&A and growth of the markets, it will be, over time, a combination of organic growth of markets, leveraging our collective capabilities, and then opportunistically, acquiring additional footprints that benefit the organization. As it relates to the Humana alliance, as you recall, we put the Humana alliance in place to accommodate the needs of our employer, clients and customers. As you reference, it's a more of a national solution. At this point in time, we would expect post-closing of the HealthSpring acquisition. That both solutions would coexist and then we would work with the Humana leadership to ensure that the solution we have is mutually beneficial to both organizations over time.

We will go next to Kevin Fischbeck with Bank of America Merrill Lynch.

I guess question on the HealthSpring deal. I guess and I've got a pretty good sense of what HealthSpring is going to be able to do, but I guess the one missing piece in my model when thinking about it, is the amortization number, do you have any guidance on what amortization might be, pro forma deal?

Kevin, it's Ralph. At this point in time, it hasn't been finalized yet so what I would suggest there could be a range of estimates in there. So I'd prefer not to lock into any one particular estimate. I think importantly, as we said, with amortization or excluding amortization, we think the transaction would be accretive. I think that's very important. But the actual amortization estimate really needs to be still finalized.

Okay. And I guess maybe then if you could just comment a little bit on cost trend. Obviously, you take your cost trend estimate down for the year, but any commentary directionally on Q3 cost trend versus Q2? And what the major drivers of trend are right now?

The cost trend -- on medical costs, the cost trend has been largely consistent for the first 3 quarters of the year here. So what we saw in Q3 was largely similar to Q2. So as I mentioned, regarding our outlook for this year, our assumption is that we would start to see the utilization trends, in particular, begin to move back to more historical levels. That's what we've anticipated in our guidance for the full year. David, do you want to add any color on what you're seeing in the marketplace?

The one piece I will add is, what we have noticed, and it's important in the utilization trend, is within our portfolio of clients, specifically, for those clients who have some of the more innovative clinical programs attached, we continue to see an uptick in utilization of many of what we'll call the important and right services, so wellness, prevention, medications compliance rates, et cetera. And all of that is taking place in our book of business that, as Ralph mentioned, is showing a good overall medical cost trend. So it's important to note that when we talk about utilization decelerating, it's important to understand that the right types of utilization, of services, of prevention, wellness, when supported with the appropriate clinical programs are actually upticking, that benefits individuals and it benefits clients.

Okay. So you're expecting trend to return to normal [ph], but right now, you're not seeing a change in trend?

That's correct.

We go to David Windley with Jefferies & Company. David H. Windley - Jefferies & Company, Inc., Research Division: I wondered on the HealthSpring acquisition, if they're early in small push but nonetheless push into Medicaid would change or soften your views that I think have been somewhat cautious about Medicaid and what would be your outlook for the Medicaid business?

David, it's David. So since those views were views that I put forth, I guess I'll address that question. As we go back to the senior solution, when we walk through our strategy, what we did indicate, that when we secure a seniors platform, we view that, that was in opportunity in targeted geographies to selectively explore the Medicaid population, especially ABD population. So we have a shared philosophy and a shared orientation with Herb and his team that it's a market-specific decision and you're going to leverage the seniors capability, the infrastructure, and very importantly, the clinical capabilities and programs. What we were trying to be clear on is that as CIGNA was configured, we did not believe we had differentiated capabilities to enter the Medicaid space where we saw as a growing market. We did not have the capability to differentiate and ultimately win. But if we sought to do it off of a differentiated senior solution and do it opportunistically in key geographies and that's the direction you should expect to see going forward. David H. Windley - Jefferies & Company, Inc., Research Division: Okay, great. And on rebates, I guess kind of a 2-part question here. First of all, could you comment on what portion of your book of business is in rebate status, if you could just give us percentage of sales or something like that? And then I'm curious in your comments around hospital contracting, you were, I thought, careful to comment that pockets of geography might be different, but on average, you kind of looking in line. I'm wondering if rebate status can have some influence on being creative on your hospital contracting side, geography-by-geography?

Yes, I'll start on the contracting, and ask Ralph to add on the rebates and maybe speak more toward our rebate position in total. But relative to contracting, first, my comments on geography were not meant to be coded but when you're managing a national portfolio, clearly, you're going to have higher and lower results so that was the reference I was making. But on total, that the pattern of contracts in 2012 really look is not materially different than the pattern of contracts in 2011. And by the way, that's consistent with our 2011 relative to 2010 performance in general. As it relates to the -- maybe the orientation of whether or not rebates correlate to the contracting piece, I would say generally speaking, no. Generally speaking, no and we'd remind you that the size of our book of business, we have 9%, 10% of guaranteed costs of the total population of our portfolio. Then David, when you take that and whittle it down and go to any specific geography and any specific sell that you're dealing with from a rebate standpoint, from a CIGNA point of view, it would not be that significant to influence in any way, shape, or form. Ralph, anything else you'd like to add on the rebates?

Just maybe just a couple of points. Obviously, there's a lot of moving parts to that in pieces, but in the quarter, maybe just for perspective, we recorded an additional $19 million in the quarter after-tax on rebates, so year-to-date, $44 million after-tax is what we have on the rebate accrual.

We go next to John Rex with JPMorgan. John F. Rex - JP Morgan Chase & Co, Research Division: With respect on some of your '12 commentaries, you referred to your current trend running 5.5% to 6.5% as you look at '11 now. So where do you anticipate commercial trend to run in '12? And does your renewal pricing that you've locked in so far match that?

John, I think our prepared remarks said 5.5% to 6% for 2011. Correct guys?

Yes. So you said 5.5% to 6.5%, I heard you. We were 5.5% to 6%. We've seen continued downtick in that. As you may have heard in my prior comments, very importantly we continue to see for prevention, wellness, kind of key service utilization, actually some uptick there. To the core of your question, we've now provided 2012 specific guidance. You should assume that as we've talked directionally, we are making directional assumptions that the rate and pace of utilization increases throughout the course of 2012 relative to what it's been in 2011 more to historic levels. Time will tell whether or not that's correct. Our basic assumptions, you should think about it, are not a step function on January 1 but that it would transpire us throughout the course of the year. And lastly, general assumption is that our pricing assumptions would be pricing more toward our projected trend and continue to get trued up as we learn more on each monthly cycle. John F. Rex - JP Morgan Chase & Co, Research Division: So on historic levels, if I look at trend in this country over the last 50 years, it's averaged about 8%? Is that commensurate with what you'd call historic levels?

Yes, John, I'm not going to put a number out there. What I might ask you to think about is, if that's your way -- if you take our 5.5% to 6%, for example, of which we have said 2012 relative to 2011 contracting is about intact in terms of rate, pace, size, and if you assume that 2011 had a lighter overall utilization rate, whatever your personal assumptions are in terms of normal utilization, then you could put it on top of the 5.5% to 6% and move it up to your projection. Clearly, we'll provide you guidance. We'll provide more clarity for you, but that's the way we would think about. John F. Rex - JP Morgan Chase & Co, Research Division: All right. And I guess, I mean, I'm trying to do -- I'm trying to understand kind of my margin for error here, that is do I have 100 -- can I withstand 100 basis points of trend re-acceleration in your guidance or can I withstand 50? And I was trying to get an order of magnitude so we can kind of get a sense of how much margin for re-acceleration the '12 could withstand?

So John, maybe, again, we're trying to be helpful here. First, as you know, but important to re-orient, 80-plus percent of the business ASO, approaching 10% in terms of shared returns, round numbers 10% guaranteed costs, so to set the frame in terms of the exposure to trend acceleration in any given point in time. In our guaranteed cost of business or risk business, our case size continues to be higher than average versus the industry because, for example, we're not in the under-50 market. The relevance there is that we use case-specific experience to set rates on a go-forward basis. Last relevant data, as you know, greater than 50% of our overall portfolio of business renews on January 1 so as you're thinking about an environment where we have 3 quarters of 2011 with moderate utilization, Ralph indicated we're assuming that 2011 has sum up -- fourth quarter has sum up taking utilization. And my comment relative to 2012 suggests we're projecting an increase in utilization, but not on January 1 kind of ratably throughout the course of the year. You can draw your conclusion. Our conclusion is that we are less exposed than most as it relates to accelerated changes in either direction for medical costs largely because we have a highly transparent portfolio and our incentives are directly aligned, broadly speaking, with our employer clients.

And our last question will come from Matt Borsch with Goldman Sachs.

On the pricing where you talked about elevated competitiveness, can you give us any granularity there in terms of whether you're seeing that in the risk business more from the public or more from the not-for-profit carriers? If you think it's largely driven by the MLR rebates. And of course, I'd be interested if you can spike out any geographies.

Matthew, it's David. So trying to give you a little bit more color. First and foremost, what we've seen is, broadly speaking, we continued [indiscernible] competitive [ph] environment as I've indicated. Within that, I flagged an uptick in level of competitiveness in some key pockets. I referenced earlier that it was specifically that we have seen in the risk space. Relative to CIGNA, I noted that in 2011, the majority of our growth has been in the ASO space and when we flagged our 400,000 customer growth for 2012, we said the vast majority of that would be ASO. And in part, we have seen the pockets of movement in the risk portfolio that we've back away from where we are leveraging our ASO space a little bit more aggressively. If it's public or private, we would say both, and geographies, a few, take Southern California as a good concrete example. And maybe, the tri-state region on the East Coast here as a second example.

Great. Yes, that triangulates with what we've heard as well. Could you -- just as the last question, I'm sorry, could you just go, because I missed a part of the call here, could you just remind us what the adjustment is, the rebates for 2011 relative to your statement that earnings will grow in 2012.

Ralph will provide the rebates.

Yes, here we had, year-to-date, our accrual was $44 million on an after-tax basis.

And at this time, I'd like to turn the call back to Mr. Cordani for any additional or closing comments.

I want to thank everybody for participating in our call. In closing, I'll briefly highlight key quarterly performance highlights in our 2012 outlook. Our third quarter operating results delivered strong top line and bottom line growth. We continue to invest for our future success, including the pending acquisition of HealthSpring. Based on the strength of our third quarter results, we are confident in achieving our increased outlook for 2011. Given our sustainable profitable growth during the past 2 years, we expect to continue this momentum into 2012 with revenue growth from each of our operating businesses. And we expect to grow our health care membership by at least 400,000 customers in 2012. And in 2012, we expect to achieve solid consolidated earnings and EPS growth. We thank you for joining us on the call today and look forward to speaking with you in the future. Have a great day.

Ladies and gentlemen, this concludes CIGNA's Third Quarter 2011 Results Review. CIGNA Investor Relations will be available to respond to additional questions shortly. A recording of this conference will be available for 10 business days following in this call. You may access the recording by dialing toll free (888) 203-1112 or area code (719) 457-0820. The pass code for the replay is 1982513. Thank you for participating. We will now disconnect.