Ladies and gentlemen, thank you for standing by for CIGNA's Second Quarter 2011 Results Review. [Operator Instructions] As a reminder, ladies and gentlemen, this conference, including the question-and-answer session, is being recorded. We'll begin by turning the conference over to Mr. Ted Detrick. Please go ahead, Mr. Detrick.

Good morning, everyone, and thank you for joining today's call. I'm Ted Detrick, Vice President of Investor Relations. And with me this morning is David Cordani, our President and Chief Executive Officer. In addition, I am pleased to introduce Ralph Nicoletti, CIGNA's Chief Financial Officer. Ralph has been in the CFO role since late June, and we certainly welcome him to the CIGNA team. In our remarks today, Dave will begin by briefly commenting on CIGNA's second quarter results. He will also discuss our results in the context of our growth strategy. In addition, David will explain how our focused strategy, coupled with our diversified portfolio of businesses, positions CIGNA to deliver revenue and earnings growth on a sustained basis. Next, Ralph will review the financial results for the second quarter and provide an update on CIGNA's financial outlook for full year 2011. 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. Now 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 cover one item pertaining to our second quarter results and disclosures. We'll look to our Run-off Reinsurance operations. Our second quarter shareholders' net income included an after-tax noncash loss of $21 million or $0.07 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. And 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. And with that, I'll turn it over to David.

Thanks, Ted, and good morning, everyone. I'll start by welcoming Ralph to our team. This is his first quarterly earnings release. He's been with us for nearly 6 weeks, and I couldn't be more excited to have him here. He brings a significant amount of experience to CIGNA. His customer focus and global background will be instrumental as we continue to execute our growth strategy and become a more customer-centered company. Today, he'll walk through our financial results and outlook. Before that, I'll take a few minutes to briefly comment on our quarterly performance, and then I'll spend some time highlighting the differentiation of our business strategy and how it's driving sustainable operating results. More specifically, I'll outline how our focus and the synergies across our ongoing businesses position us for sustained profitable growth. So let's dive in. Overall, we've delivered another very strong quarter. Through continued effective execution of our growth strategy, we delivered strong results in 2010, and we've maintained that momentum through the first half of 2011 with organic revenue growth across all our key areas of focus and double-digit earnings growth for our ongoing businesses. For the second quarter of 2011, we reported consolidated adjusted income of $418 million or $1.53 per share, with revenue growth of approximately 7% and strong earnings from each of our ongoing businesses. By delivering on our Go Deep, Go Global and Go Individual strategy, we've grown our business while demonstrating an ongoing commitment to improve the health, well-being and sense of security of the people we serve. Our approach delivers differentiated value for our customers, clients and shareholders. We are achieving our business growth by maintaining intense focus as we execute our strategy and by effectively leveraging our diversified portfolio of businesses. Our ability to capitalize on these key strengths…

Thanks, David, and good morning, everyone. I'm pleased to be part of the CIGNA team, and I look forward to meeting and getting to know you in the future. In my remarks, I'll review CIGNA's second quarter 2011 results, link these results to our growth strategy and provide an update to our full year outlook. 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 second quarter consolidated revenues grew to $5.5 billion. This is an increase of 7% over the second quarter of 2010 after excluding the impact of our planned exit from the Individual Medicare Private Fee for Service business and reflects strong growth in each of our targeted market segments. Our second quarter consolidated earnings were $418 million or $1.53 per share. That represents EPS growth of 11% over the second 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 to deliver value to our customers and shareholders. Turning to Health Care. Second quarter of 2011 premium and fees grew 8% on a quarter-over-quarter basis, excluding the impact of the exited Medicare business, and earnings grew 13% to $280 million. The premium and fee increase reflects solid growth from each of our ongoing lines of business. We also achieved year-to-date membership growth of 1.3%, adjusting for the planned nonstrategic exits. We are seeing strong demand for our solutions and continued growth in our targeted markets and customer segments. Second quarter earnings for Health Care reflect contributions from sustained business growth, solid fundamentals and the impact of favorable…

[Operator Instructions] And we'll take our first question from Matthew Borsch with Goldman Sachs.

My question is on the commercial market. And I'm curious, as you start to approach 2012 calendar renewals, well, still a ways off, but for some of the middle market accounts, are you sensing an accelerated interest in self-funding products and a meaningful change from last year? I'm just curious what the buzz in the employer community is on that.

It's David. So as we look to 2012, as you noted it's early for the middle market and clearly for the select segment season. But let me give you the trends of what you're asking for and you can follow up if I've missed your question. Broadly speaking, I would say over the last year, year and a half, we've seen continued uptick and momentum on 2 items. One, appetite for ASO or highly transparent funding arrangements. We continue to see a broadening of appetite clearly in the middle market where it's thrived in the past. And we'd describe that as 251 to 5,000 life employers but also, very importantly in the select segment, as we call it, the 51 to 250 life employers. The second trend we see is further acceleration of demand and adoption of what we call incentive and engagement-based programs, working to really get more aggressive engagement of individuals in their proactive health engagement. And the emergence we see lastly now is even further adoption to push the needle on the physician strategy. So more ACO demand, more aggressive benefit designs to get to the highest quality physicians, et cetera. So that's a continuation of a trend, and we would expect that to continue to show through in 2012.

And just staying on this broad target, on national accounts. One of your competitors has talked about seeing some pressure as some of the jumbo accounts focus maybe, in some instances, more on just straight unit price discounts. Is that a headwind you're facing as you go into next year?

Yes. So Matt, let me give you a little color on national accounts. First, to remind you how we define national accounts because we define it a little differently than our competitors. So it's commercial employers with 5,000 and more employees in multi-state. Secondly, by way of backdrop, as you'll recall, we repositioned our national account segment over the last 2 years consistent with our strategy to really focus intensely on those employers that valued engagement and incentive-based programs and were focused on improving health and productivity, and we've gone through a repositioning of that book of business. As we look at the 2012 cycle, we're meaningfully through the 2012 selling cycle and renewal cycle, although activity remains. One, I would tell you the volume of our pipeline is good as we measure it in terms of just aggregate volume on historical standards. Two, the quality of the pipeline is very good. And what we mean by that is, the ask or the need set for the employer clients really aligns very nicely to our value proposition around the alignment of health and productivity improvement or the use of incentives. So said otherwise, the season for 2012 and the clients we're looking at, it's not all about discounts unilaterally. It's about value, total costs, health and productivity improvement. Beyond that, the percentage of our book of business that was out to bid for 2012 is a lower percentage. So as we put that whole picture together, coming off the back of 2 years of repositioning the portfolio, we feel pretty good about the 2012 selling season. And while it's not over yet, we'd actually expect to see growth in that book specifically off of the incentives and engagement-based programs and the orientation around health and productivity improvement.

We'll go next to Scott Fidel with Deutsche Bank.

I just want to follow up, David, on your comment on the exchanges. And you said that the team now is starting to get a sense of which markets and products you may consider participating in. So I would interested if you can actually talk a little about which markets and products you think you might consider participating in on the exchanges.

Sure, Scott. As I noted in my prepared remarks, while there's some clarity, a lot of movement will still happen in the exchange-based framework. So first, to put it in context and remind you, over the last couple of years, we focused on individual primary initiatives in about 10 key markets around the country, working on different product designs, different distribution strategies, et cetera. And as we've talked about in the past, that was a launch, an organic launch to learn. It was highly focused in about 10 key geographies. And overall, we're pleased with those results as we've put on somewhere over 100,000 lives and been able to learn relative to that. As it relates to the exchange, what I will tell you is we use our Go Deep strategy as the specific guide. So our Go Deep strategy sorts by state and then ultimately by cities within key states. So we're looking at a better part of 175 MSAs [ph]. But we look by states. I'm not going to walk you through which states we see as attractive versus unattractive today. But the framework we would look to is: one, what is our competitive position in that marketplace; two, obviously a subset of that, what's our total cost position, the makeup of the delivery position and hospital delivery system and do we see a sustainable solution there; and three, do we think that states will have a regulatory environment that's conducive to enough choice and flexibility to be successful? We've been highly engaged with both state regulators and federal regulators on this topic, and we'll continue to be going forward. But you should assume that our Go Deep strategy is a direct guide. And then secondly, our ongoing product strategy, clearly they'll will be base programs for the Bronze, Silver and Gold, but allowing for a little programmatic flexibility is also very important to us. And we view there's another 6 to 12 months to play out in the market conditions before we firm up and finalize that.

Okay. And I just want ask a follow-up question just on VADBe. And clearly, there's been an uptick in market volatility so far in the 3Q. So just interested if you can give us an update on how the dynamic hedges have been holding up on the VADBe book so far this quarter.

It's Ralph. Overall, we've taken a lot of steps here on VADBe and -- to isolate the business within our structure and consistent with our strategy and as well as improve the risk management piece. So if you'll recall back, I guess, it's Investor Day, too, we talked a little bit about a separate funding plan that we put in place where we did model a lot of scenarios related to what could happen in the marketplace, and we funded that legal entity accordingly. So we feel like we're in a good position now to manage through the volatility. And frankly, some of the modeling done when we capitalized that entity was done in a matter in which we looked at scenarios that replicated very significant drops in the S&P as well as dynamic interest rate movements and feel good that we had capital in place.

And we'll go next to John Rex with JPMorgan. John Rex - JP Morgan Chase & Co: David, I just want to follow up on your comments on national accounts. Can you at this point on that segment size for us kind of what your expectation would be for growth? You said you expect to grow, but kind of what you know thus far. And then also, should we expect to see you expand your Medicare footprint for 2012?

So for national accounts at this point, I'm not going to give you exclusive guidance because we're not providing 2012 guidance. But if you play back the comments I had provided previously, first, benefiting from very strong retention levels, which underscore the fact that we're delivering good value to our customers, our target customers, and clients that are on board today; and secondly, referencing the success we're having in terms of our targeted growth initiatives around the health and productivity improvement. Putting those two together, again we expect to see growth in that book of business. It did lead [ph] a very challenging economic environment. So we've repositioned that book, and in a very challenging economic environment, we expect to see growth relative to that book on an overall basis. Your Medicare question, I'm going to pause for a second. Are you referencing the recent indications that have come out on PDP? Or is it broader than that, John? John Rex - JP Morgan Chase & Co: Broader than that, MA.

So from an MA standpoint, we don't have in our 2012 expectations, again without providing you guidance. We don't have a breakout organic set of expectations, but we've positioned ourselves from a Medicare standpoint, continues to be to ensure that, for our employer customers, we have a suite of solutions, be they on COB, supplemental RAPs, coordination RAPs, previously Private Fee for Service but now on an MA basis whether it's a proprietary offering in Arizona or our alliance offering with Humana, making sure that we have a more comprehensive suite to meet their needs, as they look to us as well as the employer-sponsored PDP. And to date, that's proven to be a successful strategy for us to ensure we are accommodating their needs. That would be on the organic side of the equation. I would not expect a material change of direction for us. John Rex - JP Morgan Chase & Co: . Okay. And then so appreciating the fact that you're not providing total guidance at this point. Maybe you could just do a little rundown kind of what would be the, I guess, it's the typical headwinds, tailwinds. But as you think about your '12, I'm trying to think why you shouldn't expect you could get double-digit EPS growth next year. But if you could keep it in just like what are some of the headwinds or the tailwinds to operate against growth in '12?

Sure. So when we think about headwinds and tailwinds -- and I'll cite maybe a couple per operating business to give you a flavor and then summarize it. When you think about the Health Care business, I think it really fundamentally comes to what and how does the underlying cost pressures unfold and how effective are we in terms of anticipating that, acknowledging that now we're going through the better part of the year of more muted utilization, but the cost trends, the underlying unit cost trends are in line with our expectations. So I would identify that as point one. And point two, I would identify the rate and pace of our ongoing investments in our infrastructure and growth capabilities, and we've been pretty disciplined around that. And three, you'd wrap together our total growth equation. So what's our overall retention and expansion profile look like for 2012. I'll give you some summary comments in a moment. For group insurance, I'd highlight 2: the rate and pace of disability current to the claim experience. And I'd put that in the context that our organization has done a very nice job in a challenging economic environment delivering really good value for our clients and customers. So if there was a change in course there, that would create a headwind or a tailwind. We're not expecting that at this point in time. And then similarly in that business, the rate and pace of our ongoing investments. And the International business, we always look to the retention profile of our health, life and accident portfolio, acknowledging that given our ongoing growth it continues to get more diversified, which is a good thing. And then I would point to the rate and pace of going investment as we're expanding both distribution capabilities as…

We'll go next to Charles Boorady with Credit Suisse. Charles Boorady - Crédit Suisse AG: I'm wondering if you could talk to us about provider contracting trends. Specifically, whether high-performance networks are something you've been -- you continued to roll out. And any successes you're seeing there? Any increase in the risk sharing with providers? And then just unit pricing trends.

It's David. So broadly speaking, If I put it in the context of the last couple of years, the provider contracting, our unit cost trend, we have not seen any surprises. So we've been able to deliver or beat our medical cost trend. And given that order of magnitude, 70% plus of that medical cost trend is underlying unit cost, and it's an important part of the equation. And over the last couple of years, the team has done a very good job there. As I -- as we look forward in terms of emerging trend, I put in the context of the buzzword of the day, is ACOs. But take that into the concert of more aligned contracting relationship. Thus far, we've seen very good traction in the areas we've targeted. We have innovative ACO positions in about 10 markets with over 1,000 physicians servicing in excess of 100,000 lives today. The key to those are aligning incentives, very importantly, using targeted information that help the physicians provide even a higher quality delivery for their patient or customer, and then supporting them with care extenders. By way of an emerging trend, we expect to see a lot more of that from an adoption standpoint, both going deeper with the existing relationships and broadening those relationships on a targeted basis. So within that, Charles, you're right, there is some risk sharing or we call it incentive alignment. But what powers that is the information enabling the physicians to get a more comprehensive view of their patients more rapidly and what we call care extenders, population-based health programs, lifestyle management programs, case management programs. That's an area we see much more adoption underway. Charles Boorady - Crédit Suisse AG: And what's the appetite of your customer base to accept narrower networks or high-performance networks? And are they starting to purchase again disease management, wellness or other programs that saw slightly sluggish sales during the period of economic weakness over the last couple of years? I saw your specialty growth was very strong, and I'm wondering about wellness, disease management and high-performance network adoption as well.

Yes, and I appreciate the fact, Charles, you went from narrow [ph] to high-performance because we don't think about it as narrow network. We're thinking about -- we think about this high-performance as more of a Platinum network. So I would say the interest level in that area is growing similar to the way interest level around consumer-directed or other programs started to grow several years ago. And what backs it up are the facts that we can get -- we're able to demonstrate that with a high-performance network, you generate a higher clinical quality result, a higher service result and the combination to generate a better overall total cost equation. So we're seeing continuation of early indicators of demand for that. But what it isn't, Charles, it's not the old, from 15 years ago narrow network where you're just compressing the network in totality. This is a case where you're using information to really point toward the highest value part of the solution. On your DM question, we see a fair amount of evolution in the marketplace. We've seen a lot of success, but the success has actually been by evolving the traditional disease management programs which are more silo-ed. So think of disease state of diabetes or asthma and interact with a person on just that disease state and looking at the individual on a more comprehensive basis. Because typically, an individual who needs to be on a disease management program has multiple what's referred to as comorbidities or illnesses. And what -- we've seen great success on our newer programs that we've developed that actually takes a 360 view of the individual. Our clinicians collaborate with that individual and their physician and generate a very strong quality and service outcome for them. The demand for that is significant right now. And some of the early adoption programs we've actually capped volume that we were allowed to go in it because the demand has been so high. So I see an evolution there, and an evolution that we're really excited about.

We'll go next to Josh Raskin with Barclays Capital.

A question on repurchases. I guess the deployable capital amount went up relative to where we were 3 months ago when you reported, and yet repurchases seemed to slow in the last 3 months. So just curious that -- if there's any reason behind that.

It's Ralph. No particular reason. I think as we think about this area, we have a strategy that I referred to a bit in my remarks, and we're continuing to pursue that in a disciplined way. And I think you've seen us in the past operate in that manner. We've made very effective moves with our capital, and we'll continue to do that in the future. I wouldn't read into anything that you saw over the last couple of months.

Okay. So no change in M&A pipeline or change in strategy as you came on, Ralph, or anything like that?

No, no.

Okay. And then a second question just around the diversification comments that David made in the prepared remark. I'm just curious. As you think about that as a core strategy going forward, does that mean completely new segments? Or is that really more additional products and services within your segments that you offer today?

It's David. So it's really 2 pieces. So first, what we've been able to demonstrate is off of our diversified portfolio today, so take the Health Care and the Disability component or take the global expatriate business and the U.S. Health Care business, off of those seemingly diversified aspects, we've been able to generate leverage or create more value. So Health Care and Disability together provide a better value for an employer client and an individual by either avoiding a disability or shortening the duration of a disability. So that point one, off of the diversification. Similarly, as the global employer landscape grows, we're seeing increasing demand from our employer clients, almost all of which had some sort of multinational or multi-continent footprint today. So that's an example of taking diversification and creating leverage. Adding to it, to the core of your question, is we see the opportunity to further expand our growth segments. And consistent with the strategy in prior conversations, we're targeting 3 key areas: first, on an opportunistic basis, further expanding our global capabilities, be they product or geographies; second, expanding our seniors capabilities, which is inclusive of Medicare but not exclusive to Medicare alone; and then third is expanding our individual and retail capabilities further because as we look around the globe, we see that the retail marketplace, retail more broadly defined, is continuing to evolve and grow, and we see some great growth opportunities. So the diversification is twofold: creating value today off of leveraging what we have; and then secondly, on a targeted basis, systematically seeking additional quizative [ph] opportunities to broaden that.

Got you. And so can I just sneak in one more? Did you accrue any additional rebate for minimum MLRs in the second quarter?

It's Ralph again. Yes, we did. We accrued $15 million this quarter on an after-tax basis.

Okay. And I remember your methodology is you accrue based on the full impact. So that's the reflection that you think rebates are going to be, I guess, meaningfully higher than you did in the first quarter, with the understanding that it's not a huge deal for you guys anyway?

That's correct.

Okay, perfect.

We will go next to Justin Lake with UBS.

First question on the International business. Growth looked pretty healthy in the quarter. I was curious if you can help us bifurcate the organic growth versus the Vanbreda contribution to revenue and operating income for the quarter. And then can you give us some update on the expected Vanbreda accretion for next year and how the renewal process is going there in terms of moving clients from ASO to risk relationships?

Sure, Justin. It's Ralph. On the -- I'll take the first part of the question regarding the growth. I don't have the exact numbers, but I could tell you that on an organic basis in International, so that would exclude currencies, fluctuations, excluding the benefit from having Vanbreda in the results year-on-year, we were still above 20% growth.

And that was in revenue?

That's -- yes, that was in revenue.

And what was the - was the operating income contribution from Vanbreda?

In the -- around $5 million range after-tax was in the quarter.

Okay. And the -- it looked the contribution from currencies was, I think, around $4 million?

That's correct. Yes, we did -- just to kind of point out within the overall earnings profile, we did make some more investments in the quarter behind some of our growth strategies that David alluded to just a few minutes ago as well. So you'll see some unevenness quarter-to-quarter in the results. But overall, we feel good about the results in International and we're on track, and it's delivering what we expected in the quarter.

And Justin, it's David. On the second part of your question relative to Vanbreda, on a macro basis we continue to feel very good about it. A couple of points to reinforce that. The client retention levels continue to be outstanding. In addition to that, the employee retention levels and engagement are very strong. And very importantly, with the new acquisition, you always look at the retention first and then new business sales. New business sales are very attractive as well as. So on an overall basis, there's nothing that we've seen in the last several quarters that would lead us to have a different conclusion than we had when we secured the acquisition. We feel good about it.

Okay. So the guidance is still -- is the same in terms of the incremental accretion next year?

Yes, We'll provide your overall 2012 guidance probably in a quarter or so. But relative to the direction of Vanbreda, the revenue contribution, the overall strategic and earnings contribution, we feel good about it.

Okay, great. Just one last numbers question. Guaranteed costs, the yields looked a little stronger in the quarter than we've been seeing. Anything changed in terms of mix of business or pricing strategy that's driving that growth?

Justin, nothing material that we would highlight has changed. There's always ebbs and flows given the size of our book of business. But nothing material that we'd point to.

We will go next to David Windley with Jefferies. David Windley - Jefferies & Company, Inc.: I had a follow-up on Justine's question on the International. Can you go a step further and discuss some of the drivers of that above 20% revenue organic growth?

Sure, David. Two pieces -- when you break that business apart, there's 2 major drivers of the portfolio. One is the expatriate business portfolio. And since that 20% is excluding the Vanbreda, our core expatriate portfolio. The second is the health, life and accident business portfolio. Very simply, we're seeing strong demand in growth in both. So in the health, life and accident portfolio, aided by, first, good retention of our individual customers. Beyond that, we're seeing additional cross-selling and penetration into those relationships, and then additional adds of relationships in our key geographies. That's aided by very strong distribution channel execution and product innovation going along. So, for example, there's a new product in Korea over the last couple of years, a dental product that was innovated off of the base in thought process of our U.S. dental franchise. And it's doing quite well. So we continue to innovate and generate good cross-selling opportunities with existing customers and then adding on new customers. For the core expatriate business, similarly our retention rates with our clients has been quite strong, and our new business growth has been very attractive. And as we look around the globe, you see a continued trend of multinational or global companies further growing their footprint, and that's creating more demand for the type of services we offer. So on both bases, those 2 key businesses are both had strong retention rates as well as good new business growth rates. David Windley - Jefferies & Company, Inc.: And so to follow up then, David, the retention rate sounds like they are improving. Would you attribute that to the Vanbreda? Is that a knock-on benefit from adding Vanbreda to your platform? And then secondly, the comment in the press release about higher claims in the expatriate business, would like to hear your comfort level with the underwriting in that business.

Yes, so on the first piece, on the retention, both of the businesses I'm referencing have historically had strong retention levels, and they've remained strong. It is not a knock-on contribution, your term knock-on contribution, from Vanbreda. This is separable from that. And it's -- we underscore that it's really strong delivery of the underlying value proposition and promise to those customers. Good service, good clinical quality, overall good results. As it relates to the expatriate claims that we referenced, number one, the business tends to be a little lumpy. When you go forward, if you think about the medical cost consumption around the globe, it tends to be a little lumpy. We did see a little claim pressure in the second quarter. We don't view that as an underlying trend on a go-forward basis. But of course, we're monitoring, watching and managing that.

We'll go next to Christine Arnold with Cowen and Company.

You mentioned that you're growing national accounts. Could you mention -- could you talk a little bit about the progress you're making with the single-site large employers? It seems that you've been making some progress with state and municipal government accounts. And then as a follow-up, could you break out what the prior period development was? You said that year-to-date MLR for guaranteed costs was 80.3%. Does that mean that the majority of the prior year and 3-year development was in guaranteed costs?

Christine, it's David. I'll start and then I'll ask Ralph to address the second part of your question. So to your question, as you know, our single-site large employers we track as part of our middle market, our regional portfolio business specifically because it's a localized event, a localized sale, a localized service proposition. Over the past several years, we've been very successful there in our Go Deep markets, and that success continues. We also see a trend, to one of the earlier questions. In many cases, governmental employers, whether they're cities, counties, states or whether you're dealing with university systems or otherwise, are dealing with the same budgetary pressures as commercial employers. So we see more of an appetite for a Valve [ph] program designs, maybe not consumer directed fully but more incentive- and engagement-based programs, more aligned reimbursement structures and a bit higher adoption of clinical programs. And that's boded very well for us. So we have had success. We're pretty proud of that success, and we expect to continue to see good traction in the large single-site employers directly tied to our Go Deep strategy. I'll ask Ralph to address the second part of your question.

Christine, the component on the prior year development is mostly in the guaranteed cost part of the business as opposed to the shared piece. So I guess just primarily - I didn't give you the exact number, but it's primarily that.

Okay. And then, David to follow up. Kind of reading from your comments that we can expect growth in some of that single-site business.

You're entitled to draw whatever conclusion you like. I go back to your -- my prior comment that I made to John when he was talking about 2012. At this point, we'd like to expect to see our continued success in the middle market in select segments continue forward, and success there is really based upon retention, expansion and targeted adds. So we're not providing 2012 guidance. The only place we gave a color indication is the commercial national accounts. But we have a few years of success under our belt in the segment you're referencing, and I see nothing at this point in time to tell us there's a change in the course, so.

So we'll go next to Ana Gupte with Sanford Bernstein. Ana Gupte - Sanford C. Bernstein & Co., Inc.: So following up on the hospital contract in question. In light of the debt ceiling pressures on Medicare, possibly even Medicaid, what are you expecting for 2012 unit cost trends? Is this likely to become a headwind because hospitals start to shift costs back and dig their heels on contracting in commercial? Or are you seeing any trend or hope to see what you'd hope to happen, that they'd begin to do more risk sharing? And if your contracting would -- is going to take a turn for the worse?

It's David. First, just a macro point. As we think about the debt ceiling debate and the recent dialogue, first to state the obvious, fundamentally we think it just further underscores that we have been in an environment where there's a lack of sustained affordability, whether it's through the federal lends, the state lends and employer lends or in individuals lends. And some of the recent success we've had is really focusing on changing the programs to try to get a better value by both engaging individuals, the employer clients and physicians in a different way. To the core of your statement, we think that trend is going to accelerate further because just about every stakeholder recognizes that there's a lack of sustainability. For example, I spent a better part of -- 3/4 of a day with our national physician and hospital advisory council. The cornerstone of the dialogue when I was there is exactly what you're talking about, is: How are more effective programs designed so you can get incentive alignment? What the most critical targeted uses of information that enable them to today immediately practice even higher quality health care delivery by seeing a more comprehensive view of their patients? And what care extenders, as we call them, are most leverageable are value-added for us working in partnership? So we see a high demand looking into 2012 for key hospital groups and physician groups around changing the program design. Beyond that, Ana, you're still going to see some pressure on the fundamental underlying unit costs for those that are playing against yesterday's model. I'm just trying to push on the unit cost model. As you hear from our comments, we're trying to identify and spend a disproportionate amount of our energy with those physician and hospital leaders who really want to drive change, and we think it's going to accelerate further. Ana Gupte - Sanford C. Bernstein & Co., Inc.: It sounds like some puts and takes, some encouraging evidence on that. So then, getting to your trend projection for the rest of the year, the 50 bps better, what assumptions are built into that for the back half of 2011? And as you're looking forward into 2012 and pricing for business, are you making the assumption that, that will stay at these low levels? Or are you and others pricing for a normalization of trend back to higher levels in context to your unit cost commentary and the utilization across inpatient, outpatient, and the other [ph]?

Well, Ana, it's Ralph. I'll take the first part. Essentially, on the assumptions regarding our forecast for the balance of the year, we are assuming a return to a more historical medical cost trend as we move to the balance of this year. And I'm going to give it back to David on the going forward piece.

Yes. So Ana, we've essentially reflected the very strong results through the first half of the year in our trend outlook. But embedded in that is an uptick in utilization in the second half of the year, and we'll see whether or not that manifests itself. As it relates to our pricing strategy, our pricing is dynamic, right, so it continues to be refreshed. And we've continued to price to our expected medical costs. And as you heard from my comments and Ralph's comments, I mean, embedded in that is some acceleration or uptick in utilization. To the extent that, that doesn't transpire, very importantly the 80% of our customers that are ASO see the direct benefit of that. The employer client piece [ph] within the customer, the 10% of our business or so that shared returns see that. And then on a dynamic basis, we refresh the guaranteed cost portion of our portfolio accordingly. So we're expecting to see an uptick type utilization at this point in time. We haven't provided you specific guidance on the 2012 trend on the unit costs versus utilization, and we should expect that in the -- later this fall. Ana Gupte - Sanford C. Bernstein & Co., Inc.: If I could just sneak one more follow-up on the pricing? So when you're seeing pricing both yourself and your competition, are you seeing more across-the-board possibly reduction in pricing? Or is there more of an MLR rebate-type strategy, whether some market segments and groups where competitors are showing some level of reduction in pricing but elsewhere they're not?

Ana, in short, first, our approach over the last several years has been to be consistent and disciplined from a pricing standpoint. And we've proven over time that, surprising the market in any way, shape or form, usually is a bad outcome. We'll point to our retention rates, our cross-selling rates in our new business and profitability results as an indication of success. Are there some examples of individual competitors in individual markets doing things differently? Sure. We don't see that as a trend and nor is it an issue that's kind of impeded many of the goal setting that we've had in front of us to date.

We'll go next to Carl McDonald with Citi.

I wanted to come back to the discussion around the employers in the small- and the large-group market considering moving to self-funding and get your take on how you think the stop-loss market is going to develop, particularly thinking about some of the larger competitors in the industry that don't have a very large stop-loss presence today. In your view, is that something that you can build organically? Or is that something that I think, because of the specialized needs, is something that has to come through acquisition?

It's David. So first, just an overview, as I indicated before, we've seen and continue to see an increasing appetite for ASO and ASO-bundled programs moving down market in terms of size segment. Our select segment, as I referenced in my prepared comments, 51 to 250 life employers, we saw about a 10% growth rate in the covered life base in that portfolio. And that's off of very strong results last year as well. So we see good traction. As I noted earlier this year, sales for that segment in the first quarter of the year, there's [ph] -- greater than 50% in new business sales were ASO-bundled programs. So that's an indication of success and an indication of demand. The second part of your question, if I heard you correctly, first to be clear, we have the capabilities, we have the capabilities from an expertise, from an infrastructure and from the scale standpoint. And the capabilities really are twofold. I don't think you tread into this space lightly. It's one of the key reasons why we acquired Great-West, their service infrastructure. Very importantly, the transparency of information that you could avail to employers and brokers to help those employers and those brokers understand what's driving the medical costs on a periodic basis, be it quarter or monthly basis, and having those tools that can scale to the volumes you need to scale to -- for a small employer and provide a level of insight, that's mission critical. And then having the underwriting discipline and actuarial talent to be able to handle the Southwest (sic) [Great-West] programs, we have that today. It continues to grow, and it continues to be a fundamental part of what we believe around transparency and choice. Do we expect the market to change going forward? Do we expect competitors to move into that space? Yes, because there's increased demand there. And we'll keep innovating our programs and service models to keep the lead that we have in the marketplace right now.

Great. And then I had just a couple of numbers questions. If you wanted to size the litigation matter that you talked in the Disability segment and then the unfavorable development in the expatriate business?

I'll ask Ralph to take a first portion.

Yes, I guess first on the litigation. I just want to clarify it's unrelated to the -- our Disability Management programs, but it did affect that group of business in total, roughly about $5 million range.

On an after-tax basis?

I'm sorry, on an after-tax basis.

And Carl, on your second piece, so I think your question was really on the expatriate claim portfolio. As I indicated earlier, that business tends to be a little lumpy because of just the tremendous geographic dispersion of how medical costs are consumed. We didn't break out in detail what the impact is. But you can think about it is there's a couple of points of volatility that are created there. And as we indicated before, we're managing it very closely and very aggressively. We don't see it as a -- any fundamental shift indicator for us.

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

I Just want to follow up on one of the last questions there. As far as the Disability business, it seems that you've got $30 million of favorable claims there, but I guess now a $5 million litigation offset. But you didn't change the operating income outlook there. Can you talk about what other puts and takes are in that outlook?

I'll start on the macro basis and see if Ralph wants to add. But broadly speaking, if you look back in the press release or otherwise, you could actually see a year-over-year comparator of the reserve development. And so the good news is there has been a consistent strong performance within that portfolio. And as we step back and think about it for the benefit of our employer clients and our customers, it's really indicative of real strong returns that we've been able to generate through the focus around health improvement, health maintenance, helping individuals return to work. So we'll be -- our reserves study takes place in the spring cycle. You can look at the year-over-year comparator to that, and there's -- they're about equal. And there's a headwind that Ralph has referenced, but it's a onetimer outside the Disability line of business. But within the group insurance portfolio, off of the litigation matter. On the overall outlook, the overall outlook is one that we feel good about. There's a range, about $20 million, in that outlook, and we continue to feel good about that range. Ralph, anything to that?

Yes, I would just say the flow of some of the investments we're making to grow the business going forward are a little higher in the back half than the first half.

Okay. All right, that makes sense. And then I guess you kind of addressed this a little bit, but you mentioned that -- the International business claims experience being a little bit lumpy. Was there any area in particular that you would attribute, either geographically-wise or to your core business versus the Vanbreda business where it showed up?

Yes, and my comments relative to that, Kevin, or our comments relative to that are broadly speaking relative to the core business, as you've put it, over non-Vanbreda business. As it relates to geographies, again the consumption there is pretty significant from a geographic dispersion. We have some unique events which transpire in that business which is different than any other line of business where people consume a fair amount of health care, in many cases, where they can in their home country, when they travel back home on vacation or leave or otherwise. But broadly speaking, there's no geographic concentration that we would point to.

Okay, great.

And our last question will come from Doug Simpson with Morgan Stanley.

Just interested in maybe fleshing out some of the comments earlier on Medicaid and the individual MA business longer term. Just how are you thinking about -- I guess on the Medicaid side, how do you view that in relation to the opportunity with the exchanges? Assuming it will see people bouncing back and forth between exchanges and Medicaid over time, how important could that be to you? And when would you maybe think about maybe making a move in that direction?

It's David. So as we referenced in terms of additional growth opportunities for us that we've prioritized, and this has been consistent for some time, furthering your global portfolio, furthering your senior capabilities and furthering your individual and retail capabilities, therefore we put a classic or traditionally defined Medicaid below that threshold. So it's less attractive versus those capabilities. Now to your point, as we look to the future, we see an opportunity to leverage -- evolve seniors clinical capabilities and evolve retail capabilities in a part of Medicaid. And if I understand your question, we see the ABD population and the do eligibles [ph] population as attractive as we target took our Go Deep strategy in key markets and further extend our seniors clinical capabilities, our retail capabilities. We would see the opportunity to lever into the ABD population off of the clinic -- chronic and acute care engine you'd have off of seniors and then off the do eligibles by expanding our retail footprint further.

Okay. And then I don't think you said it earlier. Could you just update us on your view of the operating expense opportunities looking out over the next 6 to 12 months?

Sure. And again, we didn't walk through the detail over the next 12 months. And as you'll recall from our Investor Day time we've spent with you, we spent a lot of time breaking out the competitive positioning of our operating expenses because it's such -- a significant portion of our businesses, is in the ASO portfolio. Having said that, we expected to see further improvement in 2011 on an operating expense basis per covered life. So our expenses per member per year. In Ralph's prepared remarks, he noted that we continue to be on track for that progress. We also expect to see further progress on our operating expense ratio. And as he noted in his prepared remarks, we expect to see further leverage there in 2011. As we look forward, we expect to see movement, a favorable improvement in our operating expense ratio. The major drivers of that will be: first, obviously smart on strategy growth, coupled against additional efficiency gains where we will gather further efficiency gains off of our technology investments; further vendor leverage, further real estate leverages categories. And Doug, when we provide the 2012 guidance in detail, we'll speak to the level and rate and pace that we expect, but we would expect further contribution from that.

Okay, great.

With no other questions in queue at this time, I'll turn the call back to David Cordani for any additional or closing comments.

Thank you. So before we conclude the call, I just want to reinforce a few key themes in today's discussion. Our second quarter results reflect continued effective execution of our growth strategy as we remain focused on improving the health, well-being and sense of security of the individuals we serve. We delivered strong results in 2010, and we've maintained that momentum through the first half of 2011, achieving attractive revenue growth across all of our key areas of focus and double-digit earnings growth for ongoing businesses. I'm very proud of our CIGNA team for the results they have achieved by keeping our customers front and center in everything we do. I'm confident in our ability to achieve our full year 2011 strategic, financial and operating goals. And finally, I believe our company is effectively positioned to deliver attractive revenue and earnings growth on a sustained basis as we seek to provide long-term value for our customers and clients in this very dynamic marketplace. We thank you again for joining today's call, and we look forward to our future discussions.

Ladies and gentlemen, this concludes CIGNA's Second Quarter 2011 Results Review. CIGNA Investor Relations will be available to respond to additional question shortly. A recording of this conference will be available for 10 business days following this call. You may access the recorded conference by dialing (719) 457-0820 or (888) 203-1112. The passcode for the replay is 5839955. Thank you for participating. We will now disconnect.