Ladies and gentlemen, thank you for standing by for Cigna's Fourth Quarter 2016 Results Review. At this time, all callers are in a listen-only mode. We will conduct a question-and-answer session later during the conference and review procedures on how to enter queue to ask questions at that time. As a reminder, ladies and gentlemen, this conference, including the Q&A session, is being recorded. We'll begin by turning the call over to Mr. Will McDowell. Please go ahead, Mr. McDowell.

Good morning, everyone, and thank you for joining today's call. I am Will McDowell, Vice President of Investor Relations. Joining me this morning are David Cordani, our President and Chief Executive Officer; and Tom McCarthy, Cigna's Chief Financial Officer. In our remarks today, David and Tom will cover a number of topics, including Cigna's full year 2016 financial results, as well as our financial outlook for 2017. As noted in our earnings release, when describing our financial results, Cigna uses certain financial measures which are not determined in accordance with accounting principles generally accepted in the United States, otherwise known as GAAP. Specifically, we use the term labeled adjusted income from operations and earnings per share on this same basis as our principal measures of financial performance. A reconciliation of these measures to the most directly comparable GAAP measure, shareholders' net income, is contained in today's earnings release, which is posted in the Investor Relations section of cigna.com. In our remarks today, we will be making some forward-looking statements, including statements regarding our outlook for 2017 and future performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. A description of these risks and uncertainties is contained in the cautionary note to today's earnings release and in our most recent reports filed with the SEC. Before turning the call over to David, I will cover a few items pertaining to our financial results and disclosures. Regarding our results, I note that in the fourth quarter, we recorded two charges to shareholders' net income, which we reported as special items. The first special item was an after-tax charge of $80 million or $0.31 per share to establish a full allowance against risk corridor program receivables that were reported on Cigna's balance sheet as of September 30, 2016. While we continue to believe that the government has a binding obligation to pay issuers the full amount due for each year of the risk corridor program, we base this allowance on GAAP accounting requirements in light of recent events. Consistent with this assessment, we did not record any additional risk corridor receivables in fourth quarter 2016. The second special item was an after-tax charge of $39 million or $0.15 per share for merger-related transaction costs. As described in today's earnings release, special items are excluded from adjusted income from operations in our discussion of financial results. Also, consistent with past practices, when we make any prospective comments on earnings or EPS outlook, we will do so on a basis that excludes the impact of any future capital deployment or prior-year development of medical costs. And with that, I will turn the call over to David.

Thanks, Will. Good morning, everyone, and thank you for joining our call today. In today's call, I'll briefly review highlights from our 2016 financial results as we close the year with solid momentum. I'll then address how we are strategically positioning for the long-term success as we drive innovation and further strengthen our capabilities to deliver value for our customers, clients, partners and ultimately you, our shareholders, all while a variety of dynamic forces continue to evolve our markets. I'll also offer some thoughts on our expectations for 2017, which include strong momentum across our businesses, attractive ongoing free cash flow generation, and an exceptionally strong capital position, all of which provide opportunity for considerable value creation in 2017 as well as over the long-term. Tom will then address our fourth quarter and full year 2016 financial performance results in more detail as well as provide the specifics for our outlook for 2017 before we take your questions. After Q&A, I'll wrap up our call with a few closing remarks. Let's dive into some highlights for the full year. For 2016, consolidated revenues increased 5% to $39.7 billion, as we continue to focus on our mission to improve the health, well being and sense-of-security of the people we serve. We reported adjusted income from operations for 2016 of $2.1 billion, or $8.10 per share, reflecting strong performance in our Commercial employer and Global Supplemental Benefits businesses. As you know, we also focused on addressing challenges that emerged in the first half of the year in our historically well performing Group Disability and Life and Seniors businesses, where we drove notable progress in the second half of 2016. Specifically, within the second half, we gained traction in Group Disability and experienced a more stable claims environment in our Life book of…

Thanks, David. Good morning, everyone. In my remarks today, I will briefly review Cigna's 2016 results and provide our outlook for 2017. Key financial highlights in the year are consolidated revenue growth of 5%, earnings per share of $8.10 and continued strong free cash flow, ending the year with approximately $2.75 billion of parent company cash. Our ability to grow revenues, deliver continued strong earnings in our Commercial Healthcare and Global Supplemental Benefits businesses and address the challenges in Seniors and Group Disability and Life reflects the underlying strength of our franchise. Regarding our segments, I will first comment on Global Health Care. 2016 premiums and fees grew 3% to $27.7 billion. We ended 2016 with 15.2 million global medical customers, growing by approximately 200,000 customers. Full-year earnings were $1.85 billion, reflecting strong performance in our Commercial employer business driven by customer growth, strong specialty results and favorable medical cost outcomes. Partially offsetting these strong Commercial results were elevated costs in our Government business. Our results also reflect the impact of not recording $15 million after-tax of additional risk corridor receivables we had anticipated in the fourth quarter of 2016. Regarding risk corridor receivables, we continue to believe that the government has a binding obligation to pay issuers the full amount for each year of the risk corridor program. Nevertheless, in light of the large program deficits announced by CMS in the fourth quarter of 2016 and a recent unfavorable court decision, based on GAAP accounting, we recorded an allowance against the full amount of our risk corridor balance in the fourth quarter of 2016. Turning to medical costs, we continued to deliver medical costs that reflect better health outcomes and strong clinical excellence for our customers and clients as a result of our deep collaborative relationships with physicians and…

Finally, we ask that you please limit yourself to one question and one follow-up. However, you may place yourself back into the queue, should you have another question. One moment, please, for our first question. Our first question comes from Justin Lake with Wolfe Research. You may ask your question.

Thanks. Good morning. A couple questions here. First, your recent communications on the Anthem deal appear to indicate that you might not agree that your partner here has the right to extend. I'm curious if you can give us some color on your recent comments via 8-K. And then I'm also curious if there's any reason in particular that you haven't given color on capital deployment on a Plan B scenario, given your partner in the deal has done so already.

Justin, good morning. It's David. Relative to your first question just briefly, obviously, we await the court's decision. And from a governance standpoint, we thought we took the appropriate step by issuing the K, and the language of the K is quite clear. Relative to your second question, what we thought was most important is to make sure that our investors understand the breadth of capital available for deployment. And our intention would be to create additional clarity in terms of the use of that to the extent there is a Plan B scenario that would be executed versus a consummation of the deal. So transparency relative to the tremendous capital that is, Tom and I both noted range between $7 billion and $14 billion. Stay tuned for more pending the insights relative to the court's decision.

Okay. And if I could just ask a question on Disability and Life. Obviously, the improvement we've seen is significant third and fourth quarter. I'm looking at your guidance and it doesn't appear to embed continued improvement through 2017, just given the run rate coming out of the back half of the year. I'm just curious if there's anything I'm missing there or is there some level of conservatism that we should think about

Well, Justin, it's Tom. Let me start first with the quarter. And again, we're really pleased with the progress we have in improving results in Group Disability and Life. In the fourth quarter, as I mentioned, reflects stable life claim experience and continued improvement in Disability and Life results as those processes continue to mature. I also called out that the quarter did include some favorable impact from tax accruals and net investment income, and I'd size those at about $10 million. So if you look at our outlook, considering all that, it really reflects continued normalized life claim experience and a continued pattern of maturity in disability claims management over the balance of 2017. And it's an attractive growth over the results we posted in 2016.

You still expect to exit the year at the typical margins in the Disability business, as you said before?

Pretty close. I mean that's one of those things. We'll see as we get closer to the end of the year, but that's the glide path we'd like to be on.

Thanks a lot.

Thank you, Justin Lake. Our next question comes from Matthew Borsch with Goldman Sachs. You may ask your question. Matthew Borsch - Goldman Sachs & Co.: Yes. I was hoping that you could comment on any observations you have on the enrollment that you've seen so far in the Individual segment and what your profitability expectations are as things evolve for the full-year 2017?

Matthew, it's David. First, let me give you a little bit of color relative to the positioning we took for 2017 and then try to provide you some color in terms of the enrollment. As you know from prior conversations, we viewed that the marketplace 2014, 2015 and 2016 specifically we call version 1.0. We viewed that it would be a relatively choppy ride in the implementation of all the new attributes of the program; that the marketplace in total would be smaller than projected and unprofitable overall. We chose to participate in that marketplace on a very focused basis, initially in five states, not expecting to make money but expecting to learn. And broadly speaking, those goals were achieved. Relative to 2017, as we were operating in 2016, our expectation was that we would move from – specifically from seven states in 2016 to 10 states in 2017. We assessed the markets and based on the formula we thought we needed to have to work in terms of benefit flexibility, but very importantly, network configuration with collaborative accountable care relationships that were acceptable to the state that we were going to operate in, we actually exited three states and entered three states resulting in seven states that we are in for 2017. The net result is we expect to grow as I noted by about 100,000 lives, those 100,000 lives will be highly biased toward our preferred offerings which are heavily oriented around the Collaborative Accountable Care relationships and the aligned models. Relative to initial measures and metrics, obviously we need to get through the quarter and see how the lives mature. You know that. As you get through the quarter, those lives will atrophy off a little bit in terms of the final manifestation of the lives we have. But they're generally in line with our initial expectations as we start the year. Matthew Borsch - Goldman Sachs & Co.: And let me ask, how are you thinking at this point about the decision to continue or not continue on the exchanges in 2018?

Matthew, important point. Again, we assess the market year-in, year-out, and as I noted, we made some very different moves in 2017 than we initially anticipated with those three exits versus just three entrances. We'll have a lot of decisions to make as we get through the spring of the year, and we'll assess our participation in the marketplace in totality with a fresh set of eyes based upon the rules, regulations and design for that marketplace that, as we sit here right now, is fragile at best. So we will fully assess whether we will participate, where, and how as we get through the spring cycle. Matthew Borsch - Goldman Sachs & Co.: All right. Thank you.

Thank you, Matthew Borsch. Our next question comes from Joshua Raskin with Barclays. You may ask your question.

Hi. Thanks. I apologize for asking again, but just related to the 8-K, I think, David, you said that the language was clear. I guess the language to me intimated that there was a disagreement between whether or not the merger agreement could be extended. So, I guess, I'm just curious if maybe I'm not reading that right. And then with respect to capital deployment, would there be anything that would preclude you – I know Tom said that there's a bias towards returning capital to shareholders in the form of buybacks. Is there anything that would preclude you from an accelerated share repurchase program? Is there something specific on the M&A front that you want the financial flexibility for, or any color on that as well.

Josh, on your first point, again, we believe the language is quite clear and appropriate from a governance standpoint, and I would direct you back both to that language and if you so choose, the contract, which is filed and public. Specifically from the capital deployment standpoint, as Tom noted, we have excellent flexibility, and I think that's the right way of attributing it. To the extent we do not have a transaction to finalize here, we will aggressively evaluate and conclude upon all options that are available to us from a capital deployment standpoint. But there are no impediments that we see relative to capital deployment, and all alternatives are available to us. And we would intend to create high visibility if we're in that environment as promptly as possible.

Got you. And then just on the 300,000 to 500,000 additional lives, I know Senior down 500,000 and then Individual up 100,000, but maybe a little bit more color on that? And just specifically, is the Senior down 500,000 to start? We saw that in January, or is that where we're going to get to at the end of the year?

Josh, important you picked up the 5 correctly, but it's 50,000. So stepping back, the growth was – is projected to be 300,000 to 500,000, so that's where you're ramping against the 500,000 number in terms of cumulative growth of lives. That growth is driven by very strong performance in all of our employer segments; national, middle, select, international, driven by strong retention, good expansion of relationships as well as targeting new business adds where our engagement in incentive-based programs, our collaboratives, our alternative funding and our sustained strong track record of low medical cost trend is indeed paying off. Specific to your question on Seniors, again, we project for 2017 for the year to have a net reduction of 50,000 lives or about 10% of the starting point as a result of not being in the active open enrollment period.

Okay. Thanks.

Thank you, Joshua Raskin. Our next question comes from A.J. Rice with UBS. You may ask your question.

Hello, everybody. Maybe I'll just ask you about the medical cost trend commentary. Obviously, another very good year for you guys, coming in below 4%. I think that's industry-leading. It sounds like on the guidance though, you're assuming that steps up to 4.5% to 5.5%, and I'm wondering what's behind that. And I know specifically, you're calling out the favorable variance that got you below 4% in 2016 was related to pharmacy costs. I'm trying to understand is that sort of a one-time step maybe because of some of the contract renegotiations you had, or is there something that continues into 2017 related to that?

A.J., it's David. Let me start. Just big-picture, we're very pleased and proud to have multiple years of posting very low medical cost trend relative to industry norms. And as you noted, we ended the full year 2016 a bit below our outlook of 4% to 5%. I'd remind you we started 2016 with an outlook of 4.5% to 5.5%, but in 2016, we lowered that by about 50 basis points. So the way we think about it is for 2017, we're planning at the same level that we planned at for 2016. We planned at 2016 at 4.5% to 5.5%. We're planning 2017 at 4.5% to 5.5%. Admittedly, it's a tick up from where we ended 2016, a modest uptick. We're viewing in terms of in our projection some uptick in utilization, some uptick in pharmacy, but no macro driver to call out that is changing the inflection point.

Okay. Great. Thanks a lot.

Thank you, A.J. Rice. Our next question comes from Gary Taylor with JPMorgan. You may ask your question.

Hi. Good morning. I want to clarify something, and then ask my real question. David, I was just trying to keep up with you, and I think the new states on the individual markets you're entering are North Carolina, Illinois and Virginia. And in response to why you entered those new markets, I heard needed benefit flexibility, network configuration and collaborative ACO arrangements acceptable to states, and none of that really, I guess, explains to me why you entered three new states. So if you could maybe try again and help us understand that?

Sure. I apologize if I wasn't clear before. So our learnings to-date, if we step back, we've participated in this market since its inception keeping our revenue in the 2%, 3%, maybe 4% range. We've expected each of the years that we would lose money. We keep that in a manageable corridor and we sought to try to learn in terms of what are the successful recipes here to deliver the right value for customers and create a sustainable solution to be able to do so with health care partners as well as for our shareholders. Our conclusion is within the current rule set, the only viable way to make this work is to have a well-coordinated, highly aligned, value-based care arrangement with the health care professionals that is the underbelly or foundation of the offering. Additionally, we've been able to successfully expand relationships with our Collaborative Accountable Care partners or delivery system alliances being physician groups or hospitals across multiple lines of business; Commercial, Medicare Advantage, Commercial Individual, et cetera. So in these three markets that you identified, we both had market conditions in terms of benefit alignment as well as delivery system partners that we were able to put together and believe in our chosen geographies – very importantly, not state-wide – in our chosen targeted geographies around those delivery system alternatives, we have a good value proposition that we are proud to bring to market with our health care partners. That's what drove us into those specific markets. And you may think about those, Gary, as sub-markets within North Carolina, sub-markets within Illinois, et cetera, built around those collaborative relationships.

That's great. That's helpful. And I think – I don't think you're assuming much in terms of profitability, but obviously ultimately you think you will be able to be profitable. That was my clarification. If you'll indulge me to ask my real question, I was going to go to Tom. Just on – one of the things you talked about on Commercial MLR was more normal stop loss experience and that 2015 was kind of unusually favorable. Can you just remind us or what have you learned about why 2015 was so good? And then the second part is, is there any different tale on the stop loss claims versus fully insured?

So let me get the Commercial on the MCR first, Gary. Just again, our Commercial MCR we're really happy with; very consistent with our expectation, continued strong results in the Commercial Group business, a little bit of pressure from the high medical costs in Individual, but as expected. So I did call out in their quarter-over-quarter comparison that's a pretty large variance versus last year, about 270 basis points. About half of that is attributable directly to just the changed MCR in Individual. The balance is largely due, as you called out, to stop loss results. And that was, as I tried to make clear, very much related to last year being very favorable; this year being more normal. And if you look back over a number of years, you'll see that kind of pattern that last year was the outlier being unusually favorable. So results this year in stop loss very consistent with our expectation. Channeled payments, I mean that gets a little – I mean they both pay off relatively quickly in the scheme of things and reserving. There's a little different shape to it given the high frequency of low-dollar claims typical in the typical reserves, but I wouldn't call out any major league differences. We're not talking about a long-term buildup of reserves like we are in Disability.

Thank you.

Thank you, Gary Taylor. Our next question comes from Ralph Giacobbe with Citi. Your line is open. Go ahead with your question.

Thanks. Good morning. Any comments or color on the MA rates released last night and impact to you specifically around Star bonus and sanctions at this point?

Ralph, it's David. Obviously as you referenced, came out last night. Our team is going through it rather thoroughly. I'd say a couple big-picture comments. The first, excluding the Stars implication, our view is that our rate implication is similar to that of the industry. Secondly, including the proposed reduction to our Stars in 2018, our revenue impact would be a bit lower than that of the industry or less positive than that of the industry. Third, as you know, we do not agree with or accept that Stars conclusion because we're of the view that our clinical outcomes, our service outcomes and our overall program outcomes are far superior than the conclusion that's being drawn. And in the current state, we're working with CMS literally as we speak to try to gain a shared understanding of the results we're delivering and arrive at a different outcome for 2018. But big picture overall, revenue impact to us, in line with the industry. Say for the proposed adjustment to our Stars, including that the revenue impact for us would be less. We're working with CMS directly on that. And to the extent we're not successful, we have a variety of other levers to be able to manage for 2018 that we would deal with down the road in terms of talking about our benefit positioning.

Okay. All right, that's helpful. Thanks. And then just a follow-up question. Is there any way to frame penetration to specialty across your ASO book? Is the opportunity really more driven by new wins, or is there opportunity in the existing book? Thanks.

Let me just give you some color and then try to give you direction going forward. First, your basic rule of thumb I think should be that the higher the average case size historically for the industry, the lower the penetration rate. The lower the average case size, the higher the penetration rate. Second rule of thumb is, as you're dealing with consumer-directed offerings, you'll have a higher average penetration rate versus non-consumer-directed offerings, the case size being similar because the individual is the aggregator and you're trying to get an overall aggregated proposition. For us, we've continued to make very good progress relative to both penetrating, using I think your orientation, our multiple blocks of business whether it's in our existing relationships or new business relationships. We see tremendous ability to further grow our specialty profile, both in the existing portfolio as well as in our new business portfolio. And the final comment I would make is, our view is that the industry historically looked at this as an opportunity to cross sell, then moved in an environment of beginning to bundle and now is just exploring the way to truly integrate. And a lot of what we've been successful at is truly integrating the programs, be they clinical, service and outcome programs. So larger versus smaller, penetration rates move, consumer directed versus non-consumer directed, penetration rates move. For us, we have opportunity both in our captive book as well as in new business going forward and we're excited about that.

Okay. Thank you.

Thank you, Ralph Giacobbe. Our next question comes from Christine Arnold with Cowen. You may ask your question.

Hi, there. Could you clarify the improvement that you expect in Medicaid in 2017 and give us a sense for magnitude there? What was kind of the profile versus your expectations this year? And what are you looking for in 2017 and how do you get there? And is your outlook towards Medicaid still from an M&A perspective kind of less Medicaid, more Medicare, unless it's Medicaid that helps you do duals? Like how do we think about the whole Medicaid proposition for you guys?

Christine, it's Tom. First, I'll start with the results this year. So again, first, let's put this into context. Very small business for us, essentially, program, Texas and Illinois. And we noted some increased Medicaid MCR in the third quarter that basically continued into the fourth quarter. And the dynamics we called out then consistent. A little different in each state; Texas, largely pressure on long-term support service costs, Illinois, a bit of rate and mix of higher acuity patients. So, I'd say we called that out as an impact on the MCR, but keep in mind, it's relatively modest overall. And again, as we move into 2017, kind of the flip-side of that dynamics. We are expecting the MCR to improve in 2017. We're taking actions to improve results, but given the relatively small scale of Medicaid in our overall business, while it will be a positive factor in the MCR, it'll be modest, and it's really not really noticeable in the overall earnings momentum either way for the company.

The M&A posture looking forward, first, relative to the marketplace, we view that over time that the Medicaid marketplace will continue to need to adopt more innovative solutions, whether they're active management, sub-program design, et cetera, care coordination program acceleration, and we think that that will over time create more opportunities both for the marketplace to grow and to bring innovative solutions as well as for ourselves. So I wouldn't limit it to duals. I would orient around programs where there is more active management, care coordination, value-based alignment, incentive-based programs, whether they be broad or narrowly focused. We see opportunities that we can bring value creation to the table, and over time, we think this marketplace will continue to evolve more in that direction.

And then one last follow-up. On Individual, are you willing to quantify the losses in 2016 and what you expect for 2017? Just because, you know, the sense we have is that there could be relief coming, and if investors know kind of what's expected and if there's any issues in 2017, I think we'll look through them, given that we'll either get relief or we'll exit. So it might be helpful to know kind of where we wound up and where we're expecting to go. Thanks.

Well, Christine, it's David. We haven't given you the exact numbers. The way we've described it is, and we've been consistent here, 2014, 2015, 2016, we expected not to make money, be it on an allocated or fully allocated basis, et cetera. At the end of the day, it is not a profitable block of business. It has been manageable. For 2017, we would expect to improve our profile somewhat, but it would still not be profitable. I think your big picture assumption, one way or the other, this book improves. It either improves fundamentally or it improves because it's no longer a sustainable offering for us and we choose not to participate in that marketplace. On a final note, for us, we've been really clear. This is not our number-one or number-two driver of our inflection point with the great outlook we have of earnings growth next year. It'll be a modest improvement off of its current baseline loss results.

Thank you.

Thank you, Christine Arnold. Our next question comes from Kevin Fischbeck with Bank of America Merrill Lynch. You may ask your question.

Great. Thanks. So if we make the assumption that we have to think about Plan B and what kind of capital deployments you're going to have, I guess definitionally, we will have seen the two big deals struck down. Do you – if that's what ultimately happens, do you feel like large M&A is kind of out of the question right now, and when we think about you deploying capital M&A, should it be around a number of smaller transactions, or do you think that these transactions don't reflect what could potentially happen down the road?

Good morning, Kevin. It's David. First of all, to capital deployment, as Tom noted, our priorities remain ensuring that we support our existing business needs. Second, we look at strategic M&A. And third, we look at opportunities to return excess capital to the shareholders. As we sit here today, our M&A priorities remain, and they've been consistent in terms of expanding our global footprint, expanding our U.S. seniors capabilities, expanding our retail base capabilities, opportunities for tuck-ins and opportunities to continue to expand our services for evolving state-based risk programs. I would not read into anything in terms of – you never say never in terms of large versus small. All deals stand on their own, and we would expect to be quite disciplined in terms of our approach going forward in terms of looking for on-strategy M&A opportunities and ensuring that they are value creative for shareholders as well as that we can create value for customers. And then with the tremendous capital balances we have in front of us, we recognize the significant responsibility that it is. And as I noted in my prepared remarks, we have a track record of not letting that capital lie idle for any elongated length of time.

Okay. And then I guess the other question that I would have for you is maybe if you could give us kind of a self-diagnostic of kind of the performance of the company over the last two years. I would argue going into the deal, you guys were probably one of the best operated companies for the five years heading into that deal. But then since the deal's been announced, we've had sanctions and Star ratings drops and a disability issue. I mean how do we think about kind of what happened in the last two years? Is it related to the deal overhang? Is there something else? And how do you feel like the company is positioned operationally, internally right now to operate as a standalone company?

Kevin, it's David. Real important question. A couple points. First, big-picture, I'm extraordinarily proud of our team. 40,000 plus colleagues around the world who wake up every day to do everything humanly possible to support our customers, our clients and work with our partners. And while we've had some challenges, which I will step up to in a moment, broadly speaking our customers, clients and partners have been buffered from that. So the value proposition we are delivering remains strong. And a way to evidence that is as you look at our 2017 growth trajectory, the ability to have outstanding retention once again with strong new business adds and expansion of relationships and delivering a tremendous, for example, medical cost trend once again, I think reinforces the value we're delivering. No doubt, when you have an environment where you'll have a disruptive overhang that now lapses 18 months, where we talk in our organization around keeping our eye focused on the marketplace, you always have a – kind of a small tension that builds over time. And while our team, I think, has done an outstanding job trying to keep that overhang distraction out of the way, indisputably that's going to creep into the organization, no matter how we communicate, align and try to stay focused. But again, our customers and clients have been well supported. Two different storylines relative to Seniors and the group business, neither of which we have time to get into in detail; regulatory and self-inflicted wounds that we own, and we are rapidly remediating them. And I think the bright spot here is that we delivered strong results for our clients and customers, and we're going to step in to 2018 and deliver an outstanding result for our clients and customers as well as our shareholders.

Okay. Great. Thanks.

Thank you, Kevin Fischbeck. Our next question comes from Peter Costa with Wells Fargo Securities. You may ask your question.

David, I've not heard you be as positive on the Medicaid business before on our conference call. And you in fact, mentioned it as one of the items for capital deployment in terms of state-based risk programs. Is that a change in your view of Medicaid going forward, and it's going to be a higher priority item for you to expand that business?

Yeah. Peter, we do not see it as a change. We see the market evolving, so let me be clear. If you go back to when we rolled out our Go Deep, Go Global, Go Individual strategy and laid out our M&A priorities all the way back some seven years ago, we put as a lower priority traditional Medicaid relative to the alternatives. We, all the way back then, had a view that the marketplace would evolve over time to more active management. And we thought the duals marketplace would be the first marketplace that evolved. So I would ask you not to read into my comments either way; rather, our organization is open-minded relative to targeted opportunities where we could create value. And where we see the opportunity to create value is by working collaboratively with health care professionals, with incentives, information, and care resources to provide better quality outcomes for individuals. And as states grapple with their budget challenges with a growing Medicaid population and growing health burden, we think programs will evolve and change and that will create opportunities. Those will be localized opportunities. We do not see it as the nation's profile will change overnight. There'll be localized opportunities that we want to be open-minded to and to be in a position to explore from a growth opportunity and value creation opportunity.

So is the evolution you're referring to the change on providers becoming more of a ACO organizations with yourselves, or is it something else with the Medicaid program that you think is evolving?

Two sides, but let's go to the first dimension. Indisputably as a country, we have an aging population, eroding health status and continued growth in chronic disease. Continuing to finance the access to care through traditional programs that simply attempt to, for example, push rates lower as a means of balancing budgets is running out of steam, period. Secondly, there are bright spots around the country of more innovative programs that state officials are driving to try to get more engagement of individuals and better value creation with health care professionals. That is resulting in changes in the delivery system, and there's a lot of bright spots around the country where delivery systems, be they physician groups, multispecialty groups, integrated hospital systems are aggressively exploring how they could do more value-based care. All those forces are changing. I wouldn't limit it to any one. All those forces are changing. But at the cornerstone is an increasing demand and need for care to be delivered and coordinated and the need to explore new solutions.

Thank you.

Thank you, Peter Costa. Our next question comes from Dave Windley with Jefferies. You may ask your question.

Hi. Good morning. David, you mentioned in your prepared remarks, I believe, that coming out of the sanctions in the Senior business you would have a stronger business, stronger platform, and I guess I'm curious on two things. One, if you're able to be a little more specific about the cadence of growth that you foresee in 2017 to the negative 50,000 member. Is that down further early and then growing later in the year, for example? And then is the chassis now something that you believe can support strong organic growth with obviously the caveat being that it sounds like you're still in negotiations with CMS around the Stars force? But is this chassis now strong enough to support an industry competitive growth rate in Medicare Advantage?

Yeah, Dave, first by way of just framing, right, we know the stats. Seniors continue to age into Medicare. Seniors who are looking at alternatives view Medicare Advantage quite favorably. It's not Cigna-specific at all; just Medicare Advantage. Medicare Advantage on average serves seniors with lower average income than fee-for-service, so they're high-value buyers. Medicare Advantage as an industry generates superior clinical outcomes through care coordination, and very importantly, the more innovative health care professionals appreciate the Medicare Advantage program as an opportunity to better coordinate care. Specific to Cigna, given that we have 85% of all of our Medicare Advantage lives in value-based programs, that creates both an opportunity in the future and it was a challenge going through the audit. And at the end of the day, the complexity is all those partnered relationships and the information flows, et cetera, that were needed to get through the audit process were challenging. We've built, to your term, a chassis now; a series of enhancements, that will put us in a much better position going forward not only to continue to serve the population where we're delivering very strong service and clinical outcomes today, but coordinate the information necessary in the evolving regulatory environment and continue to grow that chassis. So we believe it will be a very effective growth chassis for years to come for individual MA purchasers who want to be in aligned incentive-based programs with value-based care providers. So we're excited about the growth chassis over the long-term.

Okay. Thank you.

Thank you, Dave Windley. Our next question comes from Ana Gupte with Leerink Partners. You may ask your question.

Yeah, thanks. Good morning. My question is about the employer markets. The 300,000 to 500,000, I'm assuming a lot of that is coming from select and middle. That's where you're really growing. And you talk a lot about the senior story and so on, but haven't heard anything on your broad views on how the Republican plan on repeal and replace, the repeal of taxes which takes away some of that burden on employers and perhaps reduces the mix shift to being self-insured, how might all that play out, how are you trying to influence small group market reform, self-insurance stop loss? What are your organic and inorganic priorities there?

Ana, I tip my hat to you. I think you got about seven or eight questions in there. Let me attempt to be responsive to a bunch of quite important points. First, specific to our results, for 2017, the growth of 300,000 to 500,000 customers represents growth in national accounts, middle-market, select and international driven by very strong retention in all of those segments; good expansion of relationships and good targeted new business adds where our clinical capabilities, our incentive-based programs are hunting quite well. Specific to repeal and replace, and I appreciate you using that language, because I think repeal and replace is being used as language that is relatively broad sweeping, so as you very well know, the ACA had an impact, based on the way you asked your question, on the employer market, on the MA market, on the Medicaid market, as well as on the Individual market. And what we see happening today versus eight years ago is that there's a need for a change unequivocally, but there's also a lot of bright spots that have evolved over the last eight years. For example, in the employer market, there's way more adoption today of incentives, engagement and value-based care programs. MA has further evolved even more broadly adopting value-based care programs. As I noted in a prior comment, there are states that are changing Medicaid programs and evolving them to be more incentive or engagement based as we go forward. As it relates to the individual program, as noted by several people's questions, the marketplace is still unsustainable. And there's a lot of pressure to put a series of transparent changes in place for 2018 in the near future because organizations will have to make determinations in the spring of this year. As it relates to our growth priorities, they remain. We will grow our employer block of business in the United States and we see attractive growth opportunities in our targeted geographies, in our targeted segments with our capabilities. We see seniors continuing to be a growth chassis for us. We see broadening our specialty portfolio continuing to be a growth chassis. We have a sustained track record of growing our productivity management solutions out of our group portfolio. And then our international chassis continues to provide an exciting growth opportunity. So we're fortunate not to be dependent upon any one submarket. We're rather well-positioned from that standpoint.

Okay. Thank you. I appreciate the perspective.

Thank you, Ana Gupte. Our next question comes from Sarah James with Piper Jaffray. You may ask your question. Sarah E. James - Piper Jaffray & Co. (Broker): Thank you. I had a clarification on the advance notice Star comment that you made earlier. It looked to me that the box proposal (1:00:30) suggested capping the sanction impact in the Star calculation and I understand it's too soon to quantify, but could you help us understand if this is supposed to be a positive or a negative?

Sarah, it's David. I'd put that in the too soon to tell. I understand the headline that you're referencing. I can't go into the kind of details of the subcomponents there, but I understand the point you're referencing. Our team is combing through that quite thoroughly literally as we speak and I would say stay tuned for more. Obviously a lot of moving parts in there and you identify actually one of the moving parts, which I think is trying to resequence some of the disconnects we've seen in some of the program designs. Sarah E. James - Piper Jaffray & Co. (Broker): Okay. Then on the Global Supplemental business, you mentioned that there was a headwind to margins from investments. Can you size the impact that the one-time investments had on margins? Where are you investing and how do you think about the long-term growth for this business?

Well, Sarah, it's Tom. Again, that's strategic investments not investment income, of course, just to be clear on that. So that's basically the dynamic we have where we continue to invest to grow product choices, to grow distribution channels, to create more revenue growth opportunities in our overseas markets over time. Now generally, we've been able to fund that by finding operational efficiencies, but that's the dynamic. Calling out some of the increased strategic investments, underlying business growth and operating expense efficiencies is all netting to a good growth trajectory for our Global Supp business. Sarah E. James - Piper Jaffray & Co. (Broker): Is it still the mid-teens range? I think that's what you said in the past for long-term growth guidance but now that you're investing in addition to just offsetting with SG&A savings, do you still think it's a mid-teens growth profile business?

Longer-term outlook, obviously, if you look at our outlook for 2017, we've got, let's say, a 5% headwind in there for currency potential impacts. So it's a little less than that in the 2017 outlook, but over the longer-term that's a trajectory we'd expect to deliver. Sarah E. James - Piper Jaffray & Co. (Broker): Thank you.

Thank you Sarah James. Our final question comes from Michael Newshel with Evercore ISI. You may ask your question.

Thanks. Good morning. Can you confirm whether the M&A remediation costs ended up at $100 million for the full year as you expected on the last call? And how much of a step down you're expecting this year?

Michael, yes. They did up at the $100 million we expected, so no surprises in the fourth quarter. I don't think we quantified exactly what the step down will be, but it's of a substantial majority will be the step down in 2017.

And maybe just one last quick sizing question. Can you quantify the Individual market losses that you saw in 2016, including the write-off of the risk corridor receivables?

Michael, it's David. I'll ask Tom to reiterate the risk corridor receivable in a moment. We've not quantified the Individual submarket's losses. We've continued to say that 2014, 2015, 2016 have been loss profiles for that smaller book of business. I'll remind you that we've run it in 2%, 3% of our aggregate revenue over time and I think our view is that as we look to the industry level margins, we're in the ballpark, or lack thereof margins, we're in the ballpark of that result, but we haven't given you the details on it. Tom, would you remind them of the write-off?

On the risk corridor, again, that came in two flavors. The $80 million after-tax reflected the balance we had accrued at the end of September that was written off and reported as a special item, so not reflected in adjusted income from operations, and $16 million after taxes what we otherwise would've expected to accrue related to risk corridor recoveries in the fourth quarter which we were not able to accrue because we had written off the collectability.

Great. Thanks, guys.

Thank you, Michael Newshel. At this time, I'll turn the call back over to David Cordani for closing remarks.

Thank you. To conclude our call, I'd like to just underscore some key points from our discussion. We concluded the year with positive operating momentum as we enter 2017 with an expected attractive outlook to our growth profile. We reported strong revenue and earnings performance in our Global Health Care and Global Supplemental Benefits businesses, and noted improvements in the latter half of the year with the challenges we confronted earlier in the year in our Group Disability and Life business. We remain committed to achieving our average annual EPS growth rate of 10% to 13% over the long-term. We are confident in our ability to deliver on our attractive 2017 outlook of 12% to 18% earnings growth, further strengthened by our meaningful capital position and exceptional flexibility. I'd once again like to thank my colleagues around the world who embody our mission and execute our strategy every day for the benefit of our customers, our clients and our partners. And I also want to thank you, our shareholders, for joining our call today and for your continued interest in Cigna. Thanks.

Ladies and gentlemen, this concludes Cigna's fourth quarter 2016 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 this call. You may access the recording conference by dialing 203-369-3807 or 800-509-8621. Thank you for participating. We will now disconnect.