Q4 2019 Earnings Call
Yes.
[music].
Good morning.
Ladies and gentlemen, thank you for standing by for Cygnus fourth quarter 2019 results review at this time, all college or in listen only mode.
Conduct a question answer session later during the conference and review procedures on how to enter the Q to ask questions at that time.
If you should require assistance during the call.
Please press star zero on your Touchtone phone.
As a reminder, ladies and gentlemen, this conference, including the Kubernetes session is being recorded.
I'll begin by turning the conference over to Mr. well Mcdowell. Please go ahead Mr. Mcdowell.
Good morning, everyone and thank you for joining today's call I will Mcdowell.
President and Investor Relations with me this morning, our David Cordani, our President and Chief Executive Officer, and Eric Palmer Cigna's, Chief Financial Officer in all remarks today, they've been or will cover a number of topics, including cigna's full year 2019 financial results as well as our financial outlook for 2020 I.
As noted in our earnings release when describing.
Oh furniture results Cigna uses certain financial measures adjusted income from operations and adjusted revenues, which are not determined in accordance with accounting principle generally accepted in the United States otherwise known as gap.
A reconciliation of these measures to the most directly comparable GAAP measures shareholders net income and total revenues respectively.
Is contained in today's earnings release, which is posted in the Investor Relations section Cigna Dotcom.
We use the term labeled adjusted income from operations and earnings per share on the same basis I got principal measures of financial performance.
It all works today, we will be making some forward looking statements, including statements regarding our outlook for 2000.
20 and future performance.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectation.
A description of these risks and uncertainties is contained in the cautionary note today's earnings release and in our most recent reports filed with the FCC.
Before turning the call over to David I will.
Cover a few items pertaining to our financial results and disclosures.
Regarding our results in the fourth quarter, we recorded an after tax specialists in charge of $116 million or 31 cents per share for integration and transaction related costs.
We also recorded especially in charge of $162 million or 40.
Three cents per share for severance occult severance costs associated with a series of actions, we're taking to improve organizational efficiency.
As described in today's earnings release, especially items are excluded from adjusted income from operations in our discussion <unk> financial results.
Please note that consistent with past practice, when we make perspective.
Comments regarding financial performance, including our full year 2020 outlook, we will do so on a basis that excludes the impact of any future share repurchases will prior development of medical costs.
Additionally, our outlook for 2020 assumes a full year earnings from Cigna's group disability and life business, we continue to expect our.
Driven business to be completed by the third quarter of 2020.
I remind you that as previously disclosed disclosed beginning in 2020, we will no longer excluding contributions from transitioning clients from our performance measures as they transition for those clients was substantially complete as of December 31st 2019.
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And finally I will note that this morning, we posted an investor presentation to the Investor Relations section of Citi. Your dotcom that outlines our strategy and track record the strength of all four growth platforms 2020, operating and capital guidance.
Details of our longer term outlook, we hope that you will find that's helpful.
Of course with that I will turn the call over to David.
Thanks, well and good morning, everyone. Thank you for during our call today.
In 2018, we delivered a consolidated adjusted revenue of $140 billion anger earnings per share by 20% to $17 in five cents.
As a result, we.
He did the guidance that we already raised each quarter during 2019 for revenue earnings any P.S. as well as cash flow from operations.
Today I'll comment about how we delivered it needs exceptionally strong results.
And on the contributions made by each of our for growth platforms led by health services in integrated medical.
Segments.
I'll also discuss how we're positioned to drive attractive growth in 2020 and achieve our 2021 bps target of 20 to $21 per share.
Finally, I will highlight it keep pointing differentiation any driver future growth.
Our focus on being the undisputed partner of choice in health care.
Oh My comments, Eric will share more details about our full year 2019 financial results in 2020, I'll work and that will take your questions.
Let's dive in.
At our Investor Day last year, we committed to building on a decade long track record of delivering industry, leading cost trends consistent growth and effective capital.
Yep.
In 2019, we delivered on each of these commitments.
Remaining focused on our customers in patients, we executed well across each of our businesses deepened our customer relationships.
Yeah, the cheap every integration priorities.
Together this fueled our outstanding performance.
And health services we.
The liberty market, leading customer client retention, including 97% retention for the 2020 selling season and continued strong organic growth in prescriptions.
In commercial we again delivered industry, leading medical cost trend and grew our commercial medical customers for the 10th consecutive year.
Led by another year of double digit growth in the select segment.
And then the government business CMS is most recent stars ratings position us to had 87% of our Medicare advantage customers enforced or higher planned for 2021.
Reinforcement of our strong customer satisfaction and high levels of clinical quality.
Additionally, we made significant progress in advancing or five key integration priorities first and foremost we kept that promises in the marketplace by ensuring our more than 170 million customer relationships around the world experienced ongoing high service quality throughout the year.
Second we delivered medical and pharmacy cost savings.
The benefit of our customers and clients.
A flight effectively completing their transition to industry, leading pharmacy solutions, including Accredo specialty pharmacy, and express scripts customer friendly home delivery pharmacy.
Additionally, more than 95% of our customers have access to safeguardrx.
Native suite, a value based programs that improve care and value for customers were challenging medical conditions.
Third was our focus on talent.
Health Service company, our tell in their engagement is key to our performance an ongoing growth.
Our retention engagement levels today, one year into a combination are.
Our already strong pre transaction levels.
Fourth we made significant progress towards securing based operating expense synergies.
The organizational efficiency plan, we announced earlier today is another important step toward achieving these targets.
And finally, we kept their vision top of mind by accelerating.
Marketplace innovations that improve affordability predictability and simplicity, including our Imbark benefit protection program, which improves customer access to life changing gene therapies, all shielding clients when the price shock a multimillion dollar treatments.
Our digital health formulary to better Kerry.
And generating value from the 300000 digital health apps in the marketplace today.
And I patient insurance program, where insulin dependent patients with diabetes pay maximum of $25 for a 30 day supply of insulin.
As a result of this program our customers are already realizing significant out of pocket savings.
Overall 2019, with an exceptionally strong year for Cigna and gives us considerable momentum for ongoing attractive growth in 2020 and beyond.
Our achievements were in could you be driven by the focus commitment and passion of our employees, who wake up every day to fulfill our mission to improve the health well being a peace of mind.
Turning to those we serve.
In 2020, we will continue to drive significant growth in customer relationships revenue earnings and if yes, as well as strong cash flows.
In health services, we expect adjusted script growth in a range of 20% to 23% over our year end 2019.
He levels.
In integrated medical we were on track for continued medical customer growth highlighted by our government business, where we expect 13% to 16% customer growth in Medicare advantage and we remain positioned for very attractive growth over the next five years.
Additionally, after a very successful first.
Sure as a combined company, we remain on track to complete our integration activities over the next year.
We also expect to close the sale of our group disability and life business to New York life by the third quarter this year.
And we were on track to return a balance sheet to normalized levels of debt by year end 2020.
In short we're on.
I used to meet the commitments, we made when we announced the combination nearly two years ago.
And meet the commitments, we made other investor day in May of 2019.
Looking forward, a key point of differentiation and growth driver for signal from 2020 beyond is our orientation toward partnering in order to.
Achieve accelerate innovation.
Improved affordability predictability and simplicity and to further expand our distribution reach.
Several recent examples demonstrate a proven differentiation.
First is our new arrangement with Prime therapeutics.
Starting in April 2020, together, we will make pharmacy.
I hear more affordable financing pharmacy networks, and pharmaceutical manufacturer value for primes 28 million members, who are covered by 23 health plans, including employer programs Medicare and Medicaid.
Together express scripts imply will hope help each other to continue to grow in the market across the <unk>.
Country by innovating new solutions to improve affordability increase access the medicine and further improve individual health.
Disagreement shows our ability to work across health care and partner with those who seek to deliver innovative high quality health services and solutions to employers health plans and governmental agencies for the benefit of customers in.
Second example of a partnership orientation is our work with emerging and highly innovative companies.
A great. Recent example, this is our partnership but Oscar health.
With Oscar we will deliver a new innovative solutions for small businesses, which all too often are left with limited options that are highly priced.
We will walk for small.
This is access to affordable well the into health plans that brought in choice and prioritize whole personnel.
We will focus in four geographies with Oscar later, this year and we'll take our proven test alert framework to accelerated growth overtime.
A third examples our trusted relationships with health care professionals.
We have a long history of innovative value based arrangements with health care professionals.
In both the U.S. commercial and government businesses, including more than 650 collaborative accountable care relationships.
They more than 65% of cigna's medical payments are in value based arrangements across our top 40 commercial markets and all that Medicare.
Markets.
Importantly, 92% of health care providers, and our programs are delivering differentiated levels of quality and 90% of health care providers believes cygnet it'd be industry leader in this area.
These deep partnerships drive our growth, particularly in Medicare advantage, where we focus on geographies worker.
Commercial business already has aligned high performing collaborative accountable care relationships in place.
Approximately 25% of medically eligible seniors live in geographies, where commercial business had deep ties to delivery systems, but we have no Medicare advantage presence today.
That provides a.
Meaningful growth opportunity for Medicare advantage business that we have begun to capitalize in 2020 by accelerating or geographic expansion and bringing new PPL solutions to market.
This combined with the fact that 87% of our Medicare advantage customers aren't forestar or greater plans in 2021.
In our high customer MPS novel levels, which approximate 70 across all of our markets make us excited about our future customer growth, which we project to be in the range of 10% to 15% on annualized basis over the next five years.
Each of these examples gives a clear view of how diverse health care stakeholders, you Cigna as their.
Best partner for future success.
And how being the partner of choice in health care marketplace will contribute to our sustained differentiated growth overtime.
Now I'll briefly summarize that signal, we delivered exceptional full year 2019 financial results across our four growth platforms led by health.
Services and our integrated medical segments.
These results drove strong financial performance in 2018, and provide us with considerable momentum as we step into 2020 with outstanding strategic and financial flexibility.
And we remain on track to deliver our EPS goal of 20 to $21 per share in 2000.
Then 21.
With that I'll turn the call over to Eric.
Thanks, David Good morning, everyone.
My remarks today, our views Cigna's 2019 results and provide our outlook for 2020.
Consolidated financial highlights for 2019 include adjusted revenue of $140 billion.
Earnings of $6.5 billion after tax earnings.
Earnings per share growth of 20% to $17.05, an operating cash flows the more than doubled this year to $9.5 billion.
These results reflect strong consistent execution across our businesses throughout 2019.
Regarding our segment I'll first comment on health services.
Full year 2019 revenues were $96.4 billion and pre tax earnings were $5.1 billion.
Results for 2019 reflect organic growth without standing client retention under the addition of 2.7.
<unk> million pharmacy customers.
Strong volumes with 1.22 billion adjusted pharmacy scripts fulfilled and growth in specialty pharmacy.
Overall health services performed well in 2019 with result in line with our expectations, reflecting significant progress across our integration activities.
Turning to integrate a medical 2019 revenues grew 11% the $36.5 billion driven by commercial customer growth and expansion of specialty relationships premium growth, reflecting underlying cost trends and the inclusion of the express scripts Medicare part D business.
We organically grow our global medical.
Customer base to 17.1 million lives.
In 2019, we once again delivered double digit organic customer growth and our select segment with continued enrollment gains in middle market.
Well your earnings grew 9% the $3.8 billion, reflecting growth in medical customers and specialty.
Wrong operating expense discipline and continued effective medical cost management.
Turning to medical costs for our total U.S. commercial book of business full year medical cost trend for 2019 was approximately 4%, which marks the seventh consecutive year Cigna has delivered an industry leading result.
Our full year 2019, total medical care ratio or MCR was 80.8%, finishing the year at the low end of our guidance range. Our MCR performance reflects stable trends and focused execution of affordability initiatives across our commercial and government businesses.
Welcome to the pricing effect of the health insurance taxes.
Suspension.
Full year 2019 integrated medical earnings benefited from $85 million pretax of favorable net to prior year Reserve development.
Overall, the with integrated medical segment delivered strong financial results in 2019.
And our international markets business.
Revenues grew to $5.6 billion, an increase of 8% on a currency adjusted basis.
Full year 2019 pre tax earnings grew to $762 million, reflecting continued business growth, partially offset by unfavorable foreign currency impacts.
For our group disability.
In other operations segment full year 2018 revenues were $5.2 billion.
Full year pretax earnings for this segment were $501 billion with strong performance in life and continued administrative efficiencies, partially offset by higher disability claims.
Well, our corporate segment the full year.
2019 loss was $1.8 billion, primarily driven by $1.7 billion of interest costs.
As will mentioned during fourth quarter, we reported a special item charge of $162 million after tax for severance costs related to our organizational efficiency plan.
Under this plan will.
Cement efficiency initiatives that we identified primarily through our integration work.
These actions reflect our commitment to providing affordable quality solutions to the marketplace and the savings associated with this plan are included within the multiyear administrative expenses and your targets that we've previously communicated.
Overall since 2000.
In 19 results with what focused execution across each of our businesses.
Before discussing our outlook for continued attractive growth. This year I would remind view of the 2019 earnings per share baseline adjustment that we quantified on our third quarter earnings call.
Specifically signals earnings per share performance in two.
The 19 should be adjusted for the following three items.
First 12 cents per share for the tax item with favorably settled in the second quarter of 2019.
Second 18 cents per share a favorable net prior year reserve development.
Finally, 25 cents per.
They are associated with the industry packs, which was suspended for 2019 returns in 2024 a final year.
This impact is increased to reflect the incremental timing effect of the recent repeal of the industry Ducks.
When adjusting for these impacts since 2019 earnings per share baseline was $16.
Isn't that these zones.
Turning to out what we have entered 2020 well positions to drive both continued growth and innovation.
We also expect to complete our integration activities associated with express scripts combination over the next year.
For full year 2020, we expect.
<unk> adjusted revenues in the range of $154 billion to $156 billion, representing growth of 10% to 11%.
We expect full year 2020 consolidated adjusted income from operations to be 6.8 billion to $7 billion or $18 to $18 and 60.
Sounds fair share.
This represents growth in the range of 9% to 13% over our 2019 baseline.
We expect the cadence of earnings per share in 2020 to be approximately 47% in the first out and 53% in the second half of the are taking into consideration seasonality patterns within.
And our businesses.
For 2020, we projected expense ratio in the range of 8.6% to 9.1% and the consolidated adjusted tax rate in the range of 23% to 24%.
Additionally, our outlook excludes any contribution from future share repurchases and.
Your your reserve development and assumes a full year of contributions from our group disability and life business.
And as previously communicated in 2020, we will no longer report transitioning client contribution since those transitions were substantially complete as of December 30, Onest the 2019.
I will now discuss our 2000.
20 outlook for our segments.
Far too far health services business, we expect full year 2020 earnings in the range of 5.3 billion to 5.4 or $5 billion.
This represents year over year growth in the range of 4% to 7%.
And health services, we expect first.
Quarter 2020 earnings to grow by a mid single digit percentage over first quarter 2019.
This outlook reflects solid underlying growth.
And the benefits of increased year over year administrative expense synergies.
I would also note that we expect our first quarter 2020 health services that's.
<unk> expense ratio to be higher than first quarter 2019, reflecting impacts of the client transitions, we've discussed previously and including startup costs associated with our collaboration with Prime Therapeutics.
For 2020, we expect adjusted pharmacy scripts in the range of 1.47 billion.
To 1.50 billion claims.
This reflects the impact of completing the in sourcing of Cigna pharmacy services.
Growth associated with the first year of the prime collaboration and additional organic growth of 25 million to 35 million adjusted pharmacy scripts.
All in this.
Once a year over year growth of 20% to 23%.
For integrated medical we expect full year 2020 earnings in the range of 4 billion to $4.1 billion, which represents growth of 11% to 13% over the 2018 baseline.
This outlook reflects strength and growth in our.
This is driven by continued benefits from organic customer growth.
Deepening of customer relationships and effective medical cost management.
This outlook also included the benefit of administrative expense energies.
He assumptions reflected in our integrated medical earnings outlook for 2020 include the following.
Regarding global medical customers, we expect 2020 growth in the range of 150000 250000 customers driven by continued organic growth in our commercial business led by the select the middle market segments, partially offset by lower national accounts enroll them.
We also expect Medicare advantage customer growth of.
13% to 16%.
Our growth outlook also includes an expectation of lower enrollment in our U.S. individual business and the expected loss of our Texas Medicaid contracts collectively resulting in a reduction of approximately 90000 customers.
Turning to medical costs for our U.S. commercial employer.
Book of business, we expect full year 2020 medical cost trend to be in the range of 3.5% to 4.5%.
We expect the 2020 medical care ratio to be in the range of 80.2%, 81.2%, reflecting the return of the health insurance packs in 2000.
20, and continued strong performance of our commercial and government businesses offset by the mix impact of new Medicare advantage lives and normalized margins in our U.S. individual business.
We also expect strong contributions from our international markets group disability and other businesses they continue to deliver solutions.
Since doesn't have the affordability and predictability and provide a more simplified experience for those we serve.
Regarding interest expense, we expect costs of approximately $1.6 billion pre tax in 2000 wanted.
So all in for full year 2020, we expect consolidated adjusted income.
From operations of 6.8 billion to $7 billion or $18 to $18.60 per share.
I would also remind you that our outlook excludes the impact of future share repurchases and prior year Reserve development and assumes a full year of contributions from our group disability and life business.
Overall these.
The results represent a very attractive outlook aided by strong performance across our differentiated portfolio of businesses is expected result, also positions us well to achieve our 2021 earnings per share target of 20 to $21 per share.
Now moving to our capital management position and outlook.
Our subsidiaries remain well capitalized we expect them to continue to drive exceptional cash flow with strong returns on capital even as we continue reinvesting to support long term growth and innovation.
In 2019, we deployed $5.2 billion to repay that and we repurchased 11.8 million shares of stock.
For $2 billion.
We ended 2019 with a debt to capitalization ratio of 45.2% an improvement of 570 basis points over yearend 2018.
For 2020, we expect greater than $7.5 billion of cash flow from operations, reflecting the.
Drawn capital efficiency of our well performing businesses.
As previously discussed with the near term focus on accelerated debt repayment remain on track to return our debt to capitalization ratio to the upper thirtys by the end of 2020.
In 2020, we expected deployed $4.5 billion to $5 billion.
Debt repayment and $1 billion to capital expenditures.
As a reminder, our capital priorities remain as follows reinvestment back into our businesses to drive further innovation and growth.
Strategic M&A on a target a basis and returning capital to shareholders, which historically, we have done primarily through share repurchase.
Year to date as of February 15, 2020, we've repurchased 1.2 million shares for $245 million and we have $3.72 billion of remaining share repurchase authorization.
Our balance sheet and cash flow outlook remains strong benefiting from a highly efficient service based.
So the drive strategic flexibility strong margins and attractive returns on capital.
Now to recap our full year 2019 consolidated results reflect considerable strength and momentum across our four growth platforms and continued effective execution of our focus strategy.
We are confident in our ability.
Need to deliver our full year 2020 earnings outlook, we remain on track to achieve our 20 to $21 earnings per share target for 2021.
Further our clear strategic focus differentiated value proposition across our businesses and outstanding financial flexibility give us continued confidence in our long term.
Im targets for growth in revenue earnings and deep yes.
That will turn it over to the operator for the Q and a portion of the golf.
Thank you ladies and gentlemen at this time if you do have a question. Please press star one on your Touchtone phone if someone ask your question ahead of you you can we move yourself from the Q.
By pressing star too.
So if you're using a speakerphone please pick up your handset before passing the Baton Rouge. Finally, we ask that you. Please limit yourself to one question, Sean I'll sufficient time for questions from those remaining in the Q1 moment. Please for the first question.
Our first question is from Justin.
Unlike with Wolfe research.
Mr. Like your line is helping.
Thanks, Good morning, I wanted to ask a quick numbers question and then a little bit about the capital deployment. So first just in terms of the group disability sale on numbers I know you have it in there just wanted to understand how.
Yeah, you deploy capital that you received to keep this earnings neutral for 2021, the company have to begin buying back stock early or doing MSR given the earnings will go away at a moment in time and yet the shared capital deployment might take time.
Justin It's Eric.
So the question.
And on that UBS. So it's just a step back so for the group disability and life transaction as we noted in December.
We entered into that agreement, we expect $5.3 billion of after tax proceeds and we're on track for that to close in a in the third quarter since the they'll get the $5.3 billion first will be in.
For mental to operating cash flow for the year, we've got flexibility in terms of the timing of how we deploy things that the how we deployed capital for the year. Our primary focus is on achieving or that the that's capitalization ratio of below 40% by the end of year, and we've got flexibility, but beyond that and throughout the year to begin.
To what to do share repurchase and such we haven't provided any specific guidance in terms of the exact timing of the a share repurchase but we do have flexibility to to get started on that even in advance of the close.
Okay, but will it be earnings neutral to the year.
The comedy U shaped up listing the disability and the capital deployment.
That's an article.
They shouldn't that's the guidance that we have provided back when we announced the transaction.
Okay, and then if I could just ask a question about the prime a relationship congratulations on that obviously, one or two wanting to understand two things one in terms of the relationship itself unit. It's yeah. It's.
What narrowing focus but sounds like it could expand over time, how do you kind of look at the risk versus opportunity to risk being you know that some of your existing express scripts customers, we ever much water relationship <unk> prime and therefore could be somewhat dilutive versus the opportunities to work with these blues and and.
Actually expand data that partnership in trying to offset some of that risk.
Just and good morning, it's David first and foremost I mean, just re underscore how pleased we are to a vendor that relationship the validation of our deep commitment to servicing health plans partner with health plans and growing those relationships.
To your ability to retain any relationship be a commercial health when otherwise is based on it a couple of basic tenets. A are you able to drive partnership in alignment they deliver differentiated value see innovate together, we're committed to doing so and actually we view the opposite of the maybe risk that you.
Identified this further broadens our reach in or opportunity to serve more lives both individual customers and patience and about a portfolio of health plans as we go forward. So we're delighted to by by securing this we look forward to beginning to serve that relationship in the second quarter of this year.
Thanks for the car.
Thank you for the question. Your next question from Kevin Fischbeck with Bank of America. Your line is open Sir.
Okay, great. Thanks, actually just a quick numbers question first to it sounds like you're saying that the guidance basically are similar to what you were saying with Q3, but you've got another five cents drag from FX being removed and 2021 Doctor.
I've got right. That's the main change versus Q3, so outlook.
Having its Eric it really to two small things to think about their the heft incremental drag of of who sent to you know that and we have the benefit of the a up two cents pick up at and because of the lower share count as we completed.
Just from the time paired those are the two differences.
Okay, and then a question being I think that.
You guys provided initial membership guidance at the beginning of this year that was kind of a.
A little bit disappointing and Ah I guess, it's clear now that some of its individual or some of its Medicaid.
But you in your.
Presentation has long term commercial topline growth of 8% to 10%, which is a higher number then I think most people think about as far as commercial growth.
How much of that it's it's.
Able to be driven by just growing to select the middle market accounts or do you need to be starting to grow national.
Okay and individual to kind of achieved that over the long term and how do you. How do you. If so how do you turn that around.
Kevin It's Eric I'll start on that well first of all.
Those targets are very consistent with the results were driven in the commercial markets for a number of years now and I think of the growth than that.
The the brands that we target in that business is being driven by really three things <unk>. The first category would be around continued customer growth as we continue to grow in the select the middle market segment, we've got a lot of opportunity to continue to grow in those segments.
The next one I'd say would be on deepening our.
Just to clients relationships <unk>. So as we worked identify new solutions and deepen our existing solutions in terms of a.
New new product sales and again for other programs and services into the third category think about would be around working to innovate and to deliver new a new solutions.
More broadly, but again, that's the recipe that weve used for for a number of years now and we see a lot of opportunity to continue on that track in the commercial market.
Then you don't need national account growth per se or that's part of the.
Oh, yeah the growth platforms.
Yeah, I mean, it's David when you're thinking about national accounts put about in context, we define that segment to remind you a much more narrow then maybe the market in total so for integrated medical its commercial employers 5000 or more employees that are multi state.
Based on that definition and their strategy, we view that marketplaces, a flat to somewhat shrinking marketplace.
Based on our strategy within integrated medical now Eric's point to 1.3 reinforce how we continued actually grow and deepen relationships with national accounts.
Even today, we're able to successfully do that and then lastly, I'm. We're quite excited about is adding to that more broadly off of our health services platform the ability to offer.
Got a coordinated services, so we could either see deepening of relationships and bought any relationships with the national accounts, even with the medical membership performance that you're making reference to and over time, we see the ability to even further accelerate that by leveraging our health services portfolio, so that will be in that contributor as well.
Thank you.
Your question as a reminder, we ask that you. Please limit yourself to one question Cholodenko sufficient time for questions from those remaining in the queue. Our next question comes from Dave when leave with Jefferies. Your line is open Sir.
Mr. When they are you perhaps on mute Oh, sorry. Thank you I was on me sorry about that.
Thanks for taking my question on Medicare advantage.
As you look at [noise].
Double digit growth trajectory here and I think that your expectation for multiple years [noise].
That's a larger cohorts can sometimes called.
Oil and put a little pressure on margins I'm wondering what your expectations are around that and what I'm kind of platform. The resources you have any place to onboard risk score.
Risk assassin getting good new Medicare advantage numbers into programs to mitigate any initial margin pressure.
Well if David.
First and foremost we're really pleased with the start to 2020 as we indicated in 2019, we expect to grow this platform I'm, 10% to 15% and we're on track to do a 13 to 16 just back to remind me up some of the context, we're well positioned today in 2021 or stars rating takes up yet further <unk>.
87% of our our lives in Forestar greater plans and our net promoter score is tracking yet tad over 70 across our broad portfolio. So our ability to grow both in markets on platforms net new geography is being adjacent counties in new markets were opening in boarding or PPL platform will fuel this and.
Driving them to go forward basis, clearly the rate and pace of that growth may put a little margin pressure and draws toward the lower end of our margin range or at times, maybe a tad below that will balance out in our portfolios. We continue to invest as we are today.
But we like the growth outlook, we like the aggregate margin profile.
Like the sustainability the last sub no.
Maybe have there in terms of the coding and otherwise our value based provider relationships and our high engagement programs are well positioned.
To coordinate the care the services et cetera, as reinforced by the stars rating and as reinforced by our overall performance. So we feel good about the outlook for this year and the trajectory going forward.
Thank you.
Thank you for your question. Our next question, Steve Kanai Shah with Goldman Sachs. Your line is open sorry.
So I guess I don't want an Oscar and it sounds like it's very interesting partnership, but trying to understand what elements of their business are difficult to costly for say the build their offer independently. So just trying to really understand what are the functions each of the companies as well.
I'll do in in the context of the partnership.
And maybe that's a tough for me.
Deep banks, it's David so stepping back as I noted my prepared remarks first set a philosophical level, we view that the notion of partnering and be on partnering striving to be the undisputed partner choice, it's a competitive advantage and stuff.
The we want to build on why I'm it accelerates pace of innovation it accelerates value creation, whether it be around affordability predictability simplicity I'm going to you brought in speed and absolute reach within the marketplace. Oscar is a wonderful example, all that and if you take it up to the macro level, you'll recall that cigna's historically.
I'm not participated in the smallest ended the employer marketplace be it under 50 or under 100, depending on where the regulatory lines are drawn from that standpoint to we believe that's an underserved marketplace with less choice.
And less leverage if some of the most innovative solutions not of the core of your question when you're open minded to partnering you could.
At both focus an acceleration in this case by leveraging Oscars phenomenal technological infrastructure digital first infrastructure and information flow infrastructure, which is similar to our philosophy, but we just apply it up market in select middle and National and this is a case where were philosophically aligned but the the durable.
Infrastructure there to serve unique needs of the small employers and then we're able to port over our value based network configurations are high performing engage me clinical behavioral pharmacy capabilities to make one plus one equal lot more than two so we're excited about that and as I noted in my prepared remarks, we're stage to open up for.
Our markets I'm toward the latter part of this year and then feel some growth.
Thank you for your question. Our next question from AJ Rice, That's credit Suisse. Your line is open Sir.
Hi, everybody I'm, just maybe asking about the Twentytwenty bottomline and.
In 2021 bottom line.
I just did you have for two parts to first Erik I made some comments about divisional level seasonality. This year in how we might think about that and there's some of your peers have made a bigger deal about the first quarter and the impact of leap day, perhaps because your business is diversified it doesn't mean as much to you but is there anything you'd like to say about.
The seasonal pattern relative to normal year, and when you think about the range itself I guess my.
Question is there's a number you've got a number of business lines, you got variability around your capital deployment and and cost synergy realization is that right is there a couple things in that range that you see is.
Standing out that would particularly movie there's a high end or the low end of your forecast given its 60 said range on a dollar age for this year and Nextera or is it just see agglomeration of all these different business lines and then it falls out, but I guess I'm just trying to figure out are there a couple things that are big variables in your mind.
And as to where you're going to be say versus the 20 to $21 next year.
All right.
On the item related to the leap year until February having an extra day this year.
It doesn't move the pattern around a little bit and they integrate a medical segment all else equal that runs the loss ratio up a little bit.
For the for the first quarter it will normalize out over the course of the are of course fully factored into our guidance and such but but does play a modest amount of pressure on the first quarter that well recover over the balance of the are nothing that I would call out as particularly significant as it relates to the range more broadly there there aren't any.
Big items I'd call out other than just the rate and pace of our spending in our investments in terms of future growth I'm. As you know a we have continued to invest and building new capabilities in the like dissolves spend every year as we get ready for new clients to come onboard and things along those lines would be those types of items that I think about more than anything else.
This point.
Okay. Thanks.
Thank you for your question. Our next question from Ralph Jacoby with Citi. Your line is open Sir.
Thanks, Good morning, I want to go to interest expense.
Guidance. So it looks like your run rate in two to 1.6 billion at least as of the fourth quarter.
For.
The guidance calls for 1.6 billion of interest cost in 2020, Despite D. A foreigner half to 5 billion debt pay downs. So is it just timing related maybe if you can kind of help reconcile that.
Yeah, and then along those lines I guess Justins first question. So I'm sure that share repo I mean can.
The extent that you're doing at an accelerating it early on as an offset to the group disability and life does that mean, you know any upside essentially in the first half of the year essentially is not going to carry through to.
To the P.S. line, something because of timing again, thank you.
Ralph with that so on the interest expense I'm really nothing.
I'd put it in particular I call out other than we'd be looking out to the decimal point, a little bit further and the timing throughout the year, obviously to the extent we were to extinguish that earlier the interest expense will go down, but but again, our current expectation would that would be for a 1.6 billion as I noted in my prepared remarks in terms of the.
The timing on the capital deployment <unk>. The mechanics are consistent with what I outlined to Justin's question and we do have flexibility in terms of the time in which we would deploy oral or expectation is that we would fully offset the absence of the group transition by reducing the share count through.
Share repurchase and we'll approach that as we go through the course of the come in a amongst the quarters here.
Thank you for your question. Our next question from Sharon James a type of Sandler.
Jim Your line is open.
Thank you looking at.
Five year Medicare crash strategy does get shipped to focus on PPL wondering what dynamics changed in the market to make keep your more attractive and why not focused on great. Given your large national account base you appear as if had good success on retiree accounts. So why is that not a strategy thickness testing.
Good morning, it's David So first and foremost I wouldn't view it as a shift we didn't go from something and away from something to something so the individual h. emote continues to be a bedrock of the platform and in fact is a major driver of our growth in 2020 as an example that we sought to add to the individual PPL.
Warm up to a portfolio invested to do so stood up and how the arrangements with the about a based provider community to be able to offer that so its expanding choice and building on a successful platform and track record and as we both entering new markets and expanding counties, we will make our decisions in terms of individually tomorrow individual P.O. or both.
On a go forward basis, we just see it as an end and <unk> natural extension of our portfolio. Additionally to your important point, we view that the employer market place is also a very attractive addressable market and as you know.
Beyond National accounts, our broad well performing commercial portfolio of employer relationships presents another opportunity for that and it's on.
Our growth trajectory, we're just very disciplined as it relates up building the momentum so going from the proven h. ammo to adding that PPL expanding geographies and you should expect this overtime to come back and talk with you about the very attractive additional growth opportunities that exist in the employer marketplace for us as well.
Thank you.
Thank you for your question. Our next question from Gary Taylor with JP Morgan Your line is open Sir.
Hi, Good morning, two quick numbers questions. The first one is to Eric on the 80 basis point impact on the MLL R. From the hip recurring next year, just wondering when you do.
Derive that do you just presume that on in a there's there's no impact because there's no explicit gross up there just kind of yes. No question. My other question was on the PBM.
So for next year, you've got like 5%.
At the midpoint pretax.
Growth on like 22% script growth obviously, the prime scripts are coming in at breakeven you've told us.
We know that the the optum scripts coming over or lower profitability per script.
So when we just think about the core in the organic growth in script should we assume that.
Organic.
EBITDA margins are similar those new organic scripts are coming in at similar margins and in the sort of dilution and profitability per script is purely being driven by Optum and prime.
Gary It's Eric.
On the first part of their question I think the short answer is yes I'm the.
I think of that has not having a specific impacts in terms of the quantification given the you know there's there's not a way to specifically build that into a how you bid for for on a like on the second portion of your question. The although the answer is yes. The dynamics you outlined are really the biggest pieces here.
When you adjust for the prime volumes and you adjust for the Cigna transmission volumes I think of the Uh Huh core aside from those items has been consistent.
Thank you.
Thank you for your question. Our next question from Matthew Borsch B M.
Capital markets.
Line is helping.
Oh, thank you.
Hey, just lost about commercial market.
Maybe a little bit about what you've seen problem I guess, what you call your swaps.
I'm sorry.
Possums seems shifts to alternative funding away some rules.
Once you've gotten some four oh, how about media Hawking real schools I'm asking the question part looking wide eyed solved a lot.
That's all it spokes youve seen some of which he or she needs.
Yes.
Matthew David So specific to the.
Marketplace, and I think you're going into the so like segment recall that we offer choice in that marketplace. The choices heavily oriented around a well configured integrated value proposition with the medical the pharmacy, the behavioral the care management programs et cetera, and building choice around funding options today think about.
From a new business standpoint, it's tracking about 50 50.
About 50% of a new business. We're writing right now is risk about 50% of it is a is so stop loss plus or minus and that vacillates in any given year, a little bit more one a little bit more of the other and we're delighted with that we're delighted to be able to be in position to offer in that way I'd also remind get from prior conversations.
One of our strengths when you offer that choices oftentimes your literally offering that choice side by side and it's a good validation for the purchase or in this case the client of our conviction to the so proposition when you're able to put the guarantee cost side by side, but do they think about it the new business is running about 50, 50 and I wouldn't describe.
I have any any difference were seeing in terms of your terminology from a risk pool of standpoint of performance, it's performing really well for us.
Thank you.
Thank you for your question. Our next question from Josh Raskin with Nephron Research. Your line is open sorry.
Thanks, Good morning, I ask a little bit about capital.
Well, I mean, and you're talking about getting your debt to cap under 40% by the ended this year you've got another 5.3 billion of proceeds from you know disability and life and Chevron ask billion of available deployable cash next year. At you know you think about adding all these numbers up and it's approaching 20% of market cap and I understand the priorities, but is there a little bit more urgency.
From a capital deployment perspective, you know rather than sort of sitting on cash that's dilutive to returns do you think about.
No more aggressive buybacks is there a dividend increase you know things like that I'm, just curious if you're starting to feel a little bit more pressure on terms that deployment.
I should say I appreciate the appreciate the way you frame that up.
Obviously, we're very excited about the capital generation that we've got the cash flow from operations visibility that we've got for 2020 and into 2021 and that goes a lot of flexibility now that we've got a really good track record of have not to use your words sitting on cash we will deploy the capital I'm in a in a way that the affective and Ah aligned.
With our shareholders' interests in such a versus it just a accumulating a to be clear, but again. The overall history. We've got from a track record with got from a effectiveness of capital deployment and managing our capital coupled up with the the visibility and flexibility that we've got coming with the capital.
It will available for us as a as an exciting combination data with what I'll do that on that but it just reinforce Josh and appreciate your question recall from the our strategic positioning pre combination aided too by the combination et cetera, our ability to generate a significant amount of operating cash flow is a critical competency.
And we believe a strategic advantage with $19 billion in 2019 at least $75 billion in 2020 and at least eight now billion dollars in 2021, so quite deliberately as Eric said, we note the importance of that responsibility I'm not something we take lightly but our effective capital stewardship.
But the ability of will be Claire as we go forward and we have tremendous value creation opportunity in front of us right now.
Thank you for your question. Our next question from Lance Wells with Bernstein. Your line is open Sir.
Great just to the question on the individual business line in the strategy.
Okay and appetite in that business going forward and then maybe also as you can comment on.
Yes, she any increase in health services for the fourth quarter and maybe what drove that.
That's good morning, David I'll take the first question I'll ask Eric to take the second part of your question individual business line I'm presuming, you're referencing the individual exchange I'm just a.
Remind everybody the individual exchange marketplace, we took a very focused I'm deliberate posture on that in that marketplace in 2014, and as stayed steady within that marketplace systematically but slowly growing our posture. We're in 10 markets today I'm thinking about the positioning of being 10 markets highly.
And that around leveraging our value based provider relationships and that marketplaces performed pretty darn well and the last couple of years I'm going forward, we'll monitor the competitive landscape, but we see the ability to continue to grow that reasonably overtime with fair returns cornerstone to our value proposition, though is ensuring that.
In those states, we go down to sub I must say level and make sure. We're building the the value prop or the offering around.
Our highest performing physician relationships and getting the requisite alignment with the delivery system and and thus far that to perform well for us.
And we'll look forward to your and your out making individual decisions of additional market expansion, Eric Alaska to.
Yes, DNA comment last attack on the health services fourth quarter, well to Adam could have you think about on that front one as we noted throughout both they've in my prepared remarks continue to spend to invest in terms of and building a new and additional capabilities and such Additionally, we're spending on facilitating and effectuating.
The the transitions associated with the full a re and sourcing of the segment volumes and the like that Adam I would just note. We've provided some commentary throughout the year last year around the effect of a of the transitioning client going away. Since I was the volumes that are transitioning clients wound down that added cost back into.
Into the core if you will and where a well on track to extinguish that as we work through 2020.
Great. Thanks.
Thank you for your question. Our next question from Peter cost that much Wells Fargo Securities. Your line is open Sir.
Thank you.
With that on an Dave's question.
Sure earlier.
Margins in Medicare and particular timing of when that will start to add to your earnings from our perspective.
<unk> how are you getting the members that you're getting today are they coming electronically or you said have broker networks and can you talk a little bit it off the channel how that's going to evolve going forward and then also in 2021.
With the us or de patients coming on.
How do you expect that to impact your margins in the Medicare business.
[noise], Peter it's David I'm, a first broadly speaking just to reiterate what we're really pleased with the positioning we have in our existing him essays and expanding into new markets are individually to mow platform.
The lead offerings still in the lead part of the growth chassis aided by the new market entrees as well as the PPL platform specifically to your question of how we go to market thinking about that as an end proposition. So it's a multichannel approach relative to the captive partnered and and otherwise and expect that that could lead to expand over time.
Specific to the margins as I mentioned to 'em up the prior question I'm. The margins, we would expect to be at the lower end of the range that we put out as a long term range as we accelerate our growth trajectory over the near term potentially taking below that having said that with the growth. We would have earnings growth on that that brings along with it and finally relative to yesterday.
Hey, I'm as we flagged in the past I'm when asked that question it will be a smaller impact on our aggregate franchise, we will manage finally or the SRT posture and I say by M&A benefit offering by benefit offering in alignment with our value based physicians.
And we will be well position to manage that to the extent the final changes transpire as currently.
Proposed from that standpoint that net taken together attractive growth I'm, even at the lower end of the margin range, we will be experiencing earnings expansion, while simultaneously investing for growth going forward.
Thank you.
Thank you for your question. Our next question is from Frank Morgan with RBC capital markets. Your.
And it's Elton Sir.
Thank you to a real quick question any thoughts on last night CMS proposed rule around 2021, you may rate updates and then any update on the Cigna anther mitigation. Thanks.
Frank It's David I'm, a specific specific to the o. rate notice a major might imagine we're digesting the.
The detail other given the magnitude of it it's the preliminary notice you know the process in terms of I'm getting to the final rate noted Big picture I would suggest you were in macro inline with the aggregation of what that rate notice indicates.
Then when we think about the posture that rate notice the expansion of our shires proposition for.
2021 will be in good shape or for 2021 more to follow but a big picture. Our impact is broadly speaking in line, but what the rate noticed speaks to as it relates to the you'd ask specifically about the Cigna anthem litigation that is on course to resolve itself by the end of this calendar.
Any other color you can carry on that what gives you confidence will be wrapped up this month and would that result in a a a settlement payment.
I'm in specificity relative to litigation other than I would reinforce we feel very strong about our position relative to a contractual responsibility in contract so ability to collect outbreak fake into court is on track to resolve that by the end this calendar month.
Thank you. Thank you for your question our next questions from George Hell at Deutsche Bank sure you're nine is helping.
Good morning, guys and thanks for taking the question I guess T.V. talk a lot about the partnership strategy may be taking a little bit more into.
Into prime the Prime deal I guess can you talk about the the network component of it I guess, where you guys see the the best the most significant points of operating leverage that deliver through to earnings beyond 2020 is it more on the rebate side or is it more on the network side and kind of can you talk a little bit about the strings that each side brought to the relationship.
Yeah, I'm I'm not going to go through the micro pieces of the the components of the relationship I I'd, rather just refrain what we're trying to achieve together. This is a wonderful example of two organizations identifying philosophical alignment strategic alignment and then pursuing elaborate <unk> that results in additional.
Value for customers and clients that that's the end of and then that <unk> that of this which is improved affordability potentially improve coordinated access and then clinical program leverage on a go forward basis, we will continue to work with pine in terms of the best ways in which we could add additional value for them, there's 28 million individually.
<unk> or customers and members that are within the prime relationship.
And then we'll be guided by the component that they feel we create the most value for will make value added suggestions I'm involved that over time, all with the objective of creating more value for their members and clients and therefore getting some benefit for for a signal as well over time. So we're delighted with it into another validation of our ability to work with others.
Minded partners to create mutual value.
Maybe a quick follow up then is how do we think about you guys effectively strengthening a competitor at the margin or kind of enabling their competition against you in the P.B.M. business.
We don't I. Appreciate the question, we think about it the exact opposite way, it's a dynamic marketplace and those who create the most valuable when those who tried to preserver regressed to control value will lose over time. So so big picture, we're more at that around a perpetual innovation cycle and kids.
You to drive more value and we like to do that with others and create mutual volume we have a long track record the legacy as I have that the legacy of signal has that.
Fueling more of it. So this is an opportunity to create more value for 28 million more customers.
Starting in 2020, and further improve affordability for improved quality from that standpoint, that's a great outcome. Each organization has to continue to innovate each organization has to deliver value and there's ample growth opportunity in front of both organizations going forward and world aligned to mutually identified beneficial opportunities for both organization.
To grow but the cornerstone is innovation and more value delivery. So we viewed as upside not downside.
Thank you for your question our next questions from Ricky go wash It was Morgan Stanley.
<unk>.
Yeah, Hi, good morning, as we start thinking about 2021 sounds even for the P.B.N. business.
Can you can have some some sense off the size of the Doctor <unk> and also any out what what's your sign if the opportunities you're seeing what's happened to market from the other P.B.N.'s and then my second question is on the M.A. gross guidance. Obviously you came in the got into January it was.
I had a few or initial goal that these near term goals to maybe you can share with us, but really resonated into market place.
What do you think drove the <unk> expectations I performance northeast.
Paralyzing earlier.
Ricky morning, and save it specific to the 2021 P.B.M. selling season or break up as you components health plan relationships corporate relationships as we sit or today. The the health time relationships that you would expect [noise] <unk> closure completion sooner given the size shape scope of those relationships the there.
Substantially completed through the renewal cycle, and we feel great about the outcome. So that would be the pitch I give you for 2021 continued shreds from that standpoint, the corporate.
Part of the relationships are are getting into full steam right. Now we think we would have another very good year from that standpoint, and our value proposition is resonating very well in the marketplace, specifically relative to the our value proposition and some of the new innovations that we put into the marketplace be at the page.
Insurance program be it helps connect 360 et cetera put a circle round it in aggregate thinking about the size of the book moving or up to move about from a normal standpoint.
Relates to Medicare advantage, please that you're calling out the fact that we're a bit ahead of the I'm. The market, we put down before remind you. We said 10 to 15 per cent on average over time, we said in a first year, we we expected to be at the lower end of the range as we're stepping into that New result, there's no one driver of what moved us to the 13% to 16% I would.
Well a bit higher retention. So what we had initially I'm, putting all our projection retentions, even higher we love that and as I noted in my prepared remark were sitting in an M.P.S. right now I'm just in excess of 70 across the aggregate book a business that we have and the vast majority of our customers in a in this space or invalidates arrangement. So.
I wouldn't call it anything else our existing platforms drove the majority of it are new markets contributed and we had a bit higher retention rate.
<unk>.
Thank you for your question. Our next question from Scott Five dollar Stevens.
<unk>.
I got good morning question, just on a hospital volumes and there's been a little bit of debate on whether those have been taken up or not over the course of the year in just interested from your perspective across both the commercial in in Medicare books. What you saw in terms of hospital volumes in the fourth quarter and how those stranded relative to your expectations.
It's got a <unk> overall, nothing that I would call. It is particularly notable we finished the year with a trend of about 4%, which is right in the middle of of our expectations.
So get nothing that I would call out as a as a particular changing trajectory and either the commercial or in the the government business.
Okay.
Thank you for your question. Our next question from Steven <unk> with Barclays. Your line is helping Sir.
Alright, great. Thank second morning, Dave and every picture taken the question. So I have to just somewhat interrelated questions on pharmacy, Yeah, I guess first or are you able to provide a little more color on your drunk pure chairman strategy going forward for the P.D. a mail order operations.
In some conjecture that you may be changing one or you're buying group relationships I'm not sure be able to comment on them or not and secondarily in pharmacy for the 3.5% to 4.5% a commercial medical costs trend that you're expecting for 2020.
Are you able to discuss whether this includes any incremental pharmacies savings and maybe a lower pharmacy trend this year versus prior years, which obviously maybe tied to to further integration. Thanks.
When he gets David I'll take the first question I'll ask her to take the second question. You know, we we don't get into individual actions were taking relative to our supply chain a procurement strategy I would just step back and say, we have a broad portfolio of tools solutions and capabilities and we're going to continue to dynamically manage those to get the best possible value for it.
This thing in perspective customers or clients going forward beyond that we're not going to comment on any individual actions were taken in the supply chain activity or classic coming in the trend yeah, Steve on the trying to be we've had pharmacy trend in that load in single digits range for for sometime now I mean that would be the expectation we'd have going into the 2020 as well just <unk>.
Oh gosh expressed scripts delivered in 2018, a 0.4% commercial trends, we publishing or expressed scripts a client or <unk> report later this month.
I expect to another really attractive result, there, but the big and nothing else I would call up.
Thank you for your question I last question will be from <unk>. Your line is helping.
Oh, yeah. He thinks we're squeezing in here you know maybe I can ask about the <unk> you know the chart here in your presentation and obviously over the last you know 10 years.
Then your medical costs on down.
Yeah, and you got here three and a half the point have percent if I'm not mistaken that's sort of same range gave last year I know you've talked about trying to get towards a C.P.I. anything in the short term that might be keeping you in this range.
Yeah.
Can you talk about what are the factors that you know you're seeing that going to that's going to help you to get a lower from here.
About the patient out thanks.
Well, it's good morning first to your point <unk>, we're delighted with the fact that we have seven years now and go into into a plus in terms of delivering the lowest medical costs trend in the industry and our clients and customers benefit from that immediately, especially given the profile of our business highly A.S. oriented from that standpoint, and will continue to dry.
Exceptional value for our clients and customers to appreciate your calling out the C.P.I. level goal and objective a couple of years ago, we put forth a strategic objective, which said we strive to deliver a level of medical costs trend approximating C.P.I. by 2021, we've you that is indicative of a sustainable trend that the <unk>.
Them in society could good tolerate and manage to go forward basis, and indicative of a responsible trend.
I would note that today, we feel like we're we're well on our way too that journey and I would underscore that with the fact that many of our clients today, we have established relationships with us and they're leveraging our most advance consumer engagement health improvement and value based relationships are benefiting from C.P.I. or better trained from that.
Endpoints. So there's a tool kit, we have that will continue to innovate and evolve around how do we get engagement in support of the consumer in their life journey, how do we evolve the precision in speed up the health improvement programs, especially as we continue to expand and the whole person health or Rena on it accelerated basis with our market, leading behavioral health and pharmacy capabilities.
And then just further deepening the activation other than value based care delivery platforms that we have in the marketplace in were already able to deliver as I indicated C.P.R. better from any of our clients and when it's easy for the expand that in 2020 and beyond appreciate your question.
<unk>.
Thank you for your question that one now turned conference over to David Carr, Danny for closing remarks.
Thank you to wrap up I'd like to highlight just some <unk> keep a few key points from today's conversation first to remind your signal deliberate exceptional full year 2000 in 19 finance results across our for growth platforms led by a health services and integrated medical segments, we exceeded the guidance, we'd already raise each quarter for 2000, the 19 for revenue earnings any P.M.
As well as for cash flow from operations looking forward or 2019 performance gives us considerable met them.
For attractive growth in 2020 and beyond.
In 2020, we will continue to drive significant growth in customer relationships revenue earnings E.P.S. as well as continued strong operating cash flow.
We're on track to complete or integration activities associated with her combination with express scripts over the next year.
We expect to close the sale of our group disability life business to New York life, and the third quarter.
We're on track to return a balance sheet to normalize levels in depth that and have be in a position to provide exceptional strategic financial flexibility moving forward just as we committed to when we announce or combination two years ago, and we're well positioned to drive attractive growth beyond 2020, and attracted deliver our 2020 when he P.S. target of 20 to 20.
$1 per share.
You for junior call today, and we look forward to a future compensations.
Ladies and gentlemen, just completed seen as far as Carter 2019 results reveal.
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