PART II ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations CIGNA CORPORATION -  2012 Form  10-K 35 Consolidated Results of Operations – Executive Summary viewed as a substitute for the most directly comparable GAAP measure, that is shareholders’ net income. The Company excludes special items because management does not believe they are representative of the Company’s underlying results of operations. The Company also excludes the results of the GMIB business because the changes in the fair value of GMIB assets and liabilities are volatile and unpredictable. See the Run-off Reinsurance section of the MD&A for additional information on GMIB. Because of this volatility, and since the GMIB business is in run-off, management does not believe that its results are meaningful in assessing underlying results of operations. The Company measures the financial results of its segments using ‘‘segment earnings (loss)’’, that is defined as shareholders’ net income (loss) before after-tax realized investment results. Adjusted income (loss) from operations is defined as consolidated segment earnings (loss) excluding special items (described in the table below) and the results of the GMIB business. Adjusted income (loss) from operations is another measure of profitability used by the Company’s management because it presents the underlying results of operations of the Company’s businesses and permits analysis of trends in underlying revenue, expenses and shareholders’ net income. This measure is not determined in accordance with accounting principles generally accepted in the United States (‘‘GAAP’’) and should not be Summarized below is a reconciliation between shareholders’ income from continuing operations and adjusted income from operations. (In millions) 2012 2011 2010 Premiums and fees $ 26,187 $ 18,966 $ 18,274 Net investment income 1,144 1,146 1,105 Mail order pharmacy revenues 1,623 1,447 1,420 Other revenues 121 244 254 Realized investment gains 44 62 75 Total revenues 29,119 21,865 21,128 Benefits and expenses 26,642 19,989 19,326 Income before income taxes 2,477 1,876 1,802 Income taxes 853 615 519 Net income 1,624 1,261 1,283 Less: net income attributable to redeemable noncontrolling interest 1 - - Less: net income attributable to other noncontrolling interest - 1 4 Shareholders’ net income 1,623 1,260 1,279 Less: realized investment gains, net of taxes 31 41 50 SEGMENT EARNINGS 1,592 1,219 1,229 Less: adjustments to reconcile to adjusted income from operations: Results of GMIB business (after-tax) 29 (135) (24) Special items (after-tax): Charge for realignment and efficiency plan (See Note 6 to the Consolidated Financial Statements) (50) - - Costs associated with acquisitions (See Note 3 to the Consolidated Financial Statements) (40) (31) - Resolution of a federal tax matter (See Note 20 to the Consolidated Financial Statements) - - 101 Loss on early extinguishment of debt (See Note 16 to the Consolidated Financial Statements) - - (39) Loss on reinsurance transaction (See Note 3 to the Consolidated Financial Statements) - - (20) Litigation Matters (See Note 24 to the Consolidated Financial Statements) (81) - - Completion of IRS examination (See Note 20 to the Consolidated Financial Statements) - 24 - ADJUSTED INCOME FROM OPERATIONS $ 1,734 $ 1,361 $ 1,211 Financial Summary