These adjustments reflect the elimination of revenues and expenses of the retirement benefits business sold.

Note: See Explanatory Notes to Pro Forma Balance Sheet adjustments for a discussion on the form of the sale agreement and future implications to the income statement.

These adjustments primarily reflect the elimination of the assets and liabilities of the retirement benefits business sold, adjusted to include accruals of estimated costs associated with the sale.

Since the transaction is primarily in the form of a reinsurance arrangement, CIGNA retains substantially all of the contractholder deposit fund liability of the sold retirement benefits business but records a reinsurance recoverable.

CIGNA received $2.1 billion in cash upon closing of the sale of its retirement benefits business.

The adjustment to the deferred tax asset primarily reflects the elimination of the deferred tax liability associated with unrealized appreciation on investments and an increase associated with the deferred gain on the sale.

Includes pre-tax deferred gain on the sale (see note (G) below) as well as current taxes payable as a result of the sale.

Reflects the elimination of unrealized appreciation on investments related to the retirement benefits business.

Reflects the estimated after-tax gain recognized at the time of the sale. Since this transaction is primarily in the form of a reinsurance arrangement, a significant portion of the gain on the sale is initially deferred and will be amortized at the rate that earnings from the sold business would have been expected to emerge.

Using December 31, 2003 data, the estimated gain on the sale is as follows (in millions):

The actual gain to be reported in continuing operations in CIGNA’s income statement for the second quarter ended June 30, 2004, is subject to change pending final determination of the net assets of the retirement benefits business, transaction costs and other adjustments.

In addition, the gain will be impacted by the adoption in the first quarter of 2004 of Statement of Position 03-01, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts.” CIGNA expects that the gain will increase by approximately $135 million after-tax

as a result of increases in liabilities resulting from this new pronouncement. CIGNA will also record a related cumulative effect adjustment in the income statement of approximately $135 million after-tax.

Furthermore, a portion of the reinsurance liabilities may be impacted by changes in the values of related invested assets as a result of derivatives accounting requirements. These changes, which may be material to net income and possibly shareholders' equity, may be recognized through 2006.

Because of its nonrecurring nature, the gain amount has not been presented in the pro forma income statement.

Exhibits and schedules to the Agreement and the schedule to Amendment No. 5 are omitted. The registrant agrees to furnish supplementally a copy of any exhibit or schedule to the Securities and Exchange Commission upon request.