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HUM · Humana

31 filings

10-K

HUM 10-K Annual Reports

Humana - 31 annual reports

Filing record · 2016–202610-K1110-Q328-K199

2025
Humana Annual Report, Year Ended Dec 31, 2025
Humana Inc. (NYSE: HUM), headquartered in Louisville, Kentucky, reported net income of $1.2 billion, or $9.84 per diluted common share, for 2025, compared with $1.2 billion, or $9.98 per diluted share, in 2024. Total revenues rose to $129.66 billion from $117.76 billion, driven by a $10.72 billion increase in insurance premiums to $122.83 billion. Results were significantly affected by put/call valuation adjustments on non-consolidating minority interests ($513 million), value creation initiative charges ($449 million), impairment charges ($253 million), a loss on sale of business ($67 million) and settlement of certain litigation expenses ($15 million). The company also finalized its exit from the Employer Group Commercial Medical Products business during 2025. Operating cash flow fell to $921 million from $2.97 billion, reflecting timing impacts including higher receivables tied to the Inflation Reduction Act. Cash and cash equivalents rose to $4.20 billion at year-end. Individual Medicare Advantage membership declined 7.3% to 5,249,300 as the company exited unprofitable plans and counties, while Medicare stand-alone PDP membership grew 7.6% to 2,462,600 and state-based contracts grew 10.7% to 1,615,600. The filing states that for 2026 the company anticipates net membership growth of approximately 25% in individual Medicare Advantage, approximately 1,000,000 in stand-alone PDP, and approximately 150,000 in group Medicare Advantage. Government programs represented approximately 93% of total premiums and services revenue, and 83% of revenue came from federal contracts. The filing discloses an ongoing lawsuit over 2025 Star Ratings, now on appeal at the Fifth Circuit, and a lawsuit over the Final RADV Rule, which the district court vacated in September 2025 and which the government has appealed. At year-end, benefits payable were $9.97 billion, the investment portfolio totaled $16.2 billion of debt securities with a weighted average rating of AA-, and the senior notes carried a BBB (S&P) and Baa2 (Moody's) rating. The company completed an acquisition of a primary care business for approximately $941 million on February 13, 2026, and the remaining repurchase authorization was $2.7 billion as of February 18, 2026.
Feb 19, 2026
2024
Humana Annual Report, Year Ended Dec 31, 2024
Humana Inc. reported net income attributable to Humana of $1.2 billion, or $9.98 per diluted common share, in 2024, down from $2.5 billion, or $20.00 per diluted common share, in 2023. Consolidated total revenues rose 10.7% to $117.8 billion, driven by Insurance premiums, which increased 10.7% to $112.1 billion on higher per member Medicare premiums and Medicare Advantage and state-based contracts membership growth. Income from operations fell 36.2% to $2.56 billion, as the benefit ratio rose to 89.8% from 87.3% on elevated Medicare Advantage and state-based contracts medical cost trends and lower favorable prior-period reserve development. The operating cost ratio improved to 11.8% from 12.5%. The company's Insurance segment income from operations fell 51.4% to $1.3 billion, while CenterWell income from operations fell 5.3% to $1.3 billion. Interest expense rose 33.9% to $660 million. Cash and cash equivalents decreased to $2.2 billion from $4.7 billion, and operating cash flow was $3.0 billion. Medicare Advantage membership grew 4.7% to 5,661,800 individual members, while stand-alone PDP membership fell 19.7%. The filing states that Humana expects individual Medicare Advantage membership to decline by approximately 550,000 members in 2025, and that about 25% of its Medicare Advantage members are enrolled in plans rated 4-star or higher for 2025, versus 94% based on 2024 Star Ratings. Humana has filed a lawsuit seeking to vacate the 2025 Star Ratings.
Feb 20, 2025
2023
Humana Annual Report, Year Ended Dec 31, 2023
Humana Inc. (NYSE: HUM), headquartered in Louisville, Kentucky, reported net income attributable to Humana of $2.5 billion, or $20.00 per diluted common share, for 2023, compared with $2.8 billion, or $22.08 per diluted share, in 2022. Total revenues rose 14.5% to $106.4 billion, driven by a 15.5% increase in premiums revenue to $101.3 billion, primarily from individual Medicare Advantage and state-based contracts membership growth. However, the benefit ratio rose 100 basis points to 87.3%, reflecting higher-than-anticipated Medicare Advantage utilization trends, particularly in the fourth quarter of 2023. The consolidated operating cost ratio improved 120 basis points to 12.5%, and favorable prior-period medical claims reserve development totaled $872 million. Approximately 84% of 2023 premiums and services revenue came from federal government contracts. The filing highlights several forward-looking pressures. CMS's preliminary 2025 Medicare Advantage Advance Notice, issued January 31, 2024, is estimated by the company to result in a benchmark funding change approximately 160 basis points worse than its expectation of a flat rate environment. The company is also exiting its Employer Group Commercial Medical Products business over 18 to 24 months, and it expects individual Medicare Advantage membership to grow by approximately 100,000 members in 2024 while stand-alone PDP membership declines by approximately 650,000. Humana is contesting the CMS Final RADV Rule, which eliminates the Fee-For-Service Adjuster, through a lawsuit filed September 1, 2023. Management also expects Chief Executive Officer Bruce D. Broussard to step down in the latter half of 2024, with James A. Rechtin to become President and Chief Executive Officer at that time. Balance sheet and cash flow metrics remained solid. Net cash provided by operating activities was $4.0 billion in 2023, compared with $4.6 billion in 2022. The company repurchased $1.6 billion of common stock and paid $431 million in dividends in 2023. Investment securities totaled $17.0 billion, and the company's investment-grade credit rating was BBB+ by S&P and Baa2 by Moody's at December 31, 2023. The Board replaced the prior repurchase authorization with a new authorization of up to $3 billion effective February 16, 2024.
Feb 15, 2024
2022
Humana Annual Report, Year Ended Dec 31, 2022
Humana Inc. reported 2022 net income of $2.8 billion, or $22.08 per diluted common share, versus $2.9 billion, or $22.67, in 2021. Total revenues rose to $92.87 billion from $83.06 billion, driven by premiums revenue of $87.7 billion, up 9.9%, mainly from individual Medicare Advantage and state-based contracts membership growth. The benefit ratio improved to 86.3% from 86.7%, while the operating cost ratio rose to 13.7% from 12.2%, largely reflecting the consolidation of Kindred at Home and $473 million of value creation initiative charges. Individual Medicare Advantage membership reached 4,565,600 at December 31, 2022, and the company projects at least 625,000 net membership growth in that segment for 2023, while expecting declines in standalone PDP (approximately 800,000) and group commercial medical (approximately 300,000). Humana realigned into two segments, Insurance and CenterWell, in December 2022. The company completed the sale of a 60% interest in KAH Hospice to Clayton, Dubilier & Rice for cash proceeds of approximately $2.7 billion, recognizing a pre-tax gain of $237 million. Cash and cash equivalents rose to $5.06 billion, and net cash from operating activities was $4.59 billion. The Board replaced the prior $3 billion repurchase authorization with a new $3 billion program on February 15, 2023, and the company repurchased $2.10 billion of common shares during 2022. Key risks highlighted include the CMS Advance Notice for 2024, which estimates a 2.27% decrease in sector benchmark funding, and the Final RADV Rule published January 30, 2023, which eliminates the FFS Adjuster. Humana states it is considering its legal options regarding the rule. Government programs accounted for approximately 88% of total premiums and services revenue, and a qui tam suit concerning Part D actuarial equivalence remains pending.
Feb 16, 2023
2021
Humana Annual Report, Year Ended Dec 31, 2021
Humana Inc., headquartered in Louisville, Kentucky, reported 2021 net income of $2.9 billion, or $22.67 per diluted common share, down from $3.4 billion, or $25.31 per diluted share, in 2020. Total revenues rose to $83.06 billion from $77.16 billion, driven by premiums of $79.82 billion and services revenue of $3.06 billion, the latter reflecting consolidation of Kindred at Home. The company stated that the 2021 comparison was significantly affected by a $1.13 billion gain on its Kindred at Home equity method investment, put/call valuation adjustments, changes in the fair value of publicly-traded equity securities, and acquisition-related costs, and that COVID-19 impacts lowered operating results in 2021 relative to 2020. The benefit ratio rose to 86.7% from 83.1%, and the operating cost ratio fell to 12.2% from 13.2%. Income before income taxes was $3.35 billion, and the effective tax rate was 14.2% versus 28.0% in 2020. The company completed its acquisition of the remaining 60% interest in Kindred at Home on August 17, 2021, for an enterprise value of $8.2 billion, paying an approximate $5.8 billion transaction price net of its existing stake. Cash and cash equivalents ended the year at $3.39 billion, and operating cash flow fell to $2.26 billion from $5.64 billion, which the filing attributes primarily to working capital changes and lower earnings. Long-term debt rose to $10.54 billion from $6.06 billion, and total debt including short-term obligations reached roughly $12.5 billion after the acquisition financing. Management said it anticipates certain charges in 2022 tied to cost-saving and productivity initiatives, and it reported that CMS's preliminary 2023 Medicare Advantage Advance Notice estimated a 4.48% average benchmark increase. The filing shows concentration in government programs, with approximately 83% of premiums and services revenue from federal government contracts in 2021. Individual Medicare Advantage membership grew to 4,409,100 members, while stand-alone PDP membership declined to 3,606,200. The company also disclosed ongoing risk-adjustment audits (RADV), a Department of Justice information request regarding Medicare Part C risk adjustment practices, and a qui tam suit concerning Basic PDP actuarial equivalence.
Feb 17, 2022
2020
Humana Annual Report, Year Ended Dec 31, 2020
Humana Inc. (NYSE: HUM), headquartered in Louisville, Kentucky, reported net income of $3.37 billion for 2020, up from $2.71 billion in 2019, with diluted earnings per share of $25.31 versus $20.10. Total revenues rose to $77.16 billion from $64.89 billion, driven by a 17.9% increase in premiums to $74.19 billion. The company states that 83% of its 2020 premiums and services revenue came from contracts with the federal government, and its Retail segment (Medicare Advantage, PDP and state-based Medicaid) produced $3.02 billion in segment earnings. Results were materially affected by one-time items: a $745 million change in fair value of publicly-traded equity securities (largely from the Oak Street Health IPO), $578 million of received commercial risk corridor receivables, and $(103) million of put/call valuation adjustments. The filing also notes that COVID-19 significantly disrupted utilization, with non-COVID utilization falling in late 2020 and COVID-related treatment and testing costs rising. The benefit ratio improved to 83.1% from 85.6%, while the operating cost ratio rose to 13.2% from 11.5%, reflecting the reinstated non-deductible health insurance industry fee of $1.18 billion paid in 2020 and COVID-related administrative costs. Cash flow from operations was $5.64 billion, and the company repurchased $1.82 billion of common stock in 2020. In February 2021, the Board replaced the prior $3 billion repurchase authorization with a new $3 billion authorization expiring February 18, 2024, and declared a quarterly dividend of $0.70 per share. Management expects Medicare Advantage membership to increase by 425,000 to 475,000 in 2021 and stand-alone PDP membership to decline by approximately 300,000, and it flags that the 2022 Medicare Advantage Final Rate Notice implies a 3.7% rate increase for non-ESRD business. Key risks highlighted in the filing include heavy dependence on government programs, Medicare risk-adjustment and RADV audit exposure, Medicare star ratings, the transition from RAPS to EDS risk-score data, pending U.S. Department of Justice and qui tam matters related to risk adjustment, and continued uncertainty from COVID-19.
Feb 18, 2021
2019
Humana Annual Report, Year Ended Dec 31, 2019
Humana Inc. (Louisville, Kentucky, NYSE: HUM) reported net income of $2.7 billion, or $20.10 per diluted common share, for 2019, compared with $1.7 billion, or $12.16 per diluted share, in 2018. Total revenues rose to $64.89 billion from $56.91 billion, driven primarily by the Retail segment. Premiums were $62.95 billion, up from $54.94 billion, with Individual Medicare Advantage membership growing to 3,587,200 members at December 31, 2019. The benefit ratio increased to 85.6% from 83.5%, mainly due to the suspension of the health insurance industry fee in 2019 and lower favorable prior-period reserve development, while the operating cost ratio improved to 11.5% from 13.3%. Retail segment earnings were $2.24 billion, up from $1.73 billion, while Group and Specialty segment earnings fell to $28 million from $361 million. Cash flow from operations was $5.28 billion, compared with $2.17 billion in 2018. Cash and cash equivalents rose to $4.05 billion, and debt declined to $5.67 billion from $6.07 billion. The company repurchased $1.07 billion of common stock in 2019 and had approximately $2.0 billion of remaining repurchase authorization as of February 19, 2020. The Board declared a quarterly dividend of $0.625 per share in February 2020, up from $0.55 per share. Significant 2020 developments disclosed include the planned acquisition of Enclara Healthcare for approximately $707 million, a partnership with Welsh, Carson, Anderson & Stowe involving a commitment of approximately $600 million, and the resumption of the health insurance industry fee for calendar year 2020. The filing highlights concentration risk: approximately 82% of total premiums and services revenue came from federal government contracts in 2019, including 15% from individual Medicare Advantage contracts in Florida. Key risks include CMS risk-adjustment and RADV audit methodology, qui tam litigation, and the phase-in of risk score calculations from RAPS to EDS, which moves from 25% in 2019 to 50% in 2020.
Feb 20, 2020
2018
Humana Annual Report, Year Ended Dec 31, 2018
Humana Inc., headquartered in Louisville, Kentucky, reported 2018 net income of $1.68 billion, or $12.16 per diluted common share, down from $2.45 billion, or $16.81 per diluted share, in 2017. Total revenues rose to $56.91 billion from $53.77 billion, with premiums of $54.94 billion. The decline was driven by a $786 million pretax loss on the sale of KMG America, the absence of the 2017 $936 million net merger termination fee benefit, and the reinstatement of the non-deductible health insurance industry fee, which the filing says was $1.04 billion paid in 2018. Pretax income fell to $2.06 billion from $4.02 billion, and the effective tax rate dropped to 18.9% from 39.1%. The company's revenue base is concentrated in government programs. The filing states that 81% of 2018 premiums and services revenue came from federal government contracts, including 15% from individual Medicare Advantage contracts in Florida covering about 636,800 members. Individual Medicare Advantage membership reached 3,064,000 at year-end, and Retail segment premiums rose 7.8% to $48.1 billion. Management highlighted acquisitions of MCCI and Family Physicians Group and a 40% interest in Kindred at Home for about $1.1 billion, as well as an investment in value-based care arrangements, with 67% of individual Medicare Advantage members in value-based relationships. Capital returns were significant. The company repurchased $1.09 billion of shares in 2018 under a $3.0 billion authorization, paid dividends of $2.00 per share declared for the year, and increased its quarterly dividend to $0.50 with a $0.55 quarterly dividend declared in February 2019. Cash flow from operations fell to $2.17 billion from $4.05 billion, and debt rose to $6.07 billion. The filing also discloses pending risks, including a proposed CMS rule on RADV audit extrapolation, a court decision vacating CMS's Overpayment Rule, a pending Department of Justice information request on Medicare risk adjustment, and an $611 million risk corridor claim against the federal government.
Feb 21, 2019
2017
Humana Annual Report, Year Ended Dec 31, 2017
Humana Inc., headquartered in Louisville, Kentucky, is a health and well-being company with approximately 14 million medical members and 7 million specialty members at December 31, 2017. During 2017, 79% of total premiums and services revenue came from contracts with the federal government, including 15% from individual Medicare Advantage contracts with CMS in Florida. Reported 2017 results were strongly boosted by a $936 million net gain tied to the terminated Aetna Merger Agreement, which was mainly a $1 billion breakup fee. Net income rose to $2.45 billion, or $16.81 per diluted share, compared with $614 million, or $4.07 per diluted share, in 2016. Income before income taxes was $4.02 billion, versus $1.55 billion in 2016. The filing also cites a 2017 suspension of the health insurer fee and the Tax Reform Law, which raised the 2017 tax provision by about $133 million and is expected to lower the 2018 effective tax rate to approximately 32.5% to 33.5%. Underlying operations were mixed. Retail segment pretax income rose $288 million, or 17.0%, to $1.98 billion, driven by Medicare Advantage. Healthcare Services pretax income fell $129 million, or 11.8%, to $967 million, and the Individual Commercial segment swung to $193 million of pretax income from a $869 million loss, after the company exited that business effective January 1, 2018. Operating cash flow was $4.05 billion, up from $1.94 billion, largely reflecting the receipt of the merger termination fee. Humana repurchased 12.99 million shares for $3.05 billion in 2017, and a new authorization for up to $3.0 billion of repurchases was approved on December 14, 2017. Pending transactions include the sale of KMG America, expected to produce a net loss of about $365 million, and the acquisition of a 40% minority interest in Kindred at Home for about $800 million, expected to close in summer 2018. The filing highlights concentration risk and regulatory exposure. Medicare products represented about 78% of total premiums and services revenue, and the company is subject to CMS risk-adjustment audits (RADV), qui tam litigation, and a pending $611 million claim against the federal government over risk corridor payments. Management also noted that 2018 Medicare Advantage membership growth is expected to be 180,000 to 200,000 members, while Medicare stand-alone PDP membership is expected to decline by 280,000 to 320,000.
Feb 16, 2018
2016
Humana Annual Report, Year Ended Dec 31, 2016
Humana Inc. reported net income of $614 million, or $4.07 per diluted common share, for 2016, down from $1.3 billion, or $8.44 per diluted share, in 2015. Results were weighed by a $583 million write-off of commercial risk corridor receivables recorded in the fourth quarter, $505 million of reserve strengthening for the closed block of long-term care insurance policies, and $104 million of transaction and integration planning costs tied to the Aetna merger. Total revenues were $54.38 billion and stockholders' equity was $10.69 billion at December 31, 2016. Cash flow from operations rose to $1.94 billion from $868 million. The central event in the filing is the termination of the Aetna merger. A federal court granted a permanent injunction on January 23, 2017, and on February 14, 2017 Humana and Aetna agreed to mutually terminate the Merger Agreement; Humana is entitled to a $1 billion breakup fee. The Board also approved a new share repurchase authorization of up to $2.25 billion expiring December 31, 2017, under which Humana expects to complete a $1.5 billion accelerated share repurchase in the first quarter of 2017. The quarterly dividend was raised to $0.40 per share from $0.29. On the business side, Humana is exiting its individual commercial medical business effective January 1, 2018, citing an unbalanced risk pool after the 2017 open enrollment period. Medicare is the dominant revenue source, with approximately 75% of total premiums and services revenue derived from federal government contracts. Medicare Advantage Star ratings fell for the 2018 bonus year, with approximately 37% of July 31, 2016 membership in 4-Star plans or higher versus approximately 78% a year earlier, and Humana has filed for reconsideration. The company also expects a one-time suspension of the health insurer fee in 2017 to reduce operating costs and lower its effective tax rate to approximately 36% to 37%.
Feb 17, 2017
2015
Humana Annual Report, Year Ended Dec 31, 2015
Humana Inc., headquartered in Louisville, Kentucky, reported 2015 net income of $1.28 billion, or $8.44 per diluted common share, compared with $1.15 billion, or $7.36 per diluted share, in 2014. Results include a $270 million pre-tax gain from the June 1, 2015 sale of Concentra Inc. for approximately $1,055 million in cash, and a $176 million premium deficiency reserve for individual commercial medical products compliant with the Health Care Reform Law for the 2016 coverage year. Total revenues were $54.29 billion, up from $48.50 billion, and premiums revenue rose to $52.41 billion. The benefit ratio increased to 84.5% from 83.0%, while the operating cost ratio declined to 13.6% from 15.9%. Approximately 73% of 2015 premiums and services revenue came from federal government contracts, and Medicare products accounted for approximately 72%. Humana entered a Merger Agreement with Aetna Inc. on July 2, 2015, under which each Humana share converts into 0.8375 of an Aetna share plus $125 in cash, a transaction estimated at approximately $37 billion including assumed Humana debt. Stockholders approved the merger on October 19, 2015, and the merger is expected to close in the second half of 2016. Under the agreement, Humana suspended its share repurchase program and capped its quarterly dividend at $0.29 per share. Cash flow from operations fell to $868 million from $1.62 billion, reflecting working capital timing and growth in receivables under the 3Rs risk-sharing programs of the Health Care Reform Law. At year-end 2015 Humana reported 14.2 million medical members, including 2,753,400 individual Medicare Advantage members, and stockholders' equity of $10.35 billion. Total debt was $3.82 billion in long-term debt plus $299 million of short-term borrowings. The company cited an investment-grade credit rating of BBB+ from S&P and Baa3 from Moody's.
Feb 18, 2016
2014
Humana Annual Report, Year Ended Dec 31, 2014
Humana Inc. reported net income of $1.147 billion, or $7.36 per diluted common share, for 2014, compared with $1.231 billion, or $7.73 per diluted share, in 2013. Total revenues rose to $48.50 billion from $41.31 billion, driven mainly by premiums, which increased $7.13 billion, or 18.4%, to $45.96 billion. Retail segment premiums grew 24.8%, reflecting membership growth in individual Medicare Advantage, individual commercial medical and state-based Medicaid. The benefit ratio improved to 83.0% from 83.9%, while the operating cost ratio rose to 15.9% from 15.5%, as the non-deductible health insurance industry fee and other fees mandated by the Health Care Reform Law raised costs. The effective tax rate increased to 47.2% from 35.9%, which the filing attributes largely to the non-deductible industry fee. Segment results were mixed. Retail pretax income fell 14.4% to $1.10 billion, reflecting investment spending for health care exchanges and state-based contracts and higher specialty prescription drug costs tied to a new Hepatitis C treatment. Employer Group pretax income declined 10.3% to $314 million, and Healthcare Services pretax income rose 41.8% to $739 million. The filing states that 73% of 2014 premiums and services revenue came from federal government contracts, including 15% from Florida Medicare Advantage contracts with CMS. Management said the 2015 health insurance industry fee is expected to rise 41% and projected 2015 Medicare Advantage funding cuts of approximately 2%. Balance sheet and capital activity: total assets were $23.47 billion and long-term debt rose to $3.83 billion after the issuance of $1.75 billion face value of senior notes in September 2014, partly used to redeem a $500 million 6.45% note. Stockholders' equity was $9.65 billion. Management repurchased 5.7 million shares for $730 million in open market transactions in 2014, excluding a $100 million accelerated share repurchase holdback, and the remaining authorization was about $1.37 billion as of February 18, 2015. The quarterly dividend was raised to $0.28 per share.
Feb 18, 2015
2013
Humana Annual Report, Year Ended Dec 31, 2013
Humana Inc. (NYSE: HUM), headquartered in Louisville, Kentucky, reported full-year 2013 results in its 10-K filed February 19, 2014. Total revenues were $41.3 billion, up from $39.1 billion in 2012, and net income was $1.23 billion, or $7.73 per diluted share, compared with $1.22 billion, or $7.47 per diluted share, in 2012. Results were weighed down by $243 million of benefits expense (about $0.99 per diluted share) for reserve strengthening on the non-strategic closed block of long-term care policies, while favorable prior-year medical claims reserve development of $474 million helped the benefit ratio. The consolidated benefit ratio was 83.9% and the operating cost ratio was 15.5%. Approximately 75% of premiums and services revenue came from federal government contracts, including about 15% from Medicare Advantage contracts with CMS in Florida. The filing signals a sharp change in 2014 earnings dynamics. The non-deductible health insurance industry fee under the Health Care Reform Law is expected to raise the effective tax rate to approximately 45% to 47%, and the company expects operating cash flow to decline from 2013 as it builds a receivable tied to the risk adjustment, risk corridor and reinsurance provisions. Management also expects Medicare Advantage rate reductions of 6% to 7% for 2015, based on its estimate. Membership grew, with approximately 12.0 million medical members and 7.8 million specialty members at year end, and January 2014 individual Medicare Advantage membership rose about 12% from December 31, 2013. Balance sheet and capital position remained strong. Stockholders' equity was $9.3 billion, cash and investments totaled $10.9 billion, and long-term debt was $2.6 billion. The company repurchased 5.8 million shares for $502 million in 2013 and paid $168 million in dividends. Its quarterly dividend was raised to $0.27 per share, and about $580 million remained under its share repurchase authorization as of February 1, 2014.
Feb 19, 2014
2012-A2
Humana Annual Report (Amendment), Year Ended Dec 31, 2012
This filing is Humana Inc.'s Part IV, Item 15 section of its Annual Report on Form 10-K, which lists the financial statements, schedules, and exhibits included with or incorporated by reference into the report. It states that the financial statements are submitted as Item 8 of Part II, and that Schedule I (Parent Company Financial Information) and Schedule II (Valuation and Qualifying Accounts) are included, with all other schedules omitted as not applicable. The document itself contains no operating results, revenue, earnings, or balance sheet figures. The exhibit index is the most substantive content for investors. It covers Humana's charter and by-laws, multiple indentures and supplemental indentures governing its debt (including the December 10, 2012 Fifth and Sixth Supplemental Indentures with The Bank of New York Mellon Trust Company, N.A.), and a Five-Year Credit Agreement dated November 22, 2011. It also lists a large set of executive compensation and stock incentive plans, change-of-control and employment agreements with executives including Michael B. McCallister and Bruce D. Broussard, and Medicare Advantage and Medicare Prescription Drug Plan agreements and addenda with CMS. The filing states that there are no instruments defining holders' rights for long-term debt exceeding 10 percent of total assets, and that other long-term indebtedness is described in Note 11 to the consolidated financial statements. Several exhibits are marked as previously filed, including the Computation of ratio of earnings to fixed charges, the List of subsidiaries, and the PricewaterhouseCoopers LLP consent, which the filing says were filed February 22, 2013 with the Form 10-K for fiscal 2012. The filing states that the CEO and CFO certifications (Exhibits 31.1 and 31.2) and a restricted stock unit agreement (Exhibit 10(t)) are submitted electronically with this report, and that confidential portions of Exhibit 10(mm), the Department of Defense agreement with Humana Military Healthcare Services, Inc., have been omitted under a confidential treatment request.
Jan 30, 2014
2012-A
Humana Annual Report (Amendment), Year Ended Dec 31, 2012
This Part IV, Item 15 section of Humana Inc.'s annual report, filed April 12, 2013, lists the financial statements, schedules, and exhibits for the report. It states that the financial statements are submitted as Item 8 of Part II, and it includes Schedule I (Parent Company Financial Information) and Schedule II (Valuation and Qualifying Accounts). All other schedules are omitted as not applicable. It also states that the XBRL exhibits covering the consolidated balance sheets, income statements, comprehensive income, cash flows, and notes for fiscal years 2010 through 2012 were previously filed on February 22, 2013, with the Form 10-K for the fiscal year ended December 31, 2012. The exhibit index covers Humana's debt and governing documents, including its Delaware certificate of incorporation, by-laws, and a series of indentures and supplemental indentures with The Bank of New York trustees, including the Fifth and Sixth Supplemental Indentures dated December 10, 2012. It also lists a five-year credit agreement dated November 22, 2011, and Medicare-related contracts with the Centers for Medicare & Medicaid Services (CMS), including coordinated care plan and private fee-for-service agreements. A March 3, 2011 agreement between the U.S. Department of Defense and Humana Military Healthcare Services, Inc., a wholly owned subsidiary, is listed, with confidential portions omitted under a request for confidential treatment. A large share of the exhibits are compensatory plans and management contracts, including stock incentive plans, option and restricted stock agreements, deferred compensation plans, severance and change-of-control arrangements, and employment agreements with executives such as Michael B. McCallister and Bruce D. Broussard. Certifications under Rules 13a-14(a) and 15d-14(a) for the CEO and CFO (Exhibits 31.1 and 31.2) are submitted electronically with this report.
Apr 12, 2013
2012
Humana Annual Report, Year Ended Dec 31, 2012
Humana Inc. (NYSE: HUM), headquartered in Louisville, Kentucky, reported net income of $1.2 billion, or $7.47 per diluted common share, for 2012, down from $1.4 billion, or $8.46 per diluted share, in 2011. Total revenues rose 6.2% to $39.1 billion, with premiums revenue of $37.0 billion. The decline was driven mainly by a higher consolidated benefit ratio of 83.7% (up 160 basis points from 82.1%), primarily from the Retail segment, where the benefit ratio rose to 84.1% from 81.2% on individual Medicare Advantage products. Retail segment pretax income fell 26.8% to $1.2 billion, while the Health and Well-Being Services segment pretax income rose 37.7% to $486 million. As of December 31, 2012, Humana had approximately 12.1 million medical members and 8.1 million specialty members, and 75% of premiums and services revenue came from federal government contracts. Individual Medicare Advantage membership grew 17.5% to 1,927,600, and the Metropolitan Health Networks acquisition for a transaction value of $851 million closed on December 21, 2012. The filing notes that CMS's February 15, 2013 Advance Notice indicates a mid-single-digit decline in 2014 Medicare Advantage benchmark payment rates, and that Health Insurance Reform Legislation will add material new fees and taxes beginning in 2014. Balance sheet and capital position: total assets were $19.98 billion, debt rose to $2.61 billion after $1 billion of senior notes were issued in December 2012, and stockholders' equity was $8.85 billion. The company repurchased $460 million of shares during 2012 and paid dividends of $1.03 per share. The Board declared a $0.26 quarterly dividend in October 2012, and $640 million remained under the share repurchase authorization as of February 1, 2013.
Feb 22, 2013
2011
Humana Annual Report, Year Ended Dec 31, 2011
Humana Inc. (NYSE: HUM), headquartered in Louisville, Kentucky, reported full-year 2011 net income of $1.42 billion, or $8.46 per diluted share, up from $1.10 billion, or $6.47 per diluted share, in 2010. Total revenues rose 9.6% to $36.8 billion, driven mainly by Retail segment premiums, which grew 12.3% to $21.4 billion on higher individual Medicare Advantage and stand-alone PDP membership. Year-end medical membership was 11.2 million, and 76% of premiums and services revenue came from federal government contracts, including Medicare Advantage in Florida (16%) and TRICARE military services (10%). The benefit ratio improved to 82.1% from 82.9%, while the operating cost ratio rose to 14.8% from 13.2%, reflecting the Concentra acquisition and higher Medicare costs. Favorable prior-period reserve development of about $205 million benefited 2011 results. The company initiated a quarterly cash dividend of $0.25 per share in 2011 and repurchased $492 million of shares during the year, with $561 million remaining under its $1 billion authorization as of February 6, 2012. Cash and investments totaled $10.8 billion and stockholders' equity was $8.06 billion at year-end. Management flags material risks, including a CMS Risk-Adjustment Data Validation (RADV) audit methodology it considers flawed, the Health Insurance Reform Legislation, the expected decline in TRICARE revenue when the new South Region contract takes effect on April 1, 2012, and an ongoing internal investigation of Florida subsidiary operations that has been self-reported to CMS and the Department of Justice.
Feb 24, 2012
2010
Humana Annual Report, Year Ended Dec 31, 2010
Humana Inc. (NYSE: HUM), headquartered in Louisville, Kentucky, reported 2010 total revenues of $33.87 billion, net income of $1.10 billion, and diluted earnings per share of $6.47, compared with net income of $1.04 billion and diluted EPS of $6.15 in 2009. Premiums rose 9.3% to $32.7 billion, driven by the Government segment, where Medicare Advantage premium revenues grew 17.5% to $19.3 billion. Government segment pretax income increased 10.0% to $1.65 billion, while Commercial segment pretax income fell 2.5% to $101.6 million. Results were held back by a $147.5 million write-down of deferred acquisition costs on individual major medical policies and $138.9 million of reserve strengthening on a closed block of long-term care policies, partly offset by about $231.2 million of favorable prior-year reserve releases not in the ordinary course of business. The company's revenue base is highly concentrated in government programs. Government contracts generated 76% of premiums and administrative services fees in 2010, and Medicare accounted for roughly 65%. The filing flags material risks tied to the CMS Medicare Advantage risk-adjustment audit methodology, the TRICARE South Region contract (extended through March 31, 2011 with Option Period IX exercised for April 2011 to March 2012, and a pending third-generation award protest), and the Health Insurance Reform Legislation. The company also notes that a goodwill impairment in military services could occur in the second half of 2011 if the third-generation TRICARE contract is not awarded. Balance sheet and cash flow were solid. Operating cash flow rose to $2.24 billion from $1.42 billion, cash and investments totaled $10.05 billion, and stockholders' equity reached $6.92 billion. Humana acquired Concentra Inc. on December 21, 2010 for $804.7 million in cash. The company paid no cash dividends and repurchased $100.0 million of common stock in 2010.
Feb 18, 2011
2009
Humana Annual Report, Year Ended Dec 31, 2009
Humana Inc., headquartered in Louisville, Kentucky, reported 2009 total revenues of $30.96 billion and net income of $1,039.7 million, or $6.15 per diluted common share, compared with $647.2 million, or $3.83 per diluted share, in 2008. The year-over-year increase primarily reflects higher operating earnings in the Government segment, driven by significantly lower prescription drug claims expenses associated with Medicare stand-alone PDP products. Government segment income before income taxes rose to $1,497.6 million from $785.2 million, while Commercial segment income before income taxes fell to $104.2 million from $207.6 million. Premiums and ASO fees of $30.4 billion were 75.3% Government, with Medicare Advantage representing 54.0% of the total. Medical membership was 10,283,300 at December 31, 2009, down 11.0% from 11,559,100 a year earlier, mainly from declines in Medicare stand-alone PDP membership (down 37.1%) and fully-insured Commercial membership (down 7.0%). Medicare Advantage membership grew 5.1% to 1,508,500. The company expects Medicare Advantage membership to rise by 240,000 to 260,000 in 2010, while expecting Commercial medical membership to decline by 160,000 to 180,000. Cash and investments totaled $9.1 billion, and long-term debt was $1,678.2 million, or 22.5% of total capitalization, down from 30.3% a year earlier. The filing highlights several risks: the TRICARE South Region contract, which accounted for about 97% of military services premiums and ASO fees, was extended through March 31, 2011 by option exercise, but Humana lost the third-generation TRICARE award and the GAO protest outcome remains unresolved; the company may take a goodwill impairment in the second half of 2010 if the contract is not further extended; CMS Medicare Advantage audits could lead to retroactive payment adjustments; and the pending federal health reform legislation could lower Medicare payment rates and add non-deductible insurer taxes. The company has not paid cash dividends since February 1993, and its board renewed a $250 million share repurchase authorization through December 31, 2011, with no shares repurchased under it as of the filing.
Feb 19, 2010
2008
Humana Annual Report, Year Ended Dec 31, 2008
Humana Inc. (NYSE: HUM), headquartered in Louisville, Kentucky, reported 2008 total revenues of $28.9 billion and net income of $647.2 million, or $3.83 per diluted share, down from $833.7 million, or $4.91 per diluted share, in 2007. The decline primarily reflected lower operating earnings in the Government segment from higher expenses tied to its Medicare stand-alone prescription drug plan (PDP) products, along with lower net investment income from $103.1 million of other-than-temporary impairments, including $68.7 million related to Lehman Brothers. Premium revenues rose 14.9% to $28.1 billion, and the consolidated benefit ratio increased to 84.5% from 83.0%, while the SG&A expense ratio improved to 13.7% from 13.9%. The company's revenue base is concentrated in government programs: 72% of 2008 premiums and administrative services fees came from federal government contracts, including 16% from its CMS Medicare contracts in Florida and 12% from military (TRICARE) services. Medicare Advantage membership grew 25.6% to 1,435,900 members, and total medical membership reached 11.6 million. Management expects the consolidated SG&A expense ratio to be 13% to 14% in 2009 and the 2009 effective tax rate to be 34% to 35%. Balance sheet and cash flow measures show cash and investments of $7.19 billion, long-term debt of $1.94 billion, and stockholders' equity of $4.46 billion at December 31, 2008. Operating cash flow fell to $982.3 million from $1,224.3 million. The company has not paid cash dividends since February 1993, and it did not repurchase shares under its July 2008 authorization as of year-end because of market volatility. The TRICARE South Region contract was extended for a sixth option period through March 31, 2010, and the company's bid for a new nationwide TRICARE contract remains pending.
Feb 20, 2009
2007
Humana Annual Report, Year Ended Dec 31, 2007
Humana Inc., headquartered in Louisville, Kentucky, reported 2007 total revenues of $25.29 billion and net income of $833.7 million, or $4.91 per diluted share, up from $487.4 million, or $2.90 per diluted share, in 2006. Premium revenues rose 17.9% to $24.4 billion, driven mainly by the Government segment, where Medicare Advantage membership grew to 1,143,000 at December 31, 2007, and total Government premium revenues increased 24.8% to $18.2 billion. Commercial segment premium revenues rose 1.3% to $6.2 billion, supported by specialty products acquired through CompBenefits and KMG America. The consolidated benefits ratio improved to 83.0% from 84.0%, and the SG&A expense ratio improved to 13.9% from 14.3%. The company relies heavily on government contracts, which accounted for 71% of premiums and administrative services fees in 2007. Key exposures include the Florida CMS Medicare contracts (about 17% of premiums and fees), the TRICARE South Region military contract (about 12%), and Medicare Part D risk corridor settlements. Operating cash flow fell to $1.22 billion from $1.69 billion, largely because of a $725.5 million risk corridor payment to CMS for the 2006 contract year. Cash and investments totaled $6.69 billion, and debt rose to $1.69 billion after 2007 acquisitions of CompBenefits ($369.1 million) and KMG America ($156.3 million cash plus $36.1 million of assumed debt). Humana has not paid cash dividends since February 1993 and plans to retain earnings. On February 21, 2008, the Board authorized up to $150 million in share repurchases, excluding shares repurchased for employee stock plans. The company expects a 2008 SG&A expense ratio of 13.5% to 14.0% and an effective tax rate of 35.5% to 36.0%, and it anticipates Medicare Advantage membership growth of 200,000 to 250,000 members during 2008.
Feb 25, 2008
2006
Humana Annual Report, Year Ended Dec 31, 2006
Humana Inc., headquartered in Louisville, Kentucky, reported 2006 total revenues of $21.4 billion and net income of $487.4 million, or $2.90 per diluted common share, up from $296.7 million, or $1.79 per diluted share, in 2005. The company's growth was driven by its Government segment, where Medicare Advantage membership rose to 1,002,600 at December 31, 2006, up 79.7% from 557,800, and its new Medicare stand-alone prescription drug plans added 3,536,600 members. Government segment premium revenues reached $14.6 billion in 2006, and the Government share of total premiums and ASO fees was 67% for 2006, compared with 51% for 2005. Medical expense ratio (MER) rose to 84.0% from 83.2%, with the Government segment MER at 85.0% reflecting the start-up of the stand-alone PDP offerings, including a Complete plan MER of 116% that the company says was redesigned for 2007. The balance sheet and cash flow position strengthened. Cash from operations was $1,686.7 million, up from $610.1 million, helped by $738.7 million in estimated net amounts owed to CMS under Part D risk corridor provisions, which the company expects to settle in mid-2007. Total debt increased to $1,269.1 million, reflecting a $500 million 6.45% senior note issuance in May 2006 and a $450 million credit agreement balance at year-end. Stockholders' equity was $3,053.9 million. The company stated that it does not currently intend to pay dividends and plans to retain earnings for growth. Key risks highlighted in the filing include the Government segment's dependence on federal contracts, particularly CMS Medicare contracts in Florida (about 17% of premiums and ASO fees) and the TRICARE South Region contract (about 12%). Other risks include the phase-in of CMS risk adjustment payments to 100% in 2007, the phase-out of budget neutrality adjustments by 2011, and a Puerto Rico Medicaid contract that has been operating under expired terms. The company expects its 2007 effective tax rate to be between 36% and 37%, and it projects capital expenditures of approximately $200 million for 2007.
Feb 23, 2007
2005
Humana Annual Report, Year Ended Dec 31, 2005
Humana Inc. (NYSE: HUM), headquartered in Louisville, Kentucky, reported 2005 total revenues of $14.42 billion and net income of $308.5 million, or $1.87 per diluted share, up from $280.0 million, or $1.72 per diluted share, in 2004. Premium revenues rose 10.3% to $14.0 billion, driven by the Government segment, where premium revenues increased 31.8% to $7.5 billion on Medicare Advantage growth and the CarePlus acquisition. Medicare Advantage membership grew 47.9% to 557,800, while Commercial premium revenues fell 7.3% to $6.5 billion as fully insured membership declined. The consolidated medical expense ratio improved to 83.2% from 84.1%, while the SG&A expense ratio rose to 15.3% from 14.5%. The filing highlights concentration risk: 51% of 2005 premiums and ASO fees came from federal contracts, including 17% from TRICARE and about 20% from Florida CMS contracts. Management expects 2006 Medicare premium revenues to more than double, with lower earnings and margins in the first half of 2006 as Medicare enrollment ramps. Capital contributions to subsidiaries of $450 million to $650 million are expected in 2006, and the company expects a 2006 effective tax rate of 35% to 37%. Humana has paid no cash dividends since February 1993. The filing also discloses a $71.9 million pretax charge for the settlement of the managed care physician class action, and $27.0 million of pretax expenses related to Hurricane Katrina. Cash flow from operations rose to $625.6 million in 2005 from $347.8 million in 2004, and total debt was $815.0 million at year end.
Mar 3, 2006
2004
Humana Annual Report, Year Ended Dec 31, 2004
Humana Inc. (NYSE: HUM), headquartered in Louisville, Kentucky, reported 2004 total revenues of $13.1 billion, net income of $280.0 million, and diluted earnings per share of $1.72, up from $1.41 in 2003. The company operates two segments, Commercial and Government. Premium revenues rose 7.3% to $12.7 billion, driven largely by the April 2004 Ochsner Health Plan acquisition ($157.1 million in cash) and higher Medicare Advantage premium rates. Government segment pretax earnings were $273.8 million, up 22.4%, while Commercial segment pretax earnings were $142.0 million, up 17.4%. Margins were mixed. The consolidated medical expense ratio rose to 84.1% from 83.5%, mainly because of the Commercial segment, where a large customer account serving about 89,000 members generated underwriting losses and the account lapsed on January 1, 2005. The consolidated SG&A expense ratio fell to 14.5% from 15.4%. Cash flow from operations declined to $347.8 million from $413.1 million, primarily because of the timing of Medicare Advantage premium remittances. Stockholders' equity reached $2.09 billion, and the company repurchased 3.8 million shares for $67.0 million during 2004. Looking ahead, the company acquired CarePlus Health Plans of Florida on February 16, 2005 for approximately $450 million in cash, adding about 50,000 Medicare Advantage members. It expects Medicare Advantage enrollment of 470,000 to 485,000 at December 31, 2005, and an effective tax rate of approximately 30% for 2005. Key risks disclosed include a pending Medicare Advantage risk-adjustment phase-in, a TRICARE South Region contract that is subject to annual renewal, uncertainty over the Puerto Rico Medicaid contract expiring June 30, 2005, and a RICO-based managed care class action set for trial on September 6, 2005.
Mar 2, 2005
2003
Humana Annual Report, Year Ended Dec 31, 2003
Humana Inc., headquartered in Louisville, Kentucky, reported 2003 revenues of $12.2 billion and net income of $228.9 million, or $1.41 per diluted share, up from $142.8 million, or $0.85 per diluted share, in 2002. Total premiums rose 8.2% to $11.8 billion, driven mainly by the Commercial segment, where premium revenues increased 12.4% to $6.6 billion on higher fully insured per-member premiums. The company served approximately 6.8 million medical members and 1.7 million specialty members at year-end. The medical expense ratio improved slightly to 83.5% from 83.6%, and cash flow from operations was $413.1 million. The Government segment remains a large part of the business, with about 42% of premiums and administrative services fees derived from federal government contracts. The company was awarded the South Region TRICARE contract in August 2003, and the TRICARE transition is scheduled to begin in July 2004, with membership expected to temporarily fall to 1.5 million before rising to 2.8 million in November 2004. The Medicare+Choice business faces changes under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which Humana expects to produce an 8% to 10% increase in total per-member premiums in 2004. The company also has a pending acquisition of Ochsner Health Plan, expected to close in the second quarter of 2004. The filing notes several ongoing legal matters, including a managed care class action in which the trial is scheduled for September 13, 2004, and an antitrust settlement requiring increased physician reimbursement of $20 million in 2004, $15 million in 2005 and $10 million in 2006. The company has not paid cash dividends since February 1993 and plans to retain earnings for growth.
Mar 5, 2004
2002-A
Humana Annual Report (Amendment), Year Ended Dec 31, 2002
Humana Inc. filed Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2002, to correct an error on the cover page. The corrected disclosure states that the aggregate market value of voting stock held by non-affiliates was $2,480,270,991 as of June 28, 2002, calculated at an average price of $15.59 per share. The originally reported figure of $480,270,991 was an error. The amendment states that there are no other changes to the Form 10-K for 2002. The cover page also reports 160,767,347 shares of common stock outstanding as of March 19, 2003. The registrant is a Delaware corporation headquartered at 500 West Main Street, Louisville, Kentucky. Its securities registered under Section 12(b) are its $0.16 2/3 par value common stock and its 7 1/4% Senior Notes due August 2006, both listed on the New York Stock Exchange. Parts II and III of the Form 10-K incorporate by reference portions of the Registrant's Proxy Statement for the Annual Meeting of Stockholders scheduled for May 15, 2003.
Apr 3, 2003
2002
Humana Annual Report, Year Ended Dec 31, 2002
Humana Inc., headquartered in Louisville, Kentucky, reported 2002 total revenues of $11.26 billion, up from $10.19 billion in 2001, and net income of $142.8 million, or $0.85 per diluted share, compared with $117.2 million, or $0.70 per diluted share, in 2001. Premium revenues rose 10.1% to $10.9 billion, driven by commercial premium yields of 12% to 14% on fully insured business and a sharp increase in TRICARE premiums to $2.0 billion. Medicare+Choice premiums fell 9.6% to $2.6 billion as the company exited counties and membership declined 12.6% to 344,100 members. The medical expense ratio rose to 83.6% from 83.3%, while the SG&A expense ratio rose to 15.6% from 15.3%, partly due to $30.1 million of PCA-related administrative charges. The company recorded an $85.6 million pretax charge in the fourth quarter of 2002 tied to a restructuring plan that consolidates seven customer service centers into four and reduces about 2,300 net positions. Management expects the plan to improve 2003 pretax results by approximately $70 million and reduce the SG&A expense ratio by about 80 basis points in 2003. Management also anticipates 2003 Commercial premium yields of 13% to 15% and a 2003 effective tax rate of about 36%. The filing highlights risk concentrated in government contracts: about 44% of premiums and administrative services fees came from federal contracts in 2002, and the TRICARE contracts face renewal and the T-Nex competitive rebid, with an award announcement expected in mid to late 2003. Litigation remains significant, including the In re Managed Care Litigation class actions and the provider track case, though management does not believe pending actions will have a material adverse effect on financial position.
Mar 21, 2003
1999
Humana Annual Report, Year Ended Dec 31, 1999
Humana Inc. reported a net loss of $382 million for 1999, compared with net income of $129 million in 1998, on premium revenues of $9.959 billion and total revenues of $10.113 billion. The loss was driven by $585 million of pretax expenses in 1999, including a $342 million long-lived asset impairment (primarily goodwill in the Austin, Dallas and Milwaukee markets), $118 million in losses on non-core asset sales, a $50 million premium deficiency, $35 million of reserve strengthening, and $35 million of professional liability and other costs. Excluding these items, adjusted net income was $117 million, or $0.69 per diluted share, versus $213 million, or $1.27 per diluted share, in 1998. The adjusted medical expense ratio rose to 84.8 percent from 83.0 percent, driven by commercial medical cost increases that exceeded premium rate increases. Management attributed the decline to higher medical cost trends not adequately anticipated in 1999 premium pricing, including open access product growth, ineffective risk-sharing arrangements, higher pharmacy costs, and an unfavorable Florida Columbia/HCA provider contract. The company is restructuring its portfolio. It has agreed to sell its workers' compensation, Medicare supplement and North Florida Medicaid businesses for approximately $115 million, and it acquired Memorial Sisters of Charity Health Network in Houston for about $50 million in cash on January 31, 2000. Management expects 2000 commercial HMO and PPO premium yields to rise approximately 10 to 12 percent and Medicare HMO yields to rise 6 to 7 percent, while expecting membership to decline. The company exited 31 Medicare counties on January 1, 2000, and it began charging Medicare HMO member premiums in additional markets. Management stated that the company's liquidity is sufficient, citing planned divestitures, operating cash flows, and access to a $1.0 billion credit agreement and its commercial paper program. Litigation remains a significant risk. Six securities class action complaints relate to statements about the Columbia/HCA contract renewal. Twelve managed care class actions allege RICO violations, and a January 2000 jury verdict in the Chipps case awarded approximately $79 million, most of it punitive damages, which the company is appealing. Management believes the securities and managed care suits are without merit and does not expect them to have a material adverse effect, though it acknowledges that outcomes cannot be accurately predicted.
Mar 30, 2000
1997
Humana Annual Report, Year Ended Dec 31, 1997
Humana Inc. (Louisville, Kentucky) reported 1997 total revenues of $8.04 billion, up from $6.79 billion in 1996, with net income of $173 million, or $1.05 per diluted share, compared with $12 million in 1996. The 1996 results included $215 million of pretax special charges, and excluding them, 1997 net income of $173 million compared with $152 million in 1996. Premium revenues rose to $7.88 billion, driven by the full-year TRICARE contract, the PCA and ChoiceCare acquisitions, and higher premium rates. Medical membership reached 6,206,800 at year-end 1997, up from 4,851,000, and the medical loss ratio was 82.8 percent versus 84.3 percent in 1996. The company made significant acquisitions in 1997, including Physician Corporation of America for $411 million in cash and ChoiceCare Corporation for approximately $250 million, both funded through commercial paper. Total debt and other long-term obligations rose to $1.06 billion from $361 million, and stockholders' equity was $1.50 billion. Management noted that the Medicare risk, Medicaid and TRICARE lines represented about 43 percent of 1997 premium revenues, and that the loss of the Medicare risk contract covering about 249,000 Florida members would have a material adverse effect on the company. Key forward-looking items include 1998 Commercial premium rate increases of approximately 4 to 5 percent, an expected Medicare risk rate increase of about 2 percent, and Year 2000 costs estimated at $12 to $15 million. The filing also flags regulatory uncertainty from the Balanced Budget Act of 1997, and a pending class action tied to PCA's workers' compensation business, which management believes is without merit.
Mar 31, 1998
1996
Humana Annual Report, Year Ended Dec 31, 1996
Humana Inc., a Delaware corporation headquartered in Louisville, Kentucky, operates managed health care products, primarily HMOs and PPOs, serving Commercial, Medicare, Medicaid, and CHAMPUS populations. At December 31, 1996, the Company reported 4,851,000 total medical members, including 2,814,800 fully insured Commercial customers, 364,500 Medicare risk members, and 1,103,000 CHAMPUS beneficiaries, with CHAMPUS services beginning July 1, 1996 under a potential five-year Department of Defense contract. Financially, 1996 was a difficult year. Total revenues rose to $6.79 billion from $4.70 billion, driven largely by the October 1995 EMPHESYS acquisition ($650 million purchase price) and the CHAMPUS contract. However, the Company recorded special charges of $215 million pretax ($140 million after tax, or $.86 per share), and net income fell to $12 million, or $.07 per share, from $190 million, or $1.17 per share, in 1995. Excluding the special charges, net income was $152 million, or $.93 per share. The medical loss ratio rose to 84.3% reported (82.7% excluding special charges) from 81.7%, and the administrative cost ratio was 15.5% reported. Investors should note the concentration of risk in Medicare risk contracts: one HCFA contract covering about 227,500 Florida members produced roughly $1.3 billion in premium revenues, or 19% of total premium revenues, and management believes its termination would have a material adverse effect. The Company also disclosed the sale of its Washington, D.C., health plan (completed January 31, 1997) and a definitive agreement to sell its Alabama operations, both of which management said would not have a material impact.
Mar 28, 1997
1993
Humana Annual Report, Year Ended Dec 31, 1993
Humana Inc., a Delaware corporation headquartered in Louisville, Kentucky, filed this 10-K for the year ended December 31, 1993. The filing describes a managed care business that was separated from its acute-care hospital business on March 1, 1993, when Galen Health Care, Inc. was spun off to stockholders. The company operates ten HMOs and offers PPO products, with 1993 total premium revenues of $3.1 billion (Commercial HMO premiums about $1.4 billion, 43 percent of premiums). Medicare risk products produced about $1.2 billion of HCFA revenues, or 40 percent of premium revenues, and one Florida HCFA contract accounted for $1 billion, or 80 percent of HCFA revenues. The filing states that termination of that Florida contract would have a material adverse effect on revenues, profitability and business prospects. Financially, net income for 1993 was $89 million, or $.56 per share, compared with a net loss of $107 million in 1992, which included $171 million of restructuring and unusual charges. Total revenues were $3.195 billion, the medical loss ratio improved to 83.8 percent from 86.3 percent, and the administrative cost ratio was 13.2 percent. Cash, cash equivalents and marketable securities totaled $1.134 billion at year end, shareholders' equity was $889 million, and the company had approximately $247 million of unrestricted cash and securities. In January 1994 it entered a $200 million revolving credit agreement, and it acquired a Washington, D.C. HMO with about 125,000 members for $55 million on February 28, 1994. Management stated it has no current plans to pay dividends, intending to retain cash for acquisitions and expansion. The filing also notes ongoing litigation, including the Forsyth/Cade class action in Nevada, where summary judgment was entered for plaintiffs on January 28, 1994, with damages still to be determined. Management believes the final resolution will not have a material adverse effect. The company also reports changing its fiscal year end from August 31 to December 31 and faces possible health care reform, with legislative action not expected before late 1994.
Mar 29, 1994