Exhibit 99.1
Selected Financial Data set forth in this Exhibit 99.1 has been revised from the Selected Financial Data included in Item 6 to Humana’s Annual Report on Form 10-K for the year ended December 31, 2005 to reflect the retrospective application of Humana’s adoption of Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), Share-Based Payment, or SFAS 123. Revisions are highlighted in blue.
SELECTED FINANCIAL DATA WITH RETROSPECTIVE APPLICATION OF SFAS 123R
| | 2005 (a) | | 2004 (b) | | 2003(c) | | 2002 (d)(e) | | 2001 (e) | |
Summary of Operations: | | (in thousands, except per common share results and ratios) | |
Revenues: | | | | | | | | | | | |
Premiums | | $ | 14,001,591 | | $ | 12,689,432 | | $ | 11,825,283 | | $ | 10,930,397 | | $ | 9,938,961 | |
Administrative services fees | | 259,437 | | 272,796 | | 271,676 | | 244,396 | | 137,090 | |
Investment and other income | | 157,099 | | 142,097 | | 129,352 | | 86,388 | | 118,835 | |
Total revenues | | 14,418,127 | | 13,104,325 | | 12,226,311 | | 11,261,181 | | 10,194,886 | |
Operating expenses: | | | | | | | | | | | |
Medical | | 11,651,470 | | 10,669,647 | | 9,879,421 | | 9,138,196 | | 8,279,844 | |
Selling, general and administrative | | 2,195,604 | | 1,894,336 | | 1,866,531 | | 1,781,457 | | 1,551,257 | |
Depreciation and amortization | | 128,858 | | 117,792 | | 126,779 | | 120,730 | | 161,531 | |
Total operating expenses | | 13,975,932 | | 12,681,775 | | 11,872,731 | | 11,040,383 | | 9,992,632 | |
Income from operations | | 442,195 | | 422,550 | | 353,580 | | 220,798 | | 202,254 | |
Interest expense | | 39,315 | | 23,172 | | 17,367 | | 17,252 | | 25,302 | |
Income before income taxes | | 402,880 | | 399,378 | | 336,213 | | 203,546 | | 176,952 | |
Provision for income taxes | | 106,150 | | 129,431 | | 112,474 | | 64,694 | | 63,525 | |
Net income | | $ | 296,730 | | $ | 269,947 | | $ | 223,739 | | $ | 138,852 | | $ | 113,427 | |
Basic earnings per common share | | $ | 1.83 | | $ | 1.68 | | $ | 1.41 | | $ | 0.85 | | $ | 0.69 | |
Diluted earnings per common share | | $ | 1.79 | | $ | 1.66 | | $ | 1.38 | | $ | 0.83 | | $ | 0.68 | |
Financial Position: | | | | | | | | | | | |
Cash and investments | | $ | 3,477,955 | | $ | 3,074,189 | | $ | 2,927,213 | | $ | 2,415,914 | | $ | 2,327,139 | |
Total assets | | 6,869,614 | | 5,657,617 | | 5,379,814 | | 4,977,029 | | 4,715,445 | |
Medical and other expenses payable | | 1,909,682 | | 1,422,010 | | 1,272,156 | | 1,142,131 | | 1,086,386 | |
Debt | | 815,044 | | 636,696 | | 642,638 | | 604,913 | | 578,489 | |
Stockholders’ equity | | 2,508,874 | | 2,124,248 | | 1,868,972 | | 1,641,115 | | 1,541,701 | |
Key Financial Indicators: | | | | | | | | | | | |
Medical expense ratio | | 83.2 | % | 84.1 | % | 83.5 | % | 83.6 | % | 83.3 | % |
SG&A expense ratio | | 15.4 | % | 14.6 | % | 15.4 | % | 15.9 | % | 15.4 | % |
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| | 2005 (a) | | 2004 (b) | | 2003 | | 2002 | | 2001 | |
Medical Membership by Segment: | | | |
Government: | | | | | | | | | | | |
Medicare Advantage | | 557,800 | | 377,200 | | 328,600 | | 344,100 | | 393,900 | |
Medicaid | | 457,900 | | 478,600 | | 468,900 | | 506,000 | | 490,800 | |
TRICARE | | 1,750,900 | | 1,789,400 | | 1,849,700 | | 1,755,800 | | 1,714,600 | |
TRICARE ASO | | 1,138,200 | | 1,082,400 | | 1,057,200 | | 1,048,700 | | 942,700 | |
Total Government | | 3,904,800 | | 3,727,600 | | 3,704,400 | | 3,654,600 | | 3,542,000 | |
Commercial: | | | | | | | | | | | |
Fully insured | | 1,999,800 | | 2,286,500 | | 2,352,800 | | 2,340,300 | | 2,301,300 | |
Administrative services only | | 1,171,000 | | 1,018,600 | | 712,400 | | 652,200 | | 592,500 | |
Total Commercial | | 3,170,800 | | 3,305,100 | | 3,065,200 | | 2,992,500 | | 2,893,800 | |
Total Medical Membership | | 7,075,600 | | 7,032,700 | | 6,769,600 | | 6,647,100 | | 6,435,800 | |
Commercial Specialty Membership: | | | | | | | | | | | |
Dental | | 1,456,500 | | 1,246,700 | | 1,147,400 | | 1,094,600 | | 1,123,300 | |
Other | | 445,600 | | 461,500 | | 520,700 | | 545,400 | | 571,300 | |
Total specialty membership | | 1,902,100 | | 1,708,200 | | 1,668,100 | | 1,640,000 | | 1,694,600 | |
(a) Includes the acquired operations of CarePlus Health Plans of Florida from February 16, 2005, and the acquired operations of Corphealth, Inc. from December 20, 2005. Also includes expenses of $71.9 million ($44.8 million after tax, or $0.27 per diluted common share) for a class action litigation settlement, as well as expenses of $27.0 million ($16.9 million after tax, or $0.10 per diluted common share) related to Hurricane Katrina. These expenses were partially offset by the realization of a tax gain contingency of $22.8 million, or $0.14 per diluted common share.
(b) Includes the acquired operations of Ochsner Health Plan from April 1, 2004.
(c) Includes expenses of $30.8 million pretax ($18.8 million after tax, or $0.12 per diluted common share) for the writedown of building and equipment and software abandonment expenses. These expenses were partially offset by a gain of $15.2 million pretax ($10.1 million after tax, or $0.06 per diluted common share) for the sale of a venture capital investment. The net impact of these items reduced pretax income by $15.6 million ($8.7 million after tax, or $0.05 per diluted common share).
(d) Includes expenses of $85.6 million pretax ($58.2 million after tax, or $0.35 per diluted common share) for severance and facility costs related to reducing our administrative cost structure with the elimination of three customer service centers and an enterprise-wide workforce reduction, reserves for liabilities related to a previous acquisition and the impairment in the fair value of certain private debt and equity investments.
(e) We ceased amortizing goodwill upon adopting Statement of Financial Accounting Standards (SFAS) No. 142, or SFAS 142, on January 1, 2002. Assuming the non-amortization provisions of SFAS 142 were in effect as of January 1, 2001, diluted earnings per common share would have increased $0.31 in 2001.
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