EXHIBIT 12
HUMANA INC.
RATIO OF EARNINGS TO FIXED CHARGES
For the Years Ended December 31, 1999, 1998 and 1997
(Unaudited)
(Dollars in millions)
1999 1998 1997
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Earnings:
(Loss) income before income taxes $(404) $ 203 $ 270
Fixed charges 53 61 30
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Total (loss) earnings $(351) $ 264 $ 300
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Fixed charges:
Interest charged to expense $ 33 $ 47 $ 20
One-third of rent expense (a) 20 14 10
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Total fixed charges $ 53 $ 61 $ 30
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Ratio of earnings to fixed charges (b) 4.3(c) 10.0
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(a) For the purpose of determining earnings in the calculation of the ratio of
earnings to fixed charges, earnings have been increased by the provision
for income taxes and fixed charges. Fixed charges consist of interest
expense on borrowings and one-third (the proportion deemed representative
of the interest portion) of rent expense.
(b) Earnings (loss) for the year ended December 31, 1999 were not adequate to
cover fixed charges. Exclusive of $585 million expense primarily related to
goodwill write-down, losses on non-core asset sales, professional liability
reserve strengthening, premium deficiency and medical reserve
strengthening, the ratio of earnings to fixed charges would have been 4.4
for the year ended December 31, 1999.
(c) Exclusive of $132 million expense primarily related to the costs of certain
market exits and product discontinuances, asset write-offs, premium
deficiency and a one-time non-officer employee incentive, the ratio of
earnings to fixed charges would have been 6.5 for the year ended December
31, 1998.