Humana 1999 Annual Report Download - page 27

5150
HU M A N A IN C .
NOTES TO CONSOLIDATED FINANCIAL STAT E M E N T S
The segment results for the years ended December 31, 1999, 1998 and 1997 are as follows:
(In millions) Health Plan Small Group Total
1999
Revenues:
Premiums $ 6,827 $ 3,132 $ 9,959
Interest and other income 106 48 154
Total revenues 6,933 3,180 10,113
Underwriting margin 861 566 1,427
Depreciation and amortization 70 54 124
Loss before income taxes (369) (35) (404)
(In millions) Health Plan Small Group Total
1998
Revenues:
Premiums $ 6,734 $ 2,863 $ 9,597
Interest and other income 140 44 184
Total revenues 6,874 2,907 9,781
Underwriting margin 988 568 1,556
Depreciation and amortization 76 52 128
Income (loss) before income taxes 208 (5) 203
(In millions) Health Plan Small Group Total
1997
Revenues:
Premiums $ 5,487 $ 2,393 $ 7,880
Interest and other income 115 41 156
Total revenues 5,602 2,434 8,036
Underwriting margin 864 494 1,358
Depreciation and amortization 64 44 108
Income before income taxes 244 26 270
As previously discussed, during 1999 and 1998, the Company recorded pretax expenses of $585 million and $132 million,
respectively. The following table details the reduction on operating results from these expenses for the Health Plan and Small
Group segments for the years ended December 31, 1999 and 1998:
1999 1998
(In millions) Health Plan Small Group Total Health Plan Small Group Total
Underwriting margin $ 66 $ 24 $ 90 $ 60 $ 13 $ 73
Income before income taxes $ 553 $ 32 $ 585 $ 96 $ 36 $ 132
The Company’s product offerings include managed health care products and specialty products. Managed health care
product premiums were approximately $9.7 billion, $9.4 billion and $7.7 billion for the years ended December 31, 1999, 1998
and 1997, respectively. Specialty product premiums were approximately $277 million, $239 million, and $230 million for the
years ended December 31, 1999, 1998 and 1997, respectively.
Premium revenues derived from contracts with the federal government in 1999, 1998 and 1997 represent approximately
40 percent, 41 percent and 43 percent, respectively, of total premium revenues.
HU M A N A IN C .
R E P O R T OF INDEPENDENT ACCOUNTA N T S
To the Board of Directors and Stockholders
Humana Inc.
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations,
stockholders' equity and cash flows present fairly, in all material respects, the consolidated financial position of Humana Inc.
and its subsidiaries at December 31, 1999 and 1998, and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States.
These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
Louisville, Kentucky
February 9, 2000