Humana 2003 Annual Report Download - page 31

ITEM 6. SELECTED FINANCIAL DATA
2003(a) 2002(b)(c) 2001 2000 1999(d)
(in thousands, except per share results, membership and ratios)
Summary of Operations
Revenues:
Premiums ....................................... $11,825,283 $10,930,397 $ 9,938,961 $10,394,631 $ 9,958,582
Administrative services fees ........................ 271,676 244,396 137,090 86,298 97,940
Investment and other income ........................ 129,352 86,388 118,835 115,021 155,013
Total revenues ............................... 12,226,311 11,261,181 10,194,886 10,595,950 10,211,535
Operating expenses:
Medical ........................................ 9,879,421 9,138,196 8,279,844 8,781,998 8,533,090
Selling, general and administrative ................... 1,858,028 1,775,069 1,545,129 1,524,799 1,466,181
Depreciation and amortization ....................... 126,779 120,730 161,531 146,548 123,858
Goodwill impairment and other expenses .............. ————459,852
Total operating expenses ....................... 11,864,228 11,033,995 9,986,504 10,453,345 10,582,981
Income (loss) from operations ........................... 362,083 227,186 208,382 142,605 (371,446)
Interest expense ...................................... 17,367 17,252 25,302 28,615 33,393
Income (loss) before income taxes ........................ 344,716 209,934 183,080 113,990 (404,839)
Provision (benefit) for income taxes ...................... 115,782 67,179 65,909 23,938 (22,419)
Net income (loss) ..................................... $ 228,934 $ 142,755 $ 117,171 $ 90,052 $ (382,420)
Basic earnings (loss) per common share ................... $ 1.44 $ 0.87 $ 0.71 $ 0.54 $ (2.28)
Diluted earnings (loss) per common share .................. $ 1.41 $ 0.85 $ 0.70 $ 0.54 $ (2.28)
Financial Position
Cash and investments .................................. $ 2,927,213 $ 2,415,914 $ 2,327,139 $ 2,312,399 $ 2,785,702
Total assets .......................................... 5,293,323 4,879,937 4,681,693 4,597,533 4,951,578
Medical and other expenses payable ...................... 1,272,156 1,142,131 1,086,386 1,181,027 1,756,227
Debt ............................................... 642,638 604,913 578,489 599,952 686,213
Stockholders’ equity .................................. 1,835,949 1,606,474 1,507,949 1,360,421 1,268,009
Key Financial Indicators
Medical expense ratio ................................. 83.5% 83.6% 83.3% 84.5% 85.7%
SG&A expense ratio .................................. 15.4% 15.9% 15.3% 14.5% 14.6%
Medical Membership by Segment
Commercial:
Fully insured .................................... 2,352,800 2,340,300 2,301,300 2,545,800 3,083,600
Administrative services only ........................ 712,400 652,200 592,500 612,800 648,000
Medicare supplement .............................. ————44,500
Total Commercial ............................ 3,065,200 2,992,500 2,893,800 3,158,600 3,776,100
Government:
Medicare+Choice ................................. 328,600 344,100 393,900 494,200 488,500
Medicaid ....................................... 468,900 506,000 490,800 575,600 616,600
TRICARE ...................................... 1,849,700 1,755,800 1,714,600 1,070,300 1,058,000
TRICARE ASO .................................. 1,057,200 1,048,700 942,700 — —
Total Government ............................ 3,704,400 3,654,600 3,542,000 2,140,100 2,163,100
Total Medical Membership ..................... 6,769,600 6,647,100 6,435,800 5,298,700 5,939,200
Commercial Specialty Membership
Dental .............................................. 1,147,400 1,094,600 1,123,300 1,148,100 1,146,000
Other .............................................. 520,700 545,400 571,300 678,900 1,333,100
Total specialty membership ..................... 1,668,100 1,640,000 1,694,600 1,827,000 2,479,100
(a) Includes expenses of $30.8 million pretax ($18.8 million after tax, or $0.12 per diluted 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 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 share).
(b) Includes expenses of $85.6 million pretax ($58.2 million after tax, or $0.35 per diluted 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.
(c) As described in Note 2 to our consolidated financial statements included herein, we adopted Statement of Financial Accounting Standard
No. 142, Goodwill and Other Intangible Assets, as of January 1, 2002. We ceased amortizing goodwill upon adopting Statement 142 on
January 1, 2002. Note 5 identifies goodwill amortized in 2001 and the estimated impact on our reported net income and earnings per
common share had amortization been excluded from 2001 results.
(d) Includes expenses of $584.8 million pretax ($499.3 million after tax, or $2.97 per diluted share) primarily related to goodwill
impairment, losses on non-core asset sales, professional liability reserve strengthening, premium deficiency and medical reserve
strengthening.
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