Humana 2004 Annual Report Download - page 42

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Comparison of Results of Operations for 2003 and 2002
Certain financial data for our two segments was as follows for the years ended December 31, 2003 and
2002:
Change
2003 2002 Dollars Percentage
(in thousands, except ratios)
Premium revenues:
Fully insured ......................................... $ 6,240,806 $ 5,499,033 $ 741,773 13.5%
Specialty ............................................ 320,206 337,295 (17,089) (5.1)%
Total Commercial ................................. 6,561,012 5,836,328 724,684 12.4%
Medicare Advantage ................................... 2,527,446 2,629,597 (102,151) (3.9)%
TRICARE ........................................... 2,249,725 2,001,474 248,251 12.4%
Medicaid ............................................ 487,100 462,998 24,102 5.2%
Total Government ................................. 5,264,271 5,094,069 170,202 3.3%
Total ....................................... $11,825,283 $10,930,397 $ 894,886 8.2%
Administrative services fees:
Commercial .......................................... $ 122,846 $ 103,203 $ 19,643 19.0%
Government ......................................... 148,830 141,193 7,637 5.4%
Total ........................................... $ 271,676 $ 244,396 $ 27,280 11.2%
Income (loss) before income taxes:
Commercial .......................................... $ 121,010 $ (15,174) $ 136,184 897.5%
Government ......................................... 223,706 225,108 (1,402) (0.6)%
Total ........................................... $ 344,716 $ 209,934 $ 134,782 64.2%
Medical expense ratios(a):
Commercial .......................................... 82.9% 83.5% (0.6)
Government ......................................... 84.3% 83.8% 0.5
Total ........................................... 83.5% 83.6% (0.1)
SG&A expense ratios(b):
Commercial .......................................... 16.9% 18.0% (1.1)
Government ......................................... 13.4% 13.5% (0.1)
Total ........................................... 15.4% 15.9% (0.5)
(a) Represents total medical expenses as a percentage of premium revenue. Also known as MER.
(b) Represents total selling, general, and administrative expenses as a percentage of premium revenues and administrative services fees. Also
known as the SG&A expense ratio.
Medical membership was as follows at December 31, 2003 and 2002:
Change
2003 2002 Members Percentage
Commercial segment medical members:
Fully insured .............................................. 2,352,800 2,340,300 12,500 0.5%
ASO .................................................... 712,400 652,200 60,200 9.2%
Total Commercial ...................................... 3,065,200 2,992,500 72,700 2.4%
Government segment medical members:
Medicare Advantage ........................................ 328,600 344,100 (15,500) (4.5)%
Medicaid ................................................. 468,900 506,000 (37,100) (7.3)%
TRICARE ................................................ 1,849,700 1,755,800 93,900 5.3%
TRICARE ASO ........................................... 1,057,200 1,048,700 8,500 0.8%
Total Government ...................................... 3,704,400 3,654,600 49,800 1.4%
Total medical membership ....................................... 6,769,600 6,647,100 122,500 1.8%
This table of financial data should be reviewed in connection with the discussion on the following pages.
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