Humana 2005 Annual Report Download - page 40

ITEM 6. SELECTED FINANCIAL DATA
2005(a) 2004(b) 2003(c) 2002(d)(e) 2001(e)
(in thousands, except per common share results, membership and ratios)
Summary of Operations:
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 ............. 2,176,770 1,877,864 1,858,028 1,775,069 1,545,129
Depreciation and amortization ................ 128,858 117,792 126,779 120,730 161,531
Total operating expenses ................. 13,957,098 12,665,303 11,864,228 11,033,995 9,986,504
Income from operations .......................... 461,029 439,022 362,083 227,186 208,382
Interest expense ................................ 39,315 23,172 17,367 17,252 25,302
Income before income taxes ...................... 421,714 415,850 344,716 209,934 183,080
Provision for income taxes ....................... 113,231 135,838 115,782 67,179 65,909
Net income ................................... $ 308,483 $ 280,012 $ 228,934 $ 142,755 $ 117,171
Basic earnings per common share .................. $ 1.91 $ 1.75 $ 1.44 $ 0.87 $ 0.71
Diluted earnings per common share ................ $ 1.87 $ 1.72 $ 1.41 $ 0.85 $ 0.70
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 4,956,754 4,681,693
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 ............................ 2,474,105 2,090,124 1,835,949 1,606,474 1,507,949
Key Financial Indicators:
Medical expense ratio ........................... 83.2% 84.1% 83.5% 83.6% 83.3%
SG&A expense ratio ............................ 15.3% 14.5% 15.4% 15.9% 15.3%
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 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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