Humana 2005 Annual Report Download - page 9

To conclude, we’re encouraged about the Commercial
segment’s long-term prospects. In 2006, we intend
to remain focused on margin improvement while
anticipating little, if any, overall membership growth, due
to a diffi cult pricing environment and our commitment
to maintain strict pricing discipline. Over the long term,
however, we anticipate that the benefi ts we’ve derived
from our 2005 Medicare ramp-up – infrastructure
improvements, increased brand recognition, network
expansion and a national presence, coupled with market
acceptance of true consumer-directed health benefi ts – will
help our Commercial business grow substantially.
Summary
As pleased as we were with our progress in 2005, we
believe the real signifi cance of last year’s efforts is that they
positioned us for greater growth this year and beyond.
• Initial results confi rm the appeal of our Medicare
products and our overall Medicare business model.
• Medicare sales have been on target across the
product spectrum.
• Our distribution partner approach is clearly
differentiated and working well.
• Our national brand awareness is up signifi cantly,
with positive long-term implications for our
Commercial business as well as for Medicare.
m
The Medicare opportunity is having a transforming effect
on our company, producing one of the most dramatic
organic-growth stories in American business. While our
revenues increased 10 percent in 2005, to $14.4 billion,
they are projected to grow about 50 percent, to more than
$21 billion, in 2006.
Summary
With such signifi cant growth in prospect, we were pleased
to add two new members to our board of directors in 2005.
We also wish to thank another for 14 years of
distinguished service. John R. Hall, retired chairman of
the board and chief executive offi cer of Ashland Inc., will
retire from the board in April 2006. He is chairman of the
Nominating and Governance Committee and has served
Humana with distinction throughout his tenure. W. Roy
Dunbar, president of global technology and operations
for MasterCard International, brings an innovative,
consumer-focused approach to information technology
to bear on Humana’s commitment to offer consumers
and employers “Guidance when you need it most.” James
O. Robbins, who recently retired as president and chief
executive offi cer of Cox Communications, brings a wealth
of experience and expertise in leveraging technology to
provide consumers with real-time, actionable information.
This, as well as the value we offer, will contribute
meaningfully to our ongoing effort to offer state-of-the-
art customer service to the now more than nine million
Humana health plan members nationwide.
Sincerely,
David A. Jones, Jr.
Chairman of the Board
Signifi cant Stockholder
Michael B. McCallister
Director, President and Chief Executive Offi cer
Signifi cant Stockholder
This letter contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Investors are advised to read the accompanying Form 10-K which includes discussion of risks and uncertainties.
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