Humana 2005 Annual Report Download - page 92

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Amounts classified as current and non-current and their respective location in the consolidated balance
sheets were as follows at December 31, 2005 and 2004:
2005 2004
(in thousands)
Gross reserve included in:
Trade accounts payable and accrued expenses (current) ......... $ 39,471 $ 37,619
Other long-term liabilities (non-current) ...................... 245,632 193,875
Total gross reserve .................................. 285,103 231,494
Recoverables from insurance included in:
Other current assets (current) .............................. 7,886 8,441
Other assets (non-current) ................................. 57,904 43,982
Total recoverables from insurance ...................... 65,790 52,423
Total net reserve ................................ $219,313 $179,071
11. EMPLOYEE BENEFIT PLANS
Employee Savings Plan
We have defined contribution retirement and savings plans covering eligible employees. Our contribution to
these plans is based on various percentages of compensation, and in some instances, on the amount of our
employees’ contributions to the plans. The cost of these plans amounted to approximately $42.9 million in 2005,
$37.6 million in 2004, and $37.9 million in 2003, all of which was funded currently to the extent it was
deductible for federal income tax purposes. Based on the year end closing stock price of $54.33, approximately
31% of the retirement and savings plan’s assets were invested in our common stock representing less than 4% of
the shares outstanding as of December 31, 2005. The Company match is invested in the Humana common stock
fund. However, a participant may reinvest any funds, including the Company match in the Humana common
stock fund, in any other plan investment option at any time.
Severance Benefits
We provide severance and related employee benefits based upon our existing employee benefit plans and
policies. Severance benefits are generally determined based on years of service and salary. We accrue severance
benefits when payment is probable and reasonably estimable in accordance with SFAS No. 112, Employers’
Accounting for Postemployment Benefits. The cost of this benefit amounted to approximately $0.7 million in
2005, $15.5 million in 2004 and $11.2 million in 2003. Severance is paid bi-weekly resulting in payments in
periods subsequent to termination. We continually review estimates of future payments for probable severance
benefits and make necessary adjustments to our liability for severance benefits.
Stock Based Compensation
We have plans under which restricted stock awards and options to purchase our common stock have been
granted to officers, directors, key employees and consultants.
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