Humana 2006 Annual Report Download - page 52

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Comparison of Results of Operations for 2005 and 2004
Certain financial data for our two segments was as follows for the years ended December 31, 2005 and
2004:
Change
2005 2004 Dollars Percentage
(dollars in thousands)
Premium revenues:
Medicare Advantage ......................... $ 4,590,362 $ 3,086,598 $1,503,764 48.7%
TRICARE .................................. 2,407,653 2,127,595 280,058 13.2%
Medicaid ................................... 548,714 511,193 37,521 7.3%
Total Government ....................... 7,546,729 5,725,386 1,821,343 31.8%
Fully insured ................................ 6,068,115 6,614,482 (546,367) (8.3)%
Specialty ................................... 386,747 349,564 37,183 10.6%
Total Commercial ........................ 6,454,862 6,964,046 (509,184) (7.3)%
Total .............................. $14,001,591 $12,689,432 $1,312,159 10.3%
Administrative services fees:
Government ................................ $ 50,059 $ 106,764 $ (56,705) (53.1)%
Commercial ................................ 209,378 166,032 43,346 26.1%
Total .................................. $ 259,437 $ 272,796 $ (13,359) (4.9)%
Income before income taxes(a):
Government ................................ $ 316,676 $ 269,063 $ 47,613 17.7%
Commercial ................................ 86,204 130,315 (44,111) (33.8)%
Total .................................. $ 402,880 $ 399,378 $ 3,502 0.9%
Medical expense ratios(b):
Government ................................ 83.1% 84.3% (1.2)%
Commercial ................................ 83.3% 83.9% (0.6)%
Total .................................. 83.2% 84.1% (0.9)%
SG&A expense ratios(a)(c):
Government ................................ 12.7% 12.3% 0.4%
Commercial ................................ 18.5% 16.5% 2.0%
Total .................................. 15.4% 14.6% 0.8%
(a) Prior period amounts have been adjusted to reflect the expensing of stock awards under the modified
retrospective application method of SFAS 123R as more fully discussed in Note 11 to the consolidated
financial statements included in Item 8.—Financial Statements and Supplementary Data.
(b) Represents total medical expenses as a percentage of premium revenue. Also known as MER.
(c) 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.
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