Humana 2011 Annual Report Download - page 73

Commercial and other receivables for 2011 and 2010 include $144 million and $109 million, respectively,
of patient services receivables acquired with the acquisition of Concentra in December 2010. In addition, the
allowance for doubtful accounts increased $33 million from 2010 to 2011 primarily due to the Concentra
acquisition. The increase in Concentra receivables and the related allowance in 2011 result from the requirement
to record acquired balances at fair value at the acquisition date. Excluding the receivables acquired with
Concentra, the timing of reimbursements from the Puerto Rico Health Insurance Administration for our Medicaid
business primarily resulted in the increase in commercial and other receivables for 2010 as compared to 2009
followed by a decrease from 2010 to 2011.
In addition to the timing of receipts for premiums and services fees and payments of benefit expenses, other
working capital items impacting operating cash flows over the past three years primarily resulted from the timing
of payments for the Medicare Part D risk corridor provisions of our contracts with CMS as well as changes in the
timing of collections of pharmacy rebates.
Cash Flow from Investing Activities
We reinvested a portion of our operating cash flows in investment securities, primarily investment-grade
fixed income securities, totaling $850 million in 2011, $827 million in 2010, and $2.0 billion in 2009. Our
ongoing capital expenditures primarily relate to our information technology initiatives, support of services in our
Concentra and other medical facilities and administrative facilities necessary for activities such as claims
processing, billing and collections, wellness solutions, care coordination, regulatory compliance and customer
service. Total capital expenditures, excluding acquisitions, were $346 million in 2011, $222 million in 2010, and
$185 million in 2009, with 2011 reflecting increased spending associated with growth in our primary care
services and pharmacy businesses in our Health and Well-Being Services segment. Excluding acquisitions, we
expect total capital expenditures in 2012 of approximately $350 million. Cash consideration paid for acquisitions,
net of cash acquired, of $226 million in 2011, $833 million in 2010, and $12 million in 2009 primarily related to
the Anvita and MD Care acquisitions in 2011 and the Concentra acquisition in 2010.
Cash Flow from Financing Activities
Receipts from CMS associated with Medicare Part D claim subsidies for which we do not assume risk were
$378 million less than claims payments during 2011, $237 million less than claim payments during 2010, and
$493 million higher than claims payments during 2009. See Note 2 to the consolidated financial statements
included in Item 8. – Financial Statements and Supplementary Data for further description.
During 2011, we repurchased 6.7 million shares for $492 million under the stock repurchase plans
authorized by the Board of Directors in December 2009 and April 2011. During 2010, we repurchased
1.99 million shares for $100 million under the stock repurchase plan authorized by the Board of Directors in
December 2009. We also acquired common shares in connection with employee stock plans for an aggregate cost
of $49 million in 2011, $8 million in 2010, and $23 million in 2009.
During 2011, we paid dividends to stockholders of $82 million as discussed further below. No dividends
were paid during 2010 or 2009.
In 2009, net borrowings under our then existing credit agreement decreased $250 million primarily from the
repayment of amounts borrowed to fund a 2008 acquisition.
The remainder of the cash used in or provided by financing activities in 2011, 2010, and 2009 primarily
resulted from proceeds from stock option exercises, the change in the book overdraft, and the change in the
securities lending payable. The decrease in securities lending since 2009 resulted from lower margins earned
under the program which terminated in the fourth quarter of 2011.
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