Humana 2011 Annual Report Download - page 97

Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
and related impairment recognition of long-lived assets, including goodwill. These estimates are based on
knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ
materially from those estimates.
Beginning with the filing of this Form 10-K for year ended December 31, 2011, we adopted new guidance
requiring the presentation of other comprehensive income in a statement presented with equal prominence to the
other primary financial statements. As a result, we present net income, other comprehensive income, and total
comprehensive income in a single continuous statement referred to as the consolidated statement of
comprehensive income. The adoption of this guidance had no impact on our results of operations, including
diluted earnings per share common share, financial condition or cash flows. See Recently Issued Accounting
Pronouncements within this note.
Realignment of Business Segments
During the first quarter of 2011, we realigned our business segments to reflect our evolving business model.
We currently manage and report our operating results using the following segments: Retail, Employer Group, and
Health and Well-Being Services. We also disclose results for Other Businesses. All respective amounts related to
the segment change have been retrospectively adjusted throughout the financial statements. Our segment
information is more fully described in Note 16.
As a result of changing our reportable segments, we also changed the classification of certain revenues and
costs in our consolidated statements of comprehensive income. Beginning January 1, 2011, costs of certain health
and well-being services were reclassified as benefits expense including costs incurred by our wholly-owned mail
order pharmacy from transactions with our members that were historically classified as selling, general and
administrative (and now titled operating costs), as well as depreciation and amortization expenses. The effect of
this reclassification is to account for the cost of providing these benefits to our members similarly whether the
services are provided via a third party provider or internally through a stand-alone subsidiary. Likewise, co-share
amounts from our members associated with our wholly-owned mail order pharmacy operations, historically
classified as other revenue, are now classified as a reduction of benefits expense. The remaining items previously
classified as other revenue, primarily consisting of patient service revenue associated with our Concentra Inc.
subsidiary, which was acquired in December 2010, were combined with our previous administrative services fee
revenue and are now classified as services revenue. Prior period amounts have been reclassified to conform to the
new presentation. These adjustments had no impact on net income, cash flows or equity. Further, none of these
adjustments impacted our regulated subsidiaries.
After giving effect to this reclassification, consolidated benefit expenses include depreciation and
amortization expenses primarily from the delivery of pharmacy services by our wholly-owned pharmacy
business included in our Health and Well-Being Services segment. The amount of this expense was $33 million
in 2011, $18 million in 2010, and $13 million in 2009.
Cash and Cash Equivalents
Cash and cash equivalents include cash, time deposits, money market funds, commercial paper, other money
market instruments, and certain U.S. Government securities with an original maturity of three months or less.
Carrying value approximates fair value due to the short-term maturity of the investments.
Investment Securities
Investment securities, which consist entirely of debt securities, have been categorized as available for sale
and, as a result, are stated at fair value. Investment securities available for current operations are classified as
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