Humana 2012 Annual Report Download - page 66
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Comparison of Results of Operations for 2011 and 2010
Certain financial data on a consolidated basis and for our segments was as follows for the years ended
December 31, 2011 and 2010:
Consolidated
Change
2011 2010 Dollars Percentage
(dollars in millions, except per common share results)
Revenues:
Premiums:
Retail ............................ $21,402 $19,052 $2,350 12.3%
Employer Group ................... 8,877 9,080 (203) (2.2)%
Other Businesses ................... 4,827 4,580 247 5.4%
Total premiums ................ 35,106 32,712 2,394 7.3%
Services:
Retail ............................ 16 11 5 45.5%
Employer Group ................... 356 395 (39) (9.9)%
Health and Well-Being Services ....... 903 34 869 nm
Other Businesses ................... 85 115 (30) (26.1)%
Total services .................. 1,360 555 805 145.0%
Investment income ...................... 366 329 37 11.2%
Total revenues ................. 36,832 33,596 3,236 9.6%
Operating expenses:
Benefits .............................. 28,823 27,117 1,706 6.3%
Operating costs ........................ 5,395 4,380 1,015 23.2%
Depreciation and amortization ............. 270 245 25 10.2%
Total operating expenses ............. 34,488 31,742 2,746 8.7%
Income from operations ...................... 2,344 1,854 490 26.4%
Interest expense ............................ 109 105 4 3.8%
Income before income taxes .................. 2,235 1,749 486 27.8%
Provision for income taxes ................... 816 650 166 25.5%
Net income ................................ $ 1,419 $ 1,099 $ 320 29.1%
Diluted earnings per common share ............ $ 8.46 $ 6.47 $ 1.99 30.8%
Benefit ratio (a) ............................ 82.1% 82.9% (0.8)%
Operating cost ratio (b) ...................... 14.8% 13.2% 1.6%
Effective tax rate ........................... 36.5% 37.2% (0.7)%
(a) Represents total benefits expense as a percentage of premiums revenue.
(b) Represents total operating costs as a percentage of total revenues less investment income.
nm – not meaningful
Summary
Net income was $1.4 billion, or $8.46 per diluted common share, in 2011 compared to $1.1 billion, or $6.47
per diluted common share, in 2010 primarily due to improved operating performance in the Retail and Health and
Well-Being Services segments and the negative impact of certain charges described below on 2010 results that
did not recur in 2011. Share repurchase activity also contributed to the year-over-year increase in diluted
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