Humana Realigns Financial Reporting Segments

By: Humana Inc. via Business Wire News Releases

April 22, 2015 at 08:30 AM EDT

Humana Inc. (NYSE: HUM) announced today that it has realigned certain of its businesses among its financial reporting segments to correspond with internal management reporting changes and renamed its Employer Group segment the Group segment. The company’s three reportable segments remain Retail, Group, and Healthcare Services.

The more significant realignments of the company’s businesses included reclassifying Medicare benefits offered to groups to the Retail segment from the Group segment, bringing all of Humana’s Medicare offerings, which are now managed collectively, together in one segment, recognizing that in some instances we market directly to individuals that are part of a group Medicare account. In addition, the company realigned its military services business, primarily its TRICARE South Region contract previously included in the Other Businesses category, to its Group segment as the company considers this contract with the government to be a group account.

Additionally, the company has revised its reporting of membership associated with dual-eligible demonstration projects to report that membership under Medicaid rather than Medicare Advantage. Dual-eligible members not associated with demonstration projects will continue to be classified as Medicare Advantage members.

Restated historical segment financials for the 2014 quarters are included with this press release. The three reportable segments now consist of the following businesses:

Retail segment – consists of Medicare benefits, marketed to individuals or directly via group accounts, as well as individual commercial fully-insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and financial protection products. In addition, the Retail segment also includes the company’s contract with the Centers for Medicare and Medicaid Services to administer the Limited Income Newly Eligible Transition prescription drug plan program and contracts with various states to provide Medicaid, dual eligible, and Long-Term Support Services benefits, collectively, its state-based contracts.
Group segment – consists of employer group commercial fully-insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and voluntary insurance benefits, as well as administrative services only products. In addition, the company’s Group segment includes its health and wellness products (primarily marketed to employer groups) and military services business, primarily its TRICARE South Region contract.
Healthcare Services segment – includes services offered to the company’s health plan members as well as to third parties, including pharmacy solutions, provider services, home-based services, and clinical programs, as well as services and capabilities to advance population health.

The company will also continue to report under the category of Other Businesses those businesses which do not align with the reportable segments described above, primarily the company’s closed block long-term care insurance policies.

As previously announced, Humana will be releasing its first quarter 2015 financial results on April 29, 2015. Details associated with the company’s upcoming earnings release are available at:

http://phx.corporate-ir.net/phoenix.zhtml?c=92913&p=irol-newsArticle&ID=2028487

Humana Inc., headquartered in Louisville, Ky., is a leading health and well-being company focused on making it easy for people to achieve their best health with clinical excellence through coordinated care. The company’s strategy integrates care delivery, the member experience, and clinical and consumer insights to encourage engagement, behavior change, proactive clinical outreach and wellness for the millions of people we serve across the country.

More information regarding Humana is available to investors via the Investor Relations page of the company’s web site at www.humana.com, including copies of:

Annual reports to stockholders;
Securities and Exchange Commission filings;
Most recent investor conference presentations;
Quarterly earnings news releases;
Replays of most recent earnings release conference calls;
Calendar of events (including upcoming earnings conference call dates and times, as well as planned interaction with research analysts and institutional investors);
Corporate Governance information.

Humana Inc.
Segment Realignment
Supplementary Information
4/22/2015


Humana Inc. Segment Realignment Supplementary Information


Contents

Page		Description
6		1Q14 Segment Financial Information
7		2Q14 Segment Financial Information
8		3Q14 Segment Financial Information
9		4Q14 Segment Financial Information
10		FY 2014 Segment Financial Information
11		2014 Membership Detail by Quarter


Humana Inc.
1Q14 Segment Financial Information
in millions


							Healthcare			Other		Eliminations/
	Retail			Group			Services			Businesses		Corporate			Consolidated

1Q14 QTD
Revenues - external customers
Premiums:
Individual Medicare Advantage	$	6,460		$	-		$	-		$	-	$	-		$	6,460
Group Medicare Advantage		1,384			-			-			-		-			1,384
Medicare stand-alone PDP		865			-			-			-		-			865
Total Medicare		8,709			-			-			-		-			8,709
Fully-insured		525			1,329			-			-		-			1,854
Specialty		59			275			-			-		-			334
Military services		-			6			-			-		-			6
Medicaid and other		169			-			-			11		-			180
Total premiums		9,462			1,610			-			11		-			11,083
Services revenue:
Provider		-			5			307			-		-			312
ASO and other		14			188			-			3		-			205
Pharmacy		-			-			21			-		-			21
Total services revenue		14			193			328			3		-			538
Total revenues - external customers		9,476			1,803			328			14		-			11,621
Intersegment revenues
Services		-			19			3,481			-		(3,500	)		-
Products		-			-			846			-		(846	)		-
Total intersegment revenues		-			19			4,327			-		(4,346	)		-
Investment income		23			6			-			15		47			91
Total revenues		9,499			1,828			4,655			29		(4,299	)		11,712
Operating expenses:
Benefits		8,080			1,167			-			24		(147	)		9,124
Operating costs		1,010			493			4,434			4		(4,156	)		1,785
Depreciation and amortization		40			24			36			1		(19	)		82
Total operating expenses		9,130			1,684			4,470			29		(4,322	)		10,991
Income from operations		369			144			185			-		23			721
Interest expense		-			-			-			-		35			35
Income before income taxes	$	369		$	144		$	185		$	-	$	(12	)	$	686

Benefit ratio		85.4	%		72.5	%										82.3	%
Operating cost ratio		10.7	%		27.1	%		95.3	%							15.4	%


Humana Inc.
2Q14 Segment Financial Information
in millions


							Healthcare			Other		Eliminations/
	Retail			Group			Services			Businesses		Corporate			Consolidated

2Q14 QTD
Revenues - external customers
Premiums:
Individual Medicare Advantage	$	6,467		$	-		$	-		$	-	$	-		$	6,467
Group Medicare Advantage		1,366			-			-			-		-			1,366
Medicare stand-alone PDP		941			-			-			-		-			941
Total Medicare		8,774			-			-			-		-			8,774
Fully-insured		912			1,321			-			-		-			2,233
Specialty		66			275			-			-		-			341
Military services		-			4			-			-		-			4
Medicaid and other		214			-			-			18		-			232
Total premiums		9,966			1,600			-			18		-			11,584
Services revenue:
Provider		-			6			324			-		-			330
ASO and other		13			175			-			3		-			191
Pharmacy		-			-			25			-		-			25
Total services revenue		13			181			349			3		-			546
Total revenues - external customers		9,979			1,781			349			21		-			12,130
Intersegment revenues
Services		-			16			3,724			-		(3,740	)		-
Products		-			-			938			-		(938	)		-
Total intersegment revenues		-			16			4,662			-		(4,678	)		-
Investment income		24			5			-			15		48			92
Total revenues		10,003			1,802			5,011			36		(4,630	)		12,222
Operating expenses:
Benefits		8,495			1,262			-			25		(155	)		9,627
Operating costs		1,071			484			4,770			5		(4,495	)		1,835
Depreciation and amortization		37			26			35			1		(20	)		79
Total operating expenses		9,603			1,772			4,805			31		(4,670	)		11,541
Income from operations		400			30			206			5		40			681
Interest expense		-			-			-			-		35			35
Income before income taxes	$	400		$	30		$	206		$	5	$	5		$	646

Benefit ratio		85.2	%		78.9	%										83.1	%
Operating cost ratio		10.7	%		26.9	%		95.2	%							15.1	%


Humana Inc.
3Q14 Segment Financial Information
in millions


							Healthcare			Other		Eliminations/
	Retail			Group			Services			Businesses		Corporate			Consolidated

3Q14 QTD
Revenues - external customers
Premiums:
Individual Medicare Advantage	$	6,448		$	-		$	-		$	-	$	-		$	6,448
Group Medicare Advantage		1,381			-			-			-		-			1,381
Medicare stand-alone PDP		806			-			-			-		-			806
Total Medicare		8,635			-			-			-		-			8,635
Fully-insured		926			1,335			-			-		-			2,261
Specialty		67			274			-			-		-			341
Military services		-			5			-			-		-			5
Medicaid and other		352			-			-			13		-			365
Total premiums		9,980			1,614			-			13		-			11,607
Services revenue:
Provider		-			6			320			-		-			326
ASO and other		10			172			-			2		-			184
Pharmacy		-			-			26			-		-			26
Total services revenue		10			178			346			2		-			536
Total revenues - external customers		9,990			1,792			346			15		-			12,143
Intersegment revenues
Services		-			22			3,879			-		(3,901	)		-
Products		-			-			968			-		(968	)		-
Total intersegment revenues		-			22			4,847			-		(4,869	)		-
Investment income		24			6			-			15		50			95
Total revenues		10,014			1,820			5,193			30		(4,819	)		12,238
Operating expenses:
Benefits		8,469			1,324			-			24		(151	)		9,666
Operating costs		1,156			468			4,953			5		(4,684	)		1,898
Depreciation and amortization		43			27			37			-		(22	)		85
Total operating expenses		9,668			1,819			4,990			29		(4,857	)		11,649
Income from operations		346			1			203			1		38			589
Interest expense		-			-			-			-		38			38
Income before income taxes	$	346		$	1		$	203		$	1	$	-		$	551

Benefit ratio		84.9	%		82.0	%										83.3	%
Operating cost ratio		11.6	%		25.8	%		95.4	%							15.6	%


Humana Inc.
4Q14 Segment Financial Information
in millions


							Healthcare			Other			Eliminations/
	Retail			Group			Services			Businesses			Corporate			Consolidated

4Q14 QTD
Revenues - external customers
Premiums:
Individual Medicare Advantage	$	6,407		$	-		$	-		$	-		$	-		$	6,407
Group Medicare Advantage		1,359			-			-			-			-			1,359
Medicare stand-alone PDP		792			-			-			-			-			792
Total Medicare		8,558			-			-			-			-			8,558
Fully-insured		902			1,354			-			-			-			2,256
Specialty		64			274			-			-			-			338
Military services		-			4			-			-			-			4
Medicaid and other		520			-			-			9			-			529
Total premiums		10,044			1,632			-			9			-			11,685
Services revenue:
Provider		-			6			303			-			-			309
ASO and other		2			205			-			1			-			208
Pharmacy		-			-			27			-			-			27
Total services revenue		2			211			330			1			-			544
Total revenues - external customers		10,046			1,843			330			10			-			12,229
Intersegment revenues
Services		-			21			4,014			-			(4,035	)		-
Products		-			-			997			-			(997	)		-
Total intersegment revenues		-			21			5,011			-			(5,032	)		-
Investment income		26			6			-			15			52			99
Total revenues		10,072			1,870			5,341			25			(4,980	)		12,328
Operating expenses:
Benefits		8,464			1,377			-			29			(121	)		9,749
Operating costs		1,339			491			5,150			3			(4,862	)		2,121
Depreciation and amortization		45			26			47			(2	)		(29	)		87
Total operating expenses		9,848			1,894			5,197			30			(5,012	)		11,957
Income (loss) from operations		224			(24	)		144			(5	)		32			371
Interest expense		-			-			-			-			84			84
Income (loss) before income taxes	$	224		$	(24	)	$	144		$	(5	)	$	(52	)	$	287

Benefit ratio		84.3	%		84.4	%											83.4	%
Operating cost ratio		13.3	%		26.3	%		96.4	%								17.3	%


Humana Inc.
FY 2014 Segment Financial Information
in millions


							Healthcare			Other		Eliminations/
	Retail			Group			Services			Businesses		Corporate			Consolidated

2014 YTD
Revenues - external customers
Premiums:
Individual Medicare Advantage	$	25,782		$	-		$	-		$	-	$	-		$	25,782
Group Medicare Advantage		5,490			-			-			-		-			5,490
Medicare stand-alone PDP		3,404			-			-			-		-			3,404
Total Medicare		34,676			-			-			-		-			34,676
Fully-insured		3,265			5,339			-			-		-			8,604
Specialty		256			1,098			-			-		-			1,354
Military services		-			19			-			-		-			19
Medicaid and other		1,255			-			-			51		-			1,306
Total premiums		39,452			6,456			-			51		-			45,959
Services revenue:
Provider		-			23			1,254			-		-			1,277
ASO and other		39			740			-			9		-			788
Pharmacy		-			-			99			-		-			99
Total services revenue		39			763			1,353			9		-			2,164
Total revenues - external customers		39,491			7,219			1,353			60		-			48,123
Intersegment revenues
Services		-			78			15,098			-		(15,176	)		-
Products		-			-			3,749			-		(3,749	)		-
Total intersegment revenues		-			78			18,847			-		(18,925	)		-
Investment income		97			23			-			60		197			377
Total revenues		39,588			7,320			20,200			120		(18,728	)		48,500
Operating expenses:
Benefits		33,508			5,130			-			102		(574	)		38,166
Operating costs		4,576			1,936			19,307			17		(18,197	)		7,639
Depreciation and amortization		165			103			155			-		(90	)		333
Total operating expenses		38,249			7,169			19,462			119		(18,861	)		46,138
Income from operations		1,339			151			738			1		133			2,362
Interest expense		-			-			-			-		192			192
Income before income taxes	$	1,339		$	151		$	738		$	1	$	(59	)	$	2,170

Benefit ratio		84.9	%		79.5	%										83.0	%
Operating cost ratio		11.6	%		26.5	%		95.6	%							15.9	%


Humana Inc.
Ending Membership Detail
In thousands

	March 31, 2014	June 30, 2014	September 30, 2014	December 31, 2014
Medical Membership:
Retail
Individual Medicare Advantage	2,330.8	2,359.0	2,402.8	2,427.9
Group Medicare Advantage	477.6	479.7	484.9	489.7
Medicare stand-alone PDPs	3,856.5	3,885.5	3,940.8	3,994.0
Total Medicare	6,664.9	6,724.2	6,828.5	6,911.6
Individual commercial	715.6	1,120.8	1,085.8	1,016.2
State-based Medicaid	129.6	167.0	296.3	316.8
Medicare Supplement	118.4	123.5	129.2	131.9
Total Retail	7,628.5	8,135.5	8,339.8	8,376.5

Group
Fully-insured medical commercial	1,200.2	1,210.1	1,212.3	1,235.5
ASO commercial	1,142.0	1,120.1	1,111.9	1,104.3
Military services	3,098.0	3,111.3	3,085.6	3,090.4
Total Employer Group	5,440.2	5,441.5	5,409.8	5,430.2

Other Businesses
Long-term care and other	37.9	36.7	36.0	35.0
Total Other Businesses	37.9	36.7	36.0	35.0

Total Medical Membership	13,106.6	13,613.7	13,785.6	13,841.7


Specialty Membership:
Retail
Dental - fully-insured	803.2	889.1	876.4	828.5
Vision	176.7	202.7	209.0	208.4
Other supplemental benefits	143.8	137.7	134.1	128.9
Total Retail	1,123.7	1,229.5	1,219.5	1,165.8

Group
Dental - fully-insured	2,397.6	2,401.6	2,379.7	2,370.5
Dental - ASO	800.4	792.1	783.7	772.4
Vision	2,072.3	2,080.1	2,074.7	2,103.3
Other supplemental benefits	1,330.6	1,302.2	1,287.2	1,256.5
Total Employer Group	6,600.9	6,576.0	6,525.3	6,502.7

Total Specialty Membership	7,724.6	7,805.5	7,744.8	7,668.5

Contacts:

Humana Investor Relations
Regina Nethery, 502-580-3644
Rnethery@humana.com
or
Humana Corporate Communications
Tom Noland, 502-580-3674
Tnoland@humana.com
http://www.humana.com