Humana Reports Fourth Quarter and Full Year 2012 Financial Results; Reaffirms 2013 Financial Guidance

Mon Feb 4, 2013 6:00am EST

* Reuters is not responsible for the content in this press release.

http://pdf.reuters.com/htmlnews/8knews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130204:nBw045414a

http://www.businesswire.com/news/home/20130204005414/en

* 4Q12 EPS of $1.19; FY12 EPS of $7.47, both above management`s expectations 
* FY13 EPS guidance of $7.60 to $7.80 reaffirmed 
* FY12 consolidated revenues grew 6 percent to over $39 billion 
* FY12 cash flows from operations of $1.9 billion

LOUISVILLE, Ky.--(Business Wire)--
Humana Inc. (NYSE: HUM) today reported diluted earnings per common share (EPS)
for the quarter ended December 31, 2012 (4Q12) of $1.19, compared to $1.20 per
share for the quarter ended December 31, 2011 (4Q11). Results for 4Q12 were
relatively unchanged versus those for 4Q11, but exceeded management`s previous
expectations. 

For the year ended December 31, 2012 (FY12) the company reported $7.47 in EPS
compared to $8.46 for the year ended December 31, 2011 (FY11), which was higher
than management`s previous expectations for FY12 EPS in the range of $7.25 to
$7.35. FY12 consolidated results included $0.48 per share of benefit from
favorable prior period medical claims reserve development compared to $0.77 per
share in FY11. 

The company continues to anticipate EPS for the year ending December 31, 2013
(FY13) in the range of $7.60 to $7.80 as improving operating results and modest
accretion from the Metropolitan Health Networks, Inc. (Metropolitan) acquisition
that closed in late FY12 are expected to be generally offset by slightly higher
flu-related medical costs than previously anticipated, as well as additional
interest expense associated with the company`s recent senior notes offering. 

"The progress we made building our clinical capabilities in 2012 positions us
strongly for success in 2014 and beyond," said Bruce D. Broussard, President and
Chief Executive Officer of Humana. "For 2013, we will continue to enhance our
integrated care delivery model, which we believe represents the future of health
care delivery, as we forecast another year of growth in revenues, earnings and
Medicare membership." 

Consolidated Highlights

Revenues - 4Q12 consolidated revenues were $9.56 billion, an increase of 6
percent from $9.06 billion in 4Q11, with total premiums and services revenue up
5 percent compared to the prior year`s quarter. The year-over-year increase in
premiums and services revenue was primarily driven by higher Retail and Employer
Group segment revenues resulting from higher average individual and group
Medicare membership, partially offset by the company`s new South Region TRICARE
contract being accounted for as self-funded versus fully-insured for the
previous contract. The new contract became effective on April 1, 2012. 

FY12 consolidated revenues increased 6 percent to $39.13 billion from $36.83
billion in FY11 with total premiums and services revenue also up 6 percent
compared to the prior year period, as a result of similar segment-level changes
as those affecting the fourth quarter year-over-year change. 

Benefits expense - The 4Q12 consolidated benefit ratio (benefits expense as a
percent of premiums) of 83.7 percent increased by 190 basis points from 81.8
percent for the prior year`s quarter due primarily to a 360 basis point increase
in the Retail Segment benefit ratio, as discussed more fully below. 

The consolidated benefit ratio for FY12 of 83.7 percent increased by 160 basis
points from the FY11 consolidated benefit ratio of 82.1 percent also primarily
due to a 290 basis point increase in the benefit ratio for the Retail Segment. 

Operating expenses - The consolidated operating cost ratio (operating costs as a
percent of total revenues less investment income) of 17.5 percent for 4Q12
declined from 17.7 percent in 4Q11 primarily due to substantial reductions in
this operating metric for the Retail and Employer Group Segments nearly offset
by the impact of the accounting for the company`s new South Region TRICARE
contract in the company`s Other Businesses. 

The FY12 consolidated operating cost ratio of 15.1 percent increased 30 basis
points from 14.8 percent for FY11 primarily due to the impact of the new South
Region TRICARE contract discussed above, partially offset by lower
year-over-year operating cost ratios for the Retail and Employer Group Segments.


Strategic transaction update - On December 21, 2012, Humana completed its
previously disclosed acquisition of Metropolitan, a Medical Services
Organization that coordinates medical care for Medicare Advantage and Medicaid
beneficiaries, primarily in Florida. 

Retail Segment Highlights

Pretax results:

* Retail Segment pretax income of $256 million in 4Q12 compares to $326 million
in 4Q11, a decline of $70 million. This decrease was primarily due to a higher
benefit ratio, partially offset by a lower operating cost ratio. 
* For FY12, pretax earnings for the Retail Segment of $1.16 billion decreased by
$425 million from FY11 pretax earnings of $1.59 billion. The full-year decrease
reflects the same factors impacting the fourth quarter year-over-year
comparison. FY12 Retail Segment pretax results included $110 million of benefit
from favorable prior period medical claims reserve development compared to $147
million in FY11.

Enrollment:

* Individual Medicare Advantage membership was 1,927,600 at December 31, 2012,
an increase of 287,300 members, or 18 percent from 1,640,300 at December 31,
2011, primarily due to a successful enrollment season associated with the 2012
plan year as well as age-in enrollment throughout the year. 
* Effective March 31, 2012, the company added approximately 62,600 members from
the acquisition of Arcadian Management Services, Inc. (Arcadian). As previously
announced, the company divested approximately 12,600 members acquired with
Arcadian effective January 1, 2013 in accordance with the company`s previously
disclosed agreement with the United States Department of Justice. 
* January 2013 individual Medicare Advantage membership approximated 2,011,000,
up approximately 83,400 from December 31, 2012, reflecting net membership
additions in line with the company`s expectations for the recently completed
2013 Annual Election Period (AEP) for Medicare beneficiaries and the
Arcadian-related membership divestitures discussed above. 
* Membership in the company`s individual stand-alone Prescription Drug Plans
(PDPs) was 2,985,600 at December 31, 2012, up 445,200, or 18 percent compared to
2,540,400 at December 31, 2011. These increases resulted primarily from higher
gross sales primarily during the 2012 enrollment season, particularly for the
company`s innovative Humana-Walmart plan offering, supplemented by dual-eligible
and age-in enrollments throughout the year. 
* January 2013 individual stand-alone PDP membership grew to approximately
3,113,000, an increase of approximately 127,400 from December 31, 2012, in line
with the company`s expectations for net additions during the AEP. 
* HumanaOne medical membership increased to 444,000 at December 31, 2012, an
increase of 10,400, or 2 percent, from 433,600 at December 31, 2011. 
* Membership in individual specialty products(a) of 948,700 at December 31, 2012
increased 21 percent from 782,500 at December 31, 2011, driven primarily by
increased membership in dental offerings.

Premiums and services revenue:

* 4Q12 premiums and services revenue for the Retail Segment was $6.11 billion,
an increase of 15 percent from $5.31 billion in 4Q11. The increase was primarily
the result of 19 percent higher average individual Medicare Advantage membership
year over year.

Benefits expense:

* The 4Q12 benefit ratio for the Retail Segment was 82.6 percent, an increase of
360 basis points from 79.0 percent in 4Q11. The year-over-year increase was
primarily due to a higher Medicare Advantage benefit ratio associated with new
members and increased outpatient utilization for both new and existing members.

Operating costs:

* The Retail Segment`s operating cost ratio of 13.1 percent in 4Q12 decreased
160 basis points from 14.7 percent in 4Q11. The decrease was primarily the
result of cost efficiencies resulting from higher average membership together
with the company`s continued focus on operating cost efficiencies.

Employer Group Segment Highlights

Pretax results:

* Employer Group Segment pretax loss of $25 million in 4Q12 compares to a pretax
loss of $51 million in 4Q11, and reflects an improved operating cost ratio
partially offset by a year-over-year increase in the benefit ratio for this
segment. 
* For FY12, pretax earnings for the Employer Group Segment of $253 million
increased by $11 million versus FY11 pretax earnings of $242 million with the
same factors impacting fourth quarter results also driving the year-over-year
increase.

Enrollment:

* Group Medicare Advantage membership was 398,500 at December 31, 2012, an
increase of 80,300 members, or 25 percent, from 318,200 at December 31, 2011
primarily due to the addition of a large retiree account during FY12. 
* Group fully-insured commercial medical membership increased to 1,211,800 at
December 31, 2012, an increase of 31,600, or 3 percent, from 1,180,200 at
December 31, 2011. This increase primarily reflected small group business
membership gains partially offset by lower membership in large group accounts.
Approximately 59 percent of group fully-insured commercial medical membership
was in small group accounts at December 31, 2012 versus 56 percent at December
31, 2011. 
* Group administrative services only (ASO) commercial medical membership
declined to 1,237,700 at December 31, 2012, a decrease of 54,600, or 4 percent,
from 1,292,300 at December 31, 2011. This decline reflected a continuation of
discipline in pricing services for self-funded accounts amid a highly
competitive environment. 
* Membership in Employer Group specialty products(a) increased to 7,136,200 at
December 31, 2012, an increase of 603,600, or 9 percent, from 6,532,600 at
December 31, 2011. This increase primarily resulted from increased cross-sales
of the company`s specialty products to its medical membership and growth in
stand-alone specialty product sales.

Premiums and services revenue:

* 4Q12 premiums and services revenue for the Employer Group Segment were $2.63
billion, up approximately 14 percent from $2.30 billion in 4Q11 primarily
reflecting the impacts of higher average group Medicare Advantage and commercial
fully-insured membership.

Benefits expense:

* 4Q12 benefit ratio for the Employer Group Segment was 87.1 percent, an
increase of 70 basis points from 86.4 percent for 4Q11. The year-over-year
increase in the benefit ratio primarily reflected a higher percentage of members
in group Medicare Advantage plans (which carry a higher benefit ratio than
commercial fully-insured group accounts).

Operating costs:

* The Employer Group Segment`s operating cost ratio was 16.7 percent in 4Q12, a
decline of 210 basis points from 18.8 percent in 4Q11, primarily reflecting a
higher percentage of members in group Medicare Advantage plans (which carry a
lower operating cost ratio than commercial fully-insured group accounts) as well
as cost savings associated with operating cost reduction initiatives.

Health and Well-Being Services Segment Highlights

Pretax results:

* Health and Well-Being Services Segment pretax income of $75 million in 4Q12
declined $10 million from $85 million in 4Q11 primarily due to transaction costs
associated with the closings of the Metropolitan and MCCI Holdings, LLC (MCCI)
strategic transactions announced in November 2012. 
* For FY12, pretax earnings for the Health and Well-Being Services Segment of
$486 million increased by $133 million from FY11 pretax earnings of $353
million, primarily from higher earnings in the company`s RightSource mail order
operations.

Revenues:

* Revenues of $3.26 billion in 4Q12 for the Health and Well-Being Services
Segment increased 13 percent from $2.90 billion in 4Q11. This increase was
primarily due to growth in the company`s pharmacy solutions business.

Operating costs:

* The Health and Well-Being Services Segment`s operating cost ratio of 96.8
percent in 4Q12 increased by 50 basis points from 96.3 percent in 4Q11,
primarily due to costs associated with the 4Q12 closings of the previously
announced Metropolitan and MCCI strategic transactions.

Other Businesses Highlights

Pretax results:

* Other Businesses incurred a pretax loss of $31 million in 4Q12 versus pretax
income of $1 million in 4Q11, primarily due to a reserve strengthening for the
company`s closed block of long-term-care business in 4Q12 
* For FY12, a pretax loss for Other Businesses of $19 million compares to pretax
income of $84 million in FY11. This year-over-year decline primarily reflected
the combined effect of approximately $46 million in benefits expense related to
the settlement of previously disclosed litigation involving Humana Military
Healthcare Services, Inc., the 4Q12 adjustments to long-term-care reserves
described above and the change in profitability under the new South Region
TRICARE contract described below. 
* On April 1, 2012, the company`s new South Region TRICARE contract became
effective with the Department of Defense (DoD). The company`s new contract is
structured similar to self-funded products versus a fully-insured structure for
the company`s previous South Region TRICARE contract with the DoD. This change
resulted in significant volatility in year-over-year comparisons for the
company`s Other Businesses.

Balance Sheet

* At December 31, 2012, the company had cash, cash equivalents, and investment
securities of $11.15 billion, up approximately $320 million from $10.83 billion
at December 31, 2011 reflecting higher balances associated with increased
revenues for FY12 versus FY11. 
* In early December 2012, the company announced it had completed its public
offering of $1 billion of senior notes. A substantial portion of the proceeds
from that debt offering was used to complete the Metropolitan transaction,
including the retirement of Metropolitan`s indebtedness and for related
transaction fees and expenses, all in late December 2012. 
* Parent company cash and short-term investments of $346 million at December 31,
2012 decreased $176 million from $522 million at September 30, 2012, primarily
reflecting strategic transaction activity and cash dividends to stockholders
during 4Q12 partially offset by the net proceeds from the issuance of debt. Cash
and short-term investments at the parent decreased $148 million year over year
from $494 million held at the parent at December 31, 2011 as increased dividends
from subsidiaries and net proceeds from the issuance of debt during 4Q12 were
more than offset by strategic transaction activity, share repurchases and cash
dividends to stockholders. 
* Days in claims payable of 48.5 at December 31, 2012 decreased 3.1 days from
51.6 days at September 30, 2012 primarily due to a decline in processed and
unprocessed claims on hand as well as certain provider capitation payment
settlements during 4Q12. 
* Debt-to-total capitalization at December 31, 2012 was 22.8 percent, up 710
basis points from 15.7 percent at September 30, 2012, and up 570 basis points
from 17.1 percent at December 31, 2011 primarily driven by the 4Q12 issuance of
senior notes described above.

Cash Flows from Operations

Cash flows provided by operations for 4Q12 were $205 million compared to cash
flows used in operations of $1.80 billion in 4Q11. The company also evaluates
operating cash flows on a non-GAAP basis:

                                                                          
 Net cash from operating activities        4Q12              4Q11         
 (in millions)                             Cash Flows        Cash Flows   
 GAAP                                      $       205       ($1,797)     
 Timing of premium payment from CMS (b)            -         1,796        
 Non-GAAP (c)                              $       205       ($1)         
                                                                          


The year-over-year increase in the non-GAAP cash flows from operations is due
primarily to the effect on cash flows of changes in working capital accounts. 

FY12 cash flows from operations of $1.92 billion compared to $2.08 billion for
FY11, primarily due to lower net income year over year. 

Share Repurchase Program

* During FY12, under the company`s current share repurchase authorization and a
previously approved share repurchase authorization, the company executed share
repurchases of approximately $460 million, or approximately 6,252,900 of its
outstanding shares, at an average price of $73.66 per share. 
* As of February 4, 2013, approximately $640 million of the $1 billion April
2012 share repurchase authorization remained, with an expiration date of June
30, 2014.

Footnotes

(a) The company provides a full range of insured specialty products including
dental, vision and other supplemental health and financial protection products.
Members included in these products may not be unique to each product since
members have the ability to enroll in multiple products. Other supplemental
benefits include life, disability, and fixed benefit products including cancer
and critical illness policies. 

(b) Generally, when the first day of a month falls on a weekend or holiday, with
the exception of January 1 (New Year`s Day), the company receives this payment
on the last business day of the previous month. Consequently, 4Q11 cash flows
included two monthly Medicare payments compared to three monthly Medicare
payments during 4Q12. 

(c) The Company has included certain financial measures that are not in
accordance with Generally Accepted Accounting Principles (GAAP) in its summary
of financial results within this earnings press release. The company believes
that these non-GAAP measures, when presented in conjunction with comparable GAAP
measures, are useful to both management and its investors in analyzing the
company's ongoing business and operating performance. Internally, management
uses these non-GAAP financial measures as indicators of business performance, as
well as for operational planning and decision making purposes. Non-GAAP
financial measures should be considered in addition to, but not as a substitute
for, or superior to, financial measures prepared in accordance with GAAP. 

Conference Call & Virtual Slide Presentation

Humana will host a conference call, as well as a virtual slide presentation, at
9:00 a.m. eastern time today to discuss its financial results for the quarter
and the company`s expectations for future earnings. A live virtual presentation
(audio with slides) may be accessed via Humana`s Investor Relations page at
www.humana.com. The company suggests web participants sign on at least 15
minutes in advance of the call. The company also suggests web participants visit
the site well in advance of the call to run a system test and to download any
free software needed to view the presentation. 

All parties interested in the audio-only portion of the conference call are
invited to dial 888-625-7430. No password is required. The company suggests
participants dial in at least ten minutes in advance of the call. For those
unable to participate in the live event, the virtual presentation archive may be
accessed via the Historical Webcasts & Presentations section of the Investor
Relations page at www.humana.com. 

Cautionary Statement

This news release includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. When used in investor
presentations, press releases, Securities and Exchange Commission (SEC) filings,
and in oral statements made by or with the approval of one of Humana`s executive
officers, the words or phrases like "expects," "anticipates," "intends," "likely
will result," "estimates," "projects" or variations of such words and similar
expressions are intended to identify such forward-looking statements. These
forward-looking statements are not guarantees of future performance and are
subject to risks, uncertainties, and assumptions, including, among other things,
information set forth in the "Risk Factors" section of the company`s SEC
filings, a summary of which includes but is not limited to the following:

* If Humana does not design and price its products properly and competitively,
if the premiums Humana charges are insufficient to cover the cost of health care
services delivered to its members, if the company is unable to implement
clinical initiatives to provide a better health care experience for its members,
lower costs and appropriately document the risk profile of its members, or if
its estimates of benefits expense are inadequate, Humana`s profitability could
be materially adversely affected. Humana estimates the costs of its benefit
expense payments, and designs and prices its products accordingly, using
actuarial methods and assumptions based upon, among other relevant factors,
claim payment patterns, medical cost inflation, and historical developments such
as claim inventory levels and claim receipt patterns. These estimates, however,
involve extensive judgment, and have considerable inherent variability because
they are extremely sensitive to changes in payment patterns and medical cost
trends. 
* If Humana fails to effectively implement its operational and strategic
initiatives, particularly its Medicare initiatives (given the concentration of
the company`s revenues in the Medicare business), the company`s business may be
materially adversely affected. 
* If Humana fails to properly maintain the integrity of its data, to
strategically implement new information systems, to protect Humana`s proprietary
rights to its systems, or to defend against cyber-security attacks, the
company`s business may be materially adversely affected. 
* Humana`s business may be materially adversely impacted by CMS`s adoption of a
new coding set for diagnoses. 
* Humana is involved in various legal actions and governmental and internal
investigations, any of which, if resolved unfavorably to the company, could
result in substantial monetary damages. Increased litigation and negative
publicity could also increase the company`s cost of doing business. 
* As a government contractor, Humana is exposed to risks that may materially
adversely affect its business or its willingness or ability to participate in
government health care programs. 
* Recently enacted health insurance reform, including The Patient Protection and
Affordable Care Act and The Health Care and Education Reconciliation Act of
2010, could have a material adverse effect on Humana`s results of operations,
including restricting revenue, enrollment and premium growth in certain products
and market segments, restricting the company`s ability to expand into new
markets, increasing the company's medical and operating costs by, among other
things, requiring a minimum benefit ratio on insured products (and particularly
how the ratio may apply to Medicare plans, including aggregation, credibility
thresholds, and its possible application to prescription drug plans), lowering
the company`s Medicare payment rates and increasing the company`s expenses
associated with a non-deductible federal premium tax and other assessments;
financial position, including the company's ability to maintain the value of its
goodwill; and cash flows. In addition, if the new non-deductible federal premium
tax and other assessments, including a three-year commercial reinsurance fee,
were imposed as enacted, and if Humana is unable to adjust its business model to
address these new taxes and assessments, such as through the reduction of the
company`s operating costs, there can be no assurance that the non-deductible
federal premium tax and other assessments would not have a material adverse
effect on the company`s results of operations, financial position, and cash
flows. 
* Humana`s business activities are subject to substantial government regulation.
New laws or regulations, or changes in existing laws or regulations or their
manner of application could increase the company`s cost of doing business and
may adversely affect the company`s business, profitability and cash flows. 
* Any failure to manage operating costs could hamper Humana`s profitability. 
* Any failure by Humana to manage acquisitions and other significant
transactions successfully may have a material adverse effect on its results of
operations, financial position, and cash flows. 
* If Humana fails to develop and maintain satisfactory relationships with the
providers of care to its members, the company`s business may be adversely
affected. 
* Humana`s pharmacy business is highly competitive and subjects it to
regulations in addition to those the company faces with its core health benefits
businesses. 
* Changes in the prescription drug industry pricing benchmarks may adversely
affect Humana`s financial performance. 
* If Humana does not continue to earn and retain purchase discounts and volume
rebates from pharmaceutical manufacturers at current levels, Humana`s gross
margins may decline. 
* Humana`s ability to obtain funds from its subsidiaries is restricted by state
insurance regulations. 
* Downgrades in Humana`s debt ratings, should they occur, may adversely affect
its business, results of operations, and financial condition. 
* Changes in economic conditions could adversely affect Humana`s business and
results of operations. 
* The securities and credit markets may experience volatility and disruption,
which may adversely affect Humana`s business. 
* Given the current economic climate, Humana`s stock and the stock of other
companies in the insurance industry may be increasingly subject to stock price
and trading volume volatility.

In making forward-looking statements, Humana is not undertaking to address or
update them in future filings or communications regarding its business or
results. In light of these risks, uncertainties, and assumptions, the
forward-looking events discussed herein may or may not occur. There also may be
other risks that the company is unable to predict at this time. Any of these
risks and uncertainties may cause actual results to differ materially from the
results discussed in the forward-looking statements. 

Humana advises investors to read the following documents as filed by the company
with the SEC for further discussion both of the risks it faces and its
historical performance:

* Form 10-K for the year ended December 31, 2011; 
* Form 10-Qs for the quarters ended March 31, 2012, June 30, 2012 and September
30, 2012 (as amended by the Form 10-Q/A filed on December 4, 2012); 
* Form 8-Ks filed during 2012 and 2013.

About Humana

Humana Inc., headquartered in Louisville, Kentucky, is a leading health care
company that offers a wide range of insurance products and health and wellness
services that incorporate an integrated approach to lifelong well-being. By
leveraging the strengths of its core businesses, Humana believes it can better
explore opportunities for existing and emerging adjacencies in health care that
can further enhance wellness opportunities for the millions of people across the
nation with whom the company has relationships. 

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. - Earnings Guidance Points as of February 4, 2013  


                                                                                                                                              
 (in accordance with Generally Accepted          For the year ending December 31, 2013      Comments                                          
 Accounting Principles)                                                                                                                       
 Diluted earnings per common share (EPS)                                                                                                      
 Full Year                                       $7.60 to $7.80                             FY13 includes approximately $0.30 per share in    
                                                                                            investment spending                               
 First Quarter                                   $1.75 to $1.85                                                                               
 Revenues                                                                                                                                     
 Consolidated                                    $41.0 billion to $41.5 billion             Includes expected investment income in the range  
                                                                                            of $365 million to $385 million for 2013          
 Retail Segment                                  $26.25 billion to $26.75 billion           Segment-level revenues include intersegment       
 Employer Group Segment                          $11.0 billion to $11.5 billion             amounts that eliminate in consolidation           
 Health and Well-Being Services                                                                                                               
 Segment                                         $15.0 billion to $15.5 billion                                                               
 Other Businesses                                $1.8 billion to $2.1 billion                                                                 
 Ending medical membership versus prior                                                                                                       
 year end                                                                                                                                     
 Retail Segment                                  Up 100,000 to 120,000                      Includes the January 1, 2013 disposition of       
 Medicare Advantage                                                                         12,600 Medicare Advantage members acquired in     
                                                                                            the March 2012 Arcadian transaction in            
                                                                                            accordance with the company`s previously          
                                                                                            disclosed agreement with the United States        
                                                                                            Department of Justice.                            
                                                                                                                                              
 Medicare stand-alone PDPs                       Up 135,000 to 175,000                                                                        
 HumanaOne                                       Down approximately 50,000                                                                    
 Medicare Supplement                             Up 15,000 to 25,000                                                                          
 Employer Group Segment                                                                                                                       
 Medicare Advantage                              Up approximately 20,000                                                                      
 Commercial Fully-Insured                        Flat to up 5,000                                                                             
 Commercial ASO                                  Down 25,000 to 45,000                                                                        
 Benefit ratios                                                                             Benefits expense as a percent of premiums         
 Retail Segment                                  84.5% to 85.0%                                                                               
 Employer Group Segment                          85.0% to 86.0%                                                                               
 Operating cost ratios                                                                      Operating costs as a percent of total revenues    
                                                                                            excluding investment income                       
 Consolidated                                    15.0% to 15.5%                                                                               
 Health and Well-Being Services                                                                                                               
 Segment                                         95.5% to 96.0%                                                                               
 Consolidated depreciation and amortization                                                 Certain D&A is included in benefits expense on    
 Income statement                                $330 million to $350 million               the income statement but shown as a non-cash      
 Cash flows statement                            $415 million to $435 million               item on the cash flows statement                  
 Consolidated interest expense                   $140 million to $145 million                                                                 
 Detailed pretax results                                                                    Segment-level pretax results and margins include  
                                                                                            the impact of net investment income               
 Retail Segment                                  $1.29 billion to $1.33 billion;                                                              
                                                 approximately 5% pretax margin                                                               
 Employer Group Segment                          $105 million to $155 million;                                                                
                                                 1.0% to 1.2% pretax margin                                                                   
 Health and Well-Being Services                                                                                                               
 Segment                                         $500 million to $550 million;                                                                
                                                 3.0% to 3.5% pretax margin                                                                   
 Effective Tax Rate                              Approximately 37%                                                                            
 Diluted shares                                  Approximately 161.5 million                Projections exclude the impact of future share    
                                                                                            repurchases                                       
 Cash flows from operations                      $1.8 billion to $2.0 billion                                                                 
 Capital expenditures                            $425 million to $450 million                                                                 


                            
                            
                            
                            
                            
 Humana Inc.                
 Statistical Schedules      
 And                        
 Supplementary Information  
 4Q12 Earnings Release      
                            
                            
                            
 S-1                        


                                                                                                           
                                                                                                           
                                                                                                           
                                                                                                           
   Humana Inc.                                                                                             
   Statistical Schedules and Supplementary Information                                                     
   4Q12 Earnings Release                                                                                   
                                                                                                           
   Contents                                                                                                
                                                                                                           
   Page                                         Description                                                
                                                                                                           
   S-3-4                                        Consolidated Statements of Income                          
   S-5-6                                        Quarterly Segment Financial Information                    
   S-7-8                                        FY Segment Financial Information                           
   S-9                                          Consolidated Balance Sheets                                
   S-10-11                                      Consolidated Statements of Cash Flows                      
   S-12                                         Key Income Statement Ratios and Segment Operating Results  
   S-13-14                                      Health and Well-Being Services Segment Metrics             
   S-15                                         Membership Detail                                          
   S-16-17                                      Premiums and Services Revenue Detail                       
   S-18                                         Medicare Summary                                           
   S-19                                         Investments                                                
   S-20-22                                      Benefits Payable Detail and Statistics                     
   S-23                                         Footnotes                                                  
                                                                                                           
                                                                                                           
                                                                                                           
 S-2                                                                                                       


                                                                                                                                                                 
                                                                                                                                                                 
                                                                                                                                                                 
                                                                                                                                                                 
 Humana Inc.                                                                                                                                                     
 Consolidated Statements of Income                                                                                                                               
 In millions, except per common share results                                                                                                                    
                                                                                                                                                                 
                                                                               Three Months Ended December 31,                                                   
                                                                                                                              Dollar             Percentage      
                                                                               2012                       2011                Change             Change          
 Revenues:                                                                                                                                                       
                          Premiums                                             $        8,980             $        8,638      $    342           4.0     %       
                          Services                                                      475                        325             150           46.2    %       
                          Investment income                                             102                        93              9             9.7     %       
                                                   Total revenues                       9,557                      9,056           501           5.5     %       
 Operating expenses:                                                                                                                                             
                          Benefits                                                      7,516                      7,062           454           6.4     %       
                          Operating costs                                               1,655                      1,585           70            4.4     %       
                          Depreciation and amortization                                 77                         69              8             11.6    %       
                                                   Total operating expenses             9,248                      8,716           532           6.1     %       
 Income from operations                                                                 309                        340             (31    )      -9.1    %       
 Interest expense                                                                       27                         27              0             0.0     %       
 Income before income taxes                                                             282                        313             (31    )      -9.9    %       
 Provision for income taxes                                                             90                         114             (24    )      -21.1   %       
 Net income                                                                    $        192               $        199        $    (7     )      -3.5    %       
                                                                                                                                                                 
 Basic earnings per common share                                               $        1.21              $        1.22       $    (0.01  )      -0.8    %       
 Diluted earnings per common share                                             $        1.19              $        1.20       $    (0.01  )      -0.8    %       
                                                                                                                                                                 
 Shares used in computing basic earnings per common share (000's)                       158,764                    163,238                                       
 Shares used in computing diluted earnings per common share (000's)                     160,682                    165,632                                       
                                                                                                                                                                 
                                                                                                                                                                 
                                                                                                                                                                 
 S-3                                                                                                                                                             


                                                                                                                                                
                                                                                                                                                
                                                                                                                                                
                                                                                                                                                
 Humana Inc.                                                                                                                                    
 Consolidated Statements of Income                                                                                                              
 In millions, except per common share results                                                                                                   
                                                                                                                                                
                                                                               Twelve Months Ended December 31,                                 
                                                                                                                        Dollar      Percentage  
                                                                               2012                      2011           Change      Change      
 Revenues:                                                                                                                                      
                          Premiums                                             $ 37,009                  $ 35,106       $ 1,903     5.4%        
                          Services                                             1,726                     1,360          366         26.9%       
                          Investment income                                    391                       366            25          6.8%        
                                                   Total revenues              39,126                    36,832         2,294       6.2%        
 Operating expenses:                                                                                                                            
                          Benefits                                             30,985                    28,823         2,162       7.5%        
                          Operating costs                                      5,830                     5,395          435         8.1%        
                          Depreciation and amortization                        295                       270            25          9.3%        
                                                   Total operating expenses    37,110                    34,488         2,622       7.6%        
 Income from operations                                                        2,016                     2,344          (328)       -14.0%      
 Interest expense                                                              105                       109            (4)         -3.7%       
 Income before income taxes                                                    1,911                     2,235          (324)       -14.5%      
 Provision for income taxes                                                    689                       816            (127)       -15.6%      
 Net income                                                                    $ 1,222                   $ 1,419        $ (197)     -13.9%      
                                                                                                                                                
 Basic earnings per common share                                               $ 7.56                    $ 8.58         $ (1.02)    -11.9%      
 Diluted earnings per common share                                             $ 7.47                    $ 8.46         $ (0.99)    -11.7%      
                                                                                                                                                
 Shares used in computing basic earnings per common share (000's)              161,484                   165,413                                
 Shares used in computing diluted earnings per common share (000's)            163,457                   167,827                                
                                                                                                                                                
                                                                                                                                                
                                                                                                                                                
 S-4                                                                                                                                            


                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
 Humana Inc.                                                                                                                                                                              
 4Q12 Segment Financial Information                                                                                                                                                       
 In millions                                                                                                                                                                              
                                                                                     Health and                                                                                           
                                                             Employer                Well-Being              Other                   Eliminations/                                        
                                        Retail               Group                   Services                Businesses              Corporate                   Consolidated             
                                                                                                                                                                                          
 Revenues - external customers                                                                                                                                                            
 Premiums:                                                                                                                                                                                
 Medicare Advantage                         $   5,184             $    1,005              $    -                  $    -                   $     -                     $     6,189        
 Medicare stand-alone PDP                       620                    2                       -                       63                        -                           685          
 Total Medicare                                 5,804                  1,007                   -                       63                        -                           6,874        
 Fully-insured                                  255                    1,251                   -                       -                         -                           1,506        
 Specialty                                      46                     277                     -                       -                         -                           323          
 Military services                              -                      -                       -                       11                        -                           11           
 Medicaid and other (A)                         -                      -                       -                       266                       -                           266          
 Total premiums                                 6,105                  2,535                   -                       340                       -                           8,980        
 Services revenue:                                                                                                                                                                        
 Provider                                       -                      -                       271                     -                         -                           271          
 ASO and other (B)                              7                      92                      -                       100                       -                           199          
 Pharmacy                                       -                      -                       5                       -                         -                           5            
 Total services revenue                         7                      92                      276                     100                       -                           475          
 Total revenues - external customers            6,112                  2,627                   276                     440                       -                           9,455        
                                                                                                                                                                                          
 Intersegment revenues                                                                                                                                                                    
 Services                                       -                      4                       2,423                   -                         (2,427  )                   -            
 Products                                       -                      -                       565                     -                         (565    )                   -            
 Total intersegment revenues                    -                      4                       2,988                   -                         (2,992  )                   -            
 Investment income                              21                     11                      -                       15                        55                          102          
 Total revenues                                 6,133                  2,642                   3,264                   455                       (2,937  )                   9,557        
                                                                                                                                                                                          
 Operating expenses:                                                                                                                                                                      
 Benefits                                       5,042                  2,208                   -                       354                       (88     )                   7,516        
 Operating costs                                800                    439                     3,161                   128                       (2,873  )                   1,655        
 Depreciation and amortization                  35                     20                      28                      4                         (10     )                   77           
 Total operating expenses                       5,877                  2,667                   3,189                   486                       (2,971  )                   9,248        
 Income (loss) from operations                  256                    (25    )                75                      (31    )                  34                          309          
 Interest expense                               -                      -                       -                       -                         27                          27           
 Income (loss) before income taxes          $   256               $    (25    )           $    75                 $    (31    )            $     7                     $     282          
                                                                                                                                                                                          
 Benefit ratio                                  82.6   %               87.1   %                                        104.1  %                                              83.7   %     
 Operating cost ratio (C)                       13.1   %               16.7   %                96.8   %                29.1   %                                              17.5   %     
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
 S-5                                                                                                                                                                                      


                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
 Humana Inc.                                                                                                                                                                              
 4Q11 Segment Financial Information                                                                                                                                                       
 In millions                                                                                                                                                                              
                                                                                     Health and                                                                                           
                                                             Employer                Well-Being              Other                   Eliminations/                                        
                                        Retail               Group                   Services                Businesses              Corporate                   Consolidated             
                                                                                                                                                                                          
 Revenues - external customers                                                                                                                                                            
 Premiums:                                                                                                                                                                                
 Medicare Advantage                         $   4,454             $    789                $    -                  $    -                   $     -                     $     5,243        
 Medicare stand-alone PDP                       580                    2                       -                       57                        -                           639          
 Total Medicare                                 5,034                  791                     -                       57                        -                           5,882        
 Fully-insured                                  233                    1,181                   -                       -                         -                           1,414        
 Specialty                                      35                     237                     -                       -                         -                           272          
 Military services                              -                      -                       -                       814                       -                           814          
 Medicaid and other (A)                         -                      -                       -                       256                       -                           256          
 Total premiums                                 5,302                  2,209                   -                       1,127                     -                           8,638        
 Services revenue:                                                                                                                                                                        
 Provider                                       -                      -                       222                     -                         -                           222          
 ASO and other (B)                              4                      87                      -                       9                         -                           100          
 Pharmacy                                       -                      -                       3                       -                         -                           3            
 Total services revenue                         4                      87                      225                     9                         -                           325          
 Total revenues - external customers            5,306                  2,296                   225                     1,136                     -                           8,963        
                                                                                                                                                                                          
 Intersegment revenues                                                                                                                                                                    
 Services                                       -                      4                       2,185                   -                         (2,189  )                   -            
 Products                                       -                      -                       490                     -                         (490    )                   -            
 Total intersegment revenues                    -                      4                       2,675                   -                         (2,679  )                   -            
 Investment income                              19                     12                      -                       14                        48                          93           
 Total revenues                                 5,325                  2,312                   2,900                   1,150                     (2,631  )                   9,056        
                                                                                                                                                                                          
 Operating expenses:                                                                                                                                                                      
 Benefits                                       4,190                  1,909                   -                       1,036                     (73     )                   7,062        
 Operating costs                                779                    433                     2,794                   110                       (2,531  )                   1,585        
 Depreciation and amortization                  30                     21                      21                      3                         (6      )                   69           
 Total operating expenses                       4,999                  2,363                   2,815                   1,149                     (2,610  )                   8,716        
 Income (loss) from operations                  326                    (51    )                85                      1                         (21     )                   340          
 Interest expense                               -                      -                       -                       -                         27                          27           
 Income (loss) before income taxes          $   326               $    (51    )           $    85                 $    1                   $     (48     )             $     313          
                                                                                                                                                                                          
 Benefit ratio                                  79.0   %               86.4   %                                        91.9   %                                              81.8   %     
 Operating cost ratio (C)                       14.7   %               18.8   %                96.3   %                9.7    %                                              17.7   %     
                                                                                                                                                                                          
                                                                                                                                                                                          
                                                                                                                                                                                          
 S-6                                                                                                                                                                                      


                                                                                                                                                                                               
                                                                                                                                                                                               
                                                                                                                                                                                               
                                                                                                                                                                                               
 Humana Inc.                                                                                                                                                                                   
 FY 12 Segment Financial Information                                                                                                                                                           
 In millions                                                                                                                                                                                   
                                                                                       Health and                                                                                              
                                                              Employer                 Well-Being               Other                   Eliminations/                                          
                                        Retail                Group                    Services                 Businesses              Corporate                    Consolidated              
                                                                                                                                                                                               
 Revenues - external customers                                                                                                                                                                 
 Premiums:                                                                                                                                                                                     
 Medicare Advantage                         $   20,788             $    4,064               $    -                   $    -                   $     -                      $     24,852        
 Medicare stand-alone PDP                       2,587                   8                        -                        266                       -                            2,861         
 Total Medicare                                 23,375                  4,072                    -                        266                       -                            27,713        
 Fully-insured                                  1,004                   4,996                    -                        -                         -                            6,000         
 Specialty                                      171                     1,070                    -                        -                         -                            1,241         
 Military services                              -                       -                        -                        1,017                     -                            1,017         
 Medicaid and other (A)                         -                       -                        -                        1,038                     -                            1,038         
 Total premiums                                 24,550                  10,138                   -                        2,321                     -                            37,009        
 Services revenue:                                                                                                                                                                             
 Provider                                       -                       -                        1,020                    -                         -                            1,020         
 ASO and other (B)                              24                      358                      -                        308                       -                            690           
 Pharmacy                                       -                       -                        16                       -                         -                            16            
 Total services revenue                         24                      358                      1,036                    308                       -                            1,726         
 Total revenues - external customers            24,574                  10,496                   1,036                    2,629                     -                            38,735        
                                                                                                                                                                                               
 Intersegment revenues                                                                                                                                                                         
 Services                                       2                       15                       9,610                    -                         (9,627   )                   -             
 Products                                       -                       -                        2,342                    -                         (2,342   )                   -             
 Total intersegment revenues                    2                       15                       11,952                   -                         (11,969  )                   -             
 Investment income                              79                      42                       -                        58                        212                          391           
 Total revenues                                 24,655                  10,553                   12,988                   2,687                     (11,757  )                   39,126        
                                                                                                                                                                                               
 Operating expenses:                                                                                                                                                                           
 Benefits                                       20,651                  8,524                    -                        2,198                     (388     )                   30,985        
 Operating costs                                2,711                   1,696                    12,407                   492                       (11,476  )                   5,830         
 Depreciation and amortization                  131                     80                       95                       16                        (27      )                   295           
 Total operating expenses                       23,493                  10,300                   12,502                   2,706                     (11,891  )                   37,110        
 Income (loss) from operations                  1,162                   253                      486                      (19    )                  134                          2,016         
 Interest expense                               -                       -                        -                        -                         105                          105           
 Income (loss) before income taxes          $   1,162              $    253                 $    486                 $    (19    )            $     29                     $     1,911         
                                                                                                                                                                                               
 Benefit ratio                                  84.1    %               84.1    %                                         94.7   %                                               83.7    %     
 Operating cost ratio (C)                       11.0    %               16.1    %                95.5    %                18.7   %                                               15.1    %     
                                                                                                                                                                                               
                                                                                                                                                                                               
                                                                                                                                                                                               
 S-7                                                                                                                                                                                           


                                                                                                                                                                                              
                                                                                                                                                                                              
                                                                                                                                                                                              
                                                                                                                                                                                              
 Humana Inc.                                                                                                                                                                                  
 FY 11 Segment Financial Information                                                                                                                                                          
 In millions                                                                                                                                                                                  
                                                                                      Health and                                                                                              
                                                              Employer                Well-Being               Other                   Eliminations/                                          
                                        Retail                Group                   Services                 Businesses              Corporate                    Consolidated              
                                                                                                                                                                                              
 Revenues - external customers                                                                                                                                                                
 Premiums:                                                                                                                                                                                    
 Medicare Advantage                         $   18,100             $    3,152              $    -                   $    -                   $     -                      $     21,252        
 Medicare stand-alone PDP                       2,317                   8                       -                        253                       -                            2,578         
 Total Medicare                                 20,417                  3,160                   -                        253                       -                            23,830        
 Fully-insured                                  861                     4,782                   -                        -                         -                            5,643         
 Specialty                                      124                     935                     -                        -                         -                            1,059         
 Military services                              -                       -                       -                        3,616                     -                            3,616         
 Medicaid and other (A)                         -                       -                       -                        958                       -                            958           
 Total premiums                                 21,402                  8,877                   -                        4,827                     -                            35,106        
 Services revenue:                                                                                                                                                                            
 Provider                                       -                       -                       892                      -                         -                            892           
 ASO and other (B)                              16                      356                     -                        85                        -                            457           
 Pharmacy                                       -                       -                       11                       -                         -                            11            
 Total services revenue                         16                      356                     903                      85                        -                            1,360         
 Total revenues - external customers            21,418                  9,233                   903                      4,912                     -                            36,466        
                                                                                                                                                                                              
 Intersegment revenues                                                                                                                                                                        
 Services                                       -                       14                      8,510                    -                         (8,524   )                   -             
 Products                                       -                       -                       1,820                    -                         (1,820   )                   -             
 Total intersegment revenues                    -                       14                      10,330                   -                         (10,344  )                   -             
 Investment income                              76                      48                      -                        54                        188                          366           
 Total revenues                                 21,494                  9,295                   11,233                   4,966                     (10,156  )                   36,832        
                                                                                                                                                                                              
 Operating expenses:                                                                                                                                                                          
 Benefits                                       17,383                  7,318                   -                        4,411                     (289     )                   28,823        
 Operating costs                                2,405                   1,650                   10,798                   461                       (9,919   )                   5,395         
 Depreciation and amortization                  119                     85                      82                       10                        (26      )                   270           
 Total operating expenses                       19,907                  9,053                   10,880                   4,882                     (10,234  )                   34,488        
 Income from operations                         1,587                   242                     353                      84                        78                           2,344         
 Interest expense                               -                       -                       -                        -                         109                          109           
 Income (loss) before income taxes          $   1,587              $    242                $    353                 $    84                  $     (31      )             $     2,235         
                                                                                                                                                                                              
 Benefit ratio                                  81.2    %               82.4   %                                         91.4   %                                               82.1    %     
 Operating cost ratio (C)                       11.2    %               17.8   %                96.1    %                9.4    %                                               14.8    %     
                                                                                                                                                                                              
                                                                                                                                                                                              
                                                                                                                                                                                              
 S-8                                                                                                                                                                                          


                                                                                                                                                                                                              
                                                                                                                                                                                                              
                                                                                                                                                                                                              
                                                                                                                                                                                                              
 Humana Inc.                                                                                                                                                                                                  
 Consolidated Balance Sheets                                                                                                                                                                                  
 Dollars in millions, except share amounts                                                                                                                                                                    
                                                                                                                                December 31,            December 31,            YOY Change                    
                                                                                                                                2012                    2011                    Dollar            Percent     
 Assets                                                                                                                                                                                                       
 Current assets:                                                                                                                                                                                              
                         Cash and cash equivalents                                                                              $      1,306            $      1,377                                          
                         Investment securities                                                                                         8,001                   7,743                                          
                         Receivables, net                                                                                              733                     1,034                                          
                         Other                                                                                                         1,670                   1,027                                          
                         Total current assets                                                                                          11,710                  11,181           $     529         4.7   %     
                                                                                                                                                                                                              
 Property and equipment, net                                                                                                           1,098                   912                                            
 Long-term investment securities                                                                                                       1,846                   1,710                                          
 Goodwill                                                                                                                              3,640                   2,740                                          
 Other                                                                                                                                 1,685                   1,165                                          
 Total assets                                                                                                                          19,979                  17,708           $     2,271       12.8  %     
                                                                                                                                                                                                              
 Liabilities and Stockholders' Equity                                                                                                                                                                         
 Current liabilities:                                                                                                                                                                                         
                         Benefits payable                                                                                              3,779                   3,754                                          
                         Trade accounts payable and accrued expenses                                                                   2,042                   1,783                                          
                         Book overdraft                                                                                                324                     306                                            
                         Unearned revenues                                                                                             230                     213                                            
                         Total current liabilities                                                                                     6,375                   6,056            $     319         5.3   %     
                                                                                                                                                                                                              
 Long-term debt                                                                                                                        2,611                   1,659                                          
 Future policy benefits payable                                                                                                        1,858                   1,663                                          
 Other long-term liabilities                                                                                                           288                     267                                            
                         Total liabilities                                                                                             11,132                  9,645            $     1,487       15.4  %     
                                                                                                                                                                                                              
 Commitments and contingencies                                                                                                                                                                                
 Stockholders' equity:                                                                                                                                                                                        
                         Preferred stock, $1 par; 10,000,000 shares authorized, none issued                                            -                       -                                              
                         Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 194,470,820 issued at December 31, 2012           32                      32                                             
                         Capital in excess of par value                                                                                2,101                   1,938                                          
                         Retained earnings                                                                                             7,881                   6,825                                          
                         Accumulated other comprehensive income                                                                        386                     303                                            
                         Treasury stock, at cost, 36,138,955 shares at December 31, 2012                                               (1,553  )               (1,035  )                                      
                         Total stockholders' equity                                                                                    8,847                   8,063            $     784         9.7   %     
 Total liabilities and stockholders' equity                                                                                     $      19,979           $      17,708           $     2,271       12.8  %     
                                                                                                                                                                                                              
 Debt-to-total capitalization ratio                                                                                                    22.8    %               17.1    %                                      
                                                                                                                                                                                                              
                                                                                                                                                                                                              
                                                                                                                                                                                                              
 S-9                                                                                                                                                                                                          


                                                                                                                                                                                                           
                                                                                                                                                                                                           
                                                                                                                                                                                                           
                                                                                                                                                                                                           
 Humana Inc.                                                                                                                                                                                               
 Consolidated Statements of Cash Flows                                                                                                                                                                     
 Dollars in millions                                                                                                                                                                                       
                                                                                                                   Three Months Ended December 31,                                                         
                                                                                                                                                                        Dollar             Percentage      
                                                                                                                   2012                         2011                    Change             Change          
 Cash flows from operating activities                                                                                                                                                                      
                             Net income                                                                            $      192                   $      199                                                 
                             Adjustments to reconcile net income to net cash                                                                                                                               
                             provided by (used in) operating activities:                                                                                                                                   
                             Depreciation and amortization                                                                100                          78                                                  
                             Net realized capital gains                                                                   (13     )                    (4      )                                           
                             Stock-based compensation                                                                     14                           14                                                  
                             (Benefit from) provision for deferred income taxes                                           (74     )                    10                                                  
                             Changes in operating assets and liabilities excluding the effects of acquisitions:                                                                                            
                             Receivables                                                                                  (84     )                    2                                                   
                             Other assets                                                                                 (17     )                    22                                                  
                             Benefits payable                                                                             (172    )                    (143    )                                           
                             Other liabilities                                                                            179                          (198    )                                           
                             Unearned revenues                                                                            52                           (1,794  )                                           
                             Other                                                                                        28                           17                                                  
 Net cash provided by (used in) operating activities                                                                      205                          (1,797  )        $    2,002         111.4   %       
                                                                                                                                                                                                           
 Cash flows from investing activities                                                                                                                                                                      
                             Acquisitions, net of cash acquired                                                           (947    )                    (212    )                                           
                             Purchases of property and equipment                                                          (106    )                    (120    )                                           
                             Purchases of investment securities                                                           (1,055  )                    (1,011  )                                           
                             Proceeds from maturities of investment securities                                            386                          494                                                 
                             Proceeds from sales of investment securities                                                 510                          634                                                 
 Net cash used in investing activities                                                                                    (1,212  )                    (215    )             ($997  )      -463.7  %       
                                                                                                                                                                                                           
 Cash flows from financing activities                                                                                                                                                                      
                             Receipts (withdrawals) from contract deposits, net                                           (50     )                    (603    )                                           
                             Proceeds from issuance of senior notes, net                                                  990                          -                                                   
                             Change in book overdraft                                                                     47                           7                                                   
                             Common stock repurchases                                                                     (5      )                    -                                                   
                             Excess tax benefit from stock-based compensation                                             1                            3                                                   
                             Dividends paid                                                                               (41     )                    (41     )                                           
                             Proceeds from stock option exercises and other                                               8                            4                                                   
 Net cash provided by (used in) financing activities                                                                      950                          (630    )        $    1,580         250.8   %       
                                                                                                                                                                                                           
 Decrease in cash and cash equivalents                                                                                    (57     )                    (2,642  )                                           
 Cash and cash equivalents at beginning of period                                                                         1,363                        4,019                                               
                                                                                                                                                                                                           
 Cash and cash equivalents at end of period                                                                        $      1,306                 $      1,377                                               
                                                                                                                                                                                                           
                                                                                                                                                                                                           
                                                                                                                                                                                                           
 S-10                                                                                                                                                                                                      


                                                                                                                                                                                                           
                                                                                                                                                                                                           
                                                                                                                                                                                                           
                                                                                                                                                                                                           
 Humana Inc.                                                                                                                                                                                               
 Consolidated Statements of Cash Flows                                                                                                                                                                     
 Dollars in millions                                                                                                                                                                                       
                                                                                                                   Twelve Months Ended December 31,                                                        
                                                                                                                                                                        Dollar             Percentage      
                                                                                                                   2012                         2011                    Change             Change          
 Cash flows from operating activities                                                                                                                                                                      
                             Net income                                                                            $      1,222                 $      1,419                                               
                             Adjustments to reconcile net income to net cash                                                                                                                               
                             provided by operating activities:                                                                                                                                             
                             Depreciation and amortization                                                                338                          303                                                 
                             Net realized capital gains                                                                   (33     )                    (11     )                                           
                             Stock-based compensation                                                                     82                           67                                                  
                             (Benefit from) provision for deferred income taxes                                           (80     )                    22                                                  
                             Changes in operating assets and liabilities excluding the effects of acquisitions:                                                                                            
                             Receivables                                                                                  352                          (75     )                                           
                             Other assets                                                                                 (253    )                    (183    )                                           
                             Benefits payable                                                                             (41     )                    256                                                 
                             Other liabilities                                                                            300                          194                                                 
                             Unearned revenues                                                                            (43     )                    26                                                  
                             Other                                                                                        79                           61                                                  
 Net cash provided by operating activities                                                                                1,923                        2,079                 ($156  )      -7.5    %       
                                                                                                                                                                                                           
 Cash flows from investing activities                                                                                                                                                                      
                             Acquisitions, net of cash acquired                                                           (1,235  )                    (226    )                                           
                             Purchases of property and equipment                                                          (410    )                    (336    )                                           
                             Purchases of investment securities                                                           (3,221  )                    (3,678  )                                           
                             Proceeds from maturities of investment securities                                            1,497                        1,623                                               
                             Proceeds from sales of investment securities                                                 1,404                        1,259                                               
 Net cash used in investing activities                                                                                    (1,965  )                    (1,358  )             ($607  )      -44.7   %       
                                                                                                                                                                                                           
 Cash flows from financing activities                                                                                                                                                                      
                             Receipts (withdrawals) from contract deposits, net                                           (397    )                    (378    )                                           
                             Repayment of long-term debt                                                                  (36     )                    -                                                   
                             Proceeds from issuance of senior notes, net                                                  990                          -                                                   
                             Change in book overdraft                                                                     18                           (103    )                                           
                             Common stock repurchases                                                                     (518    )                    (541    )                                           
                             Excess tax benefit from stock-based compensation                                             22                           15                                                  
                             Dividends paid                                                                               (165    )                    (82     )                                           
                             Proceeds from stock option exercises and other                                               57                           72                                                  
 Net cash provided by (used) in financing activities                                                                      (29     )                    (1,017  )        $    988           97.1    %       
                                                                                                                                                                                                           
 Decrease in cash and cash equivalents                                                                                    (71     )                    (296    )                                           
 Cash and cash equivalents at beginning of period                                                                         1,377                        1,673                                               
                                                                                                                                                                                                           
 Cash and cash equivalents at end of period                                                                        $      1,306                 $      1,377                                               
                                                                                                                                                                                                           
                                                                                                                                                                                                           
                                                                                                                                                                                                           
 S-11                                                                                                                                                                                                      


                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                
 Humana Inc.                                                                                                                                                                                                                                    
 Key Income Statement Ratios and Segment Operating Results                                                                                                                                                                                      
 Dollars in millions                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                
                                                         Three Months Ended December 31,                                                              Twelve Months Ended December 31,                                                          
                                                                                                                                                                                                                                                
                                                                                                                                  Percentage                                                                                    Percentage      
                                                         2012                        2011                    Difference           Change              2012                        2011                    Difference            Change          
 Benefit ratio                                                                                                                                                                                                                                  
           Retail                                               82.6   %                    79.0   %               3.6   %                                   84.1   %                    81.2   %               2.9    %                        
           Employer Group                                       87.1   %                    86.4   %               0.7   %                                   84.1   %                    82.4   %               1.7    %                        
           Other Businesses                                     104.1  %                    91.9   %               12.2  %                                   94.7   %                    91.4   %               3.3    %                        
           Consolidated                                         83.7   %                    81.8   %               1.9   %                                   83.7   %                    82.1   %               1.6    %                        
                                                                                                                                                                                                                                                
 Operating cost ratio (C)                                                                                                                                                                                                                       
           Retail                                               13.1   %                    14.7   %               -1.6  %                                   11.0   %                    11.2   %               -0.2   %                        
           Employer Group                                       16.7   %                    18.8   %               -2.1  %                                   16.1   %                    17.8   %               -1.7   %                        
           Health and Well-Being Services                       96.8   %                    96.3   %               0.5   %                                   95.5   %                    96.1   %               -0.6   %                        
           Other Businesses                                     29.1   %                    9.7    %               19.4  %                                   18.7   %                    9.4    %               9.3    %                        
           Consolidated                                         17.5   %                    17.7   %               -0.2  %                                   15.1   %                    14.8   %               0.3    %                        
                                                                                                                                                                                                                                                
 Detail of pretax income (loss)                                                                                                                                                                                                                 
           Retail                                        $      256                  $      326                    ($70  )        -21.5    %          $      1,162                $      1,587                  ($425  )        -26.8   %       
           Employer Group                                       ($25   )                    ($51   )         $     26             51.0     %          $      253                  $      242              $     11              4.5     %       
           Health and Well-Being Services                $      75                   $      85                     ($10  )        -11.8    %          $      486                  $      353              $     133             37.7    %       
           Other Businesses                                     ($31   )             $      1                      ($32  )        -3200.0  %                 ($19   )             $      84                     ($103  )        -122.6  %       
           Consolidated                                  $      282                  $      313                    ($31  )        -9.9     %          $      1,911                $      2,235                  ($324  )        -14.5   %       
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                
           S-12                                                                                                                                                                                                                                 


                                                                                                                                                                                   
                                                                                                                                                                                   
                                                                                                                                                                                   
                                                                                                                                                                                   
 Humana Inc.                                                                                                                                                                       
 Health and Well-Being Services Segment Metrics                                                                                                                                    
                                                                                                                                                                                   
                                                                                                                                                                                   
                                                                                                               Year Ended December 31,                                             
                                                                                                                                                                                   
                                                                                                               2012                   2011             Difference                  
 Primary Care Providers:                                                                                                                                                           
                   Risk                                                                                                                                                            
                                                                Owned / JV                                     2,500                  900              1,600             177.8  %  
                                                                Contracted                                     2,900                  2,900            -                 0.0    %  
                   Path-to-Risk                                                                                18,200                 12,000           6,200             51.7   %  
                   Other                                                                                       84,900                 76,400           8,500             11.1   %  
                                                                Total                                          108,500                92,200           16,300            17.7   %  
                                                                                                                                                                                   
 Care Management Clinicians:                                                                                                                                                       
                   Employed                                                                                    3,300                  2,300            1,000             43.5   %  
                   Contracted                                                                                  3,400                  1,500            1,900             126.7  %  
                                                                Total                                          6,700                  3,800            2,900             76.3   %  
                                                                                                                                                                                   
 Care Management Statistics:                                                                                                                                                       
                   Percentage of members with complex chronic conditions in Humana Chronic Care Program        52.0     %             46.0    %        6.0     %                   
                                                                                                                                                                                   
                   Percentage of high-risk discharges reviewed by Humana Transitions Program                   21.6     %             N/A              N/A                         
                                                                                                                                                                                   
                                                                                                                                                                                   
                                                                                                                                                                                   
 S-13                                                                                                                                                                              


                                                                                                                                                                                                              
                                                                                                                                                                                                              
                                                                                                                                                                                                              
                                                                                                                                                                                                              
 Humana Inc.                                                                                                                                                                                                  
 Health and Well-Being Services Segment Metrics (Continued)                                                                                                                                                   
 Script volume in thousands                                                                                                                                                                                   
                                                                                                                                                                                                              
                                           Three Months Ended December 31,                                                       Year Ended December 31,                                                      
                                                                                                                                                                                                              
                                           2012                       2011                 Difference                            2012                   2011               Difference                         
                                                                                                                                                                                                              
 Pharmacy:                                                                                                                                                                                                    
 Generic Dispense Rate                                                                                                                                                                                        
            Retail                         85.9     %                 81.8     %           4.1     %                             84.5     %             80.9     %         3.6     %                          
            Employer Group                 78.1     %                 71.8     %           6.3     %                             76.3     %             71.0     %         5.3     %                          
                       Total               85.0     %                 80.6     %           4.4     %                             83.6     %             79.7     %         3.9     %                          
                                                                                                                                                                                                              
 Mail-Order Penetration                                                                                                                                                                                       
            Retail                         22.2     %                 22.0     %           0.2     %                             23.0     %             20.9     %         2.1     %                          
            Employer Group                 14.6     %                 15.3     %           -0.7    %                             15.3     %             15.5     %         -0.2    %                          
                       Total               21.3     %                 21.2     %           0.1     %                             22.2     %             20.2     %         2.0     %                          
                                                                                                                                                                                                              
                                                                                                              Percentage                                                                      Percentage      
                                                                                           Difference         Change                                                       Difference         Change          
 Script volume                                                                                                                                                                                                
            Retail                         54,100                     46,500               7,600              16.3    %          211,600                181,300            30,300             16.7    %       
            Employer Group                 7,200                      6,300                900                14.3    %          26,600                 25,000             1,600              6.4     %       
                       Total               61,300                     52,800               8,500              16.1    %          238,200                206,300            31,900             15.5    %       
                                                                                                                                                                                                              
                                                                                                                                                                                                              
                                                                                                                                                                                                              
 S-14                                                                                                                                                                                                         


                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
 Humana Inc.                                                                                                                                                                                            
 Membership Detail                                                                                                                                                                                      
 In thousands                                                                                                                                                                                           
                                                         Ending               Average     Ending               Year-over-year Change                Ending                Sequential Change             
                                                         December 31, 2012    4Q12        December 31, 2011    Amount               Percent         September 30, 2012    Amount            Percent     
 Medical Membership:                                                                                                                                                                                    
 Retail                                                                                                                                                                                                 
            Medicare Advantage                           1,927.6              1,921.8     1,640.3              287.3                17.5   %        1,911.8               15.8              0.8   %     
            Medicare stand-alone PDPs                    2,985.6              2,973.5     2,540.4              445.2                17.5   %        2,947.2               38.4              1.3   %     
            Individual commercial                        444.0                443.9       433.6                10.4                 2.4    %        443.4                 0.6               0.1   %     
            Medicare Supplement                          77.4                 76.6        59.6                 17.8                 29.9   %        75.2                  2.2               2.9   %     
                               Total Retail              5,434.6              5,415.8     4,673.9              760.7                16.3   %        5,377.6               57.0              1.1   %     
                                                                                                                                                                                                        
 Employer Group                                                                                                                                                                                         
            Medicare Advantage                           370.8                370.0       290.6                80.2                 27.6   %        367.9                 2.9               0.8   %     
            Medicare Advantage ASO                       27.7                 27.7        27.6                 0.1                  0.4    %        27.8                  (0.1  )           -0.4  %     
            Medicare stand-alone PDPs                    4.4                  4.4         4.2                  0.2                  4.8    %        4.4                   -                 0.0   %     
            Fully-insured medical commercial             1,211.8              1,209.5     1,180.2              31.6                 2.7    %        1,204.5               7.3               0.6   %     
            ASO commercial                               1,237.7              1,235.0     1,292.3              (54.6  )             -4.2   %        1,231.1               6.6               0.5   %     
                               Total Employer Group      2,852.4              2,846.6     2,794.9              57.5                 2.1    %        2,835.7               16.7              0.6   %     
                                                                                                                                                                                                        
 Other Businesses                                                                                                                                                                                       
            Military Services                            3,123.9              3,127.7     3,028.1              95.8                 3.2    %        3,124.6               (0.7  )           0.0   %     
            Medicaid and other                           610.8                610.0       614.2                (3.4   )             -0.6   %        607.1                 3.7               0.6   %     
            LI-NET (D)                                   67.1                 70.6        73.5                 (6.4   )             -8.7   %        73.9                  (6.8  )           -9.2  %     
                               Total Other Businesses    3,801.8              3,808.3     3,715.8              86.0                 2.3    %        3,805.6               (3.8  )           -0.1  %     
                                                                                                                                                                                                        
 Total Medical Membership                                12,088.8             12,070.7    11,184.6             904.2                8.1    %        12,018.9              69.9              0.6   %     
                                                                                                                                                                                                        
                                                                                                                                                                                                        
 Specialty Membership:                                                                                                                                                                                  
 Retail                                                                                                                                                                                                 
            Dental - fully-insured                       691.5                692.7       579.6                111.9                19.3   %        685.3                 6.2               0.9   %     
            Vision                                       118.7                117.9       83.8                 34.9                 41.6   %        113.8                 4.9               4.3   %     
            Other supplemental benefits (E)              138.5                139.4       119.1                19.4                 16.3   %        141.7                 (3.2  )           -2.3  %     
                               Total Retail              948.7                950.0       782.5                166.2                21.2   %        940.8                 7.9               0.8   %     
                                                                                                                                                                                                        
 Employer Group                                                                                                                                                                                         
            Dental - fully-insured                       2,446.4              2,441.8     2,283.9              162.5                7.1    %        2,431.0               15.4              0.6   %     
            Dental - ASO                                 868.3                866.5       869.9                (1.6   )             -0.2   %        863.1                 5.2               0.6   %     
            Vision                                       2,525.0              2,523.0     2,329.6              195.4                8.4    %        2,515.5               9.5               0.4   %     
            Other supplemental benefits (E)              1,296.5              1,295.3     1,049.2              247.3                23.6   %        1,279.0               17.5              1.4   %     
                               Total Employer Group      7,136.2              7,126.6     6,532.6              603.6                9.2    %        7,088.6               47.6              0.7   %     
                                                                                                                                                                                                        
 Total Specialty Membership                              8,084.9              8,076.6     7,315.1              769.8                10.5   %        8,029.4               55.5              0.7   %     
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
 S-15                                                                                                                                                                                                   


                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
 Humana Inc.                                                                                                                                                                                                              
 Premiums and Services Revenue Detail                                                                                                                                                                                     
 Dollars in millions, except per member per month                                                                                                                                                                         
                                                                                                                                                                                                                          
                                                                                                                                                                             Per Member per Month (F)                     
                                                                                          Three Months Ended December 31,                                                    Three Months Ended December 31,              
                                                                                                                                         Dollar            Percentage                                                     
                                                                                          2012                       2011                Change            Change            2012                       2011              
                                                                                                                                                                                                                          
 Premiums and Services Revenue                                                                                                                                                                                            
                Retail:                                                                                                                                                                                                   
                               Medicare Advantage                                         $        5,184             $        4,454      $    730          16.4    %         $        899               $        916      
                               Medicare stand-alone PDPs                                           620                        580             40           6.9     %                  70                         77       
                               Individual commercial                                               216                        205             11           5.4     %                  162                        159      
                               Medicare Supplemental                                               39                         28              11           39.3    %                  170                        160      
                               Specialty                                                           46                         35              11           31.4    %                  16                         15       
                               ASO & other services (B)                                            7                          4               3            75.0    %                                                      
                                                  Total Retail                                     6,112                      5,306           806          15.2    %                                                      
                                                                                                                                                                                                                          
                Employer Group:                                                                                                                                                                                           
                               Medicare Advantage                                                  1,005                      789             216          27.4    %                  905                        907      
                               Medicare stand-alone PDPs                                           2                          2               -            0.0     %                                                      
                               Fully-insured medical commercial                                    1,251                      1,181           70           5.9     %                  345                        334      
                               Specialty                                                           277                        237             40           16.9    %                  15                         14       
                               ASO & other services (B)                                            96                         91              5            5.5     %                                                      
                                                  Total Employer Group                             2,631                      2,300           331          14.4    %                                                      
                                                                                                                                                                                                                          
                Health and Well-Being Services:                                                                                                                                                                           
                               Pharmacy solutions                                                  2,832                      2,550           282          11.1    %                                                      
                               Provider services                                                   297                        268             29           10.8    %                                                      
                               Home care services                                                  67                         29              38           131.0   %                                                      
                               Integrated wellness services                                        68                         53              15           28.3    %                                                      
                                                  Total Health and Well-Being Services             3,264                      2,900           364          12.6    %                                                      
                                                                                                                                                                                                                          
                Other Businesses:                                                                                                                                                                                         
                               Military services (G)                                               97                         821             (724  )      -88.2   %                                                      
                               LI-NET (D)                                                          63                         57              6            10.5    %                  297                        257      
                               Medicaid and other (H)                                              280                        258             22           8.5     %                  145                        138      
                                                  Total Other Businesses                  $        440               $        1,136      $    (696  )      -61.3   %                                                      
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
                                                                                                                                                                                                                          
 S-16                                                                                                                                                                                                                     


                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
 Humana Inc.                                                                                                                                                                                                                
 Premiums and Services Revenue Detail                                                                                                                                                                                       
 Dollars in millions, except per member per month                                                                                                                                                                           
                                                                                                                                                                                                                            
                                                                                                                                                                               Per Member per Month (F)                     
                                                                                          Twelve Months Ended December 31,                                                     Twelve Months Ended December 31,             
                                                                                                                                         Dollar              Percentage                                                     
                                                                                          2012                       2011                Change              Change            2012                       2011              
                                                                                                                                                                                                                            
 Premiums and Services Revenue                                                                                                                                                                                              
                Retail:                                                                                                                                                                                                     
                               Medicare Advantage                                         $        20,788            $        18,100     $    2,688          14.9    %         $        917               $        939      
                               Medicare stand-alone PDPs                                           2,587                      2,317           270            11.7    %                  74                         80       
                               Individual commercial                                               861                        757             104            13.7    %                  162                        156      
                               Medicare Supplemental                                               143                        104             39             37.5    %                  166                        161      
                               Specialty                                                           171                        124             47             37.9    %                  16                         15       
                               ASO & other services (B)                                            26                         16              10             62.5    %                                                      
                                                  Total Retail                                     24,576                     21,418          3,158          14.7    %                                                      
                                                                                                                                                                                                                            
                Employer Group:                                                                                                                                                                                             
                               Medicare Advantage                                                  4,064                      3,152           912            28.9    %                  932                        923      
                               Medicare stand-alone PDPs                                           8                          8               -              0.0     %                                                      
                               Fully-insured medical commercial                                    4,996                      4,782           214            4.5     %                  348                        338      
                               Specialty                                                           1,070                      935             135            14.4    %                  15                         14       
                               ASO & other services (B)                                            373                        370             3              0.8     %                                                      
                                                  Total Employer Group                             10,511                     9,247           1,264          13.7    %                                                      
                                                                                                                                                                                                                            
                Health and Well-Being Services:                                                                                                                                                                             
                               Pharmacy solutions                                                  11,368                     9,897           1,471          14.9    %                                                      
                               Provider services                                                   1,181                      1,065           116            10.9    %                                                      
                               Home care services                                                  207                        84              123            146.4   %                                                      
                               Integrated wellness services                                        232                        187             45             24.1    %                                                      
                                                  Total Health and Well-Being Services             12,988                     11,233          1,755          15.6    %                                                      
                                                                                                                                                                                                                            
                Other Businesses:                                                                                                                                                                                           
                               Military services (G)                                               1,288                      3,690           (2,402  )      -65.1   %                                                      
                               LI-NET (D)                                                          266                        253             13             5.1     %                  304                        247      
                               Medicaid and other (H)                                              1,075                      969             106            10.9    %                  143                        129      
                                                  Total Other Businesses                  $        2,629             $        4,912      $    (2,283  )      -46.5   %                                                      
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
 S-17                                                                                                                                                                                                                       


                                                                                                                                                                                                 
                                                                                                                                                                                                 
                                                                                                                                                                                                 
                                                                                                                                                                                                 
 Humana Inc.                                                                                                                                                                                     
 Medicare Summary                                                                                                                                                                                
 Premiums in millions                                                                                                                                                                            
 Membership in thousands                                                                                                                                                                         
                                                                                                                                                    Per Member per Month (F)                     
                                                  Three Months Ended December 31,                        Year-over-year Change                      Three Months Ended December 31,              
                                                  2012                           2011                    Amount                   Percent           2012                       2011              
 Premiums                                                                                                                                                                                        
        Medicare Advantage                        $          6,189               $          5,243        $     946                18.0    %         $        900               $        914      
        Medicare stand-alone PDPs                            685                            639                46                 7.2     %                  75                         2        
                  Total Medicare                  $          6,874               $          5,882        $     992                16.9    %                                                      
                                                                                                                                                                                                 
                                                                                                                                                    Per Member per Month (F)                     
                                                  Twelve Months Ended December 31,                       Year-over-year Change                      Twelve Months Ended December 31,             
                                                  2012                           2011                    Amount                   Percent           2012                       2011              
 Premiums                                                                                                                                                                                        
        Medicare Advantage                        $          24,852              $          21,252       $     3,600              16.9    %         $        919               $        937      
        Medicare stand-alone PDPs                            2,861                          2,578              283                11.0    %                  80                         86       
                  Total Medicare                  $          27,713              $          23,830       $     3,883              16.3    %                                                      
                                                                                                                                                                                                 
                                                                                                                                                                                                 
                                                  Ending                         Ending                  Year-over-year Change                                                                   
                                                  December 31, 2012              December 31, 2011       Amount                   Percent                                                        
 Fully-Insured Membership                                                                                                                                                                        
        Medicare Advantage                                   2,298.4                        1,930.9            367.5              19.0    %                                                      
        Medicare stand-alone PDPs                            3,057.1                        2,618.1            439.0              16.8    %                                                      
                  Total Medicare                             5,355.5                        4,549.0            806.5              17.7    %                                                      
                                                                                                                                                                                                 
                                                                                                                                                                                                 
                                                                                                         Member Mix                                                                              
                                                  Ending                         Ending                  December 31              December 31                                                    
 Retail Segment Detail                            December 31, 2012              December 31, 2011       2012                     2011                                                           
        Medicare Advantage Membership                                                                                                                                                            
                  HMO                                        935.8                          715.3              48.5   %           43.6    %                                                      
                  PPO                                        991.8                          925.0              51.5   %           56.4    %                                                      
        Total Individual Medicare                            1,927.6                        1,640.3            100.0  %           100.0   %                                                      
                                                                                                                                                                                                 
        Medicare Advantage Membership                                                                                                                                                            
                  Risk                                       511.7                          429.1              26.5   %           26.1    %                                                      
                  Path-to-Risk                               363.9                          199.4              18.9   %           12.2    %                                                      
                  Other                                      1,052.0                        1,011.8            54.6   %           61.7    %                                                      
        Total Individual Medicare                            1,927.6                        1,640.3            100.0  %           99.9    %                                                      
                                                                                                                                                                                                 
                                                                                                                                                                                                 
                                                                                                                                                                                                 
 S-18                                                                                                                                                                                            


                                                                                                                                            
                                                                                                                                            
                                                                                                                                            
                                                                                                                                            
                                                                                                                                            
 Humana Inc.                                                                         Fair value                                             
 Investments                                                                                                                                
 Dollars in millions                                                                                                                        
                                                                                     12/31/2012          9/30/2012          12/31/2011      
 Investment Portfolio:                                                                                                                      
             Cash & cash equivalents                                                 $       1,306       $      1,363       $       1,377   
             Investment securities                                                           8,001              8,058               7,743   
             Long-term investments                                                           1,846              1,837               1,710   
                              Total investment portfolio                             $       11,153      $      11,258      $       10,830  
                                                                                                                                            
             Duration (I)                                                                    4.02               3.89                3.94    
             Average Credit Rating                                                           AA-                AA-                 AA-     
                                                                                                                                            
                                                                                                                                            
 Investment Portfolio Detail:                                                                                                               
 Cash and cash equivalents                                                           $       1,306       $      1,363       $       1,377   
 U.S. Government and agency obligations                                                                                                     
             U.S. Treasury and agency obligations                                            618                563                 725     
             U.S. Government residential mortgage-backed                                     1,569              1,908               1,751   
             U.S. Government commercial mortgage-backed                                      34                 34                  33      
                              Total U.S. Government and agency obligations                   2,221              2,505               2,509   
 Tax-exempt municipal securities                                                                                                            
             Pre-refunded                                                                    311                286                 332     
             Insured                                                                         627                618                 634     
             Other                                                                           2,120              1,961               1,874   
             Auction rate securities                                                         13                 13                  16      
                              Total tax-exempt municipal securities                          3,071              2,878               2,856   
 Residential mortgage-backed                                                                                                                
             Prime residential mortgages                                                     32                 34                  41      
             Alt-A residential mortgages                                                     1                  1                   2       
             Sub-prime residential mortgages                                                 1                  1                   1       
                              Total residential mortgage-backed                              34                 36                  44      
 Commercial mortgage-backed                                                                  659                658                 381     
 Asset-backed securities                                                                     68                 37                  83      
 Corporate securities                                                                                                                       
             Financial services                                                              864                853                 692     
             Other                                                                           2,930              2,928               2,888   
                              Total corporate securities                                     3,794              3,781               3,580   
                                                       Total investment portfolio    $       11,153      $      11,258      $       10,830  
                                                                                                                                            
                                                                                                                                            
                                                                                                                                            
 S-19                                                                                                                                       


                                                                                                                                                                                
                                                                                                                                                                                
                                                                                                                                                                                
                                                                                                                                                                                
 Humana Inc.                                                                                                                                                                    
 Detail of Benefits Payable Balance and Year-to-Date Changes                                                                                                                    
 Dollars in millions                                                                                                                                                            
                                                                                                                                                                                
                                                                                   December 31,                           September 30,                December 31,             
                                                                                   2012                                   2012                         2011                     
 Detail of benefits payable                                                                                                                                                     
                        IBNR and other benefits payable (J)                        $           3,158                      $        3,097               $       2,759            
                        Unprocessed claim inventories (K)                                      302                                 380                         280              
                        Processed claim inventories (L)                                        230                                 339                         209              
                        Payable to pharmacy benefit administrator (M)                          85                                  127                         167              
                        Benefits payable, excluding military services                          3,775                               3,943                       3,415            
                                                                                                                                                                                
                        Military services benefits payable (N)                                 4                                   15                          339              
 Total Benefits Payable                                                            $           3,779                      $        3,958               $       3,754            
                                                                                                                                                                                
                                                                                                                                                                                
                                                                                   Twelve Months Ended                    Nine Months Ended            Year Ended               
                                                                                   December 31, 2012                      September 30, 2012           December 31, 2011        
 Year-to-date changes in benefits payable,                                                                                                                                      
                        excluding military services (O)                                                                                                                         
                                                                                                                                                                                
                        Balances at January 1                                      $           3,415                      $        3,415               $       3,214            
                                                                                                                                                                                
                        Acquisitions                                                           66                                  73                          29               
                                                                                                                                                                                
                        Incurred related to:                                                                                                                                    
                        Current year                                                           30,198                              22,708                      25,834           
                        Prior years (P)                                                        (257        )                       (235     )                  (372     )       
                        Total incurred                                                         29,941                              22,473                      25,462           
                                                                                                                                                                                
                        Paid related to:                                                                                                                                        
                        Current year                                                           (26,738     )                       (19,193  )                  (22,742  )       
                        Prior years                                                            (2,909      )                       (2,825   )                  (2,548   )       
                        Total paid                                                             (29,647     )                       (22,018  )                  (25,290  )       
                                                                                                                                                                                
                        Balances at end of period                                  $           3,775                      $        3,943               $       3,415            
                                                                                                                                                                                
                                                                                                                                                                                
                                                                                   Twelve Months Ended                    Nine Months Ended            Year Ended               
                                                                                   December 31, 2012                      September 30, 2012           December 31, 2011        
 Summary of Consolidated Benefit Expense:                                                                                                                                       
                        Total benefit expense incurred, per above                  $           29,941                     $        22,473              $       25,462           
                        Military services benefit expense                                      908                                 908                         3,247            
                        Future policy benefit expense (Q)                                      136                                 88                          114              
                        Consolidated Benefit Expense                               $           30,985                     $        23,469              $       28,823           
                                                                                                                                                                                
                                                                                                                                                                                
                                                                                                                                                                                
 S-20                                                                                                                                                                           


                                                                                                                                    
                                                                                                                                    
                                                                                                                                    
                                                                                                                                    
 Humana Inc.                                                                                                                        
 Benefits Payable Statistics (R)                                                                                                    
                                                                                                                                    
                                                                                                                                    
 Receipt Cycle Time (S)                                                                                                             
                                          2012                        2011              Change                Percentage Change     
                   1st Quarter Average                 13.0           13.8              (0.8      )           -5.8       %          
                   2nd Quarter Average                 13.7           13.8              (0.1      )           -0.7       %          
                   3rd Quarter Average                 13.0           13.6              (0.6      )           -4.4       %          
                   4th Quarter Average                 12.8           14.0              (1.2      )           -8.6       %          
                   Full Year Average                   13.1           13.8              (0.7      )           -5.1       %          
                                                                                                                                    
                                                                                                                                    
                                                                                                                                    
 Unprocessed Claims Inventories                                                                                                     
                                                                                                                                    
                   Date                   Estimated Valuation         Claim Item        Number of Days                              
                                          
(millions)                 
Counts (000s)    
on Hand                                    
                   12/31/2010             $            374            981               5.0                                         
                   3/31/2011              $            482            1,197             6.0                                         
                   6/30/2011              $            410            1,093             5.1                                         
                   9/30/2011              $            419            1,272             5.7                                         
                   12/31/2011             $            280            599               2.8                                         
                   3/31/2012              $            376            1,028             4.2                                         
                   6/30/2012              $            310            1,077             4.2                                         
                   9/30/2012              $            380            1,440             5.7                                         
                   12/31/2012             $            302            1,061             4.1                                         
                                                                                                                                    
                                                                                                                                    
                                                                                                                                    
 S-21                                                                                                                               


                                                                                                                       
                                                                                                                       
                                                                                                                       
                                                                                                                       
 Humana Inc.                                                                                                           
 Benefits Payable Statistics (Continued) (R)                                                                           
                                                                                                                       
                                                                                                                       
 Days in Claims Payable (T)                                                                                            
              Quarter Ended               Days in Claims            Change Last 4         Percentage                   
                                          
Payable (DCP)            
Quarters             
Change                      
              12/31/2010                  53.5                      (1.9      )           -3.4    %                    
              3/31/2011                   55.5                      1.3                   2.4     %                    
              6/30/2011                   56.0                      (1.0      )           -1.8    %                    
              9/30/2011                   54.2                      (3.6      )           -6.2    %                    
              12/31/2011                  52.5                      (1.0      )           -1.9    %                    
              3/31/2012                   50.1                      (5.4      )           -9.7    %                    
              6/30/2012                   51.0                      (5.0      )           -8.9    %                    
              9/30/2012                   51.6                      (2.6      )           -4.8    %                    
              12/31/2012                  48.5                      (4.0      )           -7.6    %                    
                                                                                                                       
                                                                                                                       
 Year-to-Date Change in Days in Claims Payable (U)                                                                     
                                                                                          2012              2011       
 DCP - beginning of period                                                                52.5              53.5       
              Components of change in DCP:                                                                             
              Change in unprocessed claims inventories                                    (0.1    )         (2.3  )    
              Change in processed claims inventories                                      0.3               1.4        
              Change in pharmacy payment cutoff                                           (0.1    )         0.6        
              Change in capitation/provider settlements                                   (4.3    )         (0.7  )    
              All other                                                                   0.2                          
 DCP - end of period                                                                      48.5              52.5       
                                                                                                                       
                                                                                                                       
                                                                                                                       
 S-22                                                                                                                  


                                                                                                                                                                                      
                                                                                                                                                                                      
                                                                                                                                                                                      
                                                                                                                                                                                      
 Humana Inc.                                                                                                                                                                          
 Footnotes to Statistical Schedules and Supplementary Information                                                                                                                     
 
4Q12 Earnings Release                                                                                                                                                               
                                                                                                                                                                                      
 (A) The Medicaid and other category includes the company`s Medicaid business as well as the closed block of long-term care.                                                          
 (B) The ASO and other category is primarily comprised of ASO fees and other ancillary services fees.                                                                                 
 (C) The operating cost ratio is defined as operating costs as a percent of total revenues excluding investment income.                                                               
 (D) LI-NET is the CMS Limited Income Newly Eligible Transition program, operated by Humana, to provide Part D prescription drug coverage for all uncovered Full Duals and SSI-only   
 beneficiaries on a retroactive basis and all uncovered LIS eligible beneficiaries on a current basis.                                                                                
 (E) Other supplemental benefits include life, disability, and fixed benefit products including cancer and critical illness policies.                                                 
 (F) Computed based on average membership for the period (i.e., monthly ending membership during the period divided by the number of months in the period).                           
 (G) Military services revenues are generally not contracted on a per-member basis.                                                                                                   
 (H) Includes premiums associated with Medicaid and the closed block of long-term care as well as services revenue.                                                                   
 (I) Duration is the time-weighted average of the present value of the fixed income portfolio cash flows.                                                                             
 (J) IBNR represents an estimate of benefits expense payable for claims incurred but not reported (IBNR) at the balance sheet date. The level of IBNR is primarily impacted by        
 membership levels, benefit claim trends and the receipt cycle time, which represents the length of time between when a claim is initially incurred and when the claim form is        
 received (i.e. a shorter time span results in lower reserves for claims IBNR). Other benefits payable includes amounts payable to providers under capitation arrangements.           
 (K) Unprocessed claim inventories represent the estimated valuation of claims received but not yet fully processed.                                                                  
 (L) Processed claim inventories represent the estimated valuation of processed claims that are in the post-claim-adjudication process, which consists of operating functions such    
 as audit and check batching and handling.                                                                                                                                            
 (M) The balance due to the company's pharmacy benefit administrator fluctuates as a result of the number of business days in the last payment cycle of the month. Payment cycles     
 are every 8 days (8(th), 16(th), and 24th of month) and the last day of the month.                                                                                                   
 (N) Military services benefits payable primarily consist of IBNR and to a lesser extent risk share payables to the Department of Defense and liabilities to subcontractors.          
 (O) The table excludes activity associated with military services benefits payable because the federal government bears a substantial portion of the risk associated with financing  
 the cost of health benefits. More specifically, the risk-sharing provisions of the military services contracts with the federal government and with subcontractors effectively       
 limit profits and losses when actual claim experience varies from the targeted claim amount negotiated annually. As a result of these contract provisions, the impact of changes     
 in estimates for prior year military services benefits payable are substantially offset by the associated changes in estimates of revenue from health care services                  
 reimbursements. As such, any impact on the company's results of operations is reduced substantially, whether positive or negative.                                                   
 (P) Amounts incurred related to prior years vary from previously estimated liabilities as the claims ultimately are settled. Negative amounts reported for incurred related to       
 prior years result from claims being ultimately settled for amounts less than originally estimated (favorable development). There were no changes in the approach used to            
 determine the company's estimate of medical claim reserves during the quarter.                                                                                                       
 (Q) Future policy benefit expense has a related liability classified as a long-term liability on the balance sheet.                                                                  
 (R) Benefits reserves statistics represents fully-insured medical claims data and excludes military services claims data and specialty benefits.                                     
 (S) The receipt cycle time measures the average length of time between when a claim was initially incurred and when the claim form was received. Receipt cycle time data for the     
 company's largest claim processing platforms represent approximately 94% of the company's fully-insured medical claims volume. Pharmacy and specialty claims, including dental,      
 vision and other supplemental benefits, are excluded from this measurement.                                                                                                          
 (T) A common metric for monitoring benefits payable levels relative to the benefit expense is days in claims payable, or DCP, which represents the benefits payable at the end of    
 the period divided by average benefits expense per day in the quarterly period.                                                                                                      
 (U) DCP fluctuates due to a number of issues, the more significant of which are detailed in this roll forward. Growth in certain product lines can also impact DCP for the quarter   
 since a provision for claims would not have been recorded for members that had not yet enrolled earlier in the quarter, yet those members would have a provision and corresponding   
 medical claims reserve recorded upon enrollment later in the quarter. This analysis excludes the impact of military services and Medicare stand-alone PDPs upon DCP.                 
                                                                                                                                                                                      
                                                                                                                                                                                      
                                                                                                                                                                                      
 S-23                                                                                                                                                                                 


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

Copyright Business Wire 2013