3Q13 EPS of $2.31, full-year 2013 EPS of $8.65 to $8.75 reiterated
2014 EPS guidance of $7.25 to $7.75 includes $0.50 to $0.90 for
investments in and startup expenses of the company’s state-based
contracts and health care exchange businesses
Consolidated revenues expected to exceed $43 billion in 2014
Medicare Advantage membership projected to grow in 2014 by 260,000 to
Steven McCulley elected as Interim Chief Financial Officer effective
January 1, 2014
LOUISVILLE, Ky.--(BUSINESS WIRE)--Nov. 6, 2013--
Humana Inc. (NYSE: HUM) today reported diluted earnings per common share
(EPS) for the quarter ended September 30, 2013 (3Q13) of $2.31, compared
to $2.62 per share for the quarter ended September 30, 2012 (3Q12).
Results for 3Q13 reflected improved year-over-year results for the
company’s Employer Group and Healthcare Services Segments, which were
more than offset by lower results for the Retail Segment and Other
For the nine months ended September 30, 2013 (YTD13) the company
reported EPS of $7.90 compared to $6.27 in the nine months ended
September 30, 2012 (YTD12). YTD13 performance reflected improved
operating results for each of the company’s business segments compared
The company continues to anticipate EPS for the year ending December 31,
2013 (FY13) to be in the range of $8.65 to $8.75.
Looking ahead to the year ending December 31, 2014 (FY14), the company
projects EPS to be in the range of $7.25 to $7.75 reflecting expected
solid performance from the company’s existing businesses as well as
$0.50 to $0.90 per share in investment spending and startup expenses for
the company’s newer state-based contracts(a) and health care
“We are pleased that our operating results continue to show the strength
of our base business,” said Bruce D. Broussard, President and Chief
Executive Officer of Humana. “Additionally, we believe our integrated
care delivery model capabilities, like value-based provider contracting,
chronic care management and advanced data analytics, provide a
successful platform for the emerging opportunities and the challenges of
the Medicare payment pressures in the coming years.”
CFO search update
Steven E. McCulley, currently Vice President, Controller and Principal
Accounting Officer, has been elected by the company’s Board of Directors
as Interim Chief Financial Officer effective January 1, 2014. As
previously announced, James H. Bloem, currently Senior Vice President,
Chief Financial Officer and Treasurer will retire from that position
December 31, 2013. Effective with this transition, McCulley will assume
all the responsibilities currently held by Bloem until a Chief Financial
Officer has been elected. Bloem was also elected as Advisor to the
Office of Chief Financial Officer effective January 1, 2014.
Detailed press release
Humana’s full detailed earnings press release has been posted to the
company’s Investor Relations site and may be accessed at http://phx.corporate-ir.net/phoenix.zhtml?c=92913&p=irol-news&nyo=0
or via a current report on Form 8-K filed by the company with the
Securities and Exchange Commission this morning (available at www.sec.gov
or on the company’s website).
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.
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,” “believes,” “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 receives 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 (commonly known as ICD-10).
Humana is involved in various legal actions, or disputes that could
lead to legal actions (such as, among other things, provider contract
disputes relating to rate adjustments resulting from the Balanced
Budget and Emergency Deficit Control Act of 1985, as amended, commonly
referred to as “sequestration”; other provider contract disputes; and
qui tam litigation brought by individuals on behalf of the government)
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 including, among
other things, loss of material government contracts, governmental
audits and investigations, potential inadequacy of
government-determined payment rates or other changes in the
governmental programs in which Humana participates.
The Health Care Reform Law, 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, lowering the company’s
Medicare payment rates and increasing the company’s expenses
associated with a non-deductible health insurance industry fee and
other assessments; financial position, including the company's ability
to maintain the value of its goodwill; and cash flows. In addition, if
Humana is unable to adjust its business model to address the
non-deductible health insurance industry fee and other assessments,
including the three-year commercial reinsurance fee, such as through
the reduction of the company’s operating costs, there can be no
assurance that the non-deductible health insurance industry fee and
other assessments would not have a material adverse effect on the
company’s results of operations, financial position, and cash flows.
Our participation in, and the operational functionality of, the new
federal and state health insurance exchanges, which have experienced
certain technical difficulties in their early implementation and which
entail uncertainties associated with mix and volume of business, could
adversely affect our results of operations, financial position, and
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
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.
Federal government contracts account for a substantial portion of our
revenue and earnings. A delay by Congress in raising the federal
government’s debt ceiling, should it occur, could lead to a delay,
reduction, suspension or cancellation of federal government spending
that could, in turn, have a material adverse effect on our business,
cash flows, and profitability.
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
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, 2012 (as amended by the Form
10‐K/A filed on April 12, 2013);
Form 10-Q for the quarters ended March 31, 2013 and June 30, 2013;
Form 8-Ks filed during 2013.
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
Corporate Governance information.
Source: Humana Inc.
Humana Investor Relations
Regina Nethery, 502-580-3644
Tom Noland, 502-580-3674