Humana Reports Fourth Quarter 2023 Financial Results; Provides Initial Full Year 2024 Financial Guidance

Humana Inc. (NYSE: HUM) today reported consolidated pretax results and net earnings (loss) per share (EPS) for the quarter ended December 31, 2023 (4Q23) versus the quarter ended December 31, 2022 (4Q22) and for the year ended December 31, 2023 (FY 2023) versus the year ended December 31, 2022 (FY 2022) as noted in the tables below.

  • Reports 4Q23 loss per share of $4.42 on a GAAP basis, Adjusted loss per share of $0.11; reports FY 2023 earnings per share (EPS) of $20.00 on a GAAP basis, $26.09 on an Adjusted basis
  • 4Q23 results reflect additional increase in Medicare Advantage medical cost trends, driven by higher than anticipated inpatient utilization, primarily for the months of November and December, and a further increase in non-inpatient trends
  • Announces initial FY 2024 EPS guidance of ‘approximately $14.87’ on a GAAP basis, ‘approximately $16.00’ on an Adjusted basis; assumes the higher Medicare Advantage medical costs experienced in 4Q23 persist throughout 2024
  • Affirms 2024 individual Medicare Advantage annual membership growth of approximately 100,000 or 1.8 percent
  • Publishes prepared management remarks to Investor Relations page of www.humana.com ahead of this morning’s 9:00 a.m. ET question and answer session to discuss its financial results for the quarter and expectations for future earnings
Consolidated (loss) income before income taxes and equity in net earnings (pretax results) In millions4Q23 (a)4Q22 (a)FY 2023 (a)FY 2022 (a)
Generally Accepted Accounting Principles (GAAP)($591)($71)$3,383 $3,568 
Amortization associated with identifiable intangibles15 20 67 81 
Put/call valuation adjustments associated with company’s non-consolidating minority interest investments179 84 320 68 
Transaction and integration costs 35 (48)105 
Change in fair market value of publicly-traded equity securities 4 (1)123 
Impact of exit of employer group commercial medical products business1 59 16 107 
Accrued charge related to certain anticipated litigation expenses  105  
Value creation initiatives384 188 436 473 
Impairment charges91  91  
Adjustment (gain) on sale of Gentiva (formerly Kindred) Hospice 3  (237)
Adjusted (non-GAAP)$79 $322 $4,369 $4,288 
Net (loss) earnings per share (EPS)4Q23 (a)4Q22 (a)FY 2023 (a)FY 2022 (a)
GAAP($4.42)($0.12)$20.00 $22.08 
Amortization associated with identifiable intangibles0.13 0.16 0.54 0.64 
Put/call valuation adjustments associated with company’s non-consolidating minority interest investments1.46 0.66 2.57 0.53 
Transaction and integration costs 0.28 (0.38)0.83 
Change in fair market value of publicly-traded equity securities 0.03 (0.01)0.97 
Impact of exit of employer group commercial medical products business0.01 0.46 0.13 0.84 
Accrued charge related to certain anticipated litigation expenses  0.84  
Value creation initiatives3.13 1.49 3.50 3.72 
Impairment charges0.74  0.73  
Adjustment (gain) on the sale of Gentiva (formerly Kindred) Hospice 0.03  (1.86)
Cumulative net tax impact of non-GAAP adjustments(1.16)(1.02)(1.83)(1.87)
Adjusted (non-GAAP)($0.11)$1.97 $26.09 $25.88 
For comparative purposes, the 4Q22 and FY 2022 reconciliations noted in the preceding tables have been recast to exclude the impact of the employer group commercial medical products business due the exit from the business as announced by Humana on February 23, 2023. Refer to the “Footnotes” section included herein for further explanation on disclosures for Adjusted (non-GAAP) financial measures, as well as additional reconciliations.

Please refer to the tables above, as well as the consolidated and segment highlight sections in the detailed earnings release for additional discussion of the factors impacting the year-over-comparisons.

In addition, a summary of key consolidated and segment statistics comparing 4Q23 to 4Q22 and FY 2023 to FY 2022 follows.

Adjusted (non-GAAP) 4Q22 and FY 2022 metrics, where applicable, have been recast to exclude the impact of the employer group commercial medical products business as a result of the exit from the business announced by Humana on February 23, 2023.

Humana Inc. Summary of Results
($ in millions, except per share amounts)
4Q23 (a)4Q22 (a)FY 2023 (a)FY 2022 (a)
CONSOLIDATED    
Revenues$26,462$22,439$106,374$92,870
Revenues – Adjusted (non-GAAP)$25,734$21,303$102,645$88,304
Pretax results($591)($71)$3,383$3,568
Pretax results – Adjusted (non-GAAP)$79$322$4,369$4,288
(Net loss per share) EPS($4.42)($0.12)$20.00$22.08
(Net loss per share) EPS – Adjusted (non-GAAP)($0.11)$1.97$26.09$25.88
Benefits expense ratio90.7%87.3%87.3%86.3%
Benefits expense ratio – Adjusted (non-GAAP)90.5%87.1%87.2%86.2%
Operating cost ratio14.6%15.9%12.5%13.7%
Operating cost ratio – Adjusted (non-GAAP)12.9%14.7%11.7%12.8%
Operating cash flows  $3,981$4,587
Parent company cash and short term investments  $510$934
Debt-to-total capitalization  41.8%42.0%
Days in Claims Payable (DCP)41.445.9  
     
INSURANCE SEGMENT    
Revenues$25,565$21,599$102,854$88,841
Revenues – Adjusted (non-GAAP)$24,801$20,459$99,090$84,152
Benefits expense ratio91.5%87.5%88.0%86.6%
Benefits expense ratio – Adjusted (non-GAAP)91.4%87.4%88.0%86.5%
Operating cost ratio11.1%12.8%10.2%10.4%
Operating cost ratio – Adjusted (non-GAAP)10.9%12.5%9.8%10.0%
(Loss) income from operations($426)$46$2,654$3,022
(Loss) income from operations – Adjusted (non-GAAP)($361)$112$2,897$3,159
     
CENTERWELL SEGMENT    
Revenues$4,710$4,141$18,405$17,307
Operating cost ratio90.6%92.6%91.2%91.5%
Income from operations$387$263$1,404$1,291
Income from operations – Adjusted (non-GAAP) (b)$445$308$1,614$1,472
Refer to the “Footnotes” section included herein for further explanation on disclosures for Adjusted (non-GAAP) financial measures, as well as reconciliations.

Initial 2024 Earnings Guidance

Humana provided its initial GAAP and Adjusted EPS guidance for the year ending December 31, 2024 (FY 2024) as detailed below. GAAP and Adjusted EPS results for FY 2023 are also shown for comparison.

 Diluted earnings per common shareFY 2024 Guidance (c)FY 2023 (a)
GAAPapproximately $14.87$20.00 
Amortization of identifiable intangibles0.49 0.54 
Put/call valuation adjustments associated with company’s non-consolidating minority interest investments 2.57 
Transaction and integration costs (0.38)
Change in fair market value of publicly-traded equity securities (0.01)
Impact of exit of employer group commercial medical products business0.97 0.13 
Accrued charge related to certain anticipated litigation expenses 0.84 
Value creation initiatives 3.50 
Impairment charges 0.73 
Cumulative net tax impact of non-GAAP adjustments(0.33)(1.83)
Adjusted (non-GAAP) – FY 2024 projected; FY 2023 reportedapproximately $16.00$26.09 
Refer to the “Footnotes” section included herein for further explanation on disclosures for Adjusted (non-GAAP) financial measures, as well as additional reconciliations.

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