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 millions | 4Q23 (a) | 4Q22 (a) | FY 2023 (a) | FY 2022 (a) | ||||
| Generally Accepted Accounting Principles (GAAP) | ($591 | ) | ($71 | ) | $3,383 | $3,568 | ||
| Amortization associated with identifiable intangibles | 15 | 20 | 67 | 81 | ||||
| Put/call valuation adjustments associated with company’s non-consolidating minority interest investments | 179 | 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 business | 1 | 59 | 16 | 107 | ||||
| Accrued charge related to certain anticipated litigation expenses | — | — | 105 | — | ||||
| Value creation initiatives | 384 | 188 | 436 | 473 | ||||
| Impairment charges | 91 | — | 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 intangibles | 0.13 | 0.16 | 0.54 | 0.64 | ||||
| Put/call valuation adjustments associated with company’s non-consolidating minority interest investments | 1.46 | 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 business | 0.01 | 0.46 | 0.13 | 0.84 | ||||
| Accrued charge related to certain anticipated litigation expenses | — | — | 0.84 | — | ||||
| Value creation initiatives | 3.13 | 1.49 | 3.50 | 3.72 | ||||
| Impairment charges | 0.74 | — | 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 ratio | 90.7% | 87.3% | 87.3% | 86.3% |
| Benefits expense ratio – Adjusted (non-GAAP) | 90.5% | 87.1% | 87.2% | 86.2% |
| Operating cost ratio | 14.6% | 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) | 41.4 | 45.9 | ||
| 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 ratio | 91.5% | 87.5% | 88.0% | 86.6% |
| Benefits expense ratio – Adjusted (non-GAAP) | 91.4% | 87.4% | 88.0% | 86.5% |
| Operating cost ratio | 11.1% | 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 ratio | 90.6% | 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 share | FY 2024 Guidance (c) | FY 2023 (a) | ||
| GAAP | approximately $14.87 | $20.00 | ||
| Amortization of identifiable intangibles | 0.49 | 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 business | 0.97 | 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 reported | approximately $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. | ||||
