Humana Reports Fourth Quarter 2011 Financial Results, Updates 2012 Financial Guidance

• 2012 EPS guidance raised to a range of $7.50 to $7.70
• Successful 2012 annual enrollment period results in increased full-year membership expectations for Medicare Advantage
• FY11 consolidated revenues grew 10 percent
• FY11 EPS of $8.46, up 31 percent from prior year
• FY11 cash flows from operations of $2.1 billion

LOUISVILLE, Ky.--(BUSINESS WIRE)--Humana Inc. (NYSE: HUM) today reported diluted earnings per common share (EPS) for the quarter ended December 31, 2011 (4Q11) of $1.20, compared to $0.63 per share for the quarter ended December 31, 2010 (4Q10). The year-over-year increase of $0.57 per share was primarily due to expenses incurred in 4Q10 that did not recur in 4Q11 together with higher favorable medical claims reserves development in 4Q11 than in 4Q10. The 4Q10 expenses were due to reserves strengthening for the company’s closed block of long-term care business.

Comparison of operating results for the quarter is affected by the items noted below:

Consolidated Results of Operations ($ in millions except EPS)	4Q11 Pretax Income			4Q10 Pretax Income			4Q11 EPS			4Q10 EPS
GAAP	$	313		$	174		$	1.20		$	0.63
Reserve strengthening for long-term care business (closed book)(d)		-			139			-			0.52
Favorable prior-period medical claims reserve development(a)		(54	)		(38	)		(0.21	)		(0.14	)
Humana Foundation contribution		35			35			0.13			0.13
Non-GAAP(b)	$	294		$	310		$	1.12		$	1.14

The year-over-year decline in the company’s fourth quarter consolidated results of operations on a non-GAAP^(b) basis primarily reflected the impact of lower earnings in the company’s Employer Group Segment, partially offset by higher earnings in the Retail and Health and Well-Being Services Segments.

For the year ended December 31, 2011 (FY11) the company reported $8.46 in EPS compared to $6.47 for the year ended December 31, 2010 (FY10). The FY11 improved results reflected a lower year-over-year benefit ratio in the company’s Retail Segment, higher average Medicare membership and higher earnings in the company’s Health and Well-Being Services Segment.

Comparison of operating results for the full year is affected by the items noted below:

Consolidated Results of Operations ($ in millions except EPS)	FY11 Pretax Income			FY10 Pretax Income			FY11 EPS			FY10 EPS
GAAP	$	2,235		$	1,749		$	8.46		$	6.47
Favorable prior-year medical claims reserve development(a)		(205	)		(231	)		(0.77	)		(0.86	)
Write-down of certain deferred acquisition costs, or DAC(c)		-			147			-			0.55
Reserve strengthening for long-term care business (closed book)(d)		-			139			-			0.52
Humana Foundation contribution		35			35			0.13			0.13
Non-GAAP(b)	$	2,065		$	1,839		$	7.82		$	6.81

The FY11 consolidated EPS on a non-GAAP (b) basis rose 15 percent from FY10, primarily reflecting similar year-over-year increases in earnings for the company’s Retail and Health and Well-Being Services Segments more than offsetting lower earnings in the company’s Employer Group Segment. Share-repurchase activity during FY11 also contributed to the year-over-year increase in EPS.

“Humana’s ongoing operating discipline and attractive Medicare value proposition bode well for a future of favorable senior demographics and the growing need to rein in national health-care spending – especially in Medicare,” said Michael B. McCallister, Humana’s Chairman of the Board and Chief Executive Officer. “For 2012, we see further growth opportunities in Medicare and, more broadly, in our continuing expansion into adjacencies related to lifelong well-being.”

The company now anticipates EPS for the year ending December 31, 2012 (FY12) in the range of $7.50 to $7.70 versus its previous estimate of $7.40 to $7.60. This increase in FY12 EPS guidance primarily reflects an approximately 40,000-member net increase to the company’s previous expectation for Medicare Advantage membership based upon the recent annual election period for seniors.

Consolidated Highlights

Revenues – 4Q11 consolidated revenues were $9.06 billion, an increase of 9 percent from $8.28 billion in 4Q10, with total premiums and services revenue also up 9 percent compared to the prior year’s quarter. The year-over-year increase in premiums and services revenue was primarily driven by an increase in the company’s Retail and Health and Well-Being Services Segments partially offset by lower premiums and services revenue in the company’s Employer Group Segment.

FY11 consolidated revenues increased 10 percent to $36.83 billion from $33.60 billion in FY10 with total premiums and services revenue also up 10 percent compared to the prior year’s period, as a result of similar segment-level changes as those affecting the fourth quarter year-over-year change.

Benefit expenses – The 4Q11 consolidated benefit ratio (benefit expenses as a percent of premiums) of 81.8 percent decreased by 270 basis points from 84.5 percent for the prior year’s quarter due primarily to a decline in the Retail Segment benefit ratio as described below.

The consolidated benefit ratio for FY11 of 82.1 percent decreased by 80 basis points from the FY10 consolidated benefit ratio of 82.9 percent primarily due to the decline in the benefit ratio for the Retail Segment.

The consolidated benefit ratio year-over-year comparisons were impacted as follows:

Consolidated Benefit Ratio	4Q11		4Q10		FY11		FY10
GAAP	81.8	%	84.5	%	82.1	%	82.9	%
Favorable prior-period medical claims reserve development(a)	0.6	%	0.4	%	0.6	%	0.7	%
Reserve strengthening for long-term care business (closed book)(d)	-		(1.8	%)	-		(0.4	%)
Non-GAAP(b)	82.4	%	83.1	%	82.7	%	83.2	%

Operating expenses – The consolidated operating cost ratio (operating costs as a percent of total revenues less investment income) of 17.7 percent for 4Q11 compares to 14.9 percent in 4Q10 primarily reflecting increases in this metric for the company’s Retail and Employer Group Segments. A full year of operating expenses for Concentra Inc. (acquired in 4Q10) also contributed to the higher year-over-year ratio since this business carries a higher-than-average operating cost ratio.

The FY11 consolidated operating cost ratio of 14.8 percent increased 160 basis points from 13.2 percent for FY10 primarily due to the same factors impacting the fourth quarter year-over-year comparison together with those described as follows:

Consolidated operating cost ratio	4Q11		4Q10		FY11		FY10
GAAP	17.7	%	14.9	%	14.8	%	13.2	%
Write-down of certain DAC(c)	-		-		-		(0.5	%)
Humana Foundation contribution	(0.4	%)	(0.4	%)	(0.1	%)	(0.1	%)
Non-GAAP(b)	17.3	%	14.5	%	14.7	%	12.6	%

Retail Segment Highlights

Pretax results:

• Retail Segment pretax income of $326 million in 4Q11 compares to $250 million in 4Q10. This increase was primarily due to increased average individual Medicare membership and a lower benefit ratio partially offset by a higher operating cost ratio.
• For FY11, pretax earnings for the Retail Segment of $1.59 billion increased by $298 million from FY10 pretax earnings of $1.29 billion. Comparison of operating results for these periods was also affected by the items noted below:

Retail Segment Results ($ in millions)	4Q11 Pretax Income			4Q10 Pretax Income			FY11 Pretax Income			FY10 Pretax Income
GAAP	$	326		$	250		$	1,587		$	1,289
Write-down of certain DAC(c)		-			-			-			147
Favorable prior-period medical claims reserve development(a)		(43	)		(34	)		(147	)		(198	)
Non-GAAP(b)	$	283		$	216		$	1,440		$	1,238

Enrollment:

• Individual Medicare Advantage membership was 1,640,300 at December 31, 2011, an increase of 179,600 members, or 12 percent from 1,460,700 at December 31, 2010 primarily due to a successful enrollment season associated with the 2011 plan year as well as age-in enrollment throughout the year. Year-end 2011 membership included approximately 12,100 members associated with the company’s acquisition of MD Care on December 30, 2011.
• January 2012 individual Medicare Advantage membership approximated 1,813,000, up approximately 173,000 from December 31, 2011 reflecting higher-than-anticipated net membership additions from the recently completed 2012 annual election period.
• Membership in the company’s individual stand-alone Prescription Drug Plans (PDPs) was 2,540,400 at December 31, 2011, up 870,100 or 52 percent compared to 1,670,300 at December 31, 2010. These increases resulted from higher gross sales primarily during the 2011 enrollment season, particularly for the company’s innovative Humana-Walmart plan offering, supplemented by dual-eligible and age-in enrollments throughout the year.
• January 2012 individual stand-alone PDP membership grew to approximately 2,825,000, an increase of approximately 285,000 from December 31, 2011, in the range of the company’s expectations.
• HumanaOne® medical membership increased to 433,600 at December 31, 2011, an increase of 61,300, or 16 percent, from 372,300 at December 31, 2010.
• Membership in individual specialty products^(e) of 782,500 at December 31, 2011 increased 53 percent from 510,000 at December 31, 2010 driven primarily by increased sales in dental offerings.

Premiums and services revenue:

• 4Q11 premiums and services revenue for the Retail Segment was $5.31 billion, an increase of 13 percent from $4.69 billion in 4Q10. The increase was primarily the result of 11 percent higher average Medicare Advantage membership year over year.

Benefit expenses:

• The 4Q11 benefit ratio for the Retail Segment was 79.0 percent, a decrease of 270 basis points from 81.7 percent in 4Q10. The year-over-year decrease in the benefit ratio is primarily due to continued progress with cost-reduction and outcome-enhancing strategies, including care coordination and disease management, combined with an increased percent of Retail membership from stand-alone PDPs that carry a lower benefit ratio. Favorable prior-period reserve development impacted the year-over-year comparison of the benefit ratio for this segment as follows:

Retail Segment Benefit Ratio	4Q11		4Q10
GAAP	79.0	%	81.7	%
Favorable prior-period medical claims reserve development(a)	0.8	%	0.7	%
Non-GAAP(b)	79.8	%	82.4	%

Operating costs:

• The Retail Segment’s operating cost ratio of 14.7 percent in 4Q11 increased 190 basis points from 12.8 percent in 4Q10. The increase was primarily the result of expenses incurred in preparation for anticipated higher year-over-year Medicare membership additions associated with the 2012 plan year together with a higher percentage of average membership in stand-alone PDP offerings that carry a higher operating cost ratio than other Medicare products.

Employer Group Segment Highlights

Pretax results:

• Employer Group Segment pretax loss of $51 million in 4Q11 compares to a pretax income of $29 million in 4Q10 due primarily to higher year-over-year benefit and operating cost ratios.
• For FY11, pretax earnings for the Employer Group Segment of $242 million decreased by $46 million versus FY10 pretax earnings of $288 million. Favorable prior-period reserve development impacted the year-over-year comparisons of the pretax results for this segment as follows:

Employer Group Segment Results ($ in millions)	4Q11 Pretax Loss		4Q10 Pretax Income			FY11 Pretax Income			FY10 Pretax Income
GAAP	($51	)	$	29		$	242		$	288
Favorable prior-period medical claims reserve development(a)	(10	)		(4	)		(52	)		(33	)
Non-GAAP(b)	($61	)	$	25		$	190		$	255

Enrollment:

• Group Medicare Advantage membership was 318,200 at December 31, 2011, an increase of 16,900 members, or 6 percent, from 301,300 at December 31, 2010.
• January 2012 group Medicare Advantage membership approximated 386,000, up approximately 68,000 members from December 31, 2011.
• Group fully-insured commercial medical membership declined to 1,180,200 at December 31, 2011, a decrease of 72,000 or 6 percent, from 1,252,200 at December 31, 2010. This decline primarily reflected continued dedication to pricing discipline in a highly competitive environment for large group business partially offset by small group business membership gains. Approximately 56 percent of group fully-insured commercial medical membership was in small group accounts at December 31, 2011 versus 48 percent at December 31, 2010.
• Group administrative services only (ASO) commercial medical membership declined to 1,292,300 at December 31, 2011, a decrease of 161,300, or 11 percent, from 1,453,600 at December 31, 2010. 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^(e) of 6,532,600 at December 31, 2011 remained essentially flat from 6,517,500 at December 31, 2010.

Premiums and services revenue:

• 4Q11 premiums and services revenue for the Employer Group Segment were $2.30 billion, down approximately 2 percent from $2.35 billion in 4Q10 primarily reflecting the impacts of reduced group commercial fully-insured membership and rebates associated with minimum medical loss ratio regulatory requirements which became effective in 2011. Rebates result in the recognition of lower premium revenues, as amounts are set aside for payments to commercial customers during the following year.

Benefit expenses:

• 4Q11 benefit ratio for the Employer Group Segment was 86.4 percent, an increase of 200 basis points, from 84.4 percent for 4Q10. The year-over-year increase in the benefit ratio primarily reflects rebates associated with minimum medical loss ratio regulatory requirements which became effective in 2011, together with a higher percentage of members in group Medicare Advantage plans (which carry a higher benefit ratio than commercial fully-insured accounts). These items were partially offset by the impact of prior-period reserve development, which impacted the year-over-year comparison of the benefit ratio for this segment as follows:

Employer Group Segment Benefit Ratio	4Q11		4Q10
GAAP	86.4	%	84.4	%
Favorable prior-period medical claims reserve development(a)	0.5	%	0.2	%
Non-GAAP(b)	86.9	%	84.6	%

Operating costs:

• The Employer Group Segment’s operating cost ratio was 18.8 percent in 4Q11, an increase of 130 basis points from 17.5 percent in 4Q10 primarily reflecting the impact of lower premium revenues due to rebates associated with minimum medical loss ratio requirements which became effective in 2011.

Health and Well-Being Services Segment Highlights

Pretax results:

• Health and Well-Being Services Segment pretax income of $85 million in 4Q11 increased 93 percent compared to $44 million in 4Q10 reflecting growth in the company’s pharmacy solutions business as well as the addition of the Concentra business acquired in December 2010.
• For FY11, pretax earnings for the Health and Well-Being Services Segment of $353 million increased by $134 million from FY10 pretax earnings of $219 million, reflecting the same factors as those affecting the quarterly year-over-year comparisons.

Revenues:

• Revenues of $2.90 billion in 4Q11 for the Health and Well-Being Services Segment increased 32 percent from $2.20 billion in 4Q10. This increase was primarily due to growth in the company’s pharmacy solutions business together with the addition of the Concentra business acquired in December 2010.

Operating costs:

• The Health and Well-Being Services Segment’s operating cost ratio of 96.3 percent in 4Q11 decreased by 140 basis points from 97.7 percent in 4Q10 primarily due to scale efficiencies related to growth in the pharmacy solutions business.

Balance Sheet

• At December 31, 2011, the company had cash, cash equivalents, and investment securities of $10.83 billion, up 8 percent from $10.05 billion at December 31, 2010 reflecting higher balances associated with increased earnings for FY11 versus FY10.
• Parent company cash and investments of $494 million at December 31, 2011 decreased $140 million from $634 million at September 30, 2011, primarily reflecting cash dividends to stockholders and acquisition activity during 4Q11. Cash and investments at the parent decreased $59 million year over year compared to $553 million held at the parent at December 31, 2010 as increased dividends from subsidiaries during FY11 were more than offset by share repurchases, cash dividends to stockholders and acquisition activity.
• Days in claims payable of 52.5 at December 31, 2011 decreased 1.7 days from 54.2 days at September 30, 2011 primarily due to a significant decline in unprocessed claims inventories. The days unprocessed claims on hand declined to 2.8 days at December 31, 2011 from 5.7 days at September 30, 2011.
• Debt-to-total capitalization at December 31, 2011 was 17.1 percent, down 40 basis points from 17.5 percent at September 30, 2011, and down 230 basis points compared to 19.4 percent at December 31, 2010 primarily driven by higher earnings for FY11 versus FY10.

Cash Flows from Operations

Cash flows used in operations for 4Q11 were $1.80 billion compared to cash flows used in operations of $47 million in 4Q10. The company also evaluates operating cash flows on a non-GAAP basis:

Net cash from operating activities (in millions)	4Q11 Cash Flows		4Q10 Cash Flows
GAAP use of cash	($1,797	)	($47	)
Timing of premium payment from CMS(f)	1,796		--
Non-GAAP (b) use of cash	($1	)	($47	)

The year-over-year increase in the non-GAAP ^(b) cash flows from operations is due to the effect on cash flows of changes in working capital accounts, including higher net income year over year.

FY11 cash flows from operations of $2.08 billion compared to $2.24 billion for FY10 primarily due to changes in working capital accounts partially offset by higher net income year over year.

Share Repurchase Program and Cash Dividend

• In April 2011, the company’s Board of Directors replaced its previous share repurchase authorization with a new authorization for share repurchases of up to $1 billion. During FY11, the company repurchased 6,755,400 of its outstanding shares at an average price per share of $72.75. As of December 31, 2011, approximately $561 million of the April 2011 share repurchase authorization was remaining, with an expiration date of June 30, 2013.
• In April 2011, the company’s Board of Directors also initiated a quarterly cash dividend policy. A cash dividend payment of approximately $41 million, or $0.25 per share, for stockholders of record as of December 30, 2011, was paid on January 31, 2012. Stockholders received cash dividend payments of approximately $82 million in 2011.

Footnotes

(a) Actuarial standards require the use of assumptions based on moderately adverse experience, which generally results in favorable reserve development, or reserves that are considered redundant. When the Company recognizes a release of the redundancy, we disclose the amount that is not in the ordinary course of business.

(b) 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.

(c) During the second quarter of 2010, the company recognized an impairment of deferred acquisition cost (DAC) assets associated with its Individual Major Medical line of business of $147 million. The related DAC included amounts associated with commissions, underwriting and other policy issuance costs. Given then impending changes to this business associated with health insurance reform, a substantial portion of the DAC was determined to be not recoverable from future income.

(d) During the fourth quarter of 2010, the company strengthened future policy benefit reserves related to our closed block of long-term care policies in the amount of $139 million. This block of 35,000 policies was acquired in connection with our acquisition of KMG America in late 2007. No policies in this block have been sold since 2005.

(e) 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.

(f) 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 at the end of the previous month. Therefore, 4Q11 included two monthly Medicare payments compared to three monthly Medicare payments during 4Q10.

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:

• Health insurance reform legislation, 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, increasing the company's medical and administrative costs by, among other things, requiring a minimum benefit ratio on insured products (and particularly how the ratio may apply to Medicare plans), lowering the company’s Medicare payment rates and increasing the company’s expenses associated with a non-deductible federal premium tax; 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 is imposed as enacted, and if Humana is unable to adjust its business model to address this new tax, there can be no assurance that the non-deductible federal premium tax would not have a material adverse effect on the company’s results of operations, financial position, and cash flows.
• 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, or if its estimates of benefit expenses 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 that is extremely sensitive to payment patterns and medical cost trends.
• If Humana fails to effectively implement its operational and strategic initiatives, including its Medicare initiatives, the company’s business may be materially adversely affected, which is of particular importance given the concentration of the company’s revenues in the Medicare business.
• 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 is involved in various legal actions and governmental and internal investigations, including without limitation, an ongoing internal investigation and litigation and government requests for information related to certain aspects of its Florida subsidiary operations, the outcome of any of which could result in substantial monetary damages, penalties, fines or other sanctions. Increased litigation or regulatory action and any related negative publicity could increase the company’s cost of doing business.
• Humana’s business activities are subject to substantial government regulation and related audits for compliance, including, among others, existing audits regarding Medicare risk adjustment data. New laws or regulations, or changes in existing laws or regulations or their manner of application, including the methodology that may be used by the government in implementing results of risk adjustment audits, could increase the company’s cost of doing business and may adversely affect the company’s business, profitability and financial condition. In addition, as a government contractor, Humana is exposed to additional risks that may adversely affect the company’s business or the company’s willingness to participate in government health care programs.
• Any failure to manage administrative 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 mail order 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.
• Federal government contracts account for a substantial portion of Humana’s revenue and earnings. A delay by Congress in raising the federal government’s debt ceiling, should it occur, could lead to a reduction, suspension or cancellation of federal government spending that could, in turn, have a material adverse effect on Humana’s business and profitability.
• 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, 2010;
• Form 10-Q for the quarters ended March 31, 2011, June 30, 2011, and September 30, 2011;
• Form 8-Ks filed during 2011 and 2012.

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 6, 2012

(in accordance with	For the year ending December 31, 2012	Comments
Generally Accepted	(see key assumptions below)	(excludes impact of pending acquisitions)
Accounting Principles)
Diluted earnings per common	Full year 2012: $7.50 to $7.70	Excludes the impact of future share
share (EPS)	First quarter 2012: $1.35 to $1.45	repurchases
		Anticipates weighted average shares
		outstanding of 167 million
Revenues	Consolidated revenues: $38.75 billion to $39.25 billion	Includes expected investment income in the
		range of $375 million to $395 million
	Total revenues:	Segment-level revenues include investment
	Retail Segment: $24.25 billion to $24.75 billion	income and intersegment amounts that
	Employer Group Segment: $10.50 billion to $11.00 billion	eliminate in consolidation
	Health and Well-Being Services Segment: $13.25 billion to $13.75
	billion
	Other Businesses: $2.50 billion to $2.75 billion
Ending medical membership	Retail Segment:
versus prior year end	Medicare Advantage: Up 185,000 to 195,000
	Medicare stand-alone PDPs: Up 500,000 to 600,000
	HumanaOne: Up approximately 45,000
	Medicare supplement: Up 30,000 to 40,000
	Employer Group Segment:
	Medicare Advantage: Up approximately 65,000 to 75,000
	Commercial medical fully-insured: Up 50,000 to 60,000
	Commercial medical ASO: Down 60,000 to 70,000
Benefit ratios	Retail Segment: 83.5% to 84.5%	Benefit expenses as a percent of premiums
	Employer Group Segment: 85.0% to 86.0%
Operating cost ratios	Consolidated: 14.25% to 14.75%	Operating costs as a percent of total
	Health & Well-Being Services Segment: 95.75% to 96.25%	revenues excluding investment income
		Consolidated ratio assumes new TRICARE
		South Region contract will be accounted
		for on an ASO basis
Consolidated depreciation	$320 million to $340 million	Approximately $40 million is expected to be
and amortization (cash		included in benefits expense on the income
flows statement)		statement
Consolidated interest expense	$105 million to $110 million
Detailed pretax results and	Retail Segment: $1.30 billion to $1.35 billion; 5.3% to 5.5% pretax	Segment-level pretax results and margins
margins	margin	include the impact of investment income
	Employer Group Segment: $125 million to $175 million; 1.3% to 1.5%
	pretax margin
	Health and Well-Being Services Segment: $425 million to $475 million;
	3.0% to 3.5% pretax margin
Effective Tax Rate	36.0% to 36.5%
Cash flows from operations	$1.8 billion to $2.0 billion
Capital expenditures	Approximately $350 million

Humana Inc.

Statistical Schedules

And

Supplementary Information

4Q11 Earnings Release

S-1

Humana Inc.
Statistical Schedules and Supplementary Information
4Q11 Earnings Release
Contents
Page	Description
S-3-4	Consolidated Statements of Income
S-5	4Q11 Segment Financial Information
S-6	FY11 Segment Financial Information
S-7	4Q10 Segment Financial Information
S-8	FY10 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	Membership Detail
S-14-15	Premiums and Services Revenue Detail
S-16	Medicare Summary
S-17	Investments
S-18-20	Benefits Payable
S-21	Footnotes
S-2

Humana Inc.
Consolidated Statements of Income
In millions, except per common share results
			Three Months Ended December 31,
							Dollar		Percentage
			2011		2010		Change		Change
Revenues:
	Premiums		$	8,638	$	8,039	$	599	7.5	%
	Services			325		161		164	101.9	%
	Investment income			93		76		17	22.4	%
		Total revenues		9,056		8,276		780	9.4	%
Operating expenses:
	Benefits			7,062		6,789		273	4.0	%
	Operating costs			1,585		1,224		361	29.5	%
	Depreciation and amortization			69		62		7	11.3	%
		Total operating expenses		8,716		8,075		641	7.9	%
Income from operations				340		201		139	69.2	%
Interest expense				27		27		0	0.0	%
Income before income taxes				313		174		139	79.9	%
Provision for income taxes				114		67		47	70.1	%
Net income			$	199	$	107	$	92	86.0	%
Basic earnings per common share			$	1.22	$	0.64	$	0.58	90.6	%
Diluted earnings per common share			$	1.20	$	0.63	$	0.57	90.5	%
Shares used in computing basic earnings per common share (000's)				163,238		166,883
Shares used in computing diluted earnings per common share (000's)				165,632		169,303
S-3

Humana Inc.
Consolidated Statements of Income
In millions, except per common share results
			Year Ended December 31,
							Dollar		Percentage
			2011		2010		Change		Change
Revenues:
	Premiums		$	35,106	$	32,712	$	2,394	7.3	%
	Services			1,360		555		805	145.0	%
	Investment income			366		329		37	11.2	%
		Total revenues		36,832		33,596		3,236	9.6	%
Operating expenses:
	Benefits			28,823		27,117		1,706	6.3	%
	Operating costs			5,395		4,380		1,015	23.2	%
	Depreciation and amortization			270		245		25	10.2	%
		Total operating expenses		34,488		31,742		2,746	8.7	%
Income from operations				2,344		1,854		490	26.4	%
Interest expense				109		105		4	3.8	%
Income before income taxes				2,235		1,749		486	27.8	%
Provision for income taxes				816		650		166	25.5	%
Net income			$	1,419	$	1,099	$	320	29.1	%
Basic earnings per common share			$	8.58	$	6.55	$	2.03	31.0	%
Diluted earnings per common share			$	8.46	$	6.47	$	1.99	30.8	%
Shares used in computing basic earnings per common share (000's)				165,413		167,782
Shares used in computing diluted earnings per common share (000's)				167,827		169,798
S-4

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 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			14.7	%			18.8	%			96.3	%			9.7	%							17.7	%
S-5

Humana Inc.
FY11 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			11.2	%			17.8	%			96.1	%			9.4	%							14.8	%
S-6

Humana Inc.
4Q10 Segment Financial Information
In millions
									Health and
					Employer				Well-Being				Other				Eliminations/
	Retail				Group				Services				Businesses				Corporate				Consolidated
Revenues - external customers
Premiums:
Medicare Advantage		$	4,024			$	761			$	-			$	-			$	-			$	4,785
Medicare stand-alone PDP			447				2				-				13				-				462
Total Medicare			4,471				763				-				13				-				5,247
Fully-insured			194				1,264				-				-				-				1,458
Specialty			22				222				-				-				-				244
Military services			-				-				-				858				-				858
Medicaid and other (A)			-				-				-				232				-				232
Total premiums			4,687				2,249				-				1,103				-				8,039
Services revenue:
Provider			-				-				24				-				-				24
ASO and other (B)			3				101				-				33				-				137
Pharmacy			-				-				-				-				-				-
Total services revenue			3				101				24				33				-				161
Total revenues - external customers			4,690				2,350				24				1,136				-				8,200
Intersegment revenues
Services			-				3				1,819				-				(1,822	)			-
Products			-				-				355				-				(355	)			-
Total intersegment revenues			-				3				2,174				-				(2,177	)			-
Investment income			18				10				-				11				37				76
Total revenues			4,708				2,363				2,198				1,147				(2,140	)			8,276
Operating expenses:
Benefits			3,828				1,899				-				1,127				(65	)			6,789
Operating costs			600				412				2,148				127				(2,063	)			1,224
Depreciation and amortization			30				23				6				3				-				62
Total operating expenses			4,458				2,334				2,154				1,257				(2,128	)			8,075
Income from operations			250				29				44				(110	)			(12	)			201
Interest expense			-				-				-				-				27				27
Income (loss) before income taxes		$	250			$	29			$	44			$	(110	)		$	(39	)		$	174
Benefit ratio			81.7	%			84.4	%							102.2	%							84.5	%
Operating cost ratio			12.8	%			17.5	%			97.7	%			11.2	%							14.9	%
S-7

Humana Inc.
FY10 Segment Financial Information
In millions
									Health and
					Employer				Well-Being				Other				Eliminations/
	Retail				Group				Services				Businesses				Corporate				Consolidated
Revenues - external customers
Premiums:
Medicare Advantage		$	16,265			$	3,021			$	-			$	-			$	-			$	19,286
Medicare stand-alone PDP			1,959				5				-				355				-				2,319
Total Medicare			18,224				3,026				-				355				-				21,605
Fully-insured			746				5,169				-				-				-				5,915
Specialty			82				885				-				-				-				967
Military services			-				-				-				3,462				-				3,462
Medicaid and other (A)			-				-				-				763				-				763
Total premiums			19,052				9,080				-				4,580				-				32,712
Services revenue:
Provider			-				-				34				-				-				34
ASO and other (B)			11				395				-				115				-				521
Pharmacy			-				-				-				-				-				-
Total services revenue			11				395				34				115				-				555
Total revenues - external customers			19,063				9,475				34				4,695				-				33,267
Intersegment revenues
Services			-				12				7,494				-				(7,506	)			-
Products			-				-				1,292				-				(1,292	)			-
Total intersegment revenues			-				12				8,786				-				(8,798	)			-
Investment income			80				42				-				43				164				329
Total revenues			19,143				9,529				8,820				4,738				(8,634	)			33,596
Operating expenses:
Benefits			15,624				7,486				-				4,253				(246	)			27,117
Operating costs			2,113				1,662				8,575				475				(8,445	)			4,380
Depreciation and amortization			117				93				26				12				(3	)			245
Total operating expenses			17,854				9,241				8,601				4,740				(8,694	)			31,742
Income from operations			1,289				288				219				(2	)			60				1,854
Interest expense			-				-				-				-				105				105
Income (loss) before income taxes		$	1,289			$	288			$	219			$	(2	)		$	(45	)		$	1,749
Benefit ratio			82.0	%			82.4	%							92.9	%							82.9	%
Operating cost ratio			11.1	%			17.5	%			97.2	%			10.1	%							13.2	%
S-8

Humana Inc.
Consolidated Balance Sheets
Dollars in millions, except share amounts
		December 31,			December 31,			Sequential Change
		2011			2010			Dollar		Percent
Assets
Current assets:
	Cash and cash equivalents	$	1,377		$	1,673
	Investment securities		7,743			6,873
	Receivables, net		1,034			959
	Other		1,027			632
	Total current assets		11,181			10,137		$	1,044	10.3	%
Property and equipment, net			912			815
Long-term investment securities			1,710			1,500
Goodwill			2,740			2,568
Other			1,165			1,083
Total assets			17,708			16,103		$	1,605	10.0	%
Liabilities and Stockholders' Equity
Current liabilities:
	Benefits payable		3,754			3,469
	Trade accounts payable and accrued expenses		1,783			1,681
	Book overdraft		306			409
	Unearned revenues		213			185
	Total current liabilities		6,056			5,744		$	312	5.4	%
Long-term debt			1,659			1,669
Future policy benefits payable			1,663			1,493
Other long-term liabilities			267			273
	Total liabilities		9,645			9,179		$	466	5.1	%
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; 193,230,310 issued at December 31, 2011		32			32
	Capital in excess of par value		1,938			1,737
	Retained earnings		6,825			5,529
	Accumulated other comprehensive income		303			120
	Treasury stock, at cost, 29,225,996 shares at December 31, 2011		(1,035	)		(494	)
	Total stockholders' equity		8,063			6,924		$	1,139	16.5	%
Total liabilities and stockholders' equity		$	17,708		$	16,103		$	1,605	10.0	%
Debt-to-total capitalization ratio			17.1	%		19.4	%
S-9

Humana Inc.
Consolidated Statements of Cash Flows
Dollars in millions
		Three Months Ended December 31,
								Dollar			Percentage
		2011			2010			Change			Change
Cash flows from operating activities
	Net income	$	199		$	107
	Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		78			66
	Net realized capital (gains) losses		(4	)		7
	Stock-based compensation		14			11
	Provision for (benefit from) deferred income taxes		10			(83	)
	Changes in operating assets and liabilities excluding the effects of acquisitions:
	Receivables		2			(42	)
	Other assets		22			(39	)
	Benefits payable		(143	)		(258	)
	Other liabilities		(198	)		201
	Unearned revenues		(1,794	)		(31	)
	Other		17			14
Net cash used in operating activities			(1,797	)		(47	)		($1,750	)	nm
Cash flows from investing activities
	Acquisitions, net of cash acquired		(212	)		(822	)
	Purchases of property and equipment		(120	)		(70	)
	Purchases of investment securities		(1,011	)		(1,007	)
	Proceeds from maturities of investment securities		485			257
	Proceeds from sales of investment securities		634			714
	Change in securities lending collateral		9			(18	)
Net cash used in investing activities			(215	)		(946	)	$	731		-77.3	%
Cash flows from financing activities
	Receipts from CMS contract deposits		382			437
	Withdrawals from CMS contract deposits		(985	)		(877	)
	Change in book overdraft		7			168
	Change in securities lending payable		(11	)		18
	Excess tax benefit from stock-based compensation		3			-
	Dividends paid		(41	)		-
	Proceeds from stock option exercises and other		15			(3	)
Net cash used in financing activities			(630	)		(257	)		($373	)	145.1	%
Decrease in cash and cash equivalents			(2,642	)		(1,250	)
Cash and cash equivalents at beginning of period			4,019			2,923
Cash and cash equivalents at end of period		$	1,377		$	1,673
S-10

Humana Inc.
Consolidated Statements of Cash Flows
Dollars in millions
		Year Ended December 31,
								Dollar			Percentage
		2011			2010			Change			Change
Cash flows from operating activities
	Net income	$	1,419		$	1,099
	Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		303			263
	Net realized capital gains		(11	)		(6	)
	Stock-based compensation		67			63
	Provision for (benefit from) deferred income taxes		22			(199	)
	Changes in operating assets and liabilities excluding the effects of acquisitions:
	Receivables		(75	)		(27	)
	Other assets		(183	)		81
	Benefits payable		256			247
	Other liabilities		194			722
	Unearned revenues		26			(46	)
	Other		61			45
Net cash provided by operating activities			2,079			2,242			($163	)	-7.3	%
Cash flows from investing activities
	Acquisitions, net of cash acquired		(226	)		(833	)
	Purchases of property and equipment		(336	)		(222	)
	Purchases of investment securities		(3,678	)		(4,589	)
	Proceeds from maturities of investment securities		1,569			1,750
	Proceeds from sales of investment securities		1,259			2,012
	Change in securities lending collateral		54			71
Net cash used in investing activities			(1,358	)		(1,811	)	$	453		-25.0	%
Cash flows from financing activities
	Receipts from CMS contract deposits		2,517			1,757
	Withdrawals from CMS contract deposits		(2,895	)		(1,994	)
	Change in book overdraft		(103	)		35
	Change in securities lending payable		(56	)		(71	)
	Common stock repurchases		(541	)		(108	)
	Excess tax benefit from stock-based compensation		15			2
	Dividends paid		(82	)		-
	Proceeds from stock option exercises and other		128			8
Net cash used in financing activities			(1,017	)		(371	)		($646	)	174.1	%
(Decrease) increase in cash and cash equivalents			(296	)		60
Cash and cash equivalents at beginning of period			1,673			1,613
Cash and cash equivalents at end of period		$	1,377		$	1,673
S-11

Humana Inc.
Key Income Statement Ratios and Segment Operating Results
Dollars in millions
		Three Months Ended December 31,											Year Ended December 31,
											Percentage											Percentage
		2011			2010			Difference			Change		2011			2010			Difference			Change
Benefit ratio
	Retail		79.0	%		81.7	%		-2.7	%				81.2	%		82.0	%		-0.8	%
	Employer Group		86.4	%		84.4	%		2.0	%				82.4	%		82.4	%		0.0	%
	Other Businesses		91.9	%		102.2	%		-10.3	%				91.4	%		92.9	%		-1.5	%
	Consolidated		81.8	%		84.5	%		-2.7	%				82.1	%		82.9	%		-0.8	%
Operating cost ratio (C)
	Retail		14.7	%		12.8	%		1.9	%				11.2	%		11.1	%		0.1	%
	Employer Group		18.8	%		17.5	%		1.3	%				17.8	%		17.5	%		0.3	%
	Health and Well-Being Services		96.3	%		97.7	%		-1.4	%				96.1	%		97.2	%		-1.1	%
	Other Businesses		9.7	%		11.2	%		-1.5	%				9.4	%		10.1	%		-0.7	%
	Consolidated		17.7	%		14.9	%		2.8	%				14.8	%		13.2	%		1.6	%
Detail of pretax income (loss)
	Retail	$	326		$	250		$	76		30.4	%	$	1,587		$	1,289		$	298		23.1	%
	Employer Group		($51	)	$	29			($80	)	-275.9	%	$	242		$	288			($46	)	-16.0	%
	Health and Well-Being Services	$	85		$	44		$	41		93.2	%	$	353		$	219		$	134		61.2	%
	Other Businesses	$	1			($110	)	$	111		100.9	%	$	84			($2	)	$	86		nm
	Consolidated	$	313		$	174		$	139		79.9	%	$	2,235		$	1,749		$	486		27.8	%
S-12

Humana Inc.
Membership Detail
In thousands
			Ending	Average	Ending	Year-over-year Change				Ending	Sequential Change
			December 31, 2011	4Q11	December 31, 2010	Amount		Percent		September 30, 2011	Amount		Percent
Medical Membership:
Retail
	Medicare Advantage		1,640.3	1,621.2	1,460.7	179.6		12.3	%	1,613.4	26.9		1.7	%
	Medicare stand-alone PDPs		2,540.4	2,516.3	1,670.3	870.1		52.1	%	2,478.1	62.3		2.5	%
	Individual commercial		433.6	430.1	372.3	61.3		16.5	%	424.0	9.6		2.3	%
	Medicare Supplement		59.6	58.5	38.9	20.7		53.2	%	56.7	2.9		5.1	%
		Total Retail	4,673.9	4,626.1	3,542.2	1,131.7		31.9	%	4,572.2	101.7		2.2	%
Employer Group
	Medicare Advantage		290.6	289.9	273.1	17.5		6.4	%	287.9	2.7		0.9	%
	Medicare Advantage ASO		27.6	27.6	28.2	(0.6	)	-2.1	%	27.6	-		0.0	%
	Medicare stand-alone PDPs		4.2	4.2	2.4	1.8		75.0	%	4.2	-		0.0	%
	Fully-insured medical commercial		1,180.2	1,178.3	1,252.2	(72.0	)	-5.7	%	1,181.3	(1.1	)	-0.1	%
	ASO commercial		1,292.3	1,289.7	1,453.6	(161.3	)	-11.1	%	1,287.0	5.3		0.4	%
		Total Employer Group	2,794.9	2,789.7	3,009.5	(214.6	)	-7.1	%	2,788.0	6.9		0.2	%
Other Businesses
	Military Services		3,028.1	3,024.0	3,027.8	0.3		0.0	%	3,025.9	2.2		0.1	%
	Medicaid and other		614.2	616.9	621.0	(6.8	)	-1.1	%	621.5	(7.3	)	-1.2	%
	LI-NET (D)		73.5	73.9	86.1	(12.6	)	-14.6	%	74.6	(1.1	)	-1.5	%
		Total Other Businesses	3,715.8	3,714.8	3,734.9	(19.1	)	-0.5	%	3,722.0	(6.2	)	-0.2	%
Total Medical Membership			11,184.6	11,130.6	10,286.6	898.0		8.7	%	11,082.2	102.4		0.9	%
Specialty Membership:
Retail
	Dental - fully-insured		579.6	576.9	383.9	195.7		51.0	%	564.7	14.9		2.6	%
	Vision		83.8	82.9	51.7	32.1		62.1	%	79.3	4.5		5.7	%
	Other supplemental benefits (E)		119.1	116.5	74.4	44.7		60.1	%	111.6	7.5		6.7	%
		Total Retail	782.5	776.3	510.0	272.5		53.4	%	755.6	26.9		3.6	%
Employer Group
	Dental - fully-insured		2,283.9	2,278.1	2,254.5	29.4		1.3	%	2,259.5	24.4		1.1	%
	Dental - ASO		869.9	869.4	1,242.3	(372.4	)	-30.0	%	876.9	(7.0	)	-0.8	%
	Vision		2,329.6	2,308.8	2,134.7	194.9		9.1	%	2,272.8	56.8		2.5	%
	Other supplemental benefits (E)		1,049.2	1,039.8	886.0	163.2		18.4	%	1,010.1	39.1		3.9	%
		Total Employer Group	6,532.6	6,496.1	6,517.5	15.1		0.2	%	6,419.3	113.3		1.8	%
Total Specialty Membership			7,315.1	7,272.4	7,027.5	287.6		4.1	%	7,174.9	140.2		2.0	%
S-13

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
				2011		2010		Change			Change		2011		2010
Premiums and Services Revenue
	Retail:
		Medicare Advantage		$	4,454	$	4,024	$	430		10.7	%	$	916	$	918
		Medicare stand-alone PDPs			580		447		133		29.8	%	$	77	$	89
		Individual commercial			205		175		30		17.1	%	$	159	$	157
		Medicare Supplemental			28		19		9		47.4	%	$	160	$	164
		Specialty			35		22		13		59.1	%	$	15	$	15
		ASO & other services (B)			4		3		1		33.3	%
			Total Retail		5,306		4,690		616		13.1	%
	Employer Group:
		Medicare Advantage			789		761		28		3.7	%	$	907	$	927
		Medicare stand-alone PDPs			2		2		-		0.0	%
		Fully-insured medical commercial			1,181		1,264		(83	)	-6.6	%	$	334	$	337
		Specialty			237		222		15		6.8	%	$	14	$	14
		ASO & other services (B)			91		104		(13	)	-12.5	%
			Total Employer Group		2,300		2,353		(53	)	-2.3	%
	Health and Well-Being Services:
		Pharmacy solutions			2,550		2,074		476		23.0	%
		Primary care services			268		66		202		306.1	%
		Home care services			29		14		15		107.1	%
		Integrated wellness services			53		44		9		20.5	%
			Total Health and Well-Being Services		2,900		2,198		702		31.9	%
	Other Businesses:
		Military services (G)			821		876		(55	)	-6.3	%	$	157	$	163
		LI-NET (D)			57		13		44		338.5	%	$	257	$	51
		Medicaid and other (H)			258		247		11		4.5	%	$	138	$	125
			Total Other Businesses		1,136		1,136		-		0.0	%
S-14

Humana Inc.
Premiums and Services Revenue Detail
Dollars in millions, except per member per month
													Per Member per Month (F)
				Year Ended December 31,									Year Ended December 31,
								Dollar			Percentage
				2011		2010		Change			Change		2011		2010
Premiums and Services Revenue
	Retail:
		Medicare Advantage		$	18,100	$	16,265	$	1,835		11.3	%	$	939	$	930
		Medicare stand-alone PDPs			2,317		1,959		358		18.3	%	$	80	$	96
		Individual commercial			757		676		81		12.0	%	$	156	$	152
		Medicare Supplemental			104		70		34		48.6	%	$	161	$	162
		Specialty			124		82		42		51.2	%	$	15	$	15
		ASO & other services (B)			16		11		5		45.5	%
			Total Retail		21,418		19,063		2,355		12.4	%
	Employer Group:
		Medicare Advantage			3,152		3,021		131		4.3	%	$	923	$	931
		Medicare stand-alone PDPs			8		5		3		60.0	%
		Fully-insured medical commercial			4,782		5,169		(387	)	-7.5	%	$	338	$	332
		Specialty			935		885		50		5.6	%	$	14	$	14
		ASO & other services (B)			370		407		(37	)	-9.1	%
			Total Employer Group		9,247		9,487		(240	)	-2.5	%
	Health and Well-Being Services:
		Pharmacy solutions			9,897		8,410		1,487		17.7	%
		Primary care services			1,065		191		874		457.6	%
		Home care services			84		39		45		115.4	%
		Integrated wellness services			187		180		7		3.9	%
			Total Health and Well-Being Services		11,233		8,820		2,413		27.4	%
	Other Businesses:
		Military services (G)			3,690		3,547		143		4.0	%	$	173	$	164
		LI-NET (D)			253		355		(102	)	-28.7	%	$	247	$	275
		Medicaid and other (H)			969		793		176		22.2	%	$	129	$	129
			Total Other Businesses		4,912		4,695		217		4.6	%
S-15

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,
			2011		2010		Amount		Percent		2011		2010
Premiums
	Medicare Advantage		$	5,243	$	4,785	$	458	9.6	%	$	914	$	920
	Medicare stand-alone PDPs			639		462		177	38.3	%	$	82	$	87
		Total Medicare	$	5,882	$	5,247	$	635	12.1	%
											Per Member per Month (F)
			Year Ended December 31,				Year-over-year Change				Year Ended December 31,
			2011		2010		Amount		Percent		2011		2010
Premiums
	Medicare Advantage		$	21,252	$	19,286	$	1,966	10.2	%	$	937	$	931
	Medicare stand-alone PDPs			2,578		2,319		259	11.2	%	$	86	$	106
		Total Medicare	$	23,830	$	21,605	$	2,225	10.3	%
			Ending		Ending		Year-over-year Change
			December 31, 2011		December 31, 2010		Amount		Percent
Fully-Insured Membership
	Medicare Advantage			1,930.9		1,733.8		197.1	11.4	%
	Medicare stand-alone PDPs			2,618.1		1,758.8		859.3	48.9	%
		Total Medicare		4,549.0		3,492.6		1,056.4	30.2	%
S-16

Humana Inc.				Fair value
Investments
Dollars in millions
				12/31/2011		9/30/2011		12/31/2010
Investment Portfolio:
	Cash & cash equivalents			$	1,377	$	4,019	$	1,673
	Investment securities				7,743		7,865		6,873
	Long-term investments				1,710		1,696		1,500
		Total investment portfolio		$	10,830	$	13,580	$	10,046
	Duration (I)				3.94		3.10		3.96
	Average Credit Rating			AA-		AA		AA
Securities Lending Invested Collateral Portfolio:
	Cash & cash equivalents				-	$	5	$	25
	Asset-backed securities				-		-		25
					-	$	5	$	50
Investment Portfolio Detail:
Cash and cash equivalents				$	1,377	$	4,019	$	1,673
U.S. Government and agency obligations
	U.S. Treasury and agency obligations				725		881		712
	U.S. Government residential mortgage-backed				1,751		1,768		1,635
	U.S. Government commercial mortgage-backed				33		33		29
		Total U.S. Government and agency obligations			2,509		2,682		2,376
Tax-exempt municipal securities
	Pre-refunded				332		329		344
	Insured				634		633		597
	Other				1,874		1,742		1,440
	Auction rate securities				16		22		52
		Total tax-exempt municipal securities			2,856		2,726		2,433
Residential mortgage-backed
	Prime residential mortgages				41		45		53
	Alt-A residential mortgages				2		2		2
	Sub-prime residential mortgages				1		1		1
		Total residential mortgage-backed			44		48		56
Commercial mortgage-backed					381		388		321
Asset-backed securities					83		108		150
Corporate securities
	Financial services				692		898		891
	Other				2,888		2,706		2,141
		Total corporate securities			3,580		3,604		3,032
Redeemable preferred stocks					-		5		5
			Total investment portfolio	$	10,830	$	13,580	$	10,046
S-17

Humana Inc.
Detail of Benefits Payable Balance and Year-to-Date Changes
Dollars in millions
		December 31,			September 30,			December 31,
		2011			2011			2010
Detail of benefits payable
	IBNR and other benefits payable (J)	$	2,849		$	2,822		$	2,753
	Unprocessed claim inventories (K)		280			419			374
	Processed claim inventories (L)		119			94			65
	Payable to pharmacy benefit administrator (M)		167			157			22
	Benefits payable, excluding military services		3,415			3,492			3,214
	Military services benefits payable (N)		339			376			255
Total Benefits Payable		$	3,754		$	3,868		$	3,469
		Year Ended			Nine Months Ended			Year Ended
		December 31, 2011			September 30, 2011			December 31, 2010
Year-to-date changes in benefits payable, excluding military services (O)
	Balances at January 1	$	3,214		$	3,214		$	2,943
	Acquisitions		29
	Incurred related to:
	Current year		25,821			19,476			24,186
	Prior years (P)		(372	)		(318	)		(434	)
	Total incurred		25,449			19,158			23,752
	Paid related to:
	Current year		(22,729	)		(16,301	)		(21,269	)
	Prior years		(2,548	)		(2,579	)		(2,212	)
	Total paid		(25,277	)		(18,880	)		(23,481	)
	Balances at end of period	$	3,415		$	3,492		$	3,214
		Year Ended			Nine Months Ended			Year Ended
		December 31, 2011			September 30, 2011			December 31, 2010
Summary of Consolidated Benefit Expense:
	Total benefit expense incurred, per above	$	25,449		$	19,158		$	23,752
	Military services benefit expense		3,247			2,512			3,059
	Future policy benefit expense (Q)		127			91			306
	Consolidated Benefit Expense	$	28,823		$	21,761		$	27,117
S-18

Humana Inc.
Benefits Payable Statistics (R)
Receipt Cycle Time (S)
		2011		2010	Change		Percentage Change
	1st Quarter Average		13.8	13.8	0.0		0.0	%
	2nd Quarter Average		13.8	13.9	(0.1	)	-0.7	%
	3rd Quarter Average		13.6	13.9	(0.3	)	-2.2	%
	4th Quarter Average		14.0	13.6	0.4		2.9	%
	Full Year Average		13.8	13.8	0.0		0.0	%
Unprocessed Claims Inventories
	Date	Estimated Valuation (millions)		Claim Item Counts (000s)	Number of Days on Hand
	12/31/2009	$	323	776	4.3
	3/31/2010	$	426	1,092	5.6
	6/30/2010	$	434	1,009	4.9
	9/30/2010	$	429	1,064	5.2
	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
S-19

Humana Inc.
Benefits Payable Statistics (Continued) (R)
Days in Claims Payable (T)
	Quarter Ended	Days in Claims Payable (DCP)	Change Last 4 Quarters		Percentage Change		DCP Excluding Capitation		Change Last 4 Quarters		Percentage Change
	12/31/2009	55.4	(4.0	)	-6.7	%	62.1		(4.4	)	-6.6	%
	3/31/2010	54.2	(0.4	)	-0.7	%	60.8		(0.1	)	-0.2	%
	6/30/2010	57.0	0.9		1.6	%	64.3		2.8		4.6	%
	9/30/2010	57.8	1.6		2.8	%	64.5		1.8		2.9	%
	12/31/2010	53.5	(1.9	)	-3.4	%	60.0		(2.1	)	-3.4	%
	3/31/2011	55.5	1.3		2.4	%	61.8		1.0		1.6	%
	6/30/2011	56.0	(1.0	)	-1.8	%	62.0		(2.3	)	-3.6	%
	9/30/2011	54.2	(3.6	)	-6.2	%	59.5		(5.0	)	-7.8	%
	12/31/2011	52.5	(1.0	)	-1.9	%	58.3		(1.7	)	-2.8	%
Year-to-Date Change in Days in Claims Payable (U)
					2011		2010
DCP - beginning of period					53.5		55.4
	Components of change in DCP:
	Change in unprocessed claims inventories				(2.3	)	0.8
	Change in processed claims inventories				0.8		0.3
	Change in pharmacy payment cutoff				0.6		(2.9	)
	All other				(0.1	)	(0.1	)
DCP - end of period					52.5		53.5
S-20

Humana Inc.

Footnotes to Statistical Schedules and Supplementary Information

4Q11 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 benefit expenses 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 administrative 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 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 92% 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 benefit expenses per day in the quarterly period. Since the

company has some providers under capitation payment arrangements (which do not require a benefits payable IBNR reserve), the company has

also summarized this metric excluding capitation expense. In addition, this calculation excludes the impact of the company's military

services and stand-alone PDP business.

(U) DCP fluctuates due to a number of issues, the more significant of which are detailed in this rollforward. 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 reserve recorded upon enrollment later in

the quarter. This analysis excludes the impact of military services and Medicare stand-alone PDPs upon DCP.

S-21