UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-5975
HUMANA INC.
(Exact name of registrant as specified in its charter)
Delaware 61-0647538
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 West Main Street, Louisville, Kentucky 40202
(Address of principal executive offices) (Zip Code)
(502) 580-1000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months, and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
_____________ _____________
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Outstanding at
Class of Common Stock November 7, 1994
_____________________ ________________
$.16 2/3 par value 161,264,701 shares
1 of 16
HUMANA INC.
FORM 10-Q
September 30, 1994
Page of
Form 10-Q
_________
Part I: Financial Information
_____________________________
Item 1. Financial Statements
Consolidated Statement of Income for
the quarters and nine months ended
September 30, 1994 and 1993 3
Condensed Consolidated Balance
Sheet at September 30, 1994 and
December 31, 1993 4
Condensed Consolidated Statement of
Cash Flows for the nine months ended
September 30, 1994 and 1993 5
Notes to Condensed Consolidated
Financial Statements 6-7
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 8-14
Part II: Other Information
___________________________
Items 1 to 6 15-16
Exhibits
________
Ratio of Earnings to Fixed Charges
Financial Data Schedule
2
HUMANA INC.
CONSOLIDATED STATEMENT OF INCOME
For the quarters and nine months ended
September 30, 1994 and 1993
Unaudited
(Dollars in millions except per share results)
Quarter Nine Months
_______________ _______________
1994 1993 1994 1993
Revenues:
Premiums $ 906 $ 782 $2,656 $2,346
Interest 17 12 45 36
Other 3 2 11 7
Total revenues 926 796 2,712 2,389
Operating expenses:
Medical costs 736 654 2,175 1,976
Selling, general and
administrative 111 91 324 275
Depreciation and
amortization 13 12 37 36
Unusual charge (a) 18
Total operating
expenses 860 757 2,554 2,287
Income from operations 66 39 158 102
Interest expense (a) 1 1 (26) 5
Income before
income taxes 65 38 184 97
Provision for
income taxes (a) 23 15 56 37
Net income (a) $ 42 $ 23 $ 128 $ 60
Earnings per
common share (a) $ .27 $ .15 $ .80 $ .38
Shares used in
earnings per share
computation (000) 161,053 159,345 160,790 159,095
__________
(a) Results for the nine months ended September 30, 1994, include the
favorable effect of the settlement of income tax disputes with the
Internal Revenue Service partially offset by the write-down of a
nonoperational asset. See Note B.
See accompanying notes.
3
HUMANA INC.
CONDENSED CONSOLIDATED BALANCE SHEET
Unaudited
(Dollars in millions except per share amounts)
September 30, December 31,
1994 1993
Assets
Current assets:
Cash and cash equivalents $ 466 $ 372
Marketable securities 421 427
Premiums receivable, less allowance
for loss of $22 - September 30, 1994
and $17 - December 31, 1993 57 37
Deferred income taxes 56 129
Other 41 37
Total current assets 1,041 1,002
Property and equipment, net 314 300
Long-term marketable securities 497 335
Cost in excess of net tangible
assets acquired 96 60
Other 61 34
Total assets $2,009 $1,731
Liabilities and Common Stockholders' Equity
Current liabilities:
Medical costs payable $ 532 $ 448
Trade accounts payable and
accrued expenses 209 154
Unearned premium revenues 115 110
Income taxes payable 53 59
Total current liabilities 909 771
Long-term obligations 83 71
Total liabilities 992 842
Common stockholders' equity:
Common stock, 16 2/3 cents par;
authorized 300,000,000 shares;
issued and outstanding 161,235,159
shares - September 30, 1994 and
160,343,788 shares - December 31, 1993 27 27
Other 990 862
Total common stockholders' equity 1,017 889
Total liabilities and common
stockholders' equity $2,009 $1,731
See accompanying notes.
4
HUMANA INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the nine months ended September 30, 1994 and 1993
Unaudited
(Dollars in millions)
1994 1993
Cash flows from operating activities:
Net income $ 128 $ 60
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 37 36
Deferred income taxes 57 2
Unusual charge 18
Changes in operating assets and
liabilities 111 (34)
Other 2 15
Net cash provided by
operating activities 353 79
Cash flows from investing activities:
Purchase and disposition of property
and equipment, net (16) (16)
Acquisition of health plan assets (37) (5)
Change in marketable securities (177) (262)
Other investing activities (32) (1)
Net cash used in investing activities (262) (284)
Cash flows from financing activities:
Cash contributions from Galen 383
Other 3 (2)
Net cash provided by
financing activities 3 381
Increase in cash and cash equivalents 94 176
Cash and cash equivalents at
beginning of period 372 233
Cash and cash equivalents at
end of period $ 466 $ 409
Interest payments (refunds), net $ (20) $ 1
Income tax payments, net 1 26
See accompanying notes.
5
HUMANA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
(A) Basis of Presentation
The accompanying financial statements are presented in accordance with the
requirements of Form 10-Q and consequently do not include all of the
disclosures normally required by generally accepted accounting principles
or those normally made in an annual report on Form 10-K. Accordingly, for
further information, the reader of this Form 10-Q may wish to refer to
Humana Inc.'s (the "Company") Form 10-K for the year ended December 31,
1993.
The financial information has been prepared in accordance with the
Company's customary accounting practices and has not been audited. In the
opinion of management, the information presented reflects all adjustments
necessary for a fair statement of interim results. All such adjustments
are of a normal and recurring nature.
(B) Income Tax Settlement and Unusual Charge
During the second quarter ended June 30, 1994, the Company settled certain
income tax disputes with the Internal Revenue Service (the "IRS") and
reduced the net book value of a nonoperational asset to its estimated fair
value. As a result of the two separate events which are more fully
described below, Humana's net income for the nine months ended September
30, 1994, was increased by $17 million or $.10 per share.
Income Tax Settlement
The Company received $71 million in income tax refunds for the
settlement of disputes with the IRS regarding the timing of medical
claims deductions and the deductibility of intangible amortization for
tax years 1988 through 1991. The Company had previously prepaid tax
and interest for these issues for the 1988 and 1989 tax years to stop
the accrual of interest on the disputed amounts.
As a result of the settlement, the Company recognized a $29 million
($18 million or $.11 per share after tax) reduction of interest
expense and a $10 million ($.06 per share) reduction of tax expense,
both of which represented the cumulative effect from 1988 to present
of amounts provided for the disputed items. The remainder of the
refund reduced the deferred tax asset carried on the Company's balance
sheet.
Unusual Charge
The Company reduced the net book value of a nonoperational asset to
its estimated fair value. As a result, the Company recorded a
pretax charge totaling $18 million ($11 million or $.07 per share
after tax).
6
HUMANA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Unaudited
(C) Other
On August 15, 1994, the Company received notification from the National
Committee for Quality Assurance ("NCQA") that its South Florida health
plan (the "Plan") had been denied accreditation. The NCQA denial was
based upon a site visit conducted in July 1993. In anticipation of the
denial, the Company and the State of Florida (the "State") developed a
corrective action process that Humana is implementing under the
supervision of Florida's Agency for Health Care Administration. In
addition to assisting in the development of the corrective action process,
the State completed its own site visit of the Plan in August 1994.
On September 30, 1994, the Company received a letter from the Health Care
Financing Administration ("HCFA") regarding its findings as a result of a
separate investigation of the Plan. HCFA's findings focused primarily on
the collection and use of data and indicated the Plan was not fully
meeting HCFA requirements in the areas of utilization management, quality
assurance and availability/accessibility. On October 31, 1994, HCFA and
the Company agreed upon an implementation plan for a mutually developed
corrective action process.
The Company expects no material effects on its operations as a result of
the denial of accreditation by NCQA or the HCFA investigation.
(D) Subsequent Events
On October 2, 1994, the Company signed a definitive agreement to acquire
all the outstanding shares of CareNetwork, Inc. ("CareNetwork") in a cash
transaction valued at approximately $123 million. CareNetwork serves
86,400 members (including 24,700 Medicaid members) in Milwaukee and
southeastern Wisconsin. The consummation of this transaction, which is
subject to approval by CareNetwork's shareholders as well as regulatory
authorities, is expected to be completed by December 31, 1994.
On October 27, 1994, the Company entered into an unsecured credit
agreement with a group of banks which provides for replacing a $200
million revolving line of credit with a new $350 million revolving line of
credit ("the Credit Agreement"). Principal amounts outstanding under the
Credit Agreement will bear interest depending on the ratio of debt to debt
plus net worth at rates ranging from LIBOR plus 25.0 basis points to LIBOR
plus 43.75 basis points. The Credit Agreement contains events of default
identical to the prior agreement.
7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company offers managed health care products which integrate financing
and management with the delivery of health care services through a network
of providers who share financial risk or who have incentives to deliver
cost-effective medical services. These products are marketed primarily
through health maintenance organizations ("HMOs") and preferred provider
organizations ("PPOs") that encourage, and in most HMO products require,
use of contracting providers. HMOs and PPOs also control health care
costs by various means including the use of utilization controls such as
pre-admission approval for hospital inpatient services and pre-
authorization of outpatient surgical procedures.
The HMO and PPO products of Humana are primarily marketed to employer and
other groups ("Commercial") and Medicare-eligible individuals. The
products marketed to Medicare-eligible individuals are either HMO products
that provide health care services which include all Medicare benefits and,
in certain circumstances, additional health care services that are not
included in Medicare benefits ("Medicare risk") or indemnity insurance
policies that supplement Medicare benefits ("Medicare supplement").
Results of Operations
Third Quarter Ended September 30, 1994 and 1993
The Company's premium revenues increased 16 percent to $906 million for
the quarter ended September 30, 1994, compared to $782 million for the
same period in 1993. The increase in premium revenues is attributable to
same-store Commercial and Medicare risk membership gains, premium rate
increases of 3.0 percent for the Commercial product and 3.9 percent for
the Medicare risk product and the February 28, 1994 acquisition of Group
Health Association ("GHA"). GHA premium revenues during the third quarter
of 1994 totaled approximately $50 million.
Same-store Commercial and Medicare risk membership gains for the quarter
ended September 30, 1994, were 25,900 and 5,200, respectively and compare
favorably to the membership gains of 12,700 and 200 respectively, in the
same period a year ago. For all of 1994, the Company anticipates that
same-store Commercial and Medicare risk membership gains will range
between 8 and 9 percent. Medicare supplement membership declined during
the quarter ended September 30, 1994, continuing the decline which
resulted from management's decision to increase premiums to more closely
approximate competitive levels and to close certain markets.
The medical loss ratio for the quarter ended September 30, 1994, was 81.3
percent compared to 83.7 percent for the same period in 1993. The
improvement was primarily due to decreased hospital utilization in
both the Commercial and Medicare risk products and a modest reduction in
the Medicare risk product's rate of growth for physician and other medical
services costs. Patient days per thousand members for the quarter ended
September 30, 1994, decreased 2 percent from the same period a year ago to
259 days per thousand for the Commercial product and 7 percent to 1,341
days per thousand for the Medicare risk product. Additional improvements
in hospital and other medical services costs are necessary to achieve
further reductions in the medical loss ratio since premium rate increases
in both the Commercial and Medicare risk products are expected to
approximate 3 percent for the remainder of 1994.
8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED
The administrative cost ratio was 13.7 percent and 13.1 percent for the
quarters ended September 30, 1994 and 1993, respectively. The increase is
the result of additional spending for increased marketing efforts, costs
associated with the integration of GHA, and the expansion of market
service areas.
Interest income totaled $17 million and $12 million for the quarters ended
September 30, 1994 and 1993, respectively. The increase in interest
income is primarily attributable to increased levels of cash, cash
equivalents and marketable securities as well as higher yields in the
third quarter of 1994 compared to the same period in the prior year.
The Company's income before income taxes totaled $65 million for the
quarter ended September 30, 1994, compared to $38 million for the same
period in 1993. Net income was $42 million or $.27 per share compared to
$23 million or $.15 per share for the quarters ended September 30, 1994
and 1993, respectively.
Nine Months Ended September 30, 1994 and 1993
The Company's premium revenues increased 13 percent to $2.7 billion for
the nine months ended September 30, 1994 compared to $2.3 billion for the
same period in 1993. The increase in premium revenues is attributable to
same-store Commercial and Medicare risk membership gains of 113,400,
premium rate increases of 3.5 percent for the Commercial product and 3.9
percent for the Medicare risk product, and the acquisition of GHA. GHA
premium revenues, since the February 28, 1994, acquisition totaled
approximately $116 million.
On a same-store basis, Commercial membership increased 82,900 during the
nine months ended September 30, 1994, compared to a decrease of 11,900 for
the nine months ended September 30, 1993. During this same period,
Medicare risk membership increased 15,600 compared to an increase of 2,100
members in the same period a year ago. Medicare supplement membership
declined during the nine months ended September 30, 1994, continuing the
decline which resulted from management's decision to increase premiums to
more closely approximate competitive levels and to close certain markets.
The medical loss ratio for the nine months ended September 30, 1994, was
81.9 percent compared to 84.2 percent for the same period in 1993. The
reduction was primarily attributable to continued improvement in hospital
utilization in both the Commercial and Medicare risk products. Patient
days per thousand members for the nine months ended September 30, 1994,
decreased 4 percent from the same period a year ago to 272 days per
thousand for the Commercial product and 8 percent to 1,433 days per
thousand for the Medicare risk product. Additional improvements in
hospital and other medical services costs are necessary to achieve further
reductions in the medical loss ratio since premium rate increases in both
the Commercial and Medicare risk products are expected to approximate 3
percent for the remainder of 1994.
The administrative cost ratio was 13.6 percent and 13.2 percent for the
nine months ended September 30, 1994 and 1993, respectively. The increase
is a result of additional spending for increased marketing efforts, costs
associated with the integration of GHA, and the expansion of market
service areas.
9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED
Interest income totaled $45 million and $36 million for the nine months
ended September 30, 1994 and 1993, respectively. The increase in interest
income is primarily attributable to increased levels of cash, cash
equivalents and marketable securities.
The Company's income before income taxes totaled $184 million for the nine
months ended September 30, 1994 compared to $97 million for the nine
months ended September 30, 1993. Income before income taxes for 1994
includes $29 million related to the favorable settlement of tax disputes
with the IRS and an $18 million charge related to the write-down of a
nonoperational asset. Net income increased to $128 million or $.80 per
share from $60 million or $.38 per share for the nine months ended
September 30, 1994 and 1993, respectively. Included in net income for the
nine months ended September 30, 1994, is $17 million or $.10 per share
related to the nonrecurring items described above.
Liquidity
Cash provided by the Company's operations totaled $353 million and $79
million for the nine months ended September 30, 1994 and 1993,
respectively. The timing of the receipt of Medicare risk premiums
increased cash provided by operations by $5 million for the nine months
ended September 30, 1994, and reduced cash provided by operations by $102
million for the nine months ended September 30, 1993. Excluding the
effect of the timing of Medicare risk premiums, cash provided by
operations was $348 million and $181 million for the nine months ended
September 30, 1994 and 1993, respectively. The increase in cash provided
by operations was primarily attributable to increased net income, the
settlement of the tax disputes with the IRS, and the timing of payments
for medical costs and other payables.
The Company's current assets exceeded current liabilities by $132 million
and $231 million at September 30, 1994 and December 31, 1993,
respectively. The reduction in net working capital is primarily
attributable to Humana's policy of classifying unrestricted cash, cash
equivalents and marketable securities as long-term to conform with their
intended use.
The Company's subsidiaries operate in states which require certain levels
of equity and regulate the payment of dividends to the parent company. As
a result, the Company's ability to use operating subsidiaries' cash flows
is restricted to the extent that the subsidiaries' ability to pay
dividends to its parent company requires regulatory approval. At
September 30, 1994, the Company had approximately $390 million of
unrestricted cash, cash equivalents and marketable securities ($123
million of which will be used to acquire CareNetwork).
Management believes that existing working capital, including the
aforementioned unrestricted funds, future operating cash flows and the
availability of a $350 million line of credit are sufficient to meet
liquidity needs, allow the Company to pursue acquisition and expansion
opportunities and fund capital requirements.
10
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED
Capital Resources
The Company's ongoing capital expenditures relate primarily to medical
care facilities used by either employed or affiliated physicians as well
as administrative facilities and related computer information systems
necessary for activities such as claims processing, billing and
collections, medical utilization review and customer service.
Excluding acquisitions, planned capital spending in 1994 will approximate
$45 million compared to $28 million in 1993. The increase in 1994 capital
spending relates primarily to the refurbishing and equipping of the
Company's staff model primary care facilities, including those located in
Washington D.C. Management believes that its capital spending program is
adequate to expand, improve and equip its existing business.
Other Information
The Company provides medical services to Medicare risk members under
contracts with the Health Care Financing Administration ("HCFA") that are
renewed for a one-year term each December 31 unless terminated 90 days
prior thereto. The loss of these contracts or significant changes in the
program, including reductions in payments or increases in benefits without
corresponding increases in payments, would have a material adverse effect
on the revenues, profitability and business prospects of the Company. The
Company's January 1, 1995 average rate of increase (weighted average for
the members and markets served) under these contracts will be 6.3 percent.
The Company's South Florida health plan (the "Plan") was denied
accreditation by the National Committee for Quality Assurance ("NCQA").
In addition, HCFA delivered a letter regarding its separate investigation
of the Plan which indicated that the Plan was not fully meeting data
collection and use requirements in the areas of utilization management,
quality assurance and availability/accessibility. The Company has begun
various corrective action procedures developed jointly with these
regulatory agencies to resolve the issues identified and expects no
material effects on its operations as a result of the NCQA denial or HCFA
investigation.
Resolution of various loss contingencies, including litigation pending
against the Company in the ordinary course of business, is not expected to
have a material adverse effect on its financial position or results of
operations.
11
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED
1994 1993
Commercial members enrolled at:
March 31 1,381,100 1,196,000
June 30 1,386,100 1,195,200
September 30 1,408,800 1,201,500
December 31 1,214,000
Medicare risk members enrolled at:
March 31 276,600 268,600
June 30 281,200 268,200
September 30 286,400 268,400
December 31 270,800
Medicare supplement members enrolled at:
March 31 144,100 178,600
June 30 139,000 168,000
September 30 134,700 161,100
December 31 153,600
Commercial self-funded members at:
March 31 75,500 70,300
June 30 81,300 67,600
September 30 79,100 62,900
December 31 63,700
Total members enrolled at:
March 31 1,877,300 1,713,500
June 30 1,887,600 1,699,000
September 30 1,909,000 1,693,900
December 31 1,702,100
12
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED
Supplemental Consolidated Statement of Income
(Dollars in millions except per share results)
1994
First Second Third Total
Premiums:
Commercial $ 480 $ 518 $ 521 $1,519
Medicare risk 342 350 357 1,049
Medicare supplement 31 29 28 88
853 897 906 2,656
Interest 13 15 17 45
Other 3 5 3 11
869 917 926 2,712
Medical costs 703 736 736 2,175
Selling, general and
administrative 102 111 111 324
Depreciation and amortization 12 12 13 37
817 859 860 2,536
Income from operations 52 58 66 176
Interest expense 1 1 1 3
Pretax income 51 57 65 173
Provision for income taxes 19 20 23 62
Net income $ 32 $ 37 $ 42 $ 111
Earnings per share $ .20 $ .23 $ .27 $ .70
Medical loss ratio 82.4% 81.9% 81.3% 81.9%
Administrative cost ratio 13.4% 13.6% 13.7% 13.6%
Note: Second quarter and the nine-month results exclude the impact of the
favorable settlement of tax disputes with the Internal Revenue
Service and the write-down of a nonoperational asset.
13
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS, CONTINUED
Supplemental Consolidated Statement of Income
(Dollars in millions except per share results)
1993
First Second Third Fourth Total
Premiums:
Commercial $ 426 $ 422 $ 428 $ 433 $ 1,709
Medicare risk 323 323 322 328 1,296
Medicare supplement 37 33 32 30 132
786 778 782 791 3,137
Interest 10 14 12 12 48
Other 2 3 2 3 10
798 795 796 806 3,195
Medical costs 662 660 654 654 2,630
Selling, general and
administrative 93 91 91 93 368
Depreciation and
amortization 12 12 12 11 47
767 763 757 758 3,045
Income from operations 31 32 39 48 150
Interest expense 2 2 1 2 7
Pretax income 29 30 38 46 143
Provision for income taxes 11 11 15 17 54
Net income $ 18 $ 19 $ 23 $ 29 $ 89
Earnings per share $ .11 $ .12 $ .15 $ .18 $ .56
Medical loss ratio 84.3% 84.8% 83.7% 82.7% 83.8%
Administrative cost ratio 13.4% 13.1% 13.1% 13.3% 13.2%
14
Part II: Other Information
Items 1 - 4:
None
Item 5: Other Information
(a) Ratio of Earnings to Fixed Charges
The Company's ratio of earnings to fixed charges was 27.2
and 14.3 for the third quarters ended September 30, 1994 and
1993, respectively, and 24.6 and 12.9 for the nine months
ended September 30, 1994 and 1993, respectively.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 12 - Statement re: Computation of Ratio of Earnings
to Fixed Charges
Exhibit 27 - Financial Data Schedule
(b) No reports on Form 8-K have been filed during the quarter
ended September 30, 1994.
15
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HUMANA INC.
Date: /s/ James E. Murray
James E. Murray
Vice President and Controller
(Principal Accounting Officer)
Date: /s/ Arthur P. Hipwell
Arthur P. Hipwell
Senior Vice President and
General Counsel
16
Exhibit 12
HUMANA INC.
RATIO OF EARNINGS TO FIXED CHARGES
For the quarters and nine months ended September 30, 1994 and 1993
Quarter Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
Ratio of earnings
to fixed charges 27.2 14.3 24.6 12.9
For the purpose of determining earnings in the calculation of the ratio of
earnings to fixed charges (the "Ratio"), earnings have been increased by the
provision for income taxes and fixed charges. Fixed charges consist of
interest expense on borrowings and one-third (the proportion deemed
representative of the interest portion) of rents. For purposes of
calculating the Ratio, earnings and interest expense for the nine months
ended September 30, 1994, exclude the impact of nonrecurring items related
to the second quarter favorable settlement of tax disputes with the Internal
Revenue Service and the write-down of a nonoperational asset.
5
0000049071
HUMANA INC.
1,000,000
9-MOS
DEC-31-1994
JAN-01-1994
SEP-30-1994
466
421
79
22
6
1041
525
211
2009
909
0
27
0
0
990
2009
2656
2712
2175
2554
0
0
(26)
184
56
128
0
0
0
128
.8
.8
