UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-5975
A. Full title of plan: Humana Retirement and
Savings Plan
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
Humana Inc.
500 West Main Street
Louisville, Kentucky 40202
1 of 24
I N D E X
Pages
Report of Independent Accountants 3
Financial Statements:
Statement of Net Assets Available for Benefits,
December 31, 1996 and 1995 4
Statement of Changes in Net Assets Available for
Benefits for the years ended December 31, 1996
and 1995 5
Notes to Financial Statements 6-17
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes,
December 31, 1996 (Item 27a of Form 5500) 18-20
Schedule of Reportable Transactions for the year
ended December 31, 1996 (Item 27d of Form 5500) 21
Signature Page 22
Exhibit Index 23
Exhibit 23 - Consent of Coopers & Lybrand L.L.P. 24
REPORT OF INDEPENDENT ACCOUNTANTS
To the Retirement and Savings Plan Committee
Humana Inc.
We have audited the accompanying statement of net assets
available for benefits of the Humana Retirement and Savings Plan
(the "Plan") as of December 31, 1996 and 1995, and the related
statement of changes in net assets available for benefits for the
years ended December 31, 1996 and 1995. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of the Plan as of December 31, 1996 and
1995, and the changes in net assets available for benefits for
the years ended December 31, 1996 and 1995, in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedules listed on page 2 are presented for the
purpose of additional analysis and are not a required part of the
basic financial statements but are supplementary information
required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial
statements taken as a whole.
COOPERS & LYBRAND L.L.P.
Louisville, Kentucky
June 16, 1997
HUMANA RETIREMENT AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1996 and 1995
ASSETS
1996 1995
Investments:
At fair value:
Common stocks $ 257,027,353 $ 194,162,703
NC Capital Preservation Fund 10,548,080
Armada Money Market Fund 2,654,772
Armada Government Fund 1,323,112 6,165,701
Investment contracts 9,803,627 4,187,783
Participant notes receivable 7,530,998 3,624,206
Bonds and asset-backed securities 25,705 173,494
278,365,567 218,861,967
At contract value:
Investment Contracts 72,900,699 49,647,896
Total investments 351,266,266 268,509,863
Cash 888
Due from brokers for securities sold 19,489,023
Receivable from participating
employers for participant withholdings
and employers' contributions 16,230,206 13,263,046
Accrued interest and dividends 590,110 112,843
Total assets 387,576,493 281,885,752
LIABILITIES AND NET ASSETS
AVAILABLE FOR BENEFITS
Cash overdraft 97,738
Due to brokers for securities purchased 1,074,627 79,325
Accrued expenses 412,293 187,536
Forfeited employers' contributions
available to reduce future
employers' contributions 57,345 103,368
Total liabilities 1,544,265 467,967
Net assets available for benefits $ 386,032,228 $ 281,417,785
The accompanying notes are an integral
part of the financial statements.
HUMANA RETIREMENT AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the years ended December 31, 1996 and 1995
1996 1995
Additions to net assets:
Investment income:
Net (depreciation)
appreciation in fair
value of investments $ (19,030,790) $ 35,421,116
Interest 6,055,957 4,737,737
Dividends 1,675,018 506,510
(11,299,815) 40,665,363
Contributions:
Participants 23,043,766 16,506,721
Employers 25,377,619 19,350,367
Forfeited employers' contributions (228,177) (215,876)
Transfer from CareNetwork 401(k)
Salary Reduction Plan and Trust 2,445,836
Transfer from EMPHESYS Financial
Group Inc.'s Plans ( note 3) 92,358,212
Total additions 129,251,605 78,752,411
Deductions from net assets:
Benefits paid to participants 24,218,255 12,572,425
Administrative expenses 418,907 322,215
Total deductions 24,637,162 12,894,640
Net increase 104,614,443 65,857,771
Net assets available for benefits:
Beginning of period 281,417,785 215,560,014
End of period $ 386,032,228 $ 281,417,785
The accompanying notes are an integral
part of the financial statements.
NOTES TO FINANCIAL STATEMENTS
1. Summary of Plan:
The Humana Retirement and Savings Plan (the "Plan") is a
qualified, trusteed plan established for the benefit of the
employees of Humana Inc. and its subsidiaries ("Humana") and
is subject to the Employee Retirement Income Security Act of
1974 ("ERISA"). The Plan maintained two accounts, the Thrift
Account and the Retirement Account, prior to January 1, 1994.
No further contributions were accepted into the Thrift Account
subsequent to December 31, 1993, as a new Pretax Savings
Account was added to the Plan effective January 1, 1994. All
Thrift Account balances as of December 31, 1993 remained in
the Plan.
The Plan's Sponsor, Humana Inc., offers managed health care
products that integrate medical management with the delivery
of health care services through a network of providers.
Any employee of Humana who has completed at least one year of
service with a sponsoring employer and has completed 1,000
hours of service is eligible to participate in the Plan's
Pretax Savings Account. A participant, through payroll
deductions, may contribute not less than 1% nor more than 6%
of the participant's compensation per pay period. An amount
equal to 50% of the participant's contributions is contributed
by Humana. The Board of Directors of Humana, at its option,
may increase this matching percentage up to 100%.
Participants who contribute the maximum 6% amount are eligible
to make voluntary contributions of amounts which do not exceed
an additional 8% of their annual compensation. These
voluntary contributions are not subject to employer matching
contributions.
After an employee completes two years of service with a
sponsoring employer and has complied with certain other
service requirements, Humana makes annual contributions to the
Retirement Account of the Plan equal to 4% of each
participating employee's qualifying compensation earned during
the Plan year, plus 4% of any compensation that exceeds the
Social Security taxable wage base. Contribution amounts are
computed as of the end of each Plan year and are
nonforfeitable.
Contributions to the Plan by or on behalf of employees may be
restricted in amount and as to timing so as to meet various
requirements of the Internal Revenue Code of 1986 ("IRC") as
amended.
Each participant's account is credited with the participant's
contributions and the Company's contributions and the
allocations of Plan earnings and charged with an allocation of
administrative expenses. Allocations are based on
participants' account balances. Forfeited balances of
terminated participants' nonvested accounts are used to reduce
future Company contributions. The benefit to which a
participant is entitled is the benefit that can be provided
from the participant's vested account.
Contributions to the Plan are invested by National City Trust
Company (the "Trustee") in seven separate participant directed
investment funds as follows:
Interest Income Fund: In obligations of the United States
and United States Government agencies, debentures, notes or
other evidences of indebtedness, shares of preferred stock
and any other property, the rate of return from which is
established by the instruments evidencing the investments,
including principal and interest contracts.
Continued
NOTES TO FINANCIAL STATEMENTS, Continued
1. Summary of Plan, continued:
Stock Index Fund: In units of the State Street Flagship
Domestic Index Commingled Trust Fund which invests
exclusively in securities which attempt to match the return
of the Standard and Poor's 500 Index.
Humana Common Stock Fund: In Humana common stock, or in
U.S. Treasury Bills, commercial paper, certificates of
deposit and money market funds as determined by the Trustee.
All employer contributions to the Pretax Savings Account are
invested in this fund. Employer contributions may be made
in cash, in shares of Humana common stock, or a combination
thereof. At December 31, 1996 and 1995, this fund included
$51,466,809 and $69,269,143, respectively, of non-participant
directed funds related to the 401(k) employer match.
Aggressive Growth Fund: In shares of Fidelity Contrafund
which invests in common stocks and securities convertible
into common stock which have market values appearing low
relative to underlying value or future earnings and growth
potential. The Fidelity Contrafund may also invest in,
among other investments, convertible securities, warrants,
preferred stock, bonds, foreign securities, covered call
options, put options, repurchase agreements, and cash
equivalent securities.
Balanced Fund: In shares of Fidelity Balanced Fund which
invests in common and preferred stocks, straight debt issues
(including government securities) or debt securities with
equity conversion or purchase rights and in cash and cash
equivalents, the objective of which is to emphasize current
income while secondarily striving to attain capital growth.
International Fund: In shares of Harbor International Fund
which invests in equity securities, American Depositary
Receipts, European Depositary Receipts, securities
convertible into common stock, government securities, and
non-convertible preferred stocks of issuers domiciled
outside the United States so as to achieve long-term growth
of capital. The Harbor International Fund may also invest
in cash equivalent securities, such as Treasury bills,
commercial paper and certificates of deposit.
Small Capitalization Fund: In shares of Compass Small Cap
Fund which invests in equity securities consisting primarily
of emerging growth companies and companies selected for
investment because of their unique situation. The Compass
Small Cap Fund may also invest in cash equivalent
securities, such as U.S. Treasury bills, commercial paper
and certificates of deposit.
A participant may allocate his/her contributions to the Pretax
Savings Account and Humana's contribution to the Retirement
Account among the various funds in increments of not less than
1%. In the absence of such allocation, these contributions
are invested in the Interest Income Fund. In connection with
a change in allocation of a participant's or Humana's future
contributions among the seven Plan funds and a change in the
investment of existing accounts ("Transfers"), the value of
Transfers to or from the Humana Common Stock Fund will reflect
the price or prices at which all shares are purchased, sold or
transferred before, on or after the participant's monthly
election rather than transferring strictly based on the value
at the monthly closing price.
The value of a participant's interest, including employer
contributions, is generally payable upon the occurrence of one
of the following events: (1) the participant's retirement on
or after the date he/she attains age 65; (2) the participant's
early retirement after attaining age 55 and having been
credited with two years of service; (3) a
Continued
NOTES TO FINANCIAL STATEMENTS, Continued
1. Summary of Plan, continued:
determination by Humana upon competent medical or other
evidence that, by reason of permanent and total disability,
the participant is incapable of performing the duties of
his/her work; or (4) the participant's death.
Employee contributions are nonforfeitable. Participants who
withdraw from the Pretax Savings Account prior to being
credited with four years of participation or five years of
service with Humana are eligible to receive generally the
value of employer contributions at the withdrawal date,
exclusive of those made during the two years preceding
withdrawal. Employer contributions become totally nonforfeit-
able after the participant is credited with four years of
participation in the Plan or five years of service with
Humana.
Employer contributions forfeited as a result of withdrawal
following termination of employment will be available
to reduce the amount of subsequent employer contributions to
the Pretax Savings Account. If a former participant is re-employed
prior to five consecutive one-year breaks in service
and repays the amount of his/her distribution, then any
forfeited employer contributions are restored to his/her
account.
A participant may generally withdraw an amount from the Thrift
Account equal to the value of the participant's account as of
the valuation date following the date the withdrawal request
is received by the Plan Administrator. Effective January 1,
1994, in the event funds are needed because of extreme
financial hardship as defined by law, the participant may be
allowed to make a withdrawal from his/her Pretax Savings
Account. In addition, the Plan contains restrictions relating
to minimum withdrawals and the frequency of withdrawals.
Benefits under the Plan are payable to withdrawing
participants including retirees as follows:
(a) A lump sum distribution in cash or, in the event of a
distribution from the Humana Common Stock Fund, partially or
totally in Humana Common Stock, or
(b) Monthly, quarterly or annual installments for a period of
5, 10, 15 or 20 years not to exceed the life expectancy of the
participant, or the joint and last survivor expectancy of the
participant and designated beneficiary, or
(c) A life annuity form of payment, or
(d) A life annuity with guaranteed payments.
Operating expenses of the Plan are paid by the Plan.
There were approximately 17,800 and 13,000 participants at
December 31, 1996 and 1995, respectively, who had allocated
their contributions to one or more funds as follows:
1996 1995
Interest Income Fund 14,554 11,946
Humana Common Stock Fund 13,616 10,053
Aggressive Growth Fund 7,914 4,466
Continued
NOTES TO FINANCIAL STATEMENTS, Continued
1. Summary of Plan, continued:
1996 1995
Stock Index Fund 7,896 5,656
Small Capitalization Fund 5,898 3,192
Balanced Fund 5,415 3,980
International Fund 4,537 2,680
Effective January 1, 1994, participants may borrow from their
fund accounts. The aggregate of the loans to a participant
shall not exceed the lesser of $50,000 or 50% of the vested
portion of his/her participant contribution accounts,
voluntary contribution accounts plus his/her employer thrift
and pretax savings accounts to which he/she would be entitled
to if he/she incurred a termination of employment. The
minimum a participant may borrow is $500. Loan transactions
are treated as a transfer to (from) the investment fund from
(to) the Participant Notes Fund. Loan terms range from one to
four years or up to ten years for the purchase of a primary
residence. The loans are secured by the balance in the
participant's account and bear interest at a reasonable rate
in accordance with Department of Labor rules and regulations,
as determined by the Plan Administrator. Principal and
interest are repaid ratably through payroll deductions.
Humana has the right, under the Plan, to discontinue its
contribution at any time and to terminate the Plan subject to
the provisions of ERISA. If the Plan is terminated, the
interest of each participant would continue to be
nonforfeitable and would be distributed as determined by
Humana.
2. Summary of Significant Accounting Policies:
The financial statements of the Plan are prepared under the
accrual method of accounting.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
Certain reclassifications have been made to the 1995 financial
statements in order to conform to the 1996 classifications.
The changes had no effect on previously reported net assets
available for benefits.
Benefits are recorded when paid.
The Plan presents in the accompanying Statement of Changes in
Net Asset Available for Benefits, the net appreciation or
depreciation in fair value of investments which consists of
both realized gains or losses and unrealized appreciation or
depreciation.
Purchases and sales of securities are recorded on a trade-date
basis. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
Continued
NOTES TO FINANCIAL STATEMENTS, Continued
2. Summary of Significant Accounting Policies, continued:
Investments in securities traded on a national securities
exchange are valued at the last reported sales price on the
last business day of the period; securities traded in the
over-the-counter market and listed securities for which no
sale was reported on that date are valued at the mean between
the last reported bid and asked prices.
The fair values of units in the Armada Government Funds,
Armada Money Market Fund, and the NC Capital Preservation Fund
are determined by the Trustee based upon the securities
comprising the funds. The fair values for those securities
represent the last recorded sale of the year. In the absence
of recorded sales, and for securities not listed on a national
securities exchange, the fair values represent the mean of bid
and asked prices obtained from certified investment brokers.
The Interest Income Fund investments include, among others,
investment contracts, collateralized mortgage obligations,
bonds, asset-backed securities and other fixed income
obligations such as commercial paper.
Investment contracts with insurance companies are fully
benefit-responsive and are carried at contract value, which
represents contributions plus interest earned at specified
rates less withdrawals and administrative expenses. Investment
contracts with banks are carried at fair value. The
collateralized mortgage obligations, bonds and asset-backed
securities are recorded at fair value. These securities are
not listed on a national securities exchange. The fair values
represent the mean of bid and asked prices obtained from
certified investment brokers.
3. Merger:
On April 1, 1996, June 30, 1996 and September 17, 1996 the
assets of Employers Health Insurance Profit Sharing Plan,
Centerstone Insurance and Financial Services Savings and
Investment Plan, and HMO California Retirement Savings Plan,
respectively, all wholly owned subsidiaries of EMPHESYS
Financial Group Inc., a wholly owned subsidiary of Humana,
were merged with the Plan. The market values of the assets at
the time of transfer were as follows:
Employers Health Insurance Profit
Sharing Plan $91,176,109
Centerstone Insurance and Financial
Services Saving and Investment Plan 1,102,134
The HMO California Retirement Savings
Plan 79,969
$92,358,212
Effective July 6, 1995, the assets of CareNetwork, Inc.'s, a
wholly owned subsidiary of Humana, CNI 401(k) Salary Reduction
Plan and Trust were merged with the Plan. The market value of
the assets transferred was $2,445,836.
Continued
NOTES TO FINANCIAL STATEMENTS, Continued
4. Investments:
The following table sets forth the fair value/contract value
of investments at December 31, 1996. Investments that
represent 5% or more of the Plan's net assets as well as
investments in excess of $2,000,000 as of December 31, 1996
have been separately identified:
Par or Maturity
Value/Number of Fair Value/
Issuer Units or Shares Contract Value
Investments at Fair Value:
Common Stocks:
Humana Inc. Common Stock 5,321,361 $ 101,105,859
State Street Flagship
Domestic Index Fund 431,173 51,483,806
Harbor International Fund 616,683 19,857,202
Compass Small Cap Fund 1,919,469 29,060,767
Fidelity Contrafund 1,317,194 55,519,719
257,027,353
Obligations due within one year:
Armada Money Market Fund 2,654,772 2,654,772
Other 1,323,112 1,323,112
3,977,884
Investment contracts - Banks:
Caisse Des Depots (CDC) $ 3,873,495 3,873,495
Various $ 5,930,132 5,930,132
9,803,627
Bonds and asset-backed securities:
Various $ 25,758 25,705
Participant notes receivable:
Various $ 7,530,998 7,530,998
Investments at Contract Value:
Investment Contracts
Insurance Companies:
Allstate Life Insurance Co. $ 4,000,000 4,181,963
Allstate Life Insurance Co. $ 3,000,000 3,130,341
Canada Life Assurance Co. $ 3,000,000 3,097,393
Commonwealth Life Insurance Co. $ 2,836,086 2,978,433
Commonwealth Life Insurance Co. $ 2,436,214 2,555,501
Commonwealth Life Insurance Co. $ 2,844,216 2,976,808
Commonwealth Life Insurance Co. $ 3,708,000 4,001,545
Continental Assurance Co. $ 3,000,000 3,056,303
Continued
NOTES TO FINANCIAL STATEMENTS, Continued
4. Investments, continued:
Par or Maturity
Value/Number of Fair Value/
Issuer Units or Shares Contract Value
Life of Virginia $ 2,000,000 $ 2,098,946
Lincoln National
Life Insurance Co. $ 1,756,400 2,001,122
Metropolitan Life Insurance Co. $ 3,745,762 4,103,634
New York Life Insurance Co. $ 3,260,621 3,406,226
New York Life Insurance Co. $ 4,454,892 4,666,439
New York Life Insurance Co. $ 3,000,000 3,163,192
New York Life Insurance Co. $ 2,900,127 3,036,565
Provident Life & Accident
Insurance Co. $ 1,875,367 2,007,461
Provident Life & Accident
Insurance Co. $ 2,449,140 2,621,649
Provident Life & Accident
Insurance Co. $ 2,901,663 3,006,768
Prudential Insurance Co. $ 2,000,000 2,085,499
TransAmerica Accidental Life
Insurance Co. $ 3,000,000 3,182,795
United of Omaha Life
Insurance Co. $ 2,914,289 3,008,186
Others $ 7,731,722 8,533,930
72,900,699
$ 351,266,266
During the year ended December 31, 1996, the Plan's
investments (including investments bought, sold and held
during the period) appreciated (depreciated) in value as
follows:
Common stocks $ (19,031,380)
Bonds and asset-backed securities 590
$ (19,030,790)
The fair value of the investments carried at contract values
at December 31, 1996 and 1995 was $68,814,499 and $47,669,567,
respectively. The average yield and crediting interest rate
approximated 6.4% and 6.7% for 1996 and 1995, respectively.
The per share closing price of Humana common stock was $19.00
on December 31, 1996. On June 16, 1997, the per share closing
price of Humana common stock was $23.75.
Continued
NOTES TO FINANCIAL STATEMENTS, Continued
5. Reconciliation of Financial Statements to Form 5500:
The following is a reconciliation of net assets available for
benefits per the accompanying financial statements to the Form
5500:
December 31, 1996 December 31, 1995
Net assets available
for benefits per the
financial statements $ 386,032,228 $ 281,417,785
Amount allocated to
withdrawn
participants (1,484,772) (756,251)
Net assets available
for benefits per
the Form 5500 $ 384,547,456 $ 280,661,534
The following is a reconciliation of benefits paid to
participants per the financial statements to the Form 5500:
For the year ended For the year ended
December 31,1996 December 31, 1995
Benefits paid to
participants per the
financial statements $ 24,218,255 $ 12,572,425
Add: Amounts
allocated to
withdrawing
participants at
end of year 1,484,772 756,251
Less: Amounts
allocated to
withdrawing
participants at
beginning of year (756,251) (939,918)
Benefits paid to
participants per
the Form 5500 $ 24,946,776 $ 12,388,758
Amounts allocated to withdrawing participants are recorded on
the Form 5500 for benefit claims that have been processed and
approved for payment prior to December 31 but not yet paid as
of that date.
6. Income Tax Status:
The Internal Revenue Service has determined and informed
Humana by a letter dated May 19, 1994, that the Plan and
related trust are designed in accordance with applicable
sections of the IRC. The Plan administrator and the Plan's tax
counsel believe that the Plan is designed and is currently
being operated in compliance with the applicable requirements
of the IRC.
NOTES TO FINANCIAL STATEMENTS, Continued
7. Net Assets by Fund at December 31, 1996:
Interest Humana Agressive Small Participant
Income Stock Index Common Growth Balanced International Capitalization Notes
Fund Fund Stock Fund Fund Fund Fund Fund Fund Total
ASSETS
Investments:
At fair
value:
Common Stock $51,483,806 $101,105,859 $55,519,719 $19,857,202 $29,060,767 $257,027,353
NC Capital
Preservation
Fund
Armada Money
Market Fund $ 2,654,772 2,654,772
Armada Govern-
ment Fund 112,997 671,514 225,547 $ 108,049 87,450 117,555 1,323,112
Investment
Contracts 9,803,627 9,803,627
Participant
Loans $7,530,998 7,530,998
Bonds and
asset-backed
securities 25,705 25,705
12,484,104 51,596,803 101,777,373 55,745,266 108,049 19,944,652 29,178,322 7,530,998 278,365,567
At contract
value:
Investment
Contracts 72,900,699 72,900,699
Total
Investments 85,384,803 51,596,803 101,777,373 55,745,266 108,049 19,944,652 29,178,322 7,530,998 351,266,266
Cash 578 310 888
Due from Broker
for Securities
Sold 19,489,023 19,489,023
Receivable from
participating
employers for
participant
withholdings
and employers'
contributions 10,239,896 1,849,217 1,466,240 1,202,046 359,035 458,186 643,786 11,800 16,230,206
Accrued interest
and dividends 587,243 228 1,695 365 250 166 163 590,110
Total Assets 96,211,942 53,446,248 103,245,886 56,947,677 19,956,357 20,403,004 9,822,271 7,543,108 387,576,493
LIABILITIES AND
NET ASSETS
AVAILABLE
FOR BENEFITS
Cash overdraft
Due to Broker
for Securities
Purchased 112,997 531,078 225,547 87,450 117,555 1,074,627
Accrued expenses 87,937 68,716 82,633 74,122 27,727 27,615 43,543 412,293
Forfeited
employer's
contributions
and employers'
contributions 57,345 57,345
Total
Liabilities 87,937 181,713 671,056 299,669 27,727 115,065 161,098 1,544,265
Net assets
available
for benefits $96,124,005 $53,264,535 $102,574,830 $56,648,008 $19,928,630 $20,287,939 $29,661,173 $7,543,108 $386,032,228
NOTES TO FINANCIAL STATEMENTS, Continued
8. Net Assets by Fund at December 31, 1995:
Interest Humana Agressive Small Participant
Income Stock Index Common Growth Balanced International Capitalization Notes
Fund Fund Stock Fund Fund Fund Fund Fund Fund Total
ASSETS
Investments:
At fair value:
Common Stock $27,022,268 $128,661,734 $15,794,312 $9,278,626 $ 6,366,437 $7,039,326 $194,162,703
NC Capital
Preservation
Fund $10,548,080 10,548,080
Armada
Government
Fund 5,858,028 156,708 62,043 35,122 53,800 6,165,701
Investment
Contracts 4,187,783 4,187,783
Participant
Loans $3,624,206 3,624,206
Bonds and
asset-backed
securities 173,494 173,494
20,767,385 27,022,268 128,818,442 15,794,312 9,340,669 6,401,559 7,093,126 3,624,206 218,861,967
At contract
value:
Investment
Contracts: 49,647,896 49,647,896
Total
Investments 70,415,281 27,022,268 128,818,442 15,794,312 9,340,669 6,401,559 7,093,126 3,624,206 268,509,863
Receivable from
participating
employers for
participant
withholdings
and employers'
contributions 8,054,490 1,806,913 1,763,637 658,830 334,490 269,921 301,382 73,383 13,263,046
Accrued interest
and dividends 110,522 117 1,228 429 210 131 206 112,843
Total assets 78,580,293 28,829,298 130,583,307 16,453,571 9,675,369 6,671,611 7,394,714 3,697,589 281,885,752
LIABILITIES AND
NET ASSETS
AVAILABLE
FOR BENEFITS
Cash Overdraft 28,346 70,048 (656) 97,738
Due to Broker
for Securities
Purchased (37,845) 85,956 (88,613) 50,319 26,517 42,991 79,325
Accrued expenses 28,566 18,789 59,343 26,908 23,280 18,859 11,791 187,536
Forfeited
employers'
contributions
and employers'
contributions 103,368 103,368
Total Liabilities 28,566 9,290 248,667 8,343 73,599 45,376 54,782 (656) 467,967
Net asset
available
for benefits $78,551,727 $28,820,008 $130,334,640 $16,445,228 $9,601,770 $6,626,235 $ 7,339,932 $3,698,245 $281,417,785
NOTES TO FINANCIAL STATEMENTS, Continued
9. Activity by Fund for the Year Ended December 31, 1996:
Interest Humana Agressive Small
Income Stock Index Common Growth Balanced International Capitalization Participant
Fund Fund Stock Fund Fund Fund Fund Fund Notes Fund Total
Additions to
net assets:
Investments
income:
Net apprecia-
tion (depre-
ciation)in
fair value
of invest-
ments $ 590 $ 8,723,491 $(42,543,468) $7,557,450 $ 961,084 $2,578,207 $3,691,856 $(19,030,790)
Interest 5,464,301 7,297 28,735 49,917 17,511 1,730 5,619 $ 480,847 6,055,957
Dividends 478,562 782,290 247,189 166,977 1,675,018
5,464,891 8,730,788 (42,514,733) 8,085,929 1,760,885 2,827,126 3,864,452 480,847 (11,299,815)
Contributions:
Participants 2,732,690 2,612,590 4,751,152 5,463,606 2,641,309 1,917,783 2,924,636 23,043,766
Employers 10,239,100 1,849,781 10,626,116 1,201,908 356,479 460,326 643,909 25,377,619
Forfeited
employers'
contribu-
tions (228,177) (228,177)
Transfer
from
EMPHESYS
Financial
Group
Inc.'s
Plans (see
note 3) 16,626,084 12,370,967 6,394,357 25,710,528 6,991,771 8,017,039 14,119,530 2,127,936 92,358,212
Total
additions 35,062,765 25,564,126 (20,971,285) 40,461,971 11,750,444 13,222,274 21,552,527 2,608,783 129,251,605
Deductions from
net assets:
Benefits paid
to participants 8,801,953 1,944,439 6,797,307 2,952,501 1,122,442 761,639 1,541,135 296,839 24,218,255
Administrative
expenses 142,120 62,280 121,756 41,283 15,545 14,613 21,310 418,907
Interfund
Transfers 8,546,414 (887,120) (130,538) (2,734,593) 285,597 (1,215,682) (2,331,159) (1,532,919)
Total deductions 17,490,487 1,119,599 6,788,525 259,191 1,423,584 (439,430) (768,714) (1,236,080) 24,637,162
Net increase
(decrease) 17,572,278 24,444,527 (27,759,810) 40,202,780 10,326,860 13,661,704 22,321,241 3,844,863 104,614,443
Net assets
available
for benefits:
Beginning of
period 78,551,727 28,820,008 130,334,640 16,445,228 9,601,770 6,626,235 7,339,932 3,698,245 281,417,785
End of period $96,124,005 $53,264,535 $102,574,830 $56,648,008 $19,928,630 $20,287,939 $29,661,173 $7,543,108 $386,032,228
NOTES TO FINANCIAL STATEMENTS, Continued
10. Activity by Fund for the Year Ended December 31, 1995:
Interest Humana Small
Income Stock Index Common Aggressive Balanced Inter- Capital- Participant
Fund Fund Stock Growth Fund national ization Notes
Fund Fund Fund Fund Fund Total
Additions to
net assets:
Investment
income:
Net appre-
ciation
in fair
value
of invest-
ments $ 16,854 $7,282,750 $ 21,952,019 $ 3,603,836 $ 726,434 $ 723,135 $1,116,088 $ 35,421,116
Interest 4,480,403 1,310 21,405 3,572 2,203 1,401 1,622 $ 225,821 4,737,737
Dividends 34,641 351,243 90,776 29,850 506,510
4,497,257 7,284,060 21,973,424 3,642,049 1,079,880 815,312 1,147,560 225,821 40,665,363
Contributions:
Participants 2,571,118 1,511,612 4,160,731 3,102,809 2,329,219 1,273,477 1,557,755 16,506,721
Employers 8,133,603 1,760,797 8,090,570 570,396 285,005 248,434 261,562 19,350,367
Forfeited
employers'
contributions (215,876) (215,876)
Transfers
from
CareNetwork
401(k)
Salary
Reduction
Plan and Trust 968,117 173,807 372,216 191,956 271,514 145,590 126,824 195,812 2,445,836
Total additions 16,170,095 10,730,276 34,381,065 7,507,210 3,965,618 2,482,813 3,093,701 421,633 78,752,411
Deductions from
net assets:
Benefits paid
to
participants 5,065,892 914,786 4,971,191 654,072 373,711 218,279 253,859 120,635 12,572,425
Administrative
expenses 100,777 42,303 139,535 15,167 9,699 6,737 7,997 322,215
Interfund
transfers 1,465,073 393,022 (172,437) (734,783) 339,778 (14,125) (215,702) (1,060,826)
Total deductions 6,631,742 1,350,111 4,938,289 (65,544) 723,188 210,891 46,154 (940,191) 12,894,640
Net increase 9,538,353 9,380,165 29,442,776 7,572,754 3,242,430 2,271,922 3,047,547 1,361,824 65,857,771
Net assets
available
for benefits:
Beginning of
period 69,013,374 19,439,843 100,891,864 8,872,474 6,359,340 4,354,313 4,292,385 2,336,421 215,560,014
End of period $78,551,727 $28,820,008 $130,334,640 $16,445,228 $9,601,770 $6,626,235 $7,339,932 $3,698,245 $281,417,785
HUMANA RETIREMENT AND SAVINGS PLAN
PLAN #002 EIN #61-0647538
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
(Item 27a of Form 5500)
Par or Maturity
Stated Value/Number of Fair Value/
Issuer Issuer Rate Maturity Date Units or Shares Cost Contract Value
Investments at Fair Value:
Common stocks:
Humana Inc. Common Stock 5,321,361 $69,183,730 $101,105,859
State Street Flagship
Domestic Index Fund 431,173 33,873,288 51,483,806
Harbor International Fund 616,683 17,241,670 19,857,202
Compass Small Cap Fund 1,919,469 28,549,126 29,060,767
Fidelity Contrafund 1,317,194 48,689,296 55,519,719
197,537,110 257,027,353
Obligations due within one year:
Armada Government Fund - Disc 1,323,112 1,323,112 1,323,112
Armada Money Market Fund 2,654,772 2,654,772 2,654,772
3,977,884 3,977,884
Investment contracts - Banks:
Bankers Trust Co. 8.83% 06/1999 $ 1,810,870 1,810,870 1,810,870
Bankers Trust Co. 8.54% 04/1997 $ 464,453 464,453 464,453
Caisse Des Depots (CDC) 6.44% 08/2001 $ 3,873,495 3,873,495 3,873,495
Caisse Des Depots (CDC) 6.42% 12/2000 $ 1,711,812 1,711,812 1,711,812
Caisse Des Depots (CDC) 6.56% 01/1999 $ 1,942,997 1,942,997 1,942,997
9,803,627 9,803,627
Bonds and asset - backed securities:
GMAC 1992 F Grantor Trust 4.50% 09/1997 $ 25,758 25,649 25,705
Participant notes receivable 7.00% Various $ 7,530,998 7,530,998 7,530,998
/ 10.00%
Continued
HUMANA RETIREMENT AND SAVINGS PLAN
PLAN #002 EIN #61-0647538
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
(Item 27a of Form 5500)
Par or Maturity
Stated Value/Number of Fair Value/
Issuer Issuer Rate Maturity Date Units or Shares Cost Contract Value
Investments at Contract Value:
Investment Contracts
Insurance Company:
Allstate Life Insurance Co. 6.08% 02/2002 $4,000,000 $4,000,000 $4,181,963
Allstate Life Insurance Co. 6.92% 05/2001 $3,000,000 3,000,000 3,130,341
Canada Life Assurance Co. 5.71% 09/1998 $3,000,000 3,000,000 3,097,393
Commonwealth Life Insurance Co. 6.43% 03/2002 $2,836,086 2,836,086 2,978,433
Commonwealth Life Insurance Co. 6.14% 01/2000 $2,436,214 2,436,214 2,555,501
Commonwealth Life Insurance Co. 6.30% 01/2001 $2,844,216 2,844,216 2,976,808
Commonwealth Life Insurance Co. 6.81% 05/2003 $1,348,476 1,348,476 1,407,278
Commonwealth Life Insurance Co. 7.30% 12/1999 $3,708,000 3,708,000 4,001,545
Confederation Life Insurance Co.,
Group Annuity Contract 8.72% 08/1994 $ 100,000 100,000 108,223
Confederation Life Insurance Co.,
Group Annuity Contract 9.44% 05/1995 $ 981,277 981,277 999,167
Confederation Life Insurance Co.,
Group Annuity Contract 8.30% 01/1996 $ 150,000 150,000 157,282
Confederation Life Insurance Co.,
Group Annuity Contract 8.30% 08/1996 $ 250,000 250,000 250,546
Confederation Life Insurance Co.,
Group Annuity Contract 8.46% 05/1996 $ 701,127 701,127 715,206
Continental Assurance Co. 7.66% 09/1999 $3,000,000 3,000,000 3,056,303
Life of Virginia 6.20% 12/1998 $2,000,000 2,000,000 2,098,946
Lincoln National Life Insurance. Co. 8.12% 05/1999 $1,756,400 1,756,400 2,001,122
Metropolitan Life Insurance Co.,
Group Annuity Contract 6.22% 05/2000 $1,500,000 1,500,000 1,554,275
Metropolitan Life Insurance Co.,
Group Annuity Contract 6.25% 07/2000 $3,745,762 3,745,762 4,103,634
Metropolitan Life Insurance Co.,
Group Annuity Contract 8.55% 01/1998 $ 392,236 392,236 707,833
Metropolitan Life Insurance Co.,
Group Annuity Contract 8.30% 01/1998 $ 206,654 206,654 366,590
New York Life Insurance Co.,
Group Annuity Contract 7.26% 05/1997 $3,260,621 3,260,621 3,406,226
New York Life Insurance Co.,
Group Annuity Contract 7.36% 05/1997 $4,454,892 4,454,892 4,666,439
New York Life Insurance Co.,
Group Annuity Contract 7.22% 03/2000 $3,000,000 3,000,000 3,163,192
New York Life Insurance Co.,
Group Annuity Contract 6.64% 04/2001 $2,900,127 2,900,127 3,036,565
Principal Mutual Life Insurance Co. 8.62% 05/1997 $1,050,976 1,050,976 1,133,765
Principal Mutual Life Insurance Co. 8.62% 05/1998 $1,050,976 1,050,976 1,133,765
Provident Life & Accident Ins. Co.,
Group Annuity Contract 7.70% 05/1997 $1,875,367 1,875,367 2,007,461
Provident Life & Accident Ins. Co.,
Group Annuity Contract 7.72% 05/1997 $2,449,140 2,449,140 2,621,649
Continued
HUMANA RETIREMENT AND SAVINGS PLAN
PLAN #002 EIN #61-0647538
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1996
(Item 27a of Form 5500)
Par or Maturity
Stated Value/Number of Fair Value/
Issuer Issuer Rate Maturity Date Units or Shares Cost Contract Value
Investments at Contract Value:
Investment Contracts
Insurance Company:
Provident Life & Accident Ins. Co.,
Group Annuity Contract 6.73% 10/2000 $2,901,663 $2,901,663 $3,006,768
Prudential Insurance Co. 5.12% 02/1999 $2,000,000 2,000,000 2,085,499
TransAmerica Accidental
Life Insurance Co. 7.31% 02/2000 $3,000,000 3,000,000 3,182,795
United of Omaha Life Insurance Co. 5.75% 05/2001 $2,914,289 2,914,289 3,008,186
68,814,499 72,900,699
$287,689,767 $351,266,266
HUMANA RETIREMENT AND SAVINGS PLAN
PLAN #002 EIN #61-0647538
SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended December 31, 1996
(Item 27d of Form 5500)
Identity of Description Purchase Selling Lease Expense Cost Current Net Gain/
Party Involved of Asset Price Price Rental Incurred of Asset Value of Asset (Loss)
With on Transaction
Transaction Date
Single transactions
in excess of 5%
of plan assets:
Fidelity Balanced Fund Mutual Fund $19,489,023 $ 18,307,314 $ 19,489,023 $1,181,709
Fidelity Contrafund Inc Com Mutual Fund $ 24,316,082 24,316,082 24,316,082
Armada Money Market Fund Money Market 16,429,238 16,429,238 16,429,238
Armada Money Market Fund Money Market 14,677,339 14,677,339 14,677,339
Armada Gov Fund - Disc. Money Market 16,429,238 16,429,238 16,429,238
Armada Gov Fund - Disc. Money Market 24,316,417 24,316,417 24,316,417
Armada Gov Fund - Disc. Money Market 24,316,082 24,316,082 24,316,082
A series of transactions
in excess of 5% of
plan assets: *
Humana Common Stock Common Stock
Fund 22,925,576 22,925,576 22,925,576
State Street
Flagship Index Fund Mutual Fund 17,686,751 17,686,751 17,686,751
Fidelity Balanced Fund Mutual Fund 20,566,474 19,368,520 20,566,474 1,197,954
Compass Cap FDS Small
Cap Fund Mutual Fund 23,345,034 23,345,034 23,345,034
Fidelity Contrafund
Inc Com Mutual Fund 37,373,573 37,373,573 37,373,573
Armada Money Market Fund Money Market 46,654,644 46,654,644 46,654,644
Armada Money Market Fund Money Market 49,309,417 49,309,417 49,309,417
Armada Gov Fund - Disc. Money Market 131,646,445 131,646,445 131,646,445
Armada Gov Fund - Disc. Money Market 126,803,856 126,803,856 126,803,856
* Note: Single transaction items may be included with a series
of transactions.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Humana Retirement and Savings Plan has duly caused this report to be signed
by the undersigned thereunto duly authorized.
HUMANA RETIREMENT AND SAVINGS PLAN
BY:
James E. Murray
Chief Financial Officer
June 27, 1997
Exhibit Index
Exhibit 23 Consent of Coopers & Lybrand L.L.P.
Exhibit 23
CONSENT OF COOPERS & LYBRAND L.L.P.
We consent to the incorporation by reference in the Registration
Statement of the Humana Retirement and Savings Plan on Form S-8
(File No. 33-49305), of our report dated June 16, 1997 on our
audits of the financial statements and supplemental schedules of
the Humana Retirement and Savings Plan as of December 31, 1996
and 1995, and for the years ended December 31, 1996 and 1995,
which report is included in this Annual Report on Form 11-K.
COOPERS & LYBRAND L.L.P.
Louisville, Kentucky
June 27, 1997
