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Item 2.02	Results of Operations and Financial Condition.

Item 7.01	Regulation FD Disclosure.

Item 9.01	Financial Statements and Exhibits.

(d)	Exhibits:

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•	2Q19 earnings per diluted common share (EPS) of $6.94 on a GAAP basis, $6.05 on an Adjusted basis

•	2019 EPS guidance raised to approximately $17.97 on a GAAP basis, approximately $17.60 on an Adjusted basis, representing 21 percent growth in 2019

•	Retail segment results continue to exceed management expectations driven by favorable utilization and higher revenue; Healthcare Services segment is also outperforming expectations

•	Increased expected full-year individual Medicare Advantage membership growth to a range of 480,000 to 500,000 members from the previous range of 415,000 to 440,000 members, representing approximately 16 percent growth in 2019

•	Intends to initiate $1.00 billion accelerated share repurchase program after the market close

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•	Amortization expense for identifiable intangibles of approximately $18 million pretax income, or $0.10 per diluted common share; GAAP measures affected in this release include consolidated pretax, EPS, and segment earnings (for respective amortization expense for the Retail and Group and Specialty segments).

•	Put/call valuation adjustments of approximately $174 million, or $$0.99 per diluted common share, associated with Humana’s 40% minority interest in Kindred at Home. GAAP measures affected in this release include consolidated pretax and EPS.

•	Amortization expense for identifiable intangibles of approximately $21 million pretax, or $0.12 per diluted common share; GAAP measures affected in this release include consolidated pretax, EPS, and segment earnings (for respective amortization expense for the Retail and Group and Specialty segments).

•	Segment earnings of $18 million, or $0.10 per diluted common share, for the company’s Individual Commercial segment given the company’s exit on January 1, 2018, as previously disclosed. GAAP measures affected in this release include consolidated pretax income, EPS, consolidated revenues, and consolidated benefit ratio.

•	Loss of approximately $790 million pretax, or $2.59 per diluted common share, associated with the company's sale of its wholly-owned subsidiary, KMG America Corporation (KMG). GAAP measures affected in this release include consolidated pretax and EPS.

•	Adjustment of $0.04 per diluted common share related to provisional estimates for the income tax effects related to the Tax Reform Law. The only GAAP measure affected in this release is EPS.

•	Amortization expense for identifiable intangibles of approximately $36 million pretax income, or $0.20 per diluted common share; GAAP measures affected in this release include consolidated pretax, EPS, and segment earnings (for respective amortization expense for the Retail and Group and Specialty segments).

•	Put/call valuation adjustments of approximately $135 million, or $0.77per diluted common share, associated with Humana’s 40% minority interest in Kindred at Home. GAAP measures affected in this release include consolidated pretax and EPS.

•	Amortization expense for identifiable intangibles of approximately $51 million pretax, or $0.28 per diluted common share; GAAP measures affected in this release include consolidated pretax, EPS, and segment earnings (for respective amortization expense for the Retail and Group and Specialty segments).

•	Segment earnings of approximately $71 million, or $0.39 per diluted common share, for the company’s Individual Commercial segment given the company’s exit on January 1, 2018, as previously disclosed. GAAP measures affected in this release include consolidated pretax income, EPS, consolidated revenues, and consolidated benefit ratio.

•	Loss of approximately $790 million pretax, or $2.59 per diluted common share, associated with the company's sale of its wholly-owned subsidiary, KMG America Corporation (KMG). GAAP measures affected in this release include consolidated pretax and EPS.

•	Adjustment of $0.09 per diluted common share related to provisional estimates for the income tax effects related to the Tax Reform Law. The only GAAP measure affected in this release is EPS.

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•	Amortization expense for identifiable intangibles of approximately $0.40 per diluted common share.

•	Put/call valuation adjustments of approximately $0.77 per diluted common share, associated with Humana’s 40% minority interest in Kindred at Home. FY19 GAAP EPS guidance excludes the impact of future value changes of the Kindred at Home put/call option, which cannot be estimated.

•	Amortization expense for identifiable intangibles of approximately $90 million pretax, or $0.49 per diluted common share.

•	Put/call valuation adjustments of approximately $33 million, or $0.18 per diluted common share, associated with Humana's 40% minority interest in Kindred at Home.

•	Loss of approximately $786 million pretax, or $2.41 per diluted common share, associated with the company's pending sale of its wholly-owned subsidiary, KMG America Corporation (KMG).

•	Segment earnings of approximately $74 million, or $0.41 per diluted common share, for the company’s Individual Commercial segment given the company’s exit on January 1, 2018, as previously disclosed.

•	Adjustment of $0.28 per diluted common share related to provisional estimates for the income tax effects related to the Tax Reform Law.

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•	Form 10-K for the year ended December 31, 2018;

•	Form 10-Q for the quarter ended March 31, 2019; and

•	Form 8-Ks filed during 2019.

•	Annual reports to stockholders

•	Securities and Exchange Commission filings

•	Most recent investor conference presentations

•	Quarterly earnings news releases and conference calls

•	Calendar of events

•	Corporate Governance information

•	2Q19 earnings per diluted common share (EPS) of $6.94 on a GAAP basis, $6.05 on an Adjusted basis

•	2019 EPS guidance raised to approximately $17.97 on a GAAP basis, approximately $17.60 on an Adjusted basis, representing 21 percent growth in 2019

•	Retail segment results continue to exceed management expectations driven by favorable utilization and higher revenue; Healthcare Services segment is also outperforming expectations

•	Increased expected full-year individual Medicare Advantage membership growth to a range of 480,000 to 500,000 members from the previous range of 415,000 to 440,000 members, representing approximately 16 percent growth in 2019

•	Intends to initiate $1.00 billion accelerated share repurchase program after the market close

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•	the suspension of the HIF in 2019 which was contemplated in the pricing and benefit design of the company's products,

•	lower favorable prior period medical claims reserve development (Prior Period Development), including the impact of the exit of the Individual Commercial business, and

•	an increase in the Group and Specialty benefit ratio year over year as discussed in the segment highlights that follow.

•	engaging the company's Medicare Advantage members in clinical programs, as well as ensuring they are appropriately documented under the CMS risk-adjustment model; and

•	lower than expected medical costs as compared to the assumptions used in the pricing of the company's individual Medicare Advantage business for 2019.

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•	the suspension of the HIF for 2019, which increased the company's 2Q18 GAAP operating cost ratio by approximately 180 basis points in 2Q18; and

•	significant operating cost efficiencies in 2019 driven by previously implemented productivity initiatives.

•	strategic investments in the company's integrated care delivery model; and

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the impact of higher compensation expense accruals for the annual incentive program (AIP) offered to employees across all levels of the company. The higher accruals resulted from the continued strong performance of the company, including improved customer satisfaction as measured by its net promoter score, along with higher than anticipated individual Medicare Advantage membership and Adjusted EPS growth.

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At June 30, 2019, the company had cash, cash equivalents, and investment securities of $15.18 billion, up $1.01 billion, or 7 percent, from $14.18 billion at March 31, 2019, primarily reflecting the timing of Medicare risk adjustment premium revenue collections. Additional changes are outlined in the company’s consolidated statement of cash flows on pages S-6 and S-7 of the statistical supplement included in this release.

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At June 30, 2019, cash and short-term investments held at the parent company of $1.87 billion increased $1.15 billion, or 160 percent, from $721 million at March 31, 2019 primarily resulting from dividends received from subsidiaries in 2Q19 along with non-regulated subsidiary earnings and other working capital changes. These increases were partially offset by the net repayment of commercial paper borrowings, capital expenditures, cash dividends to shareholders, and capital contributions to regulated subsidiaries.

•	Days in claims payable (DCP) of 39.9 days at June 30, 2019, remained largely unchanged from 40.2 days at March 31, 2019 and 40.1 days at June  30, 2018. Changes are outlined in the DCP rollforward on page S-19 of the statistical supplement included in this release.

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Debt-to-total capitalization at June 30, 2019 was 32.5 percent, down 350 basis points from 36.0 percent at March 31, 2019, primarily resulting from the net impact of the quarter's earnings and the net repayment of commercial paper. The company’s long-term target debt-to-total capitalization target of approximately 35 percent is expected to allow the company to maintain its investment grade credit rating while providing significant financial flexibility. At times, the company's debt-to-total capitalization will exceed this target due to the timing of share repurchases, acquisitions, and debt issuance.

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•	GAAP cash flows provided by operations of $1.43 billion in 2Q19 favorably compared to cash flows used in operations of $125 million in 2Q18. The year-over-year comparison of GAAP cash flows was favorably impacted by the following factors:

◦	the timing of the mid-year Medicare risk adjustment premium revenue collections which were received during 2Q19 versus the third quarter of 2018,

◦	higher earnings in 2Q19 as compared to 2Q18,

◦	the impact of approximately $230 million related to reinsuring certain workplace voluntary benefits (WVB) and financial protections products (FPP) to a third party in connection with the divestiture of KMG in 2Q18, and

◦	the timing of other working capital changes.

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For YTD 2019, GAAP cash flows provided by operations totaled $2.33 billion versus $3.56 billion of GAAP cash flows provided by operations during YTD 2018, a decrease of $1.23 billion year over year. The year-over-year comparison was impacted by the same factors affecting the GAAP second quarter comparison; however, the YTD comparison was more significantly impacted by the timing of Medicare premium payments from CMS, as noted in the table above.

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During November 2018, the company entered into an agreement with a third party financial institution to effectuate a $750 million accelerated share repurchase (ASR) program under its previous share repurchase authorization. Under the terms of the program, which was completed in the first quarter of 2019, the company repurchased a total of approximately 2,541,100 of its outstanding shares at an average price of $295.15.

•	In July 2019, Humana's Board of Directors approved a new $3.00 billion share repurchase authorization with an expiration date of June 30, 2022, replacing its previous $3.00 billion share repurchase authorization (of which approximately $1.03 billion remained unused).

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On July 31, 2019, the company announced it intends to enter into an agreement with a third party financial institution to effect a $1.00 billion ASR program after the market close. The company will repurchase the shares through the program as part of the $3.00 billion authorized in July 2019. The actual number of shares repurchased under the agreement will be determined based on a volume-weighted average price of the company's common stock during the purchase period.

•	The company paid cash dividends to its stockholders of $74 million in 2Q19 versus $69 million in 2Q18. Cash dividends of $142 million were paid to the company’s stockholders during YTD 2019 compared to $126 million in YTD 2018. The increases primarily reflect an increase in the per share dividend amount to $0.55 for 2019 from $0.50 per share for 2018, as previously disclosed.

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The 2Q19 revenues for the Retail segment were $14.16 billion, an increase of $2.12 billion, or 18 percent, from $12.04 billion in 2Q18 primarily reflecting individual and group Medicare Advantage membership growth and higher per member premiums, as well as increased state-based contracts membership. These favorable items were partially offset by the decline in membership in the company's stand-alone PDP offerings. The year-over-year membership changes are further discussed below.

•	The YTD 2019 revenues for the Retail segment were $28.17 billion, up $4.03 billion, or 17 percent, from $24.15 billion in YTD 2018, primarily reflecting the same factors impacting the year-over-year second quarter comparison.

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Individual Medicare Advantage membership was 3,484,500 as of June 30, 2019, a net increase of 457,300 or 15 percent, from 3,027,200 as of June 30, 2018, and up 420,500, or 14 percent, from 3,064,000 as of December 31, 2018. These increases were primarily due to membership additions associated with the most recent AEP and OEP for Medicare beneficiaries. The OEP sales period, which ran from January 1 to March 31, added approximately 43,700 members.

•	Group Medicare Advantage membership was 519,100 as of June 30, 2019, a net increase of 26,000, or 5 percent, from 493,100 at June 30, 2018, and up 21,300, or 4 percent, from 497,800 as of December 31, 2018. The increases primarily resulted from net membership additions associated with the most recent AEP for Medicare beneficiaries.

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Membership in the company’s stand-alone PDP offerings was 4,400,500 as of June 30, 2019, a net decrease of 607,700, or 12 percent, from 5,008,200 as of June 30, 2018, and down 603,800, or 12 percent, from 5,004,300 as of December 31, 2018, reflecting net declines during the previous AEP for Medicare beneficiaries. These anticipated declines were primarily due to the competitive nature of the industry and the pricing discipline the company has employed, which has resulted in it no longer being the low cost plan in any market for 2019.

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State-based contracts membership (including dual-eligible demonstration members) was 465,200 as of June 30, 2019, a net increase of 140,000, or 43 percent, from 325,200 at June 30, 2018, and up 124,100, or 36 percent, from 341,100 as of December 31, 2018. The increases primarily resulted from the statewide award of a comprehensive contract under the Managed Medical Assistance (MMA) program in Florida.

•	The 2Q19 benefit ratio for the Retail segment of 85.2 percent decreased 30 basis points from 85.5 percent in 2Q18. The year-over-year decrease was primarily the result of the following factors:

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•	engaging the company's Medicare Advantage members in clinical programs, as well as ensuring they are appropriately documented under the CMS risk-adjustment model; and

•	lower than expected medical costs as compared to the assumptions used in the pricing of the company's individual Medicare Advantage business for 2019.

◦	the suspension of the HIF in 2019 which was contemplated in the pricing and benefit design of the company's products; and

◦	lower favorable Prior Period Development in the segment in 2Q19.

•	The Retail segment's favorable Prior Period Development, as noted in the table below, lowered the segment benefit ratio by 20 basis points in 2Q19 and by 50 basis points in 2Q18. Prior Period Development lowered the YTD 2019 ratio by 110 basis points and lowered the YTD 2018 benefit ratio by 100 basis points.

•	The Retail segment’s operating cost ratio of 8.5 percent in 2Q19 decreased 160 basis points from 10.1 percent in 2Q18. The year-over-year comparison was positively impacted by the following:

◦	the suspension of the HIF in 2019, which increased the Retail segment’s operating cost ratio by approximately 190 basis points in 2Q18; and

◦	significant operating cost efficiencies in 2019 driven by previously implemented productivity initiatives.

◦	continuation of strategic investments in the company's integrated care delivery model in 2Q19; and

◦	the impact of higher compensation expense accruals in 2Q19 for the AIP as a result of the continued strong performance of the company.

◦	The Retail segment’s YTD 2019 operating cost ratio of 8.4 percent decreased 170 basis points from 10.1 percent in YTD 2018 primarily reflecting the same factors that impacted the year-over-year comparison for the second quarter. The HIF impacted the segment’s YTD 2018 operating cost ratio by approximately 190 basis points.

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The Retail segment’s GAAP segment earnings of $856 million in 2Q19 increased $363 million, or 74 percent, from GAAP segment earnings of $493 million in 2Q18. The year-over-year favorable comparison was impacted by the segment's lower benefit and operating cost ratios in 2Q19, as well as increased premiums, primarily associated with significant growth in the company's individual Medicare Advantage membership.

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For YTD 2019, GAAP segment earnings for the Retail segment of $1.32 billion increased $561 million, or 74 percent, from $760 million in YTD 2018. The year-over-year increase primarily reflects the lower operating cost ratio in 2Q19 along with increased premiums associated with the significant growth in individual Medicare Advantage membership. These increases were partially offset by the segment's higher benefit ratio in YTD 2019 as described above. As expected, the company's higher-than-anticipated individual Medicare Advantage membership growth during the recently completed AEP had a muted impact on the segment's earnings in YTD 2019. While new Medicare Advantage members increase revenues, on average, they have a breakeven impact on segment earnings in the first year as they were not previously engaged in clinical program or appropriately documented under the CMS risk-adjustment model, and accordingly, carry a higher benefit ratio.

•	The 2Q19 revenues for the Group and Specialty segment were $1.87 billion, down $32 million, or 2 percent, from $1.91 billion in 2Q18. The year-over-year decrease was primarily due to the following factors:

◦	a decline in the company's fully-insured group commercial and specialty membership,

◦	the impact of certain contractual incentives and adjustments related to the previous TRICARE contract received in 2Q18, which did not recur in 2Q19, and

◦	the reduction in year-over-year premium revenues related to the company's WVB and FPP lines of business due to the exit of these businesses in connection with Humana's divestiture of KMG during 2Q18.

◦	higher stop-loss revenues related to the company's level-funded ASO accounts resulting from membership growth in this product as more fully described below; and

◦	a lower unfavorable commercial risk adjustment (CRA) payable estimate in 2Q19 as compared to 2Q18 which resulted in higher small group fully-insured commercial revenues year-over-year.

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•	The YTD 2019 revenues for the Group and Specialty segment were $3.76 billion, down $115 million, or 3 percent, from $3.88 billion in YTD 2018, primarily reflecting the same factors that impacted the year-over-year second quarter comparison.

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Group fully-insured commercial medical membership was 942,500 at June 30, 2019, a decrease of 108,400, or 10 percent, from 1,050,900 at June 30, 2018, and down 62,200, or 6 percent, from 1,004,700 at December 31, 2018. These anticipated declines primarily reflect lower membership in small group accounts due in part to more small group accounts selecting level-funded ASO products in 2019, as well as the loss of certain large group accounts due to the competitive pricing environment. The portion of group fully-insured commercial medical membership in small group accounts (2-99 sized employer groups) was approximately 61 percent at June 30, 2019 and at December 31, 2018 versus 62 percent at June 30, 2018.

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Group ASO commercial medical membership was 496,000 at June 30, 2019, an increase of 37,200, or 8 percent, from 458,800 at June 30, 2018, and up 14,100, or 3 percent, from 481,900 at December 31, 2018. These increases primarily reflect more small group accounts selecting level-funded ASO products, partially offset by the loss of certain large group accounts due to continued discipline in pricing of services for self-funded accounts amid a highly competitive environment. Small group membership comprised 37 percent of group ASO medical membership at June 30, 2019 versus 18 percent at June 30, 2018 and 26 percent at December 31, 2018.

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Military services membership was 5,971,400 at June 30, 2019, an increase of 39,900, or 1 percent, from 5,931,500 at June 30, 2018, and up 42,800, or 1 percent, versus 5,928,600 at December 31, 2018. Membership includes military service members, retirees, and their families to whom the company is providing healthcare services under the current TRICARE East Region contract. The current contract, which covers 32 states, became effective on January 1, 2018.

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Membership in specialty products(i) was 5,860,000 at June 30, 2019, a decrease of 367,700, or 6 percent, from 6,227,700, at June 30, 2018, and down 212,300, or 3 percent, from 6,072,300 at December 31, 2018. The decreases resulted from the previously disclosed exit of the company’s WVB and FPP lines of business in connection with the KMG divestiture, as well as the loss of some group accounts offering stand-alone dental and vision products.

•	The 2Q19 benefit ratio for the Group and Specialty segment was 86.3 percent, an increase of 590 basis points from 80.4 percent for 2Q18. The year-over-year increase in the benefit ratio is primarily due to the impact of the following factors:

◦	the impact of unfavorable Prior Period Development in 2Q19,

◦	the impact of the suspension of the HIF in 2019 which was contemplated in the pricing of the company's products, and

◦	membership mix, including the continued migration of fully-insured groups to level-funded ASO products in 2019.

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•	The YTD 2019 benefit ratio for the segment of 81.3 percent was 460 basis points higher than the YTD 2018 ratio of 76.7 percent. The year-to-date comparison was primarily impacted by the same factors affecting the second quarter comparison.

•	Prior Period Development for the Group and Specialty segment, as noted in the table below, increased the 2Q19 segment benefit ratio by 120 basis points but did not impact the 2Q18 ratio. Prior Period Development increased the YTD 2019 segment benefit ratio by 110 basis points while lowering the YTD 2018 ratio by 100 basis points.

•	The Group and Specialty segment’s operating cost ratio was 21.7 percent in 2Q19, a decrease of 180 basis points from 23.5 percent in 2Q18 primarily reflecting the following factors:

◦	suspension of the HIF in 2019, which increased the segment's 2Q18 GAAP operating cost ratio by approximately 160 basis points,

◦	significant operating cost efficiencies in 2019 driven by previously implemented productivity initiatives, and

◦	the exit of the WVB and FPP lines of business in connection with the KMG divestiture during late 2Q18, which carried a higher operating cost ratio.

•	The Group and Specialty segment’s operating cost ratio of 21.8 percent for YTD 2019 was down 180 basis points compared to 23.6 percent for YTD 2018. The year-over-year decrease was primarily impacted by the same factors influencing the second quarter comparison. The non-deductible HIF impacted the segment’s YTD 2018 operating cost ratio by approximately 160 basis points.

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The Group and Specialty segment’s GAAP segment earnings of $5 million in 2Q19 compared to GAAP segment earnings of $80 million in 2Q18, a decrease of $75 million, or 94 percent. The decrease primarily reflects the same factors resulting in the segment's higher benefit ratio, along with lower military services business earnings. Earnings comparisons related to the military services business were unfavorably impacted by the receipt of certain contractual incentives and adjustments in 2Q18 related to the previous TRICARE contract which did not recur in 2Q19. These declines were partially offset by the improvement of the operating cost ratio in 2Q19 compared to 2Q18.

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•	The Group and Specialty segment’s GAAP segment earnings of $170 million in YTD 2019 compared to GAAP segment earnings of $291 million in YTD 2018, a decrease of $121 million, or 42 percent. The decrease primarily reflects the same factors impacting the second quarter GAAP comparison.

•	Revenues of $6.39 billion in 2Q19 for the Healthcare Services segment increased by $396 million, or 7 percent, from $5.99 billion in 2Q18. The year-over-year comparison was favorably impacted by the following:

◦	higher revenues associated with the company's provider services business reflecting the previously disclosed acquisition of MCCI Holdings, LLC (MCCI) and Family Physicians Group (FPG).

•	YTD 2019 revenues for the Healthcare Services segment were $12.49 billion, a increase of $831 million, or 7 percent, from $11.65 billion in YTD 2018 primarily reflecting the same factors affecting the year-over-year comparison for the second quarter.

•	The Healthcare Services segment’s operating cost ratio of 96.1 percent and 96.3 percent in 2Q19 and YTD 2019, respectively, were generally unchanged from 96.2 percent in both 2Q18 and YTD 2018.

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Primary care providers in value-based (shared risk and path to risk) relationships of 58,500 at June 30, 2019 increased 12 percent from 52,100 at June 30, 2018, and increased 10 percent from 53,400 at December 31, 2018. The percentage of the company’s individual Medicare Advantage members in value-based relationships was 65 percent as of June 30, 2019 and at June 30, 2018, versus 67 percent as of December 31, 2018. The year-to-date decline was impacted by the strong AEP and OEP results which has resulted in a greater proportion of new individual Medicare Advantage members that are not yet assigned to a primary care provider.

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Medicare Advantage and dual demonstration program membership enrolled in a Humana chronic care management program (j) was 853,600 at June 30, 2019, up 13 percent from 752,700 at June 30, 2018 and up 19 percent from 716,000 at December 31, 2018. The increases were driven by the company's improved process for identifying and enrolling members in the appropriate program at the right time, coupled with growth in Special Needs Plans (SNP) membership and the insourcing of certain SNP membership to Humana At Home's care management program.

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Pharmacy script volume on an adjusted 30-day equivalent basis of 113 million for 2Q19 increased 3 percent compared to 110 million for 2Q18. Pharmacy script volume of 223 million for YTD 2019 increased 2 percent compared to 218 million for YTD 2018. These increases primarily were driven by higher individual Medicare Advantage membership, partially offset by the decline in stand-alone PDP membership.

•	The Healthcare Services segment’s 2Q19 GAAP segment earnings increased $18 million, or 9 percent, to $224 million compared to GAAP segment earnings of $206 million in 2Q18. The increase primarily resulted from the following factors:

•	The Healthcare Services segment’s GAAP segment earnings in YTD 2019 increased $20 million, or 5 percent, to $399 million compared to GAAP segment earnings of $379 million in YTD 2018 reflecting the same factors impacting the second quarter GAAP comparison.

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•	Amortization expense for identifiable intangibles of approximately $18 million pretax income, or $0.10 per diluted common share; GAAP measures affected in this release include consolidated pretax, EPS, and segment earnings (for respective amortization expense for the Retail and Group and Specialty segments).

•	Put/call valuation adjustments of approximately $174 million, or $0.99 per diluted common share, associated with Humana’s 40% minority interest in Kindred at Home. GAAP measures affected in this release include consolidated pretax and EPS.

•	Amortization expense for identifiable intangibles of approximately $21 million pretax, or $0.12 per diluted common share; GAAP measures affected in this release include consolidated pretax, EPS, and segment earnings (for respective amortization expense for the Retail and Group and Specialty segments).

•	Segment earnings of $18 million, or $0.10 per diluted common share, for the company’s Individual Commercial segment given the company’s exit on January 1, 2018, as previously disclosed. GAAP measures affected in this release include consolidated pretax income, EPS, consolidated revenues, and consolidated benefit ratio.

•	Loss of approximately $790 million pretax, or $2.59 per diluted common share, associated with the company's sale of its wholly-owned subsidiary, KMG America Corporation (KMG). GAAP measures affected in this release include consolidated pretax and EPS.

•	Adjustment of $0.04 per diluted common share related to provisional estimates for the income tax effects related to the Tax Reform Law. The only GAAP measure affected in this release is EPS.

•	Amortization expense for identifiable intangibles of approximately $36 million pretax income, or $0.20 per diluted common share; GAAP measures affected in this release include consolidated pretax, EPS, and segment earnings (for respective amortization expense for the Retail and Group and Specialty segments).

•	Put/call valuation adjustments of approximately $135 million, or $0.77 per diluted common share, associated with Humana’s 40% minority interest in Kindred at Home. GAAP measures affected in this release include consolidated pretax and EPS.

•	Amortization expense for identifiable intangibles of approximately $51 million pretax, or $0.28 per diluted common share; GAAP measures affected in this release include consolidated pretax, EPS, and segment earnings (for respective amortization expense for the Retail and Group and Specialty segments).

•	Segment earnings of approximately $71 million, or $0.39 per diluted common share, for the company’s Individual Commercial segment given the company’s exit on January 1, 2018, as previously disclosed. GAAP measures affected in this release include consolidated pretax income, EPS, consolidated revenues, and consolidated benefit ratio.

•	Loss of approximately $790 million pretax, or $2.59 per diluted common share, associated with the company's sale of its wholly-owned subsidiary, KMG America Corporation (KMG). GAAP measures affected in this release include consolidated pretax and EPS

•	Adjustment of $0.09 per diluted common share related to provisional estimates for the income tax effects related to the Tax Reform Law. The only GAAP measure affected in this release is EPS.

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•	Amortization expense for identifiable intangibles of approximately $0.40 per diluted common share.

•	Put/call valuation adjustments of approximately $0.77 per diluted common share, associated with Humana’s 40% minority interest in Kindred at Home. FY19 GAAP EPS guidance excludes the impact of future value changes of the Kindred at Home put/call option, which cannot be estimated.

•	Amortization expense for identifiable intangibles of approximately $90 million pretax, or $0.49 per diluted common share.

•	Put/call valuation adjustments of approximately $33 million, or $0.18 per diluted common share, associated with Humana's 40% minority interest in Kindred at Home.

•	Loss of approximately $786 million pretax, or $2.41 per diluted common share, associated with the company's pending sale of its wholly-owned subsidiary, KMG America Corporation (KMG).

•	Segment earnings of approximately $74 million, or $0.41 per diluted common share, for the company’s Individual Commercial segment given the company’s exit on January 1, 2018, as previously disclosed.

•	Adjustment of $0.28 per diluted common share related to provisional estimates for the income tax effects related to the Tax Reform Law.

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If Humana does not design and price its products properly and competitively, if the premiums Humana receives are insufficient to cover the cost of healthcare services delivered to its members, if the company is unable to implement clinical initiatives to provide a better healthcare experience for its members, lower costs and appropriately document the risk profile of its members, or if its estimates of benefits expense 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. The company continually reviews estimates of future payments relating to benefit expenses for services incurred in the current and prior periods and makes necessary adjustments to its reserves, including premium deficiency reserves, where appropriate. These estimates, however, involve extensive judgment, and have considerable inherent variability because they are extremely sensitive to changes in claim payment patterns and medical cost trends, so any reserves the company may establish, including premium deficiency reserves, may be insufficient.

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If Humana fails to effectively implement its operational and strategic initiatives, particularly its Medicare initiatives and state-based contract strategy, the company’s business may be materially adversely affected, which is of particular importance given the concentration of the company’s revenues in these products. In addition, there can be no assurances that the company will be successful in maintaining or improving its Star ratings in future years.

•	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.

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Humana is involved in various legal actions, or disputes that could lead to legal actions (such as, among other things, provider contract disputes and qui tam litigation brought by individuals on behalf of the government), governmental and internal investigations, and routine internal review of business processes any of which, if resolved unfavorably to the company, could result in substantial monetary damages or changes in its business practices. Increased litigation and negative publicity could also increase the company’s cost of doing business.

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As a government contractor, Humana is exposed to risks that may materially adversely affect its business or its willingness or ability to participate in government healthcare programs including, among other things, loss of material government contracts, governmental audits and investigations, potential inadequacy of government determined payment rates, potential restrictions on profitability, including by comparison of profitability of the company’s Medicare Advantage business to non-Medicare Advantage business, or other changes in the governmental programs in which Humana participates. Changes to the risk-adjustment model utilized by CMS to adjust premiums paid to Medicare Advantage, or MA, plans according to the health status of covered members, including proposed changes to the methodology used by CMS for risk adjustment data validation audits that fail to address adequately the statutory requirement of actuarial equivalence, if implemented, could have a material adverse effect on our operating results, financial position and cash flows.

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The Healthcare Reform Law, including The Patient Protection and Affordable Care Act and The Healthcare 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, restricting the company’s ability to expand into new markets, increasing the company’s medical and operating costs by, among other things, requiring a minimum benefit ratio on insured products, lowering the company’s Medicare payment rates and increasing the company’s expenses associated with a non-deductible health insurance industry fee and other assessments; the company’s financial position, including the company’s ability to maintain the value of its goodwill; and the company’s cash flows. Additionally, potential legislative or judicial changes, including activities to invalidate, repeal or replace, in whole or in part, the Health Care Reform Law, creates uncertainty for Humana’s business, and when, or in what form, such legislative or judicial changes may occur cannot be predicted with certainty.

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•	Humana’s business activities are subject to substantial government regulation. New laws or regulations, or changes in existing laws or regulations or their manner of application could increase the company’s cost of doing business and may adversely affect the company’s business, profitability and cash flows.

•	Humana’s failure to manage acquisitions, divestitures and other significant transactions successfully may have a material adverse effect on the company’s 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 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 certain of its licensed 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.

•	The securities and credit markets may experience volatility and disruption, which may adversely affect Humana’s business.

•	Form 10-K for the year ended December 31, 2018;

•	Form 10-Q for the quarter ended March 31, 2019; and

•	Form 8-Ks filed during 2019.

•	Annual reports to stockholders

•	Securities and Exchange Commission filings

•	Most recent investor conference presentations

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•	Quarterly earnings news releases and conference calls

•	Calendar of events

•	Corporate Governance information

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(A)	Put/call valuation adjustments associated with Humana’s 40% minority interest ownership in Kindred at Home

(B)	Net earnings associated with the company’s 40% minority interest ownership in Kindred at Home

(C)	Humana exited the individual commercial fully-insured medical health insurance business beginning January 1, 2018, as well as exited certain other business, and therefore no longer report separately the Individual Commercial segment and the Other Businesses category in 2019.

(D)	The Medicaid and other category includes premiums associated with the company’s Medicaid business, as well as the closed block of long-term care insurance policies in 2018.

(E)	The ASO and other category is primarily comprised of Administrative Services Only (ASO) fees and other ancillary services fees, including military services unless separately disclosed.

(F)	Includes Medicaid Temporary Assistance for Needy Families (TANF), dual-eligible demonstration, and Long-Term Support Services (LTSS) from state-based contracts.

(G)	Other supplemental benefits include group life policies.

(H)

In certain circumstances, the company contracts with providers to accept financial risk for a defined set of Medicare Advantage membership. In transferring this risk, the company prepays these providers a monthly fixed-fee per member to coordinate substantially all of the medical care for their Medicare Advantage members assigned or attributed to their provider panel, including some health benefit administrative functions and claims processing. For these capitated Shared Risk arrangements, the company generally agrees to payment rates that target a benefit expense ratio. The result is a high level of engagement on the part of the provider.

(I)

A Path to Risk provider is one who has a high level of engagement and participates in one of Humana’s pay-for-performance programs (Model Practice or Medical Home) or has a risk contract in place with a trigger (future date or membership threshold) which has not yet been met. In addition to earning incentives, these providers may also have a shared savings component by which they can share in achieved surpluses when the actual cost of the medical services provided to patients assigned or attributed to their panel is less than the agreed upon medical expense target.

(J)	The amounts primarily reflect services revenues under the TRICARE East Region contract which generally are contracted on a per-member basis.

(K)	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).

(L)

Includes Medicare Advantage (including Special Needs Plans (SNP)) and dual-eligible demonstration program members enrolled in one of Humana’s chronic care programs. These members may be enrolled in Humana At Home Chronic Care Program (HCCP), Humana At Home Remote Monitoring, or an Advance Illness Support program. Members included in these programs may not be unique to each program since members have the ability to enroll in multiple programs. In addition, the members in the HCCP program may receive varying levels of care management based on their health status and needs, ranging from active care management to ongoing monitoring.

(M)

Reflects discharges enrolled in Humana’s 30-day care management services, which supports members after they are discharged home from a hospital or other facility. The program is aimed at individuals at high-risk for re-hospitalization. Care managers visit and call members at home to ensure they have and understand correct prescriptions, their doctors are informed about members’ changed status, and that members are either self-managing adequately or are referred to appropriate ongoing services.

(N)	Script volume is presented on an adjusted 30-day equivalent basis. This includes all scripts processed by the Humana pharmacy benefit manager (PBM).

(O)	Represents reinsurance recoverables associated with the company’s state-based Medicaid contract in Kentucky.

(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 medical claim reserves during the quarter.

(Q)	Future policy benefit expense has a related liability classified as a long-term liability on the balance sheet. Prior year amounts reflect the release of reserves for future policy benefits as individual medical members transitioned to plans compliant with the Affordable Care Act.

(R)	A common metric for monitoring benefits payable levels relative to benefits expense is days in claims payable (DCP). The company calculates DCP using the quarterly reported benefits expense and benefits payable balances as presented within the company’s consolidated financial statements.

(S)

DCP fluctuates due to a number of factors, 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 medical claims reserve recorded upon enrollment later in the quarter.

(T)	Provider accruals represent portions of capitation payments set aside to pay future settlements for capitated providers. Related settlements generally happen over a 12-month period.

(U)	Represents medical and specialty claims incurred but not reported (IBNR) for non-pharmacy fully-insured products and excludes the impact of the Individual Commercial segment.

(V)	Represents Individual Commercial medical IBNR (on-exchange, off-exchange, and legacy).

(W)	Represents pharmacy claims expense including payments to the company’s pharmacy benefit manager for prescription drugs filled on behalf of Humana’s members, as well as government subsidized programs from Medicare Part D such as low income cost and reinsurance subsidies, as well as coverage gap discount programs.

(X)	Includes processed claims that are in the post claim adjudication process, which consists of operating functions such as audit, check batching and check handling. These claims are included in IBNR lags, but have not yet been mailed or released from Humana.

(Y)	Includes non-lagged reserves such as ASO stop loss, life reserves, and accidental death and dismemberment/accident and health. Also includes an explicit provision for uncertainty (also called a provision for adverse deviation) intended to ensure the unpaid claim liabilities are adequate under moderately adverse conditions.