Exhibit 99.2

n e w s   r e l e a s e	Humana Inc.
	500 West Main Street
	P.O. Box 1438
	Louisville, KY 40201-1438
	http://www.humana.com

FOR MORE INFORMATION CONTACT:
Regina Nethery
Humana Investor Relations
(502) 580-3644 e-mail: Rnethery@humana.com
Tom Noland
Humana Corporate Communications
(502) 580-3674 e-mail: Tnoland@humana.com

Humana Reports Fourth Quarter and Full Year 2014 Financial Results;

Reaffirms 2015 Financial Guidance

• 2014 Adjusted EPS^(a) of $7.51 consistent with management expectations (excluding $0.15 per share of expenses related to early retirement of debt)

• 2015 EPS guidance of $8.50 to 9.00 reaffirmed, a growth rate of approximately 17 percent from 2014 Adjusted EPS^(a)

• 2015 individual Medicare Advantage membership growth estimate reaffirmed at 300,000 to 350,000, up approximately 13 percent versus 2014

• 2015 individual Medicare stand-alone PDP membership growth estimate reaffirmed at 400,000 to 450,000, up approximately 11 percent versus 2014

LOUISVILLE, KY (February 4, 2015) – Humana Inc. (NYSE: HUM) today reported diluted earnings per common share (EPS) for the quarter ended December 31, 2014 (4Q14) of $0.94, compared to a loss of $0.19 per share for the quarter ended December 31, 2013 (4Q13). For the year ended December 31, 2014 (FY14) the company reported EPS of $7.36 compared to $7.73 for the year ended December 31, 2013 (FY13). The company also reported adjusted results^(a) for these periods as follows:

Consolidated Results of Operations ($ in millions except EPS)	4Q14 Pretax Income		4Q13 Pretax Income (Loss)			4Q14 EPS			4Q13 EPS
GAAP	$	287	($	49	)	$	0.94		($	0.19	)
Expenses associated with early retirement of debt (a)		37		—			0.15			—
Reserve strengthening for closed block of long-term care insurance policies (a)		—		243			—			0.99
Adjusted (non-GAAP) (a)	$	324	$	194		$	1.09		$	0.80
Effective tax rate							49.5	%		39.4	%

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Consolidated Results of Operations ($ in millions except EPS)	FY14 Pretax Income		FY13 Pretax Income		FY14 EPS			FY13 EPS
GAAP	$	2,170	$	1,921	$	7.36		$	7.73
Expenses associated with early retirement of debt (a)		37		—		0.15			—
Reserve strengthening for closed block of long-term care insurance policies (a)		—		243		—			0.99
Adjusted (non-GAAP) (a)	$	2,207	$	2,164	$	7.51		$	8.72
Effective tax rate						47.2	%		35.9	%

Adjusted pretax income of $324 million in 4Q14 increased $130 million, or 67.0 percent versus $194 million for 4Q13 primarily due to improved year-over-year results in each of the company’s business segments. Adjusted EPS of $1.09 for 4Q14 increased $0.29 per share, or 36.3 percent versus $0.80 in 4Q13, reflecting the improved pretax results as well as the impact of a lower weighted average share count due to the company’s share repurchase program.

Adjusted pretax income of $2.21 billion for FY14 increased $43 million, or 2.0 percent versus $2.16 billion for FY13 as higher earnings in the company’s Healthcare Services segment were substantially offset by the anticipated lower year-over-year results in the company’s Retail and Employer Group segments. As also anticipated, Adjusted EPS of $7.51 for FY14 decreased $1.21 per share, or 13.9 percent, versus $8.72 in FY13, primarily due to changes in segment pretax results, partially offset by the impact of share repurchase activity.

The company reaffirmed its estimate for EPS for the year ending December 31, 2015 (FY15) to be in the range of $8.50 to $9.00. The company’s 2015 EPS estimate reflects expected strong growth and operating efficiencies in the company’s Medicare offerings, year-over-year improvement in the Healthcare Services businesses, break-even results in its HumanaOne business and reduced investment spending in state-based^(b) contracts, partially offset by the tax implications of the expected increase in the non-deductible health insurance industry fee and a reduction in 2015 Medicare rates.

“This past year was particularly dynamic considering Medicare rate reductions, increased income taxes, the launch of healthcare exchanges and our entry into state-based contracts,” said Bruce D. Broussard, President and Chief Executive Officer of Humana. “Our 2014 results in the face of these challenges, combined with strong 2015 membership growth, demonstrate the strength of our consumer-focused strategy and integrated care delivery model. We are pleased with our projected growth trajectory and believe we are well positioned for success in 2015 and beyond.”

CONSOLIDATED HIGHLIGHTS

Total revenues

Consolidated total revenues (including investment income) for 4Q14 were $12.33 billion, an increase of 21.0 percent from $10.19 billion in 4Q13, with total premiums and services revenue up 21.2 percent compared to the prior year’s quarter. The year-over-year increase in premiums and services revenue was primarily driven by higher medical membership in the Retail segment and higher group Medicare Advantage membership in the Employer Group segment.

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FY14 consolidated total revenues (including investment income) rose $7.19 billion, or 17.4 percent, to $48.50 billion from $41.31 billion in FY13 with total premiums and services revenues of $48.12 billion up $7.18 billion, or 17.5 percent, from $40.94 billion in the prior year period. The FY14 increase reflects the same factors impacting the fourth quarter year-over-year comparison, partially offset by the impact of sequestration which became effective April 1, 2013.

Consolidated benefits expense

The 4Q14 consolidated benefit ratio (benefits expense as a percent of premiums) of 83.4 percent decreased by 240 basis points from 85.8 percent for the prior year’s quarter primarily due to the $243 million ($0.99 per share) in incremental pretax benefits expense for reserve strengthening in the company’s closed block of long-term care insurance policies in 4Q13 not recurring in 4Q14. The company also experienced favorable prior-year medical claims reserve development of $78 million in 4Q14 compared to $42 million in 4Q13.

The FY14 consolidated benefit ratio of 83.0 percent decreased by 90 basis points from 83.9 percent in FY13 primarily reflecting the same factor impacting the fourth quarter year-over-year comparison. The company experienced favorable prior-year medical claims reserve development of $518 million in FY14 compared to $474 million in FY13.

As shown in the table below, the $243 million reserve strengthening had an approximate 260 basis point impact on the 4Q13 benefit ratio and an approximate 70 basis point impact on the FY13 benefit ratio, as reported.

Consolidated Benefit Ratio	4Q14 Benefit Ratio			4Q13 Benefit Ratio			FY14 Benefit Ratio			FY13 Benefit Ratio
Benefit ratio as reported		83.4	%		85.8	%		83.0	%		83.9	%
Impact of reserve strengthening for closed block of long-term care insurance policies (a)		—			(2.6	%)		—			(0.7	%)
Adjusted (non-GAAP) (a)		83.4	%		83.2	%		83.0	%		83.2	%

Consolidated operating expenses

The consolidated operating cost ratio (operating costs as a percent of total revenues less investment income) of 17.3 percent for 4Q14 decreased from 18.9 percent in 4Q13, primarily reflecting lower ratios in the Retail and Employer Group segments.

The FY14 consolidated operating cost ratio of 15.9 percent increased from 15.5 percent in FY13, primarily reflecting higher ratios in the Retail and Employer Group segments.

Balance sheet

At December 31, 2014, the company had cash, cash equivalents, and investment securities of $11.48 billion, down $1.26 billion from $12.74 billion at September 30, 2014, primarily reflecting common stock repurchases made by the company in the open market and under an accelerated stock repurchase program in 4Q14 and redemption of senior unsecured notes as discussed further below.

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Parent company cash and short-term investments of $1.41 billion at December 31, 2014 decreased $1.08 billion from $2.49 billion at September 30, 2014, primarily due to the same factors impacting the consolidated comparisons as noted above.

At December 31, 2014, net receivables of $679 million were associated with premium stabilization programs, commonly referred to as the 3Rs^(c). Approximately 86 percent of these net receivables related to reinsurance recoverables under the 3Rs. At December 31, 2014, net receivables for the 3Rs were as follows:

Net Amounts Accrued for the 3Rs ($ in millions)	12/31/14 Balances
Reinsurance recoverables	$	586
Net risk adjustment settlement		42
Net risk corridor settlement		51
Total Net Amounts Accrued for the 3Rs	$	679

Days in claims payable of 44.7 at December 31, 2014 decreased from 47.5 days at September 30, 2014 primarily due to a seasonal decline in processed and unprocessed claims inventories, and higher provider capitation payments during 4Q14.

Debt-to-total capitalization at December 31, 2014 was 28.4 percent, down from 30.0 percent at September 30, 2014, primarily reflecting the company’s previously-disclosed redemption in October 2014 of its $500 million 6.45 percent senior unsecured notes due June 1, 2016. The company recognized a pretax loss on extinguishment of debt of approximately $37 million in October 2014 for the redemption of these notes. Additionally, in October 2014, the company entered into a commercial paper program that allows it to issue short-term, unsecured commercial paper notes in amounts not to exceed $1 billion with the net proceeds expected to be used for general corporate purposes, including repurchasing shares of its common stock. As of December 31, 2014, the company had no balance outstanding on its commercial paper program.

Cash flows from operations

Cash flows provided by operations for 4Q14 were $193 million compared to cash flows used in operations of $16 million in 4Q13, due primarily to changes in working capital.

For FY14, cash flows provided by operations totaled $1.62 billion versus $1.72 billion in cash flows from operations during FY13. The year-over-year decline primarily reflected lower net income and the impact of changes in working capital including higher receivables associated with the 3Rs, partially offset by an increase in benefits payable from growth in membership.

Share repurchases and cash dividends

In September 2014, the company’s Board of Directors approved a new $2 billion share repurchase authorization with an expiration date of December 31, 2016 replacing its previous $1 billion share repurchase authorization (of which approximately $816 million remained unused). As previously announced, the company expects to repurchase $1 billion of its outstanding shares no later than June 30, 2015 under this authorization. As of February 4, 2015, approximately $1.37 billion of the current repurchase authorization was remaining.

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In November 2014, the company entered into an agreement with a third party financial institution to effect a $500 million accelerated stock repurchase program as part of the $2 billion share repurchase authorized in September 2014. 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. Settlement of approximately $100 million of repurchases under the accelerated stock repurchase program remains pending, and the company continues to expect final settlement by the end of the first quarter of 2015.

During 4Q14, the company executed share repurchases of $500 million (including $400 million of shares repurchased under the accelerated stock repurchase program described above), or approximately 3,829,700 of its outstanding shares, at an average price of $130.56 per share under its existing share repurchase authorization. The company executed repurchases of 5,702,300 shares for $730 million during FY14 compared to 5,774,500 shares for $502 million during FY13.

The company paid cash dividends to its stockholders totaling $43 million in both 4Q14 and 4Q13, and paid $172 million during FY14 compared to $168 million in FY13.

RETAIL SEGMENT

This segment consists of Medicare and commercial fully-insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and financial protection products, marketed directly to individuals, and includes the company’s contract with CMS to administer the Limited Income Newly Eligible Transitions (LI-NET) program and contracts with various states to provide dual eligible, Temporary Assistance for Needy Families (TANF), and Long-Term Support Services (LTSS) benefits.

Retail Segment Highlights

Enrollment:

• Individual Medicare Advantage membership was 2,446,200, including 18,300 dual eligible members from state-based contracts, as of December 31, 2014, an increase of 377,500, or 18.2 percent, from 2,068,700 at December 31, 2013, primarily due to net membership additions associated with the 2014 plan year, particularly HMO offerings, as well as dual-eligible members from state-based contracts in Virginia and Illinois.

• January 2015 individual Medicare Advantage membership approximated 2,703,000, up approximately 257,000, or 10.5 percent, from December 31, 2014, reflecting net membership additions during the recently completed Annual Election Period (AEP) for Medicare beneficiaries.

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• Membership in the company’s individual stand-alone Prescription Drug Plans (PDPs) was 3,989,500 as of December 31, 2014, an increase of 717,800, or 21.9 percent, from 3,271,700 at December 31, 2013. These increases primarily resulted from growth in the company’s low-priced Humana-Walmart plan offering.

• January 2015 individual stand-alone PDP membership (excluding LI-NET) grew to approximately 4,220,000, an increase of approximately 230,500, or 5.8 percent, from December 31, 2014 with growth primarily due to higher membership in the Humana-Walmart plan offering.

• HumanaOne membership increased to 1,016,200 at December 31, 2014, an increase of 510,800, or 101.1 percent, from 505,400 at December 31, 2013. The membership growth primarily reflected new sales, both on-exchange and off-exchange, of plans compliant with the changes mandated by health care reform.

• State-based Medicaid membership increased to 298,500 at December 31, 2014, an increase of 213,000 or 249.1 percent, from 85,500 at December 31, 2013. This increase was primarily driven by the addition of membership from state-based contracts for Florida Medicaid and LTSS business.

• Membership in individual specialty products^(d) was 1,165,800 at December 31, 2014, an increase of 123,300, or 11.8 percent, from 1,042,500 at December 31, 2013, primarily due to increased membership in dental and vision offerings.

Premiums and services revenue:

• The 4Q14 premiums and services revenue for the Retail segment was $8.69 billion, an increase of 27.2 percent from $6.83 billion in 4Q13. The increase resulted primarily from an 18.4 percent increase in average individual Medicare Advantage membership year over year, along with membership growth in the company’s health care exchange and state-based Medicaid businesses and stand-alone PDP plans.

• For FY14, premium and services revenue for the Retail segment was $33.99 billion, an increase of 24.9 percent from $27.22 billion in FY13, primarily reflecting the same factors impacting the year-over-year comparison for the fourth quarter.

Benefits expense:

• The 4Q14 benefit ratio for the Retail segment of 83.3 percent increased 60 basis points from 82.7 percent in 4Q13 primarily due to higher specialty prescription drug costs associated with a new treatment for Hepatitis C, higher planned clinical investment spending, higher benefit ratios associated with members from state-based contracts, and higher flu-related costs, partially offset by increased membership in clinical programs and inclusion of the health insurance industry fee in the pricing of the company’s products.

• Retail segment benefits expense for 4Q14 included the beneficial effect of $55 million in favorable prior-year development compared to $28 million in 4Q13. FY14 benefits expense for the segment included the beneficial effect of $385 million in favorable prior-year development compared to $332 million in FY13.

• The FY14 benefit ratio for the Retail segment of 84.3 percent was 10 basis points higher than the FY13 ratio of 84.2 percent, primarily reflecting the same factors impacting the fourth quarter year-over-year comparisons.

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Operating costs:

• The Retail segment’s operating cost ratio of 14.3 percent in 4Q14 decreased 20 basis points from 14.5 percent in 4Q13. The decrease primarily resulted from the year-over-year decline in investment spending for healthcare exchanges and state-based contracts, certain LTSS contracts related to American Eldercare moving from Administrative Services Only (ASO) to fully-insured capitated arrangements, and scale efficiencies associated with growth in the company’s Medicare and individual commercial membership, partially offset by the non-deductible health insurance industry fee mandated by health care reform. The non-deductible health insurance industry fee increased the Retail segment’s operating cost ratio by approximately 120 basis points in 4Q14.

• The Retail segment’s operating cost ratio of 12.4 percent for FY14 was up 150 basis points compared to 10.9 percent for FY13, primarily reflecting the non-deductible health insurance industry fee mandated by health care reform and investment spending for healthcare exchanges and state-based contracts, partially offset by scale efficiencies associated with growth in the company’s Medicare and individual commercial membership. The non-deductible health insurance industry fee increased the Retail segment’s operating cost ratio by approximately 120 basis points in FY14.

Pretax results:

• Retail segment pretax income of $185 million in 4Q14 compared to $177 million in 4Q13, an increase of $8 million, reflecting a decrease in the operating cost ratio, partially offset by an increase in the segment’s benefit ratio.

• For FY14, pretax income for the Retail Segment of $1.10 billion decreased by $185 million from FY13 pretax earnings of $1.28 billion. The FY14 decrease primarily reflected higher benefit and operating cost ratios year over year.

EMPLOYER GROUP SEGMENT

This segment consists of Medicare and commercial fully-insured medical and specialty health insurance benefits, including dental, vision, and voluntary benefit products, as well as ASO products and health and wellness solutions businesses primarily marketed to employer groups.^(e)

Employer Group Segment Highlights

Enrollment:

• Fully-insured group Medicare Advantage membership was 489,700 at December 31, 2014, an increase of 60,600, or 14.1 percent, from 429,100 at December 31, 2013, primarily due to the addition of a new large group account.

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• Group fully-insured commercial medical membership was 1,235,500 at December 31, 2014, relatively unchanged from 1,237,000 at December 31, 2013, as higher small group business (less than 100 lives) membership year over year was offset by lower membership in large group accounts. Approximately 65 percent of group fully-insured commercial medical membership was in small group accounts at December 31, 2014, versus 63 percent at September 30, 2014, and 61 percent at December 31, 2013.

• Group ASO commercial medical membership was 1,104,300 at December 31, 2014, a decline of 58,500, or 5.0 percent, from 1,162,800 at December 31, 2013. This decline reflects continued discipline in pricing of services for self-funded accounts amid a highly competitive environment.

• Membership in Employer Group specialty products was 6,502,700 at December 31, 2014, a decline of 278,100, or 4.1 percent, from 6,780,800 at December 31, 2013. This decrease resulted primarily from declines in dental membership related to the company’s planned discontinuance of certain unprofitable product distribution partnerships.

• Membership in HumanaVitality^®, the company’s wellness and loyalty rewards program, was 3,856,800 at December 31, 2014, an increase of 1,025,800, or 36.2 percent from 2,831,000 at December 31, 2013 primarily due to the addition of group Medicare members as well as individual Medicare Advantage and HumanaOne membership growth.

Premiums and services revenue:

• The 4Q14 premiums and services revenue for the Employer Group segment was $3.11 billion, up 9.2 percent from $2.85 billion in 4Q13, primarily reflecting the impacts of higher average group Medicare Advantage membership.

• For FY14, premium and services revenue for the Employer Group segment was $12.38 billion, an increase of 9.1 percent from $11.34 billion in FY13, reflecting the same factor impacting the year-over-year comparison for the fourth quarter, along with higher fully-insured group medical premiums per member that more than offset a slight decrease in membership for this line of business.

Benefits expense:

• The 4Q14 benefit ratio for the Employer Group segment was 87.1 percent, a decrease of 40 basis points from 87.5 percent for 4Q13. The year-over-year decrease in the benefit ratio primarily reflected the inclusion of the health insurance industry fee and other health care reform related taxes and fees in pricing, partially offset by higher utilization, primarily due to costs associated with a new treatment for Hepatitis C and higher flu-related costs, as well as the continuing impact of transitional policy changes, which allowed employers to continue offering plans that are not compliant with health care reform.

• Employer Group segment benefits expense for 4Q14 included the beneficial effect of $22 million in favorable prior-year development compared to $14 million in 4Q13. FY14 benefits expense for the segment included the beneficial effect of $132 million in favorable prior-year development compared to $138 million in FY13.

• The FY14 benefits ratio for the Employer Group segment of 83.9 percent increased from the 83.5 percent ratio for FY13, primarily reflecting higher utilization due to costs associated with

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a new treatment for Hepatitis C, as well as the continuing impact of transitional policy changes, partially offset by the inclusion of the health insurance industry fee and other health care reform related taxes and fees in pricing.

Operating costs:

• The Employer Group segment’s operating cost ratio was 16.4 percent in 4Q14, a decrease of 140 basis points from 17.8 percent in 4Q13, primarily reflecting an increase in group Medicare Advantage membership which generally carries a lower operating cost ratio than commercial group medical membership, as well as operating cost efficiencies. These decreases were partially offset by the impact of the non-deductible health insurance industry fee and other fees mandated by health care reform and a higher percentage of small group commercial business which carries a higher operating cost ratio than large group business. The non-deductible health insurance industry fee increased the Employer Group segment’s operating cost ratio by approximately 110 basis points in 4Q14.

• The Employer Group segment’s operating cost ratio of 16.1 percent for FY14 was up 20 basis points compared to 15.9 percent for FY13 primarily reflecting the impact of the non-deductible health insurance industry fee and other fees mandated by health care reform and a higher percentage of small group commercial business, partially offset by an increase in group Medicare Advantage membership, as well as operating cost efficiencies. The non-deductible health insurance industry fee increased the Employer Group segment’s operating cost ratio by approximately 120 basis points in FY14.

Pretax results:

• The 4Q14 Employer Group segment pretax loss of $14 million improved from a pretax loss of $72 million in 4Q13, primarily reflecting an improvement in the segment’s benefit and operating cost ratios.

• For FY14, pretax income for the Employer Group Segment of $314 million decreased by $36 million versus FY13 pretax earnings of $350 million. The FY14 decrease primarily reflects the increase in the segment’s benefit and operating cost ratios.

HEALTHCARE SERVICES SEGMENT

This segment includes services primarily offered to the company’s health plan members as well as to third parties including pharmacy solutions, provider services, home based services, integrated behavioral health services, and predictive modeling and informatics services.^(e)

Healthcare Services Segment Highlights

Revenues:

• Revenue of $5.29 billion in 4Q14 for the Healthcare Services segment increased $1.12 billion, or 26.9 percent, from $4.17 billion in 4Q13, primarily due to substantial growth in the company’s Medicare membership which resulted in higher utilization of the pharmacy solutions and home based services businesses.

• For FY14, revenue for the Healthcare Services segment was $20.02 billion, an increase of 26.0 percent from $15.89 billion in FY13, primarily reflecting the same factors impacting the year-over-year comparison for the fourth quarter.

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Operating costs:

• The Healthcare Services segment’s operating cost ratio was 96.4 percent in 4Q14, an increase of 40 basis points from 96.0 percent in 4Q13, primarily reflecting investment in the home based services business and growth in other businesses across the segment associated with the company’s growing Medicare enrollment from the recently completed AEP, partially offset by operating efficiencies in the pharmacy solutions businesses.

• The Healthcare Services segment’s operating cost ratio of 95.5 percent for FY14 was down 30 basis points from 95.8 percent for FY13 primarily reflecting the improvement in the ratio for the pharmacy solutions businesses, partially offset by the investment in home based services and other businesses across the segment.

Operating statistics:

• Primary care providers in value-based (shared risk and path to risk) relationships of approximately 42,300 at December 31, 2014, increased 25.9 percent from 33,600 at December 31, 2013, primarily driven by the company’s focus on increasing the number of members served through these value-based relationships. At December 31, 2014, 53.2 percent of the company’s individual Medicare Advantage members were in value-based relationships, compared to 49.5 percent at December 31, 2013.

• Membership in the Humana Chronic Care Program rose to 420,700 at December 31, 2014, up 50.1 percent from 280,200 members at December 31, 2013, reflecting enhanced predictive modeling capabilities and focus on proactive clinical outreach and member engagement, particularly for the company’s Medicare Advantage membership.

• Pharmacy script volumes of 85.3 million for the quarter ended December 31, 2014 increased 20.3 percent compared to 70.9 million for the quarter ended December 31, 2013, driven primarily by higher average medical membership. Pharmacy script volumes of 329.0 million for the year ended December 31, 2014 increased 19.9 percent compared to 274.3 million for the year ended December 31, 2013, driven primarily by the same factor impacting the year-over-year comparison for the fourth quarter.

Pretax results:

• Healthcare Services segment pretax income of $146 million in 4Q14 increased from $130 million in 4Q13, primarily due to revenue growth from the pharmacy solutions and home based services businesses, partially offset by investments in the home based services business associated with the company’s growing Medicare enrollment from the recently completed AEP.

• For FY14, pretax income for the Healthcare Services segment of $739 million increased by $218 million from FY13 pretax earnings of $521 million, primarily reflecting a 30 basis point decline in the segment’s operating cost ratio on a higher revenue base that reflects the leveraging of strong growth correlated to higher Medicare membership.

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OTHER BUSINESSES

The Other Businesses category consists of the company’s military services business and closed-block long-term care insurance policies. The military services business consists primarily of the company’s TRICARE South Region contract.

Other Businesses Highlights

Pretax results:

• Other Businesses reported a pretax income of $22 million in 4Q14 versus a pretax loss of $244 million in 4Q13, primarily reflecting the $243 million of reserves strengthening for the company’s closed block of long-term care insurance policies in 4Q13.

• For FY14, Other Businesses reported pretax income of $78 million which increased $271 million compared to a pretax loss of $193 million in FY13, primarily reflecting the same factor impacting the year-over-year comparison for the fourth quarter. In addition, the year-over-year comparison reflects the loss of the company’s Medicaid contracts in Puerto Rico effective September 30, 2013 and a reduction of benefits expense related to a favorable settlement of contract claims with the DoD associated with previously-disclosed litigation in FY13.

Footnotes

(a) Adjusted financial results included in this earnings press release include: (1) for 2014, Adjusted Pretax Income and Adjusted EPS, which in each case excludes approximately $37 million of pretax expense, or $0.15 per share, as applicable, associated with the early retirement of debt in the fourth quarter of 2014 (which related to the company’s October 2014 redemption of its $500 million aggregate principal amount of 6.45% senior unsecured notes due June 1, 2016, and (2) for 2013, Adjusted Pretax Income, Adjusted EPS, and Adjusted Consolidated Benefit Ratio, which in each case excludes $243 million of pretax expense, net of reinsurance, or $0.99 per share, as applicable, for strengthening of the company’s future policy benefit reserves related to the closed block of long-term care insurance policies. This closed block of policies was acquired in connection with the company’s acquisition of KMG America in late 2007. No policies in this block have been sold since 2005. The Company has included these financial measures (not in accordance with Generally Accepted Accounting Principles (GAAP)) in its summary of financial results within this earnings press release as management believes that these measures, when presented in conjunction with the comparable GAAP measures, are useful to both management and its investors in analyzing the company’s ongoing business and operating performance. Neither of the excluded items described herein are a recurring part of the company’s operating plan. Consequently, management uses these non-GAAP financial measures as an indicator of business performance, as well as for operational planning and decision making purposes. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

(b) State-based contracts include the company’s operations and membership associated with Medicaid benefits provided for dual-eligible, Temporary Assistance for Needy Families (TANF), and Long-Term Support Services (LTSS) programs.

(c) Under health care reform, premium stabilization programs, commonly referred to as the 3Rs, became effective January 1, 2014. These programs include a permanent risk adjustment program, a transitional reinsurance program, and a temporary risk corridors program designed to more evenly spread the financial risk borne by issuers and to mitigate the risk that issuers would have mispriced products. In each case, operation of the program is subject to federal administrative action.

(d) The company provides a full range of insured specialty products including dental, vision and voluntary benefit products. Members included in these products may not be unique to each product since members have the ability to enroll in multiple products. Other supplemental benefits include life, disability, and fixed benefit products including cancer and critical illness policies.

(e) On January 1, 2014, the company made minor reclassifications to certain of its businesses from its Healthcare Services segment to its Employer Group segment to correspond with internal management reporting changes. The company’s reportable segments remain the same and prior period segment financial information has been recast to conform to the 2014 presentation.

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Conference Call & Virtual Slide Presentation

Humana will host a conference call, as well as a virtual slide presentation, at 9:00 a.m. eastern time today to discuss its financial results for the quarter and the company’s expectations for future earnings. A live virtual presentation (audio with slides) may be accessed via Humana’s Investor Relations page at www.humana.com. The company suggests web participants sign on at least 15 minutes in advance of the call. The company also suggests web participants visit the site well in advance of the call to run a system test and to download any free software needed to view the presentation.

All parties interested in the audio-only portion of the conference call are invited to dial 888-625-7430. No password is required. The company suggests participants dial in at least ten minutes in advance of the call. For those unable to participate in the live event, the virtual presentation archive may be accessed via the Historical Webcasts & Presentations section of the Investor Relations page at www.humana.com.

Cautionary Statement

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in investor presentations, press releases, Securities and Exchange Commission (SEC) filings, and in oral statements made by or with the approval of one of Humana’s executive officers, the words or phrases like “expects,” “believes,” “anticipates,” “intends,” “likely will result,” “estimates,” “projects” or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions, including, among other things, information set forth in the “Risk Factors” section of the company’s SEC filings, a summary of which includes but is not limited to the following:

• If Humana does not design and price its products properly and competitively, if the premiums Humana receives are insufficient to cover the cost of health care services delivered to its members, if the company is unable to implement clinical initiatives to provide a better health care 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. 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.

• If Humana fails to effectively implement its operational and strategic initiatives, particularly its Medicare initiatives, state-based contract strategy, and its participation in the new health insurance exchanges, 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.

• If Humana fails to properly maintain the integrity of its data, to strategically implement new information systems, to protect Humana’s proprietary rights to its systems, or to defend against cyber-security attacks, the company’s business may be materially adversely affected.

• Humana’s business may be materially adversely impacted by the adoption of a new coding set for diagnoses (commonly known as ICD-10), the implementation of which has been deferred to at least October 1, 2015.

• Humana is involved in various legal actions, or disputes that could lead to legal actions (such as, among other things, provider contract disputes relating to rate adjustments resulting from the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, commonly referred to as “sequestration”; other provider contract disputes; and qui tam litigation brought by individuals on behalf of the government) and governmental and internal investigations, 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.

• 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 health care 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.

• The Health Care Reform Law, including The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010, could have a material adverse effect on Humana’s results of operations, including restricting revenue, enrollment and premium growth in certain products and market segments, restricting the

12

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.

• Humana’s participation in the new federal and state health care exchanges, which entail uncertainties associated with mix, volume of business, and the operation of premium stabilization programs, which are subject to federal administrative action, could adversely affect the company’s results of operations, financial position, and cash flows.

• 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.

• 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.

In making forward-looking statements, Humana is not undertaking to address or update them in future filings or communications regarding its business or results. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed herein may or may not occur. There also may be other risks that the company is unable to predict at this time. Any of these risks and uncertainties may cause actual results to differ materially from the results discussed in the forward-looking statements.

Humana advises investors to read the following documents as filed by the company with the SEC for further discussion both of the risks it faces and its historical performance:

• Form 10-K for the year ended December 31, 2013;

• Form 10-Q for the quarter ended March 31, 2014, June 30, 2014, and September 30, 2014;

• Form 8-Ks filed during 2014 and 2015.

About Humana

Humana Inc., headquartered in Louisville, Ky., is a leading health and well-being company focused on making it easy for people to achieve their best health with clinical excellence through coordinated care. The company’s strategy integrates care delivery, the member experience, and clinical and consumer insights to encourage engagement, behavior change, proactive clinical outreach and wellness for the millions of people we serve across the country.

More information regarding Humana is available to investors via the Investor Relations page of the company’s web site at www.humana.com, including copies of:

• Annual reports to stockholders

• Securities and Exchange Commission filings

• Most recent investor conference presentations

• Quarterly earnings news releases

• Replays of most recent earnings release conference calls

• Calendar of events (including upcoming earnings conference call dates and times, as well as planned interaction with research analysts and institutional investors)

• Corporate Governance information

13

Humana Inc. – Earnings Guidance Points as of February 4, 2015

(in accordance with Generally Accepted Accounting Principles)	For the year ending December 31, 2015 (FY15)	Comments
Diluted earnings per common share	$8.50 to $9.00
Revenues		Revenues include expected interest income.
Consolidated	$54.5 billion to $55.0 billion
Segments
Retail Segment	$39.75 billion to $40.25 billion	Segment-level revenues include intersegment amounts that eliminate in consolidation.
Employer Group Segment	$12.0 billion to $13.0 billion
Healthcare Services Segment	$22.5 billion to $23.5 billion
Consolidated investment income	$350 million to $400 million	Investment income is included in revenue guidance above.
Benefit ratios		Benefits expense as a percent of premiums.
Retail Segment	83.5% to 84.5%
Employer Group Segment	83.5% to 84.5%
Operating cost ratios		Operating costs as a percent of total revenues excluding investment income.
Consolidated	14.5% to 15.5%
Healthcare Services Segment	95.5% to 96.0%
Consolidated depreciation and amortization (D&A)		Certain D&A is included in benefits expense on the income statement but shown as a non-cash item on the cash flows statement.
Income statement	$370 million to $390 million
Cash flows statement	$490 million to $510 million
Consolidated interest expense	$185 million to $190 million
Pretax results		Segment-level pretax results include the impact of net investment income.
Retail Segment	$1.425 billion to $1.525 billion	FY15 includes $0.30 to $0.35 per share of investment spending related to state-based contracts.
Employer Group Segment	$275 million to $325 million
Healthcare Services Segment	$775 million to $825 million
Effective Tax Rate	48.75% to 49.75%	Reflects the non-deductibility of the industry fee.
Weighted average shares for diluted earnings per common share	Approximately 150 million	Reflects impact of repurchases.
Cash flows from operations	$1.7 billion to $2.0 billion

14

Humana Inc. – Earnings Guidance Points as of February 4, 2015

(in accordance with Generally Accepted Accounting Principles)	For the year ending December 31, 2015 (FY15)	Comments
Premium Stabilization Program Net Receivables	$275 million to $350 million	Approximately 90% related to the reinsurance program
Capital expenditures	$575 million to $625 million
Commercial group fully-insured medical cost trend	5.5% to 6.5%	Includes higher costs versus the prior year associated with new treatments for Hepatitis C
Ending medical membership; and changes
Retail Segment
Medicare Advantage (MA)	2,746,200 to 2,796,200; Up 300,000 to 350,000	Includes MA membership sold directly to individuals as well as dual-eligible MA members from state-based contracts.
Medicare stand-alone PDPs	4,282,100 to 4,332,100; Up 400,000 to 450,000	Medicare stand-alone PDPs exclude Limited Income Newly Eligible Transitions (LI-NET) membership.
State-based Medicaid	298,500 to 303,500; Flat to Up 5,000	Includes Medicaid Temporary Assistance for Needy Families (TANF) which contracts are generally reinsured through partnering relationships, and Long-Term Support Services (LTSS) membership from state-based contracts.
Individual commercial	926,200 to 936,200; Down 80,000 to 90,000	Includes membership expectations for both on-exchange and off-exchange enrollment.
Medicare Supplement	166,900 to 176,900; Up 35,000 to 45,000
Employer Group Segment
Medicare Advantage	479,700 to 489,700; Flat to Down 10,000
Commercial fully-insured	1,190,500 to 1,200,500; Down 35,000 to 45,000
Commercial ASO	679,300 to 704,300; Down 400,000 to 425,000

15

Humana Inc.

Statistical Schedules

And

Supplementary Information

4Q14 Earnings Release

S-1

Humana Inc.

Statistical Schedules and Supplementary Information

4Q14 Earnings Release

Contents

Page	Description
S-3-4	Consolidated Statements of Income
S-5-6	Quarterly Segment Financial Information
S-7-8	FY Segment Financial Information
S-9	Consolidated Balance Sheets
S-10-11	Consolidated Statements of Cash Flows
S-12	Key Income Statement Ratios and Segment Operating Results
S-13-15	Healthcare Services Segment Metrics
S-16	Membership Detail
S-17-18	Premiums and Services Revenue Detail
S-19	Medicare Summary
S-20	Investments
S-21-23	Benefits Payable Detail and Statistics
S-24	Footnotes

S-2

Humana Inc.

Consolidated Statements of Income

Dollars in millions, except per common share results

	Three Months Ended December 31,
	2014		2013			Dollar Change			Percentage Change
Revenues:
Premiums	$	11,685	$	9,562		$	2,123			22.2	%
Services		544		528			16			3.0	%
Investment income		99		97			2			2.1	%
Total revenues		12,328		10,187			2,141			21.0	%
Operating expenses:
Benefits		9,749		8,203			1,546			18.8	%
Operating costs		2,121		1,908			213			11.2	%
Depreciation and amortization		87		90			(3	)		-3.3	%
Total operating expenses		11,957		10,201			1,756			17.2	%
Income (loss) from operations		371		(14	)		385			2750.0	%
Interest expense		84		35			49			140.0	%
Income (loss) before income taxes		287		(49	)		336			685.7	%
Provision (benefit) for income taxes		142		(19	)		161			847.4	%
Net income (loss)	$	145	$	(30	)	$	175			583.3	%
Basic earnings (loss) per common share	$	0.96	$	(0.19	)	$	1.15			605.3	%
Diluted earnings (loss) per common share	$	0.94	$	(0.19	)	$	1.13			594.7	%
Shares used in computing basic earnings per common share (000’s)		151,732		155,933
Shares used in computing diluted earnings per common share (000’s)		153,572		155,933

S-3

Humana Inc.

Consolidated Statements of Income

Dollars in millions, except per common share results

	Year Ended December 31,
	2014		2013		Dollar Change			Percentage Change
Revenues:
Premiums	$	45,959	$	38,829	$	7,130			18.4	%
Services		2,164		2,109		55			2.6	%
Investment income		377		375		2			0.5	%
Total revenues		48,500		41,313		7,187			17.4	%
Operating expenses:
Benefits		38,166		32,564		5,602			17.2	%
Operating costs		7,639		6,355		1,284			20.2	%
Depreciation and amortization		333		333		—			0.0	%
Total operating expenses		46,138		39,252		6,886			17.5	%
Income from operations		2,362		2,061		301			14.6	%
Interest expense		192		140		52			37.1	%
Income before income taxes		2,170		1,921		249			13.0	%
Provision for income taxes		1,023		690		333			48.3	%
Net income	$	1,147	$	1,231	$	(84	)		-6.8	%
Basic earnings per common share	$	7.44	$	7.81	$	(0.37	)		-4.7	%
Diluted earnings per common share	$	7.36	$	7.73	$	(0.37	)		-4.8	%
Shares used in computing basic earnings per common share (000’s)		154,187		157,503
Shares used in computing diluted earnings per common share (000’s)		155,874		159,151

S-4

Humana Inc.

4Q14 Segment Financial Information

In millions

	Retail			Employer Group			Healthcare Services			Other Businesses			Eliminations/ Corporate			Consolidated
Revenues - external customers
Premiums:
Medicare Advantage	$	6,498		$	1,359		$	—		$	—		$	—		$	7,857
Medicare stand-alone PDP		790			2			—			—			—			792
Total Medicare		7,288			1,361			—			—			—			8,649
Fully-insured		902			1,354			—			—			—			2,256
Specialty		64			274			—			—			—			338
Military services		—			—			—			4			—			4
Medicaid and other (A)		429			—			—			9			—			438
Total premiums		8,683			2,989			—			13			—			11,685
Services revenue:
Provider		—			6			284			—			—			290
ASO and other (B)		2			93			—			132			—			227
Pharmacy		—			—			27			—			—			27
Total services revenue		2			99			311			132			—			544
Total revenues - external customers		8,685			3,088			311			145			—			12,229
Intersegment revenues
Services		—			21			3,982			—			(4,003	)		—
Products		—			—			997			—			(997	)		—
Total intersegment revenues		—			21			4,979			—			(5,000	)		—
Investment income		20			12			—			15			52			99
Total revenues		8,705			3,121			5,290			160			(4,948	)		12,328
Operating expenses:
Benefits		7,237			2,602			—			31			(121	)		9,749
Operating costs		1,241			509			5,097			104			(4,830	)		2,121
Depreciation and amortization		42			24			47			3			(29	)		87
Total operating expenses		8,520			3,135			5,144			138			(4,980	)		11,957
Income (loss) from operations		185			(14	)		146			22			32			371
Interest expense		—			—			—			—			84			84
Income (loss) before income taxes	$	185		$	(14	)	$	146		$	22		$	(52	)	$	287
Benefit ratio		83.3	%		87.1	%											83.4	%
Operating cost ratio		14.3	%		16.4	%		96.4	%		71.7	%					17.3	%

S-5

Humana Inc.

4Q13 Segment Financial Information (Recast) (C)

In millions

	Retail			Employer Group			Healthcare Services			Other Businesses			Eliminations/ Corporate			Consolidated
Revenues - external customers
Premiums:
Medicare Advantage	$	5,621		$	1,167		$	—		$	—		$	—		$	6,788
Medicare stand-alone PDP		739			2			—			—			—			741
Total Medicare		6,360			1,169			—			—			—			7,529
Fully-insured		304			1,298			—			—			—			1,602
Specialty		55			272			—			—			—			327
Military services		—			—			—			3			—			3
Medicaid and other (A)		101			—			—			—			—			101
Total premiums		6,820			2,739			—			3			—			9,562
Services revenue:
Provider		—			6			293			—			—			299
ASO and other (B)		9			88			—			112			—			209
Pharmacy		—			—			20			—			—			20
Total services revenue		9			94			313			112			—			528
Total revenues - external customers		6,829			2,833			313			115			—			10,090
Intersegment revenues
Services		—			14			3,102			—			(3,116	)		—
Products		—			—			753			—			(753	)		—
Total intersegment revenues		—			14			3,855			—			(3,869	)		—
Investment income		19			11			—			14			53			97
Total revenues		6,848			2,858			4,168			129			(3,816	)		10,187
Operating expenses:
Benefits		5,642			2,396			—			267			(102	)		8,203
Operating costs		992			507			4,000			99			(3,690	)		1,908
Depreciation and amortization		37			27			38			7			(19	)		90
Total operating expenses		6,671			2,930			4,038			373			(3,811	)		10,201
Income (loss) from operations		177			(72	)		130			(244	)		(5	)		(14	)
Interest expense		—			—			—			—			35			35
Income (loss) before income taxes	$	177		$	(72	)	$	130		$	(244	)	$	(40	)	$	(49	)
Benefit ratio		82.7	%		87.5	%											85.8	%
Operating cost ratio		14.5	%		17.8	%		96.0	%		86.1	%					18.9	%

S-6

Humana Inc.

FY 2014 Segment Financial Information

In millions

	Retail			Employer Group			Healthcare Services			Other Businesses			Eliminations/ Corporate			Consolidated
Revenues - external customers
Premiums:
Medicare Advantage	$	25,941		$	5,490		$	—		$	—		$	—		$	31,431
Medicare stand-alone PDP		3,396			8			—			—			—			3,404
Total Medicare		29,337			5,498			—			—			—			34,835
Fully-insured		3,265			5,339			—			—			—			8,604
Specialty		256			1,098			—			—			—			1,354
Military services		—			—			—			19			—			19
Medicaid and other (A)		1,096			—			—			51			—			1,147
Total premiums		33,954			11,935			—			70			—			45,959
Services revenue:
Provider		—			23			1,183			—			—			1,206
ASO and other (B)		39			339			—			481			—			859
Pharmacy		—			—			99			—			—			99
Total services revenue		39			362			1,282			481			—			2,164
Total revenues - external customers		33,993			12,297			1,282			551			—			48,123
Intersegment revenues
Services		—			78			14,984			—			(15,062	)		—
Products		—			—			3,749			—			(3,749	)		—
Total intersegment revenues		—			78			18,733			—			(18,811	)		—
Investment income		76			44			—			60			197			377
Total revenues		34,069			12,419			20,015			611			(18,614	)		48,500
Operating expenses:
Benefits		28,608			10,019			—			113			(574	)		38,166
Operating costs		4,209			1,987			19,121			405			(18,083	)		7,639
Depreciation and amortization		154			99			155			15			(90	)		333
Total operating expenses		32,971			12,105			19,276			533			(18,747	)		46,138
Income from operations		1,098			314			739			78			133			2,362
Interest expense		—			—			—			—			192			192
Income before income taxes	$	1,098		$	314		$	739		$	78		$	(59	)	$	2,170
Benefit ratio		84.3	%		83.9	%											83.0	%
Operating cost ratio		12.4	%		16.1	%		95.5	%		73.5	%					15.9	%

S-7

Humana Inc.

FY 2013 Segment Financial Information (Recast) (C)

In millions

	Retail			Employer Group			Healthcare Services			Other Businesses			Eliminations/ Corporate			Consolidated
Revenues - external customers
Premiums:
Medicare Advantage	$	22,481		$	4,710		$	—		$	—		$	—		$	27,191
Medicare stand-alone PDP		3,025			8			—			—			—			3,033
Total Medicare		25,506			4,718			—			—			—			30,224
Fully-insured		1,160			5,117			—			—			—			6,277
Specialty		210			1,095			—			—			—			1,305
Military services		—			—			—			25			—			25
Medicaid and other (A)		328			—			—			670			—			998
Total premiums		27,204			10,930			—			695			—			38,829
Services revenue:
Provider		—			21			1,221			—			—			1,242
ASO and other (B)		16			338			—			454			—			808
Pharmacy		—			—			59			—			—			59
Total services revenue		16			359			1,280			454			—			2,109
Total revenues - external customers		27,220			11,289			1,280			1,149			—			40,938
Intersegment revenues
Services		—			51			11,808			—			(11,859	)		—
Products		—			—			2,803			—			(2,803	)		—
Total intersegment revenues		—			51			14,611			—			(14,662	)		—
Investment income		74			42			—			59			200			375
Total revenues		27,294			11,382			15,891			1,208			(14,462	)		41,313
Operating expenses:
Benefits		22,914			9,124			—			935			(409	)		32,564
Operating costs		2,963			1,806			15,223			446			(14,083	)		6,355
Depreciation and amortization		134			102			147			20			(70	)		333
Total operating expenses		26,011			11,032			15,370			1,401			(14,562	)		39,252
Income (loss) from operations		1,283			350			521			(193	)		100			2,061
Interest expense		—			—			—			—			140			140
Income (loss) before income taxes	$	1,283		$	350		$	521		$	(193	)	$	(40	)	$	1,921
Benefit ratio		84.2	%		83.5	%											83.9	%
Operating cost ratio		10.9	%		15.9	%		95.8	%		38.8	%					15.5	%

S-8

Humana Inc.

Consolidated Balance Sheets

Dollars in millions, except share amounts

	December 31,			December 31,			YTD Change
	2014			2013			Dollar		Percent
Assets
Current assets:
Cash and cash equivalents	$	1,935		$	1,138
Investment securities		7,598			8,090
Receivables, net		1,168			950
Other current assets		4,011			2,122
Total current assets		14,712			12,300		$	2,412		19.6	%
Property and equipment, net		1,419			1,218
Long-term investment securities		1,949			1,710
Goodwill		3,711			3,733
Other long-term assets		1,675			1,774
Total assets	$	23,466		$	20,735		$	2,731		13.2	%
Liabilities and Stockholders’ Equity
Current liabilities:
Benefits payable	$	4,475		$	3,893
Trade accounts payable and accrued expenses		2,185			1,821
Book overdraft		334			403
Unearned revenues		361			206
Total current liabilities		7,355			6,323		$	1,032		16.3	%
Long-term debt		3,825			2,600
Future policy benefits payable		2,349			2,207
Other long-term liabilities		291			289
Total liabilities		13,820			11,419		$	2,401		21.0	%
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $1 par; 10,000,000 shares authorized, none issued		—			—
Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 197,951,551 issued at December 31, 2014		33			33
Capital in excess of par value		2,330			2,267
Retained earnings		9,916			8,942
Accumulated other comprehensive income		223			158
Treasury stock, at cost, 48,347,541 shares at December 31, 2014		(2,856	)		(2,084	)
Total stockholders’ equity		9,646			9,316		$	330		3.5	%
Total liabilities and stockholders’ equity	$	23,466		$	20,735		$	2,731		13.2	%
Debt-to-total capitalization ratio		28.4	%		21.8	%
Return on Invested Capital (ROIC) based on Net Operating Profit After Tax (NOPAT) - trailing 12 months		10.0	%		11.3	%

S-9

Humana Inc.

Consolidated Statements of Cash Flows

Dollars in millions

	Three Months Ended December 31,
	2014			2013			Dollar Change			Percentage Change
Cash flows from operating activities
Net income (loss)	$	145		$	(30	)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		124			114
Net realized capital gains		(11	)		(8	)
Stock-based compensation		22			19
(Benefit) provision for deferred income taxes		(34	)		11
Changes in operating assets and liabilities, net of effect of businesses acquired and dispositions:
Receivables		(164	)		(125	)
Other assets		8			(165	)
Benefits payable		(201	)		(178	)
Other liabilities		175			289
Unearned revenues		115			8
Other, net		14			49
Net cash provided by (used in) operating activities		193			(16	)	$	209			1306.3	%
Cash flows from investing activities
Acquisitions, net of cash acquired		(15	)		(26	)
Purchases of property and equipment		(167	)		(127	)
Proceeds from sale of business		—			1
Purchases of investment securities		(934	)		(596	)
Maturities of investment securities		183			224
Proceeds from sales of investment securities		1,238			485
Net cash provided by (used in) investing activities		305			(39	)	$	344			882.1	%
Cash flows from financing activities
Receipts (withdrawals) from contract deposits, net		(176	)		51
Repayments of long-term debt		(500	)		—
Change in book overdraft		67			130
Common stock repurchases		(602	)		(206	)
Excess tax benefit from stock-based compensation		2			2
Dividends paid		(43	)		(43	)
Proceeds from stock option exercises and other		(16	)		4
Net cash used in financing activities		(1,268	)		(62	)	($	1,206	)		-1945.2	%
Decrease in cash and cash equivalents		(770	)		(117	)
Cash and cash equivalents at beginning of period		2,705			1,255
Cash and cash equivalents at end of period	$	1,935		$	1,138

S-10

Humana Inc.

Consolidated Statements of Cash Flows

Dollars in millions

	Year Ended December 31,
	2014			2013			Dollar Change			Percentage Change
Cash flows from operating activities
Net income	$	1,147		$	1,231
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		449			426
Net realized capital gains		(20	)		(22	)
Stock-based compensation		98			92
(Benefit) provision for deferred income taxes		(64	)		42
Changes in operating assets and liabilities, net of effect of businesses acquired and dispositions:
Receivables		(232	)		(214	)
Other assets		(952	)		(330	)
Benefits payable		582			109
Other liabilities		413			313
Unearned revenues		155			(24	)
Other, net		42			93
Net cash provided by operating activities		1,618			1,716		($	98	)		-5.7	%
Cash flows from investing activities
Acquisitions, net of cash acquired		(18	)		(187	)
Purchases of property and equipment		(528	)		(441	)
Proceeds from sales of property and equipment		—			4
Proceeds from sale of business		72			34
Purchases of investment securities		(2,883	)		(3,261	)
Maturities of investment securities		885			1,077
Proceeds from sales of investment securities		2,409			1,592
Net cash used in investing activities		(63	)		(1,182	)	$	1,119			94.7	%
Cash flows from financing activities
Receipts (withdrawals) from contract deposits, net		(919	)		(150	)
Repayments of long-term debt		(500	)		—
Proceeds from issuance of senior notes, net		1,733			—
Change in book overdraft		(69	)		79
Common stock repurchases		(872	)		(531	)
Excess tax benefit from stock-based compensation		12			8
Dividends paid		(172	)		(168	)
Proceeds from stock option exercises and other		29			60
Net cash used in financing activities		(758	)		(702	)	($	56	)		-8.0	%
Increase (decrease) in cash and cash equivalents		797			(168	)
Cash and cash equivalents at beginning of period		1,138			1,306
Cash and cash equivalents at end of period	$	1,935		$	1,138

S-11

Humana Inc.

Key Income Statement Ratios and Segment Operating Results

Dollars in millions

	Three Months Ended December 31,												Year Ended December 31,
	2014			2013			Difference			Percentage Change			2014			2013			Difference			Percentage Change
Benefit ratio
Retail		83.3	%		82.7	%		0.6	%					84.3	%		84.2	%		0.1	%
Employer Group		87.1	%		87.5	%		-0.4	%					83.9	%		83.5	%		0.4	%
Consolidated		83.4	%		85.8	%		-2.4	%					83.0	%		83.9	%		-0.9	%
Operating cost ratio
Retail		14.3	%		14.5	%		-0.2	%					12.4	%		10.9	%		1.5	%
Employer Group		16.4	%		17.8	%		-1.4	%					16.1	%		15.9	%		0.2	%
Healthcare Services		96.4	%		96.0	%		0.4	%					95.5	%		95.8	%		-0.3	%
Other Businesses		71.7	%		86.1	%		-14.4	%					73.5	%		38.8	%		34.7	%
Consolidated		17.3	%		18.9	%		-1.6	%					15.9	%		15.5	%		0.4	%
Detail of pretax income (loss)
Retail	$	185		$	177		$	8			4.5	%	$	1,098		$	1,283		($	185	)		-14.4	%
Employer Group	($	14	)	($	72	)	$	58			80.6	%	$	314		$	350		($	36	)		-10.3	%
Healthcare Services	$	146		$	130		$	16			12.3	%	$	739		$	521		$	218			41.8	%
Other Businesses	$	22		($	244	)	$	266			109.0	%	$	78		($	193	)	$	271			140.4	%
Consolidated	$	287		($	49	)	$	336			685.7	%	$	2,170		$	1,921		$	249			13.0	%

S-12

Humana Inc.

Healthcare Services Segment Metrics

	Quarter Ended December 31, 2014		Quarter Ended December 31, 2013		Difference					Quarter Ended September 30, 2014		Difference
Primary Care Providers:
Shared Risk (D)
Owned / JV		2,800		2,900		(100	)	-3.4	%		2,700		100	3.7	%
Contracted		11,800		8,400		3,400		40.5	%		10,600		1,200	11.3	%
Path to Risk (E)		27,700		22,300		5,400		24.2	%		25,200		2,500	9.9	%
Total Value-based		42,300		33,600		8,700		25.9	%		38,500		3,800	9.9	%
Medicare Care Management Professionals:
Employed		7,800		5,500		2,300		41.8	%		7,500		300	4.0	%
Contracted		12,100		7,200		4,900		68.1	%		12,100		—	0.0	%
Total		19,900		12,700		7,200		56.7	%		19,600		300	1.5	%
Care Management Statistics:
Number of members with complex chronic conditions in Humana Chronic Care Program		420,700		280,200		140,500					379,900		40,800
Number of high-risk discharges enrolled in Humana Transitions Program		45,700		18,500		27,200					32,700		13,000

S-13

Humana Inc.

Healthcare Services Segment Metrics (Continued)

Script volume in thousands

	Quarter Ended December 31, 2014			Quarter Ended December 31, 2013			Year-over-Year Difference						Quarter Ended September 30, 2014			Sequential Difference
Pharmacy:
Generic Dispense Rate
Retail		87.8	%		86.2	%		1.6	%					87.6	%		0.2	%
Employer Group		81.4	%		79.6	%		1.8	%					81.4	%		0.0	%
Total		87.3	%		85.7	%		1.6	%					87.1	%		0.2	%
Mail-Order Penetration
Retail		23.7	%		23.2	%		0.5	%					23.8	%		-0.1	%
Employer Group		13.3	%		14.3	%		-1.0	%					13.4	%		-0.1	%
Total		22.9	%		22.5	%		0.4	%					23.0	%		-0.1	%
							Difference			Percentage Change						Difference			Percentage Change
Script volume
Retail		76,500			62,700			13,800			22.0	%		75,000			1,500			2.0	%
Employer Group		8,800			8,200			600			7.3	%		8,500			300			3.5	%
Total		85,300			70,900			14,400			20.3	%		83,500			1,800			2.2	%

S-14

Humana Inc.

Healthcare Services Segment Metrics (Continued)

Script volume in thousands

	Year Ended December 31, 2014			Year Ended December 31, 2013			Year-over-Year Difference
Pharmacy:
Generic Dispense Rate
Retail		87.5	%		86.4	%		1.1	%
Employer Group		81.3	%		79.8	%		1.5	%
Total		87.0	%		85.8	%		1.2	%
Mail-Order Penetration
Retail		23.8	%		22.9	%		0.9	%
Employer Group		13.4	%		14.3	%		-0.9	%
Total		23.0	%		22.2	%		0.8	%
							Difference			Percentage Change
Script volume
Retail		295,000			242,900			52,100			21.4	%
Employer Group		34,000			31,400			2,600			8.3	%
Total		329,000			274,300			54,700			19.9	%

S-15

Humana Inc.

Membership Detail

In thousands

	Ending		Average		Ending		Year-over-Year Change						Ending		Sequential Change
	December 31, 2014		4Q14		December 31, 2013		Amount			Percent			September 30, 2014		Amount			Percent
Medical Membership:
Retail
Medicare Advantage		2,446.2		2,436.7		2,068.7		377.5			18.2	%		2,417.9		28.3			1.2	%
Medicare stand-alone PDPs		3,989.5		3,977.0		3,271.7		717.8			21.9	%		3,936.4		53.1			1.3	%
Individual commercial		1,016.2		1,039.0		505.4		510.8			101.1	%		1,085.8		(69.6	)		-6.4	%
State-based Medicaid (F)		298.5		292.4		85.5		213.0			249.1	%		281.2		17.3			6.2	%
Medicare Supplement		131.9		131.1		94.7		37.2			39.3	%		129.2		2.7			2.1	%
Total Retail		7,882.3		7,876.2		6,026.0		1,856.3			30.8	%		7,850.5		31.8			0.4	%
Employer Group
Medicare Advantage fully-insured		489.7		488.3		429.1		60.6			14.1	%		484.9		4.8			1.0	%
Medicare stand-alone PDPs		4.5		4.5		4.2		0.3			7.1	%		4.4		0.1			2.3	%
Fully-insured medical commercial		1,235.5		1,216.2		1,237.0		(1.5	)		-0.1	%		1,212.3		23.2			1.9	%
ASO commercial		1,104.3		1,104.2		1,162.8		(58.5	)		-5.0	%		1,111.9		(7.6	)		-0.7	%
Total Employer Group		2,834.0		2,813.2		2,833.1		0.9			0.0	%		2,813.5		20.5			0.7	%
Other Businesses
Military services		3,090.4		3,087.4		3,101.8		(11.4	)		-0.4	%		3,085.6		4.8			0.2	%
Puerto Rico Medicaid and other		35.0		35.3		23.4		11.6			49.6	%		36.0		(1.0	)		-2.8	%
Total Other Businesses		3,125.4		3,122.7		3,125.2		0.2			0.0	%		3,121.6		3.8			0.1	%
Total Medical Membership		13,841.7		13,812.1		11,984.3		1,857.4			15.5	%		13,785.6		56.1			0.4	%
Detail of Individual commercial
ACA compliant:
On-Exchange		554.8		566.8		—		554.8			NA			601.4		(46.6	)		-7.7	%
Off-Exchange		131.5		130.8		—		131.5			NA			126.4		5.1			4.0	%
Non-ACA compliant (legacy)		329.9		341.4		505.4		(175.5	)		-34.7	%		358.0		(28.1	)		-7.8	%
Total individual commercial		1,016.2		1,039.0		505.4		510.8			101.1	%		1,085.8		(69.6	)		-6.4	%
Specialty Membership:
Retail
Dental - fully-insured		828.5		852.6		739.3		89.2			12.1	%		876.4		(47.9	)		-5.5	%
Vision		208.4		209.1		156.5		51.9			33.2	%		209.0		(0.6	)		-0.3	%
Other supplemental benefits (G)		128.9		131.2		146.7		(17.8	)		-12.1	%		134.1		(5.2	)		-3.9	%
Total Retail		1,165.8		1,192.9		1,042.5		123.3			11.8	%		1,219.5		(53.7	)		-4.4	%
Employer Group
Dental - fully-insured		2,370.5		2,372.3		2,513.5		(143.0	)		-5.7	%		2,379.7		(9.2	)		-0.4	%
Dental - ASO		772.4		776.1		873.0		(100.6	)		-11.5	%		783.7		(11.3	)		-1.4	%
Vision		2,103.3		2,091.8		2,035.8		67.5			3.3	%		2,074.7		28.6			1.4	%
Other supplemental benefits (G)		1,256.5		1,261.8		1,358.5		(102.0	)		-7.5	%		1,287.2		(30.7	)		-2.4	%
Total Employer Group		6,502.7		6,502.0		6,780.8		(278.1	)		-4.1	%		6,525.3		(22.6	)		-0.3	%
Total Specialty Membership		7,668.5		7,694.9		7,823.3		(154.8	)		-2.0	%		7,744.8		(76.3	)		-1.0	%

S-16

Humana Inc.

Premiums and Services Revenue Detail

Dollars in millions, except per member per month

											Per Member per Month (H)
	Three Months Ended December 31,										Three Months Ended December 31,
					Dollar			Percentage
	2014		2013		Change			Change			2014		2013
Premiums and Services Revenue
Retail:
Medicare Advantage	$	6,498	$	5,621	$	877			15.6	%	$	889	$	910
Medicare stand-alone PDPs		790		739		51			6.9	%		66		75
Individual commercial		837		257		580			225.7	%		269		172
State-based Medicaid (F)		429		101		328			324.8	%		489		406
Medicare Supplemental		65		47		18			38.3	%		165		166
Specialty		64		55		9			16.4	%		18		18
ASO & other services (B)		2		9		(7	)		-77.8	%
Total Retail		8,685		6,829		1,856			27.2	%
Employer Group:
Medicare Advantage fully-insured		1,359		1,167		192			16.5	%		928		909
Medicare stand-alone PDPs		2		2		—			0.0	%
Fully-insured medical commercial		1,354		1,298		56			4.3	%		371		354
Specialty		274		272		2			0.7	%		16		15
ASO & other services (B)		120		108		12			11.1	%
Total Employer Group		3,109		2,847		262			9.2	%
Healthcare Services:
Pharmacy solutions		4,524		3,472		1,052			30.3	%
Provider services		529		533		(4	)		-0.8	%
Home based services		204		131		73			55.7	%
Integrated behavioral health services		33		32		1			3.1	%
Total Healthcare Services		5,290		4,168		1,122			26.9	%
Other Businesses:
Military services (I)		115		96		19			19.8	%
Puerto Rico Medicaid and other (J)		30		19		11			57.9	%
Total Other Businesses	$	145	$	115	$	30			26.1	%

S-17

Humana Inc.

Premiums and Services Revenue Detail

Dollars in millions, except per member per month

											Per Member per Month (H)
	Year Ended December 31,										Year Ended December 31,
					Dollar			Percentage
	2014		2013		Change			Change			2014		2013
Premiums and Services Revenue
Retail:
Medicare Advantage	$	25,941	$	22,481	$	3,460			15.4	%	$	908	$	921
Medicare stand-alone PDPs		3,396		3,025		371			12.3	%		73		78
Individual commercial		3,020		980		2,040			208.2	%		264		171
State-based Medicaid (F)		1,096		328		768			234.1	%		459		360
Medicare Supplemental		245		180		65			36.1	%		164		165
Specialty		256		210		46			21.9	%		18		17
ASO & other services (B)		39		16		23			143.8	%
Total Retail		33,993		27,220		6,773			24.9	%
Employer Group:
Medicare Advantage fully-insured		5,490		4,710		780			16.6	%		950		935
Medicare stand-alone PDPs		8		8		—			0.0	%
Fully-insured medical commercial		5,339		5,117		222			4.3	%		368		354
Specialty		1,098		1,095		3			0.3	%		16		14
ASO & other services (B)		440		410		30			7.3	%
Total Employer Group		12,375		11,340		1,035			9.1	%
Healthcare Services:
Pharmacy solutions		17,004		13,138		3,866			29.4	%
Provider services		2,186		2,205		(19	)		-0.9	%
Home based services		692		420		272			64.8	%
Integrated behavioral health		133		128		5			3.9	%
Total Healthcare Services		20,015		15,891		4,124			26.0	%
Other Businesses:
Military services (I)		412		398		14			3.5	%
Puerto Rico Medicaid and other (J)		139		751		(612	)		-81.5	%
Total Other Businesses	$	551	$	1,149	$	(598	)		-52.0	%

S-18

Humana Inc.

Medicare Summary

Premiums in millions, except per member per month

Membership in thousands

											Per Member per Month (H)
	Three Months Ended December 31,				Year-over-year Change						Three Months Ended December 31,
	2014		2013		Amount			Percent			2014		2013
Premiums
Medicare Advantage	$	7,857	$	6,788	$	1,069			15.7	%	$	895	$	910
Medicare stand-alone PDPs		792		741		51			6.9	%		66		75
Total Medicare	$	8,649	$	7,529	$	1,120			14.9	%
											Per Member per Month (H)
	Year Ended December 31,				Year-over-year Change						Year Ended December 31,
	2014		2013		Amount			Percent			2014		2013
Premiums
Medicare Advantage	$	31,431	$	27,191	$	4,240			15.6	%	$	915	$	924
Medicare stand-alone PDPs		3,404		3,033		371			12.2	%		73		78
Total Medicare	$	34,835	$	30,224	$	4,611			15.3	%
	Ending		Ending		Year-over-year Change
	December 31, 2014		December 31, 2013		Amount			Percent
Fully-Insured Membership
Medicare Advantage		2,935.9		2,497.8		438.1			17.5	%
Medicare stand-alone PDPs		3,994.0		3,275.9		718.1			21.9	%
Total Medicare		6,929.9		5,773.7		1,156.2			20.0	%
					Member Mix
	Ending		Ending		December 31,			December 31,
	December 31, 2014		December 31, 2013		2014			2013
Retail Segment Detail
Medicare Advantage Membership
HMO		1,327.4		1,059.7		54.3	%		51.2	%
PPO		1,118.8		1,009.0		45.7	%		48.8	%
Total Individual Medicare Advantage		2,446.2		2,068.7		100.0	%		100.0	%
Medicare Advantage Membership
Shared Risk (D)		709.0		561.5		29.0	%		27.1	%
Path to Risk (E)		592.0		464.4		24.2	%		22.4	%
Total Value-based		1,301.0		1,025.9		53.2	%		49.5	%
Other		1,145.2		1,042.8		46.8	%		50.5	%
Total Individual Medicare Advantage		2,446.2		2,068.7		100.0	%		100.0	%

S-19

Humana Inc.

Investments

Dollars in millions

	Fair value
	12/31/2014		9/30/2014		12/31/2013
Investment Portfolio:
Cash & cash equivalents	$	1,935	$	2,705	$	1,138
Investment securities		7,598		8,088		8,090
Long-term investment securities		1,949		1,947		1,710
Total investment portfolio	$	11,482	$	12,740	$	10,938
Duration (K)		4.14		3.72		4.33
Average Credit Rating		AA-		AA-		AA-
Investment Portfolio Detail:
Cash and cash equivalents	$	1,935	$	2,705	$	1,138
U.S. Government and agency obligations
U.S. Treasury and agency obligations		374		852		584
U.S. Government residential mortgage-backed		1,477		1,546		1,792
U.S. Government commercial mortgage-backed		21		23		28
Total U.S. Government and agency obligations		1,872		2,421		2,404
Tax-exempt municipal securities
Pre-refunded		199		166		222
Insured		484		500		548
Other		2,376		2,472		2,188
Auction rate securities		9		13		13
Total tax-exempt municipal securities		3,068		3,151		2,971
Residential mortgage-backed
Prime residential mortgages		16		17		21
Alt-A residential mortgages		1		1		1
Total residential mortgage-backed		17		18		22
Commercial mortgage-backed		843		696		673
Asset-backed securities		29		41		63
Corporate securities
Financial services		772		730		825
Other		2,946		2,978		2,842
Total corporate securities		3,718		3,708		3,667
Total investment portfolio	$	11,482	$	12,740	$	10,938

S-20

Humana Inc.

Detail of Benefits Payable Balance and Year-to-Date Changes

Dollars in millions

	December 31, 2014			September 30, 2014			December 31, 2013
Detail of benefits payable
IBNR and other benefits payable (L)	$	3,622		$	3,747		$	3,199
Unprocessed claim inventories (M)		378			453			313
Processed claim inventories (N)		246			268			202
Payable to pharmacy benefit administrator (O)		229			208			179
Total Benefits Payable	$	4,475		$	4,676		$	3,893
	Year Ended December 31, 2014			Nine Months Ended September 30, 2014			Year Ended December 31, 2013
Year-to-date changes in benefits payable, excluding military services (P)
Balances at January 1, net	$	3,893		$	3,893		$	3,775
Acquisitions		—			—			5
Incurred related to:
Current year		38,641			28,827			32,711
Prior years (Q)		(518	)		(440	)		(474	)
Total incurred		38,123			28,387			32,237
Paid related to:
Current year		(34,357	)		(24,399	)		(29,103	)
Prior years		(3,262	)		(3,270	)		(3,021	)
Total paid		(37,619	)		(27,669	)		(32,124	)
Reinsurance recoverables		78			65			—
Balances at end of period	$	4,475		$	4,676		$	3,893
	Year Ended December 31, 2014			Nine Months Ended September 30, 2014			Year Ended December 31, 2013
Summary of Consolidated Benefit Expense:
Total benefit expense incurred, per above	$	38,123		$	28,387		$	32,237
Military services benefit expense		11			7			(27	)
Future policy benefit expense (R)		32			23			354
Consolidated Benefit Expense	$	38,166		$	28,417		$	32,564

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Humana Inc.

Benefits Payable Statistics (S)

Receipt Cycle Time (T)
	2014		2013		Change		Percentage Change
1st Quarter Average		13.6		12.5		1.1		8.8	%
2nd Quarter Average		13.5		13.1		0.4		3.1	%
3rd Quarter Average		13.4		13.4		—		0.0	%
4th Quarter Average		13.5		13.4		0.1		0.7	%
Full Year Average		13.5		13.1		0.4		3.1	%

Unprocessed Claims Inventories

Date	Estimated Valuation (millions)		Claim Item Counts (000s)		Number of Days on Hand
12/31/2012	$	302		1,061		4.1
3/31/2013	$	327		1,247		4.7
6/30/2013	$	380		1,274		4.7
9/30/2013	$	404		1,879		7.4
12/31/2013	$	313		1,240		4.5
3/31/2014	$	363		1,334		4.9
6/30/2014	$	400		1,422		4.5
9/30/2014	$	453		1,778		5.2
12/31/2014	$	378		1,819		5.1

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Humana Inc.

Benefits Payable Statistics (Continued) (S)

Days in Claims Payable (U)
Quarter Ended	Days in Claims Payable (DCP)		Change Last 4 Quarters			Percentage Change
12/31/2012		48.5		(4.0	)		-7.6	%
3/31/2013		49.0		(1.1	)		-2.2	%
6/30/2013		50.7		(0.3	)		-0.6	%
9/30/2013		49.5		(2.1	)		-4.1	%
12/31/2013		47.8		(0.7	)		-1.4	%
3/31/2014		48.0		(1.0	)		-2.0	%
6/30/2014		49.4		(1.3	)		-2.6	%
9/30/2014		47.5		(2.0	)		-4.0	%
12/31/2014		44.7		(3.1	)		-6.5	%

Year-to-Date Change in Days in Claims Payable (V)	YTD 4Q 2014			YTD 3Q 2014			YTD 4Q 2013
DCP - beginning of period		47.8			47.8			48.5
Components of change in DCP:
Change in unprocessed claims inventories		0.6			1.4			0.1
Change in processed claims inventories		0.4			0.7			(0.4	)
Change in pharmacy payment cutoff		—			0.1			0.1
Change in capitation/provider settlements		(3.8	)		(3.2	)		(0.3	)
All other		(0.3	)		0.7			(0.2	)
DCP - end of period		44.7			47.5			47.8

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Humana Inc.

Footnotes to Statistical Schedules and Supplementary Information

4Q14 Earnings Release

(A) The Medicaid and other category includes the company’s Medicaid business as well as the closed block of long-term care insurance policies.

(B) The ASO and other category is primarily comprised of ASO fees and other ancillary services fees.

(C) On January 1, 2014, the company made minor reclassifications to certain of its businesses from its Healthcare Services segment to its Employer Group segment to correspond with internal management reporting changes. The company’s reportable segments remain the same and prior period segment financial information has been recast to conform to the 2014 presentation.

(D) 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.

(E) 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.

(F) Includes Medicaid Temporary Assistance for Needy Families (TANF), which contracts are generally reinsured through partnering relationships, and Long-Term Support Services (LTSS) from state-based contracts.

(G) Other supplemental benefits include life, disability, and fixed benefit products including cancer and critical illness policies.

(H) 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).

(I) The majority of Military services revenues are generally not contracted on a per-member basis.

(J) Includes premiums associated with Puerto Rico Medicaid and the closed block of long-term care insurance policies as well as services revenue.

(K) Duration is the time-weighted average of the present value of the fixed income portfolio cash flows.

(L) IBNR represents an estimate of benefits expense payable for claims incurred but not reported (IBNR) at the balance sheet date. The level of IBNR is primarily impacted by membership levels, benefit claim trends and the receipt cycle time, which represents the length of time between when a claim is initially incurred and when the claim form is received (i.e. a shorter time span results in lower reserves for claims IBNR). Other benefits payable includes amounts payable to providers under capitation arrangements.

(M) Unprocessed claim inventories represent the estimated valuation of claims received but not yet fully processed.

(N) Processed claim inventories represent the estimated valuation of processed claims that are in the post-claim-adjudication process, which consists of operating functions such as audit and check batching and handling.

(O) The balance due to the company’s pharmacy benefit administrator fluctuates as a result of the number of business days in the last payment cycle of the month. Payment cycles are every 8 days (8^th, 16^th, and 24th of month) and the last day of the month.

(P) The table excludes activity associated with military services benefits payable related to the previous contract that expired March 31, 2012.

(Q) 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.

(R) Future policy benefit expense has a related liability classified as a long-term liability on the balance sheet.

(S) Benefits payable statistics represents fully-insured medical claims data and exclude military services claims data and specialty benefits.

(T) The receipt cycle time measures the average length of time between when a claim was initially incurred and when the claim form was received. Receipt cycle time data for the company’s largest claim processing platforms represent approximately 97% of the company’s fully-insured medical claims volume. Pharmacy and specialty claims, including dental, vision and other supplemental benefits, are excluded from this measurement.

(U) A common metric for monitoring benefits payable levels relative to the benefit expense is days in claims payable, or DCP, which represents the benefits payable at the end of the period divided by average benefits expense per day in the quarterly period. This metric excludes military services, Medicare stand-alone PDPs, and incremental benefits expense associated with changes in future policyholder benefits.

(V) DCP fluctuates due to a number of factors, the more significant of which are detailed in this roll forward. 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. This metric excludes military services, Medicare stand-alone PDPs, and incremental benefits expense associated with changes in future policyholder benefits.

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