•Reports 3Q23 earnings per share (EPS) of $6.71 on a GAAP basis, Adjusted EPS of $7.78; reports YTD 2023 EPS of $24.26 on a GAAP basis, $26.10 on an Adjusted basis

•Revises FY 2023 EPS guidance to 'at least $26.31' on a GAAP basis, affirms FY 2023 Adjusted EPS of 'at least $28.25'

•Raises 2023 individual Medicare Advantage membership growth by 35,000 to 'approximately 860,000', or 19 percent growth over FY 2022 ending membership, meaningfully higher than industry growth

•Anticipates 2024 individual Medicare Advantage membership growth at or above industry growth level

•Achieves 94 percent of the company's Medicare Advantage members currently enrolled in 4-star and above contracts for 2024, an industry-leader among its publicly traded peers for the sixth consecutive year; 61 percent of members in 4.5 and 5-star contracts

Please refer to the tables above, as well as the consolidated and segment highlight sections in the detailed earnings release for additional discussion of the factors impacting the year-over-comparisons.

Prior period segment financial information has been recast to conform to Humana's recently revised segment presentation, as disclosed as part of the company's fourth quarter 2022 earnings release dated February 1, 2023. Additionally, 3Q22 and YTD 2022 Adjusted metrics have also been recast to exclude the impact of the exit of the employer group commercial medical products business as announced by Humana on February 23, 2023.

Humana’s full earnings press release, including the statistical pages, has been posted to the company’s Investor Relations site and may be accessed at https://humana.gcs-web.com/ or via a current report on Form 8-K filed by the company with the Securities and Exchange Commission this morning (available at www.sec.gov or on the company’s website).

•Amortization associated with identifiable intangibles - Since amortization varies based on the size and timing of acquisition activity, management believes this exclusion provides a more consistent and uniform indicator of performance from period to period. For all periods shown within this earnings release, GAAP measures affected include consolidated pretax results, EPS, and Insurance and CenterWell segments income from operations. The table below discloses respective period amortization expense for each segment.

•Put/call valuation adjustments associated with company’s non-consolidating minority interest investments - These amounts are the result of fair value measurements associated with our Primary Care Organization strategic partnership and are unrelated to the company's core business operations. For all periods shown within this earnings release, GAAP measures affected include consolidated pretax results and EPS.

•Transaction and integration costs - The transaction and integration costs primarily relate to the acquisition of Kindred at Home in 2021 and the subsequent divestiture of Gentiva (formerly Kindred) Hospice in 2022. For YTD 2023, 3Q22, and YTD 2022, GAAP measures affected include consolidated pretax results, EPS, and the consolidated operating cost ratio.

•Impact of exit of employer group commercial medical products business - Prior period segment financial information has been recast to exclude the impact of the exit of the employer group commercial medical products business as announced by Humana on February 23, 2023. For all periods shown within this earnings release, GAAP measures affected include consolidated pretax results, EPS, consolidated revenues, consolidated benefit expense ratio, consolidated operating cost ratio, Insurance segment revenues, Insurance segment benefit expense ratio, Insurance segment operating cost ratio, and Insurance segment income from operations.

•Accrued charge related to certain anticipated litigation expenses - This charge relates to certain anticipated expenses the company has accrued in connection with a legal matter. For 3Q23 and YTD 2023, GAAP measures affected include consolidated pretax results, EPS, the consolidated and Insurance segment operating cost ratios, and Insurance segment income from operations.

•Change in fair value of publicly-traded equity securities - These gains and losses are a result of market and economic conditions that are unrelated to the company's core business operations. For YTD 2023, 3Q22, and YTD 2022, GAAP measures affected include consolidated pretax results and EPS.

•Value creation initiatives - These charges relate to the company's ongoing initiative to drive additional value for the enterprise through cost saving, productivity initiatives, and value creation from previous investments, and primarily consist of asset impairment and severance charges. For all periods shown in this earnings release, GAAP measures affected in this release include consolidated pretax results, EPS, and the consolidated operating cost ratio.

•Gain on sale of Gentiva (formerly Kindred) Hospice - This gain related to the sale of the company's 60 percent ownership of Gentiva Hospice. For 3Q22 and YTD 3Q22, GAAP measures affected include consolidated pretax results and EPS.

•Cumulative net tax impact of non-GAAP adjustments - This adjustment represents the cumulative net impact of the corresponding tax benefit or expense related to the aforementioned items excluded from the applicable GAAP measures. For all periods presented in this earnings release, EPS is the sole GAAP measure affected.

Revenues - CONSOLIDATED (in millions)			3Q23			3Q22			YTD 2023			YTD 2022
GAAP			$26,423			$22,799			$79,912			$70,431
Change in fair market value of publicly-traded equity securities			—			(51)			(1)			119
Impact of exit of employer group commercial medical products business			(897)			(1,148)			(3,000)			(3,549)
Adjusted (non-GAAP)			$25,526			$21,600			$76,911			$67,001

Revenues - INSURANCE SEGMENT (in millions)			3Q23			3Q22			YTD 2023			YTD 2022
GAAP			$25,511			$21,743			$77,289			$67,242
Impact of exit of employer group commercial medical products business			(897)			(1,148)			(3,000)			(3,549)
Adjusted (non-GAAP)			$24,614			$20,595			$74,289			$63,693

(d) FY 2023 projected Adjusted results exclude the following:

•FY 2023 GAAP EPS excludes the YTD 2023 impact of fair value changes of the put/call options associated with Humana's non-consolidating minority interest investments as future value changes can not be estimated.

•The fair value of publicly-traded securities, their impact on GAAP EPS, and the related non-GAAP adjustment will fluctuate depending on the public trading value of the stock. The guidance set forth herein assumes no further change in the fair value of those investments, other than the YTD 2023 adjustment.

•Transaction and integration costs, the accrual related to certain anticipated litigation expenses, and value creation initiatives reflect the respective impact of YTD 2023 activity.

•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 involve extensive judgment, and have considerable inherent variability because they are extremely sensitive to changes in claim payment patterns and medical cost trends. Accordingly, Humana's reserves may be insufficient.

•If Humana fails to effectively implement its operational and strategic initiatives, including its Medicare initiatives, which are of particular importance given the concentration of the company's revenues in these products, state-based contract strategy, the growth of its CenterWell business, and its integrated care delivery model, the company’s business may be materially adversely affected. 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 maintain existing or implement new information systems, to protect Humana’s proprietary rights to its systems, or to defend against cyber-security attacks or prevent other privacy or data security incidents that result in security breaches that disrupt the company's operations or in the unintentional dissemination of sensitive personal information or proprietary or confidential information, the company’s business may be materially adversely affected.

•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.

•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 plans or retrospective recovery by CMS of previously paid premiums as a result of the final rule related to the risk adjustment data validation audit methodology published by CMS on January 30, 2023 (Final RADV Rule), which Humana believes fails to address adequately the statutory requirement of actuarial equivalence and violates the Administrative Procedure Act due to its failure to include a "Fee for Service Adjuster" could have a material adverse effect on the company's operating results, financial position and cash flows.

•Humana's business activities are subject to substantial government regulation. New laws or regulations, or legislative, judicial, or regulatory changes in existing laws or regulations or their manner of application could increase the company's cost of doing business and 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.

•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 faces significant competition in attracting and retaining talented employees. Further, managing succession for, and retention of, key executives is critical to the Company’s success, and its failure to do so could adversely affect the Company’s businesses, operating results and/or future performance.

•Humana’s pharmacy business is highly competitive and subjects it to regulations and supply chain risks 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.

•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.

•The spread of, and response to, the novel coronavirus, or COVID-19, underscores certain risks Humana faces, including those discussed above, and the ongoing, heightened uncertainty created by the pandemic precludes any prediction as to the ultimate adverse impact to Humana of COVID-19.

•Form 10-K for the year ended December 31, 2022;

•Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023; and

•Form 8-Ks filed during 2023.

Humana Inc. is committed to putting health first – for our teammates, our customers, and our company. Through our Humana insurance services, and our CenterWell health care services, we make it easier for the millions of people we serve to achieve their best health – delivering the care and service they need, when they need it. These efforts are leading to a better quality of life for people with Medicare, Medicaid, families, individuals, military service personnel, and communities at large. Learn more about what we offer at Humana.com and at CenterWell.com.

•Reports 3Q23 earnings per share (EPS) of $6.71 on a GAAP basis, Adjusted EPS of $7.78; reports YTD 2023 EPS of $24.26 on a GAAP basis, $26.10 on an Adjusted basis

•Revises FY 2023 EPS guidance to 'at least $26.31' on a GAAP basis, affirms FY 2023 Adjusted EPS of 'at least $28.25'

•Raises 2023 individual Medicare Advantage membership growth by 35,000 to 'approximately 860,000', or 19 percent growth over FY 2022 ending membership, meaningfully higher than industry growth

•Anticipates 2024 individual Medicare Advantage membership growth at or above industry growth level

•Achieves 94 percent of the company's Medicare Advantage members currently enrolled in 4-star and above contracts for 2024, an industry-leader among its publicly traded peers for the sixth consecutive year; 61 percent of members in 4.5 and 5-star contracts

Please refer to the tables above, as well as the consolidated and segment highlight sections that follow for additional discussion of the factors impacting the year-over-year comparisons.

Prior period segment financial information has been recast to conform to Humana's recently revised segment presentation, as disclosed as part of the company's fourth quarter 2022 earnings release dated February 1, 2023.

Additionally, 3Q22 and YTD 2022 Adjusted metrics have also been recast to exclude the impact of the exit of the employer group commercial medical products business as announced by Humana on February 23, 2023.

Additional FY 2023 guidance points are included on page 19 of this earnings release.

The favorable year-over-year quarter and YTD GAAP consolidated revenues comparisons were primarily driven by the following factors:

•individual Medicare Advantage and state-based contracts membership growth and

•higher per member individual Medicare Advantage premiums.

•the anticipated decline in year-over-year membership associated with the company's group commercial medical, group Medicare Advantage, and stand-alone PDP products and

•the impact of the divestiture of the company's 60 percent ownership of Gentiva (formerly Kindred) Hospice that was completed in August 2022, resulting in a partial quarter of revenues in 3Q22.

The year-over-year quarterly and YTD increases in the GAAP ratios reflect the following factors:

•investments in the benefit design of the company's Medicare Advantage products for 2023,

•continuation of elevated Medicare Advantage utilization trends initially discussed in the second quarter of 2023, combined with higher COVID-19 admissions in 3Q23 without the offsetting impact of lower non-COVID care, and

•the impact of continued strong individual Medicare Advantage growth following the previous Annual Election Period (AEP), including a higher-than-expected proportion of age-ins, which typically have a higher benefits expense ratio initially than the average new member.

•increased individual Medicare Advantage premiums and

•decreased average unit cost given the additional 20 percent payment on COVID-19 admissions during the Public Health Emergency (PHE), which ended May 11, 2023.

Additionally, the year-over-year YTD comparison was favorably impacted by higher favorable prior period medical claims reserve development (Prior Period Development).    

Furthermore, the 3Q23 and YTD 2023 ratios continue to reflect a shift in line of business mix, with growth in individual Medicare Advantage and state-based contracts and other membership, which can carry a higher benefits expense ratio.

The quarter and YTD decreases in the GAAP consolidated operating cost ratio from the respective periods in 2022 primarily related to the following:

•the divestiture of the company's 60 percent ownership of Gentiva (formerly Kindred) Hospice in August 2022; the business had a significantly higher operating cost ratio than the company's historical consolidated operating cost ratio,

•scale efficiencies associated with growth in the company's individual Medicare Advantage membership, and

•administrative cost efficiencies that resulted as part of the company's value creation initiatives, combined with a lesser impact from accelerated charges related to value creation initiatives in 3Q23 and YTD 2023 as compared

to the respective periods in 2022; the impact of the charges was recorded at the corporate level and not allocated to the segments.

•an increase in commissions for brokers related to the significant individual Medicare Advantage membership growth in 2023 and

•an accrual related to certain anticipated litigation expenses in the second and third quarters of 2023.

•Days in claims payable (DCP) of 43.1 days at September 30, 2023 represented an increase of 0.5 days from 42.6 days at June 30, 2023, and a decrease of 3.1 days from 46.2 days at September 30, 2022.

The 3.1-day year-over-year decrease was primarily driven by lower reserve requirements in provider-capitation accruals due to lower performance-based payment expectations, coupled with shifting utilization patterns from inpatient to non-inpatient service settings resulting in faster claims completion which lowers incurred but not reported (IBNR) claims.

•Humana's debt-to-total capitalization at September 30, 2023 increased 10 basis points to 41.1 percent from 41.0 percent at June 30, 2023 primarily resulting from the impact of open market share repurchases, partially offset by 3Q23 net earnings.

YTD 2023 and YTD 2022 GAAP operating cash flows were significantly impacted by the timing of the monthly premium payment from CMS, with the company receiving the respective October Medicare premium payments early in September of each year. The company received its $7.1 billion October 2023 Medicare premium payment early in September 2023, while it received the October 2022 payment of $5.8 billion in September 2022. This resulted in ten payments being received in YTD 2023 and in YTD 2022.

In addition, the year-over-year comparison in operating cash flows further reflected higher earnings in YTD 2023 compared to YTD 2022.

On October 31, 2023, the company's Board of Directors declared a cash dividend of $0.885 per share payable on January 26, 2024 to stockholders of record on December 29, 2023.

Under Rule 10b5-1, the company began initiating open market repurchases in March 2023 as part of the Board of Directors' February 2023 $3.0 billion stock repurchase authorization.

The year-over-year quarter and YTD increases in Insurance segment GAAP revenues primarily reflect the following items:

•individual Medicare Advantage and state-based contracts membership growth and

•higher per member individual Medicare Advantage premiums.

These factors were partially offset by the anticipated decline in year-over-year membership associated with the company's group commercial medical, group Medicare Advantage, and stand-alone PDP products.

The year-over-year quarter and YTD increases in the segment's GAAP ratios from the respective periods in 2022 reflect the following:

•investments in the benefit design of the company's Medicare Advantage products for 2023,

•continuation of elevated Medicare Advantage utilization trends initially discussed in the second quarter of 2023, combined with higher COVID-19 admissions in 3Q23 without the offsetting impact of lower non-COVID care, and

•the impact of continued strong individual Medicare Advantage growth following the previous AEP, including a higher-than-expected proportion of age-ins, which typically have a higher benefits expense ratio initially than the average new member.

•increased individual Medicare Advantage premiums and

•decreased average unit cost given the additional 20 percent payment on COVID-19 admissions during the PHE, which ended May 11, 2023.

Additionally, the year-over-year YTD comparison was favorably impacted by higher favorable Prior Period Development.    

Furthermore, the 3Q23 and YTD 2023 ratios continue to reflect a shift in line of business mix within the segment, with growth in individual Medicare Advantage and state-based contracts and other membership, which can carry a higher benefits expense ratio.

The decrease in the segment's 3Q23 operating cost ratio from 3Q22 primarily reflects the following:

•scale efficiencies associated with growth in the company's individual Medicare Advantage membership and

•administrative cost efficiencies that resulted as part of the company's value creation initiatives.

•an increase in commissions for brokers related to the significant individual Medicare Advantage membership growth in 2023 and

•an accrual related to certain anticipated litigation expenses in 2023.

The slight year-over-year YTD increase primarily reflects the same factors impacting the quarterly comparison but with a net negative impact.

Individual Medicare Advantage membership includes 868,000 Dual Eligible Special Need Plans (D-SNP) members as of September 30, 2023, a net increase of 201,000, or 30 percent, from 667,000 as of September 30, 2022, and up 199,100, or 30 percent, from 668,900 as of December 31, 2022.

State-based contracts and other membership as of September 30, 2023 reflects the impact of membership additions associated with the implementation of the Louisiana (effective January 2023) and Ohio contracts (effective February 2023), partially offset by ending the suspension of state eligibility redetermination efforts previously enacted as part of the PHE.

This segment includes pharmacy (excluding the PBM operations), primary care, and home solutions. The segment also includes the impact of non-consolidating minority interest investments related to the company's strategic partnerships with Welsh, Carson, Anderson & Stowe (WCAS) to develop and operate senior-focused, payor-agnostic, primary care centers, as well as the Gentiva (formerly Kindred) Hospice operations. Services offered by this segment are designed to enhance the overall healthcare experience. These services may lead to lower utilization associated with improved member health and/or lower drug costs.

CenterWell segment revenues increased in 3Q23 and YTD 2023 compared to the respective periods in 2022; these increases were impacted by the following factors:

•the company's individual Medicare Advantage membership growth, which led to higher intersegment Pharmacy Solutions revenues,

•higher revenues associated with growth in the company's Primary Care business, and

•greater intersegment revenues associated with the Home Solutions business as a result of the expansion of the value-based care home model in 2023 compared to 2022.

These increases were partially offset by the divestiture of the company's 60 percent ownership of Gentiva (formerly Kindred) Hospice in August 2022, resulting in a partial quarter of revenues in 3Q22.

The year-over-year decrease in the segment's 3Q23 operating cost ratio compared to the respective period in 2022 primarily resulted from the following factors:

•an improving ratio in the company's Primary Care business driven by year-over-year medical costs favorability and

•administrative cost efficiencies related to the Pharmacy Solutions business.

•the previously discussed divestiture of the company's 60 percent ownership of Gentiva (formerly Kindred) Hospice operations, which had a lower operating cost ratio than other businesses within the segment,

•the expansion of the value-based care model within the Home Solutions business, which carries a higher operating cost ratio compared to the core fee-for-service business, along with growth in Medicare Advantage episodes in the core fee-for-service business, and

•continued investments within the Home Solutions business to abate the pressures of the current nursing labor environment.

The year-over-year YTD increase primarily reflects the same factors impacting the quarterly comparison but with a net negative impact.

See additional operational metrics for the CenterWell segment on pages S-14 through S-16 of the statistical supplement included in this earnings release.

•Amortization associated with identifiable intangibles - Since amortization varies based on the size and timing of acquisition activity, management believes this exclusion provides a more consistent and uniform indicator of performance from period to period. For all periods shown within this earnings release, GAAP measures affected include consolidated pretax results, EPS, and Insurance and CenterWell segments income from operations. The table below discloses respective period amortization expense for each segment.

•Put/call valuation adjustments associated with company’s non-consolidating minority interest investments - These amounts are the result of fair value measurements associated with our Primary Care Organization strategic partnership and are unrelated to the company's core business operations. For all periods shown within this earnings release, GAAP measures affected include consolidated pretax results and EPS.

•Transaction and integration costs - The transaction and integration costs primarily relate to the acquisition of Kindred at Home in 2021 and the subsequent divestiture of Gentiva (formerly Kindred) Hospice in 2022. For YTD 2023, 3Q22, and YTD 2022, GAAP measures affected include consolidated pretax results, EPS, and the consolidated operating cost ratio.

•Impact of exit of employer group commercial medical products business - Prior period segment financial information has been recast to exclude the impact of the exit of the employer group commercial medical products business as announced by Humana on February 23, 2023. For all periods shown within this earnings release, GAAP measures affected include consolidated pretax results, EPS, consolidated revenues, consolidated benefit expense ratio, consolidated operating cost ratio, Insurance segment revenues, Insurance segment benefit expense ratio, Insurance segment operating cost ratio, and Insurance segment income from operations.

•Accrued charge related to certain anticipated litigation expenses - This charge relates to certain anticipated expenses the company has accrued in connection with a legal matter. For 3Q23 and YTD 2023, GAAP measures affected include consolidated pretax results, EPS, the consolidated and Insurance segment operating cost ratios, and Insurance segment income from operations.

•Change in fair value of publicly-traded equity securities - These gains and losses are a result of market and economic conditions that are unrelated to the company's core business operations. For YTD 2023, 3Q22, and YTD 2022, GAAP measures affected include consolidated pretax results and EPS.

•Value creation initiatives - These charges relate to the company's ongoing initiative to drive additional value for the enterprise through cost saving, productivity initiatives, and value creation from previous investments, and primarily consist of asset impairment and severance charges. For all periods shown in this earnings release, GAAP measures affected in this release include consolidated pretax results, EPS, and the consolidated operating cost ratio.

•Gain on sale of Gentiva (formerly Kindred) Hospice - This gain related to the sale of the company's 60 percent ownership of Gentiva Hospice. For 3Q22 and YTD 3Q22, GAAP measures affected include consolidated pretax results and EPS.

•Cumulative net tax impact of non-GAAP adjustments - This adjustment represents the cumulative net impact of the corresponding tax benefit or expense related to the aforementioned items excluded from the applicable GAAP measures. For all periods presented in this earnings release, EPS is the sole GAAP measure affected.

Income from operations - CENTERWELL SEGMENT (in millions)			3Q23			3Q22			YTD 2023			YTD 2022
GAAP			$400			$300			$1,017			$1,028
Depreciation and amortization expense			53			45			152			136
Adjusted (non-GAAP)			$453			$345			$1,169			$1,164

(d) FY 2023 projected Adjusted results exclude the following:

•FY 2023 GAAP EPS excludes the YTD 2023 impact of fair value changes of the put/call options associated with Humana's non-consolidating minority interest investments as future value changes can not be estimated.

•The fair value of publicly-traded securities, their impact on GAAP EPS, and the related non-GAAP adjustment will fluctuate depending on the public trading value of the stock. The guidance set forth herein assumes no further change in the fair value of those investments, other than the YTD 2023 adjustment.

•Transaction and integration costs, the accrual related to certain anticipated litigation expenses, and value creation initiatives reflect the respective impact of YTD 2023 activity.

(e) Prior Period Development related to the employer group commercial business:

(f) The company provides a full range of insured specialty products including dental, vision, and life insurance benefits marketed to individuals and groups. Members included in these products may not be unique to each product since members have the ability to enroll in a medical product and one or more specialty products.

•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 involve extensive judgment, and have considerable inherent variability because they are extremely sensitive to changes in claim payment patterns and medical cost trends. Accordingly, Humana's reserves may be insufficient.

•If Humana fails to effectively implement its operational and strategic initiatives, including its Medicare initiatives, which are of particular importance given the concentration of the company's revenues in these products, state-based contract strategy, the growth of its CenterWell business, and its integrated care delivery model, the company’s business may be materially adversely affected. 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 maintain existing or implement new information systems, to protect Humana’s proprietary rights to its systems, or to defend against cyber-security attacks or prevent other privacy or data security incidents that result in security breaches that disrupt the company's operations or in the unintentional dissemination of sensitive personal information or proprietary or confidential information, the company’s business may be materially adversely affected.

•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.

•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 plans or retrospective recovery by CMS of previously paid premiums as a result of the final rule related to the risk adjustment data validation audit methodology published by CMS on January 30, 2023 (Final RADV Rule), which Humana believes fails to address adequately the statutory requirement of actuarial equivalence and violates the Administrative Procedure Act due to its failure to include a "Fee for Service Adjuster" could have a material adverse effect on the company's operating results, financial position and cash flows.

•Humana's business activities are subject to substantial government regulation. New laws or regulations, or legislative, judicial, or regulatory changes in existing laws or regulations or their manner of application could increase the company's cost of doing business and 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.

•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 faces significant competition in attracting and retaining talented employees. Further, managing succession for, and retention of, key executives is critical to the Company’s success, and its failure to do so could adversely affect the Company’s businesses, operating results and/or future performance.

•Humana’s pharmacy business is highly competitive and subjects it to regulations and supply chain risks 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.

•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.

•The spread of, and response to, the novel coronavirus, or COVID-19, underscores certain risks Humana faces, including those discussed above, and the ongoing, heightened uncertainty created by the pandemic precludes any prediction as to the ultimate adverse impact to Humana of COVID-19.

•Form 10-K for the year ended December 31, 2022;

•Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023; and

•Form 8-Ks filed during 2023.

Humana Inc. is committed to putting health first – for our teammates, our customers, and our company. Through our Humana insurance services, and our CenterWell health care services, we make it easier for the millions of people we serve to achieve their best health – delivering the care and service they need, when they need it.

These efforts are leading to a better quality of life for people with Medicare, Medicaid, families, individuals, military service personnel, and communities at large. Learn more about what we offer at Humana.com and at CenterWell.com.

nm = not meaningful

Consolidated Balance Sheets (Unaudited)

Consolidated Statements of Cash Flows (Unaudited) Dollars in millions

			For the nine months ended September 30,
			2023			2022
Cash flows from operating activities
Net income			$	3,024		$	2,820
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of Gentiva (formerly Kindred) Hospice			—			(240)
Loss on investment securities, net			49			136
Equity in net losses (earnings)			39			(1)
Impairment of property and equipment			31			144
Depreciation			628			555
Amortization			51			73
Stock-based compensation			142			173
Deferred income taxes			—			(33)
Changes in operating assets and liabilities, net of effect of businesses acquired and dispositions:
Receivables			(126)			11
Other assets			(935)			(465)
Benefits payable			870			948
Other liabilities			39			(195)
Unearned revenues			7,250			5,758
Other, net			53			30
Net cash provided by operating activities			11,115			9,714
Cash flows from investing activities
Acquisitions, net of cash and cash equivalents acquired			(223)			(293)
Proceeds from sale of Gentiva (formerly Kindred) Hospice, net			—			2,708
Purchases of property and equipment, net			(721)			(862)
Purchases of investment securities			(3,366)			(4,740)
Maturities of investment securities			885			1,214
Proceeds from sales of investment securities			815			1,979
Net cash (used in) provided by investing activities			(2,610)			6
Cash flows from financing activities
Receipts from contract deposits, net			2,481			3,787
Proceeds from issuance of senior notes			1,215			744
Repayment of senior notes			(1,719)			—
Proceeds from the issuance (repayments) of commercial paper, net			1,618			(660)
Repayment of term loan			(500)			(2,000)
Debt issue costs			(4)			(2)
Change in book overdraft			(52)			(89)
Common stock repurchases			(1,002)			(1,032)
Dividends paid			(320)			(291)
Other			(135)			(13)
Net cash provided by financing activities			1,582			444
Increase in cash and cash equivalents			10,087			10,164
Cash and cash equivalents at beginning of period			5,061			3,394
Cash and cash equivalents at end of period			$	15,148		$	13,558