•Reports 4Q23 loss per share of $4.42 on a GAAP basis, Adjusted loss per share of $0.11; reports FY 2023 earnings per share (EPS) of $20.00 on a GAAP basis, $26.09 on an Adjusted basis

•4Q23 results reflect additional increase in Medicare Advantage medical cost trends, driven by higher than anticipated inpatient utilization, primarily for the months of November and December, and a further increase in non-inpatient trends

•Announces initial FY 2024 EPS guidance of 'approximately $14.87' on a GAAP basis, 'approximately $16.00' on an Adjusted basis; assumes the higher Medicare Advantage medical costs experienced in 4Q23 persist throughout 2024

•Affirms 2024 individual Medicare Advantage annual membership growth of approximately 100,000 or 1.8 percent

•Publishes prepared management remarks to Investor Relations page of www.humana.com ahead of this morning's 9:00 a.m. ET question and answer session to discuss its financial results for the quarter and expectations for future earnings

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.

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 the company's 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 4Q22, FY 2022, and FY 2023, GAAP measures affected include consolidated pretax results, EPS, and the consolidated operating cost ratio.

•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 4Q22, FY 2022, and FY 2023, GAAP measures affected include consolidated pretax results, EPS, and consolidated revenues (specifically investment income).

•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 FY 2023, GAAP measures affected include consolidated pretax results, EPS, the consolidated and Insurance segment operating cost ratios, and Insurance segment income from operations.

•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.

•Impairment charges - The company recognized non-cash impairment charges in 4Q23 related to (1) certain indefinite-lived intangible assets based on the company's estimate of future financial performance in certain state markets and (2) investments in certain joint ventures for which the company held minority ownership interests that were deemed to be unrecoverable based on recent market activity. These charges were recorded at the corporate level and not allocated to the segments. For 4Q23 and FY 2023, GAAP measures affected include consolidated pretax results, EPS, consolidated revenues (specifically investment income related to the joint venture investments), and the consolidated operating cost ratio.

•Adjustment (gain) on sale of Gentiva (formerly Kindred) Hospice - Reflects the adjustment (gain) related to the sale of the company's 60 percent ownership of Gentiva (formerly Kindred) Hospice. For 4Q22 and FY 2022, 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)			4Q23			4Q22			FY 2023			FY 2022
GAAP			$26,462			$22,439			$106,374			$92,870
Change in fair market value of publicly-traded equity securities			—			4			(1)			123
Impact of exit of employer group commercial medical products business			(764)			(1,140)			(3,764)			(4,689)
Impairment charges			36			—			36			—
Adjusted (non-GAAP)			$25,734			$21,303			$102,645			$88,304

Revenues - INSURANCE SEGMENT (in millions)			4Q23			4Q22			FY 2023			FY 2022
GAAP			$25,565			$21,599			$102,854			$88,841
Impact of exit of employer group commercial medical products business			(764)			(1,140)			(3,764)			(4,689)
Adjusted (non-GAAP)			$24,801			$20,459			$99,090			$84,152

•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, June 30, 2023, and September 30, 2023; and

•Form 8-Ks filed during 2023 and 2024.

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.

n e w s r e l e a s e

                                        

•Reports 4Q23 loss per share of $4.42 on a GAAP basis, Adjusted loss per share of $0.11; reports FY 2023 earnings per share (EPS) of $20.00 on a GAAP basis, $26.09 on an Adjusted basis

•4Q23 results reflect additional increase in Medicare Advantage medical cost trends, driven by higher than anticipated inpatient utilization, primarily for the months of November and December, and a further increase in non-inpatient trends

•Announces initial FY 2024 EPS guidance of 'approximately $14.87' on a GAAP basis, 'approximately $16.00' on an Adjusted basis; assumes the higher Medicare Advantage medical costs experienced in 4Q23 persist throughout 2024

•Affirms 2024 individual Medicare Advantage annual membership growth of approximately 100,000 or 1.8 percent

•Publishes prepared management remarks to Investor Relations page of www.humana.com ahead of this morning's 9:00 a.m. ET question and answer session to discuss its financial results for the quarter and expectations for future earnings

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.

Additional FY 2024 guidance points are included on page 18 of this earnings release.

The favorable year-over-year quarter and FY 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.

These increases 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.

Additionally, the year-over-year FY GAAP comparison was negatively impacted by the phase-out of COVID-19 sequestration relief in 2022, as well as the impact from the divestiture of the company's 60 percent ownership of Gentiva (formerly Kindred at Home) which was completed in August 2022.

The year-over-year quarterly and FY 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 as previously discussed, which further increased in 4Q23, driven by higher than anticipated inpatient utilization, primarily for the months of November and December, as well as a further increase in non-inpatient trends, predominantly in the categories of physician, outpatient surgeries and supplemental benefits, which emerged with the November and December paid claims data (received throughout December and January, respectively), and

•the impact of continued strong individual Medicare Advantage growth following the 2023 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,

•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, and

•higher favorable prior period medical claims reserve development (Prior Period Development) in 2023.    

Furthermore, the 4Q23 and FY 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 FY year-over-year decreases in the GAAP consolidated operating cost ratio from the respective periods in 2022 primarily related to the following:

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

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

•the impact of significantly reduced compensation accruals in 2023 for the annual incentive plan offered to employees across all levels of the company, in accordance with plan requirements, as the company's 2023 performance was negatively impacted by the previously-discussed higher Medicare Advantage utilization trends.

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

•the impact from accelerated charges related to value creation initiatives in 2023 compared to 2022; the impact of these charges was recorded at the corporate level and not allocated to the segments, and

•impairment charges expensed in 4Q23.

Furthermore, the year-over-year FY GAAP comparison was favorably impacted by 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. Additionally, the year-over-year FY GAAP comparison was negatively impacted by the phase-out of COVID-19 sequestration relief in 2022 and an accrual recorded in FY 2023 related to certain anticipated litigation expenses.

•Days in claims payable (DCP) of 41.4 days at December 31, 2023 represented a decrease of 1.7 days from 43.1 days at September 30, 2023, and a decrease of 4.5 days from 45.9 days at December 31, 2022.

The 1.7 day sequential decline was primarily driven by lower reserve requirements in provider-capitation accruals due to lower performance-based payment expectations.

The 4.5 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 higher overall utilization and 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 December 31, 2023 increased 70 basis points to 41.8 percent from 41.1 percent at September 30, 2023 primarily driven by a decrease in total capitalization as a result of 4Q23 open market share repurchases and the 4Q23 net loss, combined with the previously disclosed $1.35 billion issuance of senior notes in November 2023. These factors were partially offset by a declining commercial paper balance in 4Q23.

The year-over-year FY decline in operating cash flows primarily reflected lower FY 2023 earnings compared to FY 2022, combined the unfavorable impact of working capital changes.

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 FY increases in Insurance segment GAAP revenues from the respective periods in 2022 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.

Additionally, the year-over-year FY GAAP comparison was negatively impacted by the phase-out of COVID-19 sequestration relief in 2022.

The year-over-year quarter and FY 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 as previously discussed, which further increased in 4Q23, driven by higher than anticipated inpatient utilization, primarily for the months of November and December, as well as a further increase in non-inpatient trends, predominantly in the categories of physician, outpatient surgeries and supplemental benefits, which emerged with the November and December paid claims data (received throughout December and January, respectively), and

•the impact of continued strong individual Medicare Advantage growth following the 2023 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,

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

•higher favorable Prior Period Development in 2023.

Furthermore, the 4Q23 and FY 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 year-over-year quarter and FY decreases in the segment's operating cost ratio from the respective periods in 2022 primarily reflect the following:

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

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

•the impact of significantly reduced compensation accruals in 2023 for the annual incentive plan offered to employees across all levels of the company, in accordance with plan requirements, as the company's 2023 performance was negatively impacted by the previously-discussed higher Medicare Advantage utilization trends.

These factors were partially offset by an increase in commissions for brokers related to the significant individual Medicare Advantage membership growth in 2023.

Additionally, the year-over-year FY GAAP comparison was negatively impacted by the phase-out of COVID-19 sequestration relief in 2022 and an accrual recorded in FY 2023 related to certain anticipated litigation expenses.

Individual Medicare Advantage membership includes 871,300 Dual Eligible Special Need Plans (D-SNP) members as of December 31, 2023, a net increase of 202,400, or 30 percent, from 668,900 as of December 31, 2022, and up 3,300, or less than 1 percent, from 868,000 as of September 30, 2023.

State-based contracts and other membership in 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.

January 2024 individual Medicare Advantage membership approximated 5,531,100, up approximately 122,200, or 2 percent, from December 31, 2023, reflecting net membership additions during the recently completed 2024 AEP. Included within this membership is approximately 915,400 D-SNP members, an increase of 44,100, or 5 percent, from December 31, 2023.

January 2024 group Medicare Advantage membership approximated 552,700, up 43,100 approximately, or 8 percent, from December 31, 2023, reflecting net membership additions during the 2024 selling season.

January 2024 stand-alone PDP membership approximated 2,378,100, down approximately 471,000, or 17 percent, from December 31, 2023, reflecting net membership losses during the recently completed 2024 AEP.

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 4Q23 and FY 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.

Additionally, the FY comparison was negatively impacted by the divestiture of the company's 60 percent ownership of Gentiva (formerly Kindred) Hospice in August 2022.

The year-over-year quarter and FY decreases in the segment's operating cost ratio compared to the respective periods 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,

•administrative cost efficiencies related to the Pharmacy Solutions business, and

•the impact of significantly reduced compensation accruals in 2023 for the annual incentive plan offered to employees across all levels of the company, in accordance with plan requirements, as the company's 2023 performance was negatively impacted by the previously-discussed higher Medicare Advantage utilization trends.

•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.

In addition, the year-over-year FY comparison was negatively impacted by the 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.

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 the company's 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 4Q22, FY 2022, and FY 2023, GAAP measures affected include consolidated pretax results, EPS, and the consolidated operating cost ratio.

•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 4Q22, FY 2022, and FY 2023, GAAP measures affected include consolidated pretax results, EPS, and consolidated revenues (specifically investment income).

•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 FY 2023, GAAP measures affected include consolidated pretax results, EPS, the consolidated and Insurance segment operating cost ratios, and Insurance segment income from operations.

•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.

•Impairment charges - The company recognized non-cash impairment charges in 4Q23 related to (1) certain indefinite-lived intangible assets based on the company's estimate of future financial performance in certain state markets and (2) investments in certain joint ventures for which the company held minority ownership interests that were deemed to be unrecoverable based on recent market activity. These charges were recorded at the corporate level and not allocated to the segments. For 4Q23 and FY 2023, GAAP measures affected include consolidated pretax results, EPS, consolidated revenues (specifically investment income related to the joint venture investments), and the consolidated operating cost ratio.

•Adjustment (gain) on sale of Gentiva (formerly Kindred) Hospice - Reflects the adjustment (gain) related to the sale of the company's 60 percent ownership of Gentiva (formerly Kindred) Hospice. For 4Q22 and FY 2022, 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)			4Q23			4Q22			FY 2023			FY 2022
GAAP			$387			$263			$1,404			$1,291
Depreciation and amortization expense			58			45			210			181
Adjusted (non-GAAP)			$445			$308			$1,614			$1,472

(d) Prior Period Development related to the employer group commercial medical products business:

(e) 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, June 30, 2023, and September 30, 2023; and

•Form 8-Ks filed during 2023 and 2024.

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.

Consolidated Balance Sheets (Unaudited)

Consolidated Statements of Cash Flows (Unaudited) Dollars in millions

			For the year ended December 31,
			2023			2022
Cash flows from operating activities
Net income			$	2,484		$	2,802
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of Gentiva (formerly Kindred) Hospice			—			(237)
Loss on investment securities, net			54			205
Equity in net losses			63			4
Impairment of property and equipment			206			248
Intangible asset impairment			55			—
Depreciation			850			749
Amortization			67			96
Stock-based compensation			175			216
Deferred income taxes			(167)			(100)
Changes in operating assets and liabilities, net of effect of businesses acquired and dispositions:
Receivables			(337)			(54)
Other assets			(1,318)			(463)
Benefits payable			915			975
Other liabilities			841			44
Unearned revenues			(20)			32
Other, net			113			70
Net cash provided by operating activities			3,981			4,587
Cash flows from investing activities
Acquisitions, net of cash and cash equivalents acquired			(233)			(337)
Proceeds from sale of Gentiva (formerly Kindred) Hospice, net			—			2,701
Purchases of property and equipment			(1,004)			(1,137)
Proceeds from sale of property and equipment			210			17
Purchases of investment securities			(7,552)			(6,049)
Maturities of investment securities			1,292			1,365
Proceeds from sales of investment securities			3,795			2,434
Net cash used in investing activities			(3,492)			(1,006)
Cash flows from financing activities
Receipts from contract deposits, net			828			1,993
Proceeds from issuance of senior notes			2,544			1,982
Repayment of senior notes			(1,832)			(1,000)
Repayments (proceeds) from the issuance of commercial paper, net			211			(376)
Proceeds from short-term borrowings			100			—
Repayments of short-term borrowings			(100)			—
Repayment of term loan			(500)			(2,000)
Debt issue costs			(7)			(6)
Change in book overdraft			55			(28)
Common stock repurchases			(1,573)			(2,096)
Dividends paid			(431)			(392)
Other			(151)			9
Net cash used in financing activities			(856)			(1,914)
(Decrease) increase in cash and cash equivalents			(367)			1,667
Cash and cash equivalents at beginning of period			5,061			3,394
Cash and cash equivalents at end of period			$	4,694		$	5,061