Humana 2015 Annual Report Download - page 66
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58
Comparison of Results of Operations for 2014 and 2013
Certain financial data on a consolidated basis and for our segments was as follows for the years ended December 31,
2014 and 2013:
Consolidated
Change
2014 2013 Dollars Percentage
(dollars in millions, except per
common share results)
Revenues:
Premiums:
Retail $ 39,452 $ 31,922 $ 7,530 23.6 %
Group 6,456 6,237 219 3.5 %
Other Businesses 51 670 (619) (92.4)%
Total premiums 45,959 38,829 7,130 18.4 %
Services:
Retail 39 18 21 116.7 %
Group 763 735 28 3.8 %
Healthcare Services 1,353 1,350 3 0.2 %
Other Businesses 9 6 3 50.0 %
Total 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 — — %
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)%
Diluted earnings per common share $ 7.36 $ 7.73 $ (0.37) (4.8)%
Benefit ratio (a) 83.0% 83.9% (0.9)%
Operating cost ratio (b) 15.9% 15.5% 0.4 %
Effective tax rate 47.2% 35.9% 11.3 %
(a) Represents total benefits expense as a percentage of premiums revenue.
(b) Represents total operating costs, excluding depreciation and amortization, as a percentage of total revenues less
investment income.
Summary
Net income was $1.1 billion, or $7.36 per diluted common share, in 2014 compared to $1.2 billion, or $7.73 per
diluted common share, in 2013. Net income for 2014 includes expenses of $0.15 per diluted common share associated
with a loss on extinguishment of debt for the redemption of certain senior notes in 2014 and net income for 2013
includes benefits expense of $0.99 per diluted common share for reserve strengthening associated with our closed-