Stock Analysis on Net
Stock Analysis on Net

Humana Inc. (NYSE:HUM)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Humana Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Federal 915 755 466 1,019 560
States and Puerto Rico 85 107 4 93 41
Current provision 1,000 862 470 1,112 601
Deferred expense (benefit) (164) (100) 15 195 162
Provision for income taxes 836 762 485 1,307 763

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Current provision Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Humana Inc. current provision increased from 2021 to 2022 and from 2022 to 2023.
Deferred expense (benefit) Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Humana Inc. deferred expense (benefit) decreased from 2021 to 2022 and from 2022 to 2023.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Humana Inc. provision for income taxes increased from 2021 to 2022 and from 2022 to 2023.

Effective Income Tax Rate (EITR)

Humana Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Federal statutory tax rate 21.00% 21.00% 21.00% 21.00% 21.00%
Effective income tax rate 25.18% 21.38% 14.19% 27.96% 21.99%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Effective income tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Humana Inc. effective income tax rate increased from 2021 to 2022 and from 2022 to 2023.

Components of Deferred Tax Assets and Liabilities

Humana Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net operating loss carryforward 84 105 291 32 42
Compensation and other accrued expense 218 158 186 171 111
Benefits payable 150 103 67 87 89
Deferred acquisition costs 43 43 33 26 22
Jobs tax credits — 22 33 — —
Other 16 16 25 11 8
Unearned revenues 5 7 8 12 8
Capital loss carryforward — — — — 1
Investment securities 419 454 — — —
Deferred income tax assets 935 908 643 339 281
Valuation allowance (73) (57) (65) (37) (45)
Deferred income tax assets, net of valuation allowance 862 851 578 302 236
Depreciable property and intangible assets (642) (740) (1,072) (449) (329)
Prepaid expenses (156) (132) (102) (91) (64)
Investment securities — — (98) (418) (181)
Other (16) (6) (4) (3) (3)
Deferred income tax liabilities (814) (878) (1,276) (961) (577)
Net deferred income tax assets (liabilities) 48 (27) (698) (659) (341)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Deferred income tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Humana Inc. deferred income tax assets increased from 2021 to 2022 and from 2022 to 2023.
Deferred income tax assets, net of valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Humana Inc. deferred income tax assets, net of valuation allowance increased from 2021 to 2022 and from 2022 to 2023.
Net deferred income tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Humana Inc. net deferred income tax assets (liabilities) increased from 2021 to 2022 and from 2022 to 2023.

Deferred Tax Assets and Liabilities, Classification

Humana Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Deferred income tax assets (classified as Other long-term assets) 48 — — — —
Deferred income tax liabilities (classified as Other long-term liabilities) — 27 698 659 341

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
Deferred income tax assets (classified as Other long-term assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.
Deferred income tax liabilities (classified as Other long-term liabilities) Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Humana Inc. deferred income tax liabilities (classified as Other long-term liabilities) decreased from 2021 to 2022 and from 2022 to 2023.

Adjustments to Financial Statements: Removal of Deferred Taxes

Humana Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 47,065 43,055 44,358 34,969 29,074
Less: Noncurrent deferred tax assets, net 48 — — — —
Total assets (adjusted) 47,017 43,055 44,358 34,969 29,074
Adjustment to Total Liabilities
Total liabilities (as reported) 30,747 27,685 28,255 21,241 17,037
Less: Noncurrent deferred tax liabilities, net — 27 698 659 341
Total liabilities (adjusted) 30,747 27,658 27,557 20,582 16,696
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 16,262 15,311 16,080 13,728 12,037
Less: Net deferred tax assets (liabilities) 48 (27) (698) (659) (341)
Stockholders’ equity (adjusted) 16,214 15,338 16,778 14,387 12,378
Adjustment to Net Income Attributable To Humana
Net income attributable to Humana (as reported) 2,489 2,806 2,933 3,367 2,707
Add: Deferred income tax expense (benefit) (164) (100) 15 195 162
Net income attributable to Humana (adjusted) 2,325 2,706 2,948 3,562 2,869

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Humana Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Humana Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 2.36% 3.03% 3.54% 4.43% 4.20%
Adjusted net profit margin 2.21% 2.93% 3.56% 4.69% 4.46%
Total Asset Turnover
Reported total asset turnover 2.24 2.15 1.87 2.17 2.21
Adjusted total asset turnover 2.24 2.15 1.87 2.17 2.21
Financial Leverage
Reported financial leverage 2.89 2.81 2.76 2.55 2.42
Adjusted financial leverage 2.90 2.81 2.64 2.43 2.35
Return on Equity (ROE)
Reported ROE 15.31% 18.33% 18.24% 24.53% 22.49%
Adjusted ROE 14.34% 17.64% 17.57% 24.76% 23.18%
Return on Assets (ROA)
Reported ROA 5.29% 6.52% 6.61% 9.63% 9.31%
Adjusted ROA 4.95% 6.28% 6.65% 10.19% 9.87%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Humana Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Humana Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Humana Inc. adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Humana Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Humana Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

Humana Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Humana 2,489 2,806 2,933 3,367 2,707
External revenues 105,305 92,488 82,877 76,001 64,387
Profitability Ratio
Net profit margin1 2.36% 3.03% 3.54% 4.43% 4.20%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Humana 2,325 2,706 2,948 3,562 2,869
External revenues 105,305 92,488 82,877 76,001 64,387
Profitability Ratio
Adjusted net profit margin2 2.21% 2.93% 3.56% 4.69% 4.46%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Net profit margin = 100 × Net income attributable to Humana ÷ External revenues
= 100 × 2,489 ÷ 105,305 = 2.36%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Humana ÷ External revenues
= 100 × 2,325 ÷ 105,305 = 2.21%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Humana Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
External revenues 105,305 92,488 82,877 76,001 64,387
Total assets 47,065 43,055 44,358 34,969 29,074
Activity Ratio
Total asset turnover1 2.24 2.15 1.87 2.17 2.21
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
External revenues 105,305 92,488 82,877 76,001 64,387
Adjusted total assets 47,017 43,055 44,358 34,969 29,074
Activity Ratio
Adjusted total asset turnover2 2.24 2.15 1.87 2.17 2.21

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = External revenues ÷ Total assets
= 105,305 ÷ 47,065 = 2.24

2 Adjusted total asset turnover = External revenues ÷ Adjusted total assets
= 105,305 ÷ 47,017 = 2.24

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Humana Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 47,065 43,055 44,358 34,969 29,074
Stockholders’ equity 16,262 15,311 16,080 13,728 12,037
Solvency Ratio
Financial leverage1 2.89 2.81 2.76 2.55 2.42
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 47,017 43,055 44,358 34,969 29,074
Adjusted stockholders’ equity 16,214 15,338 16,778 14,387 12,378
Solvency Ratio
Adjusted financial leverage2 2.90 2.81 2.64 2.43 2.35

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 47,065 ÷ 16,262 = 2.89

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 47,017 ÷ 16,214 = 2.90

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Humana Inc. adjusted financial leverage ratio increased from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Humana 2,489 2,806 2,933 3,367 2,707
Stockholders’ equity 16,262 15,311 16,080 13,728 12,037
Profitability Ratio
ROE1 15.31% 18.33% 18.24% 24.53% 22.49%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Humana 2,325 2,706 2,948 3,562 2,869
Adjusted stockholders’ equity 16,214 15,338 16,778 14,387 12,378
Profitability Ratio
Adjusted ROE2 14.34% 17.64% 17.57% 24.76% 23.18%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net income attributable to Humana ÷ Stockholders’ equity
= 100 × 2,489 ÷ 16,262 = 15.31%

2 Adjusted ROE = 100 × Adjusted net income attributable to Humana ÷ Adjusted stockholders’ equity
= 100 × 2,325 ÷ 16,214 = 14.34%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Humana Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Humana 2,489 2,806 2,933 3,367 2,707
Total assets 47,065 43,055 44,358 34,969 29,074
Profitability Ratio
ROA1 5.29% 6.52% 6.61% 9.63% 9.31%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Humana 2,325 2,706 2,948 3,562 2,869
Adjusted total assets 47,017 43,055 44,358 34,969 29,074
Profitability Ratio
Adjusted ROA2 4.95% 6.28% 6.65% 10.19% 9.87%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income attributable to Humana ÷ Total assets
= 100 × 2,489 ÷ 47,065 = 5.29%

2 Adjusted ROA = 100 × Adjusted net income attributable to Humana ÷ Adjusted total assets
= 100 × 2,325 ÷ 47,017 = 4.95%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Humana Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.