Name: Humana Inc. (NYSE:HUM) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Humana Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	2,484)	2,802)	2,934)	3,367)	2,707)
Gain on sale of Gentiva Hospice	—)	(237)	—)	—)	—)
(Gain) loss on investment securities, net	54)	205)	130)	(838)	(62)
Gain on Kindred at Home equity method investment	—)	—)	(1,129)	—)	—)
Equity in net (earnings) losses	63)	4)	(65)	(74)	(14)
Stock-based compensation	175)	216)	180)	181)	163)
Depreciation	850)	749)	640)	528)	505)
Amortization	67)	96)	73)	88)	70)
Impairment of property and equipment	206)	248)	—)	—)	—)
Impairment of intangible assets	55)	—)	—)	—)	—)
Deferred income taxes	(167)	(100)	15)	195)	162)
Receivables	(337)	(54)	(280)	(85)	(32)
Other assets	(1,318)	(463)	(491)	(581)	118)
Benefits payable	915)	975)	104)	2,139)	1,142)
Other liabilities	841)	44)	176)	599)	471)
Unearned revenues	(20)	32)	(65)	71)	(36)
Changes in operating assets and liabilities, net of effect of businesses acquired and dispositions	81)	534)	(556)	2,143)	1,663)
Other, net	113)	70)	40)	49)	90)
Adjustments to reconcile net income to net cash provided by operating activities	1,497)	1,785)	(672)	2,272)	2,577)
Net cash provided by operating activities	3,981)	4,587)	2,262)	5,639)	5,284)
Proceeds from sale of Gentiva Hospice, net	—)	2,701)	—)	—)	—)
Acquisitions, net of cash and cash equivalents acquired	(233)	(337)	(4,187)	(709)	—)
Purchases of property and equipment	(1,004)	(1,137)	(1,342)	(964)	(736)
Proceeds from sale of property and equipment	210)	17)	26)	—)	—)
Purchases of investment securities	(7,552)	(6,049)	(7,197)	(9,125)	(6,361)
Proceeds from maturities of investment securities	1,292)	1,365)	2,597)	4,986)	1,733)
Proceeds from sales of investment securities	3,795)	2,434)	3,547)	2,747)	4,086)
Net cash used in investing activities	(3,492)	(1,006)	(6,556)	(3,065)	(1,278)
Receipts (withdrawals) from contract deposits, net	828)	1,993)	(306)	(939)	(623)
Proceeds from issuance of senior notes, net	2,544)	1,982)	2,984)	1,088)	987)
Repayment of senior notes	(1,832)	(1,000)	—)	(400)	(400)
Proceeds from issuance (repayments) of commercial paper, net	211)	(376)	352)	295)	(360)
Proceeds from short-term borrowings	100)	—)	—)	—)	—)
Repayment of short-term borrowings	(100)	—)	—)	—)	—)
Proceeds from term loan	—)	—)	2,500)	1,000)	—)
Repayment of term loan	(500)	(2,000)	(2,078)	(1,000)	(650)
Debt issue costs	(7)	(6)	(31)	—)	—)
Common stock repurchases	(1,573)	(2,096)	(79)	(1,820)	(1,070)
Dividends paid	(431)	(392)	(354)	(323)	(291)
Change in book overdraft	55)	(28)	6)	95)	54)
Other, net	(151)	9)	21)	49)	58)
Net cash provided by (used in) financing activities	(856)	(1,914)	3,015)	(1,955)	(2,295)
Increase (decrease) in cash and cash equivalents	(367)	1,667)	(1,279)	619)	1,711)
Cash and cash equivalents at beginning of period	5,061)	3,394)	4,673)	4,054)	2,343)
Cash and cash equivalents at end of period	4,694)	5,061)	3,394)	4,673)	4,054)

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 performance over the five-year period is characterized by a peak in net income and operating cash flow in 2020, followed by a general trend of moderation and increased volatility. While net income has declined from a high of 3,367 million USD in 2020 to 2,484 million USD in 2023, the company has maintained a positive cash position through strategic divestitures and active debt management.

Operating Cash Flow Analysis: Net cash provided by operating activities demonstrates significant fluctuation, peaking at 5,639 million USD in 2020 before dropping sharply to 2,262 million USD in 2021. A recovery occurred in 2022 (4,587 million USD) followed by a slight decrease to 3,981 million USD in 2023. The disparity between net income and operating cash flow is largely driven by non-cash adjustments, most notably depreciation, which has trended upward consistently from 505 million USD in 2019 to 850 million USD in 2023. Additionally, benefits payable has acted as a major swing factor, contributing 2,139 million USD in 2020 but decreasing to 915 million USD by 2023.
Investing Activities and Capital Allocation: Investing activities are dominated by the management of investment securities and strategic corporate transactions. A substantial capital outlay occurred in 2021, driven by net acquisitions totaling 4,187 million USD. This was partially offset in 2022 by the sale of Gentiva Hospice, which provided a cash inflow of 2,701 million USD. Capital expenditures for property and equipment remained relatively consistent, ranging between 736 million USD and 1,342 million USD annually. The company maintains a high turnover of investment securities, with annual purchases consistently exceeding 6,000 million USD, balanced by a combination of maturities and sales.
Financing and Shareholder Returns: Financing activities reflect a strategy of balancing debt issuance with shareholder distributions. There is a steady upward trend in dividend payments, increasing from 291 million USD in 2019 to 431 million USD in 2023. Common stock repurchases have been aggressive but inconsistent, peaking at 2,096 million USD in 2022. To fund these activities and acquisitions, the company has relied on the issuance of senior notes, with significant proceeds seen in 2021 (2,984 million USD) and 2023 (2,544 million USD), while simultaneously managing the repayment of existing senior notes and term loans.
Liquidity and Cash Position: The overall cash and cash equivalents balance has remained relatively stable, ending 2023 at 4,694 million USD compared to 4,054 million USD at the end of 2019. The volatility in annual net cash changes is smoothed by the company's ability to leverage debt markets and liquidate investment securities, ensuring that operational requirements and shareholder obligations are met despite the downward trend in net income since 2020.

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