Item 7.01
|
Regulation FD Disclosure.
|
Members of Humana Inc.s senior management team will be meeting with investors and analysts at industry conferences and various other meetings between
January 3, 2019 and January 18, 2019. During the conferences and meetings, the Company intends to address its prospects and performance. The Company will not opine on any financial results or expectations for 2018 or 2019 at the meetings
beyond those listed below since it is in the process of closing its books for 2018. The date and time of these presentations to investors are available via the Investor Relations calendar of events on Humanas web site at
www.humana.com
,
and the Companys presentations during the conferences are expected to be webcast.
Medicare Advantage and Stand-alone Prescription Drug Plans
(PDP) Enrollment
Based on final annual enrollment period (AEP) results, the Company is revising its net membership growth estimate for
its individual Medicare Advantage products for the year ended December 31, 2019 to 375,000 to 400,000 members, compared to its previous estimate of 350,000 to 400,000 members. The revised membership estimate represents expected net
membership gains of 12 to 13 percent above the year ended December 31, 2018 membership level of approximately 3.07 million members.
The
Company also reiterates its expectations for group Medicare Advantage net membership gains for the same period, projecting an increase of approximately 30,000 members year over year. The membership estimate represents an expected net membership gain
of 6 percent above the year ended December 31, 2018 membership level of approximately 500,000 members.
For PDP, the Company now estimates a net
membership decline of 700,000 to 750,000 members for the year ended December 31, 2019, compared to its previous estimate of a decline of 750,000 to 800,000 members. The membership estimate represents a decline of 14 to 15 percent
below the year ended December 31, 2018 membership level of approximately 5 million members. The revised estimate is primarily attributable to improved retention estimates.
Full Year 2018 Adjusted EPS Guidance
For the year
ended December 31, 2018, Humanas management expects to reaffirm its GAAP guidance of $11.96 in diluted earnings per common share (EPS), or approximately $14.40 in adjusted earnings per common share (Adjusted EPS).
This guidance is consistent with the guidance issued in Humanas press release dated November 7, 2018 and reaffirmed on November 28, 2018.
The Company has included adjusted EPS in this current report, a financial measure that is not in accordance with Generally Accepted Accounting Principles
(GAAP). Management believes that this measure, when presented in conjunction with the comparable measure of GAAP EPS, is useful to both management and its investors in analyzing the Companys ongoing business and operating
performance. Consequently, management uses adjusted EPS as an indicator of the Companys business performance, as well as for operational planning and decision making purposes. Adjusted EPS should be considered in addition to, but not as a
substitute for, or superior to, GAAP EPS. A reconciliation of adjusted EPS to GAAP EPS follows:
|
|
|
|
|
Diluted earnings per common share
|
|
FY18 Guidance
|
|
GAAP
|
|
~$
|
11.96
|
|
Loss on Sale of KMG America Corporation, a wholly-owned subsidiary
|
|
|
2.58
|
|
Put/call valuation adjustments associated with 40% minority interest in Kindred at Home
|
|
|
0.06
|
|
Amortization of identifiable intangibles
|
|
|
0.49
|
|
Segment earnings associated with the Individual Commercial segment
|
|
|
(0.41
|
)
|
Adjustments to provisional estimates for the income tax effects related to the tax reform law
enacted on December 22, 2017
|
|
|
(0.28
|
)
|
Adjusted
(non-GAAP)
FY18 projected
|
|
~$
|
14.40
|
|
The Company plans to host a conference call and announce its financial results for the fourth quarter and year ended
December 31, 2018 and provide detailed financial guidance for the year ended December 31, 2019, on Wednesday, February 6, 2019.
Cautionary Statement
This Current Report on Form
8-K
includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, generally including the words or phrases like expects, believes,
anticipates, intends, likely will result, estimates, projects or variations of such words and similar expressions that are intended to identify such forward-looking statements. These
forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions, including, among other things, information set forth in the Risk Factors section of the Companys SEC
filings.