HUMANA INC

Previous wording

Humana Inc., headquartered in Louisville, Kentucky, 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.

Current wording

Humana Inc., headquartered in Louisville, Kentucky, 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 Medicare and Medicaid participants, families, individuals, military service personnel, and communities at large.

Previous wording

In order to create capacity to fund growth and investment in our Medicare Advantage business and further expansion of our healthcare services capabilities, we have committed to driving additional value for the enterprise through cost saving, productivity initiatives, and value acceleration from previous investments. As a result of these initiatives, we recorded charges of $24 million for the three months ended March 31, 2025 and $29 million for the three months ended March 31, 2024 within operating costs in the condensed consolidated statements of income. These charges primarily relate to asset impairments in the 2024 and 2025 quarters, as well as severance charges in connection with workforce optimization and external consulting spend for these initiatives in the 2025 quarter.

Current wording

In order to create capacity to fund growth and investment in our Medicare Advantage business and further expansion of our healthcare services capabilities, we have committed to driving additional value for the enterprise through cost saving, productivity initiatives, and value acceleration from previous investments. As a result of these initiatives, we recorded charges, primarily in asset impairments, severance charges in connection with workforce optimization and external consulting spend, of $29 million and $53 million for the three and six months ended June 30, 2025, respectively. We recorded charges, primarily in asset impairments, of $68 million and $97 million for the three and six months ended June 30, 2024, respectively. These charges were included within operating costs in the condensed consolidated statements of income. We expect to incur additional charges in 2025.

Previous wording

•Our strategy offers our members affordable health care combined with a positive consumer experience in growing markets. At the core of this strategy is our integrated care delivery model, which unites quality care, high member engagement, and sophisticated data analytics. Our approach to primary, physician-directed care for our members aims to provide quality care that is consistent, integrated, cost-effective, and member-focused, provided by both employed physicians and physicians with network contract arrangements. The model is designed to improve health outcomes and affordability for individuals and for the health system as a whole, while offering our members a simple, seamless healthcare experience. We believe this strategy is positioning us for long-term growth in both membership and earnings. We offer providers a continuum of opportunities to increase the integration of care and offer assistance to providers in transitioning from a fee-for-service to a value-based arrangement. These include performance bonuses, shared savings and shared risk relationships. At March 31, 2025, approximately 3,501,700 members, or

Current wording

•Our strategy is to offer our members affordable health care combined with a positive consumer experience in growing markets. At the core of this strategy is our integrated care delivery model, which unites quality care, high member engagement, and sophisticated data analytics. Our approach to primary, physician-directed care for our members aims to provide quality care that is consistent, integrated, cost-effective, and member-focused, provided by both employed physicians and physicians with network contract arrangements. The model is designed to improve health outcomes and affordability for individuals and for the health system as a whole, while offering our members a simple, seamless healthcare experience. We believe this strategy is positioning us for long-term growth in both membership and earnings. We offer providers a continuum of opportunities to increase the integration of care and offer assistance to providers in transitioning from a fee-for-service to a value-based arrangement. These include performance bonuses, shared savings and shared risk relationships. At June 30, 2025, approximately 3,542,300 members, or 68%, of our individual Medicare Advantage members were in value-based relationships under our integrated care delivery model, as compared to 3,923,200 members, or 70%, at June 30, 2024.

Previous wording

•Net income attributable to Humana was $1.2 billion, or $10.30 per diluted common share, and $0.7 billion, or $6.11 per diluted common share, for the three months ended March 31, 2025 and 2024, respectively. These comparisons were significantly impacted by put/call valuation adjustments associated with non-consolidating minority interest investments and charges associated with value creation initiatives. The impact of these adjustments to our consolidated income before income taxes and equity in net losses and diluted earnings per common share was as follows for the 2025 and 2024 quarter:

Current wording

•Net income attributable to Humana was $545 million, or $4.51 per diluted common share, and $679 million, or $5.62 per diluted common share, for the three months ended June 30, 2025 and 2024, respectively. Net income attributable to Humana was $1.8 billion, or $14.81 per diluted common share, and $1.4 billion, or $11.74 per diluted common share, for the six months ended June 30, 2025 and 2024, respectively. These comparisons were significantly impacted by put/call valuation adjustments associated with non-consolidating minority interest investments, impairment charges and charges associated with value creation initiatives. The impact of these adjustments to our consolidated income before income taxes and equity in net losses and diluted earnings per common share was as follows for the 2025 and 2024 quarter and period:

Previous wording

It is reasonably possible that these laws and regulations, as well as other current or future legislative, judicial or regulatory changes including restrictions on our ability to manage our provider network, manage and sell our products, or otherwise operate our business, or restrictions on profitability, including reviews by regulatory bodies that may compare our Medicare Advantage profitability to our non-Medicare Advantage business profitability, or compare the profitability of various products within our Medicare Advantage business, and require that they remain within certain ranges of each other, increases in member benefits or changes to member eligibility criteria without corresponding increases in premium payments to us, further restrictions on service arrangements and fee payments between intercompany or vertically-integrated assets, increases in regulation of our prescription drug benefit businesses, or changes to the Part D prescription drug benefit design (and uncertainty arising from the implementation of these changes) in the aggregate may have a material adverse effect on our results of operations

Current wording

It is reasonably possible that these laws and regulations, as well as other current or future legislative, judicial or regulatory changes including restrictions on our ability to manage our provider network, manage and sell our products, or otherwise operate our business, or restrictions on profitability, including reviews by regulatory bodies that may compare our Medicare Advantage profitability to our non-Medicare Advantage business profitability, or compare the profitability of various products within our Medicare Advantage business, and require that they remain within certain ranges of each other, increases in member benefits or changes to member eligibility criteria without corresponding increases in premium payments to us, further restrictions on service arrangements and fee payments between intercompany or vertically-integrated assets, increases in regulation of our prescription drug benefit businesses, reductions in reimbursement rates, or changes to the Part D prescription drug benefit design (and uncertainty arising from the implementation of these changes) in the aggregate may have a material adverse effect on our results of operations (including restricting revenue, enrollment and premium growth in certain products and market segments, restricting our ability to expand into new markets, increasing our medical and operating costs, further lowering our Medicare payment rates and increasing our expenses associated with assessments); our financial position (including our ability to maintain the value of our goodwill); and our cash flows.

Previous wording

The following discussion primarily deals with our results of operations for the three months ended March 31, 2025, or the 2025 quarter and the three months ended March 31, 2024, or the 2024 quarter.

Current wording

The following discussion primarily deals with our results of operations for the three months ended June 30, 2025, or the 2025 quarter, the three months ended June 30, 2024, or the 2024 quarter, the six months ended June 30, 2025, or the 2025 period, and the six months ended June 30, 2024, or the 2024 period.

Previous wording

Consolidated premiums revenue increased $2.3 billion, or 8.0%, from $28.3 billion in the 2024 quarter to $30.5 billion in the 2025 quarter primarily due to higher per member Medicare premiums, driven largely by an increased direct subsidy due to the IRA, and higher per member state-based contracts premiums, as well as membership growth in the stand-alone PDP and state-based contracts businesses. These factors were partially offset by the membership decline within the individual Medicare Advantage business, inclusive of the decision to exit certain unprofitable plans and counties.

Current wording

Consolidated premiums revenue increased $2.6 billion, or 9.1%, from $28.1 billion in the 2024 quarter to $30.7 billion in the 2025 quarter and increased $4.8 billion, or 8.6%, from $56.4 billion in the 2024 period to $61.2 billion in the 2025 period primarily due to higher per member Medicare premiums, largely driven by an increased direct subsidy due to the IRA, and higher per member state-based contracts premiums, as well as membership growth in the state-based contracts and stand-alone PDP businesses. These factors were partially offset by the membership decline within the individual Medicare Advantage business, inclusive of the decision to exit certain unprofitable plans and counties.

Previous wording

CenterWell services revenue increased $0.3 billion, or 37.5%, from $0.8 billion in the 2024 quarter to $1.1 billion in the 2025 quarter primarily due to higher revenues associated with growth in the primary care business, partially offset by the impact of the v28 risk model revision.

Current wording

Consolidated services revenue increased $0.3 billion, or 27.3%, from $1.1 billion in the 2024 quarter to $1.4 billion in the 2025 quarter and increased $0.6 billion, or 26.5%, from $2.2 billion in the 2024 period to $2.7 billion in the 2025 period primarily due to higher revenues associated with growth in the primary care and pharmacy solutions businesses, partially offset by the impact of the v28 risk model revision.

Previous wording

Investment income decreased $24 million, or 8.3%, from $288 million in the 2024 quarter to $264 million in the 2025 quarter primarily due to lower interest income on debt securities.

Current wording

Investment income decreased $26 million, or 8.7%, from $298 million in the 2024 quarter to $272 million in the 2025 quarter and decreased $50 million, or 8.5%, from $586 million in the 2024 period to $536 million in the 2025 period primarily due to lower interest income on debt securities.

Previous wording

Consolidated benefits expense increased $1.4 billion, or 5.6%, from $25.1 billion in the 2024 quarter to $26.5 billion in the 2025 quarter. The consolidated benefit ratio decreased 190 basis points from 88.9% for the 2024 quarter to 87.0% for the 2025 quarter primarily due to individual Medicare Advantage pricing inclusive of plan exits, benefit design changes and favorable workday impacts in the 2025 quarter more than offsetting claims trend and the funding environment, as well as the change in Medicare Part D seasonality due to the IRA. These factors were partially offset by a shift in line of business mix resulting from reductions in individual Medicare Advantage membership, combined with growth in the stand-alone PDP and state-based contracts businesses, which carry a higher benefit ratio. In addition, the decrease was offset by a delayed flu season that led to a more acute period in the 2025 quarter compared to the 2024 quarter and lower favorable prior-period medical claims reserve development.

Current wording

Consolidated benefits expense increased $2.5 billion, or 10.1%, from $25.0 billion in the 2024 quarter to $27.6 billion in the 2025 quarter and increased $3.9 billion, or 7.8%, from $50.2 billion in the 2024 period to $54.1 billion in the 2025 period. The consolidated benefit ratio increased 70 basis points from 89.0% for the 2024 quarter to 89.7% for the 2025 quarter primarily reflecting a shift in line of business mix resulting growth in the state-based contracts and stand-alone PDP businesses that carry a higher benefit ratio, combined with a reduction in individual Medicare Advantage membership, as well as incremental investments to improve member and patient outcomes and support operational excellence. These factors were partially offset by individual Medicare Advantage pricing inclusive of plan exits and benefit design changes that more than offset claims trend and the funding environment, as well as the change in Medicare Part D seasonality due to the IRA. The consolidated benefit ratio decreased 50 basis points from 88.9% for the 2024 period to 88.4% for the 2025 period primarily due to the net favorable impact of the factors impacting the quarter comparison, as well as the favorable workday impact in the first quarter of 2025, partially offset by lower favorable prior-period medical claims reserve development in the 2025 period.

Previous wording

Consolidated benefits expense included $477 million of favorable prior-period medical claims reserve development in the 2025 quarter and $535 million of favorable prior-period medical claims development in the 2024 quarter. Prior-period medical claims reserve development decreased the consolidated benefit ratio by 160 basis points in the 2025 quarter and decreased the consolidated benefit ratio by 190 basis points in the 2024 quarter.

Current wording

Consolidated benefits expense included $161 million of favorable prior-period medical claims reserve development in the 2025 quarter and $134 million of favorable prior-period medical claims development in the 2024 quarter. Consolidated benefits expense included $638 million of favorable prior-period medical claims reserve development in the 2025 period and $669 million of favorable prior-period medical claims reserve development in the 2024 period. Prior-period medical claims reserve development decreased the consolidated benefit ratio by approximately 50 basis points in the 2025 quarter and decreased the consolidated benefit ratio by approximately 50 basis points in the 2024 quarter. Prior-period medical claims reserve development decreased the consolidated benefit ratio by approximately 100 basis points in the 2025 period and decreased the consolidated benefit ratio by approximately 120 basis points in the 2024 period.

Previous wording

Consolidated operating costs increased $338 million, or 11.1%, from $3.0 billion in the 2024 quarter to $3.4 billion in the 2025 quarter. The consolidated operating cost ratio increased 20 basis points from 10.4% for the 2024 quarter to 10.6% for the 2025 quarter primarily due to business mix changes, including within the CenterWell segment which runs a significantly higher operating cost ratio than the Insurance segment, combined with the operating leverage impact of the loss of individual Medicare Advantage membership. This factor was partially offset by administrative cost efficiencies resulting from the value creation initiatives and operating leverage associated with increased revenues from the impact of the IRA as previously described.

Current wording

Consolidated operating costs increased $0.4 billion, or 12.7%, from $3.1 billion in the 2024 quarter to $3.5 billion in the 2025 quarter and increased $0.7 billion, or 11.9%, from $6.2 billion in the 2024 period to $6.9 billion in the 2025 period. The consolidated operating cost ratio increased 20 basis points from 10.8% for the 2024 quarter to 11.0% for the 2025 quarter and increased 20 basis points from 10.6% for the 2024 period to 10.8% for the 2025 period primarily due to business mix changes, including within the CenterWell segment that runs a significantly higher operating cost ratio than the Insurance segment, combined with the operating leverage impact of the loss of individual Medicare Advantage membership. This was partially offset by administrative cost efficiencies resulting from the value creation initiatives, net of charges related to ongoing initiatives, as well as operating leverage associated with increased revenues from the impact of the IRA as previously described.

Previous wording

Depreciation and amortization decreased $26 million, or 12.4%, from $209 million in the 2024 quarter to $183 million in the 2025 quarter primarily due to decreased capital spending.

Current wording

Depreciation and amortization decreased $34 million, or 16.0%, from $212 million in the 2024 quarter to $178 million in the 2025 quarter and decreased $60 million, or 14.3%, from $421 million in the 2024 period to $361 million in the 2025 period primarily due to decreased capital spending.

Previous wording

Interest expense remained relatively unchanged from the 2024 quarter to the 2025 quarter.

Current wording

Interest expense remained relatively unchanged from the 2024 quarter and period to the 2025 quarter and period.

Previous wording

The effective income tax rate was 24.6% and 25.3% for the three months ended March 31, 2025, and 2024, respectively. The year-over-year decrease in the effective income tax rate is primarily due to reduced state tax expense.

Current wording

The effective income tax rate was 24.7% and 24.6% for the three and six months ended June 30, 2025, respectively, and 24.7% and 25.0% for the three and six months ended June 30, 2024, respectively. The year-over-year decrease in the six month period effective income tax is primarily due to reduced state tax expense.

Previous wording

(b) We provide 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.

Current wording

Members may not be unique to each product since members have the ability to enroll in more than one product.

Previous wording

Insurance segment income from operations increased $0.7 billion, or 75.3%, from $0.9 billion in the 2024 quarter to $1.6 billion in the 2025 quarter primarily due to the same factors impacting the Insurance segment's lower benefit and operating cost ratios as more fully described below.

Current wording

Insurance segment income from operations increased $3 million, or 0.4%, from $763 million in the 2024 quarter to $766 million in the 2025 quarter and increased $679 million, or 40.9%, from $1.7 billion in the 2024 period to $2.3 billion in the 2025 period primarily due to the same factors impacting the Insurance segment's benefit and operating cost ratios as more fully described below.

Previous wording

Individual Medicare Advantage membership decreased 333,100 members, or 6.0%, from March 31, 2024 to March 31, 2025, inclusive of the decision to exit certain unprofitable plans and counties. Individual Medicare Advantage membership includes 799,100 D-SNP members as of March 31, 2025, a net decrease of 123,100 D-SNP members, or 13.3%, from 922,200 D-SNP members as of March 31, 2024.

Current wording

Individual Medicare Advantage membership decreased 388,300 members, or 6.9%, from June 30, 2024 to June 30, 2025, inclusive of the decision to exit certain unprofitable plans and counties. Individual Medicare Advantage membership includes 786,000 D-SNP members as of June 30, 2025, a net decrease of 166,800 D-SNP members, or 17.5%, from 952,800 D-SNP members as of June 30, 2024.

Previous wording

Group Medicare Advantage membership increased 21,100 members, or 3.8%, from March 31, 2024 to March 31, 2025, consistent with expectations as we maintain pricing discipline in a competitive market.

Current wording

Group Medicare Advantage membership increased 25,100 members, or 4.6%, from June 30, 2024 to June 30, 2025, consistent with expectations as we maintain pricing discipline in a competitive market.

Previous wording

Medicare stand-alone PDP membership increased 86,100 members, or 3.7%, from March 31, 2024 to March 31, 2025, reflecting shifting competitive dynamics.

Current wording

Medicare stand-alone PDP membership increased 85,900 members, or 3.7%, from June 30, 2024 to June 30, 2025, reflecting shifting competitive dynamics.

Previous wording

State-based contracts and other membership increased 346,700 members, or 27.5%, from March 31, 2024 to March 31, 2025, reflecting additional membership related to the Oklahoma and Indiana contracts implemented in April 2024 and July 2024, respectively, along with the allocation of additional membership in Kentucky.

Current wording

State-based contracts and other membership increased 190,600 members, or 13.7%, from June 30, 2024 to June 30, 2025, reflecting allocation of additional membership in Kentucky and Ohio, as well as additional membership related to the Indiana contract implemented in July 2024.

Previous wording

Insurance segment premiums revenue increased $2.3 billion, or 8.0%, from $28.3 billion in the 2024 quarter to $30.5 billion in the 2025 quarter primarily due to higher per member Medicare premiums, driven largely by an increased direct subsidy due to the IRA, and higher per member state-based contracts premiums, as well as membership growth in the stand-alone PDP and state-based contracts businesses. These factors were partially offset by the membership decline within the individual Medicare Advantage business, inclusive of the decision to exit certain unprofitable plans and counties.

Current wording

Insurance segment premiums revenue increased $2.6 billion, or 9.1%, from $28.1 billion in the 2024 quarter to $30.7 billion in the 2025 quarter and increased $4.8 billion, or 8.6%, from $56.4 billion in the 2024 period to $61.2 billion in the 2025 period primarily due to higher per member Medicare premiums, largely driven by an increased direct subsidy due to the IRA, and higher per member state-based contracts premiums, as well as membership growth in the state-based contracts and stand-alone PDP businesses. These factors were partially offset by the membership decline within the individual Medicare Advantage business, inclusive of the decision to exit certain unprofitable plans and counties.

Previous wording

The Insurance segment benefit ratio decreased 190 basis points from 89.3% for the 2024 quarter to 87.4% for the 2025 quarter primarily due to individual Medicare Advantage pricing inclusive of plan exits, benefit design changes and favorable workday impacts in the 2025 quarter more than offsetting claims trend and the funding environment, as well as the change in Medicare Part D seasonality due to the IRA. These factors were partially offset by a shift in line of business mix resulting from reductions in individual Medicare Advantage membership, combined with growth in the stand-alone PDP and state-based contracts businesses, which carry a higher benefit ratio. In addition, the decrease was offset by a delayed flu season that led to a more acute period in the 2025 quarter compared to the 2024 quarter and lower favorable prior-period medical claims reserve development.

Current wording

The Insurance segment benefit ratio increased 40 basis points from 89.5% for the 2024 quarter to 89.9% for the 2025 quarter primarily reflecting a shift in line of business mix resulting growth in the state-based contracts and stand-alone PDP businesses that carry a higher benefit ratio, combined with a reduction in individual Medicare Advantage membership, as well as incremental investments to improve member and patient outcomes and support operational excellence. These factors were partially offset by individual Medicare Advantage pricing inclusive of plan exits and benefit design changes that more than offset claims trend and the funding environment, as well as the change in Medicare Part D seasonality due to the IRA. The Insurance segment benefit ratio decreased 70 basis points from 89.4% for the 2024 period to 88.7% for the 2025 period primarily due to the net favorable impact of the factors impacting the quarter comparison, as well as the favorable workday impact in the first quarter of 2025, partially offset by lower favorable prior-period medical claims reserve development in the 2025 period.

Previous wording

The Insurance segment operating cost ratio decreased 10 basis points from 8.3% for the 2024 quarter to 8.2% for the 2025 quarter primarily due to administrative cost efficiencies resulting from the value creation initiatives and operating leverage associated with increased revenues from the impact of the IRA as previously described. These factors were partially offset by the operating leverage impact of the loss of individual Medicare Advantage membership.

Current wording

The Insurance segment operating cost ratio decreased 10 basis points from 8.4% for the 2024 quarter to 8.3% for the 2025 quarter and decreased 10 basis points from 8.4% for the 2024 period to 8.3% for the 2025 period primarily due to administrative cost efficiencies resulting from the value creation initiatives and operating leverage associated with increased revenues from the impact of the IRA as previously described. These factors were partially offset by the operating leverage impact of the loss of individual Medicare Advantage membership.

Previous wording

CenterWell income from operations increased $0.1 billion, or 39.0%, from $0.3 billion in the 2024 quarter to $0.4 billion in the 2025 quarter primarily due to the CenterWell segment's lower operating cost ratio as more fully described below.

Current wording

CenterWell income from operations increased $6 million, or 1.8%, from $338 million in the 2024 quarter to $344 million in the 2025 quarter and increased $116 million, or 18.7%, from $620 million in the 2024 period to $736 million in the 2025 period primarily due to the same factors impacting the CenterWell segment's operating cost ratio as more fully described below.

Previous wording

The CenterWell segment operating cost ratio decreased 190 basis points from 93.0% for the 2024 quarter to 91.1% for the 2025 quarter primarily due to administrative cost efficiencies resulting from the value creation initiatives, as well as more favorable operating trends in the primary care business in the 2025 quarter as a result of stabilizing medical cost trends and maturation of the v28 mitigation activities, partially offset by the continued phase-in of v28.

Current wording

The CenterWell segment operating cost ratio increased 70 basis points from 92.0% for the 2024 quarter to 92.7% for the 2025 quarter primarily resulting from the continued phase-in of the v28 risk model revision within the primary care business, partially offset by more favorable operating trends in the primary care business as a result of stabilizing medical cost trends and maturation of the v28 mitigation activities, as well as administrative cost efficiencies resulting from the value creation initiatives. The CenterWell segment operating cost ratio decreased 50 basis points from 92.5% for the 2024 period to 92.0% for the 2025 period primarily due to the net favorable impact of the factors impacting the quarter comparison.

Previous wording

Cash and cash equivalents increased to approximately $4.3 billion at March 31, 2025 from $2.2 billion at December 31, 2024. The change in cash and cash equivalents for the three months ended March 31, 2025 and 2024 is summarized as follows:

Current wording

Cash and cash equivalents increased to approximately $4.0 billion at June 30, 2025 from $2.2 billion at December 31, 2024. The change in cash and cash equivalents for the six months ended June 30, 2025 and 2024 is summarized as follows:

Previous wording

Cash flows provided by operations of $0.3 billion in the 2025 quarter decreased $0.1 billion from cash flows provided by operations of $0.4 billion in the 2024 quarter. The decrease in operating cash flows primarily reflected the unfavorable impact of working capital items, partially offset by higher earnings in the 2025 quarter.

Current wording

Cash flows provided by operations remained relatively unchanged year-over-year and reflected the unfavorable impact of working capital items, partially offset by higher earnings in the 2025 period.

Previous wording

The detail of total net receivables at March 31, 2025 and December 31, 2024 and reconciliation to cash flow for the three months ended March 31, 2025 and 2024 was as follows:

Current wording

The detail of total net receivables at June 30, 2025 and December 31, 2024 and reconciliation to cash flow for the six months ended June 30, 2025 and 2024 was as follows:

Previous wording

The change in Medicare receivables for the 2025 quarter reflects higher per member Medicare premiums, driven largely by an increased direct subsidy due to the IRA. The change in Medicare receivables for the 2024 quarter reflects individual Medicare Advantage membership growth. In addition, both periods further reflect the typical pattern caused by the timing of accruals and related collections associated with the CMS risk-adjustment model. Significant collections occur with the mid-year and final settlements with CMS in the second and third quarter.

Current wording

The change in Medicare receivables for the 2025 period reflects higher per member Medicare premiums, driven largely by an increased direct subsidy due to the IRA. The change in Medicare receivables for the 2024 period reflects individual Medicare Advantage membership growth. In addition, both periods further reflect the typical pattern caused by the timing of accruals and related collections associated with the CMS risk-adjustment model. Significant collections occur with the mid-year and final settlements with CMS in the second and third quarter.

Previous wording

Our ongoing capital expenditures primarily relate to our information technology initiatives, support of services in our primary care operations including medical and administrative facility improvements necessary for activities such as the provision of care to members, claims processing, billing and collections, wellness solutions, care coordination, regulatory compliance and customer service. Total net capital expenditures, excluding acquisitions, were $95 million in the 2025 quarter and $177 million in the 2024 quarter.

Current wording

Our ongoing capital expenditures primarily relate to our information technology initiatives, support of services in our primary care operations including medical and administrative facility improvements necessary for activities such as the provision of care to members, claims processing, billing and collections, wellness solutions, care coordination, regulatory compliance and customer service. Total net capital expenditures, excluding acquisitions, were $209 million in the 2025 period and $291 million in the 2024 period.

Previous wording

Net proceeds of investment securities were $409 million in the 2025 quarter and net purchases of investment securities were $223 million in the 2024 quarter.

Current wording

Net proceeds of investment securities were $871 million in the 2025 period and net purchases of investment securities were $1.1 billion in the 2024 period.

Previous wording

Receipts from CMS associated with Medicare Part D claim subsidies for which we do not assume risk were higher than claim payments by $75 million and $569 million in the 2025 and 2024 quarters, respectively.

Current wording

Claim payments were higher than receipts from CMS associated with Medicare Part D claim subsidies for which we do not assume risk by $482 million in the 2025 period and receipts from CMS associated with Medicare Part D claim subsidies for which we do not assume risk were higher than claim payments by $348 million in the 2024 period.

Previous wording

Under our administrative services only TRICARE contracts, health care costs payments for which we do not assume risk exceeded reimbursements from the federal government by $110 million and $70 million in the 2025 and 2024 quarters, respectively.

Current wording

Under our administrative services only TRICARE contracts, health care costs payments for which we do not assume risk exceeded reimbursements from the federal government by $97 million and $63 million in the 2025 and 2024 periods, respectively.

Previous wording

In March 2025, we issued $750 million of 5.550% unsecured senior notes due May 1, 2035, $500 million of 6.000% unsecured senior notes due May 1, 2055, and an additional $250 million of our existing 5.375% unsecured senior notes due April 15, 2031. Our net proceeds, reduced for the underwriters' discounts and commissions paid, were $1.481 billion. We used the net proceeds of these offerings to repay outstanding amounts from the 4.500% Senior Notes due on April 1,2025. The remaining net proceeds will be used for general corporate purposes, which may include the repayment of our existing indebtedness, including borrowings under our commercial paper program.

Current wording

In March 2025, we issued $750 million of 5.550% unsecured senior notes due May 1, 2035, $500 million of 6.000% unsecured senior notes due May 1, 2055, and an additional $250 million of our existing 5.375% unsecured senior notes due April 15, 2031. Our net proceeds, reduced for the underwriters' discounts and commissions paid, were $1.5 billion. We used the net proceeds of these offerings to repay the remaining $577 million aggregate principal amount of our 4.500% unsecured senior notes on their maturity date of April 1, 2025. The remaining net proceeds will be used for general corporate purposes, which may include the repayment of our existing indebtedness, including borrowings under our commercial paper program.

Previous wording

In 2024, we entered into a securities lending program where we loan certain investment securities for short periods of time in exchange for collateral. We also entered into an uncommitted receivables purchase facility under which certain pharmaceutical rebate receivables may be sold on a non-recourse basis to a financial institution. In the 2025 quarter, net proceeds from the securities lending program were $175 million and net repayments from the uncommitted receivables purchase facility were $68 million.

Current wording

In 2024, we entered into a securities lending program where we loan certain investment securities for short periods of time in exchange for collateral. In 2024, we also entered into an uncommitted receivables purchase facility under which certain pharmaceutical rebate receivables may be sold on a non-recourse basis to a financial institution. In the 2025 period net proceeds from the securities lending program were $48 million and net repayments from the uncommitted receivables purchase facility were $123 million. In the 2024 period, net proceeds from the securities lending program were $79 million.

Previous wording

Net repayments from the issuance of commercial paper were $4 million and $644 million in the 2025 quarter and 2024 quarter, respectively. The maximum principal amount outstanding at any one time during the 2025 quarter was $1.2 billion.

Current wording

Net repayments from the issuance of commercial paper were $5 million and $895 million in the 2025 period and 2024 period, respectively. The maximum principal amount outstanding at any one time during the 2025 period was $1.2 billion.

Previous wording

We repurchased common shares for $702 million in the 2024 quarter, under share repurchase plans authorized by the Board of Directors. We also acquired common shares in connection with employee stock plans for $9 million and $15 million in the 2025 quarter and 2024 quarter, respectively.

Current wording

We repurchased common shares for $100 million and $750 million in the 2025 period and 2024 period, respectively, under share repurchase plans authorized by the Board of Directors. We also acquired common shares in connection with employee stock plans for $9 million and $16 million in the 2025 period and 2024 period, respectively.

Previous wording

We paid dividends to stockholders of $108 million and $109 million during the 2025 quarter and 2024 quarter, respectively.

Current wording

We paid dividends to stockholders of $214 million and $216 million during the 2025 period and 2024 period, respectively.

Previous wording

In addition, we operate as a holding company in a highly regulated industry. Humana Inc., our parent company, is dependent upon dividends and administrative expense reimbursements from our subsidiaries, most of which are subject to regulatory restrictions. We continue to maintain significant levels of aggregate excess statutory capital and surplus in our state-regulated operating subsidiaries. Cash, cash equivalents, and short-term investments at the parent company were $1.2 billion at March 31, 2025 compared to $562 million at December 31, 2024. This increase primarily reflects net proceeds from the issuance of senior notes and commercial paper, proceeds from maturities of investment securities, partially offset by repayment of borrowings under the commercial paper program, capital contributions to certain subsidiaries, net working capital changes, cash dividends to shareholders, capital expenditures, and common stock repurchases. Our use of operating cash derived from our non-insurance subsidiaries, such as our CenterWell segment, is generally not restricted by departments of insurance (or comparable state regulators).

Current wording

In addition, we operate as a holding company in a highly regulated industry. Humana Inc., our parent company, is dependent upon dividends and administrative expense reimbursements from our subsidiaries, most of which are subject to regulatory restrictions. We continue to maintain significant levels of aggregate excess statutory capital and surplus in our state-regulated operating subsidiaries. Cash, cash equivalents, and short-term investments at the parent company were $1.3 billion at June 30, 2025 compared to $562 million at December 31, 2024. This increase primarily reflects working capital changes, net proceeds from the issuance of senior notes, and dividends from insurance subsidiaries, partially offset by repayments of senior notes, capital contributions to certain subsidiaries, cash dividends to shareholders, capital expenditures, and common stock repurchases. Our use of operating cash derived from our non-insurance subsidiaries, such as our CenterWell segment, is generally not restricted by departments of insurance (or comparable state regulators).