500 West Main Street

P.O. Box 1438

Louisville, KY 40201-1438

http://www.humana.com

Regina Nethery

Humana Investor Relations

(502) 580-3644

e-mail: Rnethery@humana.com

2Q13 EPS of $2.63 exceeds management’s expectations

Year-over-year second quarter pretax income up 14 percent in Retail Segment and up 9 percent in Employer Group Segment

2013 EPS guidance raised to range of $8.65 to $8.75

2013 cash flows from operations now projected to be at least $2 billion

Net cash from operating activities

    (in millions)

GAAP

Timing of premium payment from CMS (a)

Non-GAAP (b)

Retail Segment pretax income of $418 million in 2Q13 compared to $367 million in 2Q12, an increase of $51 million, reflecting the company’s improved operating performance over the prior year. This year-over-year increase was primarily due to membership growth and a lower operating cost ratio as favorable outcomes from clinical initiatives were generally offset by related investment spending.

For 1H13, pretax earnings for the Retail Segment of $768 million increased by $273 million from 1H12 pretax earnings of $495 million. The first-half increase reflects the same factors impacting the second quarter year-over-year comparison, in addition to the favorable impact of a lower year-to-date benefit ratio.

Individual Medicare Advantage membership was 2,029,700 as of June 30, 2013, an increase of 133,900 members, or 7.1 percent from 1,895,800 at June 30, 2012 and up 102,100, or 5.3 percent from 1,927,600 at December 31, 2012, primarily due to a successful enrollment season associated with the 2013 plan year as well as age-in activity year to date.

Individual Medicare Advantage net membership growth during 2013 included the divestiture of 12,600 members acquired with the March 2012 Arcadian Management Services, Inc. transaction, in accordance with the company’s previously disclosed agreement with the United States Department of Justice.

Membership in the company’s individual stand-alone Prescription Drug Plans (PDPs) was 3,220,600 at June 30, 2013, up 250,500, or 8.4 percent compared to 2,970,100 at June 30, 2012 and up 167,900, or 5.5 percent from 3,052,700 at December 31, 2012. These increases resulted primarily from growth in the company’s innovative Humana-Walmart plan offering.

HumanaOne^® medical membership increased to 478,000 at June 30, 2013, an increase of 34,200, or 7.7 percent from 443,800 at June 30, 2012, while also increasing 34,000, or 7.7 percent from 444,000 at December 31, 2012. Membership growth reflects new sales in the first half of 2013 and favorable member retention.

Medical membership in state-based Medicaid plans increased to 70,600 at June 30, 2013, an increase of 24,100, or 51.8 percent, from 46,500 at June 30, 2012 and up 18,500, or 35.5 percent, from 52,100 at December 31, 2012, primarily driven by the addition of the company’s Kentucky Medicaid contract effective on January 1, 2013.

Membership in individual specialty products^(c) of 1,011,700 at June 30, 2013 increased 105,500, or 11.6 percent, from 906,200 at June 30, 2012 and increased 63,000, or 6.6 percent, from 948,700 at December 31, 2012, primarily driven by increased membership in dental and vision offerings.

2Q13 premiums and services revenue for the Retail Segment was $6.77 billion, an increase of 5.8 percent from $6.40 billion in 2Q12. The increase was primarily the result of a 7.0 percent increase in average individual Medicare Advantage membership year-over-year, partially offset by lower per-member premiums in the quarter which reflected the impact of sequestration beginning April 1, 2013.

The 2Q13 benefit ratio for the Retail Segment of 84.2 percent was flat year-over-year. Retail Segment benefits expense for 2Q13 included the beneficial effect of $72 million in favorable prior-year development compared to $24 million in 2Q12. Additionally, year-over-year timing differences primarily associated with clinical investment spending and weekday seasonality generally offset the impact of favorable outcomes associated with clinical programs and higher prior-year claims development.

The Retail Segment’s operating cost ratio of 9.5 percent in 2Q13 decreased 50 basis points from 10.0 percent in 2Q12. The decrease was primarily the result of cost efficiencies associated with higher average membership as well as the company’s continued focus on operating cost reductions.

Employer Group Segment pretax income of $127 million in 2Q13 compares to pretax income of $117 million in 2Q12, reflecting the company’s improved operating performance over the prior year. The year-over-year improvement was primarily driven by group Medicare membership growth and a lower operating cost ratio for this segment.

For 1H13, pretax earnings for the Employer Group Segment of $332 million increased by $86 million versus 1H12 pretax earnings of $246 million. The first-half increase reflects the same factors impacting the 2Q13 year-over-year comparison as well as a lower benefit cost ratio year to date.

Fully-insured group Medicare Advantage membership was 416,600 at June 30, 2013, an increase of 56,100 members, or 15.6 percent from 360,500 at June 30, 2012 and up 45,800, or 12.4 percent from 370,800 at December 31, 2012, reflecting on-going success in demonstrating the company’s value proposition to employers for retirees. On January 1, 2013, the company lost its sole ASO group Medicare Advantage account which had 27,900 members at June 30, 2012 and 27,700 members at December 31, 2012.

Group fully-insured commercial medical membership was 1,196,100 at June 30, 2013, roughly flat to June 30, 2012 levels and down 15,700, or 1.3 percent, from 1,211,800 at December 31, 2012, as higher small group business membership was generally offset by lower membership in large group accounts. Approximately 60 percent of group fully-insured commercial medical membership was in small group accounts at June 30, 2013 versus 58 percent at June 30, 2012 and 59 percent at December 31, 2012.

Group ASO commercial medical membership declined to 1,199,600 at June 30, 2013, a decrease of 29,200, or 2.4 percent from 1,228,800 at June 30, 2012 and down 38,100, or 3.1 percent from 1,237,700 at December 31, 2012. This decline reflected a continuation of discipline in pricing services for self-funded accounts amid a highly competitive environment.

Membership in Employer Group specialty products^(c) rose to 7,256,800 at June 30, 2013, an increase of 299,000, or 4.3 percent, from 6,957,800 at June 30, 2012 and was up 120,600, or 1.7 percent, from 7,136,200 at December 31, 2012. This increase primarily resulted from increased cross-sales of the company’s specialty products to its medical membership and growth in stand-alone specialty product sales.

2Q13 premiums and services revenue for the Employer Group Segment were $2.81 billion, up approximately 7.2 percent from $2.62 billion in 2Q12, primarily reflecting the impacts of higher average group Medicare Advantage membership.

The 2Q13 benefit ratio for the Employer Group Segment was 82.5 percent, an increase of 70 basis points from 81.8 percent for 2Q12. The year-over-year increase in the benefit ratio primarily reflected growth in the company’s group Medicare Advantage products, which generally carry a higher benefit ratio than fully-insured commercial group products, partially offset by higher favorable prior-year medical claims reserve development. Unfavorable timing differences for weekday seasonality for 2Q13 versus 2Q12 also negatively impacted this segment’s benefit ratio year over year.

The Employer Group Segment’s operating cost ratio was 15.3 percent in 2Q13, a decline of 100 basis points from 16.3 percent in 2Q12, primarily reflecting cost savings associated with operating cost reduction initiatives and a higher percentage of members in group Medicare Advantage plans (which carry a lower operating cost ratio than commercial fully-insured group accounts).

Healthcare Services Segment pretax income of $131 million in 2Q13 increased from $128 million in 2Q12, as revenue growth and the profit contribution from the Metropolitan Health Networks, Inc. (Metropolitan) acquisition and our home care services business were generally offset by previously-planned investment spending associated with the integration and build-out of provider practices and chronic care centers.

For 1H13, pretax earnings for the Healthcare Services Segment of $256 million increased by $3 million from 1H12 pretax earnings of $253 million, reflecting the same factors impacting the second quarter year-over-year comparison.

Revenues of $3.86 billion in 2Q13 for the Healthcare Services Segment increased $667 million, or 20.9 percent from $3.20 billion in 2Q12, primarily due to growth in the company’s pharmacy solutions and provider services businesses and its 2012 acquisitions of Metropolitan and SeniorBridge.

The Healthcare Services Segment’s operating cost ratio of 95.7 percent in 2Q13 was relatively unchanged from 95.4 percent in 2Q12.

On June 26, 2013, the Puerto Rico Health Insurance Administration notified Humana of its election not to renew the company’s three-year Medicaid contracts for the East, Southeast, and Southwest regions which ended June 30, 2013. Contractual transition provisions require the continuation of insurance coverage for beneficiaries through September 30, 2013 and an additional period of time thereafter to process claims. During 2Q13, Humana accrued expenses of $31 million on these contracts primarily related to benefits and administrative costs.

Other Businesses reported a pretax loss of $30 million in 2Q13 versus a pretax loss of $56 million in 2Q12. The 2Q13 results included the $31 million in Puerto Rico Medicaid expenses noted above, while the 2Q12 results included expenses associated with a previously disclosed litigation settlement.

For 1H13, Other Businesses reported pretax income of $28 million compared to a pretax loss of $51 million in 1H12. In addition to the factors impacting second quarter comparisons year-over-year for Other Businesses described above, 1H13 results include the beneficial effect of settlement of contract claims with the DoD.

If Humana does not design and price its products properly and competitively, if the premiums Humana receives are insufficient to cover the cost of health care services delivered to its members, if the company is unable to implement clinical initiatives to provide a better health care experience for its members, lower costs and appropriately document the risk profile of its members, or if its estimates of benefits expense are inadequate, Humana’s profitability could be materially adversely affected. Humana estimates the costs of its benefit expense payments, and designs and prices its products accordingly, using actuarial methods and assumptions based upon, among other relevant factors, claim payment patterns, medical cost inflation, and historical developments such as claim inventory levels and claim receipt patterns. These estimates, however, involve extensive judgment, and have considerable inherent variability because they are extremely sensitive to changes in payment patterns and medical cost trends.

If Humana fails to effectively implement its operational and strategic initiatives, particularly its Medicare initiatives (given the concentration of the company’s revenues in the Medicare business), the company’s business may be materially adversely affected.

If Humana fails to properly maintain the integrity of its data, to strategically implement new information systems, to protect Humana’s proprietary rights to its systems, or to defend against cyber-security attacks, the company’s business may be materially adversely affected.

Humana’s business may be materially adversely impacted by CMS’s adoption of a new coding set for diagnoses (commonly known as ICD-10).

Humana is involved in various legal actions, or disputes that could lead to legal actions (such as, among other things, provider contract disputes relating to rate adjustments resulting from the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, commonly referred to as “sequestration”; other provider contract claims; and qui tam litigation brought by individuals on behalf of the government) and governmental and internal investigations, any of which, if resolved unfavorably to the company, could result in substantial monetary damages. Increased litigation and negative publicity could also increase the company’s cost of doing business.

As a government contractor, Humana is exposed to risks that may materially adversely affect its business or its willingness or ability to participate in government health care programs including, among other things, loss of material government contracts, governmental audits and investigations, potential inadequacy of government-determined payment rates or other changes in the governmental programs in which Humana participates.

The Health Care Reform Law, including The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010, could have a material adverse effect on Humana’s results of operations, including restricting revenue, enrollment and premium growth in certain products and market segments, restricting the company’s ability to expand into new markets, increasing the company’s medical and operating costs by, among other things, requiring a minimum benefit ratio on insured products, lowering the company’s Medicare payment rates and increasing the company’s expenses associated with a non-deductible health insurance industry fee and other assessments; financial position, including the company’s ability to maintain the value of its goodwill; and cash flows. In addition, if the new non-deductible health insurance industry fee and other assessments, including a three-year commercial reinsurance fee, were imposed as enacted, and if Humana is unable to adjust its business model to address these new taxes and assessments, such as through the reduction of the company’s operating costs, there can be no assurance that the non-deductible health insurance industry fee and other assessments would not have a material adverse effect on the company’s results of operations, financial position, and cash flows.

Humana’s business activities are subject to substantial government regulation. New laws or regulations, or changes in existing laws or regulations or their manner of application could increase the company’s cost of doing business and may adversely affect the company’s business, profitability and cash flows.

Any failure to manage operating costs could hamper Humana’s profitability.

Any failure by Humana to manage acquisitions and other significant transactions successfully may have a material adverse effect on its results of operations, financial position, and cash flows.

If Humana fails to develop and maintain satisfactory relationships with the providers of care to its members, the company’s business may be adversely affected.

Humana’s pharmacy business is highly competitive and subjects it to regulations in addition to those the company faces with its core health benefits businesses.

Changes in the prescription drug industry pricing benchmarks may adversely affect Humana’s financial performance.

If Humana does not continue to earn and retain purchase discounts and volume rebates from pharmaceutical manufacturers at current levels, Humana’s gross margins may decline.

Humana’s ability to obtain funds from its subsidiaries is restricted by state insurance regulations.

Downgrades in Humana’s debt ratings, should they occur, may adversely affect its business, results of operations, and financial condition.

Changes in economic conditions could adversely affect Humana’s business and results of operations.

The securities and credit markets may experience volatility and disruption, which may adversely affect Humana’s business.

Given the current economic climate, Humana’s stock and the stock of other companies in the insurance industry may be increasingly subject to stock price and trading volume volatility.

Form 10-K for the year ended December 31, 2012 (as amended by the Form 10-K/A filed on April 12, 2013);

Form 10-Q for the quarter ended March 31, 2013;

Form 8-Ks filed during 2013.

Annual reports to stockholders;

Securities and Exchange Commission filings;

Most recent investor conference presentations;

Quarterly earnings news releases;

Replays of most recent earnings release conference calls;

Calendar of events (including upcoming earnings conference call dates and times, as well as planned interaction with research analysts and institutional investors);

Corporate Governance information.

(in accordance with Generally Accepted Accounting
Principles)

For the year ending December 31, 2013

Comments

Diluted earnings per common share

Full Year

Consolidated

Includes expected investment income in the range of $365 million to $385 million

Retail Segment

Segment-level revenues include intersegment amounts that eliminate in consolidation.

Employer Group Segment

Healthcare Services Segment

Other Businesses

Ending medical membership versus prior year end

Retail Segment

Medicare Advantage

Includes the January 1, 2013 disposition of 12,600 Medicare Advantage members acquired in the March 2012 Arcadian transaction in accordance with the company’s previously disclosed agreement with the United States Department of Justice.

Medicare stand-alone PDPs
(excl. LI-NET)

HumanaOne

Medicare Supplement

Employer Group Segment

Medicare Advantage fully-insured

Medicare Advantage ASO

Commercial fully-insured

Commercial ASO

Retail Segment

Benefits expense as a percent of

    premiums.

Employer Group Segment

Operating cost ratios

Consolidated

Healthcare Services Segment

(in accordance with Generally Accepted Accounting
Principles)

For the year ending December 31, 2013

Comments

Consolidated depreciation and amortization (D&A)

Certain D&A is included in benefits expense on the income statement but shown as a non-cash item on the cash flows statement

Income statement

$325 million to $345 million

Cash flows statement

Retail Segment

$1.3 billion to $1.4 billion

Approximately 5% pretax margin

Segment-level pretax results and margins include the impact of net investment income

Employer Group Segment

$250 million to $270 million

2% to 2.5% pretax margin

Healthcare Services Segment

$525 million to $550 million

Approximately 3.5% pretax margin

Approximately 160 million

Projections exclude the impact of future share repurchases

$2.0 billion to $2.2 billion

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Revenues:

Premiums

Services

Investment income

Total revenues

Operating expenses:

Benefits

Operating costs

Depreciation and amortization

Total operating expenses

Income from operations

Interest expense

Income before income taxes

Provision for income taxes

Net income

Basic earnings per common share

Diluted earnings per common share

Shares used in computing basic earnings per common share (000’s)

Shares used in computing diluted earnings per common share (000’s)

Revenues:

Premiums

Services

Investment income

Total revenues

Operating expenses:

Benefits

Operating costs

Depreciation and amortization

Total operating expenses

Income from operations

Interest expense

Income before income taxes

Provision for income taxes

Net income

Basic earnings per common share

Diluted earnings per common share

Shares used in computing basic earnings per common share (000’s)

Shares used in computing diluted earnings per common share (000’s)

Revenues - external customers

Premiums:

Medicare Advantage

Medicare stand-alone PDP

Total Medicare

Fully-insured

Specialty

Military services

Medicaid and other (A)

Total premiums

Services revenue:

Provider

ASO and other (B)

Pharmacy

Total services revenue

Total revenues - external customers

Intersegment revenues

Services

Products

Total intersegment revenues

Investment income

Total revenues

Operating expenses:

Benefits

Operating costs

Depreciation and amortization

Total operating expenses

Income (loss) from operations

Interest expense

Income (loss) before income taxes

Benefit ratio

Operating cost ratio

Revenues - external customers

Premiums:

Medicare Advantage

Medicare stand-alone PDP

Total Medicare

Fully-insured

Specialty

Military services

Medicaid and other (A)

Total premiums

Services revenue:

Provider

ASO and other (B)

Pharmacy

Total services revenue

Total revenues - external customers

Intersegment revenues

Services

Products

Total intersegment revenues

Investment income

Total revenues

Operating expenses:

Benefits

Operating costs

Depreciation and amortization