Stock Analysis on Net
Stock Analysis on Net

Humana Inc. (NYSE:HUM)

Analysis of Goodwill and Intangible Assets

Microsoft Excel

Goodwill and Intangible Asset Disclosure

Humana Inc., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Goodwill 9,550 9,142 11,092 4,447 3,928
Certificates of need 1,092 1,132 1,771 — —
Medicare licenses 288 286 522 — —
Customer contracts/relationships 956 929 883 849 646
Trade names and technology 139 142 160 122 84
Provider contracts 67 73 72 69 70
Noncompetes and other 84 86 35 29 29
Other intangible assets, cost 2,626 2,648 3,443 1,069 829
Accumulated amortization (933) (883) (804) (740) (652)
Other intangible assets, net 1,693 1,765 2,639 329 177
Goodwill and other intangible assets 11,243 10,907 13,731 4,776 4,105

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
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Humana Inc. goodwill decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.
Other intangible assets, net Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Humana Inc. other intangible assets, net decreased from 2021 to 2022 and from 2022 to 2023.
Goodwill and other intangible assets Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Humana Inc. goodwill and other intangible assets decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

Adjustments to Financial Statements: Removal of Goodwill

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: Goodwill 9,550 9,142 11,092 4,447 3,928
Total assets (adjusted) 37,515 33,913 33,266 30,522 25,146
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 16,262 15,311 16,080 13,728 12,037
Less: Goodwill 9,550 9,142 11,092 4,447 3,928
Stockholders’ equity (adjusted) 6,712 6,169 4,988 9,281 8,109

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 Goodwill (Summary)

Humana Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Total Asset Turnover
Reported total asset turnover 2.24 2.15 1.87 2.17 2.21
Adjusted total asset turnover 2.81 2.73 2.49 2.49 2.56
Financial Leverage
Reported financial leverage 2.89 2.81 2.76 2.55 2.42
Adjusted financial leverage 5.59 5.50 6.67 3.29 3.10
Return on Equity (ROE)
Reported ROE 15.31% 18.33% 18.24% 24.53% 22.49%
Adjusted ROE 37.08% 45.49% 58.80% 36.28% 33.38%
Return on Assets (ROA)
Reported ROA 5.29% 6.52% 6.61% 9.63% 9.31%
Adjusted ROA 6.63% 8.27% 8.82% 11.03% 10.77%

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 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 decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Humana Inc. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as 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 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 Goodwill
Selected Financial Data (US$ in millions)
External revenues 105,305 92,488 82,877 76,001 64,387
Adjusted total assets 37,515 33,913 33,266 30,522 25,146
Activity Ratio
Adjusted total asset turnover2 2.81 2.73 2.49 2.49 2.56

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 ÷ 37,515 = 2.81

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 Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 37,515 33,913 33,266 30,522 25,146
Adjusted stockholders’ equity 6,712 6,169 4,988 9,281 8,109
Solvency Ratio
Adjusted financial leverage2 5.59 5.50 6.67 3.29 3.10

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
= 37,515 ÷ 6,712 = 5.59

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 decreased from 2021 to 2022 but then slightly increased 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 Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Humana 2,489 2,806 2,933 3,367 2,707
Adjusted stockholders’ equity 6,712 6,169 4,988 9,281 8,109
Profitability Ratio
Adjusted ROE2 37.08% 45.49% 58.80% 36.28% 33.38%

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 × Net income attributable to Humana ÷ Adjusted stockholders’ equity
= 100 × 2,489 ÷ 6,712 = 37.08%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Humana Inc. adjusted ROE deteriorated from 2021 to 2022 and 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 Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Humana 2,489 2,806 2,933 3,367 2,707
Adjusted total assets 37,515 33,913 33,266 30,522 25,146
Profitability Ratio
Adjusted ROA2 6.63% 8.27% 8.82% 11.03% 10.77%

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 × Net income attributable to Humana ÷ Adjusted total assets
= 100 × 2,489 ÷ 37,515 = 6.63%

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