Financial Analysis

"COMMITMENTS, GUARANTEES AND CONTINGENCIES Purchase Obligations We have agreements to purchase services, primarily information technology related services, or to make improvements to real estate, in each case that are enforceable and legally binding on us and that specify all significant terms, including: fixed or minimum levels of service to be purchased; fixed, minimum or variable price provisions; and the appropriate timing of the transaction. We have purchase obligation commitments of $1.2 billion in 2026, $953 million in 2027, $595 million in 2028, $298 million in 2029, and $273 million in 2030. Purchase obligations exclude agreements that are cancellable without penalty. Off-Balance Sheet Arrangements As part of our ongoing business, we do not participate or knowingly seek to participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, or SPEs, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of December 31, 2025, we were not involved in any SPE transactions. Guarantees and Indemnifications Through indemnity agreements approved by the state regulatory authorities, certain of our regulated subsidiaries generally are guaranteed by Humana Inc., our parent company, in the event of insolvency for (1) member coverage for which premium paymen …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT The carrying value of debt outstanding was as follows at December 31, 2025 and 2024: 2025 2024 (in millions) Short-term debt: Senior notes: $600 million, 4.500% due April 1, 2025 577 Total senior notes 577 Total short-term debt $ $ 577 Long-term debt: Senior notes: $750 million, 1.350% due February 3, 2027 563 689 $600 million, 3.950% due March 15, 2027 466 538 $500 million, 5.750% due March 1, 2028 491 490 $500 million, 5.750% due December 1, 2028 497 496 $750 million, 3.700% due March 23, 2029 586 585 $500 million, 3.125% due August 15, 2029 388 433 $500 million, 4.875% due April 1, 2030 497 497 $1,500 million, 5.375% due April, 15, 2031 1,493 1,226 $750 million, 2.150% due February 3, 2032 592 744 $750 million, 5.875% due March 1, 2033 750 726 $850 million, 5.950% due March 15, 2034 832 806 $750 million, 5.550% due May 1, 2035 746 $250 million, 8.150% due June 15, 2038 260 260 $400 million, 4.625% due December 1, 2042 374 366 $750 million, 4.950% due October 1, 2044 717 714 $400 million, 4.800% due March 15, 2047 396 392 $500 million, 3.950% due August 15, 2049 517 505 $750 million, 5.500% due March 15, 2053 727 705 $1,000 million, 5.750% due April, 15, 2054 991 972 $500 million, 6.000% due May 1, 2055 486 Total long-term debt $ 12,369 $ 11,144 Maturities of the short-term and long-term debt for the years ending December 31, are as follows: For the years ending December 31, (in millions) 2026 $ 2027 1,031 2028 993 2029 979 2030 500 Thereafter 8,996 Senior Notes Our se …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

FAIR VALUE Financial Assets The following table summarizes our fair value measurements at December 31, 2025 and 2024, respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Value Quoted Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) (in millions) December 31, 2025 Cash equivalents $ 3,945 $ 3,945 $ $ Debt securities: U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations 2,278 2,278 Mortgage-backed securities 3,651 3,651 Tax-exempt municipal securities 428 428 Mortgage-backed securities: Residential 388 388 Commercial 1,012 996 16 Asset-backed securities 783 656 127 Corporate debt securities 7,656 7,359 297 Total debt securities 16,196 15,756 440 Securities lending invested collateral 638 638 Total invested assets $ 20,779 $ 4,583 $ 15,756 $ 440 December 31, 2024 Cash equivalents $ 2,048 $ 2,048 $ $ Debt securities: U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations 3,227 3,227 Mortgage-backed securities 3,995 3,995 Tax-exempt municipal securities 526 526 Mortgage-backed securities: Residential 522 522 Commercial 1,206 1,199 7 Asset-backed securities 1,403 1,330 73 Corporate debt securities 7,756 7,514 242 Total debt securities 18,635 18,313 322 Securities lending invested collateral 418 418 Total invested assets $ 21,101 $ 2,466 $ 18,313 $ 322 Our Level 3 assets ha …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill for our reportable segments for the years ended December 31, 2025 and 2024 were as follows: Insurance CenterWell Total (in millions) Balance at January 1, 2024 $ 2,663 $ 6,887 $ 9,550 Acquisitions 81 81 Balance at December 31, 2024 2,663 6,968 9,631 Acquisitions 72 72 Dispositions (17) (17) Balance at December 31, 2025 $ 2,663 $ 7,023 $ 9,686 The following table presents details of our other intangible assets included in other long-term assets in the accompanying consolidated balance sheets at December 31, 2025 and 2024: Weighted Average Life 2025 2024 Cost Accumulated Amortization Net Cost Accumulated Amortization Net (in millions) Other intangible assets: Certificates of need Indefinite $ 790 $ $ 790 $ 910 $ $ 910 Medicare licenses Indefinite 262 262 270 270 Customer contracts/relationships 8.6 years 732 692 40 965 759 206 Trade names and technology 6.1 years 104 97 7 139 119 20 Provider contracts 11.9 years 67 65 2 67 64 3 Noncompetes and other 8.4 years 85 58 27 85 51 34 Total other intangible assets 8.5 years $ 2,040 $ 912 $ 1,128 $ 2,436 $ 993 $ 1,443 Amortization expense for other intangible assets was approximately $51 million, $60 million and $67 million in 2025, 2024 and 2023, respectively. We recorded impairment charges of $128 million, $200 million and $55 million relating to indefinite-lived intangible assets in 2025, 2024 and 2023 respectively. We disposed $138 million of intangible …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES The provision for income taxes consisted of the following for the years ended December 31, 2025, 2024 and 2023: 2025 2024 2023 (in millions) Current provision Federal $ 130 $ 566 $ 915 State and local 45 39 84 Foreign 1 Total current provision 175 605 1,000 Deferred tax expense (benefit) Federal 89 (179) (178) State and local (14) (13) 6 Foreign 8 Total deferred tax expense (benefit) 75 (192) (164) Total provision for income taxes $ 250 $ 413 $ 836 The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported for the years ended December 31, 2025, 2024 and 2023 are as follows: 2025 2024 2023 ($ in millions) U.S. federal statutory tax rate $ 302 21.0 % $ 340 21.0 % $ 698 21.0 % State and local income taxes, net of federal income tax effect (6) (0.4) % 14 0.9 % 76 2.3 % Changes in unrecognized tax benefits 47 3.3 % 29 1.8 % 37 1.1 % Gain/loss on acquisitions and dispositions (102) (7.1) % % (1) % Other adjustments 9 0.6 % 30 1.8 % 26 0.8 % Provision for income taxes and effective income tax rate $ 250 17.4 % $ 413 25.5 % $ 836 25.2 % The components of income before provision for income taxes for the years ended December 31, 2025, 2024 and 2023 are as follows: 2025 2024 2023 (in millions) Domestic $ 1,485 $ 1,662 $ 3,351 Foreign (47) (42) (26) Total $ 1,438 $ 1,620 $ 3,325 As of December 31, 2025, the Company paid income taxes net of refund of $231 million for federal income taxes and $41 million for state and …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES We determine if a contract contains a lease by evaluating the nature and substance of the agreement. We lease facilities, computer hardware, and other furniture and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For new lease agreements, we combine lease and nonlease components for all of our asset classes. When portions of the lease payments are not fixed or depend on an index or rate, we consider those payments to be variable in nature. Our variable lease payments include, but are not limited to, common area maintenance, taxes and insurance which are not dependent upon an index or rate. Variable lease payments are recorded in the period in which the obligation for the payment is incurred. Most leases include options to renew, with renewal terms that can extend the lease term. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Right-of-use assets included within other long-term assets in our consolidated balance sheets were $485 million and $445 million at D …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recently Issued Accounting Pronouncements Recently Adopted Accounting Pronouncements In December 2023, the FASB issued Accounting Standards Update No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures, effective for annual 2025 year-end financial statements. The updated guidance requires additional disclosure and disaggregated information in the income tax rate reconciliation along with qualitative explanation of individually significant reconciling items. The updated guidance also requires disclosure of the income taxes paid (net of refunds received) disaggregated by jurisdiction. Our income tax footnote was updated to reflect the adoption of the standard, which did not have a material impact on our disclosures. Accounting Pronouncements Effective in Future Periods In November 2024, the FASB issued Accounting Standards Update No. 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance requires significant additional disclosures disaggregating certain costs and expenses including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The new guidance requires prospective application (with retrospective application permitted). The new guidance will be effective for us beginning with our annual 2027 year-end financial statements, with early adoption permitted. We are currently evaluating the impact on …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

SEGMENT INFORMATION Our two reportable segments, Insurance and CenterWell, are based on a combination of the type of health plan customer and adjacent businesses centered on well-being solutions for our health plans and other customers, as described below. Our Chief Executive Officer, the Chief Operating Decision Maker, utilizes these segment groupings and results of each segment, measured by income (loss) from operations, to assess performance and allocate resources primarily during our annual budget process and periodic forecast updates. The Insurance segment consists of Medicare benefits, marketed to individuals or directly via group Medicare accounts, as well as our contract with CMS to administer the Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program and contracts with various states to provide Medicaid, dual eligible demonstration, and Long-Term Support Services benefits, which we refer to collectively as our state-based contracts. This segment also includes products consisting of specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health benefits. In addition, our Insurance segment includes our Military services business, primarily our T-5 East Region contract, as well as the operations of our PBM business. The CenterWell segment includes our pharmacy solutions, primary care, and home solutions operations. Services offered by this segment are designed to enhan …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Our consolidated financial statements include the accounts of Humana Inc. and subsidiaries that the Company controls, including variable interest entities associated with medical practices for which we are the primary beneficiary. We do not own many of our medical practices but instead enter into exclusive management agreements with the affiliated Professional Associations, or P.A.s, that operate these medical practices. Based upon the provisions of these agreements, these affiliated P.A.s are variable interest entities and we are the primary beneficiary, and accordingly we consolidate the affiliated P.A.s. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-liv …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

STOCKHOLDERS EQUITY Dividends The following table provides details of dividend payments, excluding dividend equivalent rights, in 2023, 2024, and 2025, under our Board approved quarterly cash dividend policy: Payment Date Amount per Share Total Amount (in millions) 2023 $3.44 $428 2024 $3.54 $428 2025 $3.54 $426 In October 2025, the Board declared a cash dividend of $0.885 per share payable on January 30, 2026 to stockholders of record on December 26, 2025 for an aggregate amount of $107 million. In February 2026, the Board declared a cash dividend of $0.885 per share payable on April 24, 2026 to stockholders of record on March 27, 2026. Declaration and payment of future quarterly dividends is at the discretion of our Board and may be adjusted as business needs or market conditions change. Stock Repurchases Our Board of Directors may authorize the purchase of our common shares. Under our share repurchase authorization, shares may have been purchased from time to time at prevailing prices in the open market, by block purchases, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or in privately-negotiated transactions (including pursuant to accelerated share repurchase agreements with investment banks), subject to certain regulatory restrictions on volume, pricing, and timing. Effective February 16, 2024, the Board of Directors replaced the February 2023 repurchase authorization (of which approximately $824 million remained …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

"COMMITMENTS, GUARANTEES AND CONTINGENCIES Government Contracts Our Medicare products, which accounted for approximately 86% of our total premiums and services revenue for the six months ended June 30, 2026, primarily consisted of products covered under the Medicare Advantage and Medicare Part D Prescription Drug Plan contracts with the federal government. These contracts are renewed generally for a calendar year term unless CMS notifies us of its decision not to renew by May 1 of the calendar year in which the contract would end, or we notify CMS of our decision not to renew by the first Monday in June of the calendar year in which the contract would end. All material contracts between Humana and CMS relating to our Medicare products have been renewed for 2026, and all of our product offerings filed with CMS and going to market for 2026 have been approved. CMS uses a risk-adjustment model that adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members. The risk-adjustment model, which CMS implemented pursuant to the Balanced Budget Act of 1997 (BBA) and the Benefits Improvement and Protection Act of 2000 (BIPA), generally pays more where a plan's membership has higher expected costs. Under this model, rates paid to MA plans are based on actuarially determined bids, which include a process whereby our prospective payments are based on our estimated cost of providing standard Medicare-covered benefits to an enrollee with a ""nationa …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"DEBT The carrying value of debt outstanding, net of unamortized debt issuance costs, was as follows at June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 (in millions) Short-term debt: Commercial paper $ 1,319 $ Senior notes: $750 million, 1.350% due February 3, 2027 520 $600 million, 3.950% due March 15, 2027 429 Total senior notes 949 Total short-term debt $ 2,268 $ Long-term debt: Senior notes: $750 million, 1.350% due February 3, 2027 $ $ 563 $600 million, 3.950% due March 15, 2027 466 $500 million, 5.750% due March 1, 2028 491 491 $500 million, 5.750% due December 1, 2028 497 497 $750 million, 3.700% due March 23, 2029 526 586 $500 million, 3.125% due August 15, 2029 338 388 $500 million, 4.875% due April 1, 2030 497 497 $1,500 million, 5.375% due April 15, 2031 1,479 1,493 $750 million, 2.150% due February 3, 2032 485 592 $750 million, 5.875% due March 1, 2033 737 750 $850 million, 5.950% due March 15, 2034 817 832 $750 million, 5.550% due May 1, 2035 735 746 $250 million, 8.150% due June 15, 2038 258 260 $400 million, 4.625% due December 1, 2042 368 374 $750 million, 4.950% due October 1, 2044 705 717 $400 million, 4.800% due March 15, 2047 390 396 $500 million, 3.950% due August 15, 2049 506 517 $750 million, 5.500% due March 15, 2053 712 727 $1,000 million, 5.750% due April 15, 2054 975 991 $500 million, 6.000% due May 1, 2055 477 486 Junior subordinated notes: $1,000 million, 6.625% due September 15, 2056 986 Total long-term debt $ 11,979 $ 12,369 …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

"FAIR VALUE Financial Assets The following table summarizes our fair value measurements at June 30, 2026 and December 31, 2025, respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Value Quoted Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) (in millions) June 30, 2026 Cash equivalents $ 5,557 $ 5,557 $ $ Debt securities: U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations 2,506 2,506 Mortgage-backed securities 4,034 4,034 Tax-exempt municipal securities 408 408 Mortgage-backed securities: Residential 404 404 Commercial 1,084 1,068 16 Asset-backed securities 1,092 937 155 Corporate debt securities 8,100 7,804 296 Total debt securities 17,628 17,161 467 Securities lending invested collateral 702 702 Total invested assets $ 23,887 $ 6,259 $ 17,161 $ 467 December 31, 2025 Cash equivalents $ 3,945 $ 3,945 $ $ Debt securities: U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations 2,278 2,278 Mortgage-backed securities 3,651 3,651 Tax-exempt municipal securities 428 428 Mortgage-backed securities: Residential 388 388 Commercial 1,012 996 16 Asset-backed securities 783 656 127 Corporate debt securities 7,656 7,359 297 Total debt securities 16,196 15,756 440 Securities lending invested collateral 638 638 Total invested assets $ 20,779 $ 4,583 $ 15,756 $ 440 Our Level 3 ass …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill for our reportable segments for the six months ended June 30, 2026 were as follows: Insurance CenterWell Total (in millions) Balance at January 1, 2026 $ 2,663 $ 7,023 $ 9,686 Acquisitions 246 585 831 Dispositions (32) (32) Balance at June 30, 2026 $ 2,909 $ 7,576 $ 10,485 The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at June 30, 2026 and December 31, 2025: Weighted Average Life June 30, 2026 December 31, 2025 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net ($ in millions) Other intangible assets: Certificates of need Indefinite $ 790 $ $ 790 $ 790 $ $ 790 Medicare licenses Indefinite 262 262 262 262 Customer contracts/relationships 8.5 years 788 702 86 732 692 40 Trade names and technology 5.6 years 115 102 13 104 97 7 Provider contracts 11.9 years 66 64 2 67 65 2 Noncompetes and other 8.2 years 89 62 27 85 58 27 Total other intangible assets 8.4 years $ 2,110 $ 930 $ 1,180 $ 2,040 $ 912 $ 1,128 For the three months ended June 30, 2026 and 2025, amortization expense for other intangible assets was approximately $8 million and $15 million, respectively. For the six months ended June 30, 2026 and 2025, amortization expense for other intangible assets was approximately $19 million and $30 million, respectively. We recorded an impair …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

"INCOME TAXES The effective income tax rate was 25.6% and 24.7% for the three months ended June 30, 2026, and 2025, respectively, and 25.2% and 24.6% for the six months ended June 30, 2026 and 2025, respectively. The 2026 quarter and period effective income tax rate increase is primarily related to state taxes. For the six months ended June 30, 2026 and 2025, we paid income taxes net of refunds of $141 million and $29 million, respectively. For additional information regarding income taxes, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, ""Financial Statements and Supplementary Data"" in our 2025 Form 10-K."

IncomeTaxDisclosureTextBlock

Accounting Pronouncements Effective in Future Periods In November 2024, the FASB issued Accounting Standards Update No. 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance requires significant additional disclosures disaggregating certain costs and expenses including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The new guidance requires prospective application (with retrospective application permitted). The new guidance will be effective for us beginning with our annual 2027 year-end financial statements, with early adoption permitted. We are currently evaluating the impact on our disclosures. In September 2025, The FASB issued Accounting Standards Update No. 2025-06 Intangibles Goodwill and Other Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The new guidance modernizes consideration of different methods of software development, updating the requirements for capitalization of software costs. The new guidance requires prospective application (with retrospective application permitted). The new guidance will be effective for us beginning with our interim 2028 financial statements, with early adoption permitted. We are currently evaluating the impact on our consolidated results of operations, financial position, and cash flows. There are no other rece …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"SEGMENT INFORMATION Our two reportable segments, Insurance and CenterWell, are based on a combination of the type of health plan customer and adjacent businesses centered on well-being solutions for our health plans and other customers, as described below. Our Chief Executive Officer, the Chief Operating Decision Maker, utilizes these segment groupings and results of each segment, measured by income (loss) from operations, to assess performance and allocate resources primarily during our annual budget process and periodic forecast updates. The Insurance segment consists of Medicare benefits, marketed to individuals or directly via group Medicare accounts, as well as our stand-alone prescription drug plans, or PDP, and contracts with various states to provide Medicaid, and Long-Term Support Services benefits, which we refer to collectively as our state-based contracts. This segment also includes products consisting of specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health benefits. In addition, our Insurance segment includes our Military services business as well as the operations of our PBM business. The CenterWell segment includes our pharmacy solutions, primary care, and home solutions operations. Services offered by this segment are designed to enhance the overall healthcare experience. These services may lead to lower utilization associated with improved member health and/or lower drug cost …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"STOCKHOLDERS EQUITY Dividends The following table provides details of dividend payments, excluding dividend equivalent rights for unvested stock awards, during 2026 under our Board approved quarterly cash dividend policy: Record Date Payment Date Amount per Share Total Amount (in millions) 2026 payments 12/26/2025 1/30/2026 $ 0.8850 $ 107 3/27/2026 4/24/2026 $ 0.8850 $ 106 In April 2026, the Board declared a cash dividend of $0.885 per share payable on July 31, 2026 to stockholders of record as of the close of business on June 26, 2026. Declaration and payment of future quarterly dividends are at the discretion of our Board and may be adjusted as business needs or market conditions change. Stock Repurchases Our Board of Directors may authorize the purchase of our common stock shares. Under the share repurchase authorization, shares may be purchased from time to time at prevailing prices in the open market, by block purchases, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or in privately-negotiated transactions, including pursuant to accelerated share repurchase agreements with investment banks, subject to certain regulatory restrictions on volume, pricing, and timing. Effective February 16, 2024, the Board of Directors replaced the February 2023 repurchase authorization (of which approximately $824 million remained unused) with a new share repurchase authorization for repurchases of up to $3 billion of our common sha …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing