| Balance Sheet and Cash Flow
Humana’s financial standing continues to be positive. As of June 30, 2010, the company had cash, cash equivalents, and investment securities in its investment portfolio of $10.29 billion, compared to $9.91 billion on March 31, 2010, and $9.11 billion on December 31, 2009.
Parent company cash and investments of $1.0 billion on June 30, 2010, increased from $729.8 million on March 31, 2010 and from $665.6 million on December 31, 2009, as dividends from subsidiaries were partially offset primarily by federal income tax and interest payments as well as share repurchases during 2Q10.
Cash flows provided by operations were $325.3 million in 2Q10, compared with cash flows provided by operations of $161.9 million in 2Q09 with the year-over-year increase primarily due to higher net income year over year.
Debt-to-total capitalization on June 30, 2010 was 20.5%, down 110 basis points from March 31, 2010, primarily due to the increase in capitalization associated with increased net income during 2Q10.
Share Repurchase
In December 2009, the company’s board of directors renewed its authorization for the use of up to $250 million for the repurchase of Humana common shares. During 2Q10, the company repurchased 1,025,000 of its outstanding shares at an average price per share of $48.76. As of August 1, 2010, the company had approximately $200 million remaining on the December 2009 authorization, which is effective until December 31, 2011.
For FY10, shares used in computing EPS are expected to be approximately 170 million (excluding the impact of potential future share repurchases).
Outlook
Humana updated its guidance for FY10 cash flow from operations to a new range of $1.3 billion–$1.5 billion from $1.2 billion–$1.4 billion. The company maintained its capital expenditure guidance of about $200 million for FY10.
Humana’s balance sheet remained strong. Reported days in claims payable was 57.1 days, an increase of 0.1 days sequentially, and an increase of 1.0 days year over year.
Others
On July 9, 2010, Humana Inc. announced that it has acquired Cincinnati-based Hummingbird Coaching Services for an undisclosed amount. The addition of Hummingbird’s highly integrated platform for health and wellness coaching will allow Humana to offer members more targeted, lifestyle-specific assistance to reach their personal goals.
On June 21, 2010, Humana announced that its Games for Health team is launching the first of several iPhone applications. Colorfall, available in the iPhone store, is a puzzle-based game to promote cognitive health and physical activity.
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