[November 09, 2012] |
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Humana To Host Biennial Investor Meeting
LOUISVILLE, Ky. --(Business Wire)--
Humana Inc. (NYSE: HUM) announced that it will be hosting an Investor
Meeting on Tuesday, November 13, 2012, at 8:30 a.m. eastern time. The
Investor Meeting will include a number of presentations by company
leaders focusing on Humana's strategic direction, operational and
financial progress and expectations for future performance.
At the Investor Meeting, the company will be reiterating its guidance
for the years ending December 31, 2012 and 2013 as filed with the
Securities and Exchange Commission on November 5, 2012 in conjunction
with its third quarter 2012 earnings release. A copy of those detailed
guidance points is included with this release.
Humana encourages the investing public and media to listen to its
Investor Meeting via the Internet since attendance at the event is by
invitation only. The Investor Meeting web cast and virtual presentation
(audio with slides) may be accessed via the Humana's Investor Relations
page at www.humana.com.
The company suggests web participants sign on approximately 15 minutes
in advance of the event. The company also suggests web participants
visit the site in advance to run a system test and to download any free
software needed.
Below is the agenda for the event:
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Humana's Investor Meeting 2012
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Business Session - Tuesday, November 13, 2012; 8:30 a.m. EST
Webcast available via Investor Relations page at
www.humana.com
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Topic
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Speaker
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Company Overview
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Bruce Broussard
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President
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Public Affairs
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Heidi Margulis
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Senior Vice President - Public Affairs
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Health and Well-Being
Services Segment
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Bruce Perkins
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Segment President
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Retail Segment
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Tom Liston
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Segment President
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Employer Group Segment
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Beth Bierbower
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Segment President
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Financials
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Jim Bloem
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Senior Vice President,
Chief Financial Officer and Treasurer
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Wrap-Up Q&A
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Bruce Broussard
Jim Murray
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President
Executive Vice President and
Chief Operating Officer
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Closing
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Mike McCallister
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Chairman of the Board and
Chief Executive Officer
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Cautionary Statement
This news release includes forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. When used in
investor presentations, press releases, Securities and Exchange
Commission (SEC (News - Alert)) filings, and in oral statements made by or with the
approval of one of Humana's executive officers, the words or phrases
like "expects," "anticipates," "intends," "likely will result,"
"estimates," "projects" or variations of such words and similar
expressions are intended to identify such forward-looking statements.
These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties, and assumptions,
including, among other things, information set forth in the "Risk
Factors" section of the company's SEC filings, a summary of which
includes but is not limited to the following:
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If Humana does not design and price its products properly and
competitively, if the premiums Humana charges 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 benefit expenses 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.
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If Humana fails to effectively implement its operational and strategic
initiatives, including its Medicare initiatives, the company's
business may be materially adversely affected, which is of particular
importance given the concentration of the company's revenues in the
Medicare business.
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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.
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Humana's business may be materially adversely impacted by CMS's
adoption of a new coding set for diagnoses.
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Humana is involved in various legal actions and governmental and
internal investigations, including without limitation, an ongoing
internal investigation and litigation and government requests for
information related to certain aspects of its Florida subsidiary
operations, any of which, if resolved unfavorably to the company,
could result in substantial monetary damages. Increased litigation and
negative publicity could increase the company's cost of doing business.
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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.
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Recently enacted health insurance reform, 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 (and
particularly how the ratio may apply to Medicare plans, including
aggregation, credibility thresholds, and its possible application to
prescription drug plans), lowering the company's Medicare payment
rates and increasing the company's expenses associated with a
non-deductible federal premium tax 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
federal premium tax 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 federal
premium tax and other assessments would not have a material adverse
effect on the company's results of operations, financial position, and
cash flows.
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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.
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Any failure to manage operating costs could hamper Humana's
profitability.
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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.
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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.
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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.
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Changes in the prescription drug industry pricing benchmarks may
adversely affect Humana's financial performance.
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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.
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Humana's ability to obtain funds from its subsidiaries is restricted
by state insurance regulations.
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Downgrades in Humana's debt ratings, should they occur, may adversely
affect its business, results of operations, and financial condition.
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Changes in economic conditions could adversely affect Humana's
business and results of operations.
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The securities and credit markets may experience volatility and
disruption, which may adversely affect Humana's business.
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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.
In making forward-looking statements, Humana is not undertaking to
address or update them in future filings or communications regarding its
business or results. In light of these risks, uncertainties, and
assumptions, the forward-looking events discussed herein may or may not
occur. There also may be other risks that the company is unable to
predict at this time. Any of these risks and uncertainties may cause
actual results to differ materially from the results discussed in the
forward-looking statements.
Humana advises investors to read the following documents as filed by the
company with the SEC for further discussion both of the risks it faces
and its historical performance:
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Form 10-K for the year ended December 31, 2011;
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Form 10-Q for the quarters ended March 31, 2012, June 30, 2012 and
September 30, 2012;
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Form 8-Ks filed during 2012.
About Humana
Humana Inc., headquartered in Louisville, Kentucky, is a leading health
care company that offers a wide range of insurance products and health
and wellness services that incorporate an integrated approach to
lifelong well-being. By leveraging the strengths of its core businesses,
Humana believes it can better explore opportunities for existing and
emerging adjacencies in health care that can further enhance wellness
opportunities for the millions of people across the nation with whom the
company has relationships.
More information regarding Humana is available to investors via the
Investor Relations page of the company's web site at www.humana.com,
including copies of:
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Annual reports to stockholders;
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Securities and Exchange Commission filings;
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Most recent investor conference presentations;
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Quarterly earnings news releases;
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Replays of most recent earnings release conference calls;
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Calendar of events (including upcoming earnings conference call dates
and times, as well as planned interaction with research analysts and
institutional investors);
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Corporate Governance information
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Humana Inc. - Earnings Guidance Points as Issued on November 5,
2012
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(in accordance with Generally Accepted
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For the year ending December 31,
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Comments
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Accounting Principles)
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2012
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2013
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Excludes the pending acquisition of
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Metropolitan Health Networks, Inc.
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Diluted earnings per common share (EPS)
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2013 includes approximately $0.30 per
share in investment spending
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Full Year
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$7.25 to $7.35
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$7.60 to $7.80
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Revenues
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Consolidated
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$39.0 billion to $39.5 billion
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$40.8 billion to $41.3 billion
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Includes expected investment income of
approximately $385 million for 2012 and
in the range of $365 million to $385
million for 2013
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Retail Segment
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$24.5 billion to $25.0 billion
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$26.25 billion to $26.75 billion
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Segment-level revenues include
intersegment amounts that eliminate in
consolidation
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Employer Group Segment
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$10.5 billion to $11.0 billion
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$11.0 billion to $11.5 billion
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Health and Well-Being Services Segment
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$13.1 billion to $13.3 billion
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$14.75 billion to $15.25 billion
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Other Businesses
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$2.50 billion to $2.75 billion
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$1.8 billion to $2.1 billion
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Ending medical membership versus prior year
end
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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.
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Retail Segment
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Medicare Advantage
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Up 270,000 to 280,000
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Up 100,000 to 120,000
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Medicare stand-alone PDPs
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Up 440,000 to 460,000
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Up 125,000 to 175,000
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HumanaOne
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Up 5,000 to 10,000
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Down approximately 45,000
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Medicare Supplement
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Up 15,000 to 25,000
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Up 15,000 to 25,000
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Employer Group Segment
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Medicare Advantage
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Up approximately 80,000
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Up approximately 20,000
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Commercial Fully-Insured
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Up approximately 30,000
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Down 5,000 to 20,000
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Commercial ASO
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Down 50,000 to 60,000
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Down 25,000 to 45,000
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Benefit ratios
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Benefit expenses as a percent of
premiums
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Retail Segment
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84.0% to 84.5%
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84.0% to 84.5%
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Employer Group Segment
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84.0% to 85.0%
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85.0% to 86.0%
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Operating cost ratios
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Consolidated operating costs as a percent of
total revenues excluding investment income
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Consolidated
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14.75% to 15.25%
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15.0% to 15.5%
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Health & Well-Being Services Segment
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95.25% to 95.75%
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95.5% to 96.0%
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Consolidated depreciation and amortization
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$290 million to $310 million
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$330 million to $350 million
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Certain D&A is included in benefits
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Income statement
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$330 million to $345 million
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$380 million to $400 million
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expense on the income statement but
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Cash flows statement
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shown as a non-cash item on the cash
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flows statement
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Consolidated interest expense
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Approximately $105 million
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Approximately $105 million
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Detailed pretax results
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Segment-level pretax results and margins
include the impact of net investment
income
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Retail Segment
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$1.10 billion to $1.15 billion
4.5% to 4.7%
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$1.29 billion to $1.33 billion
Approximately 5% pretax margin
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Employer Group Segment
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$200 million to $210 million
Approximately 2% pretax margin
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$100 million to $150 million
1.0% to 1.2% pretax margin
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Health & Well-Being Services Segment
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$510 million to $520 million
3.75% to 4.25% pretax margin
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$460 million to $510 million
3.0% to 3.5% pretax margin
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Effective Tax Rate
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Approximately 36.8%
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Approximately 37%
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Diluted shares
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Approximately 163.5 million
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Approximately 161.5 million
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Projections exclude the impact of future
share repurchases
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Cash flows from operations
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$1.7 billion to $1.9 billion
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$1.8 billion to $2.0 billion
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Capital expenditures
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Approximately $400 million
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$425 million to $450 million
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