SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: September 15, 1998
(Date of Earliest Event Reported)
HUMANA INC.
(Exact name of Registrant as specified in its Charter)
Delaware 1-5975 61-0647538
(State of (Commission (I.R.S. Employer
Incorporation) File Number) Tax Identification
No.)
500 West Main Street
Louisville, KY 40202
(Address of principal executive offices)
(502) 580-1000
(Registrant's telephone number, including area code)
Item 5. Other Events
On September 15, 1998, Humana Inc. (the
"Company" or "Registrant") issued a press
release, a copy of which is attached hereto
as Exhibit 99 and is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits.
Exhibit 99. Copy of the Company's Press Release dated September 15, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
HUMANA INC.
_________________________________
By: Arthur P. Hipwell
Senior Vice President
and General Counsel
Dated: September 21, 1998
<PAGE>
Exhibit Index
Exhibit 99. Copy of the Company's Press Release dated September 15, 1998.
500 West Main Street
P.O. Box 1438
Louisville, KY 40201-1438
http://humana.com
news release
FOR MORE INFORMATION CONTACT:
Tom Noland
Vice President - Corporate Communications HUMANA
(502)-580-3674
E-MAIL: [email protected]
Kristi Drablos
Director - Investor Relations
(502)-580-3644
E-MAIL: [email protected]
Humana Completes Review of Business Strategy
Will exit two unprofitable Medicare markets
Will take $132 million third quarter charge
Management to detail strategy in Boston and New York presentations
LOUISVILLE, KY, September 15, 1998 - Humana Inc. (NYSE: HUM) announced
today that the company has completed a thorough review of its business
strategy in light of the termination of its proposed merger with United
HealthCare. As a result of expected merger synergies that will now not
materialize, Humana will exit Sarasota and Treasure Coast, Florida, which
are predominantly Medicare product markets; Springfield and Jefferson City,
Missouri, which are predominantly commercial product markets; and one of its
largest Medicaid markets. The company intends to honor its contractual
commitments to customers, providers and members in all the affected markets.
Members of Humana's senior management will detail the company's business
strategy in presentations to securities analysts and investors in Boston
on Sept. 23 and New York on Sept. 24.
- MORE -
500 West Main Street
P.O. Box 1438
Louisville, KY 40201-1438
http://humana.com
Page 2
news release
The company also announced that it will take a charge against 1998
third quarter earnings of $132 million ($84 million after tax, or $.50 per
diluted share). Costs for exiting markets and discontinuing products
approximate $63 million and include expected losses on insurance contracts,
severance and lease termination costs. The charge also includes $52 million
related to asset write-offs, costs related to the company's contractual
relationships with various physician practice management companies and
merger dissolution costs.
"These actions are the result of a thorough analysis of our business
by the management and board of Humana in light of our determination to remain
an independent public company," said Gregory H. Wolf, Humana's President and
Chief Executive Officer. "We had anticipated improved performance in certain
of our markets from planned initiatives, including the synergies that would
have resulted from the proposed merger. We now believe it is appropriate to
exit these markets in a manner consistent with our successful strategy of
divesting non-strategic assets."
The final element of the charge is a one-time $17 million associate
incentive for the company's 17,000 employees, excluding officers.
"Management believes the associate retention program will encourage
the continued commitment of Humana associates who have remained focused on
achieving our earnings goals," said Mr. Wolf. "Our success over 30 years
as a public company is due in large measure to the skill, resourcefulness
and commitment of our associates. This is the appropriate time for an
investment in their future - and the company's - that will contribute
substantially to long-term shareholder value."
- MORE -
500 West Main Street
P.O. Box 1438
Louisville, KY 40201-1438
http://humana.com
Page 3
news release
Humana Inc., headquartered in Louisville, Ky., is one of the nation's
largest publicly traded managed health care companies with more than 6.2
million medical members located primarily in 16 states and Puerto Rico.
Humana offers coordinated health care through a variety of plans - health
maintenance organizations, preferred provider organizations, point-of-service
plans, and administrative service products - to employer groups, government-
sponsored plans and individuals.
More information about Humana is available at http://www.humana.com.
This press release contains forward-looking information. The forward-
looking statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
may be significantly impacted by certain risks and uncertainties described
in Humana's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 1997.
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