8-K

UNITED STATES
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:   July 28, 2003

(Date of Earliest Event Reported)

HUMANA INC.
(Exact name of Registrant as specified in its Charter)

500 West Main Street
Louisville, KY 40202
(Address of principal executive offices, including zip code)

(502) 580-1000
(Registrant=s telephone number, including area code)

Item 7.   Financial Statements and Exhibits

(c)         Exhibits - See Index Below

Item 12

The following information is furnished pursuant to Item 12 - Disclosure of Results of Operations and Financial Condition.

           On July 28, 2003, Humana Inc. (the "Company" or ARegistrant") issued a press release discussing second quarter results, a copy of which is attached hereto as Exhibit 99 and is incorporated herein by reference.

           To supplement our consolidated financial results as determined by generally accepted accounting principles (GAAP), the press release also discloses non-GAAP information which management believes provides useful information to investors. A reconciliation between GAAP and Non-GAAP is provided in the statistical pages included herein. The press release also contains forward-looking statements regarding the Company.

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:   /s/Arthur P. Hipwell                                      
        Arthur P. Hipwell
        Senior Vice President
        and General Counsel

Date:    July 28, 2003

INDEX TO EXHIBITS

Number                                         Description

  99.1                Press Release, dated July 28, 2003, issued by the Company

  99.2                Statistical Pages

EX-99.1

HUMANA INC.
500 West Main Street
P.O. Box 1438
Louisville, KY 40201-1438
www.humana.com

news release

For More Information Contact:

Regina Nethery
Humana Investor Relations
(502) 580-3644
E-mail:  rnethery@humana.com

Tom Noland
Humana Corporate Communications
(502) 580-3674
E-mail:  tnoland@humana.com

Humana Reports Second Quarter and First Half 2003 Results

LOUISVILLE, KY (July 28, 2003) - Humana Inc. (NYSE: HUM) today reported results for the second quarter ended June 30, 2003 and comparative amounts for the quarter ended June 30, 2002 as follows:

	2Q03 GAAP1			2Q02 GAAP1		2Q03 Adjusted2
Earnings per diluted share	$	.43		$	.27	$	.37
Net income (in thousands)	$	69,276	$		45,359	$	59,168
Pre-tax margin		3.4%			2.4%		3.0%

           (See "Footnote Definitions" section of this press release.)

          Second quarter 2003 adjusted earnings per diluted share of $.37 increased 37 percent compared to the same period in the prior year. The improvement was driven primarily by increasing operating margins in the company's Commercial segment, as well as TRICARE revenue adjustments which were both earlier and greater than had previously been expected. Adjusted net income for the second quarter improved 30 percent compared to that for the same period in the prior year. The adjusted pre-tax margin of 3.0 percent increased 60 basis points from the second quarter of 2002.

          Results for the six months ended June 30, 2003 and 2002 are as follows:

	First Half 2003 GAAP1		First Half 2002 GAAP1		First Half 2003 Adjusted2
Earnings per diluted share	$	..62	$	..55	$	..68
Net income (in thousands)	$	100,506	$	92,129	$	109,192
Pre-tax margin		2.5%		2.4%		2.8%

           (See "Footnote Definitions" section of this press release.)

          Adjusted earnings per diluted share for the six months ended June 30, 2003 of $.68 increased 24 percent compared to $.55 for the six months ended June 30, 2002. Net income on an adjusted basis improved 19 percent for the first half of 2003 versus the first half of 2002.

           "We are particularly pleased with this quarter's results as they provide further evidence of the soundness of our Commercial strategy," said Michael B. McCallister, Humana's chief executive officer. "Humana's reputation in the Commercial segment as an innovator in solutions for employers is not only growing, it is leading to an increase in sales activity. That activity, combined with consistent pricing discipline, has helped drive the improved results for our second quarter. We anticipate our innovative products will continue to accelerate interest in all of our products and, in turn, improved results for Humana."

          Unusual Items

          During the first half of 2003, the company recorded the following items that were not reflective of the run-rate operations of the company. Management believes these unusual items should be excluded to properly reflect the run-rate operations of the company and to provide better comparability to prior year results.

          One unusual item was recorded during the second quarter ended June 30, 2003 as follows:

(in thousands, except per share amounts)	Statement of Income Line Item Impacted	Pre-tax Impact		After-tax Impact		Earnings per diluted share Impact
Gain on sale of venture capital investment	Investment income	$	15,200	$	10,108	$	..06

        (See "Footnote Definitions" section of this press release.)

          Unusual items recorded during the six months ended June 30, 2003 were as follows:

(in thousands, except per share amounts)	Statement of Income Line Item Impacted	Pre-tax Impact		After-tax Impact		Earnings per diluted share Impact
Gain on sale of venture capital investment	Investment income	$	15,200	$	10,108	$	..06
Building and equipment writedown	Restructuring charge		(17,233)		(10,529)		(.07)
Software abandonment	Restructuring charge		(13,527)		(8,265)		(.05)
Total unusual items4		$	(15,560)	$	(8,686)	$	(.05)

         (See "Footnote Definitions" section of this press release.)

     Segment Results

     Pre-tax income and margins for the company's business segments for the second quarters and six months ended June 30, 2003 and 2002 were as follows:

Pre-tax income (in thousands)	2Q03 GAAP1		2Q02 GAAP1		2Q03 Adjusted2
Commercial segment	$	43,757	$	14,893	$	31,334
Government segment		60,433		51,812		57,656
Consolidated	$	104,190	$	66,705	$	88,990

Pre-tax margins	2Q03 GAAP1	2Q02 GAAP1	2Q03 Adjusted2
Commercial segment	2.6%	1.0%	1.9%
Government segment	4.5%	3.8%	4.3%
Consolidated	3.4%	2.4%	3.0%

Pre-tax income (in thousands)	First Half 2003 GAAP1		First Half 2002 GAAP1		First Half 2003 Adjusted2
Commercial segment	$	80,996	$	40,988	$	86,425
Government segment		70,596		94,496		80,727
Consolidated	$	151,592	$	135,484	$	167,152

Pre-tax margins	First Half 2003 GAAP1	First Half 2002 GAAP1	First Half 2003 Adjusted2
Commercial segment	2.4%	1.4%	2.6%
Government segment	2.7%	3.6%	3.1%
Consolidated	2.5%	2.4%	2.8%

            (See "Footnote Definitions" section of this press release.)

          Revenues and Membership

          Consolidated revenues and membership for the second quarters and the six months ended June 30, 2003 and 2002 were as follows:

Consolidated (in thousands)	2003 GAAP1		2002 GAAP1		2003 Adjusted2
Second quarter - total revenues	$	3,029,958	$	2,831,940	$	3,014,758
First Half - total revenues	$	5,961,674	$	5,564,522	$	5,946,474
Second quarter - Ending medical membership		6,640,900		6,572,000		6,640,900

            (See "Footnote Definitions" section of this press release.)

          Commercial segment premiums and administrative services fees and membership for the second quarters and the six months ended June 30, 2003 and 2002 were as follows:

Commercial Segment (in thousands)	2Q03 GAAP1		2Q02 GAAP1		First Half 2003 GAAP1		First Half 2002 GAAP1
Premiums	$	1,630,554	$	1,437,087	$	3,246,110	$	2,863,075
Administrative services fees		30,356		25,576		59,946		50,723
Total premiums and administrative services fees	$	1,660,910	$	1,462,663	$	3,306,056	$	2,913,798
Ending medical membership		3,020,700		2,947,100		3,020,700		2,947,100

      (See "Footnote Definitions" section of this press release.)

          Commercial segment medical membership grew by 2.5 percent from June 30, 2002 to June 30, 2003. Commercial premium yields were within the 13 to 15 percent range for the second quarter of 2003. These factors contributed to a year-over-year increase in total premiums and administrative services fees for the Commercial segment of 14 percent for the second quarter of 2003 and 13 percent for the six months ended June 30, 2003.

          Government segment premiums and administrative services fees and membership for the second quarters and the six months ended June 30, 2003 and 2002 were as follows:

Government Segment (in thousands)	2Q03 GAAP1		2Q02 GAAP1		First Half 2003 GAAP1		First Half 2002 GAAP1
Premiums	$	1,282,851	$	1,306,652	$	2,510,244	$	2,522,476
Administrative services fees		41,312		38,255		72,858		78,121
Total premiums and administrative services fees	$	1,324,163	$	1,344,907	$	2,583,102	$	2,600,597
Ending medical membership		3,620,200		3,624,900		3,620,200		3,624,900

         (See "Footnote Definitions" section of this press release.)

          As expected, government segment premiums and administrative services fees decreased year-over-year by 2 percent in the second quarter of 2003 and by 1 percent during the six months ended June 30, 2003.

          Medicare+Choice membership totaled 324,200 at June 30, 2003, a decline of 29,900 members from the prior year's quarter. Medicare+Choice premium yield for the second quarter of 2003 was within the 4 to 6 percent range.

         TRICARE's insured membership totaled 1,750,800 at June 30, 2003, essentially flat versus the June 30, 2002 level. TRICARE ASO membership was 1,052,500 at the end of the second quarter of 2003, up 3 percent from the second quarter of 2002. TRICARE premium revenues and administrative services fees increased year-over-year by approximately 1 percent during the second quarter of 2003 and increased approximately 4 percent for the six months of 2003 versus the same period in the prior year.

          Medicaid membership of 492,700 at June 30, 2003 grew by approximately 1 percent from June 30, 2002. Approximately 85 percent of the company's Medicaid membership is in Puerto Rico.

          Medical and SG&A Expenses

          The company's medical expense ratio (medical expenses as a percent of premiums) and SG&A expense ratio (SG&A expenses as a percent of premiums and administrative services fees) for the quarters and six months ended June 30, 2003 and 2002 were as follows:

	2Q03	2Q02	First Half 2003	First Half 2002
Medical expense ratio -GAAP1	83.9%	84.4%	83.7%	83.8%
SG&A expense ratio -GAAP1	15.0%	14.8%	15.2%	15.4%

(See "Footnote Definitions" section of this press release.)

          The company continues to experience favorable development in its estimates of prior years' medical claims liabilities. However, management has consistently applied the same level of conservatism in its reserving methodology. Consequently, these prior year favorable developments had no favorable impact on the company's year-to-date results from operations.

          Cash flows from operations

          Cash flows provided by (used in) operations for the second quarters and the six months ended June 30, 2003 and 2002 were as follows:

(in thousands)	2Q03		2Q02		First Half 2003		First Half 2002
GAAP1	$	161,496	$	(43,778)	$	53,266	$	(183,915)
Normalized3	$	161,496	$	(43,778)	$	259,021	$	32,713

      (See "Footnote Definitions" section of this press release.)

          Share Repurchase Program

          The company announced that its Board of Directors authorized the use of up to $100 million for the repurchase of its common shares, replacing the outstanding share repurchase program under which the company repurchased 8.6 million shares for an aggregate purchase price of $94.9 million, an average price of $10.98 per share. The company had 161.7 million shares outstanding as of June 30, 2003. The company said that the shares may be purchased from time to time at prevailing prices in the open market or in privately-negotiated transactions.

          Guidance

          The company offered the following earnings guidance for the investor community:

For the Full Year 2003:	Projected
Earnings per diluted share - GAAP1	$1.39 to $1.42
Earnings per diluted share - Adjusted2	$1.44 to $1.47
Consolidated revenues - GAAP1	Over $12 billion
Commercial segment pretax income - GAAP1	Over $125 million
Commercial segment pretax income - Adjusted2	Over $130 million
Commercial segment medical membership (fully insured and ASO combined)	Organic growth of 2% to 3%
Commercial premium yields	13% to 15%
Commercial medical cost trends	12% to 14%
Commercial segment SG&A expense ratio -GAAP1	16.3% to 16.5%
Medicare+Choice membership	310,000 to 320,000 by year end
Medicare+Choice premium yields	4% to 6%
Medicare+Choice medical cost trends	4% to 6%
TRICARE pretax margin	Approximately 3%
TRICARE receivables	$300 million to $325 million
Government segment SG&A expense ratio - GAAP1	Relatively unchanged year over year
Cash flows from operations - GAAP1 and Normalized3	$375 million to $400 million
Capital expenditures	Approximately $95 million
Effective tax rate	34%

For the Third Quarter of 2003:	Projected
Earnings per diluted share - GAAP1	$.37 to $.38
Effective tax rate	33.5%

For the Full Year 2004:	Projected
Earnings per diluted share - GAAP1	Approximately $1.60 (range of $1.55 to $1.65)
Effective tax rate	36%

     (See "Footnote Definitions" section of this press release.)

          Footnote Definitions

          1 - Generally Accepted Accounting Principles ("GAAP")

          2 - Adjusted results exclude from GAAP results the impact of unusual items recorded during the first and second quarters of 2003. The statistics pages at the end of this press release provide a reconciliation of GAAP to adjusted results for the quarter and six months ended June 30, 2003. The detail of the adjustments also is described in the "Unusual Items" section of this press release.

          3 - Normalized cash flows from operations give effect to the usual adjustment for the timing of the receipt of the Medicare+Choice premium payment from the Centers for Medicare and Medicaid Services ("CMS"). The fixed monthly payment from CMS is payable to Humana on the first day of each month. However, if the first of the month falls on a weekend or a holiday, the company receives that payment early, often resulting in a significant impact on cash flows from operations. The statistics pages at the end of this press release provide a reconciliation of GAAP to normalized cash flows from operations.

         4 - Mathematical differences due to rounding in earnings per share calculations.

          Conference Call

          Humana will host a conference call, as well as a virtual slide presentation, at 9:00 a.m. EDT today to discuss its financial results for the quarter and earnings guidance.

          All parties interested in the audio only portion of the conference call are invited to dial 888-625-7430. No password is required. The company suggests participants dial in approximately ten minutes in advance of the call.

          A live virtual presentation (audio with slides) will be available and may be accessed via Humana's Investor Relations page at www.humana.com. The company suggests web participants sign on approximately 15 minutes in advance of the call. The company also suggests web participants visit the site well in advance of the call to run a system test and to download any free software needed to view the presentation.

          For those unable to participate in the live event, the virtual presentation archive will be available in the Presentations section of the Investor Relations page at www.humana.com, approximately two hours following the live web cast. An audio recording of the conference call will also be available in the Audio Archives located on the Investor Relations page at www.humana.com approximately two hours after the live call.

***********

          This news release contains forward-looking statements. The forward-looking statements made in the news release 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 the following documents, as filed by Humana with the Securities and Exchange Commission:

• Form 10-K for the year ended December 31, 2002;
• Form 10-Q for the quarter ended March 31, 2003.

***********

          Humana Inc., headquartered in Louisville, Kentucky, is one of the nation's largest publicly traded health benefits companies, with approximately 6.6 million medical members located primarily in 18 states and Puerto Rico. Humana offers coordinated health insurance coverage and related services - through traditional and Internet-based plans - to employer groups, government-sponsored plans, and individuals.

          More information regarding Humana is available via the Internet at www.humana.com including copies of:

• Annual report to stockholders;
• Securities and Exchange Commission filings;
• Most recent investor conference presentation;
• Quarterly earnings press releases;
• Audio archive of most recent earnings release conference call;
• Calendar of events (includes upcoming earnings conference call dates, times, and access number, as well as planned participation in investor conferences).

EX-99.2

Humana Inc.																																													Page 1 of 10
In thousands
																					June 30,														Percent
Ending Medical Membership																					2003							2002							Difference										Change
Commercial:
				Fully insured																	2,350.40							2,319.60							30.8										1.3
				ASO																	670.3							627.5							42.8										6.8
Total Commercial																					3,020.70							2,947.10							73.6										2.5
Government:
				Medicare+Choice																	324.2							354.1							-29.9										-8.4
				Medicaid																	492.7							487.9							4.8										1
				TRICARE																	1,750.80							1,761.00							-10.2										-0.6
				TRICARE ASO																	1,052.50							1,021.90							30.6										3
Total Government																					3,620.20							3,624.90							-4.7										-0.1
				Total ending medical membership																	6,640.90							6,572.00							68.9										1
																					June 30,																								Percent
Ending Specialty Membership																					2003							2002							Difference										Change
Commercial:
				Dental-fully insured																	745.7							777.4							-31.7										-4.1
				Dental-ASO																	365.1							308.3							56.8										18.4
														Total Dental							1,110.80							1,085.70							25.1										2.3
				Group life																	510.5							529.7							-19.2										-3.6
				Short-term disability																	20.7							22.8							-2.1										-9.2
				Total ending specialty membership																	1,642.00							1,638.20							3.8										0.2
																					Three months ended														Six months ended
																					June 30,														June 30,
Premiums																					2003							2002							2003															2002
Commercial:
				Fully insured medical																	$1,551,619							$1,353,273							$3,088,572															$2,696,534
				Specialty																	78,935							83,814							157,538															166,541
Total Commercial																					1,630,554							1,437,087							3,246,110															2,863,075
Government:
				Medicare+Choice																	630,432							662,480							1,266,274															1,334,666
				Medicaid																	116,005							113,234							237,235															224,487
				TRICARE																	536,414							530,938							1,006,735															963,323
Total Government																					1,282,851							1,306,652							2,510,244															2,522,476
Total premiums																					$2,913,405							$2,743,739							$5,756,354															$5,385,551
																					Three months ended														Six months ended
																					June 30,														June 30,
Administrative services fees																					2003							2002							2003															2002
Commercial																					$30,356							$25,576							$59,946															$50,723
Government																					41,312							38,255							72,858															78,121
Total Administrative services fees																					$71,668							$63,831							$132,804															$128,844
Humana Inc.																																	Page 2 of 10
Dollars in thousands, except per share results
								---------------------------- Three months ended --------------------------
																										Adjusted
								June 30,									Unusual									June 30,							June 30,
Consolidated Statements of Income								2003									Item									2003							2002
Revenues:
Premiums								$ 2,913,405									$       -									$ 2,913,405							$ 2,743,739
Administrative services fees								71,668									-									71,668							63,831
Investment income								43,228									(15,200)									28,028							22,681
Other income								1,657									-									1,657							1,689
Total revenues								3,029,958									(15,200)									3,014,758							2,831,940
Operating expenses:
Medical								2,444,977									-									2,444,977							2,316,188
Selling, general and administrative								448,537									-									448,537							414,433
Depreciation								25,550									-									25,550							26,306
Other intangible amortization								2,903									-									2,903							3,931
Total operating expenses								2,921,967									-									2,921,967							2,760,858
Income from operations								107,991									(15,200)									92,791							71,082
Interest expense								3,801									-									3,801							4,377
Income before income taxes								104,190									(15,200)									88,990							66,705
Provision for income taxes								34,914									(5,092)									29,822							21,346
Net income								$ 69,276									$ (10,108)									$ 59,168							$ 45,359
Basic earnings per common share								$ 0.44									$ (0.06)									$ 0.38							$ 0.28
Diluted earnings per common share								$ 0.43									$ (0.06)									$ 0.37							$ 0.27
Shares used in computing basic earnings per common share (000's)								157,395									157,395									157,395							164,853
Shares used in computing diluted earnings per common share (000's)								161,149									161,149									161,149							168,860
Key Ratios
Medical expense ratio
Commercial								83.0%									-									83.0%							83.9%
Government								85.1%									-									85.1%							85.0%
Total								83.9%									-									83.9%							84.4%
Selling, general, and administrative expense ratio
Commercial								16.8%									-									16.8%							16.4%
Government								12.7%									-									12.7%							13.0%
Total								15.0%									-									15.0%							14.8%
Humana Inc.																																						Page 3 of 10
Dollars in thousands, except per share results
											---------------------------- Six months ended --------------------------
																													Adjusted
											June 30,								Unusual										June 30,									June 30,
Consolidated Statements of Income											2003								Items										2003									2002
Revenues:
Premiums											$ 5,756,354								$        -										$ 5,756,354									$ 5,385,551
Administrative services fees											132,804								-										132,804									128,844
Investment income											69,045								(15,200)										53,845									46,989
Other income											3,471								-										3,471									3,138
Total revenues											5,961,674								(15,200)										5,946,474									5,564,522
Operating expenses:
Medical											4,816,411								-										4,816,411									4,510,727
Selling, general and administrative											895,582								-										895,582									849,497
Depreciation											52,759								-										52,759									52,171
Other intangible amortization											6,834								-										6,834									7,862
Restructuring charge											30,760								(30,760)										-									-
Total operating expenses											5,802,346								(30,760)										5,771,586									5,420,257
Income from operations											159,328								15,560										174,888									144,265
Interest expense											7,736								-										7,736									8,781
Income before income taxes											151,592								15,560										167,152									135,484
Provision for income taxes											51,086								6,874										57,960									43,355
Net income											$ 100,506								$ 8,686										$ 109,192									$ 92,129
Basic earnings per common share (A)											$ 0.64								$ 0.06										$ 0.69									$ 0.56
Diluted earnings per common share (A)											$ 0.62								$ 0.05										$ 0.68									$ 0.55
Shares used in computing basic earnings per common share (000's)											157,565								157,565										157,565									164,555
Shares used in computing diluted earnings per common share (000's)											160,982								160,982										160,982									168,274
Key Ratios
Medical expense ratio
Commercial											82.2%								-										82.2%									82.9%
Government											85.6%								-										85.6%									84.7%
Total											83.7%								-										83.7%									83.8%
Selling, general, and administrative expense ratio
Commercial											16.8%								-										16.8%									17.0%
Government											13.2%								-										13.2%									13.6%
Total											15.2%								-										15.2%									15.4%
(A) Mathematical differences due to rounding in earnings per share calculations.
Humana Inc.																																															Page 4 of 10
Dollars in thousands, except per share results
																		---------------------------- Three months ended --------------------------
																																								Adjusted
																		June 30,												Unusual										June 30,							June 30,
Operating Results by Segment																		2003												Item										2003							2002
Commercial:
Income before income taxes																		$ 43,757												$ (12,423)										$ 31,334							$ 14,893
Interest expense																		3,105												-										3,105							3,197
Depreciation and amortization																		17,744												-										17,744							17,463
Commercial EBITDA *																		64,606												(12,423)										52,183							35,553
Government:
Income before income taxes																		60,433												(2,777)										57,656							51,812
Interest expense																		696												-										696							1,180
Depreciation and amortization																		10,709												-										10,709							12,774
Government EBITDA *																		71,838												(2,777)										69,061							65,766
Consolidated:
Net income																		69,276												(10,108)										59,168							45,359
Provision for income taxes																		34,914												(5,092)										29,822							21,346
Income before income taxes																		104,190												(15,200)										88,990							66,705
Interest expense																		3,801												-										3,801							4,377
Depreciation and amortization																		28,453												-										28,453							30,237
Consolidated EBITDA *																		$ 136,444												$ (15,200)										$ 121,244							$ 101,319
																		---------------------------- Six months ended --------------------------
																																								Adjusted
																		June 30,												Unusual										June 30,							June 30,
Operating Results by Segment																		2003												Items										2003							2002
Commercial:
Income before income taxes																		$ 80,996												$ 5,429										$ 86,425							$ 40,988
Interest expense																		6,168												-										6,168							6,256
Depreciation and amortization																		36,972												-										36,972							34,630
Commercial EBITDA *																		124,136												5,429										129,565							81,874
Government:
Income before income taxes																		70,596												10,131										80,727							94,496
Interest expense																		1,568												-										1,568							2,525
Depreciation and amortization																		22,621												-										22,621							25,403
Government EBITDA *																		94,785												10,131										104,916							122,424
Consolidated:
Net income																		100,506												8,686										109,192							92,129
Provision for income taxes																		51,086												6,874										57,960							43,355
Income before income taxes																		151,592												15,560										167,152							135,484
Interest expense																		7,736												-										7,736							8,781
Depreciation and amortization																		59,593												-										59,593							60,033
Consolidated EBITDA *																		$ 218,921												$ 15,560										$ 234,481							$ 204,298
* EBITDA represents earnings (including investment and other income) before interest expense, income taxes, depreciation
and amortization. EBITDA is not a measure under accounting principles generally accepted in the United States and may
not be similar to EBITDA measures of other companies. We believe EBITDA is an important indicator of the cash content
of the Company's operating income, and as such the quality of net income. Accordingly, we believe the most directly
comparable GAAP measure is net income and, therefore, we have reconciled consolidated EBITDA to consolidated net
income. Because income taxes are not allocated to the segments, we have reconciled segment EBITDA to income
before income taxes.
Humana Inc.																																											Page 5 of 10
Dollars in thousands, except per share results
																				June 30,														March 31,									December 31,
Consolidated Balance Sheets																				2003														2003									2002
Assets
Current assets:
Cash and cash equivalents																				$ 754,942														$ 532,652									$ 721,357
Investment securities																				1,399,220														1,411,356									1,405,833
Receivables, net:
Premiums																				402,821														472,972									348,562
Administrative services fees																				36,688														55,726									68,316
Other																				223,800														258,481									250,857
Total current assets																				2,817,471														2,731,187									2,794,925
Property and equipment, net																				417,446														423,465									459,842
Other assets:
Long-term investment securities																				329,178														312,517									288,724
Goodwill																				776,874														776,874									776,874
Other																				152,885														185,144									279,665
Total other assets																				1,258,937														1,274,535									1,345,263
Total assets																				$ 4,493,854														$ 4,429,187									$ 4,600,030
Liabilities and Stockholders' Equity
Current liabilities:
Medical and other expenses payable																				$ 1,287,364														$ 1,226,043									$ 1,142,131
Trade accounts payable and accrued expenses																				455,541														512,723									552,689
Book overdraft																				79,536														84,579									94,882
Unearned premium revenues																				100,445														117,604									335,757
Short-term debt																				265,000														265,000									265,000
Total current liabilities																				2,187,886														2,205,949									2,390,459
Long-term debt																				334,610														334,328									339,913
Other long-term liabilities																				265,098														268,131									263,184
Total liabilities																				2,787,594														2,808,408									2,993,556
Commitments and contingencies
Stockholders' equity:
Preferred stock, $1 par; 10,000,000 shares authorized; none issued																				-														-									-
Common stock, $0.16 2/3 par; 300,000,000 shares authorized;
172,263,921 shares issued at June 30, 2003																				28,708														28,562									28,556
Capital in excess of par value																				938,648														931,460									931,089
Retained earnings																				821,383														752,107									720,877
Accumulated other comprehensive income																				29,839														23,257									22,455
Unearned restricted stock compensation																				(1,469)														(3,961)									(6,516)
Treasury stock, at cost, 10,606,303 shares at June 30, 2003																				(110,849)														(110,646)									(89,987)
Total stockholders' equity																				1,706,260														1,620,779									1,606,474
Total liabilities and stockholders' equity																				$ 4,493,854														$ 4,429,187									$ 4,600,030
Debt to total capitalization ratio																				26.0%														27.0%									27.4%
Humana Inc.																																														Page 6 of 10
Dollars in thousands
																Three months ended																				Six months ended
																June 30,																				June 30,
Consolidated Statements of Cash Flows																2003											2002									2003										2002
Cash flows from operating activities
Net income																$ 69,276											$ 45,359									$ 100,506										$ 92,129
Adjustments to reconcile net income to net
cash provided by operating activities:
Non-cash restructuring charge																-											-									30,760										-
Depreciation and amortization																28,453											30,237									59,593										60,033
Provision for deferred income taxes																7,408											10,158									11,054										23,038
Changes in operating assets and liabilities:
Receivables																89,189											(145,383)									40,636										(191,193)
Other assets																(28,312)											(25,330)									(22,627)										(27,728)
Medical and other expenses payable																61,321											44,326									145,233										108,303
Other liabilities																(31,057)											(5,878)									(60,069)										(16,682)
Unearned revenues																(17,159)											(4,320)									(235,312)										(242,078)
Other																(17,623)											7,053									(16,508)										10,263
Net cash provided by (used in) operating activities																161,496											(43,778)									53,266										(183,915)
Timing of Medicare+Choice premium payment from CMS																-											-									205,755										216,628
Normalized net cash provided by (used in) operating activities																161,496											(43,778)									259,021										32,713
Cash flows from investing activities
Purchases of property and equipment, net																(20,843)											(24,365)									(42,477)										(56,730)
Divestiture																-											-									-										1,109
Purchases of investment securities																(716,035)											(572,962)									(2,261,276)										(998,097)
Proceeds from maturities of investment securities																188,003											62,017									384,926										177,971
Proceeds from sales of investment securities																576,928											565,540									1,897,174										869,436
Net cash provided by (used in) investing activities																28,053											30,230									(21,653)										(6,311)
Cash flows from financing activities
Proceeds from swap exchange																31,556											-									31,556										-
Net commercial paper conduit borrowings																-											2,000									-										2,000
Change in book overdraft																(5,043)											(30,151)									(15,346)										(19,478)
Common stock repurchases																(203)											-									(21,020)										-
Other																6,431											6,517									6,782										6,984
Net cash provided by (used in) provided by financing activities																32,741											(21,634)									1,972										(10,494)
Increase (decrease) in cash and cash equivalents																222,290											(35,182)									33,585										(200,720)
Cash and cash equivalents at beginning of period																532,652											485,882									721,357										651,420
Cash and cash equivalents at end of period																$ 754,942											$ 450,700									$ 754,942										$ 450,700
Humana Inc.																																																	Page 7 of 10
Percentage of Ending Membership Under Capitation Arrangements
		Commercial Segment													Government Segment																																		Consol.
		Fully							Total						Medicare																						TRICARE							Total					Total
		Insured			ASO				Segment						+Choice								Medicaid								TRICARE						ASO							Segment					Medical
June 30, 2003
Capitated HMO
hospital system based A		6.2%			-				4.8%						12.5%								2.6%								-						-							1.5%					3.0%
Capitated HMO
physician group based A		3.1%			-				2.4%						1.9%								57.5%								-						-							8.0%					5.5%
Risk-sharing B		2.9%			-				2.2%						48.1%								33.8%								-						-							8.9%					5.9%
All other membership		87.8%			100.0%				90.6%						37.5%								6.1%								100.0%						100.0%							81.6%					85.6%
Total		100.0%			100.0%				100.0%						100.0%								100.0%								100.0%						100.0%							100.0%					100.0%
June 30, 2002
Capitated HMO
hospital system based A		6.7%			-				5.3%						13.3%								2.2%								-						-							1.6%					3.3%
Capitated HMO
physician group based A		3.9%			-				3.1%						3.3%								56.7%								-						-							8.0%					5.8%
Risk-sharing B		3.1%			-				2.4%						45.7%								34.3%								-						-							9.1%					6.1%
All other membership		86.3%			100.0%				89.2%						37.7%								6.8%								100.0%						100.0%							81.3%					84.8%
Total		100.0%			100.0%				100.0%						100.0%								100.0%								100.0%						100.0%							100.0%					100.0%
A - In a limited number of circumstances, we contract with hospitals and physicians to accept financial risk for a defined
set of HMO membership. In transferring this risk, we prepay these providers a monthly fixed-fee per member to
coordinate substantially all of the medical care for their capitated HMO membership, including some health benefit
administrative functions and claims processing. For these capitated HMO arrangements, we generally agree to
reimbursement rates that target a medical expense ratio ranging from 82% to 89%. Providers participating in hospital-
based capitated HMO arrangements generally receive a monthly payment for all of the services within their system for
their HMO membership. Providers participating in physician-based capitated HMO arrangements generally have
subcontracted specialist physicians and are responsible for reimbursing such hospitals and physicians for services
rendered to their HMO membership.
B - In some circumstances, we contract with physicians under risk-sharing arrangements whereby physicians have
assumed some level of risk for all or a portion of the medical costs of their HMO membership. Although these
arrangements do include capitation payments for services rendered, we process substantially all of the claims under
these arrangements.
Humana Inc.																																									Page 8 of 10
Medical Claim Reserves - Details and Statistics
Change in medical and other expenses payable:
The change in medical and other expenses payable is summarized as follows:
										For the Six														For the Twelve
										Months Ended														Months Ended
										June 30, 2003														December 31, 2002
Balances at January 1										$ 1,142,131														$ 1,086,386
Incurred related to:
Current year										4,884,188														9,125,915
Prior years - TRICARE										(29,466)														25,685																	(1)
Prior years - non-TRICARE (2)										(38,311)														(13,404)
Total incurred										4,816,411														9,138,196
Paid related to:
Current year										(3,684,801)														(8,002,610)
Prior years										(986,377)														(1,079,841)
Total paid										(4,671,178)														(9,082,451)
Balances at end of period										$ 1,287,364														$ 1,142,131
(1) Changes in estimates of medical expenses payable for TRICARE may result from issues that entitle us
to additional revenues derived from change orders or the bid price adjustment process, which was the
case with substantially all of the unfavorable development for prior periods recognized during 2002.
(2) Changes in estimates of non-TRICARE incurred claims for prior years recognized during 2003 and 2002
related primarily to our commercial lines of business. The impact of any reduction of "incurred related
to prior years" claims may be offset as we re-establish the "incurred related to current year". Our
reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for
our claims within a level of confidence required to meet actuarial standards. Thus, only when the
release of a prior year reserve is not offset with the same level of conservatism in estimating the current
year reserve will the redundancy reduce medical expense. We have consistently applied this
methodology in determining our best estimate for unpaid claims liability in each period.
Humana Inc.																																																Page 9 of 10
Dollars in thousands
Medical Claim Reserves - Details and Statistics
Medical and Other Expenses Payable Detail:
												June 30,													March 31,														December 31,
												2003													2003														2002
A IBNR and other medical expenses payable												$ 778,460													$ 703,910														$ 650,606
B TRICARE IBNR												232,591													232,249														212,826
C TRICARE other medical expenses payable												24,677													30,055														37,793
D Unprocessed claim inventories												92,100													99,000														92,300
E Processed claim inventories												126,516													118,300														105,422
F Payable to pharmacy benefit administrator												33,020													42,529														43,184
Total medical and other expenses payable												$ 1,287,364													$ 1,226,043														$ 1,142,131
A IBNR represents an estimate of medical expenses payable for claims incurred but not reported (IBNR) at the balance
sheet date. The level of IBNR is primarily impacted by membership levels, medical claim trends and the receipt cycle
time, which represents the length of time between when a claim is initially incurred and when the claim form is
received (i.e. a shorter time span results in lower reserves for claims IBNR).
B TRICARE IBNR has increased primarily due to an increase in claim inventories at our third party claim administrator
for claims not submitted electronically.
C TRICARE other medical expense payable may include liabilities to subcontractors and/or risk share payables to the
Department of Defense. The level of these balances may fluctuate from period to period due to the timing of payment
(cutoff) and whether or not the balances are payables or receivables (receivables from the Department of Defense
are classified as "receivables" in our balance sheet).
D Unprocessed claim inventories represent the estimated valuation of claims received but not yet fully processed.
TRICARE claim inventories are not included in this amount as an independent third party administrator processes
all TRICARE medical claims on our behalf. Reserves for TRICARE claims inventory are included in TRICARE IBNR.
E Processed claim inventories represent the estimated valuation of processed claims that are in the post claim
adjudication process, which consists of administrative functions such as audit and check batching and handling.
F The balance due to our pharmacy benefit administrator fluctuates due to bi-weekly payments and the month-end
cutoff.
Receipt Cycle Time:
Due to increasing electronic connectivity and other efficiencies gained by our providers with regards to the claim
submission process, the average length of time between when a claim was initially incurred and when the claim form
was received has generally shortened over the past several years. Below is a summary:
			Average # of Days from Incurred Date to Receipt Date (1)
			2003				2002					Change													% Change
1st Quarter Average			17.1				19.0					(1.9)													-10.0%
2nd Quarter Average			16.7				18.1					(1.4)													-7.7%
3rd Quarter Average			-				17.3					n/a													n/a
4th Quarter Average			-				16.9					n/a													n/a
Full Year Average			16.9				17.8					(0.9)													-5.1%
(1) Receipt cycle time data for our 2 largest claim processing platforms representing approximately 90% of our
claims volume.
Humana Inc.																																																			Page 10 of 10
Medical Claim Reserves - Details and Statistics
Unprocessed Claim Inventories:
The estimated valuation and number of claims on hand that are yet to be processed are as follows:
	Estimated												Number
	Valuation					Claim Item							of Days
Date	(000)					Counts							On Hand
12/31/2001	$ 125,400					518,100							5.0
03/31/2002	$ 121,000					559,600							5.2
06/30/2002	$ 110,300					513,100							4.8
09/30/2002	$ 108,800					496,200							4.8
12/31/2002	$ 92,300					424,200							4.5
03/31/2003	$ 99,000					421,700							4.4
06/30/2003	$ 92,100					446,600							4.7
Days in Claims Payable (Quarterly):
A common metric for monitoring medical claim reserve levels relative to the medical claim expenses is days in claims
payable, or DCP, which represents the medical claim liabilities at the end of the period divided by average medical
expenses per day in the quarterly period. Since we have some providers under capitation payment arrangements (which
do not require a medical claim IBNR reserve), we have also summarized this metric excluding capitation expenses.
	Days																					DCP
	in Claims					Annual																Excluding										Annual
Quarter Ended	Payable (DCP)					Change							% Change									Capitation										Change										% Change
12/31/2001	47.4					(3.9)							-7.6%									57.1										(4.4)										-7.2%
03/31/2002	47.2					(2.3)							-4.6%									56.2										(3.4)										-5.7%
06/30/2002	46.8					(3.1)							-6.2%									55.3										(4.7)										-7.8%
09/30/2002	46.6					(2.5)							-5.1%									55.3										(3.9)										-6.6%
12/31/2002	45.2					(2.2)							-4.6%									53.3										(3.8)										-6.7%
03/31/2003	46.5					(0.7)							-1.5%									54.7										(1.5)										-2.7%
06/30/2003	47.9					1.1							2.4%									56.2										0.9										1.6%
This metric fluctuates due to all of the issues reviewed above, including the change in the receipt cycle time, the change
in medical claim inventories, the change in TRICARE liability balances, and the timing of our bi-weekly payment
to our pharmacy benefits administrator. An annual recap follows:
																						2003										2002
4th quarter-prior year																						45.2										47.4
Impact of change in claim receipt cycle time																						(0.3)										(2.6)
Impact of change in unprocessed claim inventories																						0.0										(1.3)
Impact of changing TRICARE reserve balances																						0.7										0.3
Impact of change in pharmacy payment cutoff																						(0.4)										0.7
All other																						2.7										0.7
Year to date-current year																						47.9										45.2