Company: HUM
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000049071-25-000007
Chunk: 52

Company: HUMANA INC
Filing Date: 2025-02-20
Form: 10-K
Item: Item 8
Chunk 52
---
Expected option life (years)3.5 years3.0 years3.6 yearsExpected volatility28.8 %31.6 %36.1 %Risk-free interest rate at grant date4.3 %4.5 %1.8 %Dividend yield0.9 %0.7 %0.7 %We calculate the expected term for our employee stock options based on historical employee exercise behavior and base the risk-free interest rate on a traded zero-coupon U.S. Treasury bond with a term substantially equal to the option’s expected term.

103

Humana Inc.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The volatility used to value employee stock options is based on historical volatility. We calculate historical volatility using a simple-average calculation methodology based on daily price intervals as measured over the expected term of the option.Activity for our option plans was as follows for the year ended December 31, 2024:Shares  UnderOptionWeighted-AverageExercise Price (shares in thousands)Options outstanding at December 31, 2023242 $415.18 Granted149 385.05 Exercised(1)259.26 Forfeited(15)391.61 Options outstanding at December 31, 2024375 $404.61 Options exercisable at December 31, 2024166 $393.73 As of  December 31, 2024, outstanding stock options, substantially all of which are expected to vest, had no intrinsic value, and a weighted-average remaining contractual term of 4.5 years. As of December 31, 2024, exercisable stock options had no intrinsic value, and a weighted-average remaining contractual term of 3.1 years. The total intrinsic value of stock options exercised during 2024 was $0.1 million, compared with $3 million during 2023 and $32 million during 2022. Cash received from stock option exercises totaled $0.3 million in 2024, $9 million in 2023, and $51 million in 2022.Total compensation expense not yet recognized related to nonvested options was $14 million at December 31, 2024. We expect to recognize this compensation expense over a weighted-average period of approximately 1.8 years.

15. EARNINGS PER COMMON SHARE COMPUTATION

Detail supporting the computation of basic and diluted earnings per common share was as