Humana 2008 Annual Report Download - page 103

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Although minimum required levels of equity are largely based on premium volume, product mix, and the
quality of assets held, minimum requirements can vary significantly at the state level. Based on the statutory
financial statements as of December 31, 2008, we maintained aggregate statutory capital and surplus of
$3.5 billion in our state regulated subsidiaries, $1.4 billion above the aggregate $2.1 billion in applicable
statutory requirements which would trigger any regulatory action by the respective states.
16. COMMITMENTS, GUARANTEES AND CONTINGENCIES
Leases
We lease facilities, computer hardware, and other furniture and equipment under long-term operating leases
that are noncancelable and expire on various dates through 2019. We sublease facilities or partial facilities to
third party tenants for space not used in our operations. Rent with scheduled escalation terms are accounted for
on a straight-line basis over the lease term. Rent expense and sublease rental income, which are recorded net as
an administrative expense, for all operating leases were as follows for the years ended December 31, 2008, 2007
and 2006:
2008 2007 2006
(in thousands)
Rent expense ................................ $142,885 $121,163 $104,711
Sublease rental income ......................... (9,283) (10,254) (10,442)
Net rent expense .......................... $133,602 $110,909 $ 94,269
Future annual minimum payments due subsequent to December 31, 2008 under all of our noncancelable
operating leases with initial terms in excess of one year are as follows:
Minimum
Lease
Payments
Sublease
Rental
Receipts
Net Lease
Commitments
(in thousands)
For the years ending December 31:
2009 .................................. $143,446 $(1,464) $141,982
2010 .................................. 131,076 (1,260) 129,816
2011 .................................. 99,139 (650) 98,489
2012 .................................. 69,428 (372) 69,056
2013 .................................. 35,313 (106) 35,207
Thereafter .............................. 69,829 (177) 69,652
Total .............................. $548,231 $(4,029) $544,202
Purchase Obligations
We have agreements to purchase services, primarily information technology related services, or to make
improvements to real estate, in each case that are enforceable and legally binding on us and that specify all
significant terms, including: fixed or minimum levels of service to be purchased; fixed, minimum or variable
price provisions; and the appropriate timing of the transaction. We have purchase obligation commitments of
$52.1 million in 2009, $41.3 million in 2010, $27.6 million in 2011, $14.2 million in 2012, and $13.3 million
thereafter. Purchase obligations exclude agreements that are cancelable without penalty.
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