Humana 2010 Annual Report Download - page 119

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 2025. 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, 2010, 2009
and 2008:
2010 2009 2008
(in thousands)
Rent expense ................................ $155,206 $160,927 $142,885
Sublease rental income ......................... (9,639) (9,049) (9,283)
Net rent expense .......................... $145,567 $151,878 $133,602
Future annual minimum payments due subsequent to December 31, 2010 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:
2011 ......................................................... $190,525 $ (963) $189,562
2012 ......................................................... 162,434 (433) 162,001
2013 ......................................................... 133,434 (143) 133,291
2014 ......................................................... 108,159 (110) 108,049
2015 ......................................................... 82,005 (20) 81,985
Thereafter ..................................................... 133,677 0 133,677
Total ..................................................... $810,234 $(1,669) $808,565
The table above includes noncancelable operating leases acquired in connection with the acquisition of
Concentra on December 21, 2010 as described further in Note 3, including leases for medical and operating
facilities, certain corporate office space as well as office and medical equipment.
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
$81.4 million in 2011, $44.6 million in 2012, $18.4 million in 2013, $3.7 million in 2014, and no material
commitments thereafter. Purchase obligations exclude agreements that are cancelable without penalty.
Off-Balance Sheet Arrangements
As part of our ongoing business, we do not participate or knowingly seek to participate in transactions that
generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as
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