Humana 2011 Annual Report Download - page 123

Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
in the open market, by block purchases, or in privately-negotiated transactions, subject to certain regulatory
restrictions on volume, pricing, and timing. During 2011, we repurchased 0.8 million shares in open market
transactions for $53 million at an average price of $63.73 under the previously approved share repurchase
authorization and we repurchased 5.9 million shares in open market transactions for $439 million at an average
price of $74.01 under the new authorization. During 2010, we repurchased 1.99 million shares for $100 million
under the old stock repurchase plan authorized by the Board of Directors in December 2009 at an average price
of $50.17. No shares were repurchased in open market transactions during 2009. As of February 6, 2012, the
remaining authorized amount under the new authorization totaled $561 million.
In connection with employee stock plans, we acquired 0.8 million common shares for $49 million in 2011,
0.2 million common shares for $8 million in 2010, and 0.6 million common shares for $23 million in 2009.
Regulatory Requirements
Certain of our subsidiaries operate in states that regulate the payment of dividends, loans, or other cash
transfers to Humana Inc., our parent company, and require minimum levels of equity as well as limit investments
to approved securities. The amount of dividends that may be paid to Humana Inc. by these subsidiaries, without
prior approval by state regulatory authorities, is limited based on the entity’s level of statutory income and
statutory capital and surplus. In most states, prior notification is provided before paying a dividend even if
approval is not required.
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. Our state regulated
subsidiaries had aggregate statutory capital and surplus of approximately $4.7 billion and $4.3 billion as of
December 31, 2011 and 2010, respectively, which exceeded aggregate minimum regulatory requirements. The
amount of dividends that may be paid to our parent company in 2012 without prior approval by state regulatory
authorities is approximately $970 million in the aggregate. This compares to dividends that were able to be paid
in 2011 without prior regulatory approval of approximately $740 million.
15. 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 operating cost, for all operating leases were as follows for the years ended December 31, 2011, 2010 and
2009:
2011 2010 2009
(in millions)
Rent expense ........................................... $207 $155 $161
Sublease rental income ................................... (10) (9) (9)
Net rent expense .................................... $197 $146 $152
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