Humana 2012 Annual Report Download - page 127

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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
prior approval by state regulatory authorities, or ordinary dividends, 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. Actual dividends paid may vary due to consideration of excess
statutory capital and surplus and expected future surplus requirements related to, for example, premium volume
and product mix.
Although minimum required levels of equity are largely based on premium volume, product mix, and the
quality of assets held, minimum requirements vary significantly at the state level. Our state regulated subsidiaries
had aggregate statutory capital and surplus of approximately $5.1 billion and $4.7 billion as of December 31,
2012 and 2011, respectively, which exceeded aggregate minimum regulatory requirements. Excluding Puerto
Rico subsidiaries, the amount of ordinary dividends that may be paid to our parent company in 2013 is
approximately $911 million in the aggregate. This compares to ordinary dividends that were able to be paid in
2012 of approximately $860 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, 2012, 2011 and 2010:
2012 2011 2010
(in millions)
Rent expense ........................................... $218 $207 $155
Sublease rental income ................................... (11) (10) (9)
Net rent expense .................................... $207 $197 $146
Future annual minimum payments due subsequent to December 31, 2012 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 millions)
For the years ending December 31:
2013 .......................................................... $212 $(1) $211
2014 .......................................................... 179 (1) 178
2015 .......................................................... 147 0 147
2016 .......................................................... 110 0 110
2017 .......................................................... 82 0 82
Thereafter ...................................................... 122 0 122
Total ...................................................... $852 $(2) $850
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
117