Humana 2014 Annual Report Download - page 121

Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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common stock from Goldman Sachs or we may be required to make a payment. If we are obligated to make a payment,
we may elect to satisfy such obligation in cash or shares of our common stock. The obligations of Goldman Sachs
under the ASR agreement are guaranteed by The Goldman Sachs Group, Inc.
In connection with employee stock plans, we acquired 0.4 million common shares for $42 million in 2014, 0.3
million common shares for $29 million in 2013, and 0.7 million common shares for $58 million in 2012.
Regulatory Requirements
Certain of our insurance 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 insurance subsidiaries, without
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 insurance subsidiaries
had aggregate statutory capital and surplus of approximately $6.0 billion and $5.5 billion as of December 31, 2014 and
2013, respectively, which exceeded aggregate minimum regulatory requirements of $4.1 billion and $3.5 billion,
respectively. Excluding Puerto Rico subsidiaries, the amount of ordinary dividends that may be paid to our parent
company in 2015 is approximately $800 million in the aggregate. This compares to dividends that were paid to our
parent company in 2014 of approximately $927 million.
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 2027. 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, 2014, 2013 and 2012:
2014 2013 2012
(in millions)
Rent expense $ 226 $ 227 $ 218
Sublease rental income (14)(11)(11)
Net rent expense $ 212 $ 216 $ 207