Humana 2014 Annual Report Download - page 122

Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
114
Future annual minimum payments due subsequent to December 31, 2014 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,:
2015 $ 232 $ (17) $ 215
2016 198 (16) 182
2017 163 (15) 148
2018 110 (13)97
2019 78 (9)69
Thereafter 364 (9) 355
Total $ 1,145 $ (79) $ 1,066
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 $94 million in 2015, $45
million in 2016, $20 million in 2017, $16 million in 2018, and none 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 structured finance
or special purpose entities, or SPEs, which would have been established for the purpose of facilitating off-balance sheet
arrangements or other contractually narrow or limited purposes. As of December 31, 2014, we were not involved in
any SPE transactions.
Guarantees and Indemnifications
Through indemnity agreements approved by the state regulatory authorities, certain of our regulated subsidiaries
generally are guaranteed by Humana Inc., our parent company, in the event of insolvency for (1) member coverage for
which premium payment has been made prior to insolvency; (2) benefits for members then hospitalized until discharged;
and (3) payment to providers for services rendered prior to insolvency. Our parent also has guaranteed the obligations
of our military services subsidiaries.
In the ordinary course of business, we enter into contractual arrangements under which we may agree to indemnify
a third party to such arrangement from any losses incurred relating to the services they perform on behalf of us, or for
losses arising from certain events as defined within the particular contract, which may include, for example, litigation
or claims relating to past performance. Such indemnification obligations may not be subject to maximum loss clauses.
Historically, payments made related to these indemnifications have been immaterial.
Government Contracts
Our Medicare products, which accounted for approximately 72% of our total premiums and services revenue for
the year ended December 31, 2014, primarily consisted of products covered under the Medicare Advantage and Medicare
Part D Prescription Drug Plan contracts with the federal government. These contracts are renewed generally for a
calendar year term unless CMS notifies us of its decision not to renew by May 1 of the calendar year in which the
contract would end, or we notify CMS of our decision not to renew by the first Monday in June of the calendar year