Humana 2015 Annual Report Download - page 130

Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
122
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, 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.
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 insurances subsidiaries
had aggregate statutory capital and surplus of approximately $6.6 billion and $6.0 billion as of December 31, 2015 and
2014, respectively, which exceeded aggregate minimum regulatory requirements of $4.6 billion and $4.1 billion,
respectively. Subsidiary dividends are subject to state regulatory approval, the amount and timing of which could be
reduced or delayed. Excluding Puerto Rico subsidiaries, the amount of ordinary dividends that may be paid to our
parent company in 2016 is approximately $900 million in the aggregate. This compares to dividends that were paid to
our parent company in 2015 of approximately $493 million. 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.
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 2026. 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, 2015, 2014 and 2013:
2015 2014 2013
(in millions)
Rent expense $ 201 $ 226 $ 227
Sublease rental income (25)(14)(11)
Net rent expense $ 176 $ 212 $ 216
Future annual minimum payments due subsequent to December 31, 2015 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,:
2016 $ 173 $ (16) $ 157
2017 159 (16) 143
2018 127 (14) 113
2019 94 (11)83
2020 54 (7)47
Thereafter 90 (45)45
Total $ 697 $ (109) $ 588