United Healthcare 2010 Annual Report Download - page 93

13. Commitments and Contingencies
The Company leases facilities and equipment under long-term operating leases that are noncancelable and expire
on various dates through 2028. Rent expense under all operating leases for 2010, 2009 and 2008 was $297
million, $303 million and $264 million, respectively.
As of December 31, 2010, future minimum annual lease payments, net of sublease income, under all
noncancelable operating leases were as follows:
(in millions)
Future Minimum
Lease Payments
2011 ......................................................................... $259
2012 ......................................................................... 240
2013 ......................................................................... 191
2014 ......................................................................... 156
2015 ......................................................................... 129
Thereafter .................................................................... 579
The Company contracts on an administrative services only (ASO) basis with customers who fund their own
claims. The Company charges these customers administrative fees based on the expected cost of administering
their self-funded programs. In some cases, the Company provides performance guarantees related to its
administrative function. If these standards are not met, the Company may be financially at risk up to a stated
percentage of the contracted fee or a stated dollar amount. Amounts accrued for performance guarantees were not
material as of December 31, 2010 and 2009.
As of December 31, 2010, the Company has outstanding, undrawn letters of credit with financial institutions of
$66 million and surety bonds outstanding with insurance companies of $288 million, primarily to bond
contractual performance.
Legal Matters
Because of the nature of its businesses, the Company is frequently made party to a variety of legal actions and
regulatory inquiries, including class actions and suits brought by members, providers, customers and regulators,
relating to the Company’s management and administration of health benefit plans. These matters include medical
malpractice, employment, intellectual property, antitrust, privacy and contract claims, and claims related to
health care benefits coverage and other business practices. The adverse resolution of any specific lawsuit or any
potential regulatory proceeding or action could have a material adverse effect on the Company’s business,
financial condition and results of operations.
The Company records liabilities for its estimates of probable costs resulting from these matters where
appropriate. Estimates of probable costs resulting from legal and regulatory matters involving the Company are
inherently difficult to predict, particularly where the matters: involve indeterminate claims for monetary damages
or may involve fines, penalties or punitive damages; present novel legal theories or represent a shift in regulatory
policy; involve a large number of claimants or regulatory bodies; are in the early stages of the proceedings; or
could result in a change in business practices. Accordingly, except as otherwise noted below, the Company is
unable to estimate the losses or ranges of losses for those matters where there is a reasonable possibility or it is
probable that a loss may be incurred.
Litigation Matters
MDL Litigation. Beginning in 1999, a series of class action lawsuits were filed against the Company by health
care providers alleging various claims relating to the Company’s reimbursement practices, including alleged
violations of the Racketeer Influenced Corrupt Organization Act (RICO) and state prompt payment laws and
breach of contract claims. Many of these lawsuits were consolidated in a multi-district litigation in the United
States District Court for the Southern District Court of Florida (MDL). In the lead MDL lawsuit, the court
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