LabCorp 2007 Annual Report Download - page 47

Notes to Consolidated Financial Statements
(Dollars and shares in millions, except per share data)
Laboratory Corporation of America® Holdings 2007 45
holders must validly surrender their LYONs or Zero-Coupon Notes at
any time during the calendar quarter through the close of business
at 5:00 p.m., New York City time, on Monday, March 31, 2008.
Senior Notes Due 2013
On January 17, 2003, in conjunction with the acquisition of DIANON,
the Company borrowed $350.0 under a bridge loan agreement with
Credit Suisse First Boston, acting as Administrative Agent. On January 31,
2003, the Company sold $350.0 aggregate principal amount of Senior
Notes due January 31, 2013. The Notes bear interest at the rate of 5½%
per annum from February 1, 2003, payable semi-annually on February 1
and August 1, commencing on August 1, 2003. Proceeds from the
issuance of these Notes ($345.1), together with cash on hand was
used to repay the $350.0 principal amount of the Company’s bridge
loan, and as a result, such bridge loan was terminated.
Senior Notes Due 2015
On December 7, 2005, in conjunction with the execution of an overnight
share repurchase agreement with a bank, the Company borrowed
$250.0 under its revolving credit facility. On December 12, 2005, the
Company sold $250.0 aggregate principal amount of Senior Notes
due 2015. The Notes bear interest at the rate of 55/8% per annum
from December 14, 2005, payable semi-annually on June 15 and
December 15, commencing on June 15, 2006. Proceeds from the
issuance of these Notes ($247.6), together with cash on hand, were
used to repay the borrowings under the revolving credit facility.
PREFERRED STOCK AND
COMMON SHAREHOLDERS’ EQUITY
The Company is authorized to issue up to 265.0 shares of common
stock, par value $0.10 per share. The Company’s treasury shares are
recorded at aggregate cost. Common shares issued and outstanding
are summarized in the following table:
2007 2006
Issued 132.7 143.8
In treasury (21.7) (21.6)
Outstanding 111.0 122.2
The Company is authorized to issue up to 30.0 shares of preferred
stock, par value $0.10 per share. There were no preferred shares
outstanding as of December 31, 2007.
The changes in common shares issued and held in treasury are
summarized below:
Common Shares Issued
2007 2006 2005
Common stock issued at January 1 143.8 148.0 150.7
Common stock issued under employee stock plans 2.0 2.5 2.1
Retirement of common stock (13.1) (6.7) (4.8)
Common stock issued at December 31 132.7 143.8 148.0
Common Shares Held in Treasury
2007 2006 2005
Common shares held in treasury at January 1 21.6 21.5 14.5
Purchase of common stock – – 6.8
Surrender of restricted stock awards 0.1 0.1 0.2
Common shares held in treasury at December 31 21.7 21.6 21.5
Share Repurchase Program
During fi scal 2007, the Company purchased 13.1 shares of its common
stock at a total cost of $924.2. As of December 31, 2007, the Company
had outstanding authorization from the Board of Directors to purchase
approximately $425.8 of Company common stock.
On November 6, 2006, the Company executed an accelerated
share repurchase transaction with an affi liate of Lehman Brothers Inc.
for the acquisition of 3.4 shares of the Company’s outstanding common
stock for an initial purchase price of $73.40 per share. The Company
used cash on hand to pay for the shares. The purchase price for these
shares was subject to an adjustment based on the volume weighted
average price of the Company’s stock during a period following
execution of the agreement. The total cost of the initial purchase was
approximately $253.6, including a cap premium of $3.5. The forward
contract associated with the accelerated share repurchase transaction
was accounted for in accordance with EITF 00-19, “Accounting for
Derivative Financial Instruments Indexed to, and Potentially Settled in,
a Company’s Own Stock,” (“EITF 0019”) as an equity instrument. The
purchase price adjustment was settled in the fi rst quarter of 2007 and
resulted in the receipt of 0.1 additional shares by the Company. The
purchase price adjustment did not require the Company to make any
additional cash payment. The shares repurchased under the accelerated
share repurchase agreement were retired.
On December 7, 2005, the Company executed an overnight share
repurchase transaction with a bank for the acquisition of 4.8 shares of
the Company’s outstanding common stock for an initial purchase price
of $52.04 per share. The transaction was fi nanced with borrowings
Laboratory Corporation of America