LabCorp 2008 Annual Report Download - page 47

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Notes to Consolidated Financial Statements
(Dollars and shares in millions, except per share data)
Laboratory Corporation of America
Laboratory Corporation of America® Holdings 2008 45
Stockholder Rights Plan
The Company adopted a stockholder rights plan effective as of December 13, 2001 that provides
that each common stockholder of record on December 21, 2001 received a dividend of one
right for each share of common stock held. Each right entitles the holder to purchase from the
Company one-hundredth of a share of a new series of participating preferred stock at an initial
purchase price of four hundred dollars. These rights will become exercisable and will detach
from the Company’s common stock if any person becomes the beneficial owner of 15% or more
of the Company’s common stock. In that event, each right will entitle the holder, other than the
acquiring person, to purchase, for the initial purchase price, shares of the Company’s common
stock having a value of twice the initial purchase price. The rights will expire on December 13,
2011, unless earlier exchanged or redeemed.
Accumulated Other Comprehensive Earnings
The components of accumulated other comprehensive earnings are as follows:
Foreign Net Adoption of Interest Accumulated
Currency Benefit FASB Rate Other
Translation Plan Statement Swap Comprehensive
Adjustments Adjustments No. 158 Adjustments Earnings
Balance at December 31, 2005 $ 89.9 $ 0.4 $ – $ – $ 90.3
Current year adjustments (1.1) – (51.2) – (52.3)
Tax effect of adjustments 0.4 – 20.3 – 20.7
Balance at December 31, 2006 89.2 0.4 (30.9) – 58.7
Current year adjustments 96.9 4.0 – – 100.9
Tax effect of adjustments (38.0) (1.6) – – (39.6)
Balance at December 31, 2007 148.1 2.8 (30.9) – 120.0
Current year adjustments (129.6) (81.0) – (13.5) (224.1)
Tax effect of adjustments 50.1 32.0 – 5.3 87.4
Balance at December 31, 2008 $ 68.6 $ (46.2) $ (30.9) $ (8.2) $ (16.7)
14) Income Taxes
The sources of income before taxes, classified between domestic and foreign entities are as follows:
Pre-Tax Income
2008 2007 2006
Domestic $ 747.8 $ 786.5 $ 717.4
Foreign 24.6 15.8 3.5
Total pre-tax income $ 772.4 $ 802.3 $ 720.9
The provisions for income taxes in the accompanying consolidated statements of operations
consist of the following:
Years Ended December 31,
2008 2007 2006
Current:
Federal $ 188.1 $ 238.9 $ 204.0
State 39.8 49.9 43.2
Foreign 10.4 10.2 5.4
$ 238.3 $ 299.0 $ 252.6
Deferred:
Federal $ 54.0 $ 18.8 $ 26.3
State 12.8 4.2 7.5
Foreign 2.8 3.5 2.9
69.6 26.5 36.7
$ 307.9 $ 325.5 $ 289.3
The tax benefit associated with option exercises from stock plans reduced taxes currently
payable by approximately $20.9, $26.2 and $20.4 in 2008, 2007 and 2006, respectively.
Such benefits are recorded as additional paid-in-capital.