LabCorp 2010 Annual Report Download - page 33

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LABORATORY CORPORATION OF AMERICA
Notes to Consolidated Financial Statements
the same terms as the previous agreement. The combined
contractual value of these puts, in excess of the current non-
controlling interest of $25.2, totals $143.5 at December 31,
2010. At December 31, 2010, $148.1 has been classified as
a current liability in the Company’s consolidated balance sheet
as the noncontrolling interest that acquired these units has
the ability to put its units in the partnership to the Company
on December 31, 2011.
Net sales of the Ontario joint venture were $280.0 (CN$288.5),
$247.5 (CN$281.3) and $249.0 (CN$264.4) for the twelve months
ended December 31, 2010, 2009 and 2008, respectively.
3. Restructuring and Other Special Charges
During 2010, the Company recorded net restructuring charges
of $5.8 primarily related to work force reductions and the closing
of redundant and underutilized facilities. The majority of these
costs related to severance and other employee costs and con-
tractual obligations associated with leased facilities and other
facility related costs. Of this amount, $8.0 related to severance
and other employee costs in connection with certain work force
reductions and $3.1 related to contractual obligations associated
with leased facilities and other facility related costs. The Company
also reduced its prior restructuring accruals by $5.3, comprised
of $4.7 of previously recorded facility costs and $0.6 of employee
severance benefits as a result of changes in cost estimates on
the restructuring initiatives. In addition, the Company recorded
a special charge of $6.2 related to the write-off of development
costs incurred on systems abandoned during the year.
During 2009, the Company recorded net restructuring charges
of $13.5 primarily related to the closing of redundant and
underutilized facilities. The majority of these costs related to
severance and other employee costs and contractual obliga-
tions associated with leased facilities and other facility related
costs. Of this amount, $10.5 related to severance and other
employee costs for employees primarily in the affected facilities,
and $12.5 related to contractual obligations associated with
leased facilities and other facility related costs. The Company
also reduced its prior restructuring accruals by $9.5, comprised
of $7.3 of previously recorded facility costs and $2.2 of
employee severance benefits as a result of incurring less
cost than planned on those restructuring initiatives primarily
resulting from favorable settlements on lease buyouts and
severance payments that were not required to achieve the
planned reduction in work force.
During 2008, the Company recorded net restructuring
charges of $32.4 primarily related to work force reductions
and the closing of redundant and underutilized facilities. Of this
amount, $20.9 related to severance and other employee costs
in connection with the general work force reductions and
$13.4 related to contractual obligations associated with leased
facilities and equipment. The Company also recorded a credit
of $1.9, comprised of $1.2 of previously recorded facility costs
and $0.7 of employee severance benefits relating to changes
in cost estimates accrued in prior periods.
During the third quarter of 2008, the Company also
recorded a special charge of $5.5 related to estimated uncol-
lectible amounts primarily owed by patients in the areas of the
Gulf Coast severely impacted by hurricanes similar to losses
incurred during the 2005 hurricane season.
4. Restructuring Reserves
The following represents the Company’s restructuring activities
for the period indicated:
Severance Lease
and Other and Other
Employee Facility
Costs Costs Total
Balance as of December 31, 2009 $ 6.6 $ 19.0 $ 25.6
Restructuring charges 8.0 3.1 11.1
Reduction of prior restructuring accruals (0.6) (4.7) (5.3)
Cash payments and other adjustments (9.1) (4.5) (13.6)
Balance as of December 31, 2010 $ 4.9 $ 12.9 $ 17.8
Current $ 11.4
Non-current 6.4
$ 17.8
5. Joint Venture Partnerships and Equity
Method Investments
At December 31, 2010 the Company had investments in the
following unconsolidated joint venture partnerships and equity
method investments:
Net Percentage
Locations Investment Interest Owned
Joint Venture Partnerships:
Milwaukee, Wisconsin $ 9.2 50.00%
Alberta, Canada 60.9 43.37%
Cincinnati, Ohio 0.0 50.00%
Equity Method Investments:
Canada, China and Western Europe 5.4 17.50%
Charlotte, North Carolina 3.0 50.00%