LabCorp 2010 Annual Report Download - page 34

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The joint venture agreements that govern the conduct of
business of these partnerships mandates unanimous agreement
between partners on all major business decisions as well as
providing other participating rights to each partner. The equity
method investments represent the Company’s purchase of
shares in clinical diagnostic companies. The investments are
accounted for under the equity method of accounting as the
Company does not have control of these investments. The
Company has no material obligations or guarantees to,
or in support of, these unconsolidated investments and
their operations.
Condensed unconsolidated financial information for joint
venture partnerships and equity method investments is shown
in the following table.
As of December 31: 2010 2009
Current assets $ 61.9 $ 35.3
Other assets
48.4 41.4
Total assets
$ 110.3 $ 76.7
Current liabilities
$ 55.6 $ 28.0
Other liabilities
17.9 2.3
Total liabilities
73.5 30.3
Partners’ equity 36.8 46.4
Total liabilities and partners’ equity $ 110.3 $ 76.7
For the period January 1 – December 31: 2010 2009 2008
Net sales $ 255.5 $ 212.4 $ 182.0
Gross profit
73.9 69.6 69.0
Net earnings
20.0 33.3 34.3
The Company’s recorded investment in the Alberta joint
venture partnership at December 31, 2010 includes $48.9
of value assigned to the partnership’s Canadian licenses (with
an indefinite life and deductible for tax) to conduct diagnostic
testing services in the province.
6. Accounts Receivable, Net
December 31, December 31,
2010 2009
Gross accounts receivable $ 804.8 $ 747.3
Less allowance for doubtful accounts (149.2) (173.1)
$ 655.6 $ 574.2
The provision for doubtful accounts was $241.5, $248.9
and $232.8 in 2010, 2009 and 2008 respectively. In addition,
in the second quarter of 2008 the Company recorded a $45.0
increase in its provision for doubtful accounts. The Company’s
estimate of the allowance for doubtful accounts was increased
due to the impact of the economy, higher patient deductibles
and copayments, and acquisitions on the collectibility of
accounts receivable balances.
During the third quarter of 2008, the Company also recorded
a special charge of $5.5 related to estimated uncollectible
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.
7. Property, Plant and Equipment, Net
December 31, December 31,
2010 2009
Land $ 25.8 $ 23.4
Buildings and building improvements 125.4 116.7
Machinery and equipment 615.7 584.8
Software
299.2 289.6
Leasehold improvements 171.6 147.0
Furniture and fixtures 51.2 48.4
Construction in progress 95.6 49.8
Equipment under capital leases 3.5 3.5
1,388.0 1,263.2
Less accumulated depreciation and
amortization of capital lease assets (801.1) (762.4)
$ 586.9 $ 500.8
Depreciation expense and amortization of capital lease
assets was $129.1, $130.7 and $120.1 for 2010, 2009 and
2008, respectively, including software depreciation of $32.0,
$34.8, and $33.7 for 2010, 2009 and 2008, respectively.
8. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill (net of accu-
mulated amortization) for the years ended December 31, 2010
and 2009 are as follows:
2010 2009
Balance as of January 1 $ 1,897.1 $ 1,772.2
Goodwill acquired during the year 704.4 124.1
Adjustments to goodwill (0.2) 0.8
Goodwill, net $ 2,601.3 $ 1,897.1
LABORATORY CORPORATION OF AMERICA
Notes to Consolidated Financial Statements