LabCorp 2010 Annual Report Download - page 37

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The Company has registered the notes and the shares of
common stock issuable upon conversion of the notes with the
Securities and Exchange Commission.
During the second quarter of 2009, the Company redeemed
approximately $369.5 principal amount at maturity of its zero-
coupon subordinated notes, equaling approximately 50% of
the principal amount at maturity outstanding of the zero-coupon
subordinated notes. The total cash used for these redemptions
was $289.4. As a result of certain holders of the zero-coupon
subordinated notes electing to convert their notes, the Company
also issued 0.4 additional shares of common stock and reversed
approximately $11.3 of deferred tax liability to reflect the tax
benefit realized upon issuance of these shares.
On September 13, 2010, the Company announced that for
the period of September 12, 2010 to March 11, 2011, the
zero-coupon subordinated notes will accrue contingent cash
interest at a rate of no less than 0.125% of the average market
price of a zero-coupon subordinated note for the five trading
days ended September 8, 2010, in addition to the continued
accrual of the original issue discount.
On January 3, 2011, the Company announced that its zero-
coupon subordinated notes may be converted into cash and
common stock at the conversion rate of 13.4108 per $1,000
principal amount at maturity of the notes, subject to the terms
of the zero-coupon subordinated notes and the Indenture, dated
as of October 24, 2006 between the Company and The Bank
of New York Mellon, as trustee and conversion agent. In order
to exercise the option to convert all or a portion of the zero-
coupon subordinated notes, holders are required to validly
surrender their zero-coupon subordinated notes at any time
during the calendar quarter beginning January 1, 2011, through
the close of business on the last business day of the calendar
quarter, which is 5:00 p.m., New York City time, on Thursday,
March 31, 2011.
Senior Notes
On October 28, 2010, in conjunction with the acquisition of
Genzyme Genetics, the Company entered into a $925.0
Bridge Term Loan Credit Agreement, among the Company,
the lenders named therein and Citibank, N.A., as administra-
tive agent (the “Bridge Facility”). The Company replaced and
terminated the Bridge Facility in November 2010 by making
an offering in the debt capital markets. On November 19, 2010,
the Company sold $925.0 in debt securities, consisting of
$325.0 aggregate principal amount of 3.125% Senior Notes
due May 15, 2016 and $600.0 aggregate principal amount
of 4.625% Senior Notes due November 15, 2020. Beginning
on May 15, 2011, interest on the Senior Notes due 2016 and
2020 is payable semi-annually on May 15 and November 15.
On December 1, 2010, the acquisition of Genzyme Genetics
was funded by the net proceeds from the issuance of these
Notes ($915.4) and with cash on hand.
The Senior Notes due January 31, 2013 bear interest at
the rate of 5½% per annum from February 1, 2003, payable
semi-annually on February 1 and August 1. The Senior Notes
due 2015 bear interest at the rate of 55/8% per annum from
December 14, 2005, payable semi-annually on June 15 and
December 15.
12. 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:
2010 2009
Issued 124.5 127.4
In treasury (22.1) (22.1)
Outstanding 102.4 105.3
LABORATORY CORPORATION OF AMERICA
Notes to Consolidated Financial Statements