LabCorp 2011 Annual Report Download - page 34

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and $5.2 of research and development expenses (included in
selling, general and administrative expenses) for the years
ended December 31, 2011, 2010 and 2009, respectively.
In connection with the Monogram acquisition, the Company
incurred approximately $2.7 in transaction fees and expenses
(included in selling, general and administrative expenses) for
the year ended December 31, 2009.
3. Restructuring and Other Special Charges
During 2011, the Company recorded net restructuring charges
of $44.6. Of this amount, $27.4 related to severance and other
personnel costs, and $22.0 primarily related to facility-related
costs associated with the ongoing integration of certain
acquisitions including Genzyme Genetics and Westcliff. These
charges were offset by restructuring credits of $4.8 resulting
from the reversal of unused severance and facility closure
liabilities. In addition, the Company recorded fixed assets
impairment charges of $18.9 primarily related to equipment,
computer systems and leasehold improvements in closed
facilities. The Company also recorded special charges of $14.8
related to the write-off of certain assets and liabilities related to
an investment made in prior years, along with a $2.6 write-off
of an uncollectible receivable from a past installment sale of
one of the Company’s lab operations.
During 2010, the Company recorded net restructuring
charges of $5.8 primarily related to the closing of redundant
and underutilized facilities. Of this amount, $8.0 related to
severance and other employee costs for employees primarily in
the affected facilities, 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 work force reductions
and the closing of redundant and underutilized facilities. 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 buy-outs and severance
payments that were not required to achieve the planned
reduction in work force.
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, 2010 $ 4.9 $ 12.9 $ 17.8
Restructuring charges 27.4 22.0 49.4
Reduction of prior restructuring accruals (2.3) (2.5) (4.8)
Cash payments and other adjustments (21.6) (9.8) (31.4)
Balance as of December 31, 2011 $ 8.4 $ 22.6 $ 31.0
Current $ 16.0
Non-current 15.0
$ 31.0
5. Joint Venture Partnerships and Equity
Method Investments
At December 31, 2011 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 $ 14.5 50.00%
Alberta, Canada 60.3 43.37%
Equity Method Investments:
Charlotte, North Carolina 2.0 50.00%
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.
LABORATORY CORPORATION OF AMERICA
Notes to Consolidated Financial Statements