LabCorp 2011 Annual Report Download - page 36

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As of December 31, 2011, the Ontario operation has $722.2
of value assigned to the partnership’s indefinite lived Canadian
licenses to conduct diagnostic testing services in the province.
9. Accrued Expenses and Other
December 31, December 31,
2011 2010
Employee compensation and benefits $ 207.5 $ 188.0
Self-insurance reserves
72.9 70.8
Accrued taxes payable 35.8 13.8
Royalty and license fees payable 14.3 12.6
Restructuring reserves
16.0 11.4
Acquisition related reserves 3.3 18.4
Interest payable
13.3 13.0
Other
41.0 24.9
$ 404.1 $ 352.9
10. Other Liabilities
December 31, December 31,
2011 2010
Post-retirement benefit obligation $ 52.7 $ 42.0
Defined benefit plan obligation 102.7 52.8
Restructuring reserves
15.0 6.4
Self-insurance reserves
12.1 12.1
Interest rate swap liability – 2.4
Acquisition related reserves 0.6 0.6
Deferred revenue
5.9 7.2
Other
38.3 27.9
$ 227.3 $ 151.4
11. Debt
Short-term borrowings and current portion of long-term debt
at December 31, 2011 and 2010 consisted of the following:
December 31, December 31,
2011 2010
Zero-coupon convertible subordinated notes $ 135.5 $ 286.7
Term loan, current – 75.0
Total short-term borrowings and
current portion of long-term debt $135.5 $ 361.7
Long-term debt at December 31, 2011 and 2010 consisted
of the following:
December 31, December 31,
2011 2010
Revolving credit facility $ 560.0 $ –
Senior notes due 2013 350.5 350.9
Senior notes due 2015 250.0 250.0
Senior notes due 2016 325.0 325.0
Senior notes due 2020 600.0 600.0
Term loan, non-current – 300.0
Other long-term debt – 0.8
Total long-term debt $ 2,085.5 $ 1,826.7
Credit Facilities
On December 21, 2011, the Company entered into a Credit
Agreement (the “Credit Agreement”) providing for a five-year
$1,000.0 senior unsecured revolving credit facility (the “Revolving
Credit Facility”) with Bank of America, N.A., acting as Adminis-
trative Agent, Barclays Capital as Syndication Agent, and a
group of financial institutions as lending parties. As part of the
new revolving credit facility, the Company repaid all of the
outstanding principal balances of $318.8 on its existing term
loan facility and $235.0 on its existing revolving credit facility.
In conjunction with the repayment and cancellation of its old
credit facility, the Company recorded approximately $1.0 of
remaining unamortized debt costs as interest expense in the
accompanying Consolidated Statements of Operations for the
year ended December 31, 2011. The balances outstanding
on the Company’s Revolving Credit Facility at December 31,
2011 and December 31, 2010 were $560.0 and $0.0,
respectively. The Revolving Credit Facility bears interest at
varying rates based upon a base rate or LIBOR plus (in each
case) a percentage based on the Company’s debt rating with
Standard & Poor’s and Moody’s Rating Services.
The Revolving Credit Facility is available for general corporate
purposes, including working capital, capital expenditures,
acquisitions, funding of share repurchases and other restricted
payments permitted under the Credit Agreement. The Credit
Agreement also contains limitations on aggregate subsidiary
indebtedness and a debt covenant that requires that the Com-
pany maintain on the last day of any period of four consecutive
fiscal quarters, in each case taken as one accounting period,
a ratio of total debt to consolidated EBITDA (Earnings Before
Interest, Taxes, Depreciation, and Amortization) of not more
than 3.0 to 1.0. The Company was in compliance with all
covenants in the Credit Agreement at December 31, 2011.
As of December 31, 2011, the effective interest rate on the
Revolving Credit Facility was 1.26%.
The interest rate swap agreement to hedge variable interest
rate risk on the Company’s variable interest rate term loan
expired on March 31, 2011. On a quarterly basis under the
swap, the Company paid a fixed rate of interest (2.92%) and
received a variable rate of interest based on the three-month
LIBOR rate on an amortizing notional amount of indebtedness
equivalent to the term loan balance outstanding. The swap was
designated as a cash flow hedge. Accordingly, the Company
recognized the fair value of the swap in the condensed consoli-
dated balance sheets and any changes in the fair value were
LABORATORY CORPORATION OF AMERICA
Notes to Consolidated Financial Statements