LabCorp 2011 Annual Report Download - page 9

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(c) 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. 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.
The Company incurred approximately $25.7 in professional fees and expenses in connection with the acquisition of Genzyme Genetics and
other acquisition activity, including significant costs associated with the Federal Trade Commission’s review of the Company’s purchase of
specified net assets of Westcliff. These fees and expenses are included in selling, general and administrative expenses for the year ended
December 31, 2010.
The Company also incurred $7.0 of financing commitment fees (included in interest expense for the year ended December 31, 2010) in
connection with the acquisition of Genzyme Genetics.
(d) During 2009, the Company recorded net restructuring charges of $13.5 primarily related to the closing of redundant and underutilized facilities.
In October 2009, the Company received approval from its Board of Directors to freeze any additional service-based credits for any years of
service after December 31, 2009 on the defined benefit retirement plan (the “Company Plan”) and the nonqualified supplemental retirement plan
(the “PEP”). As a result of the changes to the Company Plan and PEP which were adopted in the fourth quarter of 2009, the Company recognized
a net curtailment charge of $2.8 due to remeasurement of the PEP obligation at December 31, 2009 and the acceleration of unrecognized prior
service for that plan. In addition, the Company recorded favorable adjustments of $21.5 to its tax provision relating to the resolution of certain
state income tax issues under audit, as well as the realization of foreign tax credits.
In connection with the Monogram Biosciences, Inc. acquisition, the Company incurred $2.7 in transaction fees and expenses in the third
quarter of 2009.
(e) 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. During the third quarter of 2008, the Company also recorded a special charge of $5.5 related to estimated uncollect-
ible 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.
In the fourth quarter of 2008, the Company recorded a $7.5 cumulative revenue adjustment relating to certain historic overpayments made
by Medicare for claims submitted by a subsidiary of the Company. In addition, the Company recorded a $7.1 favorable adjustment to its fourth
quarter tax provision relating to tax treaty changes adopted by the United States and Canada.
During the fourth quarter of 2008, the Company recorded charges of approximately $3.7, which related to the acceleration of the recognition of
stock compensation and certain defined benefit plan obligations due to the announced retirement of the Company’s Executive Vice President of
Corporate Affairs, effective December 31, 2008.
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 recent
acquisitions on the collectibility of accounts receivable balances.
(f) During 2007, the Company recorded net restructuring charges of $50.6 related to reductions in work force and consolidation of redundant and
underutilized facilities.
(g) Long-term obligations primarily include the Company’s zero-coupon convertible subordinated notes, 5½% senior notes due 2013, 55/8% senior
notes due 2015, 3.125% senior notes due 2016, 4.625% senior notes due 2020, term loan, revolving credit facility and other long-term obligations.
The accreted balance of the zero-coupon convertible subordinated notes was $135.5, $286.7, $292.2, $573.5 and $564.4 at December 31, 2011,
2010, 2009, 2008 and 2007, respectively. The balance of the 5½% senior notes, including principal and unamortized portion of a deferred gain on
an interest rate swap agreement, was $350.0, $350.9, $351.3, $351.7 and $352.2 at December 31, 2011, 2010, 2009, 2008 and 2007, respectively.
The principal balance of the 55/8% senior notes was $250.0 at December 31, 2011, 2010, 2009, 2008 and 2007. The principal balance of the
3.125% senior notes was $325.0 at December 31, 2011 and 2010, and $0 for all other years presented. The principal balance of the 4.625%
senior notes was $600.0 at December 31, 2011 and 2010 and $0 for all other years presented. The term loan was $0.0, $375.0, $425.0,
$475.0 and $500.0 at December 31, 2011, 2010, 2009, 2008 and 2007, respectively. The revolving credit facility was $560.0, $75.0, $70.8 at
December 31, 2011, 2009 and 2008, respectively, and $0 for all other years presented. The remainder of other long-term obligations consisted
primarily of mortgages payable with balances of $0.0, $0.8, $0.9, $0.3 and $0.4 at December 31, 2011, 2010, 2009, 2008 and 2007, respectively.
Long-term obligations exclude amounts due to affiliates.
LABORATORY CORPORATION OF AMERICA
Selected Financial Data (continued)