LabCorp 2012 Annual Report Download - page 17

15
LABORATORY CORPORATION OF AMERICA
Management’s Discussion and Analysis
of Financial Condition and Results of Operations (in millions)
The partnership units of the holders of the noncontrolling
interest in the Company’s Ontario, Canada (“Ontario”) sub-
sidiary were acquired by the Company on February 8, 2010
for $137.5. On February 17, 2010, the Company completed a
transaction to sell the units acquired from the previous non-
controlling interest holder to a new Canadian partner for the
same price. As a result of this transaction, the Company
recorded a component of noncontrolling interest in other
liabilities and a component in mezzanine equity. Upon the
completion of these two transactions, the Company’s
financial ownership percentage in its Ontario subsidiary
remained unchanged at 85.6%. Concurrent with the sale to
the new partner, the partnership agreement for the Ontario
subsidiary was amended and restated with substantially
the same terms as the previous agreement.
On October 14, 2011, the Company issued notice to a
noncontrolling interest holder in its Ontario subsidiary of
its intent to purchase the holder’s partnership units in
accordance with the terms of the joint venture’s partnership
agreement. On November 28, 2011, this purchase was
completed for a total purchase price of CN$151.7 as out-
lined in the partnership agreement (CN$147.8 plus certain
adjustments relating to cash distribution hold backs made
to finance recent business acquisitions and capital expen-
ditures). The purchase of these additional partnership units
brings the Company’s percentage interest owned to 98.2%.
The contractual value of the remaining noncontrolling
interest put totals $20.7 at December 31, 2012. At
December 31, 2012 and 2011, $20.7 and $20.2, respectively,
have been classified as mezzanine equity in the Company’s
consolidated balance sheet.
Based on current and projected levels of operations,
coupled with availability under its Revolving Credit Facility,
the Company believes it has sufficient liquidity to meet both
its anticipated short-term and long-term cash needs; however,
the Company continually reassesses its liquidity position in
light of market conditions and other relevant factors.
New Accounting Pronouncements
In June 2011, the FASB issued authoritative guidance on
the presentation of comprehensive income. Specifically,
this literature requires an entity to present components of
net earnings and other comprehensive income in one
continuous statement, referred to as the statement of
comprehensive income, or in two separate, but consecutive
statements. The authoritative guidance eliminates the option
to report other comprehensive income and its components
in the statement of changes in shareholders’ equity.
While the authoritative guidance changes the presentation
of comprehensive income, there are no changes to the
components that are recognized in net earnings or other
comprehensive income under current accounting guidance.
The Company adopted this guidance during the first quarter
of 2012 and elected to present comprehensive income in two
separate, but consecutive statements and has applied the
new presentation to the prior period presented. The adop-
tion of this authoritative guidance in the first quarter of fiscal
2012 did not have an impact on the Company’s consolidated
financial position, results of operations or cash flows.
In February 2013, the FASB issued an amendment
to existing guidance regarding the reporting of amounts
reclassified out of accumulated other comprehensive income.
The amendment requires an entity to present information
about reclassification adjustments from accumulated other
comprehensive income in its annual financial statements in
a single note or on the face of the financial statements. The
amendment is effective prospectively for reporting periods
beginning after December 15, 2012. We do not expect this
amendment to have a significant impact on the Company’s
Consolidated Financial Statements.