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27
LABORATORY CORPORATION OF AMERICA
Management’s Discussion and Analysis
of Financial Condition and Results of Operations (in millions)
27
LABORATORY CORPORATION OF AMERICA
Consolidated Statements of Cash Flows
Years Ended December 31,
(In Millions) 2012 2011 2010
Cash Flows From Operating Activities:
Net earnings $ 584.8 $ 533.1 $ 571.6
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 229.8 231.4 203.6
Stock compensation 40.7 48.9 40.0
Loss on sale of assets 5.5 7.2 4.1
Accrued interest on zero-coupon subordinated notes 2.7 3.9 5.8
Cumulative earnings less than (in excess of) distributions from
equity method investments (0.4) 1.4 6.3
Deferred income taxes 53.3 2.2 12.9
Change in assets and liabilities (net of effects of acquisitions):
(Increase) decrease in accounts receivable (net) 0.6 (37.1) (25.3)
Increase in inventories (6.3) (6.1) (5.8)
(Increase) decrease in prepaid expenses and other 7.1 9.8 (13.5)
Increase (decrease) in accounts payable (30.0) (8.7) 50.1
Increase (decrease) in accrued expenses and other (46.4) 69.6 33.8
Net cash provided by operating activities 841.4 855.6 883.6
Cash Flows From Investing Activities:
Capital expenditures (173.8) (145.7) (126.1)
Proceeds from sale of assets 3.2 3.7 4.8
Deferred payments on acquisitions (2.9) (1.0) (4.5)
Acquisition of licensing technology (2.5) – (0.4)
Investments in equity affiliates (26.0) – (10.0)
Acquisition of businesses, net of cash acquired (332.2) (137.3) (1,181.3)
Net cash used for investing activities (534.2) (280.3) (1,317.5)
Cash Flows From Financing Activities:
Proceeds from senior notes offerings 1,000.0 – 925.0
Proceeds from revolving credit facilities 305.0 880.0 160.0
Payments on revolving credit facilities (865.0) (320.0) (235.0)
Principal payments on term loan – (375.0) (50.0)
Payments on zero-coupon subordinated notes (8.2) (155.1) (11.4)
Payments on vendor-financed equipment – – (1.3)
Payments on long-term debt – (0.9) (0.1)
Payment of debt issuance costs (8.9) (3.6) (9.7)
Proceeds from sale of interest in a consolidated subsidiary – – 137.5
Cash paid to acquire an interest in a consolidated subsidiary – (147.9) (137.5)
Noncontrolling interest distributions (1.2) (7.4) (12.6)
Excess tax benefits from stock based compensation 8.2 10.4 5.1
Net proceeds from issuance of stock to employees 85.8 118.4 83.4
Purchase of common stock (516.5) (643.9) (338.1)
Net cash provided by (used for) financing activities (0.8) (645.0) 515.3
Effect of exchange rate changes on cash and cash equivalents 1.1 (1.7) 0.8
Net increase (decrease) in cash and cash equivalents 307.5 (71.4) 82.2
Cash and cash equivalents at beginning of period 159.3 230.7 148.5
Cash and cash equivalents at end of period $ 466.8 $ 159.3 $ 230.7
The accompanying notes are an integral part of these consolidated financial statements.