LabCorp 2012 Annual Report Download - page 38

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8. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill (net of accumulated amortization) for the years ended December 31, 2012
and 2011 are as follows:
2012 2011
Balance as of January 1 $ 2,681.8 $ 2,601.3
Goodwill acquired during the year 224.5 86.2
Adjustments to goodwill (4.6) (5.7)
Goodwill, net $ 2,901.7 $ 2,681.8
The components of identifiable intangible assets are as follows:
December 31, 2012 December 31, 2011
Gross Net Gross Net
Carrying Accumulated Carrying Carrying Accumulated Carrying
Amount Amortization Amount Amount Amortization Amount
Customer relationships $ 1,296.1 $ (483.3) $ 812.8 $ 1,187.5 $ (426.8) $ 760.7
Patents, licenses and technology 117.2 (76.2) 41.0 144.9 (88.3) 56.6
Non-compete agreements 32.3 (19.6) 12.7 28.1 (14.8) 13.3
Trade names 131.3 (73.4) 57.9 129.2 (61.3) 67.9
Canadian licenses 743.3 – 743.3 722.2 – 722.2
$ 2,320.2 $ (652.5) $ 1,667.7 $ 2,211.9 $ (591.2) $ 1,620.7
LABORATORY CORPORATION OF AMERICA
Notes to Consolidated Financial Statements
A summary of amortizable intangible assets
acquired during 2012, and their respective weighted-
average amortization periods are as follows:
Weighted-Average
Amount Amortization Period
Customer relationships $ 110.8 21.0
Patents, licenses and technology 2.5 8.3
Non-compete agreements 4.4 5.0
Trade names 1.9 1.5
$ 119.6 16.7
Amortization of intangible assets was $86.3, $85.8 and
$72.7 in 2012, 2011 and 2010, respectively. During 2012, the
Company recorded $6.2 accelerated amortization expense
relating to the termination of a technology licensing agreement.
Amortization expense of intangible assets is estimated
to be $84.8 in fiscal 2013, $80.7 in fiscal 2014, $77.1 in
fiscal 2015, $71.7 in fiscal 2016, $64.3 in fiscal 2017, and
$545.8 thereafter.
The Company paid $2.5, $0.0 and $0.4 in 2012, 2011 and
2010 for certain exclusive and non-exclusive licensing rights
to diagnostic testing technology. These amounts are being
amortized over the life of the licensing agreements.
As of December 31, 2012, the Ontario operation has
$743.3 of value assigned to the partnership’s indefinite lived
Canadian licenses to conduct diagnostic testing services in
Canada. This indefinite lived asset is tested for impairment
annually as described in Note 1.
9. Accrued Expenses and Other
December 31, December 31,
2012 2011
Employee compensation and benefits $ 158.0 $ 169.6
Self-insurance reserves 34.2 46.0
Accrued taxes payable 24.0 35.8
Royalty and license fees payable 13.8 14.3
Restructuring reserves 8.4 16.0
Acquisition related reserves 11.5 3.3
Interest payable 24.0 13.3
Other 37.7 41.0
$ 311.6 $ 339.3
The Company has revised the amount of self-insurance
reserves and employee compensation and benefits to
correct the December 31, 2011 presentation of current and
long-term portions of those accrued expenses. This resulted
in an adjustment to reduce accrued expenses and other
and increase other liabilities by $26.9 and $37.9 for self-
insurance and defined benefit plan obligation, respectively.
These amounts are not material to the previously reported
financial statements.