LabCorp 2012 Annual Report Download - page 39

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10. Other Liabilities
December 31, December 31,
2012 2011
Post-retirement benefit obligation $ 60.7 $ 52.7
Defined benefit plan obligation 122.5 137.5
Restructuring reserves 19.2 15.0
Self-insurance reserves 44.5 39.0
Acquisition related reserves 10.2 0.6
Deferred revenue 5.4 5.9
Other 44.9 41.4
$ 307.4 $ 292.1
11. Debt
Short-term borrowings and current portion of long-term debt
at December 31, 2012 and 2011 consisted of the following:
December 31, December 31,
2012 2011
Zero-coupon convertible subordinated notes $ 130.0 $ 135.5
5 1/2% Senior Notes due 2013 350.0 –
Total short-term borrowings and
current portion of long-term debt $ 480.0 $ 135.5
Long-term debt at December 31, 2012 and 2011 consisted
of the following:
December 31, December 31,
2012 2011
Revolving credit facility $ – $ 560.0
51/2% Senior Notes due 2013 – 350.5
55/8% Senior Notes due 2015 250.0 250.0
31/8% Senior Notes due 2016 325.0 325.0
21/5% Senior Notes due 2017 500.0 –
45/8% Senior Notes due 2020 600.0 600.0
33/4% Senior Notes due 2022 500.0 –
Total long-term debt $ 2,175.0 $ 2,085.5
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 Administrative Agent, Barclays Capital as Syndication
Agent, and a group of financial institutions as lending parties.
As part of the 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, 2012 and December 31,
2011 were $0.0 and $560.0, 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
classified as long-term debt due to the expiration date of
the agreement on December 21, 2016.
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 Company 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, 2012. As of December 31,
2012, the ratio of total debt to consolidated EBITDA was
2.0 to 1.0.
As of December 31, 2012, the effective interest rate on
the Revolving Credit Facility was 1.2%.
Zero-Coupon Convertible Subordinated Notes
The Company had $154.3 and $164.1 aggregate principal
amount at maturity of zero-coupon convertible subordinated
notes (the “notes”) due 2021 outstanding at December 31,
2012 and 2011, respectively. The notes, which are subordi-
nate to the Company’s bank debt, were sold at an issue
price of $671.65 per $1,000 principal amount at maturity
(representing a yield to maturity of 2.0% per year). Each
one thousand dollar principal amount at maturity of the
notes is convertible into 13.4108 shares of the Company’s
common stock, subject to adjustment in certain circum-
stances, if one of the following conditions occurs:
1. If the sales price of the Company’s common stock for at
least 20 trading days in a period of 30 consecutive trading
days ending on the last trading day of the preceding quarter
reaches specified thresholds (beginning at 120% and
declining 0.1282% per quarter until it reaches approximately
110% for the quarter beginning July 1, 2021 of the accreted
LABORATORY CORPORATION OF AMERICA
Notes to Consolidated Financial Statements