LabCorp 2012 Annual Report Download - page 48

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co-payments and other debts. The lawsuit seeks injunctive
relief, actual and punitive damages, as well as recovery of
attorney’s fees, and legal expenses. The Company will
vigorously defend the lawsuit.
On June 7, 2012, the Company was served with a
putative class action lawsuit, Ann Baker Pepe v. Genzyme
Corporation and Laboratory Corporation of America Holdings,
filed in the United States District Court for the District of
Massachusetts. The lawsuit alleges that the defendants
failed to preserve DNA samples allegedly entrusted to the
defendants and thereby breached a written agreement with
plaintiff and violated state laws. The lawsuit seeks injunctive
relief, actual, double and treble damages, as well as recovery
of attorney’s fees and legal expenses. The Company will
vigorously defend the lawsuit.
On August 24, 2012, the Company was served with a
putative class action lawsuit, Sandusky Wellness Center,
LLC, et al. v. MEDTOX Scientific, Inc., et al., filed in the
United States District Court for the District of Minnesota.
The lawsuit alleges that on or about February 21, 2012,
the defendants violated the federal Telephone Consumer
Protection Act by sending unsolicited facsimiles to Plaintiff
and more than 39 other recipients without the recipients’
prior express invitation or permission. The lawsuit seeks
actual damages or the sum of $0.0005 for each violation,
whichever is greater, and injunctive relief. The Company
will vigorously defend the lawsuit.
Under the Company’s present insurance programs,
coverage is obtained for catastrophic exposure as well as
those risks required to be insured by law or contract. The
Company is responsible for the uninsured portion of losses
related primarily to general, professional and vehicle liability,
certain medical costs and workers’ compensation. The self-
insured retentions are on a per occurrence basis without
any aggregate annual limit. Provisions for losses expected
under these programs are recorded based upon the
Company’s estimates of the aggregated liability of claims
incurred. At December 31, 2012, the Company had provided
letters of credit aggregating approximately $37.4, primarily in
connection with certain insurance programs. The Company’s
availability under its Revolving Credit Facility is reduced by
the amount of these letters of credit.
The Company leases various facilities and equipment
under non-cancelable lease arrangements. Future minimum
rental commitments for leases with non-cancelable terms
of one year or more at December 31, 2012 are as follows:
Operating
2013 $ 166.9
2014 133.9
2015 94.5
2016 61.2
2017 39.6
Thereafter 87.7
Total minimum lease payments 583.8
Less:
Amounts included in restructuring and acquisition related accruals (9.9)
Non-cancelable sub-lease income –
Total minimum operating lease payments $ 573.9
Rental expense, which includes rent for real estate,
equipment and automobiles under operating leases,
amounted to $226.0, $220.2 and $202.1 for the years
ended December 31, 2012, 2011 and 2010, respectively.
16. Pension and Postretirement Plans
Pension Plans
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”). Both plans have been closed to new participants.
Employees participating in the Company Plan and the PEP
no longer earn service-based credits, but continue to earn
interest credits. In addition, effective January 1, 2010, all
employees eligible for the defined contribution retirement
plan (the “401K Plan”) receive a minimum 3% non-elective
contribution (“NEC”) concurrent with each payroll period.
The NEC replaces the Company match, which has been
discontinued. Employees are not required to make a
contribution to the 401K Plan to receive the NEC. The NEC
is non-forfeitable and vests immediately. The 401K Plan
also permits discretionary contributions by the Company of
1% to 3% of pay for eligible employees based on service.
The Company believes these changes to the Company
Plan, the PEP and its 401K Plan align the Company’s retire-
ment plan strategy with prevailing industry practices and
reduce the impact of market volatility on the Company Plan.
LABORATORY CORPORATION OF AMERICA
Notes to Consolidated Financial Statements