LabCorp 2013 Annual Report Download - page 11

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(c) During 2011, the Company recorded net restructuring charges of $44.6. Of this amount, $27.4 related to severance and other personnel costs, and $22.0
primarily related to facility-related costs associated with the ongoing integration of certain acquisitions including Genzyme Genetics and Westcliff Medical
Laboratories, Inc. (“Westcliff”). These charges were offset by restructuring credits of $4.8 resulting from the reversal of unused severance and facility closure
liabilities. In addition, the Company recorded fixed assets impairment charges of $18.9 primarily related to equipment, computer systems and leasehold
improvements in closed facilities. The Company also recorded special charges of $14.8 related to the write-off of certain assets and liabilities related to an
investment made in prior years, along with a $2.6 write-off of an uncollectible receivable from a past installment sale of one of the Company’s lab operations.
(d) Following the closing of its acquisition of Orchid in mid-December 2011, the Company recorded a net $2.8 loss on its divestiture of certain assets of Orchid’s
U.S. government paternity business, under the terms of the agreement reached with the U.S. Federal Trade Commission. This non-deductible loss on disposal
was recorded in Other Income and Expense in the Company’s Consolidated Statements of Operations and decreased net earnings for the twelve months
ended December 31, 2011 by $2.8.
(e) During 2010, the Company recorded net restructuring charges of $5.8 primarily related to work force reductions and the closing of redundant and underutilized
facilities. In addition, the Company recorded a special charge of $6.2 related to the write-off of development costs incurred on systems abandoned during
the year.
The Company incurred approximately $25.7 in professional fees and expenses in connection with the acquisition of Genzyme Genetics and other acquisition
activity, including significant costs associated with the Federal Trade Commission’s review of the Company’s purchase of specified net assets of Westcliff. These
fees and expenses are included in selling, general and administrative expenses for the year ended December 31, 2010.
The Company also incurred $7.0 of financing commitment fees (included in interest expense for the year ended December 31, 2010) in connection with the
acquisition of Genzyme Genetics.
(f ) During 2009, the Company recorded net restructuring charges of $13.5 primarily related to the closing of redundant and underutilized facilities.
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”). As a result of
the changes to the Company Plan and PEP which were adopted in the fourth quarter of 2009, the Company recognized a net curtailment charge of $2.8 due
to remeasurement of the PEP obligation at December 31, 2009 and the acceleration of unrecognized prior service for that plan. In addition, the Company
recorded favorable adjustments of $21.5 to its tax provision relating to the resolution of certain state income tax issues under audit, as well as the realization
of foreign tax credits.
In connection with the Monogram Biosciences acquisition, the Company incurred $2.7 in transaction fees and expenses in the third quarter of 2009.
(g) Long-term obligations primarily include the Company’s zero-coupon convertible subordinated notes, 5 1/2% senior notes due 2013, 5 5/8% senior notes
due 2015, 3 1/8% senior notes due 2016, 2 1/5% senior notes due 2017, 2 1/2% senior notes due 2018, 4 5/8% senior notes due 2020, 3 3/4% senior notes due
2022, 4% senior notes due 2023, term loan, revolving credit facility and other long-term obligations. The accreted balance of the zero-coupon convertible
subordinated notes was $110.8, $130.0, $135.5, $286.7 and $292.2 at December 31, 2013, 2012, 2011, 2010 and 2009, respectively. The balance of the
5 1/2% senior notes, including principal and unamortized portion of a deferred gain on an interest rate swap agreement, was $0.0, $350.0, $350.5, $350.9 and
$351.3 at December 31, 2013, 2012, 2011, 2010 and 2009, respectively. The principal balance of the 5 5/8% senior notes was $250.0 at December 31, 2013,
2012, 2011, 2010 and 2009. The principal balance of the 3 1/8% senior notes was $325.0 at December 31, 2013, 2012, 2011 and 2010, and $0.0 for 2009. The
principal balance of the 4 5/8% senior notes was $600.0 at December 31, 2013, 2012, 2011 and 2010 and $0 for 2009. The principal balances of the 2 1/5% and
3 3/4% senior notes were $500.0 each at December 31, 2013 and 2012 and $0.0 for all other years presented. The principal balances of the 2 1/2% and 4%
senior notes were $400.0 and $300.0, respectively, at December 31, 2013 and $0.0 for all other years presented. The term loan was $0.0, $0.0, $0.0, $375.0 and
$425.0 at December 31, 2013, 2012, 2011, 2010 and 2009, respectively. The revolving credit facility was $0.0, $0.0, $560.0, $0.0 and $75.0 at December 31, 2013,
2012, 2011, 2010, and 2009, respectively. The remainder of other long-term obligations consisted primarily of capital leases and mortgages payable with balances
of $14.6, $0.0, $0.0, $0.8 and $0.9 at December 31, 2013, 2012, 2011, 2010 and 2009, respectively. Long-term obligations exclude amounts due to affiliates.
LABORATORY CORPORATION OF AMERICA
Selected Financial Data (continued)