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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) 2013 2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 575.4 $ 584.8 $ 533.1
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 230.1 229.8 231.4
Stock compensation 37.3 40.7 48.9
(Gain)/loss on sale of assets (3.9) 5.5 7.2
Accrued interest on zero-coupon subordinated notes 2.3 2.7 3.9
Cumulative earnings less than (in excess of) distributions from
equity method investments (4.2) (0.4) 1.4
Deferred income taxes 56.2 53.3 2.2
Change in assets and liabilities (net of effects of acquisitions):
(Increase) decrease in accounts receivable (net) (67.5) 0.6 (37.1)
Increase in inventories (15.3) (6.3) (6.1)
(Increase) decrease in prepaid expenses and other (32.3) 7.1 9.8
Increase (decrease) in accounts payable 60.8 (30.0) (8.7)
Increase (decrease) in accrued expenses and other (20.2) (46.4) 69.6
Net cash provided by operating activities 818.7 841.4 855.6
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (202.2) (173.8) (145.7)
Proceeds from sale of assets 1.1 3.2 3.7
Proceeds from sale of investments 7.5 – –
Acquisition of licensing technology – (2.5) –
Investments in equity affiliates (6.5) (26.0) –
Acquisition of businesses, net of cash acquired (159.5) (335.1) (138.3)
Net cash used for investing activities (359.6) (534.2) (280.3)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from senior notes offerings 700.0 1,000.0 –
Proceeds from revolving credit facilities 412.0 305.0 880.0
Payments on revolving credit facilities (412.0) (865.0) (320.0)
Principal payments on term loan – – (375.0)
Payments on zero-coupon subordinated notes (21.5) (8.2) (155.1)
Payments on long-term debt (350.0) – (0.9)
Payment of debt issuance costs (9.3) (8.9) (3.6)
Payments on long-term lease obligations (0.4) – –
Cash paid to acquire an interest in a consolidated subsidiary – – (147.9)
Noncontrolling interest distributions (0.9) (1.2) (7.4)
Deferred payments on acquisitions (5.6) – –
Excess tax benefits from stock based compensation 11.0 8.2 10.4
Net proceeds from issuance of stock to employees 174.0 85.8 118.4
Purchase of common stock (1,015.6) (516.5) (643.9)
Net cash used for financing activities (518.3) (0.8) (645.0)
Effect of exchange rate changes on cash and cash equivalents (3.6) 1.1 (1.7)
Net increase (decrease) in cash and cash equivalents (62.8) 307.5 (71.4)
Cash and cash equivalents at beginning of period 466.8 159.3 230.7
Cash and cash equivalents at end of period $ 404.0 $ 466.8 $ 159.3
The accompanying notes are an integral part of these consolidated financial statements.