LabCorp 2013 Annual Report Download - page 41

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10. Other Liabilities
December 31, December 31,
2013 2012
Post-retirement benefit obligation $ 60.6 $ 60.7
Defined benefit plan obligation 80.0 122.5
Restructuring reserves 16.4 19.2
Self-insurance reserves 31.6 44.5
Acquisition related reserves 7.2 10.2
Deferred revenue 4.0 5.4
Other 66.7 44.9
$ 266.5 $ 307.4
11. Debt
Short-term borrowings and current portion of long-term debt at
December 31, 2013 and 2012 consisted of the following:
December 31, December 31,
2013 2012
Zero-coupon convertible subordinated notes $ 110.8 $ 130.0
5.5% Senior Notes due 2013 – 350.0
Capital lease obligation 0.5 –
Total short-term borrowings and
current portion of long-term debt $ 111.3 $ 480.0
Long-term debt at December 31, 2013 and 2012 consisted
of the following:
December 31, December 31,
2013 2012
5.625% Senior Notes due 2015 $ 250.0 $ 250.0
3.125% Senior Notes due 2016 325.0 325.0
2.20% Senior Notes due 2017 500.0 500.0
2.50% Senior Notes due 2018 400.0 –
4.625% Senior Notes due 2020 600.0 600.0
3.75% Senior Notes due 2022 500.0 500.0
4.00% Senior Notes due 2023 300.0 –
Capital leases 14.1 –
Total long-term debt $ 2,889.1 $ 2,175.0
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.
There were no balances outstanding on the Company’s
Revolving Credit Facility at December 31, 2013 or December 31,
2012. 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 available for general corporate
purposes, including working capital, capital expenditures, acquisi-
tions, 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 of not more than 3.0 to 1.0. The Company was in compliance
with all covenants in the Credit Agreement at December 31, 2013.
As of December 31, 2013, the ratio of total debt to consolidated
EBITDA was 2.4.
As of December 31, 2013, the effective interest rate on the
Revolving Credit Facility was 1.1%.
Zero-Coupon Convertible Subordinated Notes
The Company had $128.8 and $154.3 aggregate principal amount
at maturity of zero-coupon convertible subordinated notes (the
“notes”) due 2021 outstanding at December 31, 2013 and 2012,
respectively. The notes, which are subordinate 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
circumstances, 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 conversion price per share
of common stock on the last day of the preceding quarter). The
accreted conversion price per share will equal the issue price of
a note plus the accrued original issue discount and any accrued
LABORATORY CORPORATION OF AMERICA
Notes to Consolidated Financial Statements