LabCorp 2013 Annual Report Download - page 52

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of companies from diversified industries. Other assets include
investments in commodities. The weighted average expected long-
term rate of return for the Company Plan’s assets is as follows:
Target Weighted Average Expected
Allocation Long-Term Rate of Return
Equity securities 50.0% 5.5%
Fixed income securities 45.0% 1.2%
Other assets 5.0% 0.3%
The fair values of the Company Plan’s assets at December 31, 2013
and 2012, by asset category are as follows:
Fair Value Fair Value Measurements as of
as of December 31, 2013
December 31, Using Fair Value Hierarchy
Asset Category 2013 Level 1 Level 2 Level 3
Cash $ 2.7 $ 2.7 $ – $ –
Equity securities:
U.S. large cap – blend(a) 65.5 – 65.5 –
U.S. mid cap – blend(b) 25.1 – 25.1 –
U.S. small cap – blend(c) 8.1 – 8.1 –
International equity – blend (d) 40.3 – 40.3 –
Commodities index(e) 11.3 – 11.3 –
Fixed income securities:
U.S. fixed income(f) 104.1 – 104.1 –
U.S inflation protection income(g) 11.0 – 11.0 –
Total fair value of the
Company Plan’s assets $ 268.1 $ 2.7 $ 265.4 $ –
Fair Value Fair Value Measurements as of
as of December 31, 2012
December 31, Using Fair Value Hierarchy
Asset Category 2012 Level 1 Level 2 Level 3
Cash $ 6.9 $ 6.9 $ – $ –
Equity securities:
U.S. large cap – blend(a) 58.1 – 58.1 –
U.S. mid cap – blend(b) 23.2 – 23.2 –
U.S. small cap – blend(c) 6.8 – 6.8 –
International equity – blend(d) 39.4 – 39.4 –
Commodities index(e) 11.5 – 11.5 –
Fixed income securities:
U.S. fixed income(f) 110.9 – 110.9 –
Total fair value of the
Company Plan’s assets $ 256.8 $ 6.9 $ 249.9 $ –
a) This category represents an equity index fund not actively managed that tracks the S&P 500 Index.
b) This category represents an equity index fund not actively managed that tracks the S&P mid-cap 400 Index.
c) This category represents an equity index fund not actively managed that tracks the Russell 2000 Index.
d) This category represents an equity index fund not actively managed that tracks the MSCI ACWI ex USA Index.
e) This category represents a commodities index fund not actively managed that tracks the Dow Jones – UBS Commodity Index.
f) This category primarily represents bond index funds not actively managed that track the Barclays Capital U.S. Aggregate
Index and Barclays Capital U.S. TIPS Index.
g) This category primarily represents a bond index fund not actively managed that tracks the Barclays Capital U.S. TIPS Index.
The following assumed benefit payments under the Company
Plan and PEP, which were used in the calculation of projected benefit
obligations, are expected to be paid as follows:
2013 $ 23.4
2014 23.4
2015 23.5
2016 23.3
2017 23.4
Years 2018-2022 120.5
Post-retirement Medical Plan
The Company assumed obligations under a subsidiary’s post-
retirement medical plan. Coverage under this plan is restricted to a
limited number of existing employees of the subsidiary. This plan
is unfunded and the Company’s policy is to fund benefits as claims
are incurred. The effect on operations of the post-retirement
medical plan is shown in the following table:
Year ended December 31,
2013 2012 2011
Service cost for benefits earned $ 0.4 $ 0.4 $ 0.3
Interest cost on benefit obligation 2.5 2.3 2.2
Net amortization and deferral 1.0 0.3 (0.2)
Post-retirement medical plan costs $ 3.9 $ 3.0 $ 2.3
Amounts included in accumulated other comprehensive earnings
consist of unamortized net loss of $12.7. The accumulated other
comprehensive earnings that are expected to be recognized as
components of the post-retirement medical plan costs during 2014
are $1.3 related to amortization of the net loss.
A summary of the changes in the accumulated post-retirement
benefit obligation follows:
2013 2012
Balance at January 1 $ 60.7 $ 52.7
Service cost for benefits earned 0.4 0.4
Interest cost on benefit obligation 2.5 2.3
Participants contributions 0.3 0.4
Actuarial loss 4.5 6.9
Benefits paid (2.7) (2.0)
Plan amendment (3.0) –
Balance at December 31 $ 62.7 $ 60.7
Recorded as:
Other liabilities $ 62.7 $ 60.7
LABORATORY CORPORATION OF AMERICA
Notes to Consolidated Financial Statements