LabCorp 2014 Annual Report Download - page 102

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F-23
On January 2, 2015, the Company announced that its zero-coupon subordinated notes may be converted into cash and common
stock at the conversion rate of 13.4108 per $1,000.0 principal amount at maturity of the notes, subject to the terms of the zero-
coupon subordinated notes and the Indenture, dated as of October 24, 2006 between the Company and The Bank of New York
Mellon, as trustee and conversion agent. In order to exercise the option to convert all or a portion of the zero-coupon subordinated
notes, holders are required to validly surrender their zero-coupon subordinated notes at any time during the calendar quarter
beginning January 1, 2015, through the close of business on the last business day of the calendar quarter, which is 5:00 p.m., New
York City time, on Tuesday, March 31, 2015. If notices of conversion are received, the Company plans to settle the cash portion
of the conversion obligation with cash on hand and/or borrowings under the revolving credit facility.
Senior Notes
On January 30, 2015, the Company issued the Acquisition Notes, which represent $2,900.0 in debt securities consisting of
$500.0 aggregate principal amount of 2.625% Senior Notes due 2020, $500.0 aggregate principal amount of 3.20% Senior
Notes due 2022, $1,000.0 aggregate principal amount of 3.60% Senior Notes due 2025 and $900.0 aggregate principal amount
of 4.70% Senior Notes due 2045. Net proceeds from the offering of the Acquisition Notes were $2,870.2 after deducting
underwriting discounts and other estimated expenses of the offering. Net proceeds were used to pay a portion of the cash
consideration and the fees and expenses in connection with the Covance acquisition.
On November 1, 2013, the Company issued $700.0 in new senior notes pursuant to the Company’s effective shelf registration
on Form S-3. The new senior notes consisted of $400.0 aggregate principal amount of 2.50% Senior Notes due 2018 and $300.0
aggregate principal amount of 4.00% Senior Notes due 2023. The net proceeds were used to repay all of the outstanding borrowings
under the Company’s Revolving Credit Facility and for general corporate purposes.
The Senior Notes due 2018 and Senior Notes due 2023 bear interest at the rate of 2.50% per annum and 4.00% per annum,
respectively, payable semi-annually on November 1 and May 1 of each year, commencing on May 1, 2014.
During the third quarter of 2013, the Company entered into two fixed-to-variable interest rate swap agreements for the 4.625%
senior notes due 2020 with an aggregate notional amount of $600.0 and variable interest rates based on one-month LIBOR plus
2.298% to hedge against changes in the fair value of a portion of the Company's long term debt. These derivative financial
instruments are accounted for as fair value hedges of the senior notes due 2020. These interest rate swaps are included in other
long term assets or liabilities, as applicable, and added to the value of the senior notes, with an aggregate fair value of $18.5 at
December 31, 2014.
On August 23, 2012, the Company issued $1,000.0 in new senior notes pursuant to the Company's effective shelf registration
statement on Form S-3. The new senior notes consisted of $500.0 aggregate principal amount of 2.20% Senior Notes due 2017
and $500.0 aggregate principal amount of 3.75% Senior Notes due 2022. The net proceeds were used to repay $625.0 of the
outstanding borrowings under the Company's Revolving Credit Facility. The remaining proceeds were available for other general
corporate purposes.
The Senior Notes due 2017 and Senior Notes due 2022 bear interest at the rate of 2.20% per annum and 3.75% per annum,
respectively, payable semi-annually on February 23 and August 23 of each year, commencing February 23, 2013.
The Senior Notes due 2015 bear interest at the rate of 5.625% per annum from December 14, 2005, payable semi-annually on
June 15 and December 15.
LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)