LabCorp 2014 Annual Report Download - page 70

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for trading purposes. The Company does not believe that its exposure to market risk is material to the Company’s financial position
or results of operations.
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.
The Company’s zero-coupon subordinated notes contain the following two features that are considered to be embedded
derivative instruments under authoritative guidance in connection with accounting for derivative instruments and hedging activities:
1) The Company will pay contingent cash interest on the zero-coupon subordinated notes after September 11, 2006, if the
average market price of the notes equals 120% or more of the sum of the issue price, accrued original issue discount and
contingent additional principal, if any, for a specified measurement period.
2) Holders may surrender zero-coupon subordinated notes for conversion during any period in which the rating assigned to
the zero-coupon subordinated notes by Standard & Poor’s Ratings Services is BB- or lower.
Borrowings under the Company’s revolving credit facility are subject to variable interest rates, unless fixed through interest
rate swaps or other agreements.
The Company has laboratory locations throughout the United States and other countries including, Belgium, Canada, China,
Japan, Singapore, the United Kingdom and the United Arab Emirates and, accordingly, the earnings and cash flows generated
from these operations are subject to foreign currency exchange risk.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the Index on Page F-1 of the Financial Report included herein.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable.
Item 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this report, the Company carried out an evaluation under the supervision and with the
participation of the Company’s management, including the Company’s principal executive officer and principal financial officer,
of the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended). Based upon this evaluation, the Company’s principal executive officer and principal
financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered
by this annual report.
Changes in Internal Control Over Financial Reporting
There was no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
under the Securities Exchange Act of 1934, as amended) that occurred during the most recently completed fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Report of Management on Internal Control Over Financial Reporting
The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934).
The internal control over financial reporting at the Company was designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting
principles generally accepted in the United States of America. Internal control over financial reporting includes those policies and
procedures that: