LabCorp 2015 Annual Report Download - page 100
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Index
The Company’s recorded investment in one of its Alberta joint venture partnerships at December 31, 2015 includes $35.3 of value assigned to that
partnership’s Canadian license (with an indefinite life and deductible for tax) to conduct diagnostic testing services in the province. This Canadian
partnership has a license to conduct diagnostic testing services in the province of Alberta. Substantially all of its revenue is received as reimbursement from
the Alberta government's healthcare programs. While the Canadian license provides the joint venture the ability to conduct diagnostic testing in Alberta, it
does not guarantee that the provincial government will continue to reimburse diagnostic laboratory testing in future years at current levels. A decision by the
provincial government to limit or reduce its reimbursement of laboratory diagnostic services would have a negative impact on the profits and cash flows the
Company derives from this Canadian joint venture. In December 2013, Alberta Health Services (AHS), the Alberta government's healthcare program, issued a
request for proposals for laboratory services that included the scope of services performed by the Canadian partnership. In October 2014, AHS informed the
Canadian partnership that it had not been selected as the preferred proponent. In November 2014, the Canadian partnership submitted a vendor bid appeal.
AHS established a Vendor Bid Appeal Panel to hear the appeal, and the hearing occurred in February 2015. In August 2015, AHS was directed to cancel the
request for proposal process. Subsequently, the Canadian partnership entered into a one-year extension (through March 31, 2017) of its existing contract with
AHS. If the contract is not renewed after March 2017, then the Canadian partnership's revenues would decrease substantially and the carrying value of the
Company's investment could potentially be impaired.
December 31,
2015
December 31,
2014
Gross accounts receivable $ 1,434.9
$ 1,027.3
Less allowance for doubtful accounts (217.0)
(211.6)
$ 1,217.9
$ 815.7
The provision for doubtful accounts was $265.4, $276.5 and $254.8 in 2015, 2014 and 2013 respectively.
December 31, 2015
December 31, 2014
Land $ 96.4
$ 29.3
Buildings and building improvements 681.6
201.8
Machinery and equipment 944.2
719.8
Software 561.9
434.7
Leasehold improvements 271.6
200.1
Furniture and fixtures 70.1
57.7
Construction in progress 180.4
126.7
Equipment and real estate under capital leases 65.1
42.9
2,871.3
1,813.0
Less accumulated depreciation and amortization of capital lease assets (1,123.9)
(1,026.5)
$ 1,747.4
$ 786.5
Depreciation expense and amortization of property, plant and equipment was $269.9, $157.6 and $144.7 for 2015, 2014 and 2013, respectively,
including software depreciation of $66.1, $38.5, and $39.3 for 2015, 2014 and 2013, respectively.
F-20