LabCorp 2015 Annual Report Download - page 105

Index
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During 2015 and 2014, the Company settled notices to convert $1.5 and $21.9 aggregate principal amount at maturity of its zero-coupon subordinated
notes with a conversion value of $1.3 and $28.7, respectively. The total cash used for these settlements was $ 1.3 and $18.9 and the Company also issued 0.0
and 0.1 additional shares of common stock, respectively. As a result of these conversions, in 2015 and 2014 the Company also reversed approximately $0.4
and $3.8, respectively, of deferred tax liability to reflect the tax benefit realized upon issuance of the shares.
On September 11, 2015, the Company announced that for the period of September 12, 2015 to March 11, 2016, the zero-coupon subordinated notes will
accrue contingent cash interest at a rate of no less than 0.125% of the average market price of a zero-coupon subordinated note for the five trading days ended
September 9, 2015, in addition to the continued accrual of the original issue discount.
On January 4, 2016, 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 the 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, 2016, 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 Thursday, March 31, 2016. 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 new revolving credit facility.
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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. Interest on these notes is payable semi-annually on
February 1 and August 1 of each year, commencing on August 1, 2015. 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 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.
Interest on these notes is payable semi-annually on November 1 and May 1 of each year, commencing on May 1, 2014. The net proceeds were used to repay
all of the outstanding borrowings under the Company’s Revolving Credit Facility and for general corporate purposes.
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
outstanding at that time. 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 $21.6 at December 31, 2015.
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 bore interest at the rate of 5.625% per annum from December 14, 2005, and was payable semi-annually on June 15 and
December 15.
The scheduled payments of long term debt and future minimum lease payments for capital leases at the end of 2015 are summarized as follows:
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