LabCorp 2015 Annual Report Download - page 127

Index
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
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 $21.6 at December 31, 2015. As the specific terms and notional amounts of the derivative financial instruments match those of the fixed-rate debt
being hedged, the derivative instruments are assumed to be perfectly effective hedges and accordingly, there is no impact to the Company's consolidated
statements of operations. Cash flows from the interest rate swaps are including in operating activities.

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 S&P’s Ratings Services is BB- or lower.
The Company believes these embedded derivatives had no fair value at December 31, 2015 and 2014. These embedded derivatives also had no impact on
the consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013.
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The Company periodically enters into foreign currency forward contracts, which are recognized as assets or liabilities at their fair value. These contracts
do not qualify for hedge accounting and the changes in fair value are recorded directly to earnings. The contracts are short-term in nature and the fair value of
these contracts is based on market prices for comparable contracts. The fair value of these contracts is not significant as of December 31, 2015.
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Years Ended December 31,
2015
2014
2013
Supplemental schedule of cash flow information:
Cash paid during period for:
Interest $ 166.1
$ 117.8
$ 97.2
Income taxes, net of refunds 249.4
284.1
301.5
Disclosure of non-cash financing and investing activities:
Surrender of restricted stock awards and performance shares 12.6
6.6
7.1
Conversion of zero-coupon convertible debt 1.1
9.9
10.3
Assets acquired under capital leases 22.6
29.0
13.1
Accrued property, plant and equipment 4.3
6.2
9.1
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The following table is a summary of segment information for the years ended December 31, 2015, 2014, and 2013. The “management approach” has
been used to present the following segment information. This approach is based upon the way the management of the Company organizes segments within an
enterprise for making operating decisions and assessing performance. Financial information is reported on the basis that it is used internally by the chief
operating decision maker (CODM) for evaluating segment performance and deciding how to allocate resources to segments. The Company’s chief
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