LabCorp 2015 Annual Report Download - page 51

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Index
Charges, the Company incurred $164.5 in one-time, non-recurring fees and expenses in 2015. The increase in selling, general and administrative expenses in
2015 was impacted by a net reduction of (0.8%) due to currency fluctuations.
Selling, general and administrative expenses as a percentage of net revenues increased to 19.9% in 2014 compared to 19.4% in 2013. The increase in
selling, general and administrative expenses as a percentage of net revenues is partially due to $13.8 in fees related to acquisitions recorded in 2014.
Additionally, bad debt expense increased to 4.6% of net revenues in 2014 as compared to 4.4% of net revenues in 2013. The Company also recorded $18.6 in
consulting expenses (recorded in selling, general and administrative) relating to fees incurred as part of its business process improvement initiative as well as
one-time CFO transition costs.

Years Ended December 31,
Change
2015
2014
2013
2015
2014
LCD $ 82.4
$ 75.5
$ 81.2
9.1%
(7.0)%
CDD 82.1
1.2
0.5
6,741.7%
140.0 %
Amortization of intangibles and other assets $ 164.5
$ 76.7
$ 81.7
114.5%
(6.1)%
The increase in amortization of intangibles and other assets in 2015 as compared to 2014 primarily reflect the net impact of the Acquisition.
The decrease in amortization of intangibles and other assets in 2014 as compared to 2013 primarily reflect the net impact of acquisitions closed during
2014 offset by adjustments to the fair value of deferred acquisition payments.

Years Ended December 31,
2015
2014
2013
Restructuring and other special charges $ 113.9
$ 17.8
$ 21.8
During 2015, the Company recorded net restructuring and other special charges of $113.9; $39.2 within LCD and $74.7 within CDD. The charges were
comprised of $59.2 related to severance and other personnel costs along with $55.8 in costs associated with facility closures and general integration
initiatives. A substantial portion of these costs relate to the planned closure of two CDD operations that serviced a minimum volume contract that expired on
October 31, 2015. These charges were offset by the reversal of previously established reserves of $1.1 in unused facility-related costs. Included within the
facility-related charges noted above is a $26.7 asset impairment charge relating to CDD lab and customer service applications that will no longer be used.
The Company incurred additional legal and other costs of $5.7 relating to the wind-down of the minimum volume contract operations referred to in the
previous paragraph. On February 9, 2016, the Company reached an agreement for the sale of the assets and business of one of these sites. As required by U.K.
law, substantially all of the employees were transferred with the business. The Company also recorded $25.6 in consulting expenses relating to fees incurred
as part of Project LaunchPad as well as Covance integration costs and employee compensation studies, along with $5.4 in short-term equity retention
arrangements relating to the acquisition of Covance and $0.3 of accelerated equity compensation relating to the previously disclosed retirement of a
Company executive (all recorded in selling, general and administrative expenses). During the fourth quarter, the Company paid $12.2 in settlement costs and
litigation expenses related to the resolution of a U.S. federal court putative class action lawsuit. In addition, the Company incurred $3.0 of non-capitalized
costs associated with the implementation of a major system as part of Project Launchpad.
During 2014, the Company recorded net restructuring charges of $17.8. The charges were comprised of $10.5 in severance and other personnel costs and
$8.4 in facility-related costs primarily associated with general integration activities. These charges were offset by the reversal of previously established
reserves of $0.4 in unused severance and $0.7 in unused facility-related costs.
In addition, during 2014, the Company recorded $18.6 in consulting expenses (recorded in selling, general and administrative expenses) relating to fees
incurred as part of its business process improvement initiative as well as one-time CFO transition costs. The Company also recorded $10.8 of costs related to
the Covance acquisition, of which $4.8 is included in selling, general and administrative expenses and $6.0 is included in interest expense.
During 2013, the Company recorded net restructuring charges of $21.8. The charges were comprised of $15.4 in severance and other personnel costs and
$9.5 in facility-related costs primarily associated with the ongoing integration of Orchid and the
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