LabCorp 2015 Annual Report Download - page 66

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Index
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 S&P’s Ratings Services is BB- or lower.
Each quarter-point increase or decrease in the variable rate would result in the Company's interest expense changing by approximately $1.8 per year for
the Company's unhedged variable rate debt.
 
Reference is made to the Index on Page F-1 of the Financial Report included herein.
 
Not Applicable.
 

As of the end of the period covered by this report, the Company carried out under the supervision and with the participation of the Company’s
management, including the Company’s principal executive officer and principal financial officer, an evaluation 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.

On February 19, 2015, the Company completed the Acquisition. The Company’s management has extended its oversight and monitoring processes that
support internal control over financial reporting to include Covance's operations. The Company’s management is continuing to integrate the acquired
operations of Covance into the Company’s overall internal control over financial reporting process. However, management has excluded Covance from its
assessment of internal controls over financial reporting set forth below. There have been no other changes in the Company’s internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the fiscal year ended December 31, 2015 that have materially affected, or are
reasonably likely to materially affect, the Company’s 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 U.S. Internal control over
financial reporting includes those policies and procedures that:
• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
Company;
• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting
principles generally accepted in the U.S.;
66