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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Laboratory Corporation of America Holdings | NYSE:LH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.11 | 0.05% | 204.28 | 204.38 | 200.925 | 203.21 | 149,253 | 17:20:50 |
Delaware
|
|
13-3757370
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
358 South Main Street,
|
|
|
Burlington, North Carolina
|
|
27215
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer [X]
|
Accelerated Filer [ ]
|
Non-accelerated filer [ ] (Do not check if a smaller reporting company)
|
Smaller reporting company [ ]
|
Item 1.
|
|
|
|
|
|
|
||
|
September 30, 2016 and December 31, 2015
|
|
|
|
|
|
||
|
Three and nine months ended September 30, 2016 and 2015
|
|
|
|
|
|
||
|
Three and nine months ended September 30, 2016 and 2015
|
|
|
|
|
|
||
|
Nine months ended September 30, 2016 and 2015
|
|
|
|
|
|
||
|
Nine months ended September 30, 2016 and 2015
|
|
|
|
|
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
567.6
|
|
|
$
|
716.4
|
|
Accounts receivable, net of allowance for doubtful accounts of $250.8 and $217.0 at September 30, 2016 and December 31, 2015, respectively
|
1,346.6
|
|
|
1,217.9
|
|
||
Unbilled services
|
216.3
|
|
|
156.6
|
|
||
Supplies inventories
|
198.8
|
|
|
191.0
|
|
||
Prepaid expenses and other
|
325.6
|
|
|
339.3
|
|
||
Total current assets
|
2,654.9
|
|
|
2,621.2
|
|
||
Property, plant and equipment, net
|
1,730.6
|
|
|
1,747.4
|
|
||
Goodwill, net
|
6,389.0
|
|
|
6,166.3
|
|
||
Intangible assets, net
|
3,457.2
|
|
|
3,332.4
|
|
||
Joint venture partnerships and equity method investments
|
60.4
|
|
|
58.2
|
|
||
Deferred income tax assets
|
1.9
|
|
|
2.3
|
|
||
Other assets, net
|
189.0
|
|
|
150.0
|
|
||
Total assets
|
$
|
14,483.0
|
|
|
$
|
14,077.8
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
454.8
|
|
|
$
|
497.4
|
|
Accrued expenses and other
|
589.7
|
|
|
633.1
|
|
||
Unearned revenue
|
169.5
|
|
|
146.1
|
|
||
Short-term borrowings and current portion of long-term debt
|
698.2
|
|
|
423.9
|
|
||
Total current liabilities
|
1,912.2
|
|
|
1,700.5
|
|
||
Long-term debt, less current portion
|
5,473.2
|
|
|
5,940.3
|
|
||
Deferred income taxes and other tax liabilities
|
1,227.9
|
|
|
1,235.0
|
|
||
Other liabilities
|
330.7
|
|
|
323.1
|
|
||
Total liabilities
|
8,944.0
|
|
|
9,198.9
|
|
||
Commitments and contingent liabilities
|
|
|
|
|
|
||
Noncontrolling interest
|
15.6
|
|
|
14.9
|
|
||
Shareholders’ equity:
|
|
|
|
|
|
||
Common stock, 102.8 and 101.3 shares outstanding at September 30, 2016 and December 31, 2015, respectively
|
12.1
|
|
|
12.0
|
|
||
Additional paid-in capital
|
2,130.3
|
|
|
1,974.5
|
|
||
Retained earnings
|
4,770.7
|
|
|
4,223.0
|
|
||
Less common stock held in treasury
|
(1,011.7
|
)
|
|
(978.1
|
)
|
||
Accumulated other comprehensive loss
|
(378.0
|
)
|
|
(367.4
|
)
|
||
Total shareholders’ equity
|
5,523.4
|
|
|
4,864.0
|
|
||
Total liabilities and shareholders’ equity
|
$
|
14,483.0
|
|
|
$
|
14,077.8
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net revenue
|
$
|
2,372.7
|
|
|
$
|
2,269.9
|
|
|
$
|
7,049.9
|
|
|
$
|
6,260.9
|
|
Reimbursable out-of-pocket expenses
|
42.0
|
|
|
47.4
|
|
|
163.5
|
|
|
118.7
|
|
||||
Total revenues
|
2,414.7
|
|
|
2,317.3
|
|
|
7,213.4
|
|
|
6,379.6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net cost of revenues
|
1,584.3
|
|
|
1,505.0
|
|
|
4,657.4
|
|
|
4,098.2
|
|
||||
Reimbursable out-of-pocket expenses
|
42.0
|
|
|
47.4
|
|
|
163.5
|
|
|
118.7
|
|
||||
Total cost of revenues
|
1,626.3
|
|
|
1,552.4
|
|
|
4,820.9
|
|
|
4,216.9
|
|
||||
Gross profit
|
788.4
|
|
|
764.9
|
|
|
2,392.5
|
|
|
2,162.7
|
|
||||
Selling, general and administrative expenses
|
400.5
|
|
|
385.6
|
|
|
1,224.2
|
|
|
1,221.9
|
|
||||
Amortization of intangibles and other assets
|
41.1
|
|
|
44.9
|
|
|
130.7
|
|
|
120.6
|
|
||||
Restructuring and other special charges
|
22.8
|
|
|
26.3
|
|
|
48.6
|
|
|
59.9
|
|
||||
Operating income
|
324.0
|
|
|
308.1
|
|
|
989.0
|
|
|
760.3
|
|
||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense
|
(58.2
|
)
|
|
(55.9
|
)
|
|
(166.2
|
)
|
|
(218.1
|
)
|
||||
Equity method income, net
|
2.6
|
|
|
2.0
|
|
|
5.9
|
|
|
7.6
|
|
||||
Investment income
|
0.6
|
|
|
0.5
|
|
|
1.5
|
|
|
1.4
|
|
||||
Other, net
|
(5.6
|
)
|
|
(3.2
|
)
|
|
(1.3
|
)
|
|
(4.4
|
)
|
||||
Earnings before income taxes
|
263.4
|
|
|
251.5
|
|
|
828.9
|
|
|
546.8
|
|
||||
Provision for income taxes
|
83.6
|
|
|
96.5
|
|
|
280.3
|
|
|
218.3
|
|
||||
Net earnings
|
179.8
|
|
|
155.0
|
|
|
548.6
|
|
|
328.5
|
|
||||
Less: Net earnings attributable to the noncontrolling interest
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.9
|
)
|
|
(0.9
|
)
|
||||
Net earnings attributable to Laboratory Corporation of America Holdings
|
$
|
179.5
|
|
|
$
|
154.7
|
|
|
$
|
547.7
|
|
|
$
|
327.6
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
1.74
|
|
|
$
|
1.53
|
|
|
$
|
5.36
|
|
|
$
|
3.35
|
|
Diluted earnings per common share
|
$
|
1.71
|
|
|
$
|
1.50
|
|
|
$
|
5.25
|
|
|
$
|
3.29
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net earnings
|
$
|
179.8
|
|
|
$
|
155.0
|
|
|
$
|
548.6
|
|
|
$
|
328.5
|
|
Foreign currency translation adjustments
|
(27.4
|
)
|
|
(207.5
|
)
|
|
11.7
|
|
|
(344.7
|
)
|
||||
Net benefit plan adjustments
|
(1.6
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
1.4
|
|
||||
Other comprehensive (loss) income before tax
|
(29.0
|
)
|
|
(207.5
|
)
|
|
11.2
|
|
|
(343.3
|
)
|
||||
Provision for income tax related to items of other comprehensive earnings
|
8.3
|
|
|
34.0
|
|
|
(21.8
|
)
|
|
74.0
|
|
||||
Other comprehensive loss, net of tax
|
(20.7
|
)
|
|
(173.5
|
)
|
|
(10.6
|
)
|
|
(269.3
|
)
|
||||
Comprehensive earnings (loss)
|
159.1
|
|
|
(18.5
|
)
|
|
538.0
|
|
|
59.2
|
|
||||
Less: Net earnings attributable to the noncontrolling interest
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.9
|
)
|
|
(0.9
|
)
|
||||
Comprehensive earnings (loss) attributable to Laboratory Corporation of America Holdings
|
$
|
158.8
|
|
|
$
|
(18.8
|
)
|
|
$
|
537.1
|
|
|
$
|
58.3
|
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Shareholders’
Equity
|
||||||||||||
BALANCE AT DECEMBER 31, 2014
|
$
|
10.4
|
|
|
$
|
—
|
|
|
$
|
3,786.1
|
|
|
$
|
(965.5
|
)
|
|
$
|
(10.5
|
)
|
|
$
|
2,820.5
|
|
Net earnings attributable to Laboratory Corporation of America Holdings
|
—
|
|
|
—
|
|
|
327.6
|
|
|
—
|
|
|
—
|
|
|
327.6
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(269.3
|
)
|
|
(269.3
|
)
|
||||||
Issuance of common stock for acquisition consideration
|
1.5
|
|
|
1,761.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,762.5
|
|
||||||
Issuance of common stock under employee stock plans
|
0.1
|
|
|
88.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88.9
|
|
||||||
Surrender of restricted stock and performance share awards
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.8
|
)
|
|
—
|
|
|
(10.8
|
)
|
||||||
Stock compensation
|
—
|
|
|
77.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77.7
|
|
||||||
Income tax benefit from stock options exercised
|
—
|
|
|
10.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.1
|
|
||||||
BALANCE AT SEPTEMBER 30, 2015
|
$
|
12.0
|
|
|
$
|
1,937.6
|
|
|
$
|
4,113.7
|
|
|
$
|
(976.3
|
)
|
|
$
|
(279.8
|
)
|
|
$
|
4,807.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
BALANCE AT DECEMBER 31, 2015
|
$
|
12.0
|
|
|
$
|
1,974.5
|
|
|
$
|
4,223.0
|
|
|
$
|
(978.1
|
)
|
|
$
|
(367.4
|
)
|
|
$
|
4,864.0
|
|
Net earnings attributable to Laboratory Corporation of America Holdings
|
—
|
|
|
—
|
|
|
547.7
|
|
|
—
|
|
|
—
|
|
|
547.7
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.6
|
)
|
|
(10.6
|
)
|
||||||
Issuance of common stock under employee stock plans
|
0.1
|
|
|
67.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
67.4
|
|
||||||
Surrender of restricted stock and performance share awards
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.6
|
)
|
|
—
|
|
|
(33.6
|
)
|
||||||
Conversion of zero-coupon convertible debt
|
—
|
|
|
6.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.6
|
|
||||||
Stock compensation
|
—
|
|
|
81.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81.9
|
|
||||||
BALANCE AT SEPTEMBER 30, 2016
|
$
|
12.1
|
|
|
$
|
2,130.3
|
|
|
$
|
4,770.7
|
|
|
$
|
(1,011.7
|
)
|
|
$
|
(378.0
|
)
|
|
$
|
5,523.4
|
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net earnings
|
$
|
548.6
|
|
|
$
|
328.5
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
368.9
|
|
|
339.5
|
|
||
Stock compensation
|
81.9
|
|
|
77.7
|
|
||
(Gain)/loss on sale of assets
|
(2.3
|
)
|
|
2.9
|
|
||
Accrued interest on zero-coupon subordinated notes
|
1.3
|
|
|
1.5
|
|
||
Cumulative earnings less than (in excess of) distributions from equity method investments
|
0.4
|
|
|
(1.8
|
)
|
||
Asset impairment
|
—
|
|
|
14.8
|
|
||
Deferred income taxes
|
5.2
|
|
|
(16.0
|
)
|
||
Change in assets and liabilities (net of effects of acquisitions):
|
|
|
|
|
|
||
Increase in accounts receivable (net)
|
(109.2
|
)
|
|
(89.9
|
)
|
||
Increase in unbilled services
|
(59.7
|
)
|
|
(23.0
|
)
|
||
(Increase) decrease in supplies inventories
|
(4.8
|
)
|
|
9.6
|
|
||
(Increase) decrease in prepaid expenses and other
|
(19.5
|
)
|
|
23.5
|
|
||
Decrease in accounts payable
|
(56.3
|
)
|
|
(24.3
|
)
|
||
Increase in unearned revenue
|
23.4
|
|
|
1.7
|
|
||
Decrease in accrued expenses and other
|
(50.9
|
)
|
|
(46.9
|
)
|
||
Net cash provided by operating activities
|
727.0
|
|
|
597.8
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Capital expenditures
|
(204.6
|
)
|
|
(170.7
|
)
|
||
Proceeds from sale of assets
|
23.9
|
|
|
0.5
|
|
||
Proceeds from sale of investment
|
13.5
|
|
|
8.0
|
|
||
Investments in equity affiliates
|
(12.1
|
)
|
|
(11.4
|
)
|
||
Acquisition of businesses, net of cash acquired
|
(396.8
|
)
|
|
(3,692.7
|
)
|
||
Net cash used for investing activities
|
(576.1
|
)
|
|
(3,866.3
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Proceeds from senior note offerings
|
—
|
|
|
2,900.0
|
|
||
Proceeds from term loan
|
—
|
|
|
1,000.0
|
|
||
Payments on term loan
|
—
|
|
|
(285.0
|
)
|
||
Proceeds from revolving credit facilities
|
—
|
|
|
60.0
|
|
||
Payments on revolving credit facilities
|
—
|
|
|
(60.0
|
)
|
||
Proceeds from bridge loan
|
—
|
|
|
400.0
|
|
||
Payments on bridge loan
|
—
|
|
|
(400.0
|
)
|
||
Payments on senior notes
|
(325.0
|
)
|
|
(250.0
|
)
|
||
Payments on zero-coupon subordinated notes
|
(31.5
|
)
|
|
—
|
|
||
Payment of debt issuance costs
|
—
|
|
|
(36.7
|
)
|
||
Noncontrolling interest distributions
|
(1.7
|
)
|
|
—
|
|
||
Deferred acquisition costs
|
(4.9
|
)
|
|
(0.1
|
)
|
||
Payments on long-term lease obligations
|
(6.0
|
)
|
|
(3.3
|
)
|
||
Excess tax benefits from stock based compensation
|
—
|
|
|
10.1
|
|
||
Net proceeds from issuance of stock to employees
|
67.4
|
|
|
89.2
|
|
||
Net cash (used for) provided by financing activities
|
(301.7
|
)
|
|
3,424.2
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
2.0
|
|
|
(22.7
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
(148.8
|
)
|
|
133.0
|
|
||
Cash and cash equivalents at beginning of period
|
716.4
|
|
|
580.0
|
|
||
Cash and cash equivalents at end of period
|
$
|
567.6
|
|
|
$
|
713.0
|
|
1.
|
BASIS OF FINANCIAL STATEMENT PRESENTATION
|
2.
|
BUSINESS ACQUISITIONS
|
3.
|
EARNINGS PER SHARE
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||||||||||||||||||||||
|
Earnings
|
|
Shares
|
|
Per
Share
Amount
|
|
Earnings
|
|
Shares
|
|
Per
Share
Amount
|
|
Earnings
|
|
Shares
|
|
Per
Share
Amount
|
|
Earnings
|
|
Shares
|
|
Per
Share
Amount
|
||||||||||||||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net earnings
|
$
|
179.5
|
|
|
102.9
|
|
|
$
|
1.74
|
|
|
$
|
154.7
|
|
|
101.1
|
|
|
$
|
1.53
|
|
|
$
|
547.7
|
|
|
102.3
|
|
|
$
|
5.36
|
|
|
$
|
327.6
|
|
|
97.9
|
|
|
$
|
3.35
|
|
Dilutive effect of employee stock options and awards
|
—
|
|
|
1.5
|
|
|
|
|
|
—
|
|
|
1.2
|
|
|
|
|
|
—
|
|
|
1.4
|
|
|
|
|
|
|
|
|
1.2
|
|
|
|
|
||||||||
Effect of convertible debt
|
—
|
|
|
0.5
|
|
|
|
|
|
—
|
|
|
0.6
|
|
|
|
|
|
—
|
|
|
0.5
|
|
|
|
|
|
|
|
|
0.6
|
|
|
|
|
||||||||
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings including impact of dilutive adjustments
|
$
|
179.5
|
|
|
104.9
|
|
|
$
|
1.71
|
|
|
$
|
154.7
|
|
|
102.9
|
|
|
$
|
1.50
|
|
|
$
|
547.7
|
|
|
104.2
|
|
|
$
|
5.25
|
|
|
$
|
327.6
|
|
|
99.7
|
|
|
$
|
3.29
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Stock options
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
4.
|
RESTRUCTURING AND OTHER SPECIAL CHARGES
|
|
LCD
|
|
CDD
|
|
|
||||||||||||
|
Severance and Other
Employee Costs
|
Lease and Other
Facility Costs
|
|
Severance and Other
Employee Costs
|
Lease and Other
Facility Costs
|
|
Total
|
||||||||||
Balance as of December 31, 2015
|
$
|
0.1
|
|
$
|
26.5
|
|
|
$
|
51.5
|
|
$
|
1.1
|
|
|
$
|
79.2
|
|
Restructuring charges
|
11.4
|
|
0.7
|
|
|
11.7
|
|
30.0
|
|
|
53.8
|
|
|||||
Reduction of prior restructuring accruals
|
—
|
|
(2.3
|
)
|
|
(2.4
|
)
|
(0.5
|
)
|
|
(5.2
|
)
|
|||||
Cash payments and other adjustments
|
(5.7
|
)
|
(9.5
|
)
|
|
(20.7
|
)
|
3.7
|
|
|
(32.2
|
)
|
|||||
Balance as of September 30, 2016
|
$
|
5.8
|
|
$
|
15.4
|
|
|
$
|
40.1
|
|
$
|
34.3
|
|
|
$
|
95.6
|
|
Current
|
|
|
|
|
|
|
|
|
$
|
59.9
|
|
||||||
Non-current
|
|
|
|
|
|
|
|
|
35.7
|
|
|||||||
|
|
|
|
|
|
|
|
|
$
|
95.6
|
|
5.
|
GOODWILL AND INTANGIBLE ASSETS
|
|
LCD
|
|
CDD
|
|
Total
|
||||||||||||||||||
|
September 30,
2016 |
|
December 31, 2015
|
|
September 30,
2016 |
|
December 31, 2015
|
|
September 30,
2016 |
|
December 31, 2015
|
||||||||||||
Balance as of January 1
|
$
|
3,201.7
|
|
|
$
|
2,988.9
|
|
|
$
|
2,964.6
|
|
|
$
|
110.5
|
|
|
$
|
6,166.3
|
|
|
$
|
3,099.4
|
|
Goodwill acquired during the period
|
292.8
|
|
|
225.6
|
|
|
—
|
|
|
2,969.0
|
|
|
292.8
|
|
|
3,194.6
|
|
||||||
Adjustments to goodwill
|
47.4
|
|
|
(12.8
|
)
|
|
(117.5
|
)
|
|
(114.9
|
)
|
|
(70.1
|
)
|
|
(127.7
|
)
|
||||||
Balance at end of period
|
$
|
3,541.9
|
|
|
$
|
3,201.7
|
|
|
$
|
2,847.1
|
|
|
$
|
2,964.6
|
|
|
$
|
6,389.0
|
|
|
$
|
6,166.3
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Customer relationships
|
$
|
3,257.9
|
|
|
$
|
(824.3
|
)
|
|
$
|
2,433.6
|
|
|
$
|
3,137.8
|
|
|
$
|
(725.6
|
)
|
|
$
|
2,412.2
|
|
Patents, licenses and technology
|
412.9
|
|
|
(158.8
|
)
|
|
254.1
|
|
|
309.6
|
|
|
(144.7
|
)
|
|
164.9
|
|
||||||
Non-compete agreements
|
51.9
|
|
|
(40.8
|
)
|
|
11.1
|
|
|
51.2
|
|
|
(37.2
|
)
|
|
14.0
|
|
||||||
Trade names
|
409.6
|
|
|
(135.3
|
)
|
|
274.3
|
|
|
400.9
|
|
|
(115.5
|
)
|
|
285.4
|
|
||||||
Land use right
|
10.0
|
|
|
(1.1
|
)
|
|
8.9
|
|
|
5.5
|
|
|
(0.6
|
)
|
|
4.9
|
|
||||||
Canadian licenses
|
475.2
|
|
|
—
|
|
|
475.2
|
|
|
451.0
|
|
|
—
|
|
|
451.0
|
|
||||||
|
$
|
4,617.5
|
|
|
$
|
(1,160.3
|
)
|
|
$
|
3,457.2
|
|
|
$
|
4,356.0
|
|
|
$
|
(1,023.6
|
)
|
|
$
|
3,332.4
|
|
6.
|
DEBT
|
|
September 30, 2016
|
|
|
December 31, 2015
|
|||
Zero-coupon convertible subordinated notes
|
$
|
64.3
|
|
|
$
|
94.5
|
|
3.125% senior notes due 2016
|
—
|
|
|
325.0
|
|
||
2.20% senior notes due 2017
|
500.0
|
|
|
—
|
|
||
5.00% senior notes due 2017 and 2018
|
130.0
|
|
|
—
|
|
||
Debt issuance costs
|
(3.4
|
)
|
|
(1.0
|
)
|
||
Current portion of capital leases
|
7.3
|
|
|
5.4
|
|
||
Total short-term borrowings and current portion of long-term debt
|
$
|
698.2
|
|
|
$
|
423.9
|
|
|
September 30, 2016
|
|
|
December 31, 2015
|
|||
2.20% senior notes due 2017
|
$
|
—
|
|
|
$
|
500.0
|
|
2.50% senior notes due 2018
|
400.0
|
|
|
400.0
|
|
||
4.625% senior notes due 2020
|
640.5
|
|
|
621.6
|
|
||
2.625% senior notes due 2020
|
500.0
|
|
|
500.0
|
|
||
3.75% senior notes due 2022
|
500.0
|
|
|
500.0
|
|
||
3.20% senior notes due 2022
|
500.0
|
|
|
500.0
|
|
||
4.00% senior notes due 2023
|
300.0
|
|
|
300.0
|
|
||
3.60% senior notes due 2025
|
1,000.0
|
|
|
1,000.0
|
|
||
4.70% senior notes due 2045
|
900.0
|
|
|
900.0
|
|
||
Term loan
|
715.0
|
|
|
715.0
|
|
||
Debt issuance costs
|
(44.8
|
)
|
|
(51.8
|
)
|
||
Capital leases
|
62.5
|
|
|
55.5
|
|
||
Total long-term debt
|
$
|
5,473.2
|
|
|
$
|
5,940.3
|
|
|
Issued
|
|
Held in Treasury
|
|
Outstanding
|
|||
Common shares at December 31, 2015
|
123.9
|
|
|
(22.6
|
)
|
|
101.3
|
|
Common stock issued under employee stock plans
|
1.6
|
|
|
—
|
|
|
1.6
|
|
Common stock issued upon conversion of zero-coupon subordinated notes
|
0.2
|
|
|
—
|
|
|
0.2
|
|
Surrender of restricted stock and performance share awards
|
—
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
Common shares at September 30, 2016
|
125.7
|
|
|
(22.9
|
)
|
|
102.8
|
|
|
Foreign
Currency
Translation
Adjustments
|
|
Net
Benefit
Plan
Adjustments
|
|
Accumulated
Other
Comprehensive
Earnings (Loss)
|
||||||
Balance at December 31, 2015
(a)
|
$
|
(293.0
|
)
|
|
$
|
(74.4
|
)
|
|
$
|
(367.4
|
)
|
Other comprehensive earnings before reclassifications
|
11.7
|
|
|
11.0
|
|
|
22.7
|
|
|||
Amounts reclassified from accumulated other comprehensive earnings to the Condensed Consolidated Statement of Operations
(b)
|
—
|
|
|
(11.5
|
)
|
|
(11.5
|
)
|
|||
Tax effect of adjustments
|
(29.2
|
)
|
|
7.4
|
|
|
(21.8
|
)
|
|||
Balance at September 30, 2016
|
$
|
(310.5
|
)
|
|
$
|
(67.5
|
)
|
|
$
|
(378.0
|
)
|
8.
|
INCOME TAXES
|
9.
|
COMMITMENTS AND CONTINGENCIES
|
10.
|
PENSION AND POST-RETIREMENT PLANS
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost for administrative expenses
|
$
|
1.2
|
|
|
$
|
1.0
|
|
|
$
|
3.6
|
|
|
$
|
2.9
|
|
Interest cost on benefit obligation
|
3.8
|
|
|
3.8
|
|
|
11.6
|
|
|
11.4
|
|
||||
Expected return on plan assets
|
(4.1
|
)
|
|
(4.5
|
)
|
|
(12.5
|
)
|
|
(13.7
|
)
|
||||
Net amortization and deferral
|
2.8
|
|
|
2.9
|
|
|
8.4
|
|
|
8.3
|
|
||||
Defined benefit plan costs
|
$
|
3.7
|
|
|
$
|
3.2
|
|
|
$
|
11.1
|
|
|
$
|
8.9
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost for benefits earned
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Interest cost on benefit obligation
|
0.1
|
|
|
0.2
|
|
|
0.3
|
|
|
0.7
|
|
||||
Net amortization and deferral
|
(4.0
|
)
|
|
(2.9
|
)
|
|
(12.0
|
)
|
|
(7.5
|
)
|
||||
Post-retirement medical plan benefits
|
$
|
(3.9
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
(11.7
|
)
|
|
$
|
(6.7
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Interest cost
|
0.2
|
|
|
0.2
|
|
|
0.6
|
|
|
0.6
|
|
||||
Curtailment gain
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
||||
Net periodic pension cost
|
$
|
0.2
|
|
|
$
|
(0.4
|
)
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
United Kingdom Plans
|
||||||||||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost for administrative expenses
|
$
|
0.7
|
|
|
$
|
0.9
|
|
|
$
|
2.3
|
|
|
$
|
1.9
|
|
Interest cost on benefit obligation
|
2.0
|
|
|
2.3
|
|
|
6.5
|
|
|
5.4
|
|
||||
Expected return on plan assets
|
(2.8
|
)
|
|
(3.3
|
)
|
|
(9.0
|
)
|
|
(7.6
|
)
|
||||
Defined benefit plan costs
|
$
|
(0.1
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(0.3
|
)
|
|
|
|
|
|
|
|
|
||||||||
Assumptions used to determine defined benefit plan cost
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
3.8
|
%
|
|
3.6
|
%
|
|
3.8
|
%
|
|
3.6
|
%
|
||||
Expected return on assets
|
5.6
|
%
|
|
5.4
|
%
|
|
5.6
|
%
|
|
5.4
|
%
|
||||
Salary increases
|
3.6
|
%
|
|
3.5
|
%
|
|
3.6
|
%
|
|
3.5
|
%
|
|
German Plan
|
||||||||||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost for administrative expenses
|
$
|
0.2
|
|
|
$
|
0.4
|
|
|
$
|
0.7
|
|
|
$
|
0.8
|
|
Interest cost on benefit obligation
|
0.2
|
|
|
0.1
|
|
|
0.5
|
|
|
0.3
|
|
||||
Net (gain) from earlier periods
|
(0.1
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
||||
Defined benefit plan costs
|
$
|
0.3
|
|
|
$
|
0.5
|
|
|
$
|
1.0
|
|
|
$
|
1.1
|
|
|
|
|
|
|
|
|
|
||||||||
Assumptions used to determine defined benefit plan cost
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
2.5
|
%
|
|
1.5
|
%
|
|
2.5
|
%
|
|
1.5
|
%
|
||||
Expected return on assets
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||||
Salary increases
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
11.
|
FAIR VALUE MEASUREMENTS
|
|
|
|
Fair Value Measurements as of
|
||||||||||||
|
Fair Value
as of
|
|
September 30, 2016
|
||||||||||||
|
|
Using Fair Value Hierarchy
|
|||||||||||||
|
September 30, 2016
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Noncontrolling interest put
|
$
|
15.6
|
|
|
$
|
—
|
|
|
$
|
15.6
|
|
|
$
|
—
|
|
Interest rate swap
|
40.5
|
|
|
—
|
|
|
40.5
|
|
|
—
|
|
||||
Cash surrender value of life insurance policies
|
52.8
|
|
|
—
|
|
|
52.8
|
|
|
—
|
|
||||
Deferred compensation liability
|
53.0
|
|
|
—
|
|
|
53.0
|
|
|
—
|
|
|
|
|
Fair Value Measurements as of
|
||||||||||||
|
Fair Value
as of
|
|
December 31, 2015
|
||||||||||||
|
|
Using Fair Value Hierarchy
|
|||||||||||||
|
December 31, 2015
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Noncontrolling interest put
|
$
|
14.9
|
|
|
$
|
—
|
|
|
$
|
14.9
|
|
|
$
|
—
|
|
Interest rate swap
|
21.6
|
|
|
—
|
|
|
21.6
|
|
|
—
|
|
||||
Cash surrender value of life insurance policies
|
45.5
|
|
|
—
|
|
|
45.5
|
|
|
—
|
|
||||
Deferred compensation liability
|
46.4
|
|
|
—
|
|
|
46.4
|
|
|
—
|
|
12.
|
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 Standard & Poor’s Ratings Services is BB- or lower.
|
13.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Supplemental schedule of cash flow information:
|
|
|
|
||||
Cash paid during period for:
|
|
|
|
||||
Interest
|
$
|
179.5
|
|
|
$
|
126.5
|
|
Income taxes, net of refunds
|
260.9
|
|
|
237.6
|
|
||
Disclosure of non-cash financing and investing activities:
|
|
|
|
|
|
||
Surrender of restricted stock awards and performance awards
|
$
|
—
|
|
|
$
|
10.8
|
|
Non-cash stock consideration for the Acquisition
|
—
|
|
|
1,762.5
|
|
||
Conversion of zero-coupon convertible debt
|
6.6
|
|
|
—
|
|
||
Assets acquired under capital leases
|
12.1
|
|
|
18.1
|
|
||
Increase (decrease) in accrued liabilities for the purchase of property, plant and equipment
|
1.6
|
|
|
(2.2
|
)
|
14.
|
BUSINESS SEGMENT INFORMATION
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Total revenues:
|
|||||||||||||||
LCD - net revenue
|
$
|
1,671.8
|
|
|
$
|
1,600.9
|
|
|
$
|
4,922.1
|
|
|
$
|
4,647.9
|
|
CDD - net revenue
|
701.1
|
|
|
669.0
|
|
|
2,128.3
|
|
|
1,613.0
|
|
||||
Intercompany eliminations
|
(0.2
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
||||
Total net revenues
|
2,372.7
|
|
|
2,269.9
|
|
|
7,049.9
|
|
|
6,260.9
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating earnings:
|
|||||||||||||||
LCD
|
305.6
|
|
|
290.4
|
|
|
910.0
|
|
|
801.8
|
|
||||
CDD
|
51.9
|
|
|
49.0
|
|
|
190.3
|
|
|
53.4
|
|
||||
Unallocated corporate expenses
|
(33.5
|
)
|
|
(31.3
|
)
|
|
(111.3
|
)
|
|
(94.9
|
)
|
||||
Total operating income
|
324.0
|
|
|
308.1
|
|
|
989.0
|
|
|
760.3
|
|
||||
Other expense, net
|
(60.6
|
)
|
|
(56.6
|
)
|
|
(160.1
|
)
|
|
(213.5
|
)
|
||||
Earnings before income taxes
|
263.4
|
|
|
251.5
|
|
|
828.9
|
|
|
546.8
|
|
||||
Provision for income taxes
|
83.6
|
|
|
96.5
|
|
|
280.3
|
|
|
218.3
|
|
||||
Net earnings
|
179.8
|
|
|
155.0
|
|
|
548.6
|
|
|
328.5
|
|
||||
Less income attributable to noncontrolling interests
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.9
|
)
|
|
(0.9
|
)
|
||||
Net income attributable to Laboratory Corporation of America Holdings
|
$
|
179.5
|
|
|
$
|
154.7
|
|
|
$
|
547.7
|
|
|
$
|
327.6
|
|
1.
|
changes in government and third party payer regulations or policies or other future reforms in the healthcare system (or in the interpretation of current regulations), new insurance or payment systems, including state, regional or private insurance cooperatives (e.g., Health Insurance Exchanges), affecting governmental and third-party coverage or reimbursement for clinical laboratory testing;
|
2.
|
significant monetary damages, fines, penalties, assessments, refunds, repayments, unanticipated compliance expenditures and/or exclusion from the Medicare and Medicaid programs, among other adverse consequences, resulting from interpretations of, or future changes in, laws and regulations, including laws and regulations of Medicare, Medicaid, the federal and state False Claims Acts, interpretations of such laws and regulations by U.S. or state government agencies or investigations, audits, regulatory examinations, information requests and other inquiries by state or U.S. government agencies;
|
3.
|
significant fines, penalties, costs, unanticipated compliance expenditures and/or damage to the Company’s reputation arising from the failure to comply with U.S. and international privacy and security laws and regulations, including the Health Insurance Portability and Accountability Act of 1996, the Health Information Technology for Economic and Clinical Health Act, U.S. state laws and regulations, and laws and regulations of the European Union and other countries;
|
4.
|
loss or suspension of a license or imposition of a fine or penalties under, or future changes in, or interpretations of applicable U.S., state or local licensing laws or regulations, including, but not limited to, the Clinical Laboratory Improvement Act of 1967, and the Clinical Laboratory Improvement Amendments of 1988;
|
5.
|
penalties or loss of license arising from the failure to comply with the U.S. Occupational Safety and Health Administration requirements and the U.S. Needlestick Safety and Prevention Act, or similar laws and regulations of U.S., state, local or international agencies;
|
6.
|
fines, unanticipated compliance expenditures, suspension of manufacturing, enforcement actions, injunctions, or criminal prosecution arising from failure to maintain compliance with current good manufacturing practice (cGMP) regulations and other applicable requirements of various regulatory agencies;
|
7.
|
sanctions or other remedies, including fines, unanticipated compliance expenditures, enforcement actions, injunctions or criminal prosecution arising from failure to comply with the Animal Welfare Act;
|
8.
|
changes in testing guidelines or recommendations by government agencies, medical specialty societies and other authoritative bodies affecting the utilization of laboratory tests;
|
9.
|
changes in government regulations or policies, including regulations and policies of the U.S. Food and Drug Administration, the U.S. Department of Agriculture, the Medicine and Healthcare products Regulatory Agency in the U.K., the China Food and Drug Administration , the European Medicines Agency or other U.S., state, local or international agencies, affecting the approval, availability of, and the selling and marketing of tests, products, drugs, or the conduct of drug development trials;
|
10.
|
changes in government regulations pertaining to the pharmaceutical and biotechnology industries, changes in reimbursement of pharmaceutical products or reduced spending on research and development by pharmaceutical and biotechnology customers;
|
11.
|
liabilities that result from the inability to comply with corporate governance requirements;
|
12.
|
increased competition, including price competition, a potential reduction in rates in response to price transparency and consumerism, competitive bidding and/or changes or reductions to fee schedules and competition from companies that do not comply with existing laws or regulations or otherwise disregard compliance standards in the industry;
|
13.
|
changes in payer mix or payment structure, including insurance carrier participation in Health Insurance Exchanges, an increase in capitated reimbursement mechanisms, the impact of a shift to consumer-driven health plans or plans carrying increased level of member cost-sharing, and adverse changes in payer reimbursement or payer coverage policies (implemented directly or through a third party utilization management organization) related to specific diagnostic tests, categories of testing or testing methodologies;
|
14.
|
failure to retain or attract managed care organization (MCO) business as a result of changes in business models, including new risk based or network approaches, or other changes in strategy or business models by MCOs;
|
15.
|
failure to obtain and retain new customers, an unfavorable change in the mix of testing services ordered, or a reduction in tests ordered, specimens submitted or services requested by existing customers;
|
16.
|
difficulty in maintaining relationships with customers or retaining key employees as a result of uncertainty surrounding the integration of acquisitions and the resulting negative effects on the business of the Company;
|
17.
|
consolidation and convergence of MCOs, pharmaceutical companies, health systems, large physician organizations and other customers potentially causing material shifts in insourcing, utilization, pricing and reimbursements, including full and partial risk based models;
|
18.
|
failure to effectively develop and deploy system modifications or enhancements required in response to evolving market and business needs;
|
19.
|
customers choosing to insource services that are or could be purchased from the Company;
|
20.
|
failure to identify, successfully close and effectively integrate and/or manage newly acquired businesses;
|
21.
|
inability to achieve the expected benefits and synergies of newly-acquired businesses, and impact on the Company's cash position, levels of indebtedness and stock price;
|
22.
|
inability of the Company to avoid adverse tax treatments relating to the Acquisition;
|
23.
|
termination, loss, delay, reduction in scope or increased costs of contracts, including large contracts and multiple contracts;
|
24.
|
liability arising from errors or omissions in the performance of contract research services or other contractual arrangements;
|
25.
|
changes or disruption in services or supplies provided by third parties, including transportation;
|
26.
|
damage or disruption to the Company's facilities;
|
27.
|
damage to the Company's reputation, loss of business or other harm from acts of animal rights extremists or potential harm and/or liability arising from animal research activities or the provision of animal research products;
|
28.
|
adverse results in litigation matters;
|
29.
|
inability to attract and retain experienced and qualified personnel;
|
30.
|
failure to develop or acquire licenses for new or improved technologies, such as point-of-care testing and mobile health technologies, or potential use of new technologies by customers and/or consumers to perform their own tests;
|
31.
|
substantial costs arising from the inability to commercialize newly licensed tests or technologies or to obtain appropriate coverage or reimbursement for such tests;
|
32.
|
inability to obtain and maintain adequate patent and other proprietary rights for protection of the Company's products and services and to successfully enforce the Company's proprietary rights;
|
33.
|
scope, validity and enforceability of patents and other proprietary rights held by third parties that may impact the Company's ability to develop, perform, or market the Company's products or services or operate its business;
|
34.
|
business interruption or other impact on the business due to adverse weather, fires and/or other natural disasters, acts of war, terrorism or other criminal acts, and/or widespread outbreak of influenza or other pandemic illness;
|
35.
|
discontinuation or recalls of existing testing products;
|
36.
|
a failure in the Company's information technology systems, including with respect to testing turnaround time and billing processes, or the failure to maintain the security of business information or systems or to protect against cyber security attacks, or delays or failures in the development and implementation of the Company’s automation platforms, any of which could result in a negative effect on the Company’s performance of services, a loss of business or increased costs, damages to the Company’s reputation, significant litigation exposure, an inability to meet required financial reporting deadlines, or the failure to meet future regulatory or customer information technology, data security and connectivity requirements;
|
37.
|
business interruption, increased costs, and other adverse effects on the Company's operations due to the unionization of employees, union strikes, work stoppages, general labor unrest or failure to comply with labor or employment laws;
|
38.
|
failure to maintain the Company's days sales outstanding and/or bad debt expense levels including negative impact on the Company's reimbursement, cash collections and profitability arising from unfavorable changes in third party payer policies in connection with the ICD-10-CM Code Set which was effective October 1, 2015;
|
39.
|
impact on the Company's revenue, cash collections and the availability of credit for general liquidity or other financing needs arising from a significant deterioration in the economy or financial markets or in the Company's credit ratings by S&P and/or Moody's;
|
40.
|
changes in reimbursement by foreign governments and foreign currency fluctuations;
|
41.
|
inability to obtain certain billing information from physicians, resulting in increased costs and complexity, a temporary disruption in cash receipts and ongoing reductions in reimbursements and net revenues;
|
42.
|
expenses and risks associated with international operations, including but not limited to compliance with the Foreign Corrupt Practices Act, the U.K. Bribery Act, trade sanction laws and regulations, and laws and regulations that differ from those of the U.S., and economic, political, legal and other operational risks associated with foreign markets;
|
43.
|
failure to achieve expected efficiencies and savings in connection with the Company's comprehensive, enterprise-wide business process improvement initiative; and
|
44.
|
global economic conditions and government and regulatory changes, including but not limited to the United Kingdom's announced intention to exit from the European Union.
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Net revenue
|
|
|
|
|
|
|||||
LCD
|
$
|
1,671.8
|
|
|
$
|
1,600.9
|
|
|
4.4
|
%
|
CDD
|
701.1
|
|
|
669.0
|
|
|
4.8
|
%
|
||
Intercompany eliminations
|
(0.2
|
)
|
|
—
|
|
|
N/A
|
|
||
Total
|
$
|
2,372.7
|
|
|
$
|
2,269.9
|
|
|
4.5
|
%
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Net cost of revenues
|
$
|
1,584.3
|
|
|
$
|
1,505.0
|
|
|
5.3
|
%
|
Cost of revenues as a % of net revenue
|
66.8
|
%
|
|
66.3
|
%
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Selling, general and administrative expenses
|
$
|
400.5
|
|
|
$
|
385.6
|
|
|
3.9
|
%
|
Selling, general and administrative expenses as a % of net revenue
|
16.9
|
%
|
|
17.0
|
%
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
LCD
|
$
|
19.3
|
|
|
$
|
23.2
|
|
|
(16.8
|
)%
|
CDD
|
21.8
|
|
|
21.7
|
|
|
0.5
|
%
|
||
Total amortization of intangibles and other assets
|
$
|
41.1
|
|
|
$
|
44.9
|
|
|
(8.5
|
)%
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Restructuring and other special charges
|
$
|
22.8
|
|
|
$
|
26.3
|
|
|
(13.3
|
)%
|
|
Three Months Ended September 30,
|
|
|
||||||
|
2016
|
|
2015
|
|
Change
|
||||
Interest expense
|
$
|
58.2
|
|
|
55.9
|
|
|
4.1
|
%
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Equity method income, net
|
$
|
2.6
|
|
|
$
|
2.0
|
|
|
30.0
|
%
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Other, net
|
$
|
(5.6
|
)
|
|
$
|
(3.2
|
)
|
|
75.0
|
%
|
|
Three Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Income tax expense
|
$
|
83.6
|
|
|
$
|
96.5
|
|
|
(13.4
|
)%
|
Income tax expense as a % of earnings before income taxes
|
31.7
|
%
|
|
38.4
|
%
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Net revenue
|
|
|
|
|
|
|||||
LCD
|
$
|
4,922.1
|
|
|
$
|
4,647.9
|
|
|
5.9
|
%
|
CDD
|
2,128.3
|
|
|
1,613.0
|
|
|
31.9
|
%
|
||
Intercompany eliminations
|
(0.5
|
)
|
|
—
|
|
|
N/A
|
|
||
Total
|
$
|
7,049.9
|
|
|
$
|
6,260.9
|
|
|
12.6
|
%
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Net cost of revenues
|
$
|
4,657.4
|
|
|
$
|
4,098.2
|
|
|
13.6
|
%
|
Cost of revenues as a % of net revenue
|
66.1
|
%
|
|
65.5
|
%
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Selling, general and administrative expenses
|
$
|
1,224.2
|
|
|
$
|
1,221.9
|
|
|
0.2
|
%
|
Selling, general and administrative expenses as a % of net revenue
|
17.4
|
%
|
|
19.5
|
%
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
LCD
|
$
|
66.3
|
|
|
$
|
67.1
|
|
|
(1.2
|
)%
|
CDD
|
64.4
|
|
|
53.5
|
|
|
20.4
|
%
|
||
Total amortization of intangibles and other assets
|
$
|
130.7
|
|
|
$
|
120.6
|
|
|
8.4
|
%
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Restructuring and other special charges
|
$
|
48.6
|
|
|
$
|
59.9
|
|
|
(18.9
|
)%
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Interest expense
|
$
|
166.2
|
|
|
$
|
218.1
|
|
|
(23.8
|
)%
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Equity method income, net
|
$
|
5.9
|
|
|
$
|
7.6
|
|
|
(22.4
|
)%
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Other, net
|
$
|
(1.3
|
)
|
|
$
|
(4.4
|
)
|
|
(70.5
|
)%
|
|
Nine Months Ended September 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Income tax expense
|
$
|
280.3
|
|
|
$
|
218.3
|
|
|
28.4
|
%
|
Income tax expense as a % of earnings before tax
|
33.8
|
%
|
|
40.8
|
%
|
|
|
|
|
Nine Months Ended September 30,
|
|
||||||
|
2016
|
|
2015
|
|
||||
Net cash provided by operating activities
|
$
|
727.0
|
|
|
$
|
597.8
|
|
|
Net cash used for investing activities
|
(576.1
|
)
|
|
(3,866.3
|
)
|
|
||
Net cash (used for) provided by financing activities
|
(301.7
|
)
|
|
3,424.2
|
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
2.0
|
|
|
(22.7
|
)
|
|
||
Net change in cash and cash equivalents
|
$
|
(148.8
|
)
|
|
$
|
133.0
|
|
|
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.
|
(a)
|
Exhibits
|
|
|
12.1*
|
Ratio of earnings to fixed charges
|
31.1*
|
Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)
|
31.2*
|
Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)
|
32*
|
Written Statement of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
|
10.1*
|
Amendment No. 2, dated as of July 13, 2016, to the Term Loan Credit Agreement dated as of December 19, 2014, with Bank of America, N.A.
|
10.2*
|
Amendment No. 1, dated as of July 13, 2016, to the Revolving Credit Agreement dated as of December 19, 2014, with Bank of America, N.A.
|
101.INS*
|
XBRL Instance Document
|
101.SCH*
|
XBRL Taxonomy Extension Schema
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase
|
*
|
|
filed herewith
|
|
By:
|
/s/ DAVID P. KING
|
|
|
David P. King
|
|
|
Chairman of the Board, President
|
|
|
and Chief Executive Officer
|
|
By:
|
/s/ GLENN A. EISENBERG
|
|
|
Glenn A. Eisenberg
|
|
|
Executive Vice President,
|
|
|
Chief Financial Officer
|
1 Year Laboratory Corporation o... Chart |
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