Document and Entity Information
Document and Entity Information Document - shares shares in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Oct. 30, 2017 | |
Document Information [Line Items] | |||
Entity Registrant Name | LABORATORY CORP OF AMERICA HOLDINGS | ||
Entity Central Index Key | 920,148 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | Q3 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 101.8 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 409.3 | $ 433.6 |
Accounts receivable, net of allowance for doubtful accounts of $198.4 and $191.5 at March 31, 2013 and December 31, 2012, respectively | 1,556.6 | 1,328.7 |
Unbilled Contracts Receivable | 267.3 | 190 |
Supplies inventories | 217.2 | 205.2 |
Prepaid expenses and other | 450.2 | 321.2 |
Total current assets | 2,900.6 | 2,478.7 |
Property, plant and equipment, net | 1,736.2 | 1,718.6 |
Goodwill, net | 7,325.1 | 6,424.4 |
Intangible Assets, Net (Excluding Goodwill) | 4,415.3 | 3,400.5 |
Joint venture partnerships and equity method investments | 64.7 | 57.6 |
Deferred Income Taxes and Other Assets, Current | 2.1 | 2.1 |
Other assets, net | 247.8 | 165.1 |
Total assets | 16,691.8 | 14,247 |
Current liabilities: | ||
Accounts payable | 595.4 | 508.4 |
Deferred Revenue, Current | 610.1 | 593.7 |
Deferred Tax Liabilities, Net, Current | 313.6 | 176 |
Debt, Current | 18.1 | 549.5 |
Long-term debt, less current portion | 1,537.2 | 1,827.6 |
Long-term Debt, Excluding Current Maturities | 7,200.3 | 5,300 |
Commitments and contingent liabilities | 403.4 | 392 |
Noncontrolling interest | 10,539 | 8,726 |
Shareholders' equity: | ||
Common stock, 92.8 and 93.5 shares outstanding at March 31, 2013 and December 31, 2012, respectively | 26.9 | 15.2 |
Additional paid-in capital | 1,998.4 | 2,131.7 |
Retained earnings | 12 | 12.1 |
Accumulated other comprehensive income | (5,517.2) | (4,955.8) |
Total shareholders' equity | (1,059.2) | (1,012.7) |
Total liabilities and shareholders' equity | (342.5) | (581.1) |
Stockholders' Equity Attributable to Parent | 6,125.9 | 5,505.8 |
Deferred income taxes and other tax liabilities | 1,398.1 | 1,206.4 |
Liabilities and Equity | $ 16,691.8 | $ 14,247 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - USD ($) shares in Millions, $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for Doubtful Accounts Receivable, Current | $ 269.2 | $ 235.6 |
Shareholders' Equity: | ||
Common stock, shares outstanding (in shares) | 102.1 | 102.7 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue, Net | $ 2,597.9 | $ 2,372.7 | $ 7,504.4 | $ 7,049.9 |
Reimbursement Revenue | 57.3 | 42 | 140.7 | 163.5 |
Revenues | 2,655.2 | 2,414.7 | 7,645.1 | 7,213.4 |
Cost of sales | 1,715.1 | 1,584.3 | 4,956.2 | 4,657.4 |
Cost of Reimbursable Expense | 57.3 | 42 | 140.7 | 163.5 |
Cost of Revenue | 1,772.4 | 1,626.3 | 5,096.9 | 4,820.9 |
Gross profit | 882.8 | 788.4 | 2,548.2 | 2,392.5 |
Selling, general and administrative expenses | 465.3 | 400.5 | 1,320 | 1,224.2 |
Amortization of intangibles and other assets | 54.6 | 41.1 | 153.6 | 130.7 |
Net restructuring and other special charges | 21.6 | 22.8 | 64.6 | 48.6 |
Operating Income (Loss) | 341.3 | 324 | 1,010 | 989 |
Other income (expenses): | ||||
Interest expense | (59.9) | (58.2) | (167.3) | (166.2) |
Equity method income, net | 3.2 | 2.6 | 10 | 5.9 |
Investment income | 0.7 | 0.6 | 1.4 | 1.5 |
Other, net | (4.2) | (5.6) | (8.2) | (1.3) |
Earnings before income taxes | 281.1 | 263.4 | 845.9 | 828.9 |
Provision for income taxes | 97.7 | 83.6 | 281.1 | 280.3 |
Net earnings | 183.4 | 179.8 | 564.8 | 548.6 |
Less: Net earnings attributable to the noncontrolling interest | (2.8) | (0.3) | (3.4) | (0.9) |
Net earnings attributable to Laboratory Corporation of America Holdings | $ 180.6 | $ 179.5 | $ 561.4 | $ 547.7 |
Basic earnings per common share (in dollars per share) | $ 1.77 | $ 1.74 | $ 5.48 | $ 5.36 |
Diluted earnings per common share (in dollars per share) | $ 1.74 | $ 1.71 | $ 5.40 | $ 5.25 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue, Net | $ 2,597.9 | $ 2,372.7 | $ 7,504.4 | $ 7,049.9 |
Net restructuring and other special charges | 21.6 | 22.8 | 64.6 | 48.6 |
Provision for income taxes | 97.7 | 83.6 | 281.1 | 280.3 |
Net earnings | 183.4 | 179.8 | 564.8 | 548.6 |
Other Comprehensive Earnings, Net of Tax | ||||
Foreign currency translation adjustments | 59.7 | (27.4) | 276.3 | 11.7 |
Net benefit plan adjustments | (1.2) | |||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, before Tax | 2.3 | (1.6) | 3.4 | (0.5) |
Other comprehensive earnings (loss) before tax | 62 | (29) | 279.7 | 11.2 |
Tax effect of adjustments | (20.2) | 8.3 | (41.1) | (21.8) |
Other comprehensive earnings (loss), net of tax | 41.8 | (20.7) | 238.6 | (10.6) |
Comprehensive earnings | 225.2 | 159.1 | 803.4 | 538 |
Less: Net earnings attributable to the noncontrolling interest | (2.8) | (0.3) | (3.4) | (0.9) |
Comprehensive earnings attributable to Laboratory Corporation of America Holdings | $ 222.4 | $ 158.8 | $ 800 | $ 537.1 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Millions | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income [Member] |
BALANCE at Dec. 31, 2015 | $ 4,945.1 | $ 12 | $ 1,974.5 | $ 4,223.7 | $ (978.1) | $ (287) |
Net earnings attributable to Laboratory Corporation of America Holdings | 547.7 | 547.7 | ||||
Other comprehensive earnings, net of tax | (10.6) | (10.6) | ||||
Issuance of common stock under employee stock plans | 67.4 | 0.1 | 67.3 | |||
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 | ||||
Purchase of common stock | (12.1) | (2,130.3) | (4,771.4) | |||
BALANCE at Sep. 30, 2016 | 5,604.5 | (1,011.7) | (297.6) | |||
BALANCE at Dec. 31, 2016 | 5,505.8 | 12.1 | 2,131.7 | 4,955.8 | (1,012.7) | (581.1) |
Net earnings attributable to Laboratory Corporation of America Holdings | 561.4 | 561.4 | ||||
Other comprehensive earnings, net of tax | 238.6 | 0 | 238.6 | |||
Other Significant Noncash Transaction, Value of Consideration Given | 65.2 | |||||
Issuance of common stock under employee stock plans | 46.5 | 0.1 | 65.1 | |||
Surrender of restricted stock and performance share awards | (46.5) | |||||
Conversion of zero-coupon convertible debt | 13.7 | 13.7 | ||||
Stock compensation | 85.8 | 85.8 | ||||
Purchase of common stock | (298.1) | 0.2 | 297.9 | |||
BALANCE at Sep. 30, 2017 | $ 6,125.9 | $ 12 | $ 1,998.4 | $ 5,517.2 | $ (1,059.2) | $ (342.5) |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from revolving credit facilities | $ 1,323.7 | $ 0 | |
Noncontrolling interest distributions | (0.8) | (1.7) | |
Deferred payments on acquisitions | (1.6) | (4.9) | |
Proceeds from Issuance of Long-term Debt | $ 0 | 1,200 | |
Repayments of Long-term Capital Lease Obligations | (6) | (6) | |
Net proceeds from issuance of stock to employees | 65.2 | 67.4 | |
Payments for Repurchase of Common Stock | (298.1) | 0 | |
Repayments of Senior Debt | (500) | (325) | |
Payments On Zero Coupon Subordinated Notes | (33.8) | (31.5) | |
Proceeds from Issuance of Other Long-term Debt | 0 | ||
Repayments of Lines of Credit | (1,323.7) | ||
Repayments of Other Long-term Debt | (50) | ||
Line of Credit Facility Payment | 0 | 0 | |
Payments of Debt Issuance Costs | 0 | (13.6) | |
Net cash provided by (used for) financing activities | 1,111.3 | (301.7) | |
Proceeds from (Repayments of) Other Long-term Debt | 750 | ||
Proceeds from Issuance of Other Long-term Debt | 0 | ||
Net earnings | 179.8 | 564.8 | 548.6 |
Earnings before income taxes | 263.4 | 845.9 | 828.9 |
Accreted interest on zero-coupon subordinated notes | 0.3 | 1.3 | |
Proceeds from Sale of Equity Method Investments | 0 | 13.5 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 388.2 | 368.9 | |
Stock compensation | 85.8 | 81.9 | |
Loss on sale of assets | 2.3 | (2.3) | |
Cumulative earnings in excess of distributions from equity method investments | (0.4) | 0.4 | |
Asset Impairment Charges | 23.5 | 0 | |
Deferred income taxes | (0.1) | 5.2 | |
Change in assets and liabilities (net of effects of acquisitions): | |||
Increase in accounts receivable (net) | (83) | (109.2) | |
Increase (Decrease) in Unbilled Receivables | (40.5) | (59.7) | |
Increase in inventories | (6.4) | (4.8) | |
Decrease in prepaid expenses and other | (23.8) | (19.5) | |
Decrease in accounts payable | 29.6 | (56.3) | |
Increase (Decrease) in Deferred Revenue | 10 | 23.4 | |
Increase (Decrease) in Accrued Liabilities and Other Operating Liabilities | (54.9) | (50.9) | |
Net cash provided by operating activities | 895.4 | 727 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Capital expenditures | (216.8) | (204.6) | |
Proceeds from sale of assets | 1.2 | 23.9 | |
Line of Credit Facility Payment | 0 | 0 | |
Payments to Acquire Intangible Assets | 2.3 | 0 | |
Investments in equity affiliates | (33.2) | (12.1) | |
Acquisition of businesses, net of cash acquired | (1,799.3) | (396.8) | |
Net cash used for investing activities | (2,050.4) | (576.1) | |
Proceeds from Issuance of Long-term Debt | 0 | 1,200 | |
Effect of exchange rate changes on cash and cash equivalents | 19.4 | 2 | |
Net increase (decrease) in cash and cash equivalents | (24.3) | (148.8) | |
Cash and cash equivalents at beginning of period | 433.6 | 716.4 | |
Cash and cash equivalents at end of period | $ 567.6 | $ 409.3 | $ 567.6 |
BASIS OF FINANCIAL STATEMENT PR
BASIS OF FINANCIAL STATEMENT PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | BASIS OF FINANCIAL STATEMENT PRESENTATION Laboratory Corporation of America ® Holdings together with its subsidiaries (the Company) is a leading global life sciences company that is deeply integrated in guiding patient care, providing comprehensive clinical laboratory and end-to-end drug development services. The Company’s mission is to improve health and improve lives by delivering world-class diagnostic solutions, bringing innovative medicines to patients faster and using technology to improve the delivery of care. The Company serves a broad range of customers, including managed care organizations (MCOs), biopharmaceutical companies, governmental agencies, physicians and other healthcare providers (e.g., physician assistants and nurse practitioners, generally referred to herein as physicians), hospitals and health systems, employers, patients and consumers, contract research organizations, food and nutritional companies and independent clinical laboratories. The Company believes that it generated more revenue from laboratory testing than any other company in the world in 2016. The Company reports its business in two segments, LabCorp Diagnostics (LCD) and Covance Drug Development (CDD). For further financial information about these segments, see Note 14 (Business Segment Information). During the three months ended September 30, 2017 , LCD and CDD contributed 70.7% and 29.3% , respectively, of net revenues to the Company. During the nine months ended September 30, 2017 , LCD and CDD contributed 71.3% and 28.7% , respectively, of net revenues to the Company. The condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries for which it exercises control. Long-term investments in affiliated companies in which the Company exercises significant influence, but which it does not control, are accounted for using the equity method. Investments in which the Company does not exercise significant influence (generally, when the Company has an investment of less than 20.0% and no representation on the investee's board of directors) are accounted for using the cost method. All significant inter-company transactions and accounts have been eliminated. The Company does not have any variable interest entities or special purpose entities whose financial results are not included in the condensed consolidated financial statements. The financial statements of the Company's operating foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average monthly exchange rates prevailing during the period. Resulting translation adjustments are included in “Accumulated other comprehensive income.” The accompanying condensed consolidated financial statements of the Company are unaudited. In the opinion of management, all adjustments necessary for a fair statement of results of operations, cash flows and financial position have been made. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. Interim results are not necessarily indicative of results for a full year. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles. The condensed consolidated financial statements and notes are presented in accordance with the rules and regulations of the Securities and Exchange Commission and do not contain certain information included in the Company’s 2016 Annual Report on Form 10-K. Therefore, the interim statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued the converged standard on revenue recognition with the objective of providing a single, comprehensive model for all contracts with customers to improve comparability in the financial statements of companies reporting using International Financial Reporting Standards and U.S. Generally Accepted Accounting Principles (GAAP). The standard contains principles that an entity must apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity must recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. An entity can apply the revenue standard retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings. The standard will be effective for the Company beginning January 1, 2018. The Company plans to adopt the full retrospective method effective January 1, 2018, and is continuing to evaluate the expected impact of the standard. Currently, the Company has completed the initial adoption analysis for LCD and expects this standard to impact LCD margins due to the recording of LCD bad debt expense against net revenues (versus selling, general and administrative expense) as an implicit price reduction. The Company has also completed the initial adoption analysis for each of the major revenue streams within CDD and expects this standard to also increase CDD reported revenue and decrease margins due to the inclusion of reimbursable out-of-pocket expenses in net revenues and net cost of sales, as well as the recognition of fees paid to investigators in net revenues and net costs of sales. In addition, the Company expects the timing of revenue recognition in the clinical business to accelerate, as revenue from study-related change orders and fixed price gains is recognized as the performance obligation is satisfied over the service period (versus the Company's current practice of lump-sum recognition at the point a signed change order is received or when studies are near completion). The Company is currently performing a detailed contract review which must be completed before it can quantify the expected impact of the standard. The Company also anticipates enhanced financial statement disclosures surrounding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In January 2016, the FASB issued a new accounting standard that addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. A financial instrument is defined as cash, evidence of ownership interest in a company or other entity, or a contract that both: (i) imposes on one entity a contractual obligation either to deliver cash or another financial instrument to a second entity or to exchange other financial instruments on potentially unfavorable terms with the second entity, and (ii) conveys to that second entity a contractual right either to receive cash or another financial instrument from the first entity or to exchange other financial instruments on potentially favorable terms with the first entity. The standard will be effective for the Company beginning January 1, 2018, with early adoption permitted. The Company is evaluating the impact that this new standard will have on the consolidated financial statements. In February 2016, the FASB issued a new accounting standard that sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for based on guidance similar to current guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The standard is effective on January 1, 2019, with early adoption permitted. The Company has selected its leasing software solution and is evaluating the impact that this new standard will have on the consolidated financial statements. In June 2016, the FASB issued a new accounting standard intended to provide financial statement users with more decision-useful information about expected credit losses and other commitments to extend credit held by the reporting entity. The standard replaces the incurred loss impairment methodology in current GAAP with one that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The update is effective on January 1, 2020, with early adoption permitted. The Company is currently evaluating the impact this new standard will have on the consolidated financial statements. In August 2016, the FASB issued a new accounting standard that will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. This update is effective on January 1, 2018, and will require adoption on a retrospective basis. The Company expects the adoption of this standard to reclassify interest paid upon conversion of its zero-coupon subordinated notes from a financing activity to an operating activity and potentially to impact the classification of deferred acquisition payments depending upon timing and amount of final payout. In January 2017, the FASB issued a new accounting standard that changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. This update is effective on January 1, 2018, with early adoption permitted. This adoption of this standard is not expected to have a material impact on the consolidated financial statements. In January 2017, the FASB issued a new accounting standard that eliminates Step 2 of the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The update is effective for public business entities for the first interim and annual reporting periods beginning after January 1, 2020 with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has adopted this standard effective January 1, 2017, and will utilize this approach for the annual goodwill impairment test performed in the fourth quarter. In March 2017, the FASB issued a new accounting standard that requires employers that present a measure of operating income in their statement of income to include only the service cost component of net periodic pension cost and net periodic post-retirement benefit cost in operating expenses with other employee compensation costs. The other components of net benefit cost, including amortization of prior service cost/credit, and settlement and curtailment effects are to be included in non-operating expenses. This update is effective on January 1, 2018, with early adoption permitted. The Company expects that the adoption of this standard will reduce operating margin due to the service cost remaining in operating expenses with no offset from the other components of net pension cost. This will have no impact on net earnings. In May 2017, the FASB issued a new accounting standard that amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. This update is effective on January 1, 2018, with early adoption permitted and should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact this new standard will have on the consolidated financial statements. In July 2017, the FASB issued a new accounting standard intended to reduce the complexity associated with the issuer's accounting for certain financial instruments with characteristics of liabilities and equity. Specifically, a down round feature would no longer cause a free-standing equity-linked financial instrument (or embedded conversion option) to be accounted for as a derivative liability at fair value with changes in fair value recognized in current earnings. This update is effective on January 1, 2019, with early adoption permitted and the option to use the retrospective or modified retrospective adoption method. The Company is currently evaluating the impact this new standard will have on the consolidated financial statements. In August 2017, the FASB issued a new accounting standard intended to more closely align hedge accounting with companies' risk management strategies, simplify the application of hedge accounting and increase transparency as to the scope and results of hedging programs. As a result, more hedging strategies will be eligible for hedge accounting. This update is effective on January 1, 2019, with early adoption permitted. The Company is currently evaluating the impact this new standard will have on the consolidated financial statements. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share is computed by dividing net earnings attributable to Laboratory Corporation of America Holdings by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net earnings including the impact of dilutive adjustments by the weighted average number of common shares outstanding plus potentially dilutive shares, as if they had been issued at the earlier of the date of issuance or the beginning of the period presented. Potentially dilutive common shares result primarily from the Company’s outstanding stock options, restricted stock awards, restricted stock units, performance share awards, and shares issuable upon conversion of zero-coupon subordinated notes. The following represents a reconciliation of basic earnings per share to diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 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 $ 180.6 102.2 $ 1.77 $ 179.5 102.9 $ 1.74 $ 561.4 102.4 $ 5.48 $ 547.7 102.3 $ 5.36 Dilutive effect of employee stock options and awards — 1.4 — 1.5 — 1.4 — 1.4 Effect of convertible debt — 0.1 — 0.5 — 0.1 — 0.5 Diluted earnings per share: Net earnings including impact of dilutive adjustments $ 180.6 $ 103.7 $ 1.74 $ 179.5 $ 104.9 $1.71 $ 561.4 $ 103.9 $5.40 $ 547.7 $ 104.2 $ 5.25 The following table summarizes the potential common shares not included in the computation of diluted earnings per share because their impact would have been antidilutive: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Stock options 0.1 — 0.1 — |
RESTRUCTURING AND OTHER SPECIAL
RESTRUCTURING AND OTHER SPECIAL CHARGES | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | RESTRUCTURING AND OTHER SPECIAL CHARGES During the first nine months of 2017 , the Company recorded net restructuring and other special charges of $64.6 ; $14.1 within LCD and $50.5 within CDD. The charges were comprised of $27.2 related to severance and other personnel costs along with $17.9 in costs associated with facility closures and general integration initiatives. The charges were offset by the reversal of previously established reserves of $1.5 , primarily in unused severance reserves. The Company also recognized asset impairment losses of $20.9 related to the termination of software development projects within the CDD segment and the forgiveness of certain indebtedness for LCD customers in areas heavily impacted by hurricanes during the third quarter. The Company incurred legal and other costs of $29.8 relating to recent acquisition activity. The Company also recorded $8.0 in consulting expenses relating to Covance Inc. (Covance) and Chiltern integration activities, along with $0.9 in short-term equity retention arrangements relating to the Covance acquisition. In addition, the Company incurred $8.2 of non-capitalized costs associated with the implementation of a major system as part of its LaunchPad business process improvement initiative (all recorded in selling, general and administrative expenses). During the first nine months of 2016, the Company recorded net restructuring and other special charges of $48.6 ; $9.7 within LCD and $38.9 within CDD. The charges were comprised of $23.1 related to severance and other personnel costs along with $30.7 in costs associated with facility closures. A substantial portion of these costs relate to the planned closure of duplicative data center operations. The Company reversed previously established reserves of $2.4 in unused severance reserves primarily as the result of selling one of CDD's minimum volume contract facilities to a third party and $2.8 for costs related to unused facilities. The Company incurred additional legal and other costs of $4.0 relating to the wind-down of its minimum volume contract operations and incurred $7.4 in acquisition fees and expenses. The Company also recorded $5.5 in consulting expenses relating to fees incurred as part of its integration and compensation analysis, along with $2.3 in short-term equity retention arrangements relating to the Covance acquisition and $7.4 of accelerated equity compensation relating to the announced retirement of a Company executive. In addition, the Company incurred $8.1 of non-capitalized costs associated with the implementation of a major system as part of LaunchPad (all recorded in selling, general and administrative expenses). In conjunction with certain international legal entity tax structuring, the Company recorded a one-time tax liability of $1.1 . The Company also incurred $5.6 of interest expense relating to the early retirement of subsidiary indebtedness assumed as part of its acquisition of Sequenom, Inc. (Sequenom). The following represents the Company’s restructuring reserve activities for the period indicated: 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, 2016 $ 7.5 $ 14.1 $ 28.2 $ 32.5 $ 82.3 Restructuring charges 8.7 5.9 18.5 33.0 66.1 Reduction of prior restructuring accruals (0.4 ) (0.1 ) (0.9 ) (0.1 ) (1.5 ) Cash payments and other adjustments (13.7 ) (6.7 ) (34.1 ) (29.1 ) (83.6 ) Balance as of September 30, 2017 $ 2.1 $ 13.2 $ 11.7 $ 36.3 $ 63.3 Current $ 29.1 Non-current 34.2 $ 63.3 Certain restructuring reserves for lease and other facility costs, totaling $ 9.8 as of December 31, 2016, have been reclassified from the LCD segment to the CDD segment. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS The changes in the carrying amount of goodwill for the nine-month period ended September 30, 2017 and for the year ended December 31, 2016 are as follows: LCD CDD Total September 30, December 31, 2016 September 30, December 31, 2016 September 30, December 31, 2016 Balance as of January 1 $ 3,644.8 $ 3,137.7 $ 2,779.6 $ 3,064.4 $ 6,424.4 $ 6,202.1 Goodwill acquired during the period 140.6 398.3 676.6 — 817.2 398.3 Adjustments to goodwill (4.6 ) 108.8 88.1 (284.8 ) 83.5 (176.0 ) Balance at end of period $ 3,780.8 $ 3,644.8 $ 3,544.3 $ 2,779.6 $ 7,325.1 $ 6,424.4 The components of identifiable intangible assets are as follows: September 30, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Customer relationships $ 4,297.2 $ (970.5 ) $ 3,326.7 $ 3,275.3 $ (855.2 ) $ 2,420.1 Patents, licenses and technology 455.5 (181.9 ) 273.6 395.3 (163.3 ) 232.0 Non-compete agreements 77.4 (47.3 ) 30.1 53.0 (42.1 ) 10.9 Trade names 439.8 (162.7 ) 277.1 406.3 (141.6 ) 264.7 Land use right 10.0 (2.3 ) 7.7 10.0 (1.4 ) 8.6 Canadian licenses 500.1 — 500.1 464.2 — 464.2 $ 5,780.0 $ (1,364.7 ) $ 4,415.3 $ 4,604.1 $ (1,203.6 ) $ 3,400.5 Amortization of intangible assets for the three-month periods ended September 30, 2017 and 2016 was $54.6 and $41.1 , respectively, and $153.6 and $130.7 for the nine-month periods ended September 30, 2017 and 2016. Amortization expense for the net carrying amount of intangible assets is estimated to be $59.9 for the remainder of fiscal 2017 , $ 227.8 in fiscal 2018 , $220.3 in fiscal 2019 , $213.0 in fiscal 2020 , $209.8 in fiscal 2021 and $2,506.7 thereafter. Based upon performance in the first nine months of 2017, the Company will continue to monitor the financial performance of, and assumptions for, two of the CDD reporting units for which an income approach for goodwill impairment was performed in 2016. A future impairment charge for goodwill or intangible assets could have a material effect on the Company's operating income as presented in its Consolidated Statement of Operations. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Short-term borrowings and the current portion of long-term debt at September 30, 2017 and December 31, 2016 consisted of the following: September 30, December 31, 2016 Zero-coupon convertible subordinated notes $ 8.9 $ 42.4 2.20% senior notes due 2017 — 500.0 Debt issuance costs (1.1 ) (1.3 ) Current portion of capital leases 8.4 8.4 Current portion of note payable 1.9 — Total short-term borrowings and current portion of long-term debt $ 18.1 $ 549.5 Long-term debt at September 30, 2017 and December 31, 2016 consisted of the following: September 30, December 31, 2016 2.50% senior notes due 2018 $ 400.0 $ 400.0 2.625% senior notes due 2020 500.0 500.0 4.625% senior notes due 2020 617.1 614.6 3.20% senior notes due 2022 500.0 500.0 3.75% senior notes due 2022 500.0 500.0 4.00% senior notes due 2023 300.0 300.0 3.25% senior notes due 2024 600.0 — 3.60% senior notes due 2025 1,000.0 1,000.0 3.60% senior notes due 2027 600.0 — 4.70% senior notes due 2045 900.0 900.0 Revolving credit facility — — 2014 Term loan 515.0 565.0 2017 Term loan 750.0 — Debt issuance costs (50.5 ) (43.0 ) Capital leases 59.3 56.2 Note payable 9.4 7.2 Total long-term debt $ 7,200.3 $ 5,300.0 Senior Notes On August 22, 2017, the Company issued new senior notes representing $ 1,200.0 in debt securities and consisting of a $ 600.0 aggregate principal amount of 3.25% senior notes due 2024 and a $ 600.0 aggregate principal amount of 3.60% senior notes due 2027. Interest on these notes is payable semi-annually on March 1 and September 1 of each year, commencing on March 1, 2018. Net proceeds from the offering of these notes were $ 1,190.1 after deducting underwriting discounts and other expenses of the offering. Net proceeds were used to pay off the 2.20% senior notes due August 23, 2017, as well as a portion of the cash consideration and the fees and expenses in connection with the Chiltern acquisition. On September 30, 2016, the Company announced the successful completion of the consent solicitations for the 5.00% convertible senior notes due 2017 and 2018, totaling $130.0 , assumed as part of the 2016 acquisition of Sequenom. On October 20, 2016, the Company retired $129.9 of these outstanding notes, and paid an additional $5.6 relating to the early retirement of the subsidiary indebtedness (recorded as interest expense in the Condensed Consolidated Statement of Operations). During the third quarter of 2013, the Company entered into two fixed-to-variable interest rate swap agreements for its 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 and added to the value of the senior notes, with an aggregate fair value of $ 17.1 at September 30, 2017 and $14.6 at December 31, 2016 . Zero-Coupon Subordinated Notes On September 11, 2017, the Company announced that for the period from September 11, 2017 to March 11, 2018, 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 8, 2017, in addition to the continued accrual of the original issue discount. During the nine months ended September 30, 2017 , the Company settled notices to convert $22.8 aggregate principal amount at maturity of its zero-coupon subordinated notes with a conversion value of $66.2 . The total cash used for these settlements was $33.8 and the Company also issued 0.2 shares of common stock. As a result of these conversions, the Company also reversed deferred tax liabilities of $13.7 . On October 2, 2017, 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 October 2, 2017 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 Friday, December 29, 2017. 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 revolving credit facility. Credit Facilities As part of its financing of the Covance acquisition, the Company entered into a $1,000.0 term loan in December 2014, as amended on July 13, 2016, and further amended on September 15, 2017. On September 15, 2017, the Company entered into a new $750.0 term loan. The 2017 term loan facility will mature on September 15, 2022. The 2014 term loan balance at September 30, 2017 was $515.0 and at December 31, 2016 was $565.0 . The 2017 term loan balance at September 30, 2017 was $750.0 . The Company entered into a senior revolving credit facility on December 21, 2011, which was amended and restated on December 19, 2014, further amended on July 13, 2016, and further amended and restated on September 15, 2017. The senior revolving credit facility consists of a five-year revolving facility in the principal amount of up to $1,000.0 , with the option of increasing the facility by up to an additional $350.0 , subject to the agreement of one or more new or existing lenders to provide such additional amounts and certain other customary conditions. The revolving credit facility also provides for a subfacility of up to $100.0 for swing line borrowings and a subfacility of up to $150.0 for issuances of letters of credit. The revolving credit facility is permitted to be used for general corporate purposes, including working capital, capital expenditures, funding of share repurchases and certain other payments, and acquisitions and other investments. The outstanding balance on the Company's revolving credit facility was $0.0 and $0.0 at September 30, 2017 and December 31, 2016 , respectively. Under the term loan facilities and the revolving credit facility, the Company is subject to negative covenants limiting subsidiary indebtedness and certain other covenants typical for investment grade-rated borrowers, and the Company is required to maintain certain leverage ratios. The Company was in compliance with all covenants in the term loan facilities and the revolving credit facility at September 30, 2017 . As of September 30, 2017 , the ratio of total debt to consolidated proforma trailing 12 month EBITDA was 3.5 to 1.0. The 2014 term loan credit facility accrues interest at a per annum rate equal to, at the Company’s election, either a LIBOR rate plus a margin ranging from 1.125% to 2.00% , or a base rate determined according to a prime rate or federal funds rate plus a margin ranging from 0.125% to 1.00% . The 2017 term loan credit facility accrues interest at a per annum rate equal to, at the Company’s election, either a LIBOR rate plus a margin ranging from 0.875% to 1.50% , or a base rate determined according to a prime rate or federal funds rate plus a margin ranging from 0.0% to 0.50% . Advances under the revolving credit facility will accrue interest at a per annum rate equal to, at the Company’s election, either a LIBOR rate plus a margin ranging from 0.775% to 1.25% , or a base rate determined according to a prime rate or federal funds rate plus a margin ranging from 0.00% to 0.25% . Fees are payable on outstanding letters of credit under the revolving credit facility at a per annum rate equal to the applicable margin for LIBOR loans, and the Company is required to pay a facility fee on the aggregate commitments under the revolving credit facility, at a per annum rate ranging from 0.10% to 0.25% . The interest margin applicable to the credit facilities, and the facility fee and letter of credit fees payable under the revolving credit facility, are based on the Company’s senior credit ratings as determined by Standard & Poor’s and Moody’s. As of September 30, 2017 , the effective interest rate on the revolving credit facility was 2.21% , the effective interest rate on the 2014 term loan was 2.49% and the effective interest rate on the 2017 term loan was 2.36% . |
PREFERRED STOCK AND COMMON SHAR
PREFERRED STOCK AND COMMON SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Preferred Stock and Common Shareholders' Equity | PREFERRED STOCK AND COMMON SHAREHOLDERS’ EQUITY The Company is authorized to issue up to 265.0 shares of common stock, par value $0.10 per share. The Company’s treasury shares are recorded at aggregate cost. The Company is authorized to issue up to 30.0 shares of preferred stock, par value $0.10 per share. There were no preferred shares outstanding as of September 30, 2017 and December 31, 2016. The changes in common shares issued and held in treasury are summarized below: Issued Held in Treasury Outstanding Common shares at December 31, 2016 125.6 (22.9 ) 102.7 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 ) Retirement of common stock (2.1 ) — (2.1 ) Common shares at September 30, 2017 125.3 (23.2 ) 102.1 Share Repurchase Program At the end of 2016, the Company had outstanding authorization from the board of directors to purchase up to $739.5 of Company common stock. During the nine months ended September 30, 2017 , the Company purchased 2.2 shares of its common stock at a total cost of $298.1 (inclusive of 0.1 shares of common stock at a cost of $6.0 representing committed purchases as of December 31, 2016 that settled in early 2017). As of September 30, 2017 , the Company had outstanding authorization from the board of directors to purchase up to $447.4 of Company common stock. The repurchase authorization has no expiration. Accumulated Other Comprehensive Earnings The components of accumulated other comprehensive earnings are as follows: Foreign Currency Translation Adjustments Net Benefit Plan Adjustments Accumulated Other Comprehensive Earnings (Loss) Balance at December 31, 2016 $ (470.7 ) $ (110.4 ) $ (581.1 ) Other comprehensive earnings before reclassifications 276.3 4.6 280.9 Amounts reclassified from accumulated other comprehensive earnings to the Condensed Consolidated Statement of Operations (a) — (1.2 ) (1.2 ) Tax effect of adjustments (39.1 ) (2.0 ) (41.1 ) Balance at September 30, 2017 $ (233.5 ) $ (109.0 ) $ (342.5 ) (a) The amortization of prior service cost is included in the computation of net periodic benefit cost. See Note 10 (Pension and Post-retirement Plans) below for additional information regarding the Company's net periodic benefit cost. In the first quarter of 2016, the Company finalized measurement period adjustments relating to the Covance acquisition and incorrectly recorded them retrospectively to the interim periods in 2015. The final measurement period adjustments consisted of foreign cumulative translation adjustments related to the final allocation of goodwill and intangibles to the applicable international geographies which were completed in the first quarter of 2016. In order to record these adjustments in the correct accounting period, the Company reduced the foreign currency translation adjustment by $80.4 in its first quarter 2016 Statement of Comprehensive Income, in accordance with Accounting Standards Update 2015-16 Simplifying the Accounting for Measurement-Period Adjustments. The Company concluded that the correction of this error was not material individually or in the aggregate to the prior period noted. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company does not recognize a tax benefit unless the Company concludes that it is more likely than not that the benefit will be sustained on audit by the taxing authority based solely on the technical merits of the associated tax position. If the recognition threshold is met, the Company recognizes a tax benefit measured at the largest amount of the tax benefit that the Company believes is greater than 50% likely to be realized. The gross unrecognized income tax benefits were $14.6 and $18.4 at September 30, 2017 and December 31, 2016 , respectively. It is anticipated that the amount of the unrecognized income tax benefits will change within the next 12 months; however, these changes are not expected to have a significant impact on the results of operations, cash flows or the financial position of the Company. As of September 30, 2017 and December 31, 2016 , $14.6 and $18.4 , respectively, are the approximate amounts of gross unrecognized income tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. The Company recognizes interest and penalties related to unrecognized income tax benefits in income tax expense. Accrued interest and penalties related to uncertain tax positions totaled $6.9 and $9.9 as of September 30, 2017 and December 31, 2016 , respectively. The Company has substantially concluded all U.S. federal income tax matters for years through 2012. Substantially all material state and local and foreign income tax matters have been concluded through 2012 and 2009, respectively. The Internal Revenue Service concluded the examination of the Company's 2014 federal consolidated income tax return in 2016, which did not include Covance. Covance's 2013 federal consolidated income tax return is currently under examination by the Internal Revenue Service. The Canada Revenue Agency is currently examining the Company's Canadian subsidiaries' 2013 and 2014 tax returns. The Company has various state and foreign income tax examinations ongoing throughout the year. The Company believes adequate provisions have been recorded related to all open tax years. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES The Company is involved from time to time in various claims and legal actions, including arbitrations, class actions, and other litigation (including those described in more detail below), arising in the ordinary course of business. Some of these actions involve claims that are substantial in amount. These matters include, but are not limited to, intellectual property disputes; commercial and contract disputes; professional liability; employee-related matters; and inquiries, including subpoenas and other civil investigative demands, from governmental agencies and Medicare or Medicaid payers and MCOs reviewing billing practices or requesting comment on allegations of billing irregularities that are brought to their attention through billing audits or third parties. The Company receives civil investigative demands or other inquiries from various governmental bodies in the ordinary course of its business. Such inquiries can relate to the Company or other parties, including physicians and other healthcare providers. The Company works cooperatively to respond to appropriate requests for information. The Company also is named from time to time in suits brought under the qui tam provisions of the False Claims Act and comparable state laws. These suits typically allege that the Company has made false statements and/or certifications in connection with claims for payment from U.S. federal or state healthcare programs. The suits may remain under seal (hence, unknown to the Company) for some time while the government decides whether to intervene on behalf of the qui tam plaintiff. Such claims are an inevitable part of doing business in the healthcare field today. The Company believes that it is in compliance in all material respects with all statutes, regulations and other requirements applicable to its commercial laboratory operations and drug development support services. The healthcare diagnostics and drug development industries are, however, subject to extensive regulation, and the courts have not interpreted many of the applicable statutes and regulations. There can be no assurance, therefore, that the applicable statutes and regulations will not be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that would adversely affect the Company. Potential sanctions for violation of these statutes and regulations include significant fines; the loss of various licenses, certificates and authorizations; and/or exclusion from participation in government programs. Many of the current claims and legal actions against the Company are in preliminary stages, and many of these cases seek an indeterminate amount of damages. The Company records an aggregate legal reserve, which is determined using calculations based on historical loss rates and assessment of trends experienced in settlements and defense costs. In accordance with FASB Accounting Standards Codification Topic 450 “Contingencies,” the Company establishes reserves for judicial, regulatory, and arbitration matters outside the aggregate legal reserve if and when those matters present loss contingencies that are both probable and estimable and would exceed the aggregate legal reserve. When loss contingencies are not both probable and estimable, the Company does not establish separate reserves. The Company is unable to estimate a range of reasonably probable loss for the proceedings described in more detail below in which damages either have not been specified or, in the Company's judgment, are unsupported and/or exaggerated and (i) the proceedings are in early stages; (ii) there is uncertainty as to the outcome of pending appeals or motions; (iii) there are significant factual issues to be resolved; and/or (iv) there are novel legal issues to be presented. For these proceedings, however, the Company does not believe, based on currently available information, that the outcomes will have a material adverse effect on the Company's financial condition, though the outcomes could be material to the Company's operating results for any particular period, depending, in part, upon the operating results for such period. As previously reported, the Company reached a settlement in the previously disclosed lawsuit, California ex rel. Hunter Laboratories, LLC et al. v. Quest Diagnostics Incorporated, et al. (Hunter Labs Settlement Agreement), to avoid the uncertainty and costs associated with prolonged litigation. Pursuant to the executed Hunter Labs Settlement Agreement, the Company recorded a litigation settlement expense of $34.5 in the second quarter of 2011 (net of a previously recorded reserve of $15.0 ) and paid the settlement amount of $49.5 in the third quarter of 2011. The Company also agreed to certain reporting obligations regarding its pricing for a limited time period and, at the option of the Company in lieu of such reporting obligations, to provide Medi-Cal with a discount from Medi-Cal's otherwise applicable maximum reimbursement rate from November 1, 2011, through October 31, 2012. In 2011, the California legislature enacted Assembly Bill No. 97, which imposed a 10.0% Medi-Cal payment cut on most providers of healthcare services, including clinical laboratories. In 2012, the California legislature enacted Assembly Bill No. 1494, which directed the Department of Healthcare Services (DHCS) to establish new reimbursement rates for Medi-Cal commercial laboratory services based on payments made to California clinical laboratories for similar services by other third-party payers, and provided that until the new rates are set through this process, Medi-Cal payments for commercial laboratory services would be reduced (in addition to the 10.0% payment reduction imposed by Assembly Bill No. 97 in 2011) by “up to 10 percent” for tests with dates of service on or after July 1, 2012, with a cap on payments set at 80.0% of the lowest maximum allowance established under the Medicare program. Under the terms of the Hunter Labs Settlement Agreement, the enactment of this California legislation terminated the Company's reporting obligations (or obligation to provide a discount in lieu of reporting) under that agreement. In April 2015, CMS approved a 10.0% payment reduction under Assembly Bill No. 1494. The new rate methodology established new rates that were effective July 1, 2015, but these new rates were not entered into the state computer system until February 2016. The 2016 rates have been implemented. Recoupments associated with these changes have begun. Taken together, these changes are not expected to have a material impact on the Company's consolidated revenues or results of operations. As previously reported, the Company responded to an October 2007 subpoena from the U.S. Department of Health & Human Services Office of Inspector General's regional office in New York. On August 17, 2011, the United States District Court for the Southern District of New York unsealed a False Claims Act lawsuit, United States of America ex rel. NPT Associates v. Laboratory Corporation of America Holdings , which alleges that the Company offered UnitedHealthcare kickbacks in the form of discounts in return for Medicare business. The Plaintiff's Third Amended Complaint further alleges that the Company's billing practices violated the False Claims Acts of fourteen states and the District of Columbia. The lawsuit seeks actual and treble damages and civil penalties for each alleged false claim, as well as recovery of costs, attorney's fees, and legal expenses. Neither the U.S. government nor any state government has intervened in the lawsuit. The Company's Motion to Dismiss was granted in October 2014 and Plaintiff was granted the right to replead. On January 11, 2016, Plaintiff filed a motion requesting leave to file an amended complaint under seal and to vacate the briefing schedule for the Company's motion to dismiss, while the government reviews the amended complaint. The Court granted the motion and vacated the briefing dates. Plaintiff then filed an amended complaint under seal. The Company will vigorously defend the lawsuit. In addition, the Company has received various other subpoenas since 2007 related to Medicaid billing. In October 2009, the Company received a subpoena from the State of Michigan Department of Attorney General seeking documents related to its billing to Michigan Medicaid. In June 2010, the Company received a subpoena from the State of Florida Office of the Attorney General requesting documents related to its billing to Florida Medicaid. In October 2013, the Company received a civil investigative demand from the State of Texas Office of the Attorney General requesting documents related to its billing to Texas Medicaid. The Company is cooperating with these requests. On November 4, 2013, the State of Florida through the Office of the Attorney General filed an Intervention Complaint in a False Claims Act lawsuit, State of Florida ex rel. Hunter Laboratories, LLC and Chris Riedel v. Quest Diagnostics Incorporated, et al., in the Circuit Court for the Second Judicial Circuit for Leon County. The lawsuit, originally filed by a competitor laboratory, alleges that the Company overcharged Florida’s Medicaid program. The lawsuit sought actual and treble damages and civil penalties for each alleged false claim, as well as recovery of costs, attorney’s fees, and legal expenses. The Company's Motion to Dismiss was denied in February 2015. In December 2016, the Court granted the Company's Motion for Partial Summary Judgment. In April 2017, the Company filed a Motion for Summary Judgment. On June 19, 2017, the parties filed a Notice of Settlement in Principle. A Stipulation of Dismissal with Prejudice was filed on September 28, 2017. On May 2, 2013, the Company was served with a False Claims Act lawsuit, State of Georgia ex rel. Hunter Laboratories, LLC and Chris Riedel v. Quest Diagnostics Incorporated, et al. , filed in the State Court of Fulton County, Georgia. The lawsuit, filed by a competitor laboratory, alleges that the Company overcharged Georgia's Medicaid program. The State of Georgia filed a Notice of Declination on August 13, 2012, before the Company was served with the Complaint. The case was removed to the United States District Court for the Northern District of Georgia. The lawsuit seeks actual and treble damages and civil penalties for each alleged false claim, as well as recovery of costs, attorney's fees, and legal expenses. On March 14, 2014, the Company's Motion to Dismiss was granted. The Plaintiffs repled their complaint, and the Company filed a Motion to Dismiss the First Amended Complaint. In May 2015, the Court dismissed the Plaintiffs' anti-kickback claim and remanded the remaining state law claims to the State Court of Fulton County. In July 2015, the Company filed a Motion to Dismiss these remaining claims. The Plaintiffs filed an opposition to the Company's Motion to Dismiss in August 2015. Also, the State of Georgia filed a brief as amicus curiae. The Company will vigorously defend the lawsuit. On August 24, 2012, the Company was served with a putative class action lawsuit, Sandusky Wellness Center, LLC, et al. v. MEDTOX Scientific, Inc., et al. , filed in the United States District Court for the District of Minnesota. The lawsuit alleges that on or about February 21, 2012, the defendants violated the U.S. Telephone Consumer Protection Act (TCPA) by sending unsolicited facsimiles to Plaintiff and more than 39 other recipients without the recipients' prior express invitation or permission. The lawsuit seeks the greater of actual damages or the sum of $0.0005 for each violation, subject to trebling under the TCPA, and injunctive relief. In September of 2014, Plaintiff’s Motion for Class Certification was denied. In January of 2015, the Company’s Motion for Summary Judgment on the remaining individual claim was granted. Plaintiff filed a notice of appeal. On May 3, 2016, the United States Court of Appeals for the Eighth Circuit issued its decision and order reversing the District Court’s denial of class certification. The Eighth Circuit remanded the matter for further proceedings. On December 7, 2016, the District Court granted the Plaintiff’s renewed Motion for Class Certification. The Company will vigorously defend the lawsuit. On August 31, 2015, the Company was served with a putative class action lawsuit, Patty Davis v. Laboratory Corporation of America, et al., filed in the Circuit Court of the Thirteenth Judicial Circuit for Hillsborough County, Florida. The complaint alleges that the Company violated the Florida Consumer Collection Practices Act by billing patients who were collecting benefits under the Workers’ Compensation Statutes. The lawsuit seeks injunctive relief and actual and statutory damages, as well as recovery of attorney's fees and legal expenses. In April 2017, the Circuit Court granted the Company’s Motion for Judgment on the Pleadings. The Plaintiff has appealed the Circuit Court’s ruling to the Florida Second District Court of Appeal. The Company will vigorously defend the lawsuit. In December 2014, the Company received a Civil Investigative Demand issued pursuant to the U.S. False Claims Act from the U.S. Attorney’s Office for South Carolina, which requests information regarding remuneration and services provided by the Company to physicians who also received draw and processing/handling fees from competitor laboratories Health Diagnostic Laboratory, Inc. and Singulex, Inc. The Company is cooperating with the request. Prior to the Company’s acquisition of Sequenom, between August 15, 2016, and August 24, 2016, six putative class-action lawsuits were filed on behalf of purported Sequenom stockholders (captioned Malkoff v. Sequenom, Inc., et al., No. 16-cv-02054- JAH-BLM , Gupta v. Sequenom, Inc., et al ., No. 16-cv-02084-JAH-KSC, Fruchter v. Sequenom, Inc., et al ., No. 16-cv-02101- WQH-KSC, Asiatrade Development Ltd. v. Sequenom, Inc., et al. , No. 16-cv-02113-AJB-JMA, Nunes v. Sequenom, Inc., et al. , No. 16-cv-02128-AJB-MDD, and Cusumano v. Sequenom, Inc., et al. , No. 16-cv-02134-LAB-JMA) in the United States District Court for the Southern District of California challenging the acquisition transaction. The complaints asserted claims against Sequenom and members of its board of directors (the Individual Defendants). The Nunes action also named the Company and Savoy Acquisition Corp. (Savoy), a wholly owned subsidiary of the Company, as defendants. The complaints alleged that the defendants violated Sections 14(e), 14(d)(4) and 20 of the Securities Exchange Act of 1934 by failing to disclose certain allegedly material information. In addition, the complaints in the Malkoff action, Asiatrade action, and Cusumano action alleged that the Individual Defendants breached their fiduciary duties to Sequenom shareholders. The actions sought, among other things, injunctive relief enjoining the merger. On August 30, 2016, the parties entered into a Memorandum of Understanding (MOU) in each of the above-referenced actions. In connection with the settlement, Sequenom agreed to make certain additional disclosures to its stockholders. On September 6, 2016, the Court entered an order consolidating for all pre-trial purposes the six individual actions described above under the caption In re Sequenom, Inc. Shareholder Litig. , Lead Case No. 16-cv-02054-JAH-BLM, and designating the complaint from the Malkoff action as the operative complaint for the consolidated action. On November 11, 2016, two competing motions were filed by two separate stockholders (James Reilly and Shikha Gupta) seeking appointment as lead plaintiff under the terms of the Private Securities Litigation Reform Act of 1995. On June 7, 2017, the Court entered an order declaring Mr. Reilly as the lead plaintiff and approving Mr. Reilly’s selection of lead counsel. The parties agree that the prior MOU has been terminated. The Plaintiffs filed a Consolidated Amended Class Action Complaint on July 24, 2017, and the Defendants filed a Motion to Dismiss, which remains pending. The Company will vigorously defend the lawsuit. On August 3, 2016, the Company was served with a putative class action lawsuit, Daniel L. Bloomquist v. Covance Inc., et al. , filed in the Superior Court of California, County of San Diego. The complaint alleges that Covance Inc. violated the California Labor Code and California Business & Professions Code by failing to provide overtime wages, failing to provide meal and rest periods, failing to pay for all hours worked, failing to pay for all wages owed upon termination, and failing to provide accurate itemized wage statements to Clinical Research Associates and Senior Clinical Research Associates employed by Covance Inc. in California. The lawsuit seeks monetary damages, civil penalties, injunctive relief, and recovery of attorney's fees and costs. On October 13, 2016, the case was removed to the United States District Court for the Southern District of California. On May 3, 2017, the United States District Court for the Southern District of California remanded the case back to the Superior Court. The Company will vigorously defend the lawsuit. On February 7, 2017, Sequenom received a subpoena from the U.S. Securities and Exchange Commission (SEC) relating to an SEC investigation into the trading activity of Sequenom shares in connection with the Company’s July 2016 announcement regarding the Sequenom merger. On March 7, 2017, the Company received a similar subpoena. The Company is cooperating with these requests. On March 10, 2017, the Company was served with a putative class action lawsuit, Victoria Bouffard, et al. v. Laboratory Corporation of America Holdings , filed in the United States District Court for the Middle District of North Carolina. The complaint alleges that the Company’s patient list prices unlawfully exceed the rates negotiated for the same services with private and public health insurers in violation of various state consumer protection laws. The lawsuit also alleges breach of implied contract or quasi-contract, unjust enrichment, and fraud. The lawsuit seeks statutory, exemplary, and punitive damages, injunctive relief, and recovery of attorney's fees and costs. In May 2017, the Company filed a Motion to Dismiss Plaintiffs’ Complaint and Strike Class Allegation; this motion is currently pending. On October 10, 2017, a second putative class action lawsuit, Sheryl Anderson, et al. v. Laboratory Corporation of America Holdings , was filed in the United States District Court for the Middle District of North Carolina. The complaint contains similar allegations and seeks similar relief to the Bouffard complaint, and adds additional counts regarding state consumer protection laws. The Company will vigorously defend the lawsuits. On May 24, 2017, a putative class action lawsuit, Maria T. Gonzalez, et al. v. Examination Management Services, Inc. and Laboratory Corporation of America Holdings, was filed against the Company in the United States District Court for the Southern District of California. The complaint alleges that the Company misclassified phlebotomists as independent contractors through an arrangement with the co-Defendant temporary staffing agency. The complaint further alleges that the Company violated the California Labor Code and California Business and Professions Code by failing to pay minimum wage, failing to pay for all hours worked, failing to pay for all wages owed upon termination, and failing to provide accurate itemized wage statements. The lawsuit seeks monetary damages, civil penalties, injunctive relief, and recovery of attorney's fees and costs. The Company will vigorously defend the lawsuit. On August 8, 2017, a putative class action lawsuit, John Sealock, et al. v. Covance Market Access Services, Inc ., was filed in the United States District Court for the Southern District of New York. The complaint alleges that Covance Market Access Services, Inc. violated the Fair Labor Standards Act and New York labor laws by failing to provide overtime wages, failing to pay for all hours worked, and failing to provide accurate wage statements. The lawsuit seeks monetary damages, civil penalties, injunctive relief, and recovery of attorney’s fees and costs. The Company will vigorously defend the lawsuit. Under the Company's present insurance programs, coverage is obtained for catastrophic exposure as well as those risks required to be insured by law or contract. The Company is responsible for the uninsured portion of losses related primarily to general, professional and vehicle liability, certain medical costs and workers' compensation. The self-insured retentions are on a per-occurrence basis without any aggregate annual limit. Provisions for losses expected under these programs are recorded based upon the Company's estimates of the aggregated liability of claims incurred. As of September 30, 2017 , the Company had provided letters of credit aggregating approximately $66.0 , primarily in connection with certain insurance programs. The Company’s availability under its revolving credit facility is reduced by the amount of these letters of credit. |
PENSION AND POSTRETIREMENT PLAN
PENSION AND POSTRETIREMENT PLANS | 9 Months Ended |
Sep. 30, 2017 | |
Postemployment Benefits [Abstract] | |
Pension And Postretirement Plans | PENSION AND POST-RETIREMENT PLANS The Company’s defined contribution retirement plan (401K Plan) covers substantially all employees prior to the Covance and Chiltern acquisitions. All employees eligible for the 401K Plan receive a minimum 3% non-elective contribution concurrent with each payroll period. The 401K Plan also permits discretionary contributions by the Company of up to 1% and up to 3% of pay for eligible employees based on years of service with the Company. The cost of this plan was $14.9 and $13.0 for the three months ended September 30, 2017 and 2016, respectively, and was $43.6 and $40.2 during the nine months ended September 30, 2017 and 2016, respectively. As a result of the Covance acquisition, the Company also incurred expense of $14.0 and $12.6 for the Covance 401K plan during the three months ended September 30, 2017 and 2016, respectively, and $42.6 and $39.1 during the nine months ended September 30, 2017 and 2016, respectively. All of the Covance U.S. employees are eligible to participate in the discretionary Covance 401K plan, which features a maximum 4.5% Company match, based upon a percentage of the employee’s contributions. The Company also maintains a frozen defined benefit retirement plan (Company Plan), which as of December 31, 2009, covered substantially all employees. The benefits to be paid under the Company Plan are based on years of credited service through December 31, 2009, and ongoing interest credits. Effective January 1, 2010, the Company Plan was closed to new participants. The Company’s policy is to fund the Company Plan with at least the minimum amount required by applicable regulations. The Company maintains a second, unfunded, non-contributory, non-qualified defined benefit retirement plan (PEP), which as of December 31, 2009, covered substantially all of its senior management group. The PEP supplements the Company Plan and was closed to new participants effective January 1, 2010. The effect on operations for the Company Plan and the PEP is summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Service cost for administrative expenses $ 1.4 $ 1.2 $ 4.2 $ 3.6 Interest cost on benefit obligation 3.5 3.9 10.8 11.6 Expected return on plan assets (4.1 ) (4.2 ) (12.3 ) (12.5 ) Net amortization and deferral 2.7 2.8 8.3 8.4 Defined benefit plan costs $ 3.5 $ 3.7 $ 11.0 $ 11.1 During the three and nine months ended September 30, 2017 , the Company contributed $3.4 and $9.0 , respectively, to the Company Plan. As a result of the Covance acquisition, the Company also has a frozen non-qualified Supplemental Executive Retirement Plan (SERP). The SERP, which is not funded, is intended to provide retirement benefits for certain executive officers of the Company who were formerly employees of Covance. Benefit amounts are based upon years of service and compensation of the participating employees. The components of the net periodic pension cost for the three and nine months ended September 30, 2017 and September 30, 2016 are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Interest cost $ 0.1 $ 0.2 $ 0.2 $ 0.6 Settlement gain (0.1 ) — (0.3 ) — Net periodic pension cost $ — $ 0.2 $ (0.1 ) $ 0.6 The Company has assumed the obligations under a subsidiary’s post-retirement medical plan. Coverage under this plan is restricted to a limited number of existing employees of the subsidiary. The Company funds the plan through monthly contributions to a Health Reimbursement Arrangement, which can be used by eligible participants to purchase health care insurance through insurance exchanges. Effective January 1, 2017, Health Reimbursement Arrangement contributions for Medicare eligible participants ceased. The effect on operations of the post-retirement medical plan is shown in the following table: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Interest cost on benefit obligation 0.1 0.1 0.3 0.3 Net amortization and deferral (1.7 ) (4.2 ) (5.1 ) (12.0 ) Post-retirement medical plan benefits $ (1.6 ) $ (4.1 ) $ (4.8 ) $ (11.7 ) Also as a result of the Covance acquisition, the Company sponsors a post-employment retiree health and welfare plan for the benefit of eligible employees at certain U.S. subsidiaries who retire after satisfying service and age requirements. Effective January 1, 2017, this Plan ceased directly providing medical, prescription drug and dental coverage options previously available to eligible participants. Instead, the Company will fund the plan through monthly contributions to a Health Reimbursement Arrangement, which can be used by non-Medicare eligible participants to purchase health care insurance through insurance exchanges. The net periodic post-retirement benefit cost for the three months ended September 30, 2017 and 2016 was $0.5 and $0.4 , respectively, and was $1.5 and $1.2 for the nine months ended September 30, 2017 and 2016, respectively. As a result of the Covance acquisition, the Company sponsors two defined benefit pension plans for the benefit of its employees at two United Kingdom (U.K.) subsidiaries and one defined benefit pension plan for the benefit of its employees at a German subsidiary, all of which are legacy plans of previously acquired companies. Benefit amounts for all three plans are based upon years of service and compensation. The German plan is unfunded while the U.K. pension plans are funded. The Company’s funding policy has been to contribute annually amounts at least equal to the local statutory funding requirements. U.K. Plans Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Service cost for administrative expenses $ 1.0 $ 0.7 $ 2.8 $ 2.3 Interest cost on benefit obligation 1.9 2.0 5.6 6.5 Expected return on plan assets (2.9 ) (2.8 ) (8.5 ) (9.0 ) Net (gain) from prior periods 0.2 — 0.5 — Defined benefit plan costs $ 0.2 $ (0.1 ) $ 0.4 $ (0.2 ) Assumptions used to determine defined benefit plan cost Discount rate 2.7 % 3.8 % 2.7 % 3.8 % Expected return on assets 4.7 % 5.6 % 4.7 % 5.6 % Salary increases 3.8 % 3.6 % 3.8 % 3.6 % German Plan Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Service cost for administrative expenses $ 0.3 $ 0.2 $ 0.8 $ 0.7 Interest cost on benefit obligation 0.1 0.2 0.4 0.5 Defined benefit plan costs $ 0.4 $ 0.4 $ 1.2 $ 1.2 Assumptions used to determine defined benefit plan cost Discount rate 1.7 % 2.5 % 1.7 % 2.5 % Expected return on assets N/A N/A N/A N/A Salary increases 2.0 % 2.0 % 2.0 % 2.0 % |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company’s population of financial assets and liabilities subject to fair value measurements as of September 30, 2017 and December 31, 2016 is as follows: Fair Value Measurements as of Fair Value as of September 30, 2017 Using Fair Value Hierarchy September 30, 2017 Level 1 Level 2 Level 3 Noncontrolling interest put $ 16.5 $ — $ 16.5 $ — Interest rate swap 17.1 — 17.1 — Cash surrender value of life insurance policies 60.6 — 60.6 — Deferred compensation liability 62.1 — 62.1 — Contingent consideration 16.0 — — 16.0 Fair Value Measurements as of Fair Value as of December 31, 2016 Using Fair Value Hierarchy December 31, 2016 Level 1 Level 2 Level 3 Noncontrolling interest put $ 15.2 $ — $ 15.2 $ — Interest rate swap 14.6 — 14.6 — Cash surrender value of life insurance policies 53.6 — 53.6 — Deferred compensation liability 54.2 — 54.2 — Contingent consideration 16.0 — — 16.0 The Company has a noncontrolling interest put related to its Ontario subsidiary that has been classified as mezzanine equity in the Company’s condensed consolidated balance sheets. The noncontrolling interest put is valued at its contractually determined value, which approximates fair value. The Company offers certain employees the opportunity to participate in an employee-funded deferred compensation plan (DCP). A participant's deferrals are allocated by the participant to one or more of 22 measurement funds, which are indexed to externally managed funds. From time to time, to offset the cost of the growth in the participant's investment accounts, the Company purchases life insurance policies, with the Company named as beneficiary of the policies. Changes in the cash surrender value of these policies are based upon earnings and changes in the value of the underlying investments, which are typically invested in a manner similar to the participants' allocations. Changes in the fair value of the DCP obligation are derived using quoted prices in active markets based on the market price per unit multiplied by the number of units. The cash surrender value and the DCP obligations are classified within Level 2 because their inputs are derived principally from observable market data by correlation to the hypothetical investments. The Company has contingent accrued earn-out business acquisition consideration liabilities which were recorded at fair value on the acquisition date and are remeasured quarterly based on the then assessed fair value and adjusted if necessary. The increases or decreases in the fair value of contingent consideration payable can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measure is based on significant inputs that are not observable in the market, they are categorized as Level 3. The carrying amounts of cash and cash equivalents, accounts receivable, income taxes receivable, and accounts payable are considered to be representative of their respective fair values due to their short-term nature. The fair market value of the zero-coupon subordinated notes, based on market pricing, was approximately $18.8 and $79.3 as of September 30, 2017 and December 31, 2016 , respectively. The fair market value of all of the senior notes, based on market pricing, was approximately $6,081.7 and $5,254.5 as of September 30, 2017 and December 31, 2016 , respectively. The Company's note and debt instruments are classified as Level 2 instruments, as the fair market values of these instruments are determined using other observable inputs. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments And Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company addresses its exposure to market risks, principally the market risk associated with changes in interest rates and foreign currency exchange rates, through a controlled program of risk management that includes, from time to time, the use of derivative financial instruments such as interest rate swap agreements (see Interest Rate Swap section below). Although the Company’s zero-coupon subordinated notes contain features that are considered to be embedded derivative instruments (see Embedded Derivatives Related to the Zero-Coupon Subordinated Notes section below), the Company does not hold or issue derivative financial instruments for trading purposes. The Company does not believe that its exposure to market risk is material to the Company’s financial position or results of operations. Interest Rate Swap The Company is party to two fixed-to-variable interest rate swap agreements for its 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 and added to the value of the senior notes, with an aggregate fair value of $ 17.1 and $14.6 at September 30, 2017 and December 31, 2016 , respectively. 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. Embedded Derivatives Related to the Zero-Coupon Subordinated Notes 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 Standard & Poor’s Ratings Services is BB- or lower. The Company believes these embedded derivatives had no fair value at September 30, 2017 and December 31, 2016 . These embedded derivatives also had no impact on the condensed consolidated statements of operations for the nine months ended September 30, 2017 and 2016 , respectively. Other Derivative Instruments 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 September 30, 2017 and December 31, 2016 . |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Nine Months Ended September 30, 2017 2016 Supplemental schedule of cash flow information: Cash paid during period for: Interest $ 174.4 $ 179.5 Income taxes, net of refunds 263.7 260.9 Disclosure of non-cash financing and investing activities: Surrender of restricted stock awards and performance awards $ 46.5 $ 33.6 Conversion of zero-coupon convertible debt 13.7 6.6 Assets acquired under capital leases 7.3 12.1 (Decrease) increase in accrued property, plant and equipment (0.4 ) 1.6 |
Supplemental Cash Flow Information | SUPPLEMENTAL CASH FLOW INFORMATION Nine Months Ended September 30, 2017 2016 Supplemental schedule of cash flow information: Cash paid during period for: Interest $ 174.4 $ 179.5 Income taxes, net of refunds 263.7 260.9 Disclosure of non-cash financing and investing activities: Surrender of restricted stock awards and performance awards $ 46.5 $ 33.6 Conversion of zero-coupon convertible debt 13.7 6.6 Assets acquired under capital leases 7.3 12.1 (Decrease) increase in accrued property, plant and equipment (0.4 ) 1.6 |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | BUSINESS ACQUISITIONS On September 1, 2017, the Company completed the acquisition of Chiltern International Group Limited (Chiltern), a specialty contract research organization, pursuant to a definitive agreement to acquire all of the share capital of Chiltern, in an all-cash transaction valued at approximately $1,224.5 . The Company funded the acquisition through a combination of bank financing and the issuance of bonds. Chiltern is part of the Company's CDD segment. The valuation of acquired assets and assumed liabilities as of September 1, 2017, include the following: Consideration Transferred Cash consideration $ 1,224.5 $ 1,224.5 Preliminary Net Assets Acquired Cash and cash equivalents $ 30.7 Accounts receivable 116.9 Unbilled services 32.6 Prepaid expenses and other 57.9 Property, plant and equipment 12.1 Goodwill 676.6 Customer relationships 629.0 Trade names and trademarks 24.1 Technology 47.0 Total assets acquired 1,626.9 Accounts payable 18.1 Accrued expenses and other 51.0 Unearned revenue 124.2 Deferred income taxes 208.0 Other liabilities 1.1 Total liabilities acquired 402.4 Net assets acquired $ 1,224.5 The amortization periods for intangible assets acquired are 21 years for customer relationships, 7 years for trade names and trademarks, and 9 years for technology. The Chiltern acquisition contributed $47.8 and $5.3 of revenue and operating income, respectively, during the three and nine months ended September 30, 2017. Unaudited Pro Forma Information The Company completed the Chiltern acquisition on September 1, 2017. Had the Chiltern acquisition been completed as of January 1, 2016, the Company's pro forma results for 2017 would have been as follows: Three Months Ended September 30, 2017 Three Months Ended Nine Months Ended September 30, 2017 Nine Months Ended Net revenues $ 2,696.8 $ 2,495.5 $ 7,874.8 $ 7,422.0 Operating income 342.5 322.3 1,022.8 998.4 Net income 176.8 171.9 551.5 534.2 Earnings per share: Basic $ 1.73 $ 1.67 $ 5.39 $ 5.21 Diluted $ 1.70 $ 1.63 $ 5.31 $ 5.11 The unaudited pro forma results reflect certain adjustments related to past operating performance and acquisition accounting adjustments, such as increased amortization expense and decreased depreciation expense based on the estimated fair value of assets acquired, the impact of the Company’s new financing arrangements, and the related tax effects. The pro forma results do not include any anticipated synergies which may be achievable subsequent to the Chiltern acquisition. To produce the unaudited pro forma financial information, the Company adjusted Chiltern’s assets and liabilities to their estimated fair value based on a valuation as of September 1, 2017. These pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that actually would have resulted had the acquisition of Chiltern occurred on the date indicated or that may result in the future. During the nine months ended September 30, 2017 , the Company also acquired various laboratories, including Pathology Associates Medical Laboratories (PAML), and related assets for approximately $ 605.5 in cash (net of cash acquired). The purchase consideration for all acquisitions year to date, including Chiltern, has been allocated to the estimated fair market value of the net assets acquired, including approximately $ 1,103.0 in identifiable intangible assets (primarily customer relationships, technology and non-compete agreements) and a residual amount of goodwill of approximately $ 817.2 . These acquisitions were made primarily to extend the Company's geographic reach in important market areas and/or enhance the Company's scientific differentiation and esoteric testing capabilities. With the acquisition of PAML, the Company assumed PAML’s ownership interests in five joint ventures. The Company's acquisition of PAML represents the first step in completing the transaction. During the remainder of 2017 and into 2018, the Company will acquire the ownership interests in three of the joint ventures and will continue to evaluate future options for their interests in the remaining joint venture. As the Company continues the progression to close various components of this transaction, minority interest will be recorded for the portion of the consolidated joint ventures not yet closed. The purchase consideration for the transaction has been preliminarily allocated to the estimated fair market value of the net assets acquired. The amounts paid in advance for the ownership interest in the three joint ventures are included in other assets on the condensed consolidated balance sheet. The total purchase consideration for the transaction, inclusive of the amounts for the future acquisition of the ownership interests in the four joint ventures, is classified as cash paid for acquisition of a business on the condensed consolidated statement of cash flows. The purchase price allocation for the Chiltern and PAML acquisitions are still preliminary and subject to change. The areas of the purchase price allocation that are not yet finalized relate primarily to intangible assets, goodwill, investment in joint ventures and the impact of finalizing deferred taxes. Accordingly, adjustments may be made as additional information is obtained about the facts and circumstances that existed as of the valuation date. The Company expects these purchase price allocations to be finalized within a year from each acquisition date. Any adjustments will be recorded in the period in which they are identified. |
BUSINESS SEGMENT INFORMATION Bu
BUSINESS SEGMENT INFORMATION Business Segment information (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | |
Segment Reporting Disclosure [Text Block] | BUSINESS SEGMENT INFORMATION The following table is a summary of segment information for the three and nine months ended September 30, 2017 and 2016 . 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 its business unit operations 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 executive officer has been identified as the CODM. Segment asset information is not presented because it is not used by the CODM at the segment level. Operating earnings of each segment represents net revenues less directly identifiable expenses to arrive at operating income for the segment. General management and administrative corporate expenses are included in general corporate expenses below. The table below represents information about the Company’s reporting segments for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net revenues: LCD $ 1,837.2 $ 1,671.8 $ 5,354.2 $ 4,922.1 CDD 761.1 701.1 2,151.1 2,128.3 Intercompany eliminations (0.4 ) (0.2 ) (0.9 ) (0.5 ) Net revenues 2,597.9 2,372.7 7,504.4 7,049.9 Operating earnings: LCD 336.2 — 305.6 980.2 910.0 CDD 43.0 51.9 134.9 190.3 Unallocated corporate expenses (37.9 ) (33.5 ) (105.1 ) (111.3 ) Total operating income 341.3 324.0 1,010.0 989.0 Other income (expense), net (60.2 ) (60.6 ) (164.1 ) (160.1 ) Earnings before income taxes 281.1 263.4 845.9 828.9 Provision for income taxes 97.7 83.6 281.1 280.3 Net earnings 183.4 179.8 564.8 548.6 Less income attributable to noncontrolling interests (2.8 ) (0.3 ) (3.4 ) (0.9 ) Net income attributable to Laboratory Corporation of America Holdings $ 180.6 $ 179.5 $ 561.4 $ 547.7 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic earnings per Share to Diluted Earnings per Share | The following represents a reconciliation of basic earnings per share to diluted earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 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 $ 180.6 102.2 $ 1.77 $ 179.5 102.9 $ 1.74 $ 561.4 102.4 $ 5.48 $ 547.7 102.3 $ 5.36 Dilutive effect of employee stock options and awards — 1.4 — 1.5 — 1.4 — 1.4 Effect of convertible debt — 0.1 — 0.5 — 0.1 — 0.5 Diluted earnings per share: Net earnings including impact of dilutive adjustments $ 180.6 $ 103.7 $ 1.74 $ 179.5 $ 104.9 $1.71 $ 561.4 $ 103.9 $5.40 $ 547.7 $ 104.2 $ 5.25 |
Potential common shares not included in computation of diluted earnings per share | The following table summarizes the potential common shares not included in the computation of diluted earnings per share because their impact would have been antidilutive: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Stock options 0.1 — 0.1 — |
RESTRUCTURING AND OTHER SPECI23
RESTRUCTURING AND OTHER SPECIAL CHARGES Restructuring and Other Special Charges Detail (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | The following represents the Company’s restructuring reserve activities for the period indicated: 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, 2016 $ 7.5 $ 14.1 $ 28.2 $ 32.5 $ 82.3 Restructuring charges 8.7 5.9 18.5 33.0 66.1 Reduction of prior restructuring accruals (0.4 ) (0.1 ) (0.9 ) (0.1 ) (1.5 ) Cash payments and other adjustments (13.7 ) (6.7 ) (34.1 ) (29.1 ) (83.6 ) Balance as of September 30, 2017 $ 2.1 $ 13.2 $ 11.7 $ 36.3 $ 63.3 Current $ 29.1 Non-current 34.2 $ 63.3 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the nine-month period ended September 30, 2017 and for the year ended December 31, 2016 are as follows: LCD CDD Total September 30, December 31, 2016 September 30, December 31, 2016 September 30, December 31, 2016 Balance as of January 1 $ 3,644.8 $ 3,137.7 $ 2,779.6 $ 3,064.4 $ 6,424.4 $ 6,202.1 Goodwill acquired during the period 140.6 398.3 676.6 — 817.2 398.3 Adjustments to goodwill (4.6 ) 108.8 88.1 (284.8 ) 83.5 (176.0 ) Balance at end of period $ 3,780.8 $ 3,644.8 $ 3,544.3 $ 2,779.6 $ 7,325.1 $ 6,424.4 |
Schedule of Intangible Assets and Goodwill [Table Text Block] | The components of identifiable intangible assets are as follows: September 30, 2017 December 31, 2016 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Customer relationships $ 4,297.2 $ (970.5 ) $ 3,326.7 $ 3,275.3 $ (855.2 ) $ 2,420.1 Patents, licenses and technology 455.5 (181.9 ) 273.6 395.3 (163.3 ) 232.0 Non-compete agreements 77.4 (47.3 ) 30.1 53.0 (42.1 ) 10.9 Trade names 439.8 (162.7 ) 277.1 406.3 (141.6 ) 264.7 Land use right 10.0 (2.3 ) 7.7 10.0 (1.4 ) 8.6 Canadian licenses 500.1 — 500.1 464.2 — 464.2 $ 5,780.0 $ (1,364.7 ) $ 4,415.3 $ 4,604.1 $ (1,203.6 ) $ 3,400.5 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Short-term borrowings and current portion of long-term debt | Short-term borrowings and the current portion of long-term debt at September 30, 2017 and December 31, 2016 consisted of the following: September 30, December 31, 2016 Zero-coupon convertible subordinated notes $ 8.9 $ 42.4 2.20% senior notes due 2017 — 500.0 Debt issuance costs (1.1 ) (1.3 ) Current portion of capital leases 8.4 8.4 Current portion of note payable 1.9 — Total short-term borrowings and current portion of long-term debt $ 18.1 $ 549.5 |
DEBT (Short-term borrowings and
DEBT (Short-term borrowings and current portion of long-term debt) (Table) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Short-term Debt [Line Items] | ||
Capital Lease Obligations, Current | $ 8.4 | $ 8.4 |
Total short-term borrowings and current portion of long-term debt | 18.1 | 549.5 |
Senior notes due 2020 [Member] | ||
Short-term Debt [Line Items] | ||
Senior Notes, Noncurrent | $ 500 | 500 |
Debt Instrument, Interest Rate, Stated Percentage | 4.625% | |
Senior notes due 2022 [Member] | ||
Short-term Debt [Line Items] | ||
Senior Notes, Noncurrent | $ 500 | $ 500 |
DEBT (Long-term debt) (Table) (
DEBT (Long-term debt) (Table) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 19, 2014USD ($) | |
Debt Instrument [Line Items] | ||||
Long-term Debt [Text Block] | Long-term debt at September 30, 2017 and December 31, 2016 consisted of the following: September 30, December 31, 2016 2.50% senior notes due 2018 $ 400.0 $ 400.0 2.625% senior notes due 2020 500.0 500.0 4.625% senior notes due 2020 617.1 614.6 3.20% senior notes due 2022 500.0 500.0 3.75% senior notes due 2022 500.0 500.0 4.00% senior notes due 2023 300.0 300.0 3.25% senior notes due 2024 600.0 — 3.60% senior notes due 2025 1,000.0 1,000.0 3.60% senior notes due 2027 600.0 — 4.70% senior notes due 2045 900.0 900.0 Revolving credit facility — — 2014 Term loan 515.0 565.0 2017 Term loan 750.0 — Debt issuance costs (50.5 ) (43.0 ) Capital leases 59.3 56.2 Note payable 9.4 7.2 Total long-term debt $ 7,200.3 $ 5,300.0 | |||
Long-term Debt, Excluding Current Maturities | $ 7,200.3 | $ 7,200.3 | $ 5,300 | |
Line of Credit Facility, Fair Value of Amount Outstanding | 515 | 515 | 565 | |
Other Long-term Debt | 515 | 515 | 56.2 | |
Capital Lease Obligations, Noncurrent | 59.3 | 59.3 | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000 | |||
Credit Facility Option to Increase | 350 | |||
Credit Facility, Maximum Swing Line Borrowings | 100 | |||
Capital lease obligation | 8.4 | 8.4 | 8.4 | |
Senior notes due 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | 400 | 400 | 400 | |
Senior notes due 2020 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | 617.1 | 617.1 | 614.6 | |
Senior Notes, Noncurrent | $ 500 | $ 500 | 500 | |
Stated interest rate percentage | 4.625% | 4.625% | ||
Senior notes due 2022 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | $ 500 | $ 500 | 500 | |
Senior Notes, Noncurrent | 500 | 500 | 500 | |
Senior notes due 2023 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | 300 | 300 | 300 | |
Senior notes due 2025 [Member] [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | 1,000 | 1,000 | 1,000 | |
Senior notes due 2045 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | $ 900 | $ 900 | $ 900 | |
Long-term Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Effective Percentage | 2.49% | 2.49% | ||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt to EBITDA (Leverage) Ratio | 0 | 0 | ||
Credit Facility, Maximum Letters of Credit | $ 150 | |||
Prime Rate [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Interest Rate Description | 0.00% to 0.25% | |||
Prime Rate [Member] | Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Interest Rate Description | 0.125% to 1.00% | |||
London Interbank Offered Rate (LIBOR) [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Commitment Fee Description | 0.10% to 0.25% | |||
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Interest Rate Description | 0.775% to 1.25% | |||
London Interbank Offered Rate (LIBOR) [Member] | Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Interest Rate Description | 1.125% to 2.00% |
PREFERRED STOCK AND COMMON SH28
PREFERRED STOCK AND COMMON SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Preferred Stock and Common Shareholders' Equity | PREFERRED STOCK AND COMMON SHAREHOLDERS’ EQUITY The Company is authorized to issue up to 265.0 shares of common stock, par value $0.10 per share. The Company’s treasury shares are recorded at aggregate cost. The Company is authorized to issue up to 30.0 shares of preferred stock, par value $0.10 per share. There were no preferred shares outstanding as of September 30, 2017 and December 31, 2016. The changes in common shares issued and held in treasury are summarized below: Issued Held in Treasury Outstanding Common shares at December 31, 2016 125.6 (22.9 ) 102.7 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 ) Retirement of common stock (2.1 ) — (2.1 ) Common shares at September 30, 2017 125.3 (23.2 ) 102.1 Share Repurchase Program At the end of 2016, the Company had outstanding authorization from the board of directors to purchase up to $739.5 of Company common stock. During the nine months ended September 30, 2017 , the Company purchased 2.2 shares of its common stock at a total cost of $298.1 (inclusive of 0.1 shares of common stock at a cost of $6.0 representing committed purchases as of December 31, 2016 that settled in early 2017). As of September 30, 2017 , the Company had outstanding authorization from the board of directors to purchase up to $447.4 of Company common stock. The repurchase authorization has no expiration. Accumulated Other Comprehensive Earnings The components of accumulated other comprehensive earnings are as follows: Foreign Currency Translation Adjustments Net Benefit Plan Adjustments Accumulated Other Comprehensive Earnings (Loss) Balance at December 31, 2016 $ (470.7 ) $ (110.4 ) $ (581.1 ) Other comprehensive earnings before reclassifications 276.3 4.6 280.9 Amounts reclassified from accumulated other comprehensive earnings to the Condensed Consolidated Statement of Operations (a) — (1.2 ) (1.2 ) Tax effect of adjustments (39.1 ) (2.0 ) (41.1 ) Balance at September 30, 2017 $ (233.5 ) $ (109.0 ) $ (342.5 ) (a) The amortization of prior service cost is included in the computation of net periodic benefit cost. See Note 10 (Pension and Post-retirement Plans) below for additional information regarding the Company's net periodic benefit cost. In the first quarter of 2016, the Company finalized measurement period adjustments relating to the Covance acquisition and incorrectly recorded them retrospectively to the interim periods in 2015. The final measurement period adjustments consisted of foreign cumulative translation adjustments related to the final allocation of goodwill and intangibles to the applicable international geographies which were completed in the first quarter of 2016. In order to record these adjustments in the correct accounting period, the Company reduced the foreign currency translation adjustment by $80.4 in its first quarter 2016 Statement of Comprehensive Income, in accordance with Accounting Standards Update 2015-16 Simplifying the Accounting for Measurement-Period Adjustments. The Company concluded that the correction of this error was not material individually or in the aggregate to the prior period noted. |
Changes in common shares issued and held in treasury | The changes in common shares issued and held in treasury are summarized below: Issued Held in Treasury Outstanding Common shares at December 31, 2016 125.6 (22.9 ) 102.7 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 ) Retirement of common stock (2.1 ) — (2.1 ) Common shares at September 30, 2017 125.3 (23.2 ) 102.1 |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | The components of accumulated other comprehensive earnings are as follows: Foreign Currency Translation Adjustments Net Benefit Plan Adjustments Accumulated Other Comprehensive Earnings (Loss) Balance at December 31, 2016 $ (470.7 ) $ (110.4 ) $ (581.1 ) Other comprehensive earnings before reclassifications 276.3 4.6 280.9 Amounts reclassified from accumulated other comprehensive earnings to the Condensed Consolidated Statement of Operations (a) — (1.2 ) (1.2 ) Tax effect of adjustments (39.1 ) (2.0 ) (41.1 ) Balance at September 30, 2017 $ (233.5 ) $ (109.0 ) $ (342.5 ) (a) The amortization of prior service cost is included in the computation of net periodic benefit cost. See Note 10 (Pension and Post-retirement Plans) below for additional information regarding the Company's net periodic benefit cost. |
PENSION AND POSTRETIREMENT PL29
PENSION AND POSTRETIREMENT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Pension And Postretirement Plans | PENSION AND POST-RETIREMENT PLANS The Company’s defined contribution retirement plan (401K Plan) covers substantially all employees prior to the Covance and Chiltern acquisitions. All employees eligible for the 401K Plan receive a minimum 3% non-elective contribution concurrent with each payroll period. The 401K Plan also permits discretionary contributions by the Company of up to 1% and up to 3% of pay for eligible employees based on years of service with the Company. The cost of this plan was $14.9 and $13.0 for the three months ended September 30, 2017 and 2016, respectively, and was $43.6 and $40.2 during the nine months ended September 30, 2017 and 2016, respectively. As a result of the Covance acquisition, the Company also incurred expense of $14.0 and $12.6 for the Covance 401K plan during the three months ended September 30, 2017 and 2016, respectively, and $42.6 and $39.1 during the nine months ended September 30, 2017 and 2016, respectively. All of the Covance U.S. employees are eligible to participate in the discretionary Covance 401K plan, which features a maximum 4.5% Company match, based upon a percentage of the employee’s contributions. The Company also maintains a frozen defined benefit retirement plan (Company Plan), which as of December 31, 2009, covered substantially all employees. The benefits to be paid under the Company Plan are based on years of credited service through December 31, 2009, and ongoing interest credits. Effective January 1, 2010, the Company Plan was closed to new participants. The Company’s policy is to fund the Company Plan with at least the minimum amount required by applicable regulations. The Company maintains a second, unfunded, non-contributory, non-qualified defined benefit retirement plan (PEP), which as of December 31, 2009, covered substantially all of its senior management group. The PEP supplements the Company Plan and was closed to new participants effective January 1, 2010. The effect on operations for the Company Plan and the PEP is summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Service cost for administrative expenses $ 1.4 $ 1.2 $ 4.2 $ 3.6 Interest cost on benefit obligation 3.5 3.9 10.8 11.6 Expected return on plan assets (4.1 ) (4.2 ) (12.3 ) (12.5 ) Net amortization and deferral 2.7 2.8 8.3 8.4 Defined benefit plan costs $ 3.5 $ 3.7 $ 11.0 $ 11.1 During the three and nine months ended September 30, 2017 , the Company contributed $3.4 and $9.0 , respectively, to the Company Plan. As a result of the Covance acquisition, the Company also has a frozen non-qualified Supplemental Executive Retirement Plan (SERP). The SERP, which is not funded, is intended to provide retirement benefits for certain executive officers of the Company who were formerly employees of Covance. Benefit amounts are based upon years of service and compensation of the participating employees. The components of the net periodic pension cost for the three and nine months ended September 30, 2017 and September 30, 2016 are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Interest cost $ 0.1 $ 0.2 $ 0.2 $ 0.6 Settlement gain (0.1 ) — (0.3 ) — Net periodic pension cost $ — $ 0.2 $ (0.1 ) $ 0.6 The Company has assumed the obligations under a subsidiary’s post-retirement medical plan. Coverage under this plan is restricted to a limited number of existing employees of the subsidiary. The Company funds the plan through monthly contributions to a Health Reimbursement Arrangement, which can be used by eligible participants to purchase health care insurance through insurance exchanges. Effective January 1, 2017, Health Reimbursement Arrangement contributions for Medicare eligible participants ceased. The effect on operations of the post-retirement medical plan is shown in the following table: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Interest cost on benefit obligation 0.1 0.1 0.3 0.3 Net amortization and deferral (1.7 ) (4.2 ) (5.1 ) (12.0 ) Post-retirement medical plan benefits $ (1.6 ) $ (4.1 ) $ (4.8 ) $ (11.7 ) Also as a result of the Covance acquisition, the Company sponsors a post-employment retiree health and welfare plan for the benefit of eligible employees at certain U.S. subsidiaries who retire after satisfying service and age requirements. Effective January 1, 2017, this Plan ceased directly providing medical, prescription drug and dental coverage options previously available to eligible participants. Instead, the Company will fund the plan through monthly contributions to a Health Reimbursement Arrangement, which can be used by non-Medicare eligible participants to purchase health care insurance through insurance exchanges. The net periodic post-retirement benefit cost for the three months ended September 30, 2017 and 2016 was $0.5 and $0.4 , respectively, and was $1.5 and $1.2 for the nine months ended September 30, 2017 and 2016, respectively. As a result of the Covance acquisition, the Company sponsors two defined benefit pension plans for the benefit of its employees at two United Kingdom (U.K.) subsidiaries and one defined benefit pension plan for the benefit of its employees at a German subsidiary, all of which are legacy plans of previously acquired companies. Benefit amounts for all three plans are based upon years of service and compensation. The German plan is unfunded while the U.K. pension plans are funded. The Company’s funding policy has been to contribute annually amounts at least equal to the local statutory funding requirements. U.K. Plans Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Service cost for administrative expenses $ 1.0 $ 0.7 $ 2.8 $ 2.3 Interest cost on benefit obligation 1.9 2.0 5.6 6.5 Expected return on plan assets (2.9 ) (2.8 ) (8.5 ) (9.0 ) Net (gain) from prior periods 0.2 — 0.5 — Defined benefit plan costs $ 0.2 $ (0.1 ) $ 0.4 $ (0.2 ) Assumptions used to determine defined benefit plan cost Discount rate 2.7 % 3.8 % 2.7 % 3.8 % Expected return on assets 4.7 % 5.6 % 4.7 % 5.6 % Salary increases 3.8 % 3.6 % 3.8 % 3.6 % German Plan Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Service cost for administrative expenses $ 0.3 $ 0.2 $ 0.8 $ 0.7 Interest cost on benefit obligation 0.1 0.2 0.4 0.5 Defined benefit plan costs $ 0.4 $ 0.4 $ 1.2 $ 1.2 Assumptions used to determine defined benefit plan cost Discount rate 1.7 % 2.5 % 1.7 % 2.5 % Expected return on assets N/A N/A N/A N/A Salary increases 2.0 % 2.0 % 2.0 % 2.0 % |
Schedule of Pensions and Postretirement Plans | The effect on operations for the Company Plan and the PEP is summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Service cost for administrative expenses $ 1.4 $ 1.2 $ 4.2 $ 3.6 Interest cost on benefit obligation 3.5 3.9 10.8 11.6 Expected return on plan assets (4.1 ) (4.2 ) (12.3 ) (12.5 ) Net amortization and deferral 2.7 2.8 8.3 8.4 Defined benefit plan costs $ 3.5 $ 3.7 $ 11.0 $ 11.1 As a result of the Covance acquisition, the Company sponsors two defined benefit pension plans for the benefit of its employees at two United Kingdom (U.K.) subsidiaries and one defined benefit pension plan for the benefit of its employees at a German subsidiary, all of which are legacy plans of previously acquired companies. Benefit amounts for all three plans are based upon years of service and compensation. The German plan is unfunded while the U.K. pension plans are funded. The Company’s funding policy has been to contribute annually amounts at least equal to the local statutory funding requirements. U.K. Plans Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Service cost for administrative expenses $ 1.0 $ 0.7 $ 2.8 $ 2.3 Interest cost on benefit obligation 1.9 2.0 5.6 6.5 Expected return on plan assets (2.9 ) (2.8 ) (8.5 ) (9.0 ) Net (gain) from prior periods 0.2 — 0.5 — Defined benefit plan costs $ 0.2 $ (0.1 ) $ 0.4 $ (0.2 ) Assumptions used to determine defined benefit plan cost Discount rate 2.7 % 3.8 % 2.7 % 3.8 % Expected return on assets 4.7 % 5.6 % 4.7 % 5.6 % Salary increases 3.8 % 3.6 % 3.8 % 3.6 % German Plan Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Service cost for administrative expenses $ 0.3 $ 0.2 $ 0.8 $ 0.7 Interest cost on benefit obligation 0.1 0.2 0.4 0.5 Defined benefit plan costs $ 0.4 $ 0.4 $ 1.2 $ 1.2 Assumptions used to determine defined benefit plan cost Discount rate 1.7 % 2.5 % 1.7 % 2.5 % Expected return on assets N/A N/A N/A N/A Salary increases 2.0 % 2.0 % 2.0 % 2.0 % |
Supplemental Employee Retirement Plan [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Costs of Retirement Plans [Table Text Block] | The components of the net periodic pension cost for the three and nine months ended September 30, 2017 and September 30, 2016 are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Interest cost $ 0.1 $ 0.2 $ 0.2 $ 0.6 Settlement gain (0.1 ) — (0.3 ) — Net periodic pension cost $ — $ 0.2 $ (0.1 ) $ 0.6 |
Postretirement Health Coverage [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Costs of Retirement Plans [Table Text Block] | The effect on operations of the post-retirement medical plan is shown in the following table: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Interest cost on benefit obligation 0.1 0.1 0.3 0.3 Net amortization and deferral (1.7 ) (4.2 ) (5.1 ) (12.0 ) Post-retirement medical plan benefits $ (1.6 ) $ (4.1 ) $ (4.8 ) $ (11.7 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Company's population of financial assets and liabilities subject to fair value measurements | The Company’s population of financial assets and liabilities subject to fair value measurements as of September 30, 2017 and December 31, 2016 is as follows: Fair Value Measurements as of Fair Value as of September 30, 2017 Using Fair Value Hierarchy September 30, 2017 Level 1 Level 2 Level 3 Noncontrolling interest put $ 16.5 $ — $ 16.5 $ — Interest rate swap 17.1 — 17.1 — Cash surrender value of life insurance policies 60.6 — 60.6 — Deferred compensation liability 62.1 — 62.1 — Contingent consideration 16.0 — — 16.0 Fair Value Measurements as of Fair Value as of December 31, 2016 Using Fair Value Hierarchy December 31, 2016 Level 1 Level 2 Level 3 Noncontrolling interest put $ 15.2 $ — $ 15.2 $ — Interest rate swap 14.6 — 14.6 — Cash surrender value of life insurance policies 53.6 — 53.6 — Deferred compensation liability 54.2 — 54.2 — Contingent consideration 16.0 — — 16.0 |
SUPPLEMENTAL CASH FLOW INFORM31
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Nine Months Ended September 30, 2017 2016 Supplemental schedule of cash flow information: Cash paid during period for: Interest $ 174.4 $ 179.5 Income taxes, net of refunds 263.7 260.9 Disclosure of non-cash financing and investing activities: Surrender of restricted stock awards and performance awards $ 46.5 $ 33.6 Conversion of zero-coupon convertible debt 13.7 6.6 Assets acquired under capital leases 7.3 12.1 (Decrease) increase in accrued property, plant and equipment (0.4 ) 1.6 |
Supplemental Cash Flow Information | SUPPLEMENTAL CASH FLOW INFORMATION Nine Months Ended September 30, 2017 2016 Supplemental schedule of cash flow information: Cash paid during period for: Interest $ 174.4 $ 179.5 Income taxes, net of refunds 263.7 260.9 Disclosure of non-cash financing and investing activities: Surrender of restricted stock awards and performance awards $ 46.5 $ 33.6 Conversion of zero-coupon convertible debt 13.7 6.6 Assets acquired under capital leases 7.3 12.1 (Decrease) increase in accrued property, plant and equipment (0.4 ) 1.6 |
BUSINESS ACQUISITIONS Business
BUSINESS ACQUISITIONS Business Acquisitions Tables (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Information [Table Text Block] | Three Months Ended September 30, 2017 Three Months Ended Nine Months Ended September 30, 2017 Nine Months Ended Net revenues $ 2,696.8 $ 2,495.5 $ 7,874.8 $ 7,422.0 Operating income 342.5 322.3 1,022.8 998.4 Net income 176.8 171.9 551.5 534.2 Earnings per share: Basic $ 1.73 $ 1.67 $ 5.39 $ 5.21 Diluted $ 1.70 $ 1.63 $ 5.31 $ 5.11 |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | Consideration Transferred Cash consideration $ 1,224.5 $ 1,224.5 Preliminary Net Assets Acquired Cash and cash equivalents $ 30.7 Accounts receivable 116.9 Unbilled services 32.6 Prepaid expenses and other 57.9 Property, plant and equipment 12.1 Goodwill 676.6 Customer relationships 629.0 Trade names and trademarks 24.1 Technology 47.0 Total assets acquired 1,626.9 Accounts payable 18.1 Accrued expenses and other 51.0 Unearned revenue 124.2 Deferred income taxes 208.0 Other liabilities 1.1 Total liabilities acquired 402.4 Net assets acquired $ 1,224.5 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reconciliation of Operating Income to Consolidated [Abstract] | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] | The table below represents information about the Company’s reporting segments for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net revenues: LCD $ 1,837.2 $ 1,671.8 $ 5,354.2 $ 4,922.1 CDD 761.1 701.1 2,151.1 2,128.3 Intercompany eliminations (0.4 ) (0.2 ) (0.9 ) (0.5 ) Net revenues 2,597.9 2,372.7 7,504.4 7,049.9 Operating earnings: LCD 336.2 — 305.6 980.2 910.0 CDD 43.0 51.9 134.9 190.3 Unallocated corporate expenses (37.9 ) (33.5 ) (105.1 ) (111.3 ) Total operating income 341.3 324.0 1,010.0 989.0 Other income (expense), net (60.2 ) (60.6 ) (164.1 ) (160.1 ) Earnings before income taxes 281.1 263.4 845.9 828.9 Provision for income taxes 97.7 83.6 281.1 280.3 Net earnings 183.4 179.8 564.8 548.6 Less income attributable to noncontrolling interests (2.8 ) (0.3 ) (3.4 ) (0.9 ) Net income attributable to Laboratory Corporation of America Holdings $ 180.6 $ 179.5 $ 561.4 $ 547.7 |
BASIS OF FINANCIAL STATEMENT 34
BASIS OF FINANCIAL STATEMENT PRESENTATION (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Ownership percentage below which investments are generally accounted for on the cost method (in thousandths) | 20.00% | ||
LabCorp Diagnostics [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percent of Revenue Contributed | 70.70% | 71.30% | |
Covance Drug Development [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Percent of Revenue Contributed | 29.30% | 28.70% |
EARNINGS PER SHARE (Reconciliat
EARNINGS PER SHARE (Reconciliation of Basic Earnings Per Share to Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income [Abstract] | ||||
Net earnings attributable to Laboratory Corporation of America Holdings | $ 180.6 | $ 179.5 | $ 561.4 | $ 547.7 |
Shares [Abstract] | ||||
Net earnings, basic (in shares) | 102.2 | 102.9 | 102.4 | 102.3 |
Dilutive effect of employee stock options and awards, (in shares) | 1.4 | 1.5 | 1.4 | 1.4 |
Effect of convertible debt, net of tax, (in shares) | 0.1 | 0.5 | 0.1 | 0.5 |
Per Share Amount [Abstract] | ||||
Basic earnings per common share (in dollars per share) | $ 1.77 | $ 1.74 | $ 5.48 | $ 5.36 |
Diluted earnings per common share (in dollars per share) | $ 1.74 | $ 1.71 | $ 5.40 | $ 5.25 |
Net Income (Loss) Available to Common Stockholders, Diluted | $ 180.6 | $ 179.5 | $ 561.4 | $ 547.7 |
Weighted Average Number of Shares Outstanding, Diluted | 103.7 | 104.9 | 103.9 | 104.2 |
EARNINGS PER SHARE (Potential c
EARNINGS PER SHARE (Potential common shares not included in computation of diluted earnings per share) (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Stock options (in shares) | 0.1 | 0 | 0.1 | 0 |
RESTRUCTURING AND OTHER SPECI37
RESTRUCTURING AND OTHER SPECIAL CHARGES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Mar. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||||
Reclassified restructuring reserves between segments | $ 9.8 | ||||
Goodwill, Acquired During Period | $ 817.2 | 398.3 | |||
Restructuring Reserve | 63.3 | 82.3 | |||
Restructuring Charges | 66.1 | ||||
Restructuring Reserve Settled With Cash And Other Adjustment | 83.6 | ||||
Net restructuring charges | 64.6 | $ 48.6 | |||
Restructuring charges related to severance and other employee costs | 27.2 | 23.1 | |||
Restructuring charges related to contractual obligations associated with leased facilities and other facility related costs | 17.9 | 30.7 | |||
Employee Severance Benefits Related Restructuring Reserve Accrual Adjustment | 1.5 | 2.4 | |||
Asset Impairment Charges | 23.5 | 0 | |||
Unused facility restructuring reserves | 2.8 | ||||
Reduction in total prior restructuring accruals | (1.5) | ||||
Restructuring Reserve, Current | 29.1 | ||||
Restructuring Reserve, Noncurrent | 34.2 | ||||
special charge - consulting expense | 8 | ||||
Special charge, wind-down of min volume contract | $ 4 | ||||
Business Combination, Acquisition Related Costs | 7.4 | ||||
Special charge, accelerated equity compensation | 2.3 | 0.9 | |||
Special charge, accelerated equity compensation | 7.4 | 29.8 | |||
Special charge - one-time tax liability | 1.1 | 1.1 | |||
Amortization of Debt Discount (Premium) | 5.6 | ||||
Covance Drug Development [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Goodwill, Acquired During Period | 676.6 | 0 | |||
Net restructuring charges | 50.5 | 38.9 | |||
Asset Impairment Charges | 20.9 | ||||
Covance Drug Development [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Reserve | 11.7 | 28.2 | |||
Restructuring Charges | 18.5 | ||||
Restructuring Reserve Settled With Cash And Other Adjustment | 34.1 | ||||
Reduction in total prior restructuring accruals | 0.9 | ||||
Covance Drug Development [Member] | Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Reserve | 36.3 | 32.5 | |||
Restructuring Charges | 33 | ||||
Restructuring Reserve Settled With Cash And Other Adjustment | (29.1) | ||||
Reduction in total prior restructuring accruals | 0.1 | ||||
LabCorp Diagnostics [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Goodwill, Acquired During Period | 140.6 | 398.3 | |||
Net restructuring charges | 14.1 | $ 9.7 | |||
LabCorp Diagnostics [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Reserve | 2.1 | 7.5 | |||
Restructuring Charges | 8.7 | ||||
Restructuring Reserve Settled With Cash And Other Adjustment | (13.7) | ||||
Reduction in total prior restructuring accruals | (0.4) | ||||
LabCorp Diagnostics [Member] | Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Reserve | 13.2 | $ 14.1 | |||
Restructuring Charges | 5.9 | ||||
Restructuring Reserve Settled With Cash And Other Adjustment | 6.7 | ||||
Reduction in total prior restructuring accruals | (0.1) | ||||
Selling, General and Administrative Expenses [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Other Special Charges | $ 8.1 | $ 8.2 | |||
Covance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Business Acquisition, Transaction Costs | $ 5.5 |
RESTRUCTURING RESERVES (Details
RESTRUCTURING RESERVES (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||
Amortization of Debt Discount (Premium) | $ 5.6 | ||
Balance, beginning of period | $ 82.3 | ||
Restructuring charges | 66.1 | ||
Reduction of prior restructuring accruals | (1.5) | ||
Cash payments and other adjustments | (83.6) | ||
Balance, end of period | 63.3 | ||
Current | $ 29.1 | ||
Non-current | 34.2 | ||
Total Restructuring Reserve | 82.3 | 63.3 | |
LabCorp Diagnostics [Member] | Severance and Other Employee Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Balance, beginning of period | 7.5 | ||
Restructuring charges | 8.7 | ||
Reduction of prior restructuring accruals | (0.4) | ||
Cash payments and other adjustments | 13.7 | ||
Balance, end of period | 2.1 | ||
Total Restructuring Reserve | 7.5 | 2.1 | |
LabCorp Diagnostics [Member] | Lease and Other Facility Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Balance, beginning of period | 14.1 | ||
Restructuring charges | 5.9 | ||
Reduction of prior restructuring accruals | (0.1) | ||
Cash payments and other adjustments | (6.7) | ||
Balance, end of period | 13.2 | ||
Total Restructuring Reserve | 14.1 | 13.2 | |
Covance Drug Development [Member] | Severance and Other Employee Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Balance, beginning of period | 28.2 | ||
Restructuring charges | 18.5 | ||
Reduction of prior restructuring accruals | 0.9 | ||
Cash payments and other adjustments | (34.1) | ||
Balance, end of period | 11.7 | ||
Total Restructuring Reserve | 28.2 | 11.7 | |
Covance Drug Development [Member] | Lease and Other Facility Costs [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Balance, beginning of period | 32.5 | ||
Restructuring charges | 33 | ||
Reduction of prior restructuring accruals | 0.1 | ||
Cash payments and other adjustments | 29.1 | ||
Balance, end of period | 36.3 | ||
Total Restructuring Reserve | $ 32.5 | $ 36.3 |
GOODWILL AND INTANGIBLE ASSET39
GOODWILL AND INTANGIBLE ASSETS (Changes in Carrying Amount of Goodwill) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Goodwill [Line Items] | |||
Severance Costs | $ 27.2 | $ 23.1 | |
Intangible Assets, Gross (Excluding Goodwill) | 5,780 | $ 4,604.1 | |
Balance as of January 1 | 6,424.4 | 6,202.1 | 6,202.1 |
Goodwill, Acquired During Period | 817.2 | 398.3 | |
Adjustments to goodwill | 83.5 | (176) | |
Balance at end of period | 7,325.1 | 6,424.4 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 1,364.7 | 1,203.6 | |
Intangible Assets, Net (Excluding Goodwill) | 4,415.3 | 3,400.5 | |
LabCorp Diagnostics [Member] | |||
Goodwill [Line Items] | |||
Balance as of January 1 | 3,644.8 | 3,137.7 | 3,137.7 |
Goodwill, Acquired During Period | 140.6 | 398.3 | |
Adjustments to goodwill | (4.6) | 108.8 | |
Balance at end of period | 3,780.8 | 3,644.8 | |
Covance Drug Development [Member] | |||
Goodwill [Line Items] | |||
Balance as of January 1 | 2,779.6 | $ 3,064.4 | 3,064.4 |
Goodwill, Acquired During Period | 676.6 | 0 | |
Adjustments to goodwill | 88.1 | (284.8) | |
Balance at end of period | 3,544.3 | 2,779.6 | |
Customer Relationships [Member] | |||
Goodwill [Line Items] | |||
Intangible Assets, Gross (Excluding Goodwill) | 4,297.2 | 3,275.3 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 970.5 | 855.2 | |
Intangible Assets, Net (Excluding Goodwill) | 3,326.7 | 2,420.1 | |
Patents, Licenses And Technology [Member] | |||
Goodwill [Line Items] | |||
Intangible Assets, Gross (Excluding Goodwill) | 455.5 | 395.3 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 181.9 | 163.3 | |
Intangible Assets, Net (Excluding Goodwill) | 273.6 | 232 | |
Noncompete Agreements [Member] | |||
Goodwill [Line Items] | |||
Intangible Assets, Gross (Excluding Goodwill) | 77.4 | 53 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 47.3 | 42.1 | |
Intangible Assets, Net (Excluding Goodwill) | 30.1 | 10.9 | |
Trade Names [Member] | |||
Goodwill [Line Items] | |||
Intangible Assets, Gross (Excluding Goodwill) | 439.8 | 406.3 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 162.7 | 141.6 | |
Intangible Assets, Net (Excluding Goodwill) | 277.1 | 264.7 | |
Use Rights [Member] | |||
Goodwill [Line Items] | |||
Intangible Assets, Gross (Excluding Goodwill) | 10 | 10 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 2.3 | 1.4 | |
Intangible Assets, Net (Excluding Goodwill) | 7.7 | 8.6 | |
Canadian licenses [Member] | |||
Goodwill [Line Items] | |||
Intangible Assets, Gross (Excluding Goodwill) | 500.1 | 464.2 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 0 | 0 | |
Intangible Assets, Net (Excluding Goodwill) | $ 500.1 | $ 464.2 |
GOODWILL AND INTANGIBLE ASSET40
GOODWILL AND INTANGIBLE ASSETS (Components of identifiable intangible assets) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | $ 5,780 | $ 4,604.1 |
Accumulated Amortization | (1,364.7) | (1,203.6) |
Intangible Assets, Net (Excluding Goodwill) | 4,415.3 | 3,400.5 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | 4,297.2 | 3,275.3 |
Accumulated Amortization | (970.5) | (855.2) |
Intangible Assets, Net (Excluding Goodwill) | 3,326.7 | 2,420.1 |
Patents, Licenses And Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | 455.5 | 395.3 |
Accumulated Amortization | (181.9) | (163.3) |
Intangible Assets, Net (Excluding Goodwill) | 273.6 | 232 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | 77.4 | 53 |
Accumulated Amortization | (47.3) | (42.1) |
Intangible Assets, Net (Excluding Goodwill) | 30.1 | 10.9 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | 439.8 | 406.3 |
Accumulated Amortization | (162.7) | (141.6) |
Intangible Assets, Net (Excluding Goodwill) | 277.1 | 264.7 |
Use Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | 10 | 10 |
Accumulated Amortization | (2.3) | (1.4) |
Intangible Assets, Net (Excluding Goodwill) | 7.7 | 8.6 |
Canadian licenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | 500.1 | 464.2 |
Accumulated Amortization | 0 | 0 |
Intangible Assets, Net (Excluding Goodwill) | $ 500.1 | $ 464.2 |
GOODWILL AND INTANGIBLE ASSET41
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 7,325.1 | $ 7,325.1 | $ 6,424.4 | $ 6,202.1 | ||
Amortization of intangible assets | 54.6 | $ 41.1 | 153.6 | $ 130.7 | ||
Finite-Lived Intangible Assets, Future Amortization Expense | ||||||
Estimated amortization expense, 2012 | 59.9 | 59.9 | ||||
Estimated amortization expense, 2013 | 227.8 | 227.8 | ||||
Estimated amortization expense, 2014 | 220.3 | 220.3 | ||||
Estimated amortization expense, 2015 | 213 | 213 | ||||
Estimated amortization expense, 2016 | 209.8 | 209.8 | ||||
Estimated amortization expense, Thereafter | 2,506.7 | 2,506.7 | ||||
LabCorp Diagnostics [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Goodwill | 3,780.8 | 3,780.8 | 3,644.8 | 3,137.7 | ||
Covance Drug Development [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 3,544.3 | $ 3,544.3 | $ 2,779.6 | $ 3,064.4 |
DEBT (Senior Notes) (Details)
DEBT (Senior Notes) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 19, 2014 | |
Debt Instrument [Line Items] | ||||
Convertible Subordinated Debt, Current | $ 8.9 | $ 42.4 | ||
Senior notes due 2017 | 0 | 500 | ||
Short term debt issuance costs | 1.1 | 1.3 | ||
Long-term Debt, Excluding Current Maturities | 7,200.3 | 5,300 | ||
Long-term Line of Credit | $ 0 | 0 | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000 | |||
Credit Facility Option to Increase | 350 | |||
Credit Facility, Maximum Swing Line Borrowings | $ 100 | |||
Debt Instrument, Basis Spread on Variable Rate | 2.298% | |||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 515 | 565 | ||
Long term debt issuance costs | 50.5 | 43 | ||
Capital Lease Obligations, Noncurrent | 59.3 | |||
Other Long-term Debt | 515 | 56.2 | ||
Capital Lease Obligations, Current | 8.4 | 8.4 | ||
Notes Payable | 1.9 | 0 | ||
Debt, Current | 18.1 | 549.5 | ||
Amortization of Debt Discount (Premium) | $ 5.6 | |||
Senior notes due 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | 400 | 400 | ||
Senior notes due 2023 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | 300 | 300 | ||
Senior notes due 2024 [Member] [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | $ 600 | 0 | ||
Debt Instrument, Interest Rate, Effective Percentage | 3.25% | |||
Senior notes due 2025 [Member] [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | $ 1,000 | 1,000 | ||
Senior notes due 2027 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | $ 600 | 0 | ||
Debt Instrument, Interest Rate, Effective Percentage | 3.60% | |||
Senior notes due 2024 and 2027 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | $ 1,200 | |||
Net Proceeds from Debt | $ 1,190.1 | |||
Senior notes due 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate, Effective Percentage | 2.20% | |||
Senior notes due 2045 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | $ 900 | 900 | ||
Senior notes due 2022 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | 500 | 500 | ||
Senior Notes, Noncurrent | 500 | 500 | ||
Senior notes due 2020 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | 617.1 | 614.6 | ||
Senior Notes, Noncurrent | $ 500 | 500 | ||
Stated interest rate percentage | 4.625% | |||
2017 Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 750 | $ 0 | ||
Senior notes due 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | 130 | |||
Sequenom notes retired | $ 129.9 |
DEBT (Convertible Subordinated
DEBT (Convertible Subordinated Notes) (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017USD ($)shares | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | |
Zero Coupon Convertible Subordinated Notes [Line Items] | |||
Number of trading days used to establish contingent cash interest rate on zero-coupon subordinated notes (in days) | five | ||
Stock conversion rate for zero-coupon subordinated notes (per thousand) | shares | 0 | 0 | |
tax benefit realized upon conversion of zero coupon convertible debt | $ 13,700,000 | ||
Principal amount of zero-coupon subordinated notes | 22,800,000 | $ 22,800,000 | |
Debt Conversion, Converted Instrument, Amount | 66,200,000 | ||
Payments On Zero Coupon Subordinated Notes | $ 33,800,000 | $ 33,800,000 | $ 31,500,000 |
Zero-coupon convertible subordinated notes [Member] | |||
Zero Coupon Convertible Subordinated Notes [Line Items] | |||
Minimum contingent cash interest rate on zero-coupon subordinated notes (in hundredths) | 0.125% | ||
Stock conversion rate for zero-coupon subordinated notes (per thousand) | shares | 13.4108 | 13.4108 | |
Principal amount of zero-coupon subordinated notes | $ 1,000,000,000 | $ 1,000,000,000 |
DEBT (Credit Facilities) (Detai
DEBT (Credit Facilities) (Details) $ in Millions | 3 Months Ended | |||
Sep. 30, 2017USD ($)Rate | Dec. 31, 2016USD ($) | Dec. 19, 2014USD ($) | Jun. 30, 2011USD ($) | |
Line of Credit Facility [Line Items] | ||||
Previously Recorded Litigation Reserve In Connection With False Claims Act Lawsuit | $ 15 | |||
Long-term Debt, Excluding Current Maturities | $ 7,200.3 | $ 5,300 | ||
Convertible Subordinated Debt, Current | 8.9 | 42.4 | ||
Long-term Line of Credit | 0 | 0 | ||
Line of Credit Facility, Fair Value of Amount Outstanding | 515 | 565 | ||
Revolving Credit Facility, maximum borrowing capacity | $ 1,000 | |||
Capital Lease Obligations, Current | 8.4 | 8.4 | ||
Notes Payable | 1.9 | 0 | ||
Debt, Current | 18.1 | 549.5 | ||
Other Long-term Debt | 515 | 56.2 | ||
Credit Facility Option to Increase | 350 | |||
Credit Facility, Maximum Swing Line Borrowings | 100 | |||
Notes Payable | $ 9.4 | 7.2 | ||
Long-term Debt [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Revolving Credit Facility, interest rate at period end | 2.49% | |||
2017 Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Revolving Credit Facility, interest rate at period end | 2.36% | |||
Senior notes due 2027 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | $ 600 | 0 | ||
Revolving Credit Facility, interest rate at period end | Rate | 3.60% | |||
Senior notes due 2024 [Member] [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | $ 600 | 0 | ||
Revolving Credit Facility, interest rate at period end | Rate | 3.25% | |||
Senior notes due 2020 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Senior Notes, Noncurrent | $ 500 | 500 | ||
Long-term Debt, Excluding Current Maturities | $ 617.1 | 614.6 | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.625% | |||
Senior notes due 2045 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | $ 900 | 900 | ||
Senior notes due 2022 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Senior Notes, Noncurrent | 500 | 500 | ||
Long-term Debt, Excluding Current Maturities | 500 | 500 | ||
2017 Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 750 | $ 0 | ||
Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Credit Facility, Maximum Letters of Credit | $ 150 | |||
Debt to EBITDA (leverage) ratio | 0 | |||
Line of Credit Facility, Interest Rate at Period End | 2.21% | |||
Prime Rate [Member] | Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Interest Rate Description | 0.125% to 1.00% | |||
Prime Rate [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Interest Rate Description | 0.00% to 0.25% | |||
Prime Rate [Member] | 2017 Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Interest Rate Description | 0.0% to 0.50% | |||
London Interbank Offered Rate (LIBOR) [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Commitment Fee Description | 0.10% to 0.25% | |||
London Interbank Offered Rate (LIBOR) [Member] | Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Interest Rate Description | 1.125% to 2.00% | |||
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Interest Rate Description | 0.775% to 1.25% | |||
London Interbank Offered Rate (LIBOR) [Member] | 2017 Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Interest Rate Description | 0.875% to 1.50% |
PREFERRED STOCK AND COMMON SH45
PREFERRED STOCK AND COMMON SHAREHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | |
Rollforward of common shares issued | |||||
Commons Stock Issued During Period Shares Employee Stock Plans | 1.6 | ||||
Stock Repurchased and Retired During Period, Shares | 2.1 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 0.2 | ||||
Stock Repurchased During Period, Shares | 2.2 | ||||
Rollforward of Share Repurchase Program | |||||
Outstanding common stock repurchase authorization, beginning balance | $ 739.5 | ||||
Purchase of common stock | (298.1) | ||||
Outstanding common stock repurchase authorization, ending balance | $ 447.4 | $ 447.4 | |||
Common Shares Outstanding Rollforward [Abstract] | |||||
Common shares outstanding, beginning balance (in shares) | 102.7 | ||||
Commons Stock Issued During Period Shares Employee Stock Plans | 1.6 | ||||
Stock Repurchased and Retired During Period, Shares | 2.1 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 0.2 | ||||
Restricted Stock Awards And Performance Shares Surrendered | $ 46.5 | $ 33.6 | |||
Common shares outstanding, ending balance (in shares) | 102.1 | 102.1 | |||
Commons Stock Issued During Period Shares Employee Stock Plans | 1.6 | ||||
Rollforward of common shares held in treasury | |||||
Restricted Stock Awards And Performance Shares Surrendered | (0.3) | ||||
Treasury Stock, Carrying Basis | $ 298.1 | ||||
Share repurchases unsettled at period end | 0.1 | ||||
Common Stock, Shares Authorized | 265 | ||||
Common Stock, Par or Stated Value Per Share | $ 0.10 | ||||
Preferred Stock, Shares Authorized | 30 | ||||
Preferred Stock, Par or Stated Value Per Share | $ 0.10 | ||||
Stock Repurchased and Retired During Period, Shares | 2.1 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 0.2 | ||||
Restricted Stock Awards And Performance Shares Surrendered | $ 46.5 | $ 33.6 | |||
Preferred Stock, Shares Outstanding | 0 | ||||
Share repurchases unsettled at period end | $ 6 | ||||
Common Stock [Member] | |||||
Rollforward of common shares issued | |||||
Common shares issued, beginning balance (in shares) | 125.6 | ||||
Commons Stock Issued During Period Shares Employee Stock Plans | 1.6 | ||||
Stock Repurchased and Retired During Period, Shares | 2.1 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 0.2 | ||||
Common shares issued, ending balance (in shares) | 125.3 | 125.3 | |||
Common Stock, Shares, Issued | 125.3 | 125.6 | 125.3 | 125.6 | |
Common Shares Outstanding Rollforward [Abstract] | |||||
Commons Stock Issued During Period Shares Employee Stock Plans | 1.6 | ||||
Stock Repurchased and Retired During Period, Shares | 2.1 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 0.2 | ||||
Commons Stock Issued During Period Shares Employee Stock Plans | 1.6 | ||||
Rollforward of common shares held in treasury | |||||
Restricted Stock Awards And Performance Shares Surrendered | 0 | ||||
Stock Repurchased and Retired During Period, Shares | 2.1 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 0.2 | ||||
Treasury Stock, Common [Member] | |||||
Rollforward of common shares issued | |||||
Commons Stock Issued During Period Shares Employee Stock Plans | 0 | ||||
Stock Repurchased and Retired During Period, Shares | 0 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 0 | ||||
Common Shares Outstanding Rollforward [Abstract] | |||||
Commons Stock Issued During Period Shares Employee Stock Plans | 0 | ||||
Stock Repurchased and Retired During Period, Shares | 0 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 0 | ||||
Commons Stock Issued During Period Shares Employee Stock Plans | 0 | ||||
Rollforward of common shares held in treasury | |||||
Common shares held in Treasury, beginning balance (in shares) | (22.9) | ||||
Restricted Stock Awards And Performance Shares Surrendered | (0.3) | ||||
Common shares held in Treasury, ending balance (in shares) | (23.2) | (23.2) | |||
Treasury Stock, Shares | 23.2 | 22.9 | 23.2 | 22.9 | |
Stock Repurchased and Retired During Period, Shares | 0 | ||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 0 |
PREFERRED STOCK AND COMMON SH46
PREFERRED STOCK AND COMMON SHAREHOLDERS' EQUITY PREFERRED STOCK AND COMMON SHAREHOLDERS' EQUITY - Accumulated Other Comprehensive Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The components of accumulated other comprehensive earnings are as follows: Foreign Currency Translation Adjustments Net Benefit Plan Adjustments Accumulated Other Comprehensive Earnings (Loss) Balance at December 31, 2016 $ (470.7 ) $ (110.4 ) $ (581.1 ) Other comprehensive earnings before reclassifications 276.3 4.6 280.9 Amounts reclassified from accumulated other comprehensive earnings to the Condensed Consolidated Statement of Operations (a) — (1.2 ) (1.2 ) Tax effect of adjustments (39.1 ) (2.0 ) (41.1 ) Balance at September 30, 2017 $ (233.5 ) $ (109.0 ) $ (342.5 ) (a) The amortization of prior service cost is included in the computation of net periodic benefit cost. See Note 10 (Pension and Post-retirement Plans) below for additional information regarding the Company's net periodic benefit cost. | |||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, before Tax | $ 0 | |||
Other Comprehensive (Income) Loss, Defined Benefit Plan, before Reclassification Adjustment and Tax | 4.6 | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | (1.2) | |||
Other Comprehensive Income (Loss), before Reclassifications, before Tax | 280.9 | |||
Accumulated Other Comprehensive Earnings [Roll Forward] | ||||
Foreign Currency Translation Adjustments, Beginning balance | (470.7) | |||
Other comprehensive income before reclassifications | 276.3 | |||
Tax effect of adjustments | (39.1) | |||
Foreign Currency Translation Adjustments, Ending balance | $ (233.5) | (233.5) | ||
Net Benefit Plan Adjustments, Beginning balance | (110.4) | |||
Amounts reclassified from accumulated other comprehensive income | (1.2) | |||
Tax effect of adjustments | (2) | |||
Net Benefit Plan Adjustments, Ending balance | (109) | (109) | ||
Accumulated Other Comprehensive Earnings, Beginning balance | (581.1) | |||
Other comprehensive income before reclassifications | 276.3 | |||
Amounts reclassified from accumulated other comprehensive income | (1.2) | |||
Tax effect of adjustments | (20.2) | $ 8.3 | (41.1) | $ (21.8) |
Accumulated Other Comprehensive Earnings, Ending balance | $ (342.5) | $ (342.5) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Gross unrecognized income tax benefits | $ 14.6 | $ 18.4 |
Accrued interest and penalties related to unrecognized income tax benefits | $ 6.9 | $ 9.9 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2011USD ($) | Jun. 30, 2011USD ($) | Dec. 31, 2016 | Sep. 30, 2017USD ($) | Aug. 24, 2012Recipients$ / Violation | |
Loss Contingencies [Line Items] | |||||
Litigation settlement expense in connection with the California False Claims Act lawsuit | $ 34.5 | ||||
Previously Recorded Litigation Reserve In Connection With False Claims Act Lawsuit | $ 15 | ||||
Litigation Settlement, Gross | $ 49.5 | ||||
Payment reduction by Assembly Bill No. 97 | 10.00% | ||||
Percent of lowest maximum (cap on payments) | 80.00% | ||||
Number of Recipients | Recipients | 39 | ||||
Proposed damages per violation | $ / Violation | 0.0005 | ||||
Amount Outstanding Letters Of Credit | $ 66 |
PENSION AND POSTRETIREMENT PL49
PENSION AND POSTRETIREMENT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plan Disclosures [Line Items] | ||||
Payment for Pension Benefits | $ 0 | $ 0 | ||
Minimum non-elective contribution (NEC) % for the 401(K) plan (in hundredths) | 3.00% | |||
Discretionary Contribution Percentage Mininum | 1.00% | |||
Discretionary Contribution Percentage Maximum | 3.00% | |||
Defined contribution retirement plan cost | $ 14.9 | $ 13 | 43.6 | $ 40.2 |
Defined Benefit Plan and Postretirement Plan Disclosure | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement and Curtailment | (0.1) | 0 | (0.3) | 0 |
Supplemental Employee Retirement Plan [Member] | ||||
Defined Benefit Plan and Postretirement Plan Disclosure | ||||
Interest cost on benefit obligation | 0.1 | 0.2 | 0.2 | 0.6 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Curtailment | 0 | 0.2 | (0.1) | 0.6 |
Pension Plan [Member] | ||||
Defined Benefit Plan and Postretirement Plan Disclosure | ||||
Service cost for benefits earned | 1.4 | 1.2 | 4.2 | 3.6 |
Interest cost on benefit obligation | 3.5 | 3.9 | 10.8 | 11.6 |
Expected return on plan assets | (4.1) | (4.2) | (12.3) | (12.5) |
Net amortization and deferral | 2.7 | 2.8 | 8.3 | 8.4 |
Defined benefit/postretirement plan costs | 3.5 | 3.7 | 11 | 11.1 |
Postretirement Health Coverage [Member] | ||||
Defined Benefit Plan and Postretirement Plan Disclosure | ||||
Defined benefit/postretirement plan costs | 0.5 | 0.4 | 1.5 | 1.2 |
Other Pension, Postretirement and Supplemental Plans [Member] | ||||
Defined Benefit Plan and Postretirement Plan Disclosure | ||||
Service cost for benefits earned | 1 | 0.7 | 2.8 | 2.3 |
Interest cost on benefit obligation | 1.9 | 2 | 5.6 | 6.5 |
Expected return on plan assets | (2.9) | (2.8) | (8.5) | (9) |
Net amortization and deferral | 0.2 | 0 | 0.5 | 0 |
Defined benefit/postretirement plan costs | $ 0.2 | $ (0.1) | $ 0.4 | $ (0.2) |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate | 2.70% | 3.80% | 2.70% | 3.80% |
Defined Benefit Plan Expected Rate Of Return On Assets Other Assets | 4.70% | 5.60% | 4.70% | 5.60% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Rate of Compensation Increase | 3.80% | 3.60% | 3.80% | 3.60% |
Other Pension Plan [Member] | ||||
Defined Benefit Plan and Postretirement Plan Disclosure | ||||
Service cost for benefits earned | $ 0.3 | $ 0.2 | $ 0.8 | $ 0.7 |
Interest cost on benefit obligation | 0.1 | 0.2 | 0.4 | 0.5 |
Defined benefit/postretirement plan costs | $ 0.4 | $ 0.4 | $ 1.2 | $ 1.2 |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate | 1.70% | 2.50% | 1.70% | 2.50% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Rate of Compensation Increase | 2.00% | 2.00% | 2.00% | 2.00% |
Other Postretirement Benefits Plan [Member] | ||||
Defined Benefit Plan and Postretirement Plan Disclosure | ||||
Interest cost on benefit obligation | $ 0.1 | $ 0.1 | $ 0.3 | $ 0.3 |
Net amortization and deferral | (1.7) | (4.2) | (5.1) | (12) |
Defined benefit/postretirement plan costs | (1.6) | (4.1) | (4.8) | (11.7) |
Covance [Member] | ||||
Defined Benefit Plan Disclosures [Line Items] | ||||
Defined contribution retirement plan cost | $ 14 | $ 12.6 | $ 42.6 | $ 39.1 |
PENSION AND POSTRETIREMENT PL50
PENSION AND POSTRETIREMENT PLANS Defined Contribution Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Non Elective Contribution | 3.00% | |||
Defined Contribution Plan, Cost | $ 14.9 | $ 13 | $ 43.6 | $ 40.2 |
Discretionary Contribution Percentage Mininum | 1.00% | |||
Discretionary Contribution Percentage Maximum | 3.00% | |||
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 4.50% | |||
Covance [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Contribution Plan, Cost | $ 14 | 12.6 | 42.6 | 39.1 |
Postretirement Health Coverage [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ 0.5 | $ 0.4 | $ 1.5 | $ 1.2 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Liabilities Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Noncontrolling interest puts | $ 16.5 | $ 15.2 |
Fair market value of zero-coupon subordinated notes | 18.8 | 79.3 |
Fair market value of senior notes | 6,081.7 | 5,254.5 |
Cash Surrender Value, Fair Value Disclosure | 60.6 | 53.6 |
Fair Value Liabilities Measured On Recurring Basis Deferred Compensation Liability | 62.1 | 54.2 |
Contingent Consideration Classified as Equity, Fair Value Disclosure | 16 | 16 |
Level 1 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Noncontrolling interest puts | 0 | 0 |
Cash Surrender Value, Fair Value Disclosure | 0 | 0 |
Contingent Consideration Classified as Equity, Fair Value Disclosure | 0 | 0 |
Fair Value Hedges, Net | 0 | 0 |
Level 2 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Noncontrolling interest puts | 16.5 | 15.2 |
Cash Surrender Value, Fair Value Disclosure | 60.6 | 53.6 |
Fair Value Liabilities Measured On Recurring Basis Deferred Compensation Liability | 0 | 0 |
Contingent Consideration Classified as Equity, Fair Value Disclosure | 0 | 0 |
Fair Value Hedges, Net | 17.1 | 14.6 |
Level 3 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Financial Statement Captions [Line Items] | ||
Noncontrolling interest puts | 0 | 0 |
Cash Surrender Value, Fair Value Disclosure | 0 | 0 |
Fair Value Liabilities Measured On Recurring Basis Deferred Compensation Liability | 0 | 0 |
Contingent Consideration Classified as Equity, Fair Value Disclosure | 16 | 16 |
Fair Value Hedges, Net | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS AND HE52
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Long-term Debt, Excluding Current Maturities | $ 7,200,300,000 | $ 5,300,000,000 |
Debt Instrument, Basis Spread on Variable Rate | 2.298% | |
Minimum percentage of market price to calculated value of zero-coupon subordinated debt at which the entity is subject to contingent cash interest | 120.00% | |
Embedded derivative, fair value | $ 0 | |
Embedded derivative, impact on condensed consolidated statements of operations | $ 0 | |
Senior notes due 2020 [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.625% | |
Long-term Debt, Excluding Current Maturities | $ 617,100,000 | $ 614,600,000 |
Senior Long Term Notes Due2020 Member | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Long-term Debt, Excluding Current Maturities | $ 600,000,000 |
SUPPLEMENTAL CASH FLOW INFORM53
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Conversion [Line Items] | ||
Fair Value of Assets Acquired | $ 7.3 | $ 12.1 |
Decrease in Capital Expenditures Incurred but not yet Paid | (0.4) | |
Capital Expenditures Incurred but Not yet Paid | 1.6 | |
Cash paid during period for: | ||
Interest | 174.4 | 179.5 |
Income taxes, net of refunds | 263.7 | 260.9 |
Disclosure of non-cash financing and investing activities: | ||
Restricted Stock Awards And Performance Shares Surrendered | 46.5 | 33.6 |
Conversion of zero-coupon convertible debt | 13.7 | $ 6.6 |
Other Significant Noncash Transaction, Value of Consideration Given | $ 65.2 |
BUSINESS ACQUISITIONS (Details)
BUSINESS ACQUISITIONS (Details) - USD ($) $ / shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Jul. 31, 2017 | Dec. 31, 2015 | |
Business Combination Purchase Price Allocation [Line Items] | |||||||
Proforma consolidated net revenue | $ 2,696.8 | $ 2,495.5 | $ 7,874.8 | $ 7,422 | |||
Proforma consolidated net income | 5.3 | ||||||
Revenues | 2,655.2 | 2,414.7 | 7,645.1 | 7,213.4 | |||
Operating Income (Loss) | 341.3 | 324 | 1,010 | 989 | |||
Other Long-term Debt | 515 | 515 | $ 56.2 | ||||
Other Significant Noncash Transaction, Value of Consideration Given | 65.2 | ||||||
Net Income (Loss) Attributable to Parent | 180.6 | 179.5 | 561.4 | 547.7 | |||
Goodwill, Acquired During Period | 817.2 | 398.3 | |||||
Goodwill | 7,325.1 | 7,325.1 | $ 6,424.4 | $ 6,202.1 | |||
Cash payments for laboratory-related assets | 216.8 | 204.6 | |||||
Payments to Acquire Businesses, Net of Cash Acquired | 1,799.3 | 396.8 | |||||
Business Acquisition, Pro Forma Income (Loss) from Continuing Operations, Net of Tax | 342.5 | 322.3 | 1,022.8 | 998.4 | |||
Business Acquisition, Pro Forma Net Income (Loss) | $ 176.8 | $ 171.9 | $ 551.5 | $ 534.2 | |||
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ 0 | $ 0 | $ 0 | $ 0 | |||
Proforma consolidated diluted earnings per share | $ 0 | $ 0 | $ 0 | $ 0 | |||
Chiltern [Member] | |||||||
Business Combination Purchase Price Allocation [Line Items] | |||||||
Cash paid for acquisition | $ 1,224.5 | ||||||
Revenues | $ 47.8 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | 30.7 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 116.9 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets | 32.6 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets | 57.9 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 12.1 | ||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | 676.6 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | 1,626.9 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | 18.1 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities | 51 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | 124.2 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent | 208 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other | 1.1 | ||||||
Business Combination, Separately Recognized Transactions, Liabilities Recognized | 402.4 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 1,224.5 | ||||||
Customer Relationships [Member] | Chiltern [Member] | |||||||
Business Combination Purchase Price Allocation [Line Items] | |||||||
Acquired Finite-lived Intangible Assets, Useful Life | 21 years | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 629 | ||||||
Trademarks and Trade Names [Member] | Chiltern [Member] | |||||||
Business Combination Purchase Price Allocation [Line Items] | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 24.1 | ||||||
Software and Software Development Costs [Member] | Chiltern [Member] | |||||||
Business Combination Purchase Price Allocation [Line Items] | |||||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 years | ||||||
Technology-Based Intangible Assets [Member] | Chiltern [Member] | |||||||
Business Combination Purchase Price Allocation [Line Items] | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 47 |
BUSINESS ACQUISITIONS Busines55
BUSINESS ACQUISITIONS Business Acquisitions in the Aggregate (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||||||
Proforma consolidated net revenue | $ 2,696.8 | $ 2,495.5 | $ 7,874.8 | $ 7,422 | ||
Other Long-term Debt | 515 | 515 | $ 56.2 | |||
Revenues | 2,655.2 | $ 2,414.7 | 7,645.1 | 7,213.4 | ||
Payments to Acquire Businesses, Net of Cash Acquired | 1,799.3 | $ 396.8 | ||||
Goodwill, Acquired During Period | 817.2 | 398.3 | ||||
Goodwill | $ 7,325.1 | 7,325.1 | $ 6,424.4 | $ 6,202.1 | ||
Excluding Covance [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Payments to Acquire Businesses, Net of Cash Acquired | 605.5 | |||||
Finite-lived Intangible Assets Acquired | $ 1,103 |
BUSINESS SEGMENT INFORMATION 56
BUSINESS SEGMENT INFORMATION Business Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Total net revenues | $ 2,597.9 | $ 2,372.7 | $ 7,504.4 | $ 7,049.9 |
Intercompany revenue elimination | (0.4) | (0.2) | (0.9) | (0.5) |
Reimbursement Revenue | 57.3 | 42 | 140.7 | 163.5 |
Revenues | 2,655.2 | 2,414.7 | 7,645.1 | 7,213.4 |
Operating Income (Loss) | 341.3 | 324 | 1,010 | 989 |
Earnings before income taxes | 281.1 | 263.4 | 845.9 | 828.9 |
Provision for income taxes | 281.1 | 263.4 | 845.9 | 828.9 |
Provision for income taxes | 97.7 | 83.6 | 281.1 | 280.3 |
Net earnings | 183.4 | 179.8 | 564.8 | 548.6 |
Net income attributable to Laboratory Corporation of America Holdings | (2.8) | (0.3) | (3.4) | (0.9) |
Income Loss from Continuing Operations Before Income Taxes and Minority Interest | (60.2) | (60.6) | (164.1) | (160.1) |
Net Income (Loss) Attributable to Parent | 180.6 | 179.5 | 561.4 | 547.7 |
Corporate Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | $ (37.9) | (33.5) | $ (105.1) | (111.3) |
LabCorp Diagnostics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Percent of Revenue Contributed | 70.70% | 71.30% | ||
Total net revenues | $ 1,837.2 | 1,671.8 | $ 5,354.2 | 4,922.1 |
Operating Income (Loss) | $ 336.2 | 305.6 | 980.2 | $ 910 |
Covance Drug Development [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Percent of Revenue Contributed | 29.30% | 28.70% | ||
Total net revenues | $ 761.1 | 701.1 | 2,151.1 | $ 2,128.3 |
Operating Income (Loss) | $ 43 | $ 51.9 | $ 134.9 | $ 190.3 |
Uncategorized Items - lh-201709
Label | Element | Value |
Conversion of convertible debt | lh_Conversionofconvertibledebt | $ 0 |