Item 6. SELECTED FINANCIAL DATA (in millions, except per share amounts)

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Item 6. SELECTED FINANCIAL DATA (in millions, except per share amounts)

The selected financial data presented below under the captions “Statement of Operations Data” and “Balance Sheet Data” as of and for the five-year period ended December 31, 2018, are derived from consolidated financial statements of the Company, which have been audited by an independent registered public accounting firm. This data should be read in conjunction with the accompanying notes, the Company's consolidated financial statements and the related notes thereto, and “Management's Discussion and Analysis of Financial Condition and Results of Operations,” all included elsewhere in this annual report.



	Year Ended December 31,
	(a) 2018		(b)(k) 2017		(c)(k) 2016		(d)(k) 2015		(e)(k) 2014
Statement of Operations Data:
Net revenues	$	11,333.4	$	10,308.0	$	9,552.9	$	8,505.7	$	6,011.6
Gross profit	3,176.4		3,091.8		2,854.0		2,903.3		2,203.1
Operating income (i)	1,325.7		1,305.2		1,270.6		996.8		904.3
Net earnings attributable to Laboratory
Corporation of America Holdings (j)	883.7		1,227.1		711.8		437.6		511.2
Basic earnings per common share	$	8.71	$	11.99	$	6.94	$	4.43	$	6.03
Diluted earnings per common share	$	8.61	$	11.81	$	6.82	$	4.35	$	5.91
Basic weighted average common
shares outstanding	101.4		102.4		102.5		98.8		84.8
Diluted weighted average common
shares outstanding	102.6		103.9		104.3		100.6		86.4
Balance Sheet Data:
Cash and cash equivalents, and
short-term investments	$	426.8	$	316.6	$	433.6	$	716.4	$	580.0
Goodwill and intangible assets, net (h)	11,271.4		11,567.0		9,824.9		9,526.6		4,575.2
Total assets (f)	16,185.3		16,673.0		14,334.8		14,104.7		7,262.8
Long-term obligations (f) (g)	6,059.8		6,762.1		5,849.5		6,364.2		2,990.8
Total shareholders' equity	6,971.4		6,804.1		5,518.2		4,945.1		2,820.5


(a)	During 2018, the Company recorded net restructuring charges of $48.1. The charges were comprised of $40.3 in severance and other personnel costs and $11.8 in facility-related costs primarily associated with facility closures and general integration initiatives. These charges were offset by the reversal of previously established reserves of $2.0 in unused severance and $2.0 in unused facility-related costs.

(a)

During 2018, the Company recorded net restructuring charges of $48.1. The charges were comprised of $40.3 in severance and other personnel costs and $11.8 in facility-related costs primarily associated with facility closures and general integration initiatives. These charges were offset by the reversal of previously established reserves of $2.0 in unused severance and $2.0 in unused facility-related costs.


(b)	During 2017, the Company recorded net restructuring charges of $70.9. The charges were comprised of $36.1 in severance and other personnel costs and $39.9 in facility-related costs primarily associated with facility closures and general integration initiatives. These charges were offset by the reversal of previously established reserves of $0.5 in unused severance and $4.6 in unused facility-related costs. The Company also recognized asset impairment losses of $23.5

(b)

During 2017, the Company recorded net restructuring charges of $70.9. The charges were comprised of $36.1 in severance and other personnel costs and $39.9 in facility-related costs primarily associated with facility closures and general integration initiatives. These charges were offset by the reversal of previously established reserves of $0.5 in unused severance and $4.6 in unused facility-related costs. The Company also recognized asset impairment losses of $23.5

Index

related to the termination of software development projects within the Covance Drug Development (CDD) segment and the forgiveness of certain indebtedness for LabCorp Diagnostics (LCD) customers in areas heavily impacted by hurricanes during the third quarter.


(c)	During 2016, the Company recorded net restructuring charges of $58.4. The charges were comprised of $30.9 in severance and other personnel costs and $33.8 in facility-related costs primarily associated with facility closures and general integration initiatives. These charges were offset by the reversal of previously established reserves of $2.8 in unused severance and $3.5 in unused facility-related costs.

(c)

During 2016, the Company recorded net restructuring charges of $58.4. The charges were comprised of $30.9 in severance and other personnel costs and $33.8 in facility-related costs primarily associated with facility closures and general integration initiatives. These charges were offset by the reversal of previously established reserves of $2.8 in unused severance and $3.5 in unused facility-related costs.


(d)	During 2015, the Company recorded net restructuring charges of $113.9. The charges were comprised of $59.2 in severance and other personnel costs and $55.8 in facility-related costs primarily associated with facility closures and general integration initiatives. These charges were offset by the reversal of previously established reserves of $1.1 in unused facility-related costs.


(e)	During 2014, the Company recorded net restructuring charges of $17.8. The charges were comprised of $10.5 in severance and other personnel costs and $8.4 in facility-related costs primarily associated with facility closures and general integration initiatives. These charges were offset by the reversal of previously established reserves of $0.4 in unused severance and $0.7 in unused facility-related costs.

(e)

During 2014, the Company recorded net restructuring charges of $17.8. The charges were comprised of $10.5 in severance and other personnel costs and $8.4 in facility-related costs primarily associated with facility closures and general integration initiatives. These charges were offset by the reversal of previously established reserves of $0.4 in unused severance and $0.7 in unused facility-related costs.


(f)	During the first quarter of 2016, the Company adopted Accounting Standards Update (ASU 2015-03) Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. In accordance with this guidance, unamortized debt issuance costs of $52.8 and $39.0 associated with the Senior Notes and loan obligations have been reclassified from total assets to long-term obligations for fiscal 2015 and 2014, respectively, in the table above.

(f)

During the first quarter of 2016, the Company adopted Accounting Standards Update (ASU 2015-03) Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. In accordance with this guidance, unamortized debt issuance costs of $52.8 and $39.0 associated with the Senior Notes and loan obligations have been reclassified from total assets to long-term obligations for fiscal 2015 and 2014, respectively, in the table above.


(g)	Long-term obligations primarily include the Company’s zero-coupon convertible subordinated notes, 5.625% Senior Notes due 2015, 3.125% Senior Notes due 2016, 2.20% Senior Notes due 2017, 2.50% Senior Notes due 2018, 4.625% Senior Notes due 2020, 2.625% Senior Notes due 2020, 3.75% Senior Notes due 2022, 3.20% Senior Notes due 2022, 4.00% Senior Notes due 2023, 3.25% Senior Notes due 2024, 3.60% Senior Notes due 2025, 3.60% Senior Notes due 2027, 4.70% Senior Notes due 2045, 2014 term loan, 2017 term loan, revolving credit facility and other long-term obligations. The accreted balance of the zero-coupon convertible subordinated notes was $8.7, $8.8, $42.4, $94.5, and $93.9 at December 31, 2018, 2017, 2016, 2015, and 2014, respectively. The principal balance of the 5.625% Senior Notes was $0.0 at December 31, 2018, 2017, 2016 and 2015 and $250.0 at December 31, 2014. The principal balance of the 3.125% Senior Notes was $0.0 at December 31, 2018, 2017, and 2016 and $325.0 at December 31, 2015 and 2014. The principal balance of the 4.625% Senior Notes was $600.0 at December 31, 2018, 2017, 2016, 2015, and 2014. The aggregate fair value of the fixed-to-variable interest rate swap on the 4.625% Senior Notes was ($3.1) at December 31, 2018, $4.1 at December 31, 2017, $14.6 at December 31, 2016, $21.6 at December 31, 2015, and $18.5 at December 31, 2014. The principal balance of the 2.625% Senior Notes was $500.0 at December 31, 2018, 2017, 2016, and 2015, and was $0.0 for the year 2014. The principal balance of the 2.20% Senior Notes was $0.0 at December 31, 2018 and 2017 and $500.0 at December 31, 2016, 2015, and 2014. The principal balance of the 3.75% Senior Notes was $500.0 at December 31, 2018, 2017, 2016, 2015, and 2014. The principal balance of the 3.20% Senior Notes was $500.0 at December 31, 2018, 2017, 2016 and 2015 and was $0.0 at December 31, 2014. The principal balance of the 2.50% Senior Notes due 2018 was $0.0 at December 31, 2018 and $400.0 for all other years presented. The principal balance of the 4.00% Senior Notes due 2023 was $300.0 at December 31, 2018, 2017, 2016, 2015, and 2014.The principal balances of the 3.60% Senior Notes due 2025 and 4.70% Senior Notes due 2045 were $1,000.0 and $900.0, respectively, at December 31, 2018, 2017, 2016 and 2015 and were each $0.0 at both December 31, 2014. The principal balance of the 3.25% Senior Notes due 2024 was $600.0 at December 31, 2018 and 2017, and $0.0 for all other years presented. The principal balance of the 3.60% notes due 2027 was $600.0 at December 31, 2018 and 2017, and $0.0 for all other years presented. The outstanding balance on the 2014 term loan was $0.0 at December 31, 2018, $72.0 at December 31, 2017, $565.0 at December 31, 2016, $715.0 at December 31, 2015, and $0.0 at December 31, 2014. The outstanding balance on the 2017 term loan was $527.1 at December 31, 2018, $750.0 at December 31, 2017, and $0.0 for all other years presented. The outstanding balance on the revolving credit facility was $0.0 at December 31, 2018, 2017, 2016, 2015, and 2014. The remainder of other long-term obligations consisted primarily of capital leases and mortgages payable with balances of $67.8, $76.8, $71.8, $60.9, and $42.4 at December 31, 2018, 2017, 2016, 2015, and 2014, respectively. Long-term obligations exclude amounts due to affiliates.

(g)

Long-term obligations primarily include the Company’s zero-coupon convertible subordinated notes, 5.625% Senior Notes due 2015, 3.125% Senior Notes due 2016, 2.20% Senior Notes due 2017, 2.50% Senior Notes due 2018, 4.625% Senior Notes due 2020, 2.625% Senior Notes due 2020, 3.75% Senior Notes due 2022, 3.20% Senior Notes due 2022, 4.00% Senior Notes due 2023, 3.25% Senior Notes due 2024, 3.60% Senior Notes due 2025, 3.60% Senior Notes due 2027, 4.70% Senior Notes due 2045, 2014 term loan, 2017 term loan, revolving credit facility and other long-term obligations. The accreted balance of the zero-coupon convertible subordinated notes was $8.7, $8.8, $42.4, $94.5, and $93.9 at December 31, 2018, 2017, 2016, 2015, and 2014, respectively. The principal balance of the 5.625% Senior Notes was $0.0 at December 31, 2018, 2017, 2016 and 2015 and $250.0 at December 31, 2014. The principal balance of the 3.125% Senior Notes was $0.0 at December 31, 2018, 2017, and 2016 and $325.0 at December 31, 2015 and 2014. The principal balance of the 4.625% Senior Notes was $600.0 at December 31, 2018, 2017, 2016, 2015, and 2014. The aggregate fair value of the fixed-to-variable interest rate swap on the 4.625% Senior Notes was ($3.1) at December 31, 2018, $4.1 at December 31, 2017, $14.6 at December 31, 2016, $21.6 at December 31, 2015, and $18.5 at December 31, 2014. The principal balance of the 2.625% Senior Notes was $500.0 at December 31, 2018, 2017, 2016, and 2015, and was $0.0 for the year 2014. The principal balance of the 2.20% Senior Notes was $0.0 at December 31, 2018 and 2017 and $500.0 at December 31, 2016, 2015, and 2014. The principal balance of the 3.75% Senior Notes was $500.0 at December 31, 2018, 2017, 2016, 2015, and 2014. The principal balance of the 3.20% Senior Notes was $500.0 at December 31, 2018, 2017, 2016 and 2015 and was $0.0 at December 31, 2014. The principal balance of the 2.50% Senior Notes due 2018 was $0.0 at December 31, 2018 and $400.0 for all other years presented. The principal balance of the 4.00% Senior Notes due 2023 was $300.0 at December 31, 2018, 2017, 2016, 2015, and 2014.The principal balances of the 3.60% Senior Notes due 2025 and 4.70% Senior Notes due 2045 were $1,000.0 and $900.0, respectively, at December 31, 2018, 2017, 2016 and 2015 and were each $0.0 at both December 31, 2014. The principal balance of the 3.25% Senior Notes due 2024 was $600.0 at December 31, 2018 and 2017, and $0.0 for all other years presented. The principal balance of the 3.60% notes due 2027 was $600.0 at December 31, 2018 and 2017, and $0.0 for all other years presented. The outstanding balance on the 2014 term loan was $0.0 at December 31, 2018, $72.0 at December 31, 2017, $565.0 at December 31, 2016, $715.0 at December 31, 2015, and $0.0 at December 31, 2014. The outstanding balance on the 2017 term loan was $527.1 at December 31, 2018, $750.0 at December 31, 2017, and $0.0 for all other years presented. The outstanding balance on the revolving credit facility was $0.0 at December 31, 2018, 2017, 2016, 2015, and 2014. The remainder of other long-term obligations consisted primarily of capital leases and mortgages payable with balances of $67.8, $76.8, $71.8, $60.9, and $42.4 at December 31, 2018, 2017, 2016, 2015, and 2014, respectively. Long-term obligations exclude amounts due to affiliates.


(h)	During 2016, the Company revised the final purchase price allocation for Covance. As a result, an out of period adjustment of $25.6 was recorded to reduce goodwill and increase a deferred tax asset as of December 31, 2015. The Company concluded that the impact of this adjustment was not material to the current or prior periods.


(i)	The Company changed its financial statement classification for certain gross receipts taxes in 2016, removing these taxes from its provision for income taxes and moving this expense into selling, general and administrative expenses. Certain gross receipts taxes of $6.1, $6.1, and $7.6 were reclassified in 2015, 2014 and 2013, respectively.

Index


(j)	Net earnings attributable to Laboratory Corporation of America Holdings in 2017 includes a provisional net benefit of $519.0 due to the Tax Cuts and Jobs Act (TCJA). For additional information on the TCJA, see Note 14 to the Consolidated Financial Statements.


(k)	The selected financial data for the years ended December 31, 2018, 2017 and 2016 and as of December 31, 2018, 2017 and 2016, reflects the adoption of Accounting Standards Codification 606 Revenue from Contracts with Customers (ASC 606). See Note 1 of the notes to the consolidated financial statements for a summary of adjustments. The select financial data for the years ended December 31, 2015 and 2014 and as of December 31, 2015 and 2014 does not reflect the adoption of ASC 606.

(k)

The selected financial data for the years ended December 31, 2018, 2017 and 2016 and as of December 31, 2018, 2017 and 2016, reflects the adoption of Accounting Standards Codification 606 Revenue from Contracts with Customers (ASC 606). See Note 1 of the notes to the consolidated financial statements for a summary of adjustments. The select financial data for the years ended December 31, 2015 and 2014 and as of December 31, 2015 and 2014 does not reflect the adoption of ASC 606.

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