001-12215 | 16-1387862 | |
(Commission File Number) | (I.R.S. Employer Identification No.) | |
Three Giralda Farms Madison, NJ | 07940 | |
(Address of principal executive offices) | (Zip Code) | |
(973) 520-2700 | ||
(Registrant's telephone number, including area code) |
d. | Exhibit | |
99.1 | Press release of Quest Diagnostics Incorporated dated January 23, 2013, announcing, among other things, its results for the quarter ended December 31, 2012. |
• | Full year record cash from operations of $1.2 billion and expanded operating margins |
• | Fourth quarter adjusted diluted EPS from continuing operations of $1.01, vs. $1.20 in 2011 |
• | Fourth quarter reported diluted EPS from continuing operations of $0.87 vs. $1.16 in 2011 |
• | Fourth quarter revenues from continuing operations of $1.8 billion, 4% below prior year |
• | 2013 guidance before special items: Diluted EPS between $4.35 - $4.55; revenues to grow between 0% and 1% |
• | Revenue growth of between 0% and 1%; |
• | Earnings per diluted share to be between $4.35 and $4.55 |
• | Cash provided by operations to approximate $1 billion |
• | Capital expenditures to approximate $250 million |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net revenues | $ | 1,773.8 | $ | 1,848.2 | $ | 7,382.6 | $ | 7,391.9 | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of services | 1,072.6 | 1,068.8 | 4,364.7 | 4,362.9 | |||||||||||
Selling, general and administrative | 421.0 | 441.0 | 1,745.2 | 1,743.1 | |||||||||||
Amortization of intangible assets | 18.5 | 17.8 | 74.7 | 61.2 | |||||||||||
Other operating (income) expense, net | (3.3 | ) | 0.2 | (2.8 | ) | 238.1 | |||||||||
Total operating costs and expenses | 1,508.8 | 1,527.8 | 6,181.8 | 6,405.3 | |||||||||||
Operating income | 265.0 | 320.4 | 1,200.8 | 986.6 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (40.0 | ) | (42.6 | ) | (164.7 | ) | (169.6 | ) | |||||||
Equity earnings in unconsolidated joint ventures | 6.0 | 6.1 | 25.6 | 29.0 | |||||||||||
Other income, net | 0.6 | 3.5 | 6.7 | 2.8 | |||||||||||
Total non-operating expenses, net | (33.4 | ) | (33.0 | ) | (132.4 | ) | (137.8 | ) | |||||||
Income from continuing operations before taxes | 231.6 | 287.4 | 1,068.4 | 848.8 | |||||||||||
Income tax expense | 81.6 | 93.8 | 401.9 | 354.7 | |||||||||||
Income from continuing operations | 150.0 | 193.6 | 666.5 | 494.1 | |||||||||||
Income (loss) from discontinued operations, net of taxes | (84.4 | ) | 5.3 | (74.4 | ) | 11.6 | |||||||||
Net income | 65.6 | 198.9 | 592.1 | 505.7 | |||||||||||
Less: Net income attributable to noncontrolling interests | 9.8 | 9.4 | 36.4 | 35.1 | |||||||||||
Net income attributable to Quest Diagnostics | $ | 55.8 | $ | 189.5 | $ | 555.7 | $ | 470.6 | |||||||
Amounts attributable to Quest Diagnostics' common stockholders: | |||||||||||||||
Income from continuing operations | $ | 140.2 | $ | 184.2 | $ | 630.1 | $ | 459.0 | |||||||
Income (loss) from discontinued operations, net of taxes | (84.4 | ) | 5.3 | (74.4 | ) | 11.6 | |||||||||
Net income | $ | 55.8 | $ | 189.5 | $ | 555.7 | $ | 470.6 | |||||||
Earnings per share attributable to Quest Diagnostics' common stockholders - basic: | |||||||||||||||
Income from continuing operations | $ | 0.88 | $ | 1.17 | $ | 3.96 | $ | 2.88 | |||||||
Income (loss) from discontinued operations | (0.53 | ) | 0.03 | (0.47 | ) | 0.07 | |||||||||
Net income | $ | 0.35 | $ | 1.20 | $ | 3.49 | $ | 2.95 | |||||||
Earnings per share attributable to Quest Diagnostics' common stockholders - diluted: | |||||||||||||||
Income from continuing operations | $ | 0.87 | $ | 1.16 | $ | 3.92 | $ | 2.85 | |||||||
Income (loss) from discontinued operations | (0.53 | ) | 0.03 | (0.46 | ) | 0.07 | |||||||||
Net income | $ | 0.34 | $ | 1.19 | $ | 3.46 | $ | 2.92 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 158.7 | 157.8 | 158.6 | 158.7 | |||||||||||
Diluted | 160.1 | 159.1 | 160.1 | 160.2 | |||||||||||
Operating income as a percentage of net revenues | 14.9 | % | 17.3 | % | 16.3 | % | 13.4 | % | |||||||
December 31, 2012 | December 31, 2011 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 295.6 | $ | 164.9 | |||
Accounts receivable, net | 867.0 | 906.5 | |||||
Inventories | 93.1 | 89.1 | |||||
Deferred income taxes | 174.2 | 153.3 | |||||
Prepaid expenses and other current assets | 91.0 | 87.4 | |||||
Current assets held for sale | 40.2 | — | |||||
Total current assets | 1,561.1 | 1,401.2 | |||||
Property, plant and equipment, net | 755.8 | 799.8 | |||||
Goodwill | 5,535.8 | 5,795.8 | |||||
Intangible assets, net | 872.2 | 1,035.6 | |||||
Other assets | 204.6 | 281.0 | |||||
Non-current assets held for sale | 354.4 | — | |||||
Total assets | $ | 9,283.9 | $ | 9,313.4 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 1,016.2 | $ | 906.8 | |||
Short-term borrowings and current portion of long-term debt | 9.4 | 654.4 | |||||
Current liabilities held for sale | 22.0 | — | |||||
Total current liabilities | 1,047.6 | 1,561.2 | |||||
Long-term debt | 3,354.2 | 3,370.5 | |||||
Other liabilities | 635.5 | 666.7 | |||||
Non-current liabilities held for sale | 60.8 | — | |||||
Stockholders' equity: | |||||||
Quest Diagnostics stockholders' equity: | |||||||
Common stock, par value $0.01 per share; 600 shares authorized at both December 31, 2012 and 2011; 215.1 shares and 214.6 shares issued at December 31, 2012 and 2011, respectively | 2.2 | 2.1 | |||||
Additional paid-in capital | 2,370.7 | 2,347.5 | |||||
Retained earnings | 4,690.4 | 4,263.6 | |||||
Accumulated other comprehensive income (loss) | 14.3 | (8.0 | ) | ||||
Treasury stock, at cost; 56.7 shares and 57.2 shares at December 31, 2012 and 2011, respectively | (2,914.5 | ) | (2,912.3 | ) | |||
Total Quest Diagnostics stockholders' equity | 4,163.1 | 3,692.9 | |||||
Noncontrolling interests | 22.7 | 22.1 | |||||
Total stockholders' equity | 4,185.8 | 3,715.0 | |||||
Total liabilities and stockholders' equity | $ | 9,283.9 | $ | 9,313.4 |
Twelve Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 592.1 | $ | 505.7 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 286.6 | 281.1 | |||||
Provision for doubtful accounts | 268.6 | 279.6 | |||||
Deferred income tax provision | 6.5 | 28.6 | |||||
Stock-based compensation expense | 50.3 | 71.9 | |||||
Excess tax benefits from stock-based compensation arrangements | (4.0 | ) | (4.5 | ) | |||
Provision for special charge | — | 236.0 | |||||
Asset impairment and loss on sale of business | 86.3 | — | |||||
Other, net | (7.7 | ) | 8.6 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (243.0 | ) | (306.7 | ) | |||
Accounts payable and accrued expenses | (13.2 | ) | (17.6 | ) | |||
Settlement of special charge | — | (241.0 | ) | ||||
Income taxes payable | 100.6 | 39.1 | |||||
Termination of interest rate swap agreements | 71.8 | — | |||||
Other assets and liabilities, net | (7.8 | ) | 14.7 | ||||
Net cash provided by operating activities | 1,187.1 | 895.5 | |||||
Cash flows from investing activities: | |||||||
Business acquisitions, net of cash acquired | (50.6 | ) | (1,298.6 | ) | |||
Sale of securities acquired in business acquisition | — | 213.5 | |||||
Capital expenditures | (182.2 | ) | (161.5 | ) | |||
Decrease in investments and other assets | 15.7 | 3.2 | |||||
Net cash used in investing activities | (217.1 | ) | (1,243.4 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from borrowings | 715.0 | 2,689.4 | |||||
Repayments of debt | (1,369.4 | ) | (1,710.3 | ) | |||
Purchases of treasury stock | (200.0 | ) | (935.0 | ) | |||
Exercise of stock options | 162.1 | 136.8 | |||||
Excess tax benefits from stock-based compensation arrangements | 4.0 | 4.5 | |||||
Dividends paid | (108.1 | ) | (64.7 | ) | |||
Distributions to noncontrolling interests | (37.8 | ) | (35.7 | ) | |||
Other financing activities, net | 12.1 | (21.5 | ) | ||||
Net cash (used in) provided by financing activities | (822.1 | ) | 63.5 | ||||
Net change in cash and cash equivalents | 147.9 | (284.4 | ) | ||||
Less: Cash included in assets held for sale | (17.2 | ) | — | ||||
Cash and cash equivalents, beginning of period | 164.9 | 449.3 | |||||
Cash and cash equivalents, end of period | $ | 295.6 | $ | 164.9 | |||
Cash paid during the period for: | |||||||
Interest | $ | 163.1 | $ | 161.8 | |||
Income taxes | $ | 305.4 | $ | 285.3 |
1) | The computation of basic and diluted earnings per common share is as follows: |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
(in millions, except per share data) | |||||||||||||||
Amounts attributable to Quest Diagnostics' common stockholders: | |||||||||||||||
Income from continuing operations | $ | 140.2 | $ | 184.2 | $ | 630.1 | $ | 459.0 | |||||||
Income (loss) from discontinued operations, net of taxes | (84.4 | ) | 5.3 | (74.4 | ) | 11.6 | |||||||||
Net income available to common stockholders | $ | 55.8 | $ | 189.5 | $ | 555.7 | $ | 470.6 | |||||||
Income from continuing operations | $ | 140.2 | $ | 184.2 | $ | 630.1 | $ | 459.0 | |||||||
Less: Earnings allocated to participating securities | 0.6 | 1.0 | 2.5 | 2.9 | |||||||||||
Earnings available to Quest Diagnostics' common stockholders - basic and diluted | $ | 139.6 | $ | 183.2 | $ | 627.6 | $ | 456.1 | |||||||
Weighted average common shares outstanding - basic | 158.7 | 157.8 | 158.6 | 158.7 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Stock options and performance share units | 1.4 | 1.3 | 1.5 | 1.5 | |||||||||||
Weighted average common shares outstanding - diluted | 160.1 | 159.1 | 160.1 | 160.2 | |||||||||||
Earnings per share attributable to Quest Diagnostics' common stockholders - basic: | |||||||||||||||
Income from continuing operations | $ | 0.88 | $ | 1.17 | $ | 3.96 | $ | 2.88 | |||||||
Income (loss) from discontinued operations | (0.53 | ) | 0.03 | (0.47 | ) | 0.07 | |||||||||
Net income | $ | 0.35 | $ | 1.20 | $ | 3.49 | $ | 2.95 | |||||||
Earnings per share attributable to Quest Diagnostics' common stockholders - diluted: | |||||||||||||||
Income from continuing operations | $ | 0.87 | $ | 1.16 | $ | 3.92 | $ | 2.85 | |||||||
Income (loss) from discontinued operations | (0.53 | ) | 0.03 | (0.46 | ) | 0.07 | |||||||||
Net income | $ | 0.34 | $ | 1.19 | $ | 3.46 | $ | 2.92 |
2) | Adjusted amounts for operating income, operating income as a percentage of net revenues, income from continuing operations, and diluted earnings per common share represent the Company's results before the Medi-Cal charge, restructuring and integration charges, transaction costs related to the acquisitions of Athena Diagnostics and Celera Corporation, and CEO succession costs. Adjusted measures are presented because management believes those measures are useful adjuncts to reported results under accounting principles generally accepted in the United States when comparing results of operations from period to period. Adjusted measures should not be considered as an alternative to the corresponding measures determined under accounting principles generally accepted in the United States. The following tables reconcile reported results to adjusted results: |
Three Months Ended December 31, 2012 | |||||||||||
(dollars in millions, except per share data) | |||||||||||
Restructuring & Integration Charges | |||||||||||
As Reported | (a) | As Adjusted | |||||||||
Operating income | $ | 265.0 | $ | 36.4 | $ | 301.4 | |||||
Operating income as a % of net revenues | 14.9 | % | 2.1 | % | 17.0 | % | |||||
Income from continuing operations (b) | 140.2 | 22.3 | 162.5 | ||||||||
Diluted earnings per common share | 0.87 | 0.14 | 1.01 |
(a) | Represents costs primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating our business. |
(b) | For the restructuring and integration charges, income tax benefits were calculated using a combined federal and state rate of 38.7%. |
Twelve Months Ended December 31, 2012 | |||||||||||||||
(dollars in millions, except per share data) | |||||||||||||||
Restructuring & Integration Charges | CEO Succession Costs | ||||||||||||||
As Reported | (c) | (d) | As Adjusted | ||||||||||||
Operating income | $ | 1,200.8 | $ | 106.0 | $ | 10.1 | $ | 1,316.9 | |||||||
Operating income as a % of net revenues | 16.3 | % | 1.4 | % | 0.1 | % | 17.8 | % | |||||||
Income from continuing operations (e) | 630.1 | 65.0 | 6.1 | 701.2 | |||||||||||
Diluted earnings per common share | 3.92 | 0.40 | 0.04 | 4.36 |
(c) | Represents costs primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating our business. |
(d) | Principally represents accrued severance and accelerated vesting of equity awards in connection with the succession of our prior CEO. |
(e) | For both the restructuring and integration charges, and CEO succession costs, income tax benefits were calculated using a combined federal and state rate of 38.7%. |
Three Months Ended December 31, 2011 | |||||||||||||||
(dollars in millions, except per share data) | |||||||||||||||
Restructuring & Integration Charges | CEO Succession Costs | ||||||||||||||
As Reported | (f) | (g) | As Adjusted | ||||||||||||
Operating income | $ | 320.4 | $ | 5.5 | $ | 5.6 | $ | 331.5 | |||||||
Operating income as a % of net revenues | 17.3 | % | 0.3 | % | 0.3 | % | 17.9 | % | |||||||
Income from continuing operations (h) | 184.2 | 3.4 | 3.4 | 191.0 | |||||||||||
Diluted earnings per common share | 1.16 | 0.02 | 0.02 | 1.20 |
(f) | Includes $8.7 million of pre-tax costs principally associated with professional fees incurred in conjunction with further restructuring and integrating our business. The remainder is primarily associated with the reversal of certain previously established reserves for restructuring activities, principally associated with workforce reductions. |
(g) | Principally represents accrued severance and accelerated vesting of equity awards in connection with the succession of our prior CEO. |
(h) | For both the restructuring and integration charges, and CEO succession costs, income tax benefits were calculated using a combined federal and state rate of 38.7%. |
Twelve Months Ended December 31, 2011 | |||||||||||||||||||||||
(dollars in millions, except per share data) | |||||||||||||||||||||||
Medi-Cal Settlement | Restructuring & Integration Charges | Transaction Costs | CEO Succession Costs | ||||||||||||||||||||
As Reported | (i) | (j) | (k) | (l) | As Adjusted | ||||||||||||||||||
Operating income | $ | 986.6 | $ | 236.0 | $ | 52.1 | $ | 16.9 | $ | 5.6 | $ | 1,297.2 | |||||||||||
Operating income as a % of net revenues | 13.4 | % | 3.1 | % | 0.7 | % | 0.2 | % | 0.1 | % | 17.5 | % | |||||||||||
Income from continuing operations (m) | 459.0 | 194.7 | 31.9 | 15.2 | 3.4 | 704.2 | |||||||||||||||||
Diluted earnings per common share | 2.85 | 1.22 | 0.20 | 0.09 | 0.02 | 4.38 |
(i) | Represents the first quarter 2011 pre-tax charge of $236 million associated with the Medi-Cal settlement. |
(j) | Represents costs incurred in conjunction with further restructuring and integrating our business, and includes $41.6 million of pre-tax charges, principally associated with workforce reductions, with the remainder principally professional fees. |
(k) | Includes $20.0 million of pre-tax transaction costs, associated with the acquisitions of Athena Diagnostics and Celera Corporation. Of these costs, $16.9 million, primarily related to professional fees, was recorded in selling, general, and administrative expenses and $3.1 million of financing related costs were recorded in interest expense, net. |
(l) | Principally represents accrued severance and accelerated vesting of equity awards in connection with the succession of our prior CEO. |
(m) | Income tax benefit of $41.3 million associated with the Medi-Cal charge was calculated by applying a combined federal and the applicable state tax rate of 36% to the portion of the settlement for which a tax benefit has been recorded. Income tax benefit of $4.8 million associated with transaction costs was calculated by applying a combined federal and state rate of 38.7% to those costs for which a tax benefit has been recorded. For the impact of restructuring and integration charges, income tax benefits were calculated using a combined federal and state rate of 38.7%. |
3) | The following tables summarize the impact to the year over year comparisons for the Medi-Cal charge, restructuring and integration charges, transaction costs, and CEO succession costs on certain reported results for the three and twelve months ended December 31, 2012 and 2011 (in millions, except per share data): |
Three Months ended December 31, 2012 and 2011 | |||||||||||||||||||||||
Restructuring & Integration Charges | CEO Succession Costs | ||||||||||||||||||||||
2012 | 2011 | Better (Worse) | 2012 | 2011 | Better (Worse) | ||||||||||||||||||
Cost of services | $ | 22.9 | $ | (2.7 | ) | $ | (25.6 | ) | $ | — | $ | — | $ | — | |||||||||
Selling, general and administrative | 13.5 | 8.2 | (5.3 | ) | — | 5.6 | 5.6 | ||||||||||||||||
Operating income | 36.4 | 5.5 | (30.9 | ) | — | 5.6 | 5.6 | ||||||||||||||||
Income from continuing operations | 22.3 | 3.4 | (18.9 | ) | — | 3.4 | 3.4 | ||||||||||||||||
Diluted earnings per common share | 0.14 | 0.02 | (0.12 | ) | — | 0.02 | 0.02 |
Twelve Months ended December 31, 2012 and 2011 | |||||||||||||||||||||||
Restructuring & Integration Charges | CEO Succession Costs | ||||||||||||||||||||||
2012 | 2011 | Better (Worse) | 2012 | 2011 | Better (Worse) | ||||||||||||||||||
Cost of services | $ | 51.5 | $ | 22.2 | $ | (29.3 | ) | $ | — | $ | — | $ | — | ||||||||||
Selling, general and administrative | 54.5 | 29.9 | (24.6 | ) | 10.1 | 5.6 | (4.5 | ) | |||||||||||||||
Operating income | 106.0 | 52.1 | (53.9 | ) | 10.1 | 5.6 | (4.5 | ) | |||||||||||||||
Income from continuing operations | 65.0 | 31.9 | (33.1 | ) | 6.1 | 3.4 | (2.7 | ) | |||||||||||||||
Diluted earnings per common share | 0.40 | 0.20 | (0.20 | ) | 0.04 | 0.02 | (0.02 | ) | |||||||||||||||
Medi-Cal Settlement | Transaction Costs | ||||||||||||||||||||||
2012 | 2011 | Better (Worse) | 2012 | 2011 | Better (Worse) | ||||||||||||||||||
Cost of services | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Selling, general and administrative | — | — | — | — | 16.9 | 16.9 | |||||||||||||||||
Operating income | — | 236.0 | 236.0 | — | 16.9 | 16.9 | |||||||||||||||||
Income from continuing operations | — | 194.7 | 194.7 | — | 15.2 | 15.2 | |||||||||||||||||
Diluted earnings per common share | — | 1.22 | 1.22 | — | 0.09 | 0.09 |
4) | The Company previously announced its plan to sell its HemoCue diagnostics products business and completed the sale of its OralDNA salivary-diagnostics business. As a result, the Company's fourth quarter 2012 results include related after-tax charges in discontinued operations for the estimated asset impairment associated with HemoCue and the loss on sale associated with OralDNA totaling $89.5 million, or $0.56 per diluted share, in the period. Results of operations for HemoCue and OralDNA have been reported as discontinued operations in the accompanying financial tables and related notes to financial tables for all periods presented. At December 31, 2012, the assets and liabilities of HemoCue have been reported as held for sale on the accompanying balance sheet. |
Three Months Ended December 31, 2012 | Continuing Operations | Adjustments for HemoCue and OralDNA | Proforma Results | Loss on Sale / Impairment | Restructuring & Integration Charges | CEO Succession Costs | Proforma Adjusted | |||||||||||||||||||||
(dollars in millions, except per share data) | As Reported | (a) | (b) | (c) | (d) | (e) | Results | |||||||||||||||||||||
Net revenues | $ | 1,773.8 | $ | 31.0 | $ | 1,804.8 | $ | — | $ | — | $ | — | $ | 1,804.8 | ||||||||||||||
Operating income (loss) | 265.0 | (82.7 | ) | 182.3 | 86.4 | 37.7 | — | 306.4 | ||||||||||||||||||||
Operating income (loss) as a % of net revenues | 14.9 | % | (4.8 | )% | 10.1 | % | 4.8 | % | 2.1 | % | — | % | 17.0 | % | ||||||||||||||
Income (loss) from continuing operations (f) | 140.2 | (84.5 | ) | 55.7 | 89.5 | 23.1 | — | 168.3 | ||||||||||||||||||||
Diluted earnings (loss) per common share | 0.87 | (0.53 | ) | 0.34 | 0.56 | 0.15 | — | 1.05 | ||||||||||||||||||||
Twelve Months Ended December 31, 2012 | ||||||||||||||||||||||||||||
(dollars in millions, except per share data) | ||||||||||||||||||||||||||||
Net revenues | $ | 7,382.6 | $ | 116.9 | $ | 7,499.5 | $ | — | $ | — | $ | — | $ | 7,499.5 | ||||||||||||||
Operating income (loss) | 1,200.8 | (75.4 | ) | 1,125.4 | 86.4 | 107.8 | 10.1 | 1,329.7 | ||||||||||||||||||||
Operating income (loss) as a % of net revenues | 16.3 | % | (1.3 | )% | 15.0 | % | 1.2 | % | 1.4 | % | 0.1 | % | 17.7 | % | ||||||||||||||
Income (loss) from continuing operations (f) | 630.1 | (74.7 | ) | 555.4 | 89.5 | 66.3 | 6.1 | 717.3 | ||||||||||||||||||||
Diluted earnings (loss) per common share | 3.92 | (0.47 | ) | 3.45 | 0.56 | 0.42 | 0.04 | 4.47 |
(a) | Represents the results of HemoCue and Oral DNA included in discontinued operations, which include charges for asset impairment and loss on sale. |
(b) | Represents the results before the treatment of HemoCue and Oral DNA as discontinued operations. |
(c) | Represents pre-tax charges totaling $86.4 million, for asset impairment of HemoCue and loss on sale of OralDNA. Income (loss) from continuing operations includes $7.5 million income tax expense related to the re-valuation of deferred tax assets associated with HemoCue. |
(d) | Represents costs primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating our business. |
(e) | Principally represents accrued severance and accelerated vesting of equity awards in connection with the succession of our prior CEO. |
(f) | For both the restructuring and integration charges, and CEO succession costs, income tax benefits were calculated using a combined federal and state rate of 38.7%. |
5) | Other operating (income) expense, net includes special charges, and miscellaneous income and expense items related to operating activities. For the twelve months ended December 31, 2011, other operating expense, net included a pre-tax charge of $236 million associated with the Medi-Cal settlement. |
6) | Other income, net represents miscellaneous income and expense items related to non-operating activities, such as gains and losses associated with investments and other non-operating assets. For the three months ended December 31, 2012 and 2011, other income, net includes gains of $0.5 million and $3.8 million, respectively, associated with investments held in trusts pursuant to our supplemental deferred compensation plans. For the twelve months ended December 31, 2012 and 2011, other income, net includes gains of $6.5 million and $0.3 million, respectively, associated with investments held in trusts pursuant to our supplemental deferred compensation plans. For the twelve months ended December 31, 2011, other income, net includes a pre-tax gain of $3.2 million associated with the sale of an investment. |
7) | Results for both the three and twelve months ended December 31, 2012 include discrete tax benefits of $0.02 per diluted share. Results for the three and twelve months ended December 31, 2011 include discrete tax benefits of $0.08 and $0.11 per diluted share, respectively, primarily associated with certain state tax planning initiatives and the favorable resolution of certain tax contingencies. |
8) | In January 2012, our Board of Directors authorized $1.0 billion of additional share repurchases, bringing the total available under share repurchase authorizations at that time to $1.1 billion. For the three months ended December 31, 2012, the Company repurchased 869 thousand shares of its common stock at an average price of $57.55 per share for $50 million. For the twelve months ended December 31, 2012, the Company repurchased 3.4 million shares of its common stock at an average price of $58.31 per share for $200 million. For the three and twelve months ended December 31, 2012, the Company reissued 0.5 million shares and 3.9 million shares, respectively, for employee benefit plans. As of December 31, 2012, the Company had $865 million remaining under share repurchase authorizations. |