Document and Entity Information
Document and Entity Information (USD $) | |||
3 Months Ended
Mar. 31, 2010 | May. 05, 2010
| Jun. 30, 2009
| |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Life Technologies Corp | ||
Entity Central Index Key | 0001073431 | ||
Document Type | 10-Q | ||
Document Period End Date | 2010-03-31 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,010 | ||
Document Fiscal Period Focus | Q1 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $7,321,844,730 | ||
Entity Common Stock, Shares Outstanding | 182,607,998 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) (USD $) | ||
In Thousands | Mar. 31, 2010
| Dec. 31, 2009
|
Current assets: | ||
Cash and cash equivalents | $609,153 | $596,587 |
Short-term investments | 13,231 | 10,766 |
Restricted cash and investments | 19,526 | 40,721 |
Trade accounts receivable, net of allowance for doubtful accounts of $10,161 and $10,809, respectively | 526,655 | 591,058 |
Inventories, net | 323,866 | 353,222 |
Deferred income tax assets | 14,808 | 19,822 |
Prepaid expenses and other current assets | 176,835 | 183,988 |
Total current assets | 1,684,074 | 1,796,164 |
Long-term investments (includes $34,375 and $34,800 measured at fair value, respectively) | 42,326 | 380,167 |
Property and equipment, net | 813,473 | 829,032 |
Goodwill | 3,794,702 | 3,783,806 |
Intangible assets, net | 2,008,710 | 2,071,607 |
Deferred income tax assets | 14,222 | 106,562 |
Other assets | 98,014 | 148,402 |
Total assets | 8,455,521 | 9,115,740 |
Current liabilities: | ||
Current portion of long-term debt | 345,860 | 481,701 |
Accounts payable | 172,549 | 237,250 |
Restructuring accrual | 26,047 | 26,548 |
Deferred compensation and related benefits | 144,905 | 244,625 |
Deferred revenues and reserves | 96,912 | 129,035 |
Accrued expenses and other current liabilities | 197,155 | 203,139 |
Accrued income taxes | 136,984 | 63,425 |
Total current liabilities | 1,120,412 | 1,385,723 |
Long-term debt | 2,289,660 | 2,620,089 |
Pension liabilities | 147,868 | 155,934 |
Deferred income tax liabilities | 518,799 | 693,256 |
Income taxes payable | 117,100 | 118,084 |
Other long-term obligations, deferred credits and reserves | 79,963 | 115,986 |
Total liabilities | 4,273,802 | 5,089,072 |
Stockholders' equity: | ||
Preferred stock; $0.01 par value, 6,405,884 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock; $0.01 par value, 400,000,000 shares authorized; 198,322,582 and 196,297,725 shares issued, respectively | 1,983 | 1,963 |
Additional paid-in-capital | 4,854,640 | 4,784,786 |
Accumulated other comprehensive income | 60,672 | 51,968 |
Retained earnings | 245,710 | 154,204 |
Less cost of treasury stock: 16,509,516 shares and 16,214,572 shares, respectively | (981,286) | (966,253) |
Total stockholders' equity | 4,181,719 | 4,026,668 |
Total liabilities and stockholders' equity | $8,455,521 | $9,115,740 |
1_Consolidated Balance Sheets (
Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | ||
In Thousands, except Share data | Mar. 31, 2010
| Dec. 31, 2009
|
Current assets: | ||
Allowance for doubtful accounts | $10,161 | $10,809 |
Long term investments at fair value | $34,375 | $34,800 |
Stockholders' equity: | ||
Preferred stock, par value | 0.01 | 0.01 |
Preferred stock, shares authorised | 6,405,884 | 6,405,884 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | 0.01 | 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 198,322,582 | 196,297,725 |
Treasury stock, shares | 16,509,516 | 16,214,572 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) (USD $) | ||
In Thousands, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Consolidated Statements of Operations (Unaudited) [Abstract] | ||
Revenues | $884,943 | $775,737 |
Cost of revenues | 281,754 | 320,159 |
Purchased intangibles amortization | 70,086 | 70,892 |
Gross profit | 533,103 | 384,686 |
Operating expenses: | ||
Selling, general and administrative | 259,685 | 241,095 |
Research and development | 86,353 | 80,320 |
Business integration costs | 25,266 | 27,398 |
Total operating expenses | 371,304 | 348,813 |
Operating income | 161,799 | 35,873 |
Other income (expense): | ||
Interest income | 1,347 | 1,416 |
Interest expense | (41,518) | (48,136) |
Loss on early extinguishment of debt | (54,185) | |
Gain on divestiture of equity investments | 45,137 | |
Other income (expense) | (3,997) | 206 |
Total other expense, net | (53,216) | (46,514) |
Income (loss) before provision for income taxes | 108,583 | (10,641) |
Income tax benefit (provision) | (17,076) | 26,245 |
Net income | $91,507 | $15,604 |
Earnings per common share: | ||
Basic | 0.51 | 0.09 |
Diluted | 0.48 | 0.09 |
Weighted average shares used in per share calculations: | ||
Basic | 180,867 | 173,713 |
Diluted | 189,834 | 175,380 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) (USD $) | ||
In Thousands | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $91,507 | $15,604 |
Adjustments to reconcile net income to net cash provided by operating activities, net of effects of businesses acquired and divested: | ||
Depreciation | 31,479 | 27,263 |
Amortization of intangible assets | 72,129 | 73,587 |
Amortization of deferred debt issuance costs | 57,830 | 5,244 |
Amortization of inventory fair market value adjustments | 209 | 61,175 |
Amortization of deferred revenue fair market value adjustment | 2,535 | 13,162 |
Share-based compensation expense | 18,599 | 13,474 |
Incremental tax benefits from stock options exercised | (11,500) | |
Deferred income taxes | (92,321) | 9,129 |
Loss on disposal of assets | 25 | 1,109 |
Gain on sale of equity investment | (45,137) | |
Debt discount cost amortization | 11,191 | 10,471 |
Other non-cash adjustments | 14,931 | (210) |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (17,384) | (9,884) |
Inventories | (26,096) | (27,599) |
Prepaid expenses and other current assets | 8,262 | 23,381 |
Other assets | (7,237) | 5,620 |
Accounts payable | (43,670) | (4,188) |
Accrued expenses and other liabilities | (79,056) | (49,087) |
Income taxes | 84,527 | (63,882) |
Net cash provided by operating activities | 70,823 | 104,369 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of investments | (2,536) | (3,424) |
Net cash paid for business combinations | (34,594) | (17,322) |
Net cash paid for asset purchases | (1,300) | (13,540) |
Purchases of property and equipment | (30,285) | (26,045) |
Net cash received for divestiture of equity investment | 462,792 | |
Net cash provided by (used in) investing activities | 394,077 | (60,331) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from long-term obligations | 1,496,693 | |
Principal payments on long-term obligations | (1,972,512) | (20,000) |
Issuance cost payments on long-term obligations | (14,424) | |
Incremental tax benefits from stock options exercised | 11,500 | |
Proceeds from sale of common stock | 39,932 | 7,515 |
Capital lease payments | (512) | |
Purchase of treasury stock | (15,034) | (813) |
Net cash used in financing activities | (454,357) | (13,298) |
Effect of exchange rate changes on cash | 2,023 | (18,983) |
Net increase in cash and cash equivalents | 12,566 | 11,757 |
Cash and cash equivalents, beginning of period | 596,587 | 335,930 |
Cash and cash equivalents, end of period | $609,153 | $347,687 |
Basis of Presentation
Basis of Presentation | |
3 Months Ended
Mar. 31, 2010 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation Financial Statement Preparation The unaudited consolidated financial statements have been prepared by Life Technologies Corporation according to the rules and regulations of the Securities and Exchange Commission (SEC) and, therefore, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted. The Company has evaluated subsequent events through the date the financial statements were issued. In the opinion of management, the accompanying unaudited consolidated financial statements for the periods presented reflect all adjustments, which are normal and recurring, necessary to fairly state the financial position, results of operations and cash flows. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December31, 2009 filed with the SEC on February26, 2010. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements include the accounts of Life Technologies Corporation and its majority owned or controlled subsidiaries collectively referred to as Life Technologies (the Company). All significant intercompany accounts and transactions have been eliminated in consolidation. For purposes of these Notes to Consolidated Financial Statements, gross profit is defined as revenues less cost of revenues including amortization of purchased intangibles and gross margin is defined as gross profit divided by revenues. Operating income is defined as gross profit less operating expenses, and operating margin is defined as operating income divided by revenues. Reclassification The Company has reclassified the historically presented divisional revenue to conform to the current year presentation. The reclassification had no impact on previously reported results of operations or financial position. Long-Lived Assets The Company periodically re-evaluates the original assumptions and rationale utilized in the establishment of the carrying value and estimated lives of its long-lived assets. The criteria used for these evaluations include managements estimate of the assets continuing ability to generate income from operations and positive cash flow in future periods as well as the strategic significance of any intangible asset to the Companys business objectives. If assets are considered to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets, which is determined by applicable market prices, when available. The Company did not rec |
Composition of Certain Financia
Composition of Certain Financial Statement Items | |
3 Months Ended
Mar. 31, 2010 | |
Composition of Certain Financial Statement Items [Abstract] | |
Composition of Certain Financial Statement Items | 2. Composition of Certain Financial Statement Items Fair Value of Financial Instruments The Company has certain financial instruments in which the carrying value does not equal the fair value. The estimated fair value of the convertible senior notes is determined by using observable market information and valuation methodologies that correlate fair value with the market price of the Companys common stock, and the estimated fair value of the senior notes, the secured loan, and the term loans was determined by using observable market information. The fair value and carrying amounts of the Companys long-term debt obligations were as follows: Fair Value Carrying Amounts March 31, December 31, March 31, December 31, 2010 2009 2010 2009 (in thousands) (unaudited) (unaudited) 3.375% Senior Notes (principal due 2013) $ 252,745 $ $ 249,886 $ 4.400% Senior Notes (principal due 2015) 507,125 498,365 6.000% Senior Notes (principal due 2020) 767,505 748,479 2% Convertible Senior Notes (principal due 2023) 530,365 535,081 343,730 339,595 11/2% Convertible Senior Notes (principal due 2024) 508,500 472,500 414,171 409,858 31/4% Convertible Senior Notes (principal due 2025) 412,444 400,750 338,652 336,481 Term Loan A 1,313,375 1,330,000 Term Loan B 645,713 642,500 Secured Loan 34,375 34,800 34,375 34,800 For details on the carrying amounts of the long-term debt obligations, refer to Note 4 Long-Term Debt. The carrying amounts of financial instruments such as cash equivalents, foreign cash accounts, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses, and other current liabilities approximate the related fair values due to the short-term maturities of these instruments. The Company invests its excess cash in marketable securities, money market funds, corporate notes, government securities, highly liquid debt instruments, time deposits, and certificates of deposit with original maturities of three months or less at the date of purchase. These instruments are readily convertible into cash. The Company has established guidelines that maintain safety and liquidity. The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. The cost of securities sold is based on the specific identification method. Investments consisted of the following: March 31, December 31, 2010 2009 (in thousands) (unaudited) Short-term Bank deposits $ 13,231 $ 10,766 Total short-term investments 13,231 10,766 Long-term Auction rate securities 29,964 30,827 Put option 4,411 3,973 Equity securities 7,951 345,367 Total long-term investments 42,326 380,167 T |
Business Combinations and Dives
Business Combinations and Divestitures | |
3 Months Ended
Mar. 31, 2010 | |
Business Combinations and Divestitures [Abstract] | |
Business Combinations and Divestitures | 3. Business Combinations and Divestitures Divestiture of Equity Investment In January2010, the Company completed the sale of its 50% ownership stake in the Applied Biosystems/MDS Analytical Technologies Instruments joint venture and selected assets and liabilities directly attributable to the joint venture to Danaher Corporation for $435.9million in cash, excluding transactions costs, and recorded a gain of $45.1million, which is subject to certain working capital adjustments, in other income in Consolidated Statements of Operations. Included in the sale was the carrying value of the equity investments of $330.4million, accounts receivable of $71.3million, net inventory of $55.1million, other current assets of $17.6million, long term assets of $13.7million, accounts payable of $9.8million, other current liabilities of $80.8million, and long term liabilities of $6.7million. The transaction allows the Company to focus on its core competencies for biological solutions in life science research, genomic medicine, molecular diagnostics and applied markets. The Company acquired the joint venture as a part of the merger with AB consummated in November2008. The Company accounted for its investment in the joint venture using the equity method which required us to show our share of earnings or losses from the investment in other income as a single amount in accordance with the guidance in ASC Topic 323, InvestmentsEquity Method and Joint Ventures. At December31, 2009, the investment value in the equity was $337.4million which was included in long term investments in the Consolidated Balance Sheets. Immaterial Acquisitions The Company completed several additional stock acquisitions that were not material individually or collectively to the overall consolidated financial statements and the results of operations. These acquisitions have been included in the consolidated financial statements from the respective dates of the acquisitions. For acquisitions consummated after January1, 2009, the Company accounted for these acquisitions in accordance with ASC Topic 805, Business Combinations when such stock acquisitions met the qualification and definition of a business under the guidance, otherwise the Company accounted for the acquisitions as asset purchases. For acquisitions consummated prior to January1, 2009, the Company accounted for such stock acquisitions in accordance with SFAS 141, Business Combinations when such stock acquisitions met the qualification and definition of a business under the guidance, otherwise the Company accounted for the acquisitions as asset purchases. Business Consolidation Costs The Company continues to integrate recent and pending acquisitions and divestitures into its operations and recorded approximately $25.3million and $27.4million of costs for the three months ended March31, 2010 and 2009, respectively, related to these efforts. Expenses for the three months ended March31, 2010 and 2009 related primarily to integration and restructuring efforts, including severance and site consolidation, currently underway related to various mergers, acquisitions and divestitures. In association with the AB merg |
Long-Term Debt
Long-Term Debt | |
3 Months Ended
Mar. 31, 2010 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | 4. Long-Term Debt Long-term debt consisted of the following: March 31, December 31, 2010 2009 (in thousands) (unaudited) 3.375% Senior Notes (principal due 2013), net of unamortized discount $ 249,886 $ 4.400% Senior Notes (principal due 2015), net of unamortized discount 498,365 6.000% Senior Notes (principal due 2020), net of unamortized discount 748,479 2% Convertible Senior Notes (principal due 2023), net of unamortized discount 343,730 339,595 11/2% Convertible Senior Notes (principal due 2024), net of unamortized discount 414,171 409,858 31/4% Convertible Senior Notes (principal due 2025), net of unamortized discount 338,652 336,481 Term Loan A 1,330,000 Term Loan B 642,500 Secured Loan 34,375 34,800 Capital leases 7,862 8,556 Total debt 2,635,520 3,101,790 Less current portion (345,860 ) (481,701 ) Total long-term debt $ 2,289,660 $ 2,620,089 Senior Notes In February2010, the Company issued $1,500.0million of fixed rate unsecured notes which consisted of an aggregate principal amount of $250.0million of 3.375% Senior Notes due 2013 (the 2013 Notes) at an issue price of 99.95%, an aggregate principal amount of $500.0million of 4.400% Senior Notes due 2015 (the 2015 Notes) at an issue price of 99.67% and an aggregate principal amount of $750.0million of 6.000% Senior Notes due 2020 (the 2020 Notes) at an issue price of 99.80%. As a result, at the time of issuance, the Company recorded $0.1million, $1.7 million, and $1.5million of debt discounts for the 2013 Notes, 2015 Notes, and 2020 Notes, respectively. At March31, 2010, the unamortized debt discount balance was $0.1million, $1.6 million, and $1.5million for the 2013 Notes, 2015 Notes, and 2020 Notes, respectively. The debt discounts are amortized over the lives of the associated Notes. The aggregate net proceeds from the Notes offering were $1,484.8million after deducting the underwriting discount of $11.9 million. Total deferred financing costs associated with the issuance of the senior notes were $14.4million, including $11.9million of the underwriting discount and $2.5million of legal and accounting fees. At March31, 2010, the unamortized issuance costs were $14.3million, which are expected to be recognized over a weighted average period of 7.4years. The Company recognized total interest expense of $8.4million for the three months ended March31, 2010 for the Notes based on the effective interest rates of 3.39%, 4.47% and 6.03% for the 2013, 2015 and 2020 Notes, respectively. The Notes are unsecured and unsubordinated obligations with interest payable semi-annually. The Company, at its option, may redeem the 2013 Notes, the 2015 Notes, and the 2020 Notes, in each case, in whole or in part at any time at a redemption price equal to the greater of 100% of the principal amount of the notes to be redeemed and the sum of the present values of the remaining scheduled payments of the notes to be redeemed discounted |
Lines of Credit
Lines of Credit | |
3 Months Ended
Mar. 31, 2010 | |
Lines of Credit [Abstract] | |
Lines of Credit | 5. Lines of Credit Under the Credit Agreement, the Company entered into a revolving credit facility of $250.0 million (the Revolving Credit Facility) with Bank of America, N.A in November2008. Interest rates on outstanding borrowings are determined by reference to LIBOR or to an alternate base rate, with margins determined based on changes in the Companys leverage ratio. If necessary, the Company currently anticipates using the proceeds of the Revolving Credit Facility for the purpose of general working capital and capital expenditures and/or other capital needs as they may arise. As of March31, 2010, the Company has issued $14.1million in letters of credit under the Revolving Credit Facility, and accordingly, the remaining available credit is $235.9million. At March31, 2010, the Companys foreign subsidiaries in China, Japan, and India had available bank lines of credit denominated in local currency to meet short-term working capital requirements. The credit facilities bear interest at a fixed rate, the respective banks prime rate, or the TIBOR rate. The United States dollar equivalent of these facilities totaled $13.4million, none of which was outstanding at March31, 2010. Additionally, the Companys Japan subsidiary has an outstanding letter of credit with United States dollar equivalent of $3.2million at March31, 2010 to support its import duty. The weighted average interest rate of the Companys total lines of credit was 2.82% at March 31, 2010. |
Commitments and Contingencies
Commitments and Contingencies | |
3 Months Ended
Mar. 31, 2010 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Letters of Credit The Company had outstanding letters of credit totaling $43.4million at March31, 2010, of which $11.7million was to support liabilities associated with the Companys self-insured workers compensation programs, $4.5million was to support its building lease requirements, $24.0million was to support performance bond agreements, and $3.2million was to support duty on imported products. Executive Employment Agreements The Company has employment contracts with key executives that provide for the continuation of salary if terminated for reasons other than cause, as defined in those agreements. At March31, 2010, future employment contract commitments for such key executives were approximately $35.1 million for the remainder of fiscal year 2010. Contingent Acquisition Obligations As a result of current and prior year acquisitions, the Company may have payment obligations based on certain technological milestones, patent milestones and the achievement of future gross sales of the acquired companies. Some of the purchase agreements the Company has entered into do not limit the payments to a maximum amount, or restrict the payments deadline. For acquisitions accounted for under SFAS 141, Business Combinations, the Company will account for any such contingent payments as an addition to the purchase price of the acquired company. For acquisitions accounted for under ASC Topic 805, Business Combinations, these obligations will be accounted for at fair value at the time of acquisition with subsequent revisions reflected in the Statement of Operations. During the three months ended March31, 2010, none of the contingent payments were earned. Environmental Liabilities As a result of the merger with Applied Biosystems Inc., the Company assumed certain environmental exposures. At March31, 2010, the environmental reserves, which were not discounted, were approximately $1.7million, including current reserves of $1.6million. In addition, some of the assumed environmental reserves are covered under insurance policies. At March31, 2010, the Company also has receivables of approximately $1.1million, of which $1.0million is included in short-term assets, for expected reimbursements under the insurance policies. The Company assumed certain environmental exposures as a result of the merger with Dexter Corporation in 2000 and recorded reserves to cover estimated environmental clean-up costs. The environmental reserves, which were not discounted, were approximately $6.6million at March31, 2010, including current reserves of $2.8million. In addition, the Company has an insurance policy to cover these assumed environmental exposures. Based upon currently available information, the Company believes that it has adequately provided for these environmental exposures and that the outcome of these matters will not have a material adverse effect on its Consolidated Results of Operations. Litigation The Company is subject to potential liabilities under government regulations and various claims and legal actions that are pending or may be asserted. These matters have arisen in the ordinary course |
Pension Plans and Postretiremen
Pension Plans and Postretirement Health and Benefit Program | |
3 Months Ended
Mar. 31, 2010 | |
Pension Plans and Postretirement Health and Benefit Program [Abstract] | |
Pension Plans and Postretirement Health and Benefit Program | 7. Pension Plans and Postretirement Health and Benefit Program The Company has several defined benefit pension plans covering its United States employees and employees in several foreign countries. The components of net periodic pension cost (income)for the Companys pension plans and postretirement benefits plans for the three months ended March31, 2010 and 2009 were as follows: Domestic Plans Three months ended March 31 (in thousands) (unaudited) 2010 2009 Service cost $ $ 75 Interest cost 8,861 9,115 Expected return on plan assets (8,558 ) (8,858 ) Amortization of prior service cost 15 Amortization of actuarial loss 477 59 Settlement gain* (5,473 ) Net periodic pension (income)cost $ (4,678 ) $ 391 Postretirement Plans Three months ended March 31 (in thousands) (unaudited) 2010 2009 Service cost $ 46 $ 53 Interest cost 329 921 Expected return on plan assets (98 ) (149 ) Amortization of prior service cost 60 60 Amortization of actuarial loss 197 149 Total periodic pension cost $ 534 $ 1,034 Foreign Plans Three months ended March 31 (in thousands) (unaudited) 2010 2009 Service cost $ 986 $ 1,146 Interest cost 1,419 1,161 Expected return on plan assets (1,094 ) (851 ) Amortization of actuarial loss 58 64 Settlement loss 18 Net periodic pension cost $ 1,387 $ 1,520 * A settlement gain related to the lump sum benefit that the Company paid out during the three months ended March31, 2010 in conjunction with the restructuring efforts that occurred upon the merger with AB as permitted by the plan provision upon termination. |
Income Taxes
Income Taxes | |
3 Months Ended
Mar. 31, 2010 | |
Income Taxes [Abstract] | |
Income Taxes | 8. Income Taxes Income taxes are determined using an estimated annual effective tax rate applied against income, and then adjusted for the tax impacts of certain significant and discrete items. For the three months ended March31, 2010, the Company treated the tax impact related to the following as discrete events for which the tax effect was recognized separately from the application of the estimated annual effective tax rate: (i)sale of the Mass Spectrometry division (ii)early extinguishment of debt; and (iii)benefits relating to certain prior acquisitions. The Companys effective tax rate recorded for the period ended March31, 2010 was 15.7%. Excluding the impact of the discrete items discussed above, the effective tax rate would have been 25.1%. In accordance with the disclosure requirements as described in ASC Topic 740, Income Taxes, the Company has classified uncertain tax positions as non-current income tax liabilities unless expected to be paid in one year. The Companys continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company is subject to routine compliance reviews on various tax matters around the world in the ordinary course of business. Currently, income tax audits are in Austria, China, Italy, Norway, Singapore, United Kingdom, and the United States. |
Stock Repurchase Program
Stock Repurchase Program | |
3 Months Ended
Mar. 31, 2010 | |
Stock Repurchase Program [Abstract] | |
Stock Repurchase Program | 9. Stock Repurchase Program In July2007, the Board of Directors of the Company approved a program authorizing management to repurchase up to $500.0million of common stock over the next three years, of which $265.0 million remains open and available for purchase at March31, 2010. The cost of repurchased shares are included in treasury stock and reported as a reduction in stockholders equity. No shares were repurchased for the three months ended March31, 2010 and 2009. |
Restructuring Costs
Restructuring Costs | |
3 Months Ended
Mar. 31, 2010 | |
Restructuring Costs [Abstract] | |
Restructuring Costs | 10. Restructuring Costs In November2008, the Company completed the merger with AB to form a company that combines both businesses into a global leader in biotechnology reagents and instrument systems dedicated to improving the human condition. In connection with the merger and the desire to achieve synergies associated with economies of scale, the Company initiated a restructuring plan under two phases; the first phase was launched immediately after the merger date to complete in the short term, and the second phase was launched to complete in approximately two years, to provide one-time termination costs including severance costs and retention bonuses related to elimination of duplicative positions and change in control agreements to mostly sales, finance, IT, research and development, and customer services employees, one-time relocation costs to those employees whose employment positions have been moved to another location, and one-time charges associated with closure of certain leased facilities which are no longer being used in the Companys operations for both acquirees and acquirers employees and facilities. The Company finalized its restructuring plan during the fiscal year 2009 and expects to complete its entire plan in early 2011. For the restructuring activities related to the acquired companys employees and facilities (the first phase), the activities have been accounted for in accordance with Emerging Issues Task Force (EITF)Issue No.95-3, Recognition of Liabilities in Connection with a Purchase Business Combination. As a result, the Company increased the purchase price of AB by $98.2million, which consisted of $90.3million, $0.7million, and $7.2million of one-time termination costs, one-time relocation costs, and one-time site closure costs, respectively. If the actual payment is less than the expected amount, any excess reserves will be reversed with a corresponding decrease in goodwill. If the actual payment exceeds the expected amount, any additional costs will be recorded in business consolidation costs in the Consolidated Statements of Operations. The following table summarizes the restructuring activity accounted for under EITF 95-3 Recognition of Liabilities in Connection with a Purchase Business Combination for the period ended March31, 2010, as well as the remaining restructuring accrual in the Consolidated Balance Sheets at March31, 2010: One-Time One-Time One-Time Termination Site Closure Relocation (in thousands) (unaudited) Costs Costs Costs Total Restructuring accrual at December31, 2009 $ 10,221 $ 477 $ 4,752 $ 15,450 Amounts paid (5,846 ) (71 ) (1,006 ) (6,923 ) Other adjustment (49 ) (49 ) Foreign currency translation (8 ) (95 ) (103 ) Restructuring accrual at March31, 2010 $ 4,367 $ 357 $ 3,651 $ 8,375 The restructuring activities related to the acquirers employees and facilities, as well as the activities related to the acquirees employees and facilities in |