COVANCE INC

CIK:0001023131|SEC Filings

CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
CONSOLIDATED STATEMENTS OF INCOME
Net revenues	$ 627,075	$ 606,722	$ 1,886,583	$ 1,779,219
Reimbursable out-of-pocket expenses	43,922	40,328	137,810	146,142
Total revenues	670,997	647,050	2,024,393	1,925,361
Costs and expenses:
Cost of revenue (excluding depreciation and amortization)	431,006	424,857	1,310,218	1,255,316
Reimbursable out-of-pocket expenses	43,922	40,328	137,810	146,142
Selling, general and administrative (excluding depreciation and amortization)	84,373	87,052	258,979	266,448
Depreciation and amortization	35,177	32,191	102,151	95,072
Impairment charges	0	0	52,564	0
Total costs and expenses	594,478	584,428	1,861,722	1,762,978
Income from operations	76,519	62,622	162,671	162,383
Other (income) expense, net:
Interest income	(572)	(667)	(1,826)	(1,806)
Interest expense	3,194	1,426	9,705	4,440
Foreign exchange transaction loss, net	1,608	882	3,552	1,911
Gain on sale of businesses	(13,448)	0	(15,096)	0
Gain on sale of investments	0	0	0	(16,400)
Other (income) expense , net	(9,218)	1,641	(3,665)	(11,855)
Income before taxes	85,737	60,981	166,336	174,238
Taxes on income	19,738	16,780	32,584	40,877
Net income	$ 65,999	$ 44,201	$ 133,752	$ 133,361
Basic earnings per share	$ 1.20	$ 0.81	$ 2.41	$ 2.45
Weighted average shares outstanding - basic	55,219,766	54,703,763	55,485,756	54,524,296
Diluted earnings per share	$ 1.16	$ 0.78	$ 2.32	$ 2.35
Weighted average shares outstanding - diluted	57,119,595	56,939,181	57,553,096	56,754,527

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Net income	$ 133,752	$ 133,361
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	102,151	95,072
Non-cash impairment charges	52,564	0
Non-cash compensation expense associated with employee benefit and stock compensation plans	30,962	29,863
Deferred income tax benefit	(23,901)	(6,787)
Gain on sale of businesses	(15,096)	0
Gain on sale of investments	0	(16,400)
Loss on disposal of property and equipment	626	487
Changes in operating assets and liabilities, net of businesses sold and acquired:
Accounts receivable	1,324	(14,382)
Unbilled services	(17,370)	(10,477)
Inventory	(7,682)	(246)
Accounts payable	(5,818)	17,590
Accrued liabilities	(81,395)	(24,736)
Unearned revenue	(20,663)	10,746
Income taxes	23,681	20,228
Other assets and liabilities, net	(40,530)	(21,474)
Net cash provided by operating activities	132,605	212,845
Cash flows from investing activities:
Capital expenditures	(105,484)	(103,703)
Acquisition of business	(10,516)	0
Proceeds from sale of businesses	28,287	0
Short-term investments proceeds (purchases)	109,794	(109,794)
Proceeds from sale of investments	0	17,781
Other, net	3,546	528
Net cash provided by (used in) investing activities	25,627	(195,188)
Cash flows from financing activities:
Net repayments under revolving credit facility	0	(55,000)
Stock issued under option plans	63,257	57,172
Purchase of treasury stock	(113,906)	(29,505)
Net cash used in financing activities	(50,649)	(27,333)
Effect of exchange rate changes on cash	(20,447)	(348)
Net change in cash and cash equivalents	87,136	(10,024)
Cash and cash equivalents, beginning of period	617,686	492,824
Cash and cash equivalents, end of period	$ 704,822	$ 482,800

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Current Assets:
Cash and cash equivalents	$ 704,822	$ 617,686
Short-term investments	0	111,359
Accounts receivable	330,751	331,815
Unbilled services	159,191	141,707
Inventory	51,463	48,257
Deferred income taxes	56,027	51,543
Prepaid expenses and other current assets	215,269	201,621
Total Current Assets	1,517,523	1,503,988
Property and equipment, net	862,173	913,612
Goodwill	118,075	109,820
Other assets	34,557	29,168
Total Assets	2,532,328	2,556,588
Current Liabilities:
Accounts payable	53,937	59,713
Accrued payroll and benefits	129,891	170,806
Accrued expenses and other current liabilities	113,304	153,808
Unearned revenue	219,764	240,398
Income taxes payable	26,263	7,952
Total Current Liabilities	543,159	632,677
Long-term debt	250,000	250,000
Deferred income taxes	13,022	32,035
Other liabilities	77,002	76,630
Total Liabilities	883,183	991,342
Commitments and Contingent Liabilities
Stockholders' Equity:
Preferred Stock - Par value $1.00 per share; 10,000,000 shares authorized; no shares issued and outstanding at September 30, 2014 and December 31, 2013	0	0
Common Stock - Par value $0.01 per share; 140,000,000 shares authorized; 82,461,494 and 80,935,089 shares issued and outstanding, including those held in treasury, at September 30, 2014 and December 31, 2013, respectively	825	809
Paid-in capital	959,398	859,535
Retained earnings	1,913,585	1,779,833
Accumulated other comprehensive (loss) income	(10,080)	25,746
Treasury stock at cost (25,882,990 and 24,595,756 shares at September 30, 2014 and December 31, 2013, respectively)	(1,214,583)	(1,100,677)
Total Stockholders' Equity	1,649,145	1,565,246
Total Liabilities and Stockholders' Equity	$ 2,532,328	$ 2,556,588