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Item 1. Financial Statements

2024-04-30 compared with 2023-10-30 · 176 added, 292 removed, 567 unchanged (45% of the section changed)

3 unchanged sentences

(in millions)

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Current assets:

4 unchanged sentences

Prepaid expenses and other 678.1 655.3

Current assets of discontinued operations — 1,226.1

Total current assets 3,456.5 3,765.4

3 unchanged sentences

Joint venture partnerships and equity method investments 17.7 26.9

Deferred income taxes 7.7 6.4

Other assets, net 546.0 536.5

Long-term assets of discontinued operations — 3,038.2

Total assets $ 16,531.0 $ 16,725.1

7 unchanged sentences

Short-term borrowings and current portion of long-term debt 2,041.5 999.8

Current liabilities of discontinued operations — 657.6

Total current liabilities 3,941.5 3,225.2

4 unchanged sentences

Other liabilities 468.2 409.3

Long-term liabilities of discontinued operations — 241.3

Total liabilities 8,556.2 8,834.6

2 unchanged sentences

Shareholders’ equity:

Common stock, 84.9 and 88.2 shares outstanding at September 30, 2023, and December 31, 2022, respectively

Common stock, $0.10 par value, 84.3 and 83.9 shares outstanding at March 31, 2024, and December 31, 2023, respectively

Additional paid-in capital 82.0 38.4

7 unchanged sentences

(in millions, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Revenues $ 3,176.6 $ 3,037.8

18 unchanged sentences

Net earnings attributable to Laboratory Corporation of America Holdings $ 228.0 $ 212.9

Basic earnings per common share:

Basic earnings per common share continuing operations $ 2.12 $ 3.07 $ 6.22 $ 10.50

Basic earnings per common share discontinued operations $ — $ 0.84 $ 0.44 $ 2.59

Basic earnings per common share $ 2.12 $ 3.91 $ 6.66 $ 13.09

Diluted earnings per common share:

Diluted earnings per common share continuing operations $ 2.11 $ 3.06 $ 6.19 $ 10.45

Diluted earnings per common share discontinued operations $ — $ 0.84 $ 0.44 $ 2.57

Diluted earnings per common share $ 2.11 $ 3.90 $ 6.63 $ 13.02

Basic earnings per share:

Basic earnings per share continuing operations $ 2.71 $ 2.35

Basic earnings per share discontinued operations $ — $ 0.06

Basic earnings per share $ 2.71 $ 2.41

Diluted earnings per share:

Diluted earnings per share continuing operations $ 2.69 $ 2.34

Diluted earnings per share discontinued operations $ — $ 0.05

Diluted earnings per share $ 2.69 $ 2.39

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(in millions, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

(in millions)

Three Months Ended March 31,

Net earnings $ 228.3 $ 213.3

2 unchanged sentences

Other comprehensive earnings (loss) before tax ( 126.7 ) 49.3

Provision (benefit) for income tax related to items of comprehensive earnings ( 0.2 ) ( 0.3 ) ( 0.8 ) ( 1.1 )

Provision for income tax related to items of comprehensive earnings 0.6 ( 0.3 )

Other comprehensive earnings (loss), net of tax ( 126.1 ) 49.0

15 unchanged sentences

Other comprehensive earnings (loss), net of tax — — — 49.0 49.0

Issuance of common stock under employee stock plans — 18.2 — — 18.2

Net share settlement tax payments from issuance of stock to employees — ( 27.3 ) — — ( 27.3 )

Stock compensation — 38.2 — — 38.2

BALANCE AT MARCH 31, 2022 $ 8.5 $ 29.1 $ 10,948.4 $ ( 264.9 ) $ 10,721.1

Net earnings attributable to Laboratory Corporation of America Holdings — — 358.6 — 358.6

Other comprehensive earnings (loss), net of tax — — — ( 240.6 ) ( 240.6 )

Dividends declared — — ( 64.7 ) — ( 64.7 )

2 unchanged sentences

Stock compensation — 40.6 — — 40.6

Purchase of common stock ( 0.2 ) ( 59.3 ) ( 340.5 ) — ( 400.0 )

BALANCE AT JUNE 30, 2022 $ 8.3 $ — $ 10,897.9 $ ( 505.5 ) $ 10,400.7

Net earnings attributable to Laboratory Corporation of America Holdings — — 352.8 — 352.8

Other comprehensive earnings (loss), net of tax — — — ( 255.5 ) ( 255.5 )

Dividends declared — — ( 66.4 ) — ( 66.4 )

Issuance of common stock under employee stock plans — 31.5 — — 31.5

Net share settlement tax payments from issuance of stock to employees — ( 7.2 ) — — ( 7.2 )

Stock compensation — 36.3 — — 36.3

Purchase of common stock ( 0.1 ) ( 60.6 ) ( 339.3 ) — ( 400.0 )

BALANCE AT SEPTEMBER 30, 2022 $ 8.2 $ — $ 10,845.0 $ ( 761.0 ) $ 10,092.2

BALANCE AT MARCH 31, 2023 $ 8.1 $ 47.7 $ 10,729.9 $ ( 444.2 ) $ 10,341.5

BALANCE AT DECEMBER 31, 2023 $ 7.7 $ 38.4 $ 7,888.2 $ ( 59.3 ) $ 7,875.0

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BALANCE AT MARCH 31, 2024 $ 7.7 $ 82.0 $ 8,055.3 $ ( 185.4 ) $ 7,959.6

Net earnings attributable to Laboratory Corporation of America Holdings — — 188.9 — 188.9

Other comprehensive earnings (loss), net of tax — — — 52.5 52.5

Fortrea Holdings Inc.

spin off — — ( 2,018.1 ) 238.0 ( 1,780.1 )

Dividends declared — — ( 64.5 ) — ( 64.5 )

Issuance of common stock under employee stock plans — 26.8 — — 26.8

Net share settlement tax payments from issuance of stock to employees — ( 18.2 ) — — ( 18.2 )

Stock compensation — 38.1 — — 38.1

BALANCE AT JUNE 30, 2023 $ 8.1 $ 94.4 $ 8,836.2 $ ( 153.7 ) $ 8,785.0

Net earnings attributable to Laboratory Corporation of America Holdings — — 183.3 — 183.3

Other comprehensive earnings (loss), net of tax — — — ( 55.1 ) ( 55.1 )

Dividends declared — — ( 64.6 ) — ( 64.6 )

Net share settlement tax payments from issuance of stock to employees — ( 0.9 ) — — ( 0.9 )

Stock compensation — 34.4 — — 34.4

Purchase of common stock ( 0.4 ) ( 123.2 ) ( 885.4 ) — ( 1,009.0 )

BALANCE AT SEPTEMBER 30, 2023 $ 7.7 $ 4.7 $ 8,069.5 $ ( 208.8 ) $ 7,873.1

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

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Deferred income taxes ( 19.5 ) 27.2

Other ( 3.0 ) 9.6

Change in assets and liabilities (net of effects of acquisitions and divestitures):

Decrease (increase) in accounts receivable ( 173.6 ) 59.8

Decrease (increase) in unbilled services 103.4 ( 64.6 )

Decrease (increase) in supplies inventory 9.7 ( 47.5 )

Increase in accounts receivable ( 187.1 ) ( 108.4 )

Decrease in unbilled services 63.9 56.9

Increase in supplies inventory ( 0.6 ) ( 10.0 )

Increase in prepaid expenses and other ( 24.9 ) ( 57.5 )

Increase (decrease) in accounts payable ( 188.6 ) 112.6

Increase in unearned revenue 50.7 27.6

Decrease in accounts payable ( 121.1 ) ( 77.7 )

(Decrease) increase in unearned revenue ( 41.6 ) 16.3

Decrease in accrued expenses and other ( 156.9 ) ( 96.8 )

Net cash provided by continuing operating activities 622.7 1,157.6

Net cash provided by discontinued operating activities 125.4 144.7

Net cash provided by operating activities 748.1 1,302.3

Net cash provided by (used for) continuing operating activities ( 29.8 ) 185.7

Net cash used for discontinued operating activities — ( 64.5 )

Net cash provided by (used for) operating activities ( 29.8 ) 121.2

CASH FLOWS FROM INVESTING ACTIVITIES:

1 unchanged sentence

Proceeds from sale of assets 0.1 0.1

Proceeds from sale or distribution of investments 6.7 0.7

Proceeds from exit from swaps — 2.9

Proceeds from sale of business 13.5 —

Investments in equity affiliates ( 13.7 ) ( 6.1 )

Acquisition of businesses, net of cash acquired ( 259.2 ) 0.2

Net cash used in continuing investing activities ( 816.2 ) ( 1,345.1 )

Net cash used in discontinued investing activities ( 24.7 ) ( 33.8 )

Net cash used for continuing investing activities ( 393.1 ) ( 84.0 )

Net cash used for discontinued investing activities — ( 15.7 )

Net cash used for investing activities ( 393.1 ) ( 99.7 )

5 unchanged sentences

Dividends paid ( 62.1 ) ( 64.4 )

Purchase of common stock ( 1,009.0 ) ( 800.0 )

Other ( 4.0 ) ( 3.3 )

Net cash used in continuing financing activities ( 1,112.5 ) ( 949.6 )

Net cash used for continuing financing activities ( 11.7 ) ( 60.6 )

Net cash provided by discontinued financing activities — —

Net cash provided by (used in) financing activities 387.2 ( 949.6 )

Net cash used for financing activities ( 11.7 ) ( 60.6 )

Effect of exchange rate changes on cash and cash equivalents ( 2.9 ) 3.0

Net increase (decrease) in cash and cash equivalents 297.9 ( 1,062.8 )

Net decrease in cash and cash equivalents ( 437.5 ) ( 36.1 )

Cash and cash equivalents at beginning of period 536.8 430.0

Cash and cash equivalents of discontinued operations as of end of period $ — $ 105.0

Cash and cash equivalents of discontinued operations at end of period $ — $ 99.1

Cash and cash equivalents at end of period $ 99.3 $ 294.8

4 unchanged sentences

BASIS OF FINANCIAL STATEMENT PRESENTATION

Laboratory Corporation of America® Holdings (Labcorp® or the Company) is a global leader of innovative and comprehensive laboratory service that serves physicians, hospitals, patients and biopharmaceutical clients.

The Company provides insights and advances science to improve health and improve lives through its strong diagnostics and drug development laboratory capabilities.

On June 30, 2023 (the Distribution Date), Labcorp completed the previously announced separation (the Separation) of Fortrea Holdings Inc.

(Fortrea) from the Company, see Note 2 (Discontinued Operations) to the condensed consolidated financial statements.

The remainder of the Drug Development segment has been renamed as the Biopharma Laboratory Services segment.

All current and historical operating results of Fortrea are presented as Discontinued Operations, net of tax, in the consolidated statement of operations.

All historical assets and liabilities of Fortrea are classified as current and long-term assets of discontinued operations and current and long-term liabilities of discontinued operations in the accompanying balance sheet as of December 31, 2022.

The spin-off is expected to be treated as tax-free for the Company and its shareholders for U.S.

federal income tax purposes.

The Company reports its business in two segments, Diagnostics Laboratories (Dx) and Biopharma Laboratory Services (BLS).

Laboratory Corporation of America® Holdings (Labcorp® or the Company) is a global leader of innovative and comprehensive laboratory services that provides vital information to help doctors, hospitals, pharmaceuitcal companies, researchers, and patients make clear and confident decisions.

By leveraging its unparalleled diagnostics and drug development capabilities, the Company provides insights and accelerates innovations to improve health and improve lives.

The Company reports its business in two segments, Diagnostics Laboratories (Dx) and Biopharma Laboratory Services (BLS), formerly Drug Development.

For further financial information about these segments, see Note 12 (Business Segment Information) to the Condensed Consolidated Financial Statements.

During the three months ended September 30, 2023, Dx and BLS contributed approximately 77 % and 23 %, respectively, of revenues to the Company.

During the nine months ended September 30, 2023, Dx and BLS contributed approximately 77 % and 23 %, respectively, of revenues to the Company.

During the three months ended March 31, 2024, Dx and BLS contributed approximately 78 % and 22 %, respectively, of revenues to the Company.

During the three months ended March 31, 2023, Dx and BLS contributed approximately 78 % and 22 %, respectively, of revenues to the Company.

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 (SEC) and do not contain certain information included in the Company’s fiscal year 2023 Annual Report on Form 10-K (Annual Report).

Therefore, these interim statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report.

The condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries for which it exercises control.

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Resulting translation adjustments are included in “Accumulated other comprehensive income (loss).”

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.

Therefore, these interim statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report.

DISCONTINUED OPERATIONS

On June 30, 2023 (the Distribution Date), Labcorp completed the previously announced separation (the Separation) from the Company of Fortrea Holdings Inc.

(Fortrea), formerly the Company's Clinical Development and Commercialization Services (CDCS) business, into a separate, publicly-traded company.

All historical operating results of Fortrea are presented as Discontinued Operations, net of tax, in the consolidated statement of operations.

The spin-off is expected to be treated as tax-free for the Company and its shareholders for U.S.

federal income tax purposes.

A discontinued operation may include a component or a group of components of the Company's operations.

3 unchanged sentences

or (3) the component or group of components is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spin-off).

For any component classified as held for sale or disposed of by sale or other than by sale, qualifying for presentation as a discontinued operation, the Company reports the results of operations of the discontinued operations (including any gain or loss recognized on the disposal or loss recognized on classification as held for sale of a discontinued operation), less applicable income taxes (benefit), as a separate component in the consolidated statement of operations for current and all prior periods presented.

The Company also reports assets and liabilities associated with discontinued operations as separate line items on the consolidated balance sheet for prior periods.

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

1 unchanged sentence

(dollars and shares in millions, except per share data)

discontinued operation), less applicable income taxes (benefit), as a separate component in the consolidated statement of operations for current and all prior periods presented.

The Company also reports assets and liabilities associated with discontinued operations as separate line items on the consolidated balance sheet for prior periods.

The spin-off of Fortrea from Labcorp was achieved through the Company’s pro-rata distribution of 100% of the outstanding shares of Fortrea common stock to holders of record of Labcorp common stock.

12 unchanged sentences

Earnings from Discontinued Operations, Net of Tax in the Consolidated Statements of Operations reflect the after-tax results of Fortrea's business and Separation-related fees, and do not include any allocation of general corporate overhead expense or interest expense of the Company.

The following table summarizes the significant line items included in Earnings from Discontinued Operations, Net of Tax in the Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31, 2023

Revenues $ 740.1

6 unchanged sentences

Other income (expense):

Interest expense — — ( 0.5 ) ( 0.3 )

Investment income (expense) — 0.4 ( 1.2 ) 1.0

Other, net ( 5.7 )

5 unchanged sentences

(dollars and shares in millions, except per share data)

The following table summarizes the carrying value of the significant classes of assets and liabilities classified as discontinued operations as of December 31, 2022:

Current assets:

Cash and cash equivalents $ 109.4

Accounts receivable, net 436.5

Unbilled services 583.6

Prepaid expenses and other 96.6

Total current assets 1,226.1

Property, plant and equipment, net 162.1

Goodwill, net 1,997.3

Intangible assets, net 823.3

Deferred income taxes 1.2

Other assets, net 54.3

Total assets $ 4,264.3

Current liabilities:

Accounts payable $ 82.6

Accrued expenses and other 281.8

Unearned revenue 271.5

Short-term operating lease liabilities 21.7

Total current liabilities 657.6

Operating lease liabilities 26.8

Deferred income taxes and other tax liabilities 192.8

Other liabilities 21.7

Total liabilities 898.9

The Company's revenues by segment and by payers/customer groups for the three and nine months ended September 30, 2023, and 2022, were as follows:

For the Three Months Ended September 30, 2023 For the Three Months Ended September 30, 2022

North America Europe Other Total North America Europe Other Total

Payer/Customer

Clients 24 % — % — % 24 % 23 % — % — % 23 %

Patients 9 % — % — % 9 % 8 % — % — % 8 %

Medicare and Medicaid 8 % — % — % 8 % 8 % — % — % 8 %

Third party 36 % — % — % 36 % 38 % — % — % 38 %

Total Dx revenues by payer 77 % — % — % 77 % 77 % — % — % 77 %

Pharmaceutical, biotechnology and medical device companies 10 % 9 % 4 % 23 % 10 % 9 % 4 % 23 %

Total revenues 87 % 9 % 4 % 100 % 87 % 9 % 4 % 100 %

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in millions, except per share data)

For the Nine Months Ended September 30, 2023 For the Nine Months Ended September 30, 2022

The Company's revenues by segment and by payers/customer groups for the three months ended March 31, 2024, and 2023, were as follows:

For the Three Months Ended March 31, 2024 For the Three Months Ended March 31, 2023

North America Europe Other Total North America Europe Other Total

8 unchanged sentences

Revenues in the U.S.

were $ 2,550.6 ( 83.4 %) and $ 2,392.4 ( 83.5 %) for the three months ended September 30, 2023, and 2022, respectively, and for the nine months ended September 30, 2023, and 2022, were $ 7,645.0 ( 83.8 %) and $ 7,454.0 ( 83.4 %), respectively.

were $ 2,654.6 ( 83.6 %) and $ 2,557.4 ( 84.2 %) for the three months ended March 31, 2024, and 2023, respectively.

Accounts Receivable, Unbilled Services and Unearned Revenue

The following table provides information about accounts receivable, unbilled services, and unearned revenue from contracts with customers:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Dx accounts receivable $ 1,260.9 $ 1,135.2

6 unchanged sentences

Unearned revenue $ 377.5 $ 421.7

Revenues recognized during the period that were included in the unearned revenue balance at the beginning of the period were $ 6.3 and $ 9.3 for the three months ended September 30, 2023 and 2022, respectively, and $ 79.1 and $ 65.9 for the nine months ended September 30, 2023, and 2022, respectively.

Revenues recognized during the period that were included in the unearned revenue balance at the beginning of the period were $ 51.0 and $ 52.6 for the three months ended March 31, 2024 and 2023, respectively.

Credit Loss Rollforward

The Company estimates future expected losses on accounts receivable, unbilled services and notes receivable over the remaining collection period of the instrument.

The rollforward for the allowance for credit losses for the nine months ended September 30, 2023, is as follows:

The rollforward for the allowance for credit losses for the three months ended March 31, 2024, was as follows:

Accounts Receivable Unbilled Services Note and Other Receivables Total

2 unchanged sentences

Less, write offs 0.9 0.1 — 1.0

Balance as of September 30, 2023 $ 32.8 $ 8.9 $ 0.7 $ 42.4

The credit loss expense in the first nine months primarily related to the collection risk from several biotech receivable balances in the first quarter.

BUSINESS ACQUISITIONS

During the nine months ended September 30, 2023, the Company acquired several businesses and related assets for cash of approximately $ 516.7 .

These acquisitions consisted of the clinical and outreach businesses of Jefferson Health ($ 108.0 ), Enzo BioChem ($ 112.8 ), Providence Health & Services - Oregon ($ 110.0 ), Tufts Medicine ($ 157.0 ), and other smaller acquisitions

Balance as of March 31, 2024 $ 34.2 $ 7.4 $ 0.7 $ 42.3

The credit loss expense in the first three months primarily related to the collection risk from several biotech receivable balances in the first quarter.

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

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(dollars and shares in millions, except per share data)

BUSINESS ACQUISITIONS AND DISPOSITIONS

During the three months ended March 31, 2024, the Company acquired several businesses and related assets for cash of approximately $ 259.2 .

These acquisitions consisted of the clinical and outreach businesses of Baystate Medical Center ($ 116.6 ), Providence Medical Foundation ($ 54.9 ), and Westpac Labs, Inc.

The preliminary purchase considerations for these acquisitions were allocated under the acquisition method of accounting to the estimated fair market value of the net assets acquired, including approximately $ 159.4 in identifiable intangible assets.

A residual amount of non-tax deductible goodwill of approximately $ 230.5 was recorded as of September 30, 2023.

A residual amount of tax deductible goodwill of approximately $ 141.7 was recorded as of March 31, 2024.

The amortization period for non-compete agreements and customer list assets acquired from these businesses are 5 and 15 years, respectively.

The purchase price allocations for these acquisitions have not been finalized as of September 30, 2023.

The purchase price allocations for these acquisitions have not been finalized as of March 31, 2024.

The preliminary valuation of acquired assets and assumed liabilities, include the following:

Business Acquisitions Measurement Period Adjustments Amounts Acquired During the Nine Months Ended September 30, 2023

Baystate Medical Center Providence Medical Foundation Westpac Labs, Inc.

Amounts Acquired During the Three Months Ended March 31, 2024 Measurement Period Adjustments for Prior Year Acquisitions During the Three Months Ended March 31, 2024

Cash and cash equivalents $ — $ — $ — $ — $ —

Accounts receivable ( 3.0 ) — ( 3.0 )

Inventories — — 1.8 1.8 —

Prepaid expenses and other 0.4 0.6 1.0

Property, plant and equipment 7.2 0.9 — 8.1 —

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Total assets acquired $ 157.5 $ 55.8 $ 97.7 $ 311.0 $ —

Accrued expenses and other 3.9 ( 8.3 ) ( 4.4 )

Deferred income taxes — ( 2.3 ) ( 2.3 )

Lease liabilities 7.2 0.9 — 8.1 —

Other liabilities 3.7 — 10.0 13.7 —

Total liabilities acquired 10.9 0.9 10.0 21.8 —

Net assets acquired $ 146.6 $ 54.9 $ 87.7 $ 289.2 $ —

During the nine months ended September 30, 2022, the Company acquired several businesses and related assets for approximately $ 1,013.6 in cash.

The purchase considerations for these acquisitions were allocated under the acquisition method of accounting to the estimated fair market value of the net assets acquired, including approximately $ 407.4 in identifiable intangible assets and a residual amount of non-tax deductible goodwill of approximately $ 571.3 .

The amortization period for intangible assets acquired from this businesses range from 5 to 23 years for customer relationships and non-compete agreements.

These acquisitions were made primarily to complement and accelerate the Company’s existing liquid biopsy capabilities and enhance the Company's diagnostic footprint and capabilities.

The preliminary valuation of acquired assets and assumed liabilities, include the following:

Preliminary Personal Genome Diagnostics Inc.

Preliminary Ascension Healthcare Other Acquisitions Measurement Period Adjustments Amounts Acquired During the Nine Months Ended September 30, 2022

Accounts receivable $ 4.1 $ — $ — $ — $ 4.1

Unbilled services 2.9 — — — 2.9

Inventories 2.5 24.6 — — 27.1

Prepaid expenses and other 1.2 0.4 — — 1.6

Property, plant and equipment 9.9 43.5 0.1 — 53.5

Deferred income taxes — — — 17.7 17.7

Less escrow payment made in 2023 30.0 — — 30.0 —

Cash paid for acquisitions $ 116.6 $ 54.9 $ 87.7 $ 259.2 $ —

During the three months ended March 31, 2023, the Company recorded several measurement period adjustments for 2022 acquisitions, relating to final valuations and deferred tax true-ups.

The adjustments include the following:

Measurement Period Adjustments During Three Months Ended March 31, 2023

Cash and cash equivalents $ 0.2

Goodwill ( 30.5 )

Intangible assets 19.9

Other assets — — 0.8 — 0.8

Total assets acquired $ ( 10.4 )

Accounts payable 3.8 — — — 3.8

Accrued expenses and other ( 8.4 )

Unearned revenue 3.3 — — — 3.3

Lease liabilities — 2.9 — — 2.9

Deferred income taxes ( 2.0 )

Other liabilities 76.2 — — ( 70.0 ) 6.2

Total liabilities acquired ( 10.4 )

Net assets acquired $ —

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in millions, except per share data)

Pro Forma Information

Had the Company's total 2024 and 2023 acquisitions been completed as of January 1, the Company's pro forma results would have been as follows:

Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30,

2023 2023 2022 2022

Three Months Ended March 31, Three Months Ended March 31,

Revenues $ 3,191.1 $ 3,106.0

Net earnings from continuing operations attributable to Laboratory Corporation of America Holdings $ 227.5 $ 216.2

During the three months ended March 31, 2024, the Company sold the assets of its Beacon Laboratory Benefit Solutions, Inc.

for $13.5 and recorded a gain of $4.9.

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in millions, except per share data)

EARNINGS PER SHARE

Basic earnings per share is computed by dividing net earnings attributable to the Company by the weighted average number of common shares outstanding.

Basic earnings per share is computed by dividing net earnings attributable to the Company by the weighted average number of shares of the Company's common stock 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.

1 unchanged sentence

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,

2023 2022 2023 2022

Earnings Shares Per Share Amount Earnings Shares Per Share Amount Earnings Shares Per Share Amount Earnings Shares Per Share Amount

Three Months Ended March 31,

Earnings Shares Per Share Amount Earnings Shares Per Share Amount

Basic earnings per share:

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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,

2023 2022 2023 2022

Three Months Ended March 31,

Employee stock options and awards 0.3 0.6

GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the nine months ended September 30, 2023, are as follows:

The changes in the carrying amount of goodwill for the three months ended March 31, 2024, were as follows:

Balance as of December 31, 2023 $ 4,813.9 $ 1,328.6 $ 6,142.5

1 unchanged sentence

Foreign currency impact and other adjustments to goodwill ( 9.4 ) ( 55.9 ) ( 65.3 )

Balance as of September 30, 2023 $ 4,745.4 $ 1,586.5 $ 6,331.9

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in millions, except per share data)

Balance as of March 31, 2024 $ 4,946.2 $ 1,272.7 $ 6,218.9

The Company assesses goodwill and indefinite-lived intangibles for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

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Accordingly, there can be no assurance that the estimates and assumptions made for the purposes of the goodwill impairment analysis will prove to be accurate predictions of future performance.

During the fourth quarter of 2022, the company recorded a goodwill impairment, related to the early development reporting unit, at which time the amount of fair value in excess of carrying value was reduced to zero .

As such, the company continues to closely monitor the performance of the early development reporting unit.

The Company will continue to monitor the financial performance of, and assumptions for, its reporting units.

1 unchanged sentence

A future impairment charge for goodwill or intangible assets could have a material effect on the Company's consolidated financial position and results of operations.

T he components of identifiable intangible assets are as follows:

September 30, 2023 December 31, 2022

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in millions, except per share data)

T he components of identifiable intangible assets were as follows:

March 31, 2024 December 31, 2023

Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net

7 unchanged sentences

5,149.2 ( 1,755.1 ) 3,394.1 5,058.4 ( 1,716.4 ) 3,342.0

Amortization of intangible assets for the three and nine months ended September 30, 2023, and 2022, was $ 55.7 and $ 49.0 and $ 160.6 and $ 149.0 , respectively.

Amortization of intangible assets for the three months ended March 31, 2024, and 2023, was $ 60.1 and $ 53.4 , respectively.

The amortization expense for the net carrying amount of intangible assets is estimated to be $ 183.3 for the remainder of fiscal 2024, $ 237.3 in fiscal 2025, $ 228.4 in fiscal 2026, $ 217.1 in fiscal 2027, $ 209.0 in fiscal 2028, and $ 1,737.4 thereafter.

Short-term borrowings and the current portion of long-term debt at September 30, 2023, and December 31, 2022, consisted of the following:

September 30, 2023 December 31, 2022

Short-term borrowings and the current portion of long-term debt at March 31, 2024, and December 31, 2023, consisted of the following:

March 31, 2024 December 31, 2023

Revolving line of credit $ 42.4 $ —

1 unchanged sentence

3.25% senior notes due 2024 600.0 600.0

3.60% senior notes due 2025 1,000.0 —

Debt issuance costs ( 1.7 ) ( 1.3 )

1 unchanged sentence

Total short-term borrowings and current portion of long-term debt $ 2,041.5 $ 999.8

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in millions, except per share data)

Long-term debt at September 30, 2023, and December 31, 2022, consisted of the following:

September 30, 2023 December 31, 2022

2.30% senior notes due 2024 $ 400.0 $ 400.0

3.25% senior notes due 2024 — 600.0

Long-term debt at March 31, 2024, and December 31, 2023, consisted of the following:

March 31, 2024 December 31, 2023

3.60% senior notes due 2025 — 1,000.0

7 unchanged sentences

Total long-term debt $ 3,047.6 $ 4,054.7

During the second quarter of 2021, the Company entered into fixed-to-variable interest rate swap agreements for its 2.70 % senior notes due 2031 with an aggregate notional amount of $ 500.0 and variable interest rates based on three-month SOFR plus 1.0706 % to hedge against changes in the fair value of a portion of the Company's long-term debt.

These interest rate swaps are included in other long-term liabilities and deducted from the value of the senior notes with an aggregate fair value of $ 94.9 at September 30, 2023.

Credit Facilities

The Company maintains a senior revolving credit facility, which was amended and restated on April 30, 2021.

The Company maintains a senior revolving credit facility, which was amended and restated on January 13, 2023.

It consists of a five-year facility in the principal amount of up to $ 1,000.0 , with the option of increasing the facility by up to an additional $ 500.0 , subject to the agreement of one or more new or existing lenders to provide such additional amounts and certain other customary conditions.

3 unchanged sentences

The revolving credit facility also provides for the issuance of letters of credit without a reduction of the availability of borrowings under the facility.

There was $ 90.0 outstanding on the Company's current revolving credit facility as of September 30, 2023.

As of September 30, 2023, the effective interest rate on the revolving credit facility was 6.42 %.

There was $ 42.4 outstanding on the Company's current revolving credit facility and $ 90.7 in outstanding letters of credit on the Company's subfacility as of March 31, 2024.

As of March 31, 2024, the effective interest rate on the

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in millions, except per share data)

revolving credit facility was 6.42 %.

The credit facility expires on April 30, 2026.

Under 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 revolving credit facility at September 30, 2023, and expects that it will remain in compliance with its existing debt covenants for the next twelve months.

There were $ 85.4 in outstanding letters of credit as of September 30, 2023.

The Company was in compliance with all covenants in the revolving credit facility at March 31, 2024, and expects that it will remain in compliance with its existing debt covenants for the next twelve months.

PREFERRED STOCK AND COMMON SHAREHOLDERS’ EQUITY

1 unchanged sentence

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, 2023, and December 31, 2022.

There were no preferred shares outstanding as of March 31, 2024, and December 31, 2023.

The changes in common shares issued are summarized below:

2 unchanged sentences

Shares issued under employee stock plans 0.4

Shares retired due to Fortrea spin ( 0.2 )

Shares repurchased ( 3.7 )

Common shares at September 30, 2023 84.9

Common shares at March 31, 2024 84.3

Share Repurchase Program

On August 8, 2023, the Company entered into accelerated share repurchase agreements (collectively, the ASR Agreements) with two different banks, Goldman Sachs & Co.

LLC and Morgan Stanley & Co.

LLC (collectively, the Financial Institutions),

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in millions, except per share data)

to repurchase approximately $ 1,000.0 in the aggregate of the Company’s common stock (Common Stock), as part of the Company’s Common Stock repurchase program.

The remaining repurchase authorization has no expiration date.

Under the ASR Agreements, the Company made an aggregate payment of $ 1,000.0 to the Financial Institutions and received an aggregate initial number of approximately 3.7 shares of Common Stock from the Financial Institutions, which were removed from the outstanding share count in connection with entering into the ASR Agreements.

The 3.7 shares reflects the 80% of the shares that would ultimately be repurchased under the ASR Agreements if the price of the Common Stock established in the ASR Agreement as the inception of the ASR Agreements remains constant.

The specific number of shares that the Company ultimately will repurchase under the ASR Agreements will be based generally on the average of the daily volume-weighted average price per share of the Common Stock during a repurchase period, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR Agreements.

At settlement, under certain circumstances, the Financial Institutions may be required to deliver additional shares of Common Stock to the Company, or the Company may be required, at its election, either to make cash payments or deliver shares of Common Stock to the Financial Institutions.

The ASR Agreements contain provisions customary for agreements of this type, including provisions for adjustments to the transaction terms, the circumstances generally under which the ASR Agreements may be accelerated, extended or terminated early by the Financial Institutions, and various acknowledgments, representations and warranties made by the parties to one another.

Repurchases and settlements under the ASR Agreements are expected to be completed by the end of December 2023.

When the Company repurchases shares of Common Stock, the amount paid to repurchase the shares in excess of the par or stated value is allocated to additional paid-in-capital unless subject to limitation or the balance in additional paid-in-capital is exhausted.

Remaining amounts are recognized as a reduction in retained earnings.

As of September 30, 2023, the Company had outstanding authorization from the board of directors to purchase up to $ 531.5 of the Company's common stock.

For the nine months ended September 30, 2023, the Company paid $ 192.9 in common stock dividends.

On October 12, 2023 , the Company announced a cash dividend of $ 0.72 per share of common stock for the fourth quarter, or approximately $ 62.1 in the aggregate.

The dividend will be payable on December 12, 2023 , to stockholders of record of all issued and outstanding shares of common stock as of the close of business on November 8, 2023 .

As of March 31, 2024, the Company had outstanding authorization from the board of directors to purchase up to $ 531.5 of the Company's common stock.

For the three months ended March 31, 2024, the Company paid $ 62.1 in common stock dividends.

On April 11, 2024 , the Company announced a cash dividend of $ 0.72 per share of common stock for the first quarter, or approximately $ 61.4 in the aggregate.

The dividend will be payable on June 12, 2024 , to stockholders of record of all issued and outstanding shares of common stock as of the close of business on May 28, 2024 .

The declaration and payment of any future dividends will be at the discretion of the Company's board of directors.

Accumulated Other Comprehensive Earnings (Loss)

The components of accumulated other comprehensive earnings (loss) are as follows:

The components of accumulated other comprehensive earnings (loss) were as follows:

Foreign Currency Translation Adjustments Net Benefit Plan Adjustments Accumulated Other Comprehensive Earnings (Loss)

Balance as of December 31, 2023 $ ( 47.6 ) $ ( 11.7 ) $ ( 59.3 )

Fortrea Holdings Inc.

spin off 231.6 6.4 238.0

Current year adjustments ( 124.3 ) ( 1.5 ) ( 125.8 )

Pension settlement charge — ( 10.8 ) ( 10.8 )

Amounts reclassified from accumulated other comprehensive income — ( 0.9 ) ( 0.9 )

Tax effect of adjustments — 0.6 0.6

Balance as of September 30, 2023 $ ( 186.9 ) $ ( 21.9 ) $ ( 208.8 )

Balance as of March 31, 2024 $ ( 171.9 ) $ ( 13.5 ) $ ( 185.4 )

COMMITMENTS AND CONTINGENCIES

19 unchanged sentences

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 reasonably estimable and would exceed the aggregate legal reserve.

When loss contingencies are not both probable and reasonably estimable, the Company does not establish separate reserves.

2 unchanged sentences

The Company has received various subpoenas and other civil investigative demands 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.

The Company cooperated with this request.

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.

2 unchanged sentences

The Company cooperated with this request.

On January 26, 2021, the Company was notified that a qui tam Petition was pending under seal in the District Court, 250th Judicial District, Travis County, Texas, and that the State of Texas has intervened.

On April 14, 2021, the Petition was unsealed.

15 unchanged sentences

The court held oral arguments on December 9, 2020.

On May 26, 2022, the Florida Supreme Court issued an

On May 26, 2022, the Florida Supreme Court issued an opinion approving the result of the Florida Second District Court of Appeal in favor of the Plaintiff.

The Company will vigorously defend the lawsuit.

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

1 unchanged sentence

(dollars and shares in millions, except per share data)

opinion approving the result of the Florida Second District Court of Appeal in favor of the Plaintiff.

The Company will vigorously defend the lawsuit.

On March 10, 2017, the Company was served with a putative class action lawsuit, Victoria Bouffard, et al.

Laboratory Corporation of America Holdings , filed in the U.S.

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 Allegations;

the Motion to Dismiss was granted in March 2018 without prejudice.

On October 10, 2017, a second putative class action lawsuit, Sheryl Anderson, et al.

Laboratory Corporation of America Holdings , was filed in the U.S.

District Court for the Middle District of North Carolina.

The complaint contained similar allegations and sought similar relief to the Bouffard complaint, and added additional counts regarding state consumer protection laws.

On August 10, 2018, the Plaintiffs filed an Amended Complaint, which consolidated the Bouffard and Anderson actions.

In September 2023, the lawsuit was dismissed with prejudice.

On December 29, 2021, a related lawsuit, Nathaniel J.

On December 29, 2021, the Company was served with a putative class action lawsuit, Nathaniel J.

Nolan, et al.

Laboratory Corporation of America Holdings , was filed in the U.S.

Laboratory Corporation of America Holdings , filed in the U.S.

District Court for the Middle District of North Carolina.

4 unchanged sentences

On March 13, 2023, Plaintiffs filed a Notice of Appeal.

The Company will vigorously defend the Nolan lawsuit.

On April 10, 2024, the U.S.

Court of Appeals for the Fourth Circuit issued an order affirming in part, reversing in part, and remanding the case to the District Court for further proceedings.

The Company will vigorously defend the lawsuit.

On April 1, 2019, Covance Research Products was served with a Grand Jury Subpoena issued by the Department of Justice (DOJ) in Miami, Florida requiring the production of documents related to the importation into the United States of live non-human primate shipments originating from or transiting through China, Cambodia, and/or Vietnam from April 1, 2014 through March 28, 2019.

26 unchanged sentences

The Company will vigorously defend the remaining claims in the multi-district litigation.

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in millions, except per share data)

The Company was served with a shareholder derivative lawsuit, Raymond Eugenio, Derivatively on Behalf of Nominal Defendant, Laboratory Corporation of America Holdings v.

7 unchanged sentences

On July 14, 2020, the court entered an order staying the lawsuit pending the resolution of the multi-district litigation.

The lawsuit will be vigorously defended.

The Company will vigorously defend the lawsuit.

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in millions, except per share data)

Certain governmental entities have requested information from the Company related to the AMCA Incident.

14 unchanged sentences

On September 22, 2022, the Ninth Circuit granted the Company's Petition for Permission to Appeal the Order Granting Class Certification.

On February 8, 2024, the Ninth Circuit affirmed the trial court’s decision to certify both a California damages class and a nationwide injunctive class.

On March 25, 2024, the Company filed a Petition for Rehearing En Banc with the Ninth Circuit.

On April 18, 2024, the Ninth Circuit denied the Petition for Rehearing En Banc.

The Company will vigorously defend the lawsuit.

22 unchanged sentences

The second lawsuit seeks to recover civil penalties and recovery of attorney's fees and costs.

On February 24, 2022, the parties entered into a Memorandum of Understanding of the terms of a settlement of the Bermejo I and Bermejo II lawsuits and on March 17, 2023, the court issued a preliminary approval of the parties’ settlement agreement of the Bermejo I lawsuit, but the Bermejo II lawsuit settlement is still pending Court approval.

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in millions, except per share data)

On February 24, 2022, the parties entered into a Memorandum of Understanding of the terms of a settlement of the Bermejo I and Bermejo II lawsuits.

The court granted preliminary approval of the parties’ settlement agreement of the Bermejo I lawsuit on March 17, 2023, and of the Bermejo II lawsuit on November 29, 2023.

The settlement funds for the Bermejo I and Bermejo II settlements have been transferred to a claims administrator for processing.

Once the claims administration is completed, the parties will seek final settlement approval from the court.

On June 14, 2021, a single plaintiff filed a Private Attorney General Act lawsuit, Becker v.

2 unchanged sentences

A settlement of the Bermejo I and Bermejo II lawsuits, if approved by the court, will resolve the Becker lawsuit.

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars and shares in millions, except per share data)

On November 23, 2021, the Company was served with a single plaintiff Private Attorney General Act lawsuit, Poole v.

13 unchanged sentences

§ 1332(d), jurisdictional threshold.

The parties entered into a settlement agreement dated September 9, 2022, which is pending court approval.

The parties entered into a settlement agreement which received court preliminary approval on December 13, 2023.

Settlement proceeds were transferred to the settlement fund administrator in January 2024 and have been distributed by the settlement fund administrator.

A case review is scheduled by the court for September 13, 2024, at which time the court is expected to sua sponte dismiss the lawsuit given its resolution by settlement.

On June 7, 2023, the Company was served with a putative class action lawsuit, Connie Howard, Yadira Yazmin Hernandez, and Deborah Reynolds, et al.

19 unchanged sentences

The Company is cooperating with the DOJ.

There are various other pending legal proceedings involving the Company including, but not limited to, additional employment-related lawsuits, professional liability lawsuits, and commercial lawsuits.

While it is not feasible to predict the outcome of such proceedings, in the opinion of the Company, the likelihood of loss is remote and any reasonably possible loss

On February 13, 2024, a putative class action lawsuit, Michael Wiggins and Teri Stevens v.

Laboratory Corporation of America Holdings , was filed in the U.S.

District Court for the Eastern District of Pennsylvania, alleging that the Company’s website includes a computer code created by Google that sent information to Google related to Plaintiffs and their online activities.

Plaintiffs assert statutory and common law claims against the Company and seek to represent a class of all persons whose health information was allegedly shared with Google from the Company’s website before March 8, 2023.

Plaintiffs seek an injunction, damages, attorneys’ fees, and costs.

On April 12, 2024, the Company filed a Motion to Compel Arbitration and Stay Proceedings.

The Company will vigorously defend the lawsuit.

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

1 unchanged sentence

(dollars and shares in millions, except per share data)

associated with the resolution of such proceedings is not expected to be material to the Company’s financial condition, results of operations, or cash flows, either individually or in the aggregate.

While it is not feasible to predict the outcome of such proceedings, in the opinion of the Company, the likelihood of loss is remote and any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to the Company’s financial condition, results of operations, or cash flows, either individually or in the aggregate.

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.

3 unchanged sentences

FAIR VALUE MEASUREMENTS

The Company’s population of financial assets and liabilities subject to fair value measurements as of September 30, 2023, and December 31, 2022, is as follows:

The Company’s population of financial assets and liabilities subject to fair value measurements as of March 31, 2024, and December 31, 2023, was as follows:

Fair Value Measurements as of

September 30, 2023

March 31, 2024

Balance Sheet Fair Value as of Using Fair Value Hierarchy

Classification September 30, 2023 Level 1 Level 2 Level 3

Classification March 31, 2024 Level 1 Level 2 Level 3

Noncontrolling interest put Noncontrolling interest $ 15.2 $ — $ 15.2 $ —

2 unchanged sentences

Cash surrender value of life insurance policies Other assets, net 94.1 — 94.1 —

Deferred compensation asset Other assets, net 28.3 — 28.3 —

Deferred compensation liability Other liabilities 121.0 — 121.0 —

6 unchanged sentences

Noncontrolling interest put Noncontrolling interest $ 15.5 $ — $ 15.5 $ —

Cross currency swaps Other liabilities, net 45.7 — 45.7 —

Cross currency swaps Accrued expenses and other;

Other liabilities 109.0 — 109.0 —

Interest rate swaps Other liabilities, net 69.6 — 69.6 —

Cash surrender value of life insurance policies Other assets, net 95.4 — 95.4 —

Deferred compensation asset Other assets, net 21.1 — 21.1 —

Deferred compensation liability Other liabilities 107.4 — 107.4 —

3 unchanged sentences

Balance at December 31, 2023 $ 66.1

Adjustments ( 11.3 )

Balance as of September 30, 2023 $ 66.1

Additions 13.7

Balance as of March 31, 2024 $ 79.8

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.

3 unchanged sentences

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 the life insurance policies are based upon earnings and changes in the value of the underlying investments, which are typically invested in a similar manner to the participant's 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.

Changes in the cash surrender value of the life insurance policies are based upon earnings and changes in the value of the underlying

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES

1 unchanged sentence

(dollars and shares in millions, except per share data)

investments, which are typically invested in a similar manner to the participant's 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.

Contingent accrued earn-out business acquisition consideration liabilities are measured at fair value using Level 3 valuations.

3 unchanged sentences

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 senior notes, based on market pricing, was approximately $ 4,936.6 and $ 4,973.9 as of September 30, 2023, and December 31, 2022, respectively.

The fair market value of the senior notes, based on market pricing, was approximately $ 4,829.2 and $ 4,850.4 as of March 31, 2024, and December 31, 2023, 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.

3 unchanged sentences

During the second quarter of 2022, the Company terminated $ 300.0 of those cross-currency swap agreements and entered into new USD to Swiss Franc cross-currency swap agreements with an aggregate notional value of $ 300.0 that mature in 2024.

These cross currency swaps are included in other long-term liabilities as appropriate with an aggregate fair value of $ 55.6 and $ 45.7 as of September 30, 2023 and December 31, 2022, respectively.

During the first quarter of 2024, the Company terminated its 2024 and 2025 USD to Swiss Franc cross currency swaps and entered into two new swaps, each with a notional value of $300.0 and maturity dates of 2031 and 2034, respectively.

These cross currency swaps are included in accrued expenses and other and other long-term liabilities as appropriate with an aggregate fair value of $ 92.0 and $ 109.0 as of March 31, 2024 and December 31, 2023, respectively.

Changes in the fair value of the cross-currency swaps are charged or credited through accumulated other comprehensive income in the Consolidated Balance Sheet until the hedged item is recognized in earnings.

1 unchanged sentence

SUPPLEMENTAL CASH FLOW INFORMATION

Nine Months Ended September 30,

Three Months Ended March 31,

Cash paid during period for:

4 unchanged sentences

BUSINESS SEGMENT INFORMATION

The following table is a summary of segment information for the three and nine months ended September 30, 2023, and 2022.

The following table is a summary of segment information for the three months ended March 31, 2024, and 2023.

The “management approach” has been used to present the following segment information.

2 unchanged sentences

The Company’s chief executive officer has been identified as the CODM.

As a result of the spin-off, the Company recast the segment results to exclude the historical results of Fortrea.

Additionally, the remaining operations of the Drug Development segment has been renamed as the BLS segment.

Prior periods have been conformed for comparability.

The prior period has been conformed to the new segment presentation as a result of the spin-off of Fortrea.

Segment asset information is not presented because it is not used by the CODM at the segment level.

The Corporate costs not allocated to segments include the costs of centralized functions, other charges such as acquisition expenses, spin-off costs, remaining unallocated costs of the CDCS business, and COVID-19 related costs not deemed to relate to segment.

Centralized functions include corporate governance, executive management and related human resources, finance, legal, risk management, and information technology functions.

2 unchanged sentences

(dollars and shares in millions, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Dx $ 2,479.7 $ 2,382.8

12 unchanged sentences

SUBSEQUENT EVENTS

On October 4, 2023, the Company announced it had entered into an agreement with Baystate Health, Inc.

(Baystate Health) to acquire its outreach laboratory business and select operating assets, including laboratory service centers operated by Baystate Health throughout Massachusetts for $ 151.1 in cash.

This strategic relationship will build upon Labcorp's and Baystate Health's existing reference laboratory relationship to improve the efficiency of routine and specialty lab testing.

On April 24, 2024, the Company announced that it has been selected as the winning bidder for select assets of Invitae, a leading medical genetics company.

Before the transaction can proceed, the court overseeing the process must issue an approval order following a hearing currently scheduled for May 6, 2024.

The purchase price for the transaction is $ 239.0 .

The transaction is anticipated to close in third quarter of 2024, subject to customary closing conditions for a transaction of this type, including applicable regulatory approvals.

Through this transaction, the Company would acquire assets being auctioned through a voluntary bankruptcy protection process.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements