What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-02 compared with 2024-04-30 · 193 added, 70 removed, 163 unchanged (62% of the section changed)

53 unchanged sentences

discontinuation or recalls of existing testing products;

a failure in the Company’s information technology systems, including with respect to testing turnaround time and billing processes, the failure of the Company or its third-party suppliers and vendors to maintain the security of business information or systems or to protect against cybersecurity incidents such as denial of service attacks, malware, ransomware, and computer viruses, delays or failures in the development and implementation of the Company’s automation platforms, or adverse effects from the use of or regulation of artificial intelligence and machine learning tools, any of which could result in a negative effect on the Company’s performance of services, a loss of business or increased costs, damages to the Company’s reputation, significant litigation exposure, an inability to meet required financial reporting deadlines, or the failure to meet future regulatory or customer information technology, data security and connectivity requirements;

a failure in the Company’s information technology systems, including with respect to testing turnaround time and billing processes, the failure of the Company or its third-party suppliers and vendors to maintain the security of business information or systems or to protect against cybersecurity incidents such as denial of service attacks, malware, ransomware, and computer viruses, delays or failures in the development and implementation of the Company’s automation platforms, or adverse effects from the use of or regulation of artificial intelligence and machine learning tools, any of which could result in a negative effect on the Company’s performance of services, a loss of business or increased costs, delays in cash collections, damages to the Company’s reputation, significant litigation exposure, an inability to meet required financial reporting deadlines, or the failure to meet future regulatory or customer information technology, data security and connectivity requirements;

business interruption, increased costs, and other adverse effects on the Company’s operations due to the unionization of employees, union strikes, work stoppages, general labor unrest or failure to comply with labor or employment laws;

10 unchanged sentences

changing global economic conditions and government and regulatory changes;

risks associated with the impacts and expected benefits and costs of the recently completed spin-off of Fortrea, including but not limited to factors that could adversely affect the Company’s ability to realize the expected benefits of the spin-off, the failure of the spin-off to qualify as a tax-free transaction for U.S.

risks associated with the impacts and expected benefits and costs of the completed spin-off of Fortrea, including but not limited to factors that could adversely affect the Company’s ability to realize the expected benefits of the spin-off, the failure of the spin-off to qualify as a tax-free transaction for U.S.

federal income tax purposes, and potential exposure to unexpected claims, liabilities, or costs under the Company’s agreements with Fortrea and/or otherwise in connection with the spin-off;

risks and uncertainties as to the completion, timing, and expected benefits of the planned holding company reorganization (Reorganization), including, but not limited to the effect of the announcement of the Reorganization on the company's business generally, market reaction to the announcement, and unexpected issues that may arise in the continued planning for the Reorganization.

risks and uncertainties as to the expected benefits of the Reorganization, including, but not limited to the effect of the Reorganization on the Company's business generally, and unexpected issues that may arise as a result of the Reorganization.

Except as may be required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

2 unchanged sentences

On June 30, 2023, Labcorp completed the previously announced separation of Fortrea from the Company.

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

All historical operating results of Fortrea are presented as Discontinued Operations, net of tax, in the Condensed Consolidated Statements of operations.

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

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GENERAL (dollars in millions, except per share data)

Revenues for the three months ended March 31, 2024, were $3,176.6, an increase of 4.6% from $3,037.8 during the three months ended March 31, 2023.

Revenues for the six months ended June 30, 2024, were $6,397.5, an increase of 5.4% from $6,071.5 during the six months ended June 30, 2023.

The increase was due to organic revenue of 3.0%, acquisitions, net of divestitures, of 2.1%, and favorable foreign currency translation of 0.2%.

The 3.0% increase in organic revenue was driven by a 4.3% increase in the company's organic Base Business, partially offset by a 1.3% decrease in COVID-19 PCR testing (COVID-19 Testing).

Compared to the Base Business last year, Base Business revenue grew 6.8% .

Base Business includes Labcorp's operations except for COVID-19 Testing.

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RESULTS OF OPERATIONS (dollars in millions)

Three months ended March 31, 2024, compared with three months ended March 31, 2023

Three Months Ended March 31,

Three months ended June 30, 2024, compared with three months ended June 30, 2023

Three Months Ended June 30,

2024 2023 Change

3 unchanged sentences

Total $ 3,220.9 $ 3,033.7 6.2 %

Total revenues for the three months ended March 31, 2024, were $3,176.6, an increase of 4.6% over $3,037.8 in the first quarter of 2023.

The increase was due to organic revenue of 2.3%, acquisitions, net of divestitures, of 1.8%, and favorable foreign currency translation of 0.5%.

Total revenues for the three months ended June 30, 2024, were $3,220.9, an increase of 6.2% over $3,033.7 in the second quarter of 2023.

The increase was due to organic revenue of 3.8%, acquisitions, net of divestitures, of 2.5%, partially offset by unfavorable foreign currency translation of 0.1%.

The 3.8% increase in organic revenue was driven by a 4.5% increase in the company's organic Base Business, partially offset by a 0.7% decrease in COVID-19 Testing.

Compared to Base Business last year, Base Business revenue grew 6.9% .

Base Business includes Labcorp's operations except for COVID-19 Testing.

Dx revenues for the three months ended March 31, 2024, were $2,479.7, an increase of 4.1% over $2,382.8 in the first quarter of 2023.

Dx revenues for the three months ended June 30, 2024, were $2,524.9, an increase of 7.9% over $2,340.8 in the second quarter of 2023.

The increase was due to organic revenue of 4.7% and acquisitions, net of divestitures, of 3.2%, partially offset by unfavorable foreign currency translation of 0.1%.

The 4.7% increase in organic growth was due to a 5.6% increase in the Base Business, partially offset by a 0.9% decrease in COVID-19 Testing.

Total Base Business growth compared to the Base Business in the prior year was 8.9%.

Dx organic volume increased by 2.9% for the three months ended June 30, 2024, while total volume (measured by requisitions) increased by 5.7% as acquisition volume, net of divestitures, contributed 2.8%.

Organic volume was up due to a 3.4% increase in the Base Business, partially offset by a 0.5% decrease in COVID-19 Testing.

Price/mix increased by 2.1% due to organic Base Business growth of 2.2% and acquisitions of 0.4%, partially offset by a decrease in COVID-19 Testing of 0.4%.

Base Business volume increased 6.3% compared to the Base Business last year.

Price/mix was up 2.5% in the Base Business compared to the Base Business last year.

BLS revenues for the three months ended June 30, 2024, were $707.0, an increase of 1.1% over $699.0 in the second quarter of 2023.

The increase was due to organic growth of 1.2%, partially offset by unfavorable foreign currency translation of 0.1%.

Cost of Revenues

Three Months Ended June 30,

2024 2023 Change

Cost of revenues $ 2,294.5 $ 2,191.5 4.7 %

Cost of revenues as a % of revenues 71.2 % 72.2 %

Cost of revenues increased 4.7% during the three months ended June 30, 2024, as compared with the corresponding period in 2023.

Cost of revenues as a percentage of revenues during the three months ended June 30, 2024, decreased to 71.2% as compared to 72.2% in the corresponding period in 2023.

This decrease in cost of revenues as a percent of revenues was primarily due to demand, LaunchPad savings, and CDCS costs in 2023 that do not qualify as discontinued operations, partially offset by higher personnel costs.

Selling, General and Administrative Expenses

Three Months Ended June 30,

2024 2023 Change

Selling, general and administrative expenses $ 557.8 $ 505.8 10.3 %

Selling, general and administrative expenses as a % of revenues 17.3 % 16.7 %

Selling, general and administrative expenses as a percentage of revenues was 17.3% and 16.7% during the three months ended June 30, 2024, and 2023, respectively.

The increase is primarily due to higher personnel costs partially offset by LaunchPad savings and demand.

Amortization of Intangibles and Other Assets

Three Months Ended June 30,

2024 2023 Change

Amortization of intangibles and other assets $ 62.2 $ 51.5 20.8 %

The increase in amortization of intangibles and other assets primarily reflects additional amortization for assets acquired subsequent to June 30, 2023.

Goodwill and Other Asset Impairments

Three Months Ended June 30,

2024 2023 Change

Goodwill and other asset impairments $ — $ 2.8 (100.0) %

The Company recorded no impairment charges during the three months ended June 30, 2024.

The Company recorded impairment charges of $2.8 in intangible assets during the three months ended June 30, 2023.

Restructuring and Other Charges

Three Months Ended June 30,

2024 2023 Change

Restructuring and other charges $ 11.6 $ 15.8 (26.3) %

During the three months ended June 30, 2024, the Company recorded net restructuring and other charges of $11.6.

The charges were comprised of $9.2 related to severance and other personnel cost and $2.7 in facility-related costs.

The charges were adjusted by the reversal of a previously established liability of $0.3 in unused facility-related costs.

During the three months ended June 30, 2023, the Company recorded net restructuring and other charges of $15.8.

The charges were comprised of $5.2 related to severance and other personnel costs and $8.9 in facility closures, lease terminations, and general integration activities.

The charges were adjusted by the reversal of a previously established liability of $0.6 in unused severance liabilities and the increase of a previously established liability of $2.3 in facility-related costs.

Interest Expense

Three Months Ended June 30,

2024 2023 Change

Interest expense $ (47.6) $ (49.8) (4.4) %

The decrease in interest expense for the three months ended June 30, 2024, as compared with the corresponding period in 2023, is primarily due to the repayment of the November 2023 $300.0 senior notes.

Equity Method Income

Three Months Ended June 30,

2024 2023 Change

Equity method income (expense), net $ (0.3) $ 0.9 (133.0) %

Equity method income (expense) represents the Company's ownership share in joint venture partnerships along with equity investments in other companies in the health care industry.

The decrease in income for the three months ended June 30, 2024, as compared with the corresponding period in 2023, was partially due to the sale of the Company's interest in one joint venture and the acquisition of the remaining interest in another joint venture during 2023.

Three Months Ended June 30,

2024 2023 Change

Other, net $ 19.5 $ (16.9) 215.0 %

The change in Other, net for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, is primarily due to $22.9 of transition services fees charged to Fortrea related to administrative and IT systems support.

The costs to provide these services are included in operating income but the service fees are included in other income.

In addition, the Company recorded investment losses of $1.5 for the three months ended June 30, 2024 compared to investment losses of $4.1 for the corresponding period of 2023.

Foreign currency transaction losses of $1.9 were recognized for the three months ended June 30, 2024, as compared to losses of $11.2 for the corresponding period of 2023.

Income Tax Expense

Three Months Ended June 30,

2024 2023 Change

Income tax expense $ 62.1 $ 49.8 24.7 %

Income tax expense as a % of earnings before income taxes 23.2 % 24.3 %

The current year and prior year effective tax rate differs from the U.S.

federal statutory rate of 21.0% primarily due to state income taxes and the disallowance of certain executive compensation, which were partially offset by research and development tax credits and favorable foreign rate differentials.

Operating Income by Segment

As a result of the spin-off of Fortrea, the Company recast the segment results to exclude the historical results of the CDCS business for all periods presented.

The remaining operations of the previously reported Drug Development segment have been renamed the Biopharma Laboratory Services segment.

Three Months Ended June 30,

2024 2023 Change

Dx segment operating income $ 441.5 $ 409.7 7.8 %

Dx segment operating margin 17.5 % 17.5 % — %

BLS segment operating income 107.4 104.6 2.7 %

BLS segment operating margin 15.2 % 15.0 % 0.2 %

Segment operating income 548.9 514.3 6.7 %

General corporate and unallocated expenses (180.3) (177.9) 1.3 %

Amortization of intangibles and other assets (62.2) (51.5) 20.8 %

Goodwill and other asset impairments — (2.8) (100.0) %

Restructuring and other charges (11.6) (15.8) (26.3) %

Total operating income $ 294.8 $ 266.3 10.7 %

Dx operating income was $441.5 for the three months ended June 30, 2024, an increase of $31.8 over operating income of $409.7 in the corresponding period of 2023.

The increase in adjusted operating income was driven by organic demand, acquisitions, and LaunchPad savings, partially offset by higher personnel costs.

BLS operating income was $107.4 for the three months ended June 30, 2024, an increase of $2.8 over operating income of $104.6 in the corresponding period of 2023.

The increase was due to organic growth and LaunchPad savings, partially offset by higher personnel costs.

General corporate and unallocated expenses are comprised primarily of administrative services such as executive management, human resources, legal, finance, corporate affairs, and information technology.

General corporate and unallocated

expenses were $180.3 for the three months ended June 30, 2024, an increase of $2.4 over corporate expenses of $177.9 in the corresponding period of 2023, primarily due to costs related to the spin-off of Fortrea and personnel costs.

The Company remains on track to deliver approximately $100.0 to $125.0 of Launchpad savings in fiscal 2024.

Six Months Ended June 30, 2024, compared with six months ended June 30, 2023

Six Months Ended June 30,

2024 2023 Change

Dx $ 5,004.6 $ 4,723.6 5.9 %

BLS $ 1,417.9 $ 1,360.3 4.2 %

Intercompany eliminations and other (25.0) (12.4) 101.6 %

Total $ 6,397.5 $ 6,071.5 5.4 %

The increase in revenues for the six months ended June 30, 2024, as compared with the corresponding period in 2023 was 5.4%.

The increase was due to organic revenue of 3.0%, acquisitions, net of divestitures, of 2.1%, and favorable foreign currency translation of 0.2%.

The 3.0% increase in organic revenue was driven by a 4.3% increase in the company's organic Base Business, partially offset by a 1.3% decrease in COVID-19 Testing.

Compared to the Base Business last year, Base Business revenue grew 6.8% .

Dx revenues for the six months ended June 30, 2024, were $5,004.6, an increase of 5.9% over $4,723.6 during the six months ended June 30, 2023.

The increase was due to organic revenue of 3.3% and acquisitions, net of divestitures, of 2.7%.

1 unchanged sentence

Total Base Business growth compared to the Base Business in the prior year was 7.8%.

Dx total volume (measured by requisitions) for the three months ended March 31, 2024, increased by 3.4% as acquisition volume, net of divestitures, contributed 2.2%, while organic volume increased by 1.2%.

Organic volume was up due to a 2.6% increase in the Base Business, including the negative impact from adverse weather of 1%.

This was partially offset by a 1.4% decrease in COVID-19 Testing.

Price/mix increased by 0.6% due to organic Base Business growth of 1.7%, partially offset by a decrease in COVID-19 Testing of 1.1%.

Dx total volume (measured by requisitions) for the six months ended June 30, 2024, increased by 4.6% as acquisition volume, net of divestitures, contributed 2.5%, while organic volume increased by 2.1%.

Organic volume was up due to a 3.0% increase in the Base Business, partially offset by a 1.0% decrease in COVID-19 Testing.

Price/mix increased by 1.4% due to organic Base Business growth of 1.9% and acquisitions, net of divestitures of 0.2%, partially offset by a decrease in COVID-19 Testing of 0.7%.

Base Business volume increased 5.6% compared to the Base Business last year.

Price/mix was up 2.2% in the Base Business compared to the Base Business last year.

BLS revenues for the three months ended March 31, 2024, were $710.9, an increase of 7.5% over $661.3 in the first quarter of 2023.

BLS revenues for the six months ended June 30, 2024, were $1,417.9, an increase of 4.2% over $1,360.3 during the six months ended June 30, 2023.

The increase was due to organic growth of 3.1% and favorable foreign currency translation of 1.1%.

Cost of Revenues

Three Months Ended March 31,

Six Months Ended June 30,

2024 2023 Change

1 unchanged sentence

Cost of revenues as a % of revenues 71.5 % 72.1 %

Cost of revenues increased 4.2% during the three months ended March 31, 2024, as compared with the corresponding period in 2023.

Cost of revenues as a percentage of revenues during the three months ended March 31, 2024, decreased to 71.8% as compared to 72.0% in the corresponding period in 2023.

This decrease in cost of revenues as a percent of revenues was primarily due to LaunchPad savings and CDCS costs during the first quarter of 2023 that do not qualify as discontinued operations, largely offset by higher personnel costs and lower COVID-19 Testing.

Cost of revenues increased 4.4% during the six months ended June 30, 2024, as compared with the corresponding period in 2023.

Cost of revenues as a percentage of revenues during the six months ended June 30, 2024, decreased to 71.5% as compared to 72.1% in the corresponding period in 2023.

This decrease in cost of revenues as a percent of revenues was primarily due to LaunchPad saving, demand, and CDCS costs in 2023 that do not qualify as discontinued operations, largely offset by higher personnel costs and lower COVID-19 Testing.

Selling, General and Administrative Expenses

Three Months Ended March 31,

Six Months Ended June 30,

2024 2023 Change

1 unchanged sentence

Selling, general and administrative expenses as a % of revenues 16.7 % 15.9 %

Selling, general and administrative expenses as a percentage of revenues was 16.0% and 15.1% during the three months ended March 31, 2024, and 2023, respectively.

The increase is primarily due to higher personnel costs and a reduction in COVID-19 Testing revenues.

Selling, general and administrative expenses as a percentage of revenues were 16.7% and 15.9% during the six months ended June 30, 2024, and 2023, respectively.

The increase is primarily due to higher personnel costs and a reduction in COVID-19 Testing revenues, partially offset by LaunchPad savings and demand.

Amortization of Intangibles and Other Assets

Three Months Ended March 31,

Six Months Ended June 30,

2024 2023 Change

Amortization of intangibles and other assets $ 122.3 $ 104.9 16.6 %

The increase in amortization of intangibles and other assets primarily reflects additional amortization for assets acquired subsequent to March 31, 2023.

The increase in amortization of intangibles and other assets primarily reflects additional amortization for assets acquired subsequent to June 30, 2023.

Goodwill and Other Asset Impairments

Three Months Ended March 31,

Six Months Ended June 30,

2024 2023 Change

Goodwill and other asset impairments $ 2.5 $ 5.0 (50.9) %

The Company recorded impairment charges of $2.5 during the three months ended March 31, 2024 related to a decommissioned robotic asset.

The Company recorded impairment charges of $2.2 in capitalized software costs during the three months ended March 31, 2023.

The Company recorded impairment charges of $2.5 related to a decommissioned robotic asset during the six months ended June 30, 2024.

The Company recorded impairment charges of $5.0 in capitalized software costs and other intangible assets six months ended June 30, 2023.

Restructuring and Other Charges

Three Months Ended March 31,

Six Months Ended June 30,

2024 2023 Change

Restructuring and other charges $ 16.6 $ 23.3 (28.6)%

During the three months ended March 31, 2024, the Company recorded net restructuring and other charges of $5.0.

The charges were comprised of $5.8 related to severance and other personnel costs.

During the six months ended June 30, 2024, the Company recorded net restructuring and other charges of $16.6.

The charges were comprised of $15.1 related to severance and other personnel costs and $1.8 in facility-related costs.

The charges were adjusted by the reversal of a previously established liability of $0.3 in unused facility-related costs.

During the three months ended March 31, 2023, the Company recorded net restructuring and other charges of $7.5.

During the six months ended June 30, 2023, the Company recorded net restructuring and other charges of $23.3.

The charges were comprised of $9.2 related to severance and other personnel costs and $13.2 in facility closures, lease terminations, and general integration activities.

1 unchanged sentence

Interest Expense

Three Months Ended March 31,

Six Months Ended June 30,

2024 2023 Change

Interest expense $ (94.5) $ (100.5) (6.0) %

The decrease in interest expense for the three months ended March 31, 2024, as compared with the corresponding period in 2023, is primarily due to decreased borrowings under the Company's revolving credit facility, repayment of the November 2023 $300.0 senior notes, and partially offset by a higher interest rate on variable rate debt.

The decrease in interest expense for the six months ended June 30, 2024, as compared with the corresponding period in 2023, is primarily due to decreased borrowings under the Company's revolving credit facility, repayment of the November 2023 $300.0 senior notes, and partially offset by a higher interest rate on variable rate debt.

Equity Method Income

Three Months Ended March 31,

Six Months Ended June 30,

2024 2023 Change

Equity method income, net $ 0.1 $ (2.1) (102.7) %

Equity method income represents the Company's ownership share in joint venture partnerships along with equity investments in other companies in the health care industry.

The increase in income for the three months ended March 31, 2024, as compared with the corresponding period in 2023, was partially due to the sale of the Company's interest in one joint venture and the acquisition of the remaining interest in another joint venture during 2023.

Three Months Ended March 31,

Equity method expense, net $ (0.2) $ (1.2) (79.9) %

Equity method expense represents the Company's ownership share in joint venture partnerships along with equity investments in other companies in the health care industry.

Six Months Ended June 30,

2024 2023 Change

Other, net $ 39.5 $ (23.8) 265.7 %

The change in Other, net for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, is primarily due to $22.4 of transition services fees charged to Fortrea related to administrative and IT systems support.

The change in Other, net for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, is primarily due to $45.3 of transition services fees charged to Fortrea related to administrative and IT systems support.

The costs to provide these services are included in operating income but the service fees are included in other income.

In addition, the Company recorded investment losses of $4.2 for the three months ended March 31, 2024 compared to investment losses of $1.5 for the corresponding period of 2023.

Foreign currency transaction losses of $3.3 were recognized for the three months ended March 31, 2024, as compared to gains of $3.6 for the corresponding period of 2023.

In addition, the Company recorded investment losses of $5.7 for the six months ended June 30, 2024 compared to investment losses of $5.6 for the corresponding period of 2023.

Foreign currency transaction losses of $5.2 were recognized for the six months ended June 30, 2024, as compared to losses of $18.0 for the corresponding period of 2023.

The Company also recorded a $4.9 gain on the sale of the assets of its Beacon Laboratory Benefit Solutions, Inc.

1 unchanged sentence

Income Tax Expense

Three Months Ended March 31,

Six Months Ended June 30,

2024 2023 Change

4 unchanged sentences

Operating Income by Segment

As a result of the spin-off of Fortrea, the Company recast the segment results to exclude the historical results of the CDCS business for all periods presented.

The remaining operations of the previously reported Drug Development segment have been renamed the Biopharma Laboratory Services segment.

Three Months Ended March 31,

During the fourth quarter of 2022, the Company modified the segment performance measure to exclude the amortization of intangibles and other assets, restructuring and other charges, goodwill and other asset impairments, and certain corporate charges for items such as transaction costs, remaining unallocated costs of the CDCS business, COVID-19-related costs, and other special items.

These changes align with how the CODM now evaluates segment performance and allocates resources.

Prior periods have been conformed for comparability.

Six Months Ended June 30,

2024 2023 Change

6 unchanged sentences

Amortization of intangibles and other assets (122.3) (104.9) 16.6 %

Restructuring and other charges (5.0) (7.5) (33.6) %

Goodwill and other asset impairments (2.5) (5.0) (50.9) %

Restructuring and other charges (16.6) (23.3) (28.6) %

Total operating income $ 616.1 $ 596.1 3.3 %

Dx operating income was $417.9 for the three months ended March 31, 2024, a decrease of $23.6 over operating income of $441.5 in the corresponding period of 2023, and Dx operating margin decreased 170 basis points year-over-year.

The decrease in adjusted operating income margin was due to a reduction in COVID-19 Testing, adverse weather and the mix impact from lab management agreements, which is expected to improve over time.

BLS operating income was $99.9 for the three months ended March 31, 2024, an increase of $26.3 over operating income of $73.6 in the corresponding period of 2023.

Dx operating income was $859.4 for the six months ended June 30, 2024, an increase of $8.2 over operating income of $851.2 in the corresponding period of 2023, and Dx operating margin decreased 80 basis points year-over-year.

The decrease was due to a reduction in COVID-19 Testing and higher personnel costs, partially offset by a recovery in the Base Business.

BLS operating income was $207.3 for the six months ended June 30, 2024, an increase of $29.1 over operating income of $178.2 in the corresponding period of 2023.

The increase was due to organic growth and LaunchPad savings, partially offset by higher personnel expense.

General corporate and unallocated expenses were $128.9 for the three months ended March 31, 2024, an increase of $6.7 over corporate expenses of $122.2 in the corresponding period of 2023, primarily due to costs related to the spin-off of Fortrea, personnel costs, and research and development costs.

The Company remains on track to deliver approximately $350.0 of net savings from its three-year LaunchPad initiative by the end of 2024 and approximately $100.0 to $125.0 of savings in fiscal 2024.

General corporate expenses are comprised primarily of administrative services such as executive management, human resources, legal, finance, corporate affairs, and information technology.

Corporate expenses were $309.2 for the six months ended June 30, 2024, a increase of $9.1 over corporate expenses of $300.1 in the corresponding period of 2023, primarily due to costs related to the spin-off of Fortrea, and personnel costs.

The Company remains on track to deliver approximately $100.0 to $125.0 of Launchpad savings in fiscal 2024.

LIQUIDITY AND CAPITAL RESOURCES (dollars and shares in millions)

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The Company's senior unsecured revolving credit facility is further discussed in Note 7 (Debt) to the Company's condensed consolidated financial statements.

In summary, the Company's cash flows from continuing operations were as follows for the three months ended March 31, 2024, and 2023, respectively:

Three Months Ended March 31,

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

In summary, the Company's cash flows from continuing operations were as follows for the six months ended June 30, 2024, and 2023, respectively:

Six Months Ended June 30,

Net cash provided by operating activities from continuing operations $ 531.3 $ 347.2

Net cash used for investing activities from continuing operations (578.1) (328.6)

1 unchanged sentence

Effect of exchange rate changes on cash and cash equivalents (3.2) 6.3

Net increase (decrease) in cash and cash equivalents from continuing operations $ (437.5) $ 44.1

Net decrease in cash and cash equivalents from continuing operations $ (271.7) $ (99.8)

Cash and Cash Equivalents

Cash and cash equivalents at March 31, 2024, and 2023, totaled $99.3 and $294.8, respectively.

Cash and cash equivalents at June 30, 2024, and 2023, totaled $265.1 and $1,930.6, respectively.

Cash and cash equivalents consist of highly liquid instruments, such as time deposits, commercial paper, and other money market investments, which have original maturities of three months or less.

Cash Flows from Operating Activities

During the three months ended March 31, 2024, the Company's continuing operations used $29.8 of cash as compared to providing $185.7 during the same period in 2023.

The $215.5 decrease in cash provided from operations in 2024 as compared with the corresponding 2023 period is primarily due to lower cash earnings and the timing of working capital requirements.

During the six months ended June 30, 2024, the Company's continuing operations used $531.3 of cash as compared to providing $347.2 during the same period in 2023.

The $184.1 increase in cash provided from operations in 2024 as compared with the corresponding 2023 period is primarily due to higher cash earnings.

Cash Flows from Investing Activities

Net cash used for investing activities from continuing operations for the three months ended March 31, 2024, was $393.1 as compared to $84.0 for the three months ended March 31, 2023.

The change in cash used for investing activities was primarily due to an increase in business acquisitions and higher capital expenditures during the three months ended March 31, 2024.

Capital expenditures were $133.8 and $78.2 for the three months ended March 31, 2024, and 2023, respectively.

Net cash used for investing activities from continuing operations for the six months ended June 30, 2024, was $578.1 as compared to $328.6 for the six months ended June 30, 2023.

The change in cash used for investing activities was primarily due to an increase in business acquisitions and higher capital expenditures during the six months ended June 30, 2024.

Capital expenditures were $262.0 and $181.5 for the six months ended June 30, 2024, and 2023, respectively.

On March 28, 2024, the Company announced that it entered into an agreement to acquire selected assets of BioReference Health, a wholly owned subsidiary of OPKO Health for $237.5.

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

Through this transaction Labcorp will acquire laboratory testing businesses focused on clinical diagnostics and reproductive and women's health across the United States, outside of New York and New Jersey.

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.

On May 6, 2024, the United States Bankruptcy Court approved the previously announced bid by Labcorp to acquire the assets of Invitae.

The purchase price for the transaction is $239.0.

The transaction is anticipated to close on August 5, 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.

Cash Flows from Financing Activities

Net cash used by financing activities from continuing operations for the three months ended March 31, 2024, was $11.7 as compared to $60.6 for the three months ended March 31, 2023.

The change in cash flows from financing activities from continuing operations for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, was primarily due to net proceeds from revolving credit facilities of $42.4 in 2024.

At March 31, 2024, the Company had $99.3 of cash and $957.6 of available borrowings under its revolving credit facility, which does not mature until 2026.

Net cash used by financing activities from continuing operations for the six months ended June 30, 2024, was $221.7 as compared to $124.7 for the six months ended June 30, 2023.

The change in cash flows from financing activities from continuing operations for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, was primarily due to share repurchases of $100.0 in 2024.

At June 30, 2024, the Company had $265.1 of cash and $980.0 of available borrowings under its revolving credit facility, which does not mature until 2026.

Under the Company's revolving credit facility and indentures relating to the Company's senior notes, the Company is subject to negative covenants limiting subsidiary indebtedness and certain other covenants typical for investment grade-rated borrowers , and with respect to the revolving credit facility, the Company is required to maintain certain leverage ratios.

The Company was in compliance with all covenants under the revolving credit facility and the indentures related to the Company's outstanding senior notes at March 31, 2024.

The Company was in compliance with all covenants under the revolving credit facility and the indentures related to the Company's outstanding senior notes at June 30, 2024.

The Company expects that it will remain in compliance with all covenants associated with its existing debt obligations for the next twelve months.

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The Company anticipates that it will refinance the $2,000.0 in debt coming due during the next 12 months.

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 second 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.

As of June 30, 2024, the Company had outstanding authorization from the board of directors to purchase up to $430.4 of the Company's common stock.

On July 24, 2024, the Board adopted a new share repurchase plan authorizing up to $1,000.0 of the Company's shares in addition to the remaining amount outstanding under the previous plan.

In aggregate, the share repurchase authorization is $1,430.4.

For the six months ended June 30, 2024, the Company paid $122.5 in common stock dividends.

On July 25, 2024, the Company announced a cash dividend of $0.72 per share of common stock for the second quarter, or approximately $61.2 in the aggregate.

The dividend will be payable on September 13, 2024, to stockholders of record of all issued and outstanding shares of common stock as of the close of business on August 29, 2024.

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

Guarantor Information

In connection with the Reorganization, the Company, LCAH and U.S.

Bank Trust Company, National Association (the Trustee) entered a seventeenth supplemental indenture (the Seventeenth Supplemental Indenture) to the indenture, dated as of November 19, 2010 between LCAH and the Trustee (the Indenture), in order to (i) provide for the full and unconditional guarantee by the Company of LCAH’s obligations under the Indenture and each series of senior unsecured notes issued and outstanding thereunder (the Labcorp Holdings Guarantee), (ii) permit the Company to satisfy LCAH’s reporting obligations under the Indenture for so long as the Labcorp Holdings Guarantee remains in place and the Company’s financial statements and other information comply with the requirements of Rule 3-10 of Regulation S-X and the Exchange Act (Regulation S-X) and (iii) make certain other changes to the Indenture consistent with the foregoing.

As of June 30, 2024, there was $5,070.3 aggregate principal amount of issued and outstanding senior notes of LCAH that are fully and unconditionally guaranteed by the Company.

Accordingly, pursuant to Rule 3-10 of Regulation S-X, separate consolidated financial statements of LCAH have not been presented.

As permitted under Rule 13-01(a)(4)(vi) of Regulation S-X, we have excluded the summarized financial infor mation for LCAH because the assets, liabilities and results of operations of LCAH are not materially different than the corresponding amounts in the Company’s consolidated financial statements and management believes such summarized financial information would be repetitive and would not provide incremental value to investors.

Credit Ratings

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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 2. Management’s Discussion and Analysis