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Item 1. Financial Statements

2024-10-29 compared with 2024-08-02 · 179 added, 132 removed, 682 unchanged (31% of the section changed)

4 unchanged sentences

(in millions)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Current assets:

29 unchanged sentences

Shareholders’ equity:

Common stock, $0.10 par value, 83.8 and 83.9 shares outstanding at June 30, 2024, and December 31, 2023, respectively

Common stock, $0.10 par value, 83.7 and 83.9 shares outstanding at September 30, 2024, and December 31, 2023, respectively

Additional paid-in capital — 38.4

8 unchanged sentences

(in millions, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

33 unchanged sentences

(in millions)

Three Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

3 unchanged sentences

Other comprehensive earnings (loss) before tax 79.9 ( 54.9 ) ( 53.3 ) 47.2

(Provision) benefit for income tax related to items of comprehensive earnings ( 0.1 ) ( 0.3 ) 0.5 ( 0.6 )

Provision for income tax related to items of comprehensive earnings ( 1.1 ) ( 0.2 ) ( 0.6 ) ( 0.8 )

Other comprehensive earnings (loss), net of tax 78.8 ( 55.1 ) ( 53.9 ) 46.4

33 unchanged sentences

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

Net earnings attributable to Labcorp Holdings Inc.

— — 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

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

15 unchanged sentences

BALANCE AT JUNE 30, 2024 $ 7.7 $ 12.5 $ 8,177.6 $ ( 192.0 ) $ 8,005.8

Net earnings attributable to Labcorp Holdings Inc.

— — 169.3 — 169.3

Other comprehensive earnings (loss), net of tax — — — 78.8 78.8

Dividends declared — — ( 61.1 ) — ( 61.1 )

Issuance of common stock under employee stock plans — 26.3 — — 26.3

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

Stock compensation — 27.0 — — 27.0

Purchase of common stock ( 0.1 ) ( 64.9 ) ( 10.0 ) — ( 75.0 )

BALANCE AT SEPTEMBER 30, 2024 $ 7.6 $ — $ 8,275.8 $ ( 113.2 ) $ 8,170.2

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

3 unchanged sentences

(in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

11 unchanged sentences

Decrease in unbilled services 22.8 103.4

Decrease (increase) in supplies inventory 27.7 ( 16.1 )

Decrease (increase) in prepaid expenses and other 21.6 ( 30.2 )

Decrease in supplies inventory 2.0 9.7

Increase in prepaid expenses and other ( 39.8 ) ( 74.9 )

Decrease in accounts payable ( 138.2 ) ( 188.6 )

8 unchanged sentences

Proceeds from sale of business 13.5 —

Proceeds from sale or distribution of investments — 6.7

Investments in equity affiliates ( 42.3 ) ( 20.1 )

4 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from senior note offerings 2,000.0 —

Payments on senior notes ( 600.0 ) —

Proceeds from revolving credit facilities 2,463.7 1,968.5

Payments on revolving credit facilities ( 2,463.7 ) ( 1,878.9 )

Proceeds from accounts receivable securitization 300.0 —

Net share settlement tax payments from issuance of stock to employees ( 38.7 ) ( 39.6 )

3 unchanged sentences

Other ( 29.7 ) ( 15.0 )

Net cash used for continuing financing activities ( 221.7 ) ( 124.7 )

Net cash provided by (used for) continuing financing activities 1,326.6 ( 1,112.5 )

Net cash provided by discontinued financing activities — 1,499.7

Net cash (used for) provided by financing activities ( 221.7 ) 1,484.4

Net cash provided by financing activities 1,326.6 387.2

Effect of exchange rate changes on cash and cash equivalents 2.5 3.5

Net (decrease) increase in cash and cash equivalents ( 271.7 ) 1,610.0

Net increase in cash and cash equivalents 980.5 297.9

Cash and cash equivalents at beginning of period 536.8 430.0

Cash and cash equivalents of discontinued operations at end of period $ — $ 109.4

Cash and cash equivalents at end of period $ 1,517.3 $ 727.9

15 unchanged sentences

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

During the three months ended June 30, 2024, Dx and BLS contributed approximately 78 % and 22 %, respectively, of revenues to the Company.

During the six months ended June 30, 2024, Dx and BLS contributed approximately 78 % and 22 %, respectively, of revenues to the Company.

During the three months ended September 30, 2024, Dx and BLS contributed approximately 78 % and 22 %, respectively, of revenues to the Company.

During the nine months ended September 30, 2024, 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.

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DISCONTINUED OPERATIONS

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

On June 30, 2023 (the Distribution Date), Labcorp completed the previously announced separation (the Separation or spin-off) 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.

21 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 Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023:

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Revenues $ 1,506.6

10 unchanged sentences

Net earnings attributable to Labcorp Holdings Inc.

$ 33.9 $ 38.8

The Company's revenues by segment and by payers/customer groups for the three and six months ended June 30, 2024, and 2023, were as follows:

For the Three Months Ended June 30, 2024 For the Three Months Ended June 30, 2023

The Company's revenues by segment and by payers/customer groups for the three and nine months ended September 30, 2024, and 2023, were as follows:

For the Three Months Ended September 30, 2024 For the Three Months Ended September 30, 2023

North America Europe Other Total North America Europe Other Total

11 unchanged sentences

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

For the Six Months Ended June 30, 2024 For the Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2024 For the Nine Months Ended September 30, 2023

North America Europe Other Total North America Europe Other Total

7 unchanged sentences

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

Revenues in the U.S.

were $ 2,698.8 ( 83.8 %) and $ 2,537.0 ( 83.6 %) for the three months ended June 30, 2024 and 2023, respectively, and were $ 5,353.4 ( 83.7 %) and $ 5,094.4 ( 83.9 %) for the six months ended June 30, 2024 and 2023, respectively.

Revenues in the United States were $ 2,738.4 ( 83.4 %) and $ 2,550.6 ( 83.4 %) for the three months ended September 30, 2024 and 2023, respectively, and were $ 8,091.8 ( 83.6 %) and $ 7,645.0 ( 83.8 %) for the nine months ended September 30, 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 as of June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

The following table provides information about accounts receivable, unbilled services, and unearned revenue from contracts with customers as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

Dx accounts receivable $ 1,323.7 $ 1,135.2

6 unchanged sentences

Unearned revenue $ 403.1 $ 421.7

Revenues recognized during the period that were included in the unearned revenue balance at the beginning of the period were $ 26.8 and $ 20.2 for the three months ended June 30, 2024 and 2023, respectively, and $ 77.8 and $ 72.8 for the six months ended June 30, 2024 and 2023, respectively.

Revenues recognized during the period that were included in the unearned revenue balance at the beginning of the period were $ 20.2 and $ 6.3 for the three months ended September 30, 2024 and 2023, respectively, and $ 98.0 and $ 79.1 for the nine months ended September 30, 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 six months ended June 30, 2024, was as follows:

The rollforward for the allowance for credit losses for the nine months ended September 30, 2024, was as follows:

Accounts Receivable Unbilled Services Note and Other Receivables Total

2 unchanged sentences

Less, write offs 1.5 5.9 — 7.4

Balance as of June 30, 2024 $ 34.1 $ 1.8 $ 0.7 $ 36.6

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

Balance as of September 30, 2024 $ 38.9 $ 1.6 $ 0.7 $ 41.2

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

BUSINESS ACQUISITIONS AND DISPOSITIONS

During the nine months ended September 30, 2024, the Company acquired several businesses and related assets for cash of approximately $ 751.2 .

These acquisitions consisted of the clinical and outreach businesses of Baystate Medical Center ($ 120.2 ), Providence Medical Foundation ($ 54.9 ), and Westpac Labs, Inc.

($ 97.7 ), and selected assets of the Invitae

LABCORP HOLDINGS INC.

2 unchanged sentences

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

BUSINESS ACQUISITIONS AND DISPOSITIONS

During the six months ended June 30, 2024, the Company acquired several businesses and related assets for cash of approximately $ 293.1 .

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

($ 97.7 ) and an escrow payment of $ 23.9 for selected assets of the Invitae Corporation that is anticipated to close on August 5, 2024.

Corporation ($ 240.8 ) and BioReference Health ( 237.6 ).

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 $ 393.6 in identifiable intangible assets.

A residual amount of tax deductible goodwill of approximately $ 141.7 was recorded as of June 30, 2024.

A residual amount of tax deductible goodwill of approximately $ 349.5 was recorded as of September 30, 2024.

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

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

The purchase price allocations for the Invitae and BioReference Health acquisitions have not been finalized as of September 30, 2024.

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

Baystate Medical Center Providence Medical Foundation Westpac Labs, Inc.

Invitae Corporation Amounts Acquired During the Six Months Ended June 30, 2024 Measurement Period Adjustments for Prior Year Acquisitions During the Six Months Ended June 30, 2024

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

Invitae Corporation BioReference Health Measurement Period Adjustments During the Nine Months Ended September 30, 2024 Amounts Acquired During the Nine Months Ended September 30, 2024

Inventories — — 1.8 12.1 — — 13.9

2 unchanged sentences

Intangible assets 79.5 29.0 50.8 113.2 121.1 7.4 401.0

Other assets — — — 23.9 23.9 —

Total assets acquired $ 157.4 $ 55.8 $ 97.7 $ 302.4 $ 237.6 $ ( 3.9 ) $ 847.0

Unearned revenue — — — 3.3 — — 3.3

Lease liabilities 7.2 0.9 — 58.3 — ( 3.9 ) 62.5

4 unchanged sentences

Cash paid for acquisitions $ 120.2 $ 54.9 $ 97.7 $ 240.8 $ 237.6 $ — $ 751.2

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 transaction 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.

During the six months ended June 30, 2023, the Company acquired two businesses and the related assets for cash of approximately $ 136.9 .

These acquisitions consisted of Jefferson Health and Valley Medical Laboratories in British Columbia which expanded the Company's presence in the northeastern U.S.

On September 17, 2024, the Company announced that it entered into an agreement with Cinven, Inc.

to acquire a 15 % minority interest in SYNLAB, a leader in medical diagnostic services and specialty testing in Europe, for approximately $ 155.9 (€ 140.0 ).

The transaction is anticipated to close in early 2025, subject to customary closing conditions for a transaction of this type, including applicable regulatory approvals.

The Company will acquire the minority interest through an intermediate holding company that will be established to hold the investment with SYNLAB and will be represented on the holding company board with Cinven, Inc.

and other investors.

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

These acquisitions consisted of the clinical and outreach business of Jefferson Health ($ 108.0 ), Enzo BioChem ($ 112.8 ), Providence Health & Services - Oregon ($ 110.0 ), Tuffts Medicine ($ 157.0 ), and other small acquisitions for $ 28.9 .

A residual amount of non-tax deductible goodwill of approximately $ 50.8 was recorded as of June 30, 2023.

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

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

3 unchanged sentences

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

During the six months ended June 30, 2023, the Company recorded several measurement period adjustments for 2022 acquisitions, relating to final valuations and deferred tax true-ups.

During the nine months ended September 30, 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 Six Months Ended June 30, 2023

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

Cash and cash equivalents $ — $ 0.2 $ 0.2

Accounts receivable ( 3.0 ) — ( 3.0 )

Inventories 1.3 — 1.3

Prepaid expenses and other 0.4 0.6 1.0

2 unchanged sentences

Intangible assets 284.6 19.5 304.1

Other assets 2.1 — 2.1

Total assets acquired $ 520.6 $ ( 10.6 ) $ 510.0

5 unchanged sentences

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 June 30, Three Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

2 unchanged sentences

$ 172.2 $ 174.8 613.1 $ 582.7

During the six months ended June 30, 2024, the Company sold the assets of its Beacon Laboratory Benefit Solutions, Inc.

During the nine months ended September 30, 2024, the Company sold the assets of its Beacon Laboratory Benefit Solutions, Inc.

for $ 13.5 and recorded a gain of $ 4.9 .

7 unchanged sentences

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

The following represents a reconciliation of basic earnings per share to diluted earnings per share for the three and six months ended June 30:

Three Months Ended June 30, Six Months Ended June 30,

The following represents a reconciliation of basic earnings per share to diluted earnings per share for the three and nine months ended September 30:

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

2024 2023 2024 2023

7 unchanged sentences

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 June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

1 unchanged sentence

GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the six months ended June 30, 2024, were as follows:

The changes in the carrying amount of goodwill for the nine months ended September 30, 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 ( 9.5 ) ( 0.1 ) ( 9.6 )

Balance as of June 30, 2024 $ 4,944.9 $ 1,275.3 $ 6,220.2

Balance as of September 30, 2024 $ 5,153.9 $ 1,328.5 $ 6,482.4

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.

14 unchanged sentences

T he components of identifiable intangible assets were as follows:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

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

5 unchanged sentences

5,443.5 ( 1,902.8 ) 3,540.7 5,058.4 ( 1,716.4 ) 3,342.0

Amortization of intangible assets for the three and six months ended June 30, 2024, and 2023, was $ 62.2 and $ 51.5 and $ 122.3 and $ 104.9 , respectively.

Amortization of intangible assets for the three and nine months ended September 30, 2024, and 2023, was $ 63.7 and $ 55.7 and $ 186.0 and $ 160.6 , respectively.

The amortization expense for the net carrying amount of intangible assets is estimated to be $ 71.0 for the remainder of fiscal 2024, $ 260.4 in fiscal 2025, $ 251.4 in fiscal 2026, $ 240.1 in fiscal 2027, $ 232.2 in fiscal 2028, and $ 1,915.4 thereafter.

Short-term borrowings and the current portion of long-term debt at June 30, 2024, and December 31, 2023, consisted of the following:

June 30, 2024 December 31, 2023

Revolving line of credit $ 20.0 $ —

Short-term borrowings and the current portion of long-term debt at September 30, 2024, and December 31, 2023, consisted of the following:

September 30, 2024 December 31, 2023

2.30% senior notes due 2024 400.0 400.0

4 unchanged sentences

Total short-term borrowings and current portion of long-term debt $ 1,399.9 $ 999.8

Long-term debt at June 30, 2024, and December 31, 2023, consisted of the following:

June 30, 2024 December 31, 2023

Long-term debt at September 30, 2024, and December 31, 2023, consisted of the following:

September 30, 2024 December 31, 2023

3.60% senior notes due 2025 — 1,000.0

4 unchanged sentences

2.70% senior notes due 2031 442.9 430.4

4.55% senior notes due 2032 500.0 —

4.80% senior notes due 2034 850.0 —

4.70% senior notes due 2045 900.0 900.0

Debt issuance costs ( 41.1 ) ( 26.3 )

AR facility 300.0 —

Note payable 0.3 0.6

6 unchanged sentences

The revolving credit facility is permitted to be used for general corporate purposes, including working capital, capital expenditures, funding of share repurchases and certain other payments, acquisitions, and other investments.

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 $ 20.0 outstanding on the Company's current revolving credit facility and $ 90.7 in outstanding letters of credit on the Company's subfacility as of June 30, 2024.

As of June 30, 2024, the effective interest rate on the revolving credit facility was 6.44 %.

The credit facility expires on April 30, 2026.

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

LABCORP HOLDINGS INC.

2 unchanged sentences

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

under the facility.

There was $ 0.0 outstanding on the Company's current revolving credit facility and $ 91.9 in outstanding letters of credit on the Company's subfacility as of September 30, 2024.

As of September 30, 2024, the effective interest rate on the revolving credit facility was 6.26 %.

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 June 30, 2024, and expects that it will remain in compliance with its existing debt covenants for the next twelve months.

The Company was in compliance with all covenants in the revolving credit facility at September 30, 2024, and expects that it will remain in compliance with its existing debt covenants for the next twelve months.

On August 23, 2024, the Company and a bankruptcy-remote special purpose vehicle (SPV) entered into an accounts receivable securitization facility (AR Facility) with PNC Bank, National Association (PNC) with a three-year term.

The AR Facility allows the Company to borrow from PNC an amount of up to $ 300.0 through August of 2027 and may increase up to $ 700.0 , subject to the satisfaction of certain conditions.

The SPV is a variable interest entity (VIE) for which the Company is the primary beneficiary.

The SPV's sole business consists of the continuous purchase of receivables from the Company which is used as collateral for the loan with PNC.

Although the SPV is included in the Company's consolidated financial statements, it is a separate legal entity with separate creditors.

Upon the transfer of ownership and control of the receivables to the SPV, the Company has no retained interests in the receivables sold and they become unavailable to the Company's creditors should the relevant seller become insolvent.

The Company has collection and administrative responsibilities for the receivables sold to the SPV.

During the three months ended September 30, 2024, the Company received loan proceeds of $ 300.0 under the AR Facility, which is included in cash from financing activities in the Condensed Consolidated Statement of Cash Flows.

On September 23, 2024, LCAH entered into an indenture with U.S.

Bank Trust Company, National Association, as trustee (the Trustee) (the Indenture).

Also, on September 23, 2024, the Company, LCAH, and the Trustee entered into certain first, second, and third supplemental indentures to the Indenture under each of which LCAH issued, and the Company guaranteed, $ 650.0 aggregate principal amount of 4.35 % Senior Notes due 2030 (the 2030 Notes), $ 500.0 aggregate principal amount of 4.55 % Senior Notes due 2032 (the 2032 Notes) and $ 850.0 aggregate principal amount of 4.80 % Senior Notes due 2034, respectively (the 2034 Notes and, together with the 2030 Notes and the 2032 Notes, the Notes), totaling $ 2,000.0 .

Interest on the Notes is payable semi-annually on April 1 and October 1 of each year, commencing April 1, 2025.

Net proceeds from the offering of the Notes were approximately $ 1,982.1 after deducting underwriting discounts and other estimated expenses of the offering.

The net proceeds will be used to redeem or repay indebtedness and, to the extent not used for such purpose, for other general corporate purposes.

Indebtedness to be redeemed or repaid at or prior to maturity were the Company's 2.30 % senior notes due 2024, its 3.60 % senior notes due 2025 and $ 350.0 of borrowings under its revolving credit facility.

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 June 30, 2024, and December 31, 2023.

The changes in common shares issued during the six months ended June 30, 2024 are summarized below:

There were no preferred shares outstanding as of September 30, 2024, and December 31, 2023.

The changes in common shares issued during the nine months ended September 30, 2024 are summarized below:

Issued and Outstanding

2 unchanged sentences

Shares repurchased ( 0.8 )

Common shares at June 30, 2024 83.8

Common shares at September 30, 2024 83.7

Share Repurchase Program

1 unchanged sentence

Remaining amounts are recognized as a reduction in retained earnings.

During the six months ended June 30, 2024, the Company purchased 0.5 shares of its common stock at an average price of $ 202.66 for a total cost of $ 100.0 .

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 third 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 .

During the nine months ended September 30, 2024, the Company purchased 0.8 shares of its common stock at an average price of $ 211.63 for a total cost of $ 175.0 .

On July 24, 2024, the Board adopted a new share repurchase plan authorizing up to

LABCORP HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

$ 1,000.0 of the Company's shares in addition to the remaining amount outstanding under the previous plan.

As of September 30, 2024, the Company had outstanding authorization from the board of directors to purchase up to $ 1,355.4 of the Company's common stock.

For the nine months ended September 30, 2024, the Company paid $ 183.0 in common stock dividends.

On October 10, 2024 , the Company announced a cash dividend of $ 0.72 per share of common stock for the third quarter, or approximately $ 61.0 in the aggregate.

The dividend will be payable on December 13, 2024 , to stockholders of record of all issued and outstanding shares of common stock as of the close of business on November 26, 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) during the six months ended June 30, 2024 were as follows:

The components of accumulated other comprehensive earnings (loss) during the nine months ended September 30, 2024 were as follows:

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

3 unchanged sentences

Tax effect of adjustments — ( 0.6 ) ( 0.6 )

Balance as of June 30, 2024 $ ( 179.1 ) $ ( 12.9 ) $ ( 192.0 )

Balance as of September 30, 2024 $ ( 100.8 ) $ ( 12.4 ) $ ( 113.2 )

COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

Some of these actions involve claims that are substantial in amount.

These matters include, but are not limited to, intellectual property disputes, commercial and contract disputes, professional liability claims, employee-related matters, transaction-related disputes, securities and corporate law matters, and inquiries, including subpoenas and other civil investigative demands, from governmental agencies, Medicare or Medicaid payers and managed care organizations (MCOs) reviewing billing practices or requesting comment on allegations of billing irregularities that are brought to their attention

LABCORP HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

through billing audits or third parties.

The Company receives civil investigative demands or other inquiries from various governmental bodies in the ordinary course of its business.

12 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.

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probable and reasonably estimable.

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

21 unchanged sentences

The Plaintiff appealed the Circuit Court’s ruling to the Florida Second District Court of Appeal.

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October 16, 2019, the Florida Second District Court of Appeal reversed the Circuit Court’s dismissal, but certified a controlling issue of Florida law to the Florida Supreme Court.

On October 16, 2019, the Florida Second District Court of Appeal reversed the Circuit Court’s dismissal, but certified a controlling issue of Florida law to the Florida Supreme Court.

On February 17, 2020, the Florida Supreme Court accepted jurisdiction of the lawsuit.

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d/b/a American Medical Collection Agency (AMCA), an external collection agency, notified the Company about a security incident AMCA experienced that may have involved certain personal information about some of the Company’s patients (the AMCA Incident).

The Company referred patient balances to AMCA only when direct collection efforts were unsuccessful.

The Company referred patient balances to

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AMCA only when direct collection efforts were unsuccessful.

The Company’s systems were not impacted by the AMCA Incident.

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The complaint generally alleges that the defendants failed to ensure that the Company utilized proper cybersecurity safeguards and failed to implement a sufficient response to data security incidents, including the AMCA Incident.

The complaint asserts derivative claims for breach of fiduciary duty and seeks relief including

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damages, certain disclosures, and certain changes to the Company’s internal governance practices.

The complaint asserts derivative claims for breach of fiduciary duty and seeks relief including damages, certain disclosures, and certain changes to the Company’s internal governance practices.

On June 2, 2020, the Company filed a Motion to Stay the lawsuit due to its overlap with the multi-district litigation referenced above.

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

On September 13, 2024, the

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Company filed a Petition for Writ of Certiorari with the United States Supreme Court.

The Company will vigorously defend the lawsuit.

26 unchanged sentences

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

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

1 unchanged sentence

The lawsuit seeks monetary damages, civil penalties, and recovery of attorney’s fees and costs.

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

On July 28, 2024, the Court issued a dismissal of the lawsuit pursuant to a settlement agreement between plaintiff and the Company.

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

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The lawsuit seeks monetary damages, liquidated damages, civil penalties, and recovery of attorney's fees and costs.

On June 24, 2021, the District Court remanded the case to the Superior Court of California, County of Los Angeles on the grounds that potential damages did not meet the Class Action Fairness Act (CAFA), 28 U.S.C.

On June 24, 2021, the

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District Court remanded the case to the Superior Court of California, County of Los Angeles on the grounds that potential damages did not meet the Class Action Fairness Act (CAFA), 28 U.S.C.

§ 1332(d), jurisdictional threshold.

1 unchanged sentence

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 September 13, 2024, the court issued its final approval of the settlement and dismissed the lawsuit.

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

Laboratory Corporation of America, Laboratory Corporation of America Holdings, and Meta Platforms, Inc.

, filed in the U.S.

Laboratory Corporation of America, Laboratory Corporation of America Holdings, and Meta Platforms, Inc., filed in the U.S.

District Court for the Northern District of California, alleging that the Company’s website includes a tracking code created by Meta, known as the Meta Pixel, that sent information related to Plaintiffs and their online activities to Meta.

6 unchanged sentences

Among other things, the Amended Complaint contains allegations that in addition to the Meta Pixel, the Company's website uses Google Analytics and other online tracking technologies.

On October 11, 2023, the Company filed a Motion to Dismiss the Amended Complaint.

On September 27, 2024, the Court denied the Motion to Dismiss the Amended Complaint.

The Company will vigorously defend the lawsuit.

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requiring the production of information related to the Medicare billing rule regarding reimbursement for laboratory testing performed for hospital patients.

The Company is cooperating with the DOJ.

The Company cooperated with the DOJ and entered into an agreement dated September 26, 2024 to resolve the matter.

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

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website includes a computer code created by Google that sent information to Google related to Plaintiffs and their online activities.

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.

1 unchanged sentence

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

The Company will vigorously defend the lawsuit.

On October 11, 2024, the Court granted the Motion to Compel Arbitration and Stay Proceedings.

The Company will vigorously defend any arbitration proceeding.

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.

4 unchanged sentences

Provisions for losses expected under these programs are recorded based upon the Company's estimates of the aggregated liability of claims incurred.

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FAIR VALUE MEASUREMENTS

The Company’s population of financial assets and liabilities subject to fair value measurements as of June 30, 2024, and December 31, 2023, was as follows:

The Company’s population of financial assets and liabilities subject to fair value measurements as of September 30, 2024, and December 31, 2023, was as follows:

Fair Value Measurements as of

June 30, 2024

September 30, 2024

Balance Sheet Fair Value as of Using Fair Value Hierarchy

Classification June 30, 2024 Level 1 Level 2 Level 3

Classification September 30, 2024 Level 1 Level 2 Level 3

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

24 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.

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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 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.

5 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 $ 4,812.3 and $ 4,850.4 as of June 30, 2024, and December 31, 2023, respectively.

The fair market value of the senior notes, based on market pricing, was approximately $ 6,314.0 and $ 4,850.4 as of September 30, 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.

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Cross-Currency Swap

1 unchanged sentence

Dollar (USD) to Swiss Franc cross-currency swap agreements with an aggregate notional value of $ 600.0 .

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.

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 $ 103.6 and $ 109.0 as of June 30, 2024 and December 31, 2023, respectively.

During the third quarter of 2024, the Company entered into five new USD to Swiss Franc cross currency swaps, with an aggregate notional value of $ 600.0 , of which $ 300.0 matures in 2029 and $ 300.0 matures in 2034.

The cross currency swaps, in aggregate, are included in Accrued expenses and other and other long-term liabilities, as appropriate, with an aggregate fair value of $ 175.4 and $ 109.0 as of September 30, 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

Six Months Ended June 30,

Nine Months Ended September 30,

Cash paid during period for:

4 unchanged sentences

BUSINESS SEGMENT INFORMATION

The following table is a summary of segment information for the three and six months ended June 30, 2024, and 2023.

The following table is a summary of segment information for the three and nine months ended September 30, 2024, and 2023.

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

9 unchanged sentences

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Three Months Ended June 30, Six Months Ended June 30,

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

2024 2023 2024 2023

13 unchanged sentences

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