What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-10-29 compared with 2024-08-02 · 123 added, 127 removed, 229 unchanged (52% of the section changed)

21 unchanged sentences

changes in testing guidelines or recommendations by government agencies, medical specialty societies, and other authoritative bodies affecting the development, validation, approval, clearance, commercialization, or utilization of laboratory tests;

changes in applicable government regulations or policies affecting the approval, availability of, and the selling and marketing of diagnostic tests, including LDTs, drug development, or the conduct of drug development and medical device and diagnostic studies and trials, including regulations and policies of the U.S.

changes in and failure to comply with applicable government regulations or policies affecting the approval, availability of, and the selling and marketing of diagnostic tests, including LDTs, drug development, or the conduct of drug development and medical device and diagnostic studies and trials, including regulations and policies of the U.S.

Food and Drug Administration, the U.S.

Department of Agriculture, the Medicine and Healthcare products Regulatory Agency in the United Kingdom, the National Medical Products Administration in China, the Pharmaceutical and Medical Devices Agency in Japan, the

European Medicines Agency in the European Union, and similar regulations and policies of agencies in other jurisdictions in which the Company conducts business;

Department of Agriculture, the Medicine and Healthcare products Regulatory Agency in the United Kingdom, the National Medical Products Administration in China, the Pharmaceutical and

Medical Devices Agency in Japan, the European Medicines Agency, the European Union, and similar regulations and policies of agencies in other jurisdictions in which the Company conducts business;

changes in government regulations or reimbursement pertaining to the pharmaceutical, biotechnology and medical device and diagnostic industries, changes in reimbursement of pharmaceutical products, or reduced spending on research and development by pharmaceutical, biotechnology and medical device and diagnostic customers;

52 unchanged sentences

GENERAL (dollars in millions, except per share data)

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.

Revenues for the nine months ended September 30, 2024, were $9,679.5, an increase of 6.0% from $9,128.3 during the nine months ended September 30, 2023.

The increase was due to organic revenue of 3.4%, acquisitions, net of divestitures, of 2.4%, and favorable foreign currency translation of 0.2%.

The 3.4% increase in organic revenue was driven by a 4.5% increase in the Company's organic Base Business, partially offset by a 1.1% 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.

2 unchanged sentences

RESULTS OF OPERATIONS (dollars in millions)

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

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

3 unchanged sentences

Total $ 3,282.0 $ 3,056.8 7.4 %

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%.

Total revenues for the three months ended September 30, 2024, were $3,282.0, an increase of 7.4% over $3,056.8 in the third quarter of 2023.

The increase was due to organic revenue of 4.2%, acquisitions, net of divestitures, of 3.1%, and favorable foreign currency translation of 0.1%.

The 4.2% increase in organic revenue was driven by a 4.8% increase in the Company's organic Base Business, partially offset by a 0.6% 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 June 30, 2024, were $2,524.9, an increase of 7.9% over $2,340.8 in the second quarter of 2023.

Dx revenues for the three months ended September 30, 2024, were $2,553.5, an increase of 8.9% over $2,344.7 in the third quarter of 2023.

The increase was due to organic revenue of 5.0% and acquisitions, net of divestitures, of 4.0%, partially offset by unfavorable foreign currency translation of 0.1%.

The 5.0% increase in organic growth was due to a 5.7% increase in the Base Business, partially offset by a 0.7% 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%.

Dx organic volume increased by 2.2% for the three months ended September 30, 2024, while total volume (measured by requisitions) increased by 5.1% as acquisition volume, net of divestitures, contributed 2.8%.

Organic volume was up due to a 2.7% 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%.

Price/mix increased by 3.8% due to organic Base Business growth of 3.0% and acquisitions, net of divestitures, of 1.2%, partially offset by a decrease in COVID-19 Testing of 0.3%.

BLS revenues for the three months ended September 30, 2024, were $737.7, an increase of 2.6% over $719.1 in the third quarter of 2023.

The increase was due to organic growth of 2.0% and favorable foreign currency translation of 0.6%.

Cost of Revenues

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

1 unchanged sentence

Cost of revenues as a % of revenues 72.4 % 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.

Cost of revenues increased 7.8% during the three months ended September 30, 2024, as compared with the corresponding period in 2023.

Cost of revenues as a percentage of revenues during the three months ended September 30, 2024, increased to 72.4% as compared to 72.2% in the corresponding period in 2023.

This increase in cost of revenues as a percent of revenues was primarily due to higher personnel costs and the impact of the Invitae transaction, partially offset by demand and LaunchPad savings.

Selling, General and Administrative Expenses

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

1 unchanged sentence

Selling, general and administrative expenses as a % of revenues 17.3 % 17.2 %

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.

Selling, general and administrative expenses as a percentage of revenues was 17.3% and 17.2% during the three months ended September 30, 2024, and 2023, respectively.

The increase is primarily due to higher personnel costs and the impact from Invitae, partially offset by LaunchPad savings and demand.

Amortization of Intangibles and Other Assets

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

Amortization of intangibles and other assets $ 63.7 $ 55.7 14.3 %

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

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

Goodwill and Other Asset Impairments

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

Goodwill and other asset impairments $ — $ 10.2 (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.

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

The Company recorded impairment charges of $10.2 in intangible assets during the three months ended September 30, 2023.

Restructuring and Other Charges

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

Restructuring and other charges $ 18.0 $ 7.5 138.9 %

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.

During the three months ended September 30, 2024, the Company recorded net restructuring and other charges of $18.0.

The charges were comprised of $19.3 related to severance and other personnel costs.

The charges were adjusted by the reversal of a previously established liability of $1.2 in unused severance-related costs and $0.1 in unused facility-related costs.

During the three months ended September 30, 2023, the Company recorded net restructuring and other charges of $7.5.

The charges were comprised of $11.2 related to severance and other personnel costs and $0.9 in facility closures, lease terminations, and general integration activities.

1 unchanged sentence

Interest Expense

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

Interest expense $ (50.4) $ (50.3) 0.3 %

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.

For the three months ended September 30, 2024, interest expense remained relatively flat as compared to the same period in 2023.

There was a decrease in interest expense related to the repayment of the November 2023 $300.0 senior notes which was offset by increased interest expense related to the revolving credit facility and the new accounts receivable securitization facility (AR Facility).

Equity Method Income

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

1 unchanged sentence

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,

The decrease in income for the three months ended September 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 September 30,

2024 2023 Change

Other, net $ 4.3 $ 21.1 78.5 %

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 change in Other, net for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, is partially due to a decrease of $4.3 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 $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.

In addition, the Company recorded investment losses of $1.6 for the three months ended September 30, 2024 compared to investment gains of $4.0 for the corresponding period of 2023.

Foreign currency transaction losses of $10.0 were recognized for the three months ended September 30, 2024, as compared to losses of $2.8 for the corresponding period of 2023.

Income Tax Expense

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 Change

1 unchanged sentence

Income tax expense as a % of earnings before income taxes 19.5 % 23.1 %

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.

The year-over-year decrease in the effective tax rate for the three months ended September 30 is primarily attributable to the relative geographical mix of earnings among domestic and foreign entities resulting in favorable foreign rate differentials along with year-over-year increases in the U.S.

research and development tax credits.

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,

Three Months Ended September 30,

2024 2023 Change

9 unchanged sentences

Total operating income $ 254.1 $ 252.3 0.7 %

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.

Dx operating income was $387.4 for the three months ended September 30, 2024, an increase of $1.1 over operating income of $386.3 in the corresponding period of 2023, and Dx operating margin decreased 130 basis points year-over-year.

The decrease in operating margin was due to the Invitae transaction and the unfavorable impact of weather and days.

BLS operating income was $120.9 for the three months ended September 30, 2024, an increase of $11.9 over operating income of $109.0 in the corresponding period of 2023, and BLS operating margin increased 120 basis points year-over-year.

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.

General corporate, unallocated expenses, and other 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 $172.5 for the three months ended September 30, 2024, an increase of $2.9 over corporate expenses of $169.6 in the corresponding period of 2023, primarily due to costs related to acquisitions 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,

Nine Months Ended September 30,

2024 2023 Change

3 unchanged sentences

Total $ 9,679.5 $ 9,128.3 6.0 %

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 in revenues for the nine months ended September 30, 2024, as compared with the corresponding period in 2023 was 6.0%.

The increase was due to organic revenue of 3.4%, acquisitions, net of divestitures, of 2.4%, and favorable foreign currency translation of 0.2%.

The 3.4% increase in organic revenue was driven by a 4.5% increase in the Company's organic Base Business, partially offset by a 1.1% 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.

Dx revenues for the nine months ended September 30, 2024, were $7,558.1, an increase of 6.9% over $7,068.3 during the nine months ended September 30, 2023.

The increase was due to organic revenue of 3.8% and acquisitions, net of divestitures, of 3.2%.

1 unchanged sentence

Total Base Business growth compared to the Base Business in the prior year was 8.5%.

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%.

Dx total volume (measured by requisitions) for the nine months ended September 30, 2024, increased by 4.7% as acquisition volume, net of divestitures, contributed 2.6%, while organic volume increased by 2.1%.

Organic volume was up due to a 2.9% increase in the Base Business, partially offset by a 0.8% decrease in COVID-19 Testing.

2 unchanged sentences

Price/mix was up 2.9% in the Base Business compared to the Base Business last year.

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.

BLS revenues for the nine months ended September 30, 2024, were $2,155.6, an increase of 3.7% over $2,079.4 during the nine months ended September 30, 2023.

The increase was due to organic growth of 2.7% and favorable foreign currency translation of 0.9%.

Cost of Revenues

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 Change

1 unchanged sentence

Cost of revenues as a % of revenues 71.8 % 72.1 %

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.

Cost of revenues increased 5.6% during the nine months ended September 30, 2024, as compared with the corresponding period in 2023.

Cost of revenues as a percentage of revenues during the nine months ended September 30, 2024, decreased to 71.8% 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 demand, LaunchPad savings, and CDCS costs in 2023 that do not qualify as discontinued operations, largely offset by higher personnel costs, lower COVID-19 Testing, and the impact from the Invitae transaction.

Selling, General and Administrative Expenses

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 Change

1 unchanged sentence

Selling, general and administrative expenses as a % of revenues 16.9 % 16.3 %

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.

Selling, general and administrative expenses as a percentage of revenues were 16.9% and 16.3% during the nine months ended September 30, 2024, and 2023, respectively.

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

Amortization of Intangibles and Other Assets

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 Change

Amortization of intangibles and other assets $ 186.0 $ 160.6 15.8 %

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

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

Goodwill and Other Asset Impairments

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 Change

Goodwill and other asset impairments $ 2.5 $ 15.2 (83.8) %

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.

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

The Company recorded impairment charges of $15.2 in capitalized software costs and other intangible assets nine months ended September 30, 2023.

Restructuring and Other Charges

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 Change

Restructuring and other charges $ 34.6 $ 30.8 12.3%

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

During the nine months ended September 30, 2024, the Company recorded net restructuring and other charges of $34.6.

The charges were comprised of $34.4 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 six months ended June 30, 2023, the Company recorded net restructuring and other charges of $23.3.

The charges were adjusted by the reversal of a previously established liability of $1.2 in unused severance-related costs and $0.4 in unused facility-related costs.

During the nine months ended September 30, 2023, the Company recorded net restructuring and other charges of $30.8.

The charges were comprised of $20.4 related to severance and other personnel costs and $14.0 in facility closures, lease terminations, and general integration activities.

1 unchanged sentence

Interest Expense

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 Change

Interest expense $ (144.9) $ (150.8) (3.9) %

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.

The decrease in interest expense for the nine months ended September 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

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 Change

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,

Equity method income (expense), net $ (0.7) $ (1.5) (50.7) %

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 equity method expense for the nine months ended September 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.

Nine Months Ended September 30,

2024 2023 Change

Other, net $ 43.8 $ (2.7) 1,721.5 %

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 change in Other, net for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, is primarily due to $41.0 of additional transition services fees charged to Fortrea related to administrative and IT systems support during the nine months ended September 30, 2024 as compared to the same period in 2023.

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 $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.

In addition, the Company recorded investment losses of $7.3 for the nine months ended September 30, 2024 compared to investment losses of $1.6 for the corresponding period of 2023.

Foreign currency transaction losses of $15.2 were recognized for the nine months ended September 30, 2024, as compared to losses of $8.6 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

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 Change

7 unchanged sentences

Prior periods have been conformed for comparability.

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 Change

9 unchanged sentences

Total operating income $ 870.2 $ 848.4 2.6 %

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.

Dx operating income was $1,246.8 for the nine months ended September 30, 2024, an increase of $9.3 over operating income of $1,237.5 in the corresponding period of 2023, and Dx operating margin decreased 100 basis points year-over-year.

The decrease in operating margin was due to a reduction in COVID-19 Testing, higher personnel costs, and the impact from the Invitae transaction, partially offset by growth in the Base Business.

BLS operating income was $328.2 for the nine months ended September 30, 2024, an increase of $41.0 over operating income of $287.2 in the corresponding period of 2023, and BLS operating margin increased 140 basis points year-over-year.

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

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.

Corporate expenses were $481.7 for the nine months ended September 30, 2024, an increase of $12.0 over corporate expenses of $469.7 in the corresponding period of 2023, primarily due to costs related to acquisitions, and personnel costs.

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

4 unchanged sentences

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 six months ended June 30, 2024, and 2023, respectively:

Six Months Ended June 30,

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

Nine Months Ended September 30,

Net cash provided by operating activities from continuing operations $ 808.6 $ 622.7

Net cash used for investing activities from continuing operations (1,157.2) (816.2)

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

Net cash provide by (used for) financing activities from continuing operations 1,326.6 (1,112.5)

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

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

Net increase (decrease) in cash and cash equivalents from continuing operations $ 980.5 $ (1,302.5)

Cash and Cash Equivalents

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

Cash and cash equivalents at September 30, 2024, and 2023, totaled $1,517.3 and $727.9, 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 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.

During the nine months ended September 30, 2024, the Company's continuing operations used $808.6 of cash as compared to providing $622.7 during the same period in 2023.

The $185.9 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 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.

Net cash used for investing activities from continuing operations for the nine months ended September 30, 2024, was $1,157.2 as compared to $816.2 for the nine months ended September 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 nine months ended September 30, 2024.

Capital expenditures were $377.8 and $286.4 for the nine months ended September 30, 2024, and 2023, respectively.

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.

Cash Flows from Financing Activities

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 June 30, 2024.

Net cash provided by financing activities from continuing operations for the nine months ended September 30, 2024, was $1,326.6 as compared to net cash used for financing activities of $1,112.5 for the nine months ended September 30, 2023.

The change in cash flows from financing activities from continuing operations for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, was primarily due to $2,000.0 of proceeds for new debt securities, and $300.0 of proceeds for the AR Facility, offset by the $600.0 payment of the 3.25% senior notes due September 2024.

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 were used to redeem or repay indebtedness and, to the extent not used for such purpose, for other general corporate purposes.

Indebtedness 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.

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

The AR Facility provides for purchases of accounts receivable by PNC in an amount of up to $300.0 through August of 2027 and may increase to up to $700.0, subject to the satisfaction of certain conditions.

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.

At September 30, 2024, the Company had $1,517.3 of cash and $1,000.0 of available borrowings under its revolving credit facility, which does not mature until 2026.

Under the Company's credit facilities 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 credit facilities, the Company is required to maintain certain leverage ratios.

The Company was in compliance with all covenants under the credit facilities and the indentures related to the Company's outstanding senior notes at September 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.

The Company continues to evaluate its outstanding debt portfolio to take advantage of market conditions that would allow the Company to maintain a reasonable interest rate and lower financing risk.

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

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.

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 fourth 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.

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.

In connection with the Reorganization, the Company, LCAH and the Trustee entered into a seventeenth supplemental indenture (the Seventeenth Supplemental Indenture) to an indenture, dated as of November 19, 2010, between LCAH and the Trustee (the 2010 Indenture).

In addition, the Company, LCAH and the Trustee entered into the 2024 Indenture (the 2010 Indenture, together with the 2024 Indenture, the Indentures).

The Seventeenth Supplemental Indenture, among other things, provides for the full and unconditional guarantee by the Company of LCAH’s obligations under the 2010 Indenture, and each series of senior unsecured notes issued and outstanding thereunder, and the 2024 Indenture provides for the full and unconditional guarantee by the Company of LCAH’s obligations, and each series of senior unsecured notes issued and outstanding, thereunder (collectively, the Labcorp Holdings Guarantees).

Also, the Indentures permit the Company to satisfy LCAH’s reporting obligations so long as the Labcorp Holdings Guarantees remain 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).

As of September 30, 2024, there was $4,492.9 and $2,000.0 aggregate principal amount of issued and outstanding senior notes of LCAH, issued under the 2010 Indenture and the 2024 Indenture, respectively, 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.

As permitted under Rule 13-01(a)(4)(vi) of Regulation S-X, we have excluded the summarized financial information 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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Item 2. Management’s Discussion and Analysis