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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-25 · 113 added, 116 removed, 214 unchanged (52% of the section changed)

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The 7.2% increase in revenues for the year ended December 31, 2025, as compared to the corresponding period in 2024, was primarily due to organic revenue of 4.4%, acquisitions, net of divestitures of 2.5%, and favorable foreign currency translation of 0.4%.

The 3.9% increase in organic revenue was due to a 4.9% increase in the Company’s organic Base Business (Base Business includes the Company’s business operations except for COVID-19 Testing), partially offset by a 1.0% decrease in COVID-19 Testing.

The Company defines organic growth as the increase in revenue excluding the year over year impact of acquisitions, divestitures, and currency.

Acquisition and divestiture impact is considered for a twelve-month period following the close of each transaction.

Separation of Fortrea Holdings Inc.

On June 30, 2023, Labcorp completed the previously announced separation (Spin-off) of its former Clinical Development and Commercialization Services (CDCS) business into Fortrea.

All historical operating results of Fortrea are presented as Earnings from discontinued operations, net of tax, in the Company’s Consolidated Statements of Operations.

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

federal income tax purposes.

As a result of the separation of Fortrea, the Company recast 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 (BLS) segment.

Acquisition and divestiture impact is considered for a 12-month period following the close of each transaction.

On June 30, 2023, the Company completed the Spin-off.

The TSA dated June 29, 2023 between Fortrea and LCAH expired on June 30, 2025, and all services provided under the TSA terminated on or before the expiration date.

On July 4, 2025, the U.S.

government enacted the OBBBA, which includes provisions addressing regulations and federal funding affecting healthcare.

These provisions include, but are not limited to, changes to Medicaid and the ACA, and could lead to revised regulatory requirements and reduced federal funding.

As a result of these changes, the Company could experience a decline in utilization of its diagnostics testing services due to a reduction in overall insurance coverage, which may cause the Company’s revenue to decrease.

However, the Company currently believes any such reduction would not likely have a material impact on its results of operations in future periods.

The potential impacts described above represent the Company’s assessment at this time, and the Company will continue to evaluate the impact of the OBBBA on its business and operations, if any, as the legislation’s provisions continue to become effective through 2028.

RESULTS OF OPERATIONS (dollars in millions)

The following tables present the financial measures that management considers to be the most significant indicators of the Company ’ s performance.

For discussion of 2023 results and comparison with 2022 results refer to “ Management ’ s Discussion and Analysis of Financial Conditions and Results of Operations ” in the Company ’ s Annual Report on Form 10-K for the year ended December 31, 2023 .

For the discussion of 2024 results and comparison with 2023 results refer to “ Management ’ s Discussion and Analysis of Financial Conditions and Results of Operations ” in the Company ’ s Annual Report on Form 10-K for the year ended December 31, 2024 .

Year Ended December 31,

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Dx revenues for the year ended December 31, 2025, were $10,876.5, an increase of 7.2% compared to revenues of $10,144.3 in the corresponding period in 2024.

The increase was due to organic revenue of 4.1% and acquisitions, net of divestitures of 3.7%.

The 4.1% increase in organic revenue was due to a 5.4% contribution from organic Base Business, partially offset by a 1.3% decrease in COVID-19 Testing.

Total Base Business growth compared to the Base Business in the prior year was 9.2%.

Total volume, measured by requisitions, increased by 5.3% as acquisitions, net of divestitures, volume contributed growth of 2.7%, and organic volume increased by 2.6%.

Organic volume was impacted by a 3.3% increase in the Base Business, partially offset by a 0.8% decrease in COVID-19 Testing.

Price/mix increased by 2.5% due to organic Base Business growth of 2.1% and acquisitions, net of divestitures, of 1.0%, partially offset by a decrease in COVID-19 Testing of 0.5%.

The increase was primarily due to organic revenue of 4.1% and acquisitions, net of divestitures of 3.2%, partially offset by unfavorable foreign currency translation of 0.1%.

Dx total volume, measured by requisitions, increased by 3.7%, as organic volume increased by 2.2% and acquisition volume, net of divestitures, contributed 1.5%.

Price/mix increased by 3.5% due to organic growth of 1.9% and acquisitions, net of divestitures, of 1.7%, partially offset by unfavorable foreign currency translation of 0.1%.

BLS revenues for the year ended December 31, 2025, were $3,098.2, an increase of 6.0% over revenues of $2,922.6 in the corresponding period in 2024.

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Cost of revenues $ 9,939.2 $ 9,384.5 5.9 %

Cost of revenues as a % of revenues 72.1 % 72.3 %

Cost of revenues increased 6.7% for the year ended December 31, 2024, as compared with corresponding period in 2023, and decreased as a percentage of revenues to 72.1% for the year ended December 31, 2024, as compared to 72.3% for corresponding period in 2023.

This decrease in cost of revenues as a percentage of revenues was primarily due to higher organic demand and LaunchPad savings, partially offset by higher personnel costs and lower COVID-19 Testing.

Cost of revenues as a percentage of revenues

71.2 % 72.1 %

Cost of revenues increased 5.9% for the year ended December 31, 2025, as compared with corresponding period in 2024, and decreased as a percentage of revenues to 71.2% for the year ended December 31, 2025, as compared to 72.1% for the corresponding period in 2024.

This decrease was primarily due to operational efficiencies and the impact from revenue growth, including the performance of Invitae.

Selling, General, and Administrative Expenses

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Selling, general, and administrative expenses $ 2,216.3 $ 2,230.0 (0.6) %

SG&A as a % of revenues 17.1 % 16.6 %

Selling, general and administrative expenses as a percentage of revenues increased to 17.1% for the year ended December 31, 2024, as compared to 16.6% for the corresponding period in 2023.

The increase in selling, general and administrative expenses as a percentage of revenues 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.

Goodwill and Other Asset Impairments

Years Ended December 31,

2024 2023 Change

Goodwill and other asset impairments $ 5.3 $ 349.0 (98.5) %

The impairment charges for the year ended December 31, 2024, were primarily due to the decommissioning of an information system and a robotic asset.

The impairment charges for the year ended December 31, 2023, were primarily comprised of $333.6 of goodwill impairment for the ED reporting unit, which is part of the BLS segment.

Selling, general, and administrative expenses as a percentage of revenues

15.9 % 17.1 %

Selling, general, and administrative expenses as a percentage of revenues decreased to 15.9% for the year ended December 31, 2025, as compared to 17.1% for the year ended December 31, 2024.

The decrease was primarily due to growth in demand as the Company leveraged the growth of its revenues and a decrease in costs related to the Spin-off, partially offset by higher personnel costs and the impact from Invitae.

Amortization of Intangibles and Other Assets

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The increase in amortization of intangibles and other assets primarily reflects additional amortization for assets acquired subsequent to December 31, 2024.

Goodwill and Other Asset Impairments

Years Ended December 31,

2025 2024 Change

Goodwill and other asset impairments $ 4.3 $ 5.3 (18.9) %

The impairment charges for the year ended December 31, 2025, were primarily due to the write-off of certain facility-related assets and capitalized software costs.

The impairment charges for the year ended December 31, 2024, were primarily due to the decommissioning of an information system and a robotic asset.

Restructuring and Other Charges

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Restructuring and other charges $ 127.2 $ 46.0 176.5 %

For the year ended December 31, 2024, the Company recorded net restructuring charges of $46.0.

The charges were comprised of $43.0 in severance and other personnel costs, and $5.9 in facility-related costs primarily associated with general integration activities.

The charges were adjusted by the reversal of previously established liability of $2.5 in unused severance and $0.4 in unused facility-related costs.

For the year ended December 31, 2025, the Company recorded net restructuring charges of $127.2, including $105.5 of charges associated with the restructuring of ED.

The charges were comprised of $101.3 in long-lived asset impairment and other non-cash charges, $27.2 in severance and other personnel costs, $17.9 in facility-related costs, and $13.9 in contract termination costs.

The charges were adjusted by the reversal of previously established liabilities of $33.1.

For the year ended December 31, 2024, the Company recorded net restructuring charges of $46.0.

The charges were comprised of $43.0 in severance and other personnel costs and $5.9 in facility-related costs primarily associated with general integration activities.

The charges were adjusted by the reversal of previously established liability of $1.7 in unused severance and $4.9 in unused facility-related costs.

The charges were adjusted by the reversal of previously established liabilities of $2.9.

Interest Expense

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Interest expense $ 224.1 $ 208.3 7.6 %

The increase in interest expense for the year ended December 31, 2024, as compared with the corresponding period in 2023 is primarily due to higher borrowings under its revolving credit facility, senior notes, and the new accounts receivable securitization facility.

Equity Method Income, Net

For the year ended December 31, 2025, interest expense increased 7.6% as compared with the corresponding period in 2024.

The increase was primarily due to higher weighted-average interest rates during the year ended December 31, 2025, when compared to the year ended December 31, 2024.

Equity Method Loss, Net

Year Ended December 31,

2025 2024 Change

Equity method income, net $ (1.4) $ (1.4) — %

Equity method income, net represents the Company’s ownership share in joint venture partnerships along with equity investments in other companies in the health care industry, which remained flat in the year ended December 31, 2024, as compared with the corresponding period in 2023.

Equity method loss, net $ (13.3) $ (1.4) (866.3) %

Equity method loss, net 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 Equity method loss, net for the year ended December 31, 2025, as compared with the corresponding period in 2024, was primarily due to the loss recognized from the SYNLAB investment that closed in the first quarter of 2025.

Year Ended December 31,

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Other, net $ (55.0) $ 60.2 (191.4) %

Other, net for the year ended December 31, 2024, was primarily due to $80.0 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 a $6.4 gain related to the divestiture of Beacon Laboratory Benefit Solutions, Inc.

This income was partially offset by foreign currency transaction losses of $15.3 and an $11.4 loss on investments.

Other, net for the year ended December 31, 2023, was primarily due to $46.1 of transition services fees charged to Fortrea related to administrative and IT systems support, partially offset by pension plan settlement charges of $10.9 and a $4.8 loss on investments.

The change in Other, net for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to the TSA expiration resulting in a $76.2 decrease of fees charged to Fortrea for the year ended December 31, 2025, as compared with the corresponding period in 2024, related to the provision of administrative and information technology systems support.

The costs to provide these transition services were included in Operating income, but the service fees were included in Other, net.

In addition, there were net investment losses of $42.6, recorded during the year ended December 31, 2025, compared to net investment losses of $11.4 for the corresponding period of 2024, which are primarily driven by a decrease in the value of investments in other companies or investment funds that develop technology relating to the Company’s operations.

Provision for Income Taxes

Year Ended December 31,

Income tax expense $ 212.4 $ 188.5

Income tax expense as a % of income before tax 22.1 % 33.1 %

The decrease in effective tax rate as compared with the prior year is primarily attributable to the unfavorable impact of the prior year goodwill impairment of the ED reporting unit, while no goodwill impairment was recognized during the year ended December 31, 2024.

Operating Results by Segment

Provision for income taxes

$ 229.8 $ 212.4

Provision for income taxes as a percentage of earnings from operations before income taxes

20.7 % 22.1 %

The decrease in the effective tax rate for the year ended December 31, 2025, as compared with the corresponding period in 2024, was primarily attributable to the release of specific uncertain tax positions.

Results of Operations by Segment

Year Ended December 31,

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Total Operating income

Dx operating income was $1,606.3 for the year ended December 31, 2024, an increase of 0.9% over operating income of $1,591.3 in the corresponding period of 2023, and Dx operating margin decreased 110 basis points year-over-year.

The decrease in operating margin was primarily due to higher personnel costs, partially offset by organic demand.

BLS operating income was $458.9 for the year ended December 31, 2024, an increase of 15.8% from operating income of $396.3 in the corresponding period of 2023, and BLS operating margin increased 140 basis points year over year.

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

$ 1,384.7 $ 1,086.7 27.4 %

(1) Amount does not cross-foot due to rounding.

Dx segment operating income was $1,779.9 for the year ended December 31, 2025, an increase of 10.8% from operating income of $1,606.3 in the corresponding period of 2024, and Dx operating margin increased approximately 50 basis points year-over-year.

The increase in operating margin was primarily due to increased organic revenue growth, including the performance of Invitae.

BLS segment operating income was $498.5 for the year ended December 31, 2025, an increase of 8.6% from operating income of $458.9 in the corresponding period of 2024, and BLS operating margin increased approximately 40 basis points year over year.

The increase in operating margin was primarily due to increased organic revenue growth and operating efficiencies, partially offset by higher personnel costs.

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 $670.8 for the year ended December 31, 2024, an increase of 4.1% over corporate expenses of $644.1 in the corresponding period of 2023, primarily due to higher costs related to acquisitions and personnel.

LIQUIDITY AND CAPITAL RESOURCES (dollars and shares in millions)

The Company’s strong cash-generating capability and financial condition typically have provided ready access to capital markets.

Corporate expenses were $482.2 for the year ended December 31, 2025, a decrease of 28.1% over corporate expenses of $670.8 in the corresponding period of 2024, primarily due to decreases in acquisition-related costs and costs related to the Spin-off.

LIQUIDITY AND CAPITAL RESOURCES (dollars and shares in millions, except per share amounts)

The Company’s cash-generating capability and financial condition typically have provided ready access to capital markets.

The Company’s principal source of liquidity is operating cash flow, supplemented by proceeds from debt offerings.

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Year Ended December 31,

Net cash provided by continuing operating activities $ 1,585.8 $ 1,202.3

Net cash used for continuing investing activities (1,366.8) (1,146.8)

Net cash provided by (used for) continuing financing activities 779.9 (1,559.0)

Net cash provided by operating activities $ 1,640.5 $ 1,585.8

Net cash used for investing activities (1,194.0) (1,366.8)

Net cash (used for) provided by financing activities

(1,457.0) 779.9

Effect of exchange rate on changes in cash and cash equivalents 24.1 (17.0)

Net cash impact from discontinued operations — 1,600.4

Net change in cash and cash equivalents $ 981.9 $ 106.8

Net (decrease) increase in cash and cash equivalents

$ (986.4) $ 981.9

Cash and Cash Equivalents

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Cash Flows from Operating Activities

During the year ended December 31, 2024, the Company’s continuing operations provided $1,585.8 of cash as compared to $1,202.3 in 2023.

The $383.5 increase in cash provided from operations in 2024, as compared with the corresponding 2023 period, was primarily due to higher cash earnings and favorable working capital requirements.

During the year ended December 31, 2025, the Company’s operations provided $1,640.5 of cash as compared to $1,585.8 in 2024.

The $54.7 increase in net cash provided from operations in 2025, as compared with the corresponding 2024 period, was primarily due to higher cash earnings, partially offset by working capital timing.

Cash Flows from Investing Activities

Net cash used for continuing investing activities for the year ended December 31, 2024, was $1,366.8 as compared to $1,146.8 for the year ended December 31, 2023.

The increase in net cash used for investing activities for the year ended December 31, 2024 as compared to the year ended December 31, 2023, was primarily due to an increase in business acquisitions and higher capital expenditures.

Net cash used for investing activities for the year ended December 31, 2025, was $1,194.0 as compared to $1,366.8 for the

year ended December 31, 2024.

The decrease in net cash used for investing activities for the year ended December 31, 2025 as compared to the year ended December 31, 2024, was primarily due to a decrease in business acquisitions and lower capital expenditures, partially offset by the investment in SYNLAB in 2025.

Capital expenditures were $434.5 and $489.9 for the years ended December 31, 2025, and 2024, respectively.

Capital expenditures in 2025 were 3.1% of revenues, primarily in connection with projects to support growth in the Company’s core businesses.

The Company expects this level of spending to remain consistent in 2025, primarily in connection with projects to support growth in the Company’s core businesses, facility expansion and updates, projects related to its LaunchPad initiative, and further acquisition integration initiatives.

The Company expects this level of spending to increase in 2026 to 4.0%, primarily in connection with projects to support growth in the Company’s core businesses, facility expansion and updates, projects related to its LaunchPad initiative, and further acquisition integration initiatives.

Cash Flows from Financing Activities

Net cash provided by continuing financing activities for the year ended December 31, 2024, was $779.9 compared to cash used in continuing financing activities of $1,559.0 for the year ended December 31, 2023.

This movement in cash within financing activities for 2024, as compared to 2023, was primarily due to $2,000.0 of proceeds from new debt securities and $300.0 of proceeds from the new accounts receivable facility described below, partially offset by $1,000.0 of payments towards the Company’s senior notes, $250.1 of share repurchases, and $243.1 of dividends paid, compared to $1,000.0 of share repurchases and $300.0 of payments towards the Company’s senior notes, and $254.0 of dividends paid in 2023.

On September 23, 2024, LCAH (the Issuer) entered into a base indenture with U.S.

Bank Trust Company, National Association, as trustee (the Trustee) (the 2024 Indenture).

On September 23, 2024, the Company, the Issuer and the Trustee entered into supplemental indentures to the 2024 Indenture under which the Issuer issued, and the Company guaranteed, $2,000.0 in debt securities, consisting of $650.0 aggregate principal amount of 4.35% senior notes due 2030, $500.0 aggregate principal amount of 4.55% senior notes due 2032, and $850.0 aggregate principal amount of 4.80% senior notes due 2034, with interest payable semi-annually on April 1 and October 1 of each year, commencing April 1, 2025.

Net proceeds from these offerings were approximately $1,983.0 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 or to be redeemed or repaid at or prior to maturity were the Company’s 2.30% senior notes due December 2024, its 3.60% senior notes due February 2025, and $500.0 of borrowings under its revolving credit facility.

On January 13, 2023, LCAH amended and restated its revolving credit facility.

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

The Company is required to pay a facility fee on the aggregate commitments under the revolving credit facility, at a per annum rate ranging from 0.100% to 0.225%, depending on the Company’s debt ratings.

Borrowings under the revolving credit facility will accrue interest at a per annum rate equal to, at the Company’s election, either (x) a LIBOR (changed to SOFR in 2023) rate plus a margin ranging from 0.775% to 1.275% or (y) a base rate plus a margin ranging from 0% to 0.275%, in each case, depending on the Company’s debt ratings.

On August 23, 2024, the Company and a bankruptcy-remote special purpose vehicle entered into a $300.0 three-year accounts receivable securitization facility with PNC Bank, National Association (PNC) as administrative agent (AR Facility).

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.

On January 31, 2025, the Company amended its AR Facility (AR Facility Amendment).

The AR Facility Amendment increased the amount the Company can borrow from PNC from $300.0 to $700.0 through August of 2027.

In addition, pursuant to the terms of the AR Facility Amendment (i) the Toronto-Dominion Bank became a party to the underlying receivables purchase agreement as a committed purchaser through January 2026 and (ii) MUFG Bank Ltd.

and certain of its related conduit purchasers became parties to the underlying receivables purchase agreement as purchasers and the loans or investments of such conduit purchasers may accrue interest as specified in the AR Facility Amendment and receivables purchase agreement.

On February 18, 2025, the Company borrowed an additional $225.0 under the AR Facility Amendment, bringing the amount outstanding under the AR Facility Amendment to $525.0.

At December 31, 2024, the Company had $1,518.7 of Cash and cash equivalents 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 as of December 31, 2024.

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

Net cash used for financing activities for the year ended December 31, 2025, was $1,457.0 compared to net cash provided by financing activities of $779.9 for the year ended December 31, 2024.

This movement in cash within financing activities for 2025, as compared to 2024, was primarily due to a decrease in proceeds from senior note offerings of $2,000.0, an increase in common stock repurchases of $199.9, and a decrease in proceeds from the Company’s accounts receivable securitization facility of $75.0.

In addition to Cash and cash equivalents, the Company had $1,000.0 of available borrowings under its revolving credit facility, which was amended on June 27, 2025 and expires in 2030.

Under the Company’s credit facilities and indentures relating to the Company’s senior notes and the accounts receivable securitization facility (AR Facility), 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 and AR Facility at December 31, 2025.

The Company expects that it will remain in compliance with all covenants associated with its existing debt obligations for the next 12 months.

In 2025, the Company borrowed an additional $225.0 under its AR Facility, bringing the amount outstanding to $525.0 at December 31, 2025.

On January 28, 2026, the Company amended its AR Facility.

Among other things, this amendment extended the scheduled termination date to January 26, 2029 and permits the Company at its option to increase the facility limit from $700.0 to $825.0 at any time on or before May 29, 2026.

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

At December 31, 2024, the Company had outstanding authorization from its Board to purchase up to $1,280.4 maximum value of Company Common Stock.

At December 31, 2025, the Company had outstanding authorization from its Board to purchase up to $830.4 maximum value of Common Stock.

The repurchase authorization has no expiration date.

For the year ended December 31, 2025, the Company paid $240.7 in Common Stock dividends.

On January 8, 2025, the Company announced a cash dividend of $0.72 per share of Common Stock for the first quarter, or approximately $61.0 in the aggregate.

The dividend will be payable on March 12, 2025, to stockholders of record of all issued and outstanding shares of Common Stock at the close of business on February 27, 2025.

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

On January 14, 2026, the Company announced a cash dividend of $0.72 per share of Common Stock, or approximately $61.0 in the aggregate.

The dividend will be paid on March 12, 2026, to stockholders of record of all issued and outstanding shares of Common Stock as of the close of business on February 27, 2026.

The declaration and payment of any future dividends will be at the discretion of the Board.

Guarantor Information

In connection with the Reorganization, the Company, LCAH and the Trustee entered into a seventeenth supplemental indenture (the Seventeenth Supplemental Indenture) to the 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.

In 2024, the Company, LCAH and U.S.

Bank Trust Company, National Association (the Trustee) entered into a seventeenth supplemental indenture (the Seventeenth Supplemental Indenture) to the indenture, dated as of November 19, 2010, between LCAH and the Trustee (2010 Indenture).

In addition, the Company, LCAH and the Trustee entered into the 2024 Indenture on September 23, 2024 (the 2024 Indenture, together with the 2010 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 Consolidated Financial Statements and other information comply with the requirements of Rule 3-10 of Regulation S-X.

At December 31, 2025, there was $3,097.3 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 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

The investment grade debt ratings from Moody’s and S&P contribute to the Company’s ability to access capital markets.

The investment grade credit ratings from Moody’s and S&P Global Ratings contribute to the Company’s ability to access capital markets.

Off-balance Sheet Arrangements

The Company does not have any variable interest entities or special purpose entities whose financial results are not included in the Company’s Consolidated Financial Statements and the Company does not have any off-balance sheet financing other than normal, short-term leases and letters of credit.

The Company does not have any variable interest entities or special purpose entities whose financial results are not included in the Company’s Consolidated Financial Statements.

The Company has a noncancelable contract with a vendor to purchase inventory supplies pursuant to which the Company is obligated to make expected total future minimum payments of $129.2, including $34.7 in 2026, $20.5 in 2027, and $74.0 in 2028.

Other Commercial Commitments

The Company has debt instruments outstanding.

At December 31, 2024, the Company had total future payments of $6,373.9, with $1,000.4 payable within 12 months.

The Company has leases for patient service centers, laboratories and testing facilities, clinical facilities, general office spaces, vehicles, and office and laboratory equipment.

At December 31, 2024, the Company had total future lease payments of $1,140.3, with $190.7 payable within 12 months.

At December 31, 2024, the Company had provided letters of credit aggregating approximately $102.7, primarily in connection with certain insurance programs which are renewed annually.

The contractual value of the noncontrolling interest put in the Company’s Ontario subsidiary totaled $14.3 and $15.5 at December 31, 2024, and 2023, respectively, and has been classified as mezzanine equity in the Company’s Consolidated Balance Sheets.

At December 31, 2025, the Company had total future payments of $5,622.6, with $500.3 payable within 12 months, which the Company anticipates refinancing in future periods.

The Company has leases for PSCs, laboratories and testing facilities, clinical facilities, general office spaces, vehicles, and office and laboratory equipment.

At December 31, 2025, the Company had total future lease payments for short-term and long-term leases of $1,144.3, with payments of $234.4 due within 12 months.

At December 31, 2025, the Company had provided letters of credit aggregating approximately $110.2, primarily in connection with certain insurance programs that are renewed annually.

At December 31, 2025, and in connection with the pending acquisitions of select clinical laboratory assets from Empire City Laboratories, Inc.

(Empire City) and select assets of the outreach business from Parkview Health System, Inc.

(Parkview), the Company expects to pay up to $415.0, which includes $85.0 of consideration contingent on performance.

The Empire City transaction closed during the first quarter of 2026.

Subject to customary closing conditions and applicable regulatory approvals, the Company expects the acquisition of select assets from Parkview to close in 2026.

See Note 4 Business Acquisitions and Dispositions to the Company’s Consolidated Financial Statements for additional information.

Based on current and projected levels of cash flows from operations, coupled with availability under its revolving credit facility, the Company believes it has sufficient liquidity to meet both its anticipated short-term and long-term cash needs for the next 12 months and the reasonably foreseeable future;

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• Income taxes;

• Goodwill and indefinite-lived assets;

• Goodwill and indefinite-lived intangible assets;

• Legal contingencies.

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The following are descriptions of the Dx payer portfolios:

Client payers represent the portion of Dx’s revenue related to physicians, hospitals, health systems, accountable care organizations, employers, and other entities where payment is received exclusively from the entity ordering the testing service.

Client payers represent the portion of Dx’s revenue related to physicians, hospitals, health systems, ACOs, employers, and other entities where payment is received exclusively from the entity ordering the testing service.

Generally, client revenues are recorded on a fee-for-service basis at Dx’s client list price, less any negotiated discount.

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BLS revenue is generally recognized over time, as the services are delivered to the customer, based on the extent of progress towards completion of the performance obligation.

The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided.

The majority of BLS’s contracts contain a single

performance obligation, as BLS provides a significant service of integrating all promises in the contract and the promises are highly interdependent and interrelated with one another.

The selection of the method to measure progress towards completion

requires judgment and is based on the nature of the services to be provided.

The majority of BLS’s contracts contain a single performance obligation, as BLS provides a significant service of integrating all promises in the contract and the promises are highly interdependent and interrelated with one another.

For contracts that include multiple performance obligations, BLS allocates the contract value to the goods and services based on a customer price list, if available.

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For businesses that enter into primarily short-term contracts, BLS applies the practical expedient, which allows costs to obtain a contract to be expensed when incurred if the amortization period of the assets that would otherwise have been recognized is one year or less.

Amortization of assets from sales commissions is included in selling, general, and administrative expense.

Amortization of assets from sales commissions is included in Selling, general, and administrative expenses in the Consolidated Statements of Operations.

Business Combinations

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Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company does not recognize a tax benefit, unless the Company concludes that it is more likely than not that the benefit will be sustained on audit by the taxing authority based solely

on the technical merits of the associated tax position.

The effect on deferred tax assets and liabilities of a change in tax rates is

recognized in income in the period that includes the enactment date.

The Company does not recognize a tax benefit, unless the Company concludes that it is more likely than not that the benefit will be sustained on audit by the taxing authority based solely on the technical merits of the associated tax position.

If the recognition threshold is met, the Company recognizes a tax benefit measured at the largest amount of the tax benefit that the Company believes is greater than 50% likely to be realized.

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Management performed its annual goodwill and indefinite-lived intangible asset impairment testing as of the beginning of the fourth quarter of 2025.

The Company elected to perform a quantitative assessment for goodwill and indefinite-lived intangible assets for each of its reporting units.

Based upon the results of the quantitative assessments, the Company concluded that the fair values of each of its reporting units, as of October 1, 2024, were greater than the carrying values.

by unfavorable or unforeseen changes which could impact the existing assumptions used in the impairment analysis.

The Company elected to perform a qualitative assessment for goodwill and indefinite-lived intangible assets for each of its reporting units.

Based upon the results of the qualitative assessments, the Company concluded that the fair values of each of its reporting units, as of October 1, 2025, were greater than the carrying values.

Although the Company believes that the current assumptions and estimates used in its goodwill analysis are reasonable, supportable, and appropriate, continued efforts to maintain or improve the performance of these businesses could be impacted by unfavorable or unforeseen changes which could impact the existing assumptions used in the impairment analysis.

Various factors could reasonably be expected to unfavorably impact existing assumptions primarily delays in new customer bookings and the related delay in revenue from new customers, increases in customer termination activity, or increases in operating costs.

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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 Financial Accounting Standards Board (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 estimable and would exceed the aggregate legal reserve.

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 estimable and would exceed the aggregate legal reserve.

If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued.

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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-K

Item 7. Management’s Discussion and Analysis