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What changed in Labcorp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Labcorp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+526 added−626 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-25)

Top changes in Labcorp's 2025 10-K

526 paragraphs added · 626 removed · 423 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

233 edited+43 added−65 removed112 unchanged
Biggest changeAND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and shares in millions, except per share data) The components of income tax expense attributable to continuing operations are as follows: Year Ended December 31, 2024 2023 2022 Current tax expense: Federal $ 125.9 $ 183.1 $ 150.8 State 46.2 38.9 25.4 Foreign 60.4 44.6 34.0 $ 232.5 $ 266.6 $ 210.2 Deferred tax (benefit) expense: Federal $ (6.3) $ (63.1) $ 15.8 State (11.1) (31.6) 0.6 Foreign (2.7) 16.6 7.3 (20.1) (78.1) 23.7 Total income tax expense $ 212.4 $ 188.5 $ 233.9 The effective tax rates on earnings before income taxes are reconciled to statutory U.S. income tax rates as follows: Year Ended December 31, 2024 2023 2022 Statutory U.S. rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of U.S. federal income tax effect 2.8 4.0 4.2 Foreign earnings taxed at lower rates than the statutory U.S. rate (1.7) (2.2) (0.7) Tax credits (2.5) (3.8) (5.4) Impairment of assets — 10.8 3.7 Limitation of officer compensation 0.7 1.7 1.2 Worthless stock loss — (2.6) — Deferred tax adjustments 0.9 4.6 (2.6) Remeasurement of deferred taxes 1.3 (1.1) (0.1) Change in valuation allowance (2.4) (1.6) 0.2 Other 2.0 2.3 (2.6) Effective rate 22.1 % 33.1 % 18.9 % The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: December 31, 2024 2023 Deferred tax assets: Accounts receivable $ 33.7 $ 27.9 Employee compensation and benefits 70.8 81.7 Operating lease liability 199.3 191.4 Acquisition and restructuring reserves 8.9 9.2 Capitalized research and design costs 194.7 142.9 Tax loss carryforwards 224.0 246.9 Other 108.6 95.1 Total gross deferred tax assets 840.0 795.1 Less: valuation allowance (127.2) (150.2) Deferred tax assets, net of valuation allowance $ 712.8 $ 644.9 Deferred tax liabilities: Right of use asset $ (181.6) $ (175.3) Intangible assets (626.7) (614.8) Property, plant and equipment (177.7) (163.5) Other (71.7) (66.2) Total gross deferred tax liabilities $ (1,057.7) $ (1,019.8) Net deferred tax liabilities $ (344.9) $ (374.9) F-30 Index LABCORP HOLDINGS INC.
Biggest changeAND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and Shares in Millions, Except Per Share Data) The effective tax rates on earnings before income taxes are reconciled to statutory U.S. income tax rates as follows: Year Ended December 31, 2025 2024 2023 Amount % Amount % Amount % Statutory U.S. rate $ 232.6 21.0 % $ 201.5 21.0 % $ 119.5 21.0 % State and local income taxes, net of federal income tax effects (1) 24.3 2.2 % 23.4 2.4 % 2.7 0.5 % Foreign tax effects: Canada: Deferred tax adjustments 0.4 — % 0.5 0.1 % 9.9 1.7 % Other 1.1 0.1 % (2.5) (0.3) % 3.3 0.6 % Germany: Deferred tax adjustments (0.2) — % (0.2) — % (6.8) (1.2) % Other 1.1 0.1 % 1.1 0.1 % 5.8 1.0 % United Kingdom: Goodwill impairment — — % — — % 39.1 6.9 % Deferred tax adjustments 0.3 — % — — % 12.9 2.3 % Other (0.3) — % (0.4) — % 5.1 0.8 % Switzerland: Foreign rate differential (16.9) (1.5) % (16.0) (1.7) % (16.1) (2.8) % Other 2.7 0.2 % 3.8 0.4 % 0.6 0.1 % Other foreign jurisdictions (0.4) — % (0.3) — % 1.0 0.2 % Enactment of new tax laws — — % — — % — — % Effect of cross-border tax laws: Other 3.0 0.3 % 4.5 0.5 % 2.1 0.4 % Tax credits: R&D tax credits (16.2) (1.5) % (18.0) (1.9) % (13.2) (2.3) % Other (1.1) (0.1) % (0.7) (0.1) % (1.3) (0.2) % Valuation allowances 0.5 — % (1.4) (0.1) % — — % Nontaxable or nondeductible items: Goodwill impairment — — % — — % 18.1 3.2 % Officer compensation 8.3 0.7 % 6.9 0.7 % 9.9 1.7 % Worthless stock loss — — % — — % (14.8) (2.6) % Other 5.3 0.5 % 7.5 0.8 % 5.7 1.0 % Changes in unrecognized tax benefits (8.3) (0.7) % 1.9 0.2 % (1.0) (0.2) % Other adjustments: Deferred tax adjustments 0.1 — % 3.2 0.3 % 6.4 1.1 % Other (6.5) (0.6) % (2.4) (0.3) % (0.4) (0.1) % Effective tax rate $ 229.8 20.7 % $ 212.4 22.1 % $ 188.5 33.1 % (1) State taxes in California, New Jersey, and New York contributed to the majority of the tax effect in this category F-32 TABLE OF CONTENTS LABCORP HOLDINGS INC.
Earnings per Share Basic earnings per common share (Basic EPS) is computed by dividing Net earnings attributable to Labcorp Holdings Inc. by the weighted-average number of common shares outstanding.
Earnings per Share Basic earnings per share (Basic EPS) is computed by dividing Net earnings attributable to Labcorp Holdings Inc. by the weighted-average number of common shares outstanding.
Diluted earnings per common share (Diluted EPS) is computed by dividing Net earnings attributable to Labcorp Holdings Inc., and if applicable, including the impact of dilutive adjustments by the weighted-average number of common shares outstanding plus potentially dilutive shares, as if they had been issued at the earlier of the date of issuance or the beginning of the period presented.
Diluted earnings per share (Diluted EPS) is computed by dividing Net earnings attributable to Labcorp Holdings Inc., and if applicable, including the impact of dilutive adjustments by the weighted-average number of common shares outstanding plus potentially dilutive shares, as if they had been issued at the earlier of the date of issuance or the beginning of the period presented.
When using an input method, revenue is recognized by dividing the actual costs incurred by the total estimated cost expected to complete the contract, and multiplying that percentage by the total contract value. Contract costs principally include direct labor costs, research model costs, and allocated overhead.
When using an input method, revenue is recognized by dividing the actual costs incurred by the total estimated cost expected to complete the contract and multiplying that percentage by the total contract value. Contract costs principally include direct labor costs, research model costs, and allocated overhead costs.
The weighted-average amortization period for non-compete agreements, customer relationships, trade names, and technology assets acquired from these businesses are 5.0, 14.4, 2.0, and 11.0 years, respectively. The purchase price allocations for these acquisitions were preliminary at December 31, 2024. The valuation of acquired assets and assumed liabilities include the following: Baystate Medical Center Providence Medical Foundation Westpac Labs, Inc.
The weighted-average amortization period for customer relationships, technology, non-compete agreements, and trade names assets acquired from these businesses are 14.4, 11.0, 5.0, and 2.0 years, respectively. The purchase price allocations for these acquisitions were preliminary at December 31, 2024. The valuation of acquired assets and assumed liabilities include the following: Baystate Medical Center Providence Medical Foundation Westpac Labs, Inc.
The Company has substantially concluded all U.S. federal income tax matters for years through 2018 and is currently under Internal Revenue Service examination for tax years 2019 through 2022. Substantially all material state and local and foreign income tax matters have been concluded through 2017 and 2018, respectively.
The Company has substantially concluded all U.S. federal income tax matters for years through 2018 and is currently under Internal Revenue Service examination for tax years 2019 through 2022. Substantially all material state and local and foreign income tax matters have been concluded through 2017 and 2019, respectively.
During the first quarter of 2024, the Company terminated its 2024 and 2025 USD to Swiss Franc cross currency swaps and entered into two new swaps, each with a notional value of $300.0 and maturity dates of 2031 and 2034, respectively.
Cross Currency Swaps 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.
Dx bills insured patients as directed by their health plan and after consideration of the fees and terms associated with an established health plan contract. Medicare and Medicaid This portfolio relates to fee-for-service revenue from traditional Medicare and Medicaid programs. Revenue from these programs is based on the fee schedule established by the related government authority.
Dx bills insured patients as directed by their health plan and after consideration of the fees and terms associated with an established health plan contract. Medicare and Medicaid This portfolio relates to fee-for-service revenue from traditional Medicare and Medicaid programs. Net revenue from these programs is based on the fee schedule established by the related government authority.
The majority of Dx’s third-party revenue is reimbursed on a fee-for-service basis. These payers are billed at Dx’s established list price and revenue is recorded net of contractual discounts. The majority of Dx’s MCO sales are recorded based upon contractually negotiated fee schedules with sales for non-contracted MCOs recorded based on historical reimbursement experience.
The majority of Dx’s third-party revenue is reimbursed on a fee-for-service basis. These payers are billed at Dx’s established list price and revenue is recorded net of contractual discounts. The majority of Dx’s MCO revenues are recorded based upon contractually negotiated fee schedules with sales for non-contracted MCOs recorded based on historical reimbursement experience.
In addition to diagnostic testing along with occupational and wellness testing for employers and forensic deoxyribonucleic acid analysis, Dx also offered a range of other testing services. Within the Dx segment, a majority of the revenue transactions initiated when Dx receives a requisition form to perform a diagnostic test.
In addition to diagnostic testing along with occupational and wellness testing for employers and forensic deoxyribonucleic acid analysis, Dx also offered a range of other testing services. Within the Dx segment, a majority of the revenue transactions are initiated when Dx receives a requisition form to perform a diagnostic test.
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.
The SPV’s sole business consists of the continuous purchase of receivables from the Company which is used as collateral for the loan. Although the SPV is included in the Company’s Consolidated Financial Statements, it is a separate legal entity with separate creditors.
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.
Indebtedness 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.
Translation adjustments are accumulated in a separate component of Shareholders’ equity in the Consolidated Balance Sheets and are included in the determination of comprehensive earnings in the Consolidated Statements of Comprehensive Earnings and Consolidated Statements of Changes in Shareholders’ Equity. Transaction gains and losses are included in the determination of Net earnings in the Consolidated Statements of Operations. 2.
Translation adjustments are accumulated in a separate component of Shareholders’ equity in the Consolidated Balance Sheets and are included in the determination of comprehensive earnings in the Consolidated Statements of Comprehensive Earnings and Consolidated Statements of Changes in Shareholders’ Equity. Transaction gains and losses are included in the determination of Net earnings in the Consolidated Statements of Operations.
The Company is unable to estimate a range of reasonably probable loss for the proceedings described in more detail below in which damages either have not been specified or, in the Company’s judgment, are unsupported and/or exaggerated and (i) the proceedings are in early stages, (ii) there is uncertainty as to the outcome of pending appeals or motions, (iii) there are significant factual issues to be resolved, and/or (iv) there are novel legal issues to be presented.
The Company is unable to estimate a range of reasonably possible loss for the proceedings described in more detail below in which damages either have not been specified or, in the Company’s judgment, are unsupported and/or exaggerated and (i) the proceedings are in early stages, (ii) there is uncertainty as to the outcome of pending appeals or motions, (iii) there are significant factual issues to be resolved, and/or (iv) there are novel legal issues to be presented.
Target allocation percentages are established at an asset class level by plan fiduciaries. Target allocation ranges are guidelines, not limitations, and occasionally plan fiduciaries will approve allocations above or below a target range. The allocation of the plan assets by asset category is as follows: December 31, 2024 U.S. Plans Non-U.S.
Target allocation percentages are established at an asset class level by plan fiduciaries. Target allocation ranges are guidelines, not limitations, and occasionally plan fiduciaries will approve allocations above or below a target range. The allocation of the plan assets by asset category is as follows: December 31, 2025 U.S. Plans Non-U.S.
Plans. A one percentage point decrease or increase in the discount rate would have resulted in a respective increase or decrease in 2024 retirement plan expense of $0.6 for the Non-U.S. Plans. Weighted-average assumptions used to determine net periodic benefit obligations are as follows: U.S. Plans Non-U.S.
Plans. A one percentage point decrease or increase in the discount rate would have resulted in a respective increase or decrease in 2025 retirement plan expense of $0.6 for the Non-U.S. Plans. Weighted-average assumptions used to determine net periodic benefit obligations are as follows: U.S. Plans Non-U.S.
Foreign Currencies For subsidiaries outside of the U.S. that operate in a local currency environment, income and expense items are translated to U.S. dollars at the monthly average rates of exchange prevailing during the period, assets and liabilities are translated at period-end exchange rates and equity accounts are translated at historical exchange rates.
Foreign Currencies For subsidiaries outside of the U.S. that operate in a local currency environment, income and expense items are translated to USD at the monthly average rates of exchange prevailing during the period, assets and liabilities are translated at period-end exchange rates and equity accounts are translated at historical exchange rates.
The change in the unrecognized loss will change amortization cost in upcoming periods. A one percentage point increase or decrease in the expected return on plan assets would have resulted in a corresponding change in 2024 pension expense of $1.8 for the U.S. Plans.
The change in the unrecognized loss will change amortization cost in upcoming periods. A one percentage point increase or decrease in the expected return on plan assets would have resulted in a corresponding change in 2025 pension expense of $1.8 for the U.S. Plans.
A summary of the changes in the accumulated post-retirement benefit obligation follows: Year Ended December 31, 2024 2023 Beginning balance $ 3.6 $ 3.9 Interest cost on benefit obligation 0.2 0.2 Actuarial loss (0.2) (0.2) Benefits paid (0.4) (0.3) Ending balance $ 3.2 $ 3.6 Recorded as: Accrued expenses and other $ 0.5 $ 0.6 Other liabilities 2.7 3.0 $ 3.2 $ 3.6 The weighted-average discount rates used in the calculation of the accumulated post-retirement benefit obligation were 5.6% and 5.1% at December 31, 2024, and 2023, respectively.
A summary of the changes in the accumulated post-retirement benefit obligation follows: Year Ended December 31, 2025 2024 Beginning balance $ 3.2 $ 3.6 Interest cost on benefit obligation 0.2 0.2 Actuarial loss (gain) 0.1 (0.2) Benefits paid (0.6) (0.4) Ending balance $ 2.9 $ 3.2 Recorded as: Accrued expenses and other $ 0.4 $ 0.5 Other liabilities 2.5 2.7 $ 2.9 $ 3.2 The weighted-average discount rates used in the calculation of the accumulated post-retirement benefit obligation were 5.4% and 5.6% at December 31, 2025, and 2024, respectively.
Amortization of assets from sales commissions is included in Selling, general, and administrative expense in the Consolidated Statements of Operations. Accounts Receivable, Unbilled Services, and Unearned Revenue Differences in the timing of revenue recognition and associated billing and cash collections result in recording accounts receivable, unbilled services, and unearned revenue in the Consolidated Balance Sheets.
Amortization of assets from sales commissions is included in Selling, general, and administrative expenses in the Consolidated Statements of Operations. Accounts Receivable, Unbilled Services, and Unearned Revenue Differences in the timing of revenue recognition and associated billing and cash collections result in recording accounts receivable, unbilled services, and unearned revenue in the Consolidated Balance Sheets.
Plans Year Ended December 31, 2024 2023 2022 2024 2023 2022 Discount rate 5.1 % 5.5 % 2.8 % 3.7 % 4.0 % 2.1 % Salary increases N/A N/A N/A 2.0 % 2.0 % 2.0 % Expected long term rate of return 6.0 % 6.0 % 4.5 % 4.1 % 5.3 % 3.6 % Cash balance interest credit rate 4.0 % 4.0 % 4.0 % N/A N/A N/A A one percentage point decrease or increase in the discount rate would have resulted in a respective increase or decrease in 2024 retirement plan expense of $0.2 for the U.S.
Plans Year Ended December 31, 2025 2024 2023 2025 2024 2023 Discount rate 5.6 % 5.1 % 5.5 % 4.5 % 3.7 % 4.0 % Salary increases N/A N/A N/A 2.0 % 2.0 % 2.0 % Expected long term rate of return 6.0 % 6.0 % 6.0 % 5.7 % 4.1 % 5.3 % Cash balance interest credit rate 4.0 % 4.0 % 4.0 % N/A N/A N/A A one percentage point decrease or increase in the discount rate would have resulted in a respective increase or decrease in 2025 retirement plan expense of $0.3 for the U.S.
The Company targets funding the minimum required contributions but may make additional contributions into the pension plans in 2025, depending upon factors such as how the funded status of those plans change or to reduce the administrative costs of the plan.
The Company targets funding the minimum required contributions but may make additional contributions into the pension plans in 2026, depending upon factors such as how the funded status of those plans change or to reduce the administrative costs of the plan.
Both finance and operating leases are reflected as liabilities on the commencement date of the lease based on the present value of the lease payments to be made over the lease term. Right-of-use assets are valued at the initial measurement of the lease liability, plus any initial direct costs or rent prepayments, minus lease incentives and any deferred lease payments.
Both finance and operating leases are reflected as liabilities on the commencement date of the lease based on the present value of the lease payments to be made over the lease term. ROU assets are valued at the initial measurement of the lease liability, plus any initial direct costs or rent prepayments, minus lease incentives and any deferred lease payments.
The declaration and payment of any future dividends will be at the discretion of the Company’s Board.
The declaration and payment of any future dividends will be at the discretion of the Board.
The Petition alleges that the Company submitted claims for reimbursement to Texas Medicaid that were higher than permitted under Texas Medicaid’s alleged “best price” regulations, and that the Company offered remuneration to Texas health care providers in the form of discounted pricing for certain laboratory testing services in exchange for the providers’ referral of Texas Medicaid business to the Company.
The Petition alleges that the Company submitted claims for reimbursement to Texas Medicaid that were higher than permitted under Texas Medicaid’s alleged “best price” regulations, and that the Company offered remuneration to Texas healthcare providers in the form of discounted pricing for certain laboratory testing services in exchange for the providers’ referral of Texas Medicaid business to the Company.
At December 31, 2024, the estimated benefit payments, which were used in the calculation of projected benefit obligations, are expected to be paid as follows: December 31, 2024 U.S. Plans Non-U.S.
At December 31, 2025, the estimated benefit payments, which were used in the calculation of projected benefit obligations, are expected to be paid as follows: December 31, 2025 U.S. Plans Non-U.S.
Fair Value Measurement of Level 3 Pension Assets Annuities Balance at January 1, 2023 $ 50.1 Actual return on plan assets 2.7 Balance at December 31, 2023 52.8 Actual return on plan assets (7.0) Balance at December 31, 2024 $ 45.8 Investment Policies Plan fiduciaries of various plans set investment policies and strategies, based on consultation with professional advisors, and oversee investment allocation, which includes selecting investment managers and setting long-term strategic targets.
Fair Value Measurement of Level 3 Pension Assets Annuities Balance at December 31, 2023 $ 52.8 Actual return on plan assets (7.0) Balance at December 31, 2024 45.8 Actual return on plan assets 2.3 Balance at December 31, 2025 $ 48.1 Investment Policies Plan fiduciaries of various plans set investment policies and strategies, based on consultation with professional advisors, and oversee investment allocation, which includes selecting investment managers and setting long-term strategic targets.
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 participants’ 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.
In connection with the Spin-off, the Company entered into several agreements with Fortrea on or prior to the Distribution Date that, among other things, provide a framework for the Company’s relationship with Fortrea after the Spin-off, including a separation and distribution agreement, a tax matters agreement, an employee matters agreement, and a transition services agreement.
In connection with the Spin-off, the Company entered into several agreements with Fortrea on or prior to the Distribution Date that, among other things, provide a framework for the Company’s relationship with Fortrea after the Spin-off, including a separation and distribution agreement, a tax matters agreement, an employee matters agreement, and a TSA.
In addition to contractual discounts, other adjustments including anticipated payer denials are considered when determining revenue. Any remaining adjustments to revenue are recorded at the time of final collection and settlement. These adjustments are not material to Dx’s results of operations in any period presented. Third-party reimbursement is also received through capitation agreements with MCOs and independent physician associations.
In addition to contractual discounts, other adjustments including anticipated payer denials are considered when determining revenue. Any remaining adjustments to revenue are recorded at the time of final collection and settlement. These adjustments are not material to Dx’s results of operations in any period presented. Third-party reimbursement is also received through capitation agreements with MCOs and IPAs.
A one percentage point increase or decrease in the expected return on plan assets would have resulted in a corresponding change in 2024 pension expense of $3.4 for the Non-U.S. Plans. The salary increase assumptions are used to estimate the annual rate at which pay of plan participants will grow.
A one percentage point increase or decrease in the expected return on plan assets would have resulted in a corresponding change in 2025 pension expense of $3.1 for the Non-U.S. Plans. The salary increase assumptions are used to estimate the annual rate at which pay of plan participants will grow.
PREFERRED STOCK AND COMMON SHAREHOLDERS’ EQUITY The Company is authorized to issue up to 265.0 shares of Common Stock, par value $0.10 per share. 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 at December 31, 2024, and 2023.
PREFERRED STOCK AND COMMON SHAREHOLDERS’ EQUITY The Company is authorized to issue up to 265.0 shares of its Common Stock. 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 at December 31, 2025, and 2024.
The Company recognizes interest and penalties related to unrecognized income tax benefits in Provision for income taxes in the Consolidated Statements of Operations. Accrued interest and penalties related to uncertain tax positions totaled $0.2 and $0.1 at December 31, 2024, and 2023, respectively.
The Company recognizes interest and penalties related to unrecognized income tax benefits in Provision for income taxes in the Consolidated Statements of Operations. Accrued interest and penalties related to uncertain tax positions totaled $0.0 and $0.2 at December 31, 2025, and 2024, respectively.
In addition to contractual discounts, other adjustments including anticipated payer denials are considered when determining revenue. Any remaining adjustments to revenue are recorded at the time of final collection and settlement. These adjustments are not material to Dx’s results of operations in any period presented. Third Party Third party includes revenue related to managed care organizations (MCOs).
In addition to contractual discounts, other adjustments including anticipated payer denials are considered when determining net revenue. Any remaining adjustments to revenue are recorded at the time of final collection and settlement. These adjustments are not material to Dx’s results of operations in any period presented. Third Party Third party includes revenue related to MCOs.
Plans Year Ended December 31, 2024 2023 2024 2023 Discount rate 5.6 % 5.1 % 5.2 % 4.3 % Salary increases N/A N/A 2.0 % 2.0 % The discount rate is determined using the weighted-average yields on high-quality fixed income securities that have maturities consistent with the timing of benefit payments.
Plans Year Ended December 31, 2025 2024 2025 2024 Discount rate 5.2 % 5.6 % 5.3 % 5.2 % Salary increases N/A N/A 2.0 % 2.0 % The discount rate is determined using the weighted-average yields on high-quality fixed income securities that have maturities consistent with the timing of benefit payments.
Although recorded at amortized cost on the Company’s Consolidated Balance Sheets, the fair market value of the Company’s senior notes was $5,762.6 and $4,850.4 at December 31, 2024, and 2023, respectively. The Company’s senior notes are considered Level 2 instruments, as the fair market values of these instruments are based on observable market pricing. 18.
Although recorded at amortized cost on the Company’s Consolidated Balance Sheets, the fair market value of the Company’s senior notes was $4,963.6 and $5,762.6 at December 31, 2025, and 2024, respectively. The Company’s senior notes are considered Level 2 instruments, as the fair market values of these instruments are based on observable market pricing. 18.
Plans Year Ended December 31, 2024 2023 2022 2024 2023 2022 Service cost for benefits earned $ 3.7 $ 3.9 $ 2.8 $ 1.5 $ 1.4 $ 2.4 Interest cost on benefit obligation 11.1 12.3 9.1 14.7 15.2 9.1 Expected return on plan assets (11.0) (11.6) (12.9) (16.0) (16.7) (15.8) Net amortization and deferral 3.3 4.5 4.6 0.5 0.1 0.8 Settlements — 10.9 4.1 — — (1.1) Defined-benefit plan costs $ 7.1 $ 20.0 $ 7.7 $ 0.7 $ — $ (4.6) Service costs are the only component of net periodic benefit costs recorded within Operating income in the Company’s Consolidated Statements of Operations.
Plans Year Ended December 31, 2025 2024 2023 2025 2024 2023 Service cost $ 2.6 $ 3.7 $ 3.9 $ 1.5 $ 1.5 $ 1.4 Interest cost 11.2 11.1 12.3 15.9 14.7 15.2 Expected return on plan assets (11.0) (11.0) (11.6) (17.8) (16.0) (16.7) Net amortization and deferral 2.2 3.3 4.5 0.2 0.5 0.1 Settlements 11.1 — 10.9 — — — Defined-benefit plan costs (benefits) $ 16.1 $ 7.1 $ 20.0 $ (0.2) $ 0.7 $ — Service costs are the only component of net periodic benefit costs recorded within Operating income in the Company’s Consolidated Statements of Operations.
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 reasonably estimable.
In accordance with FASB Accounting Standards Codification Topic 450 “Contingencies,” the Company establishes reserves for judicial, regulatory, and arbitration matters outside the aggregate legal reserve if and when those matters present loss contingencies that are both probable and reasonably estimable and would exceed the aggregate legal reserve.
F-20 Index LABCORP HOLDINGS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and shares in millions, except per share data) 2023 During the year ended December 31, 2023, the Company acquired several businesses and related assets for cash of approximately $671.5.
F-22 TABLE OF CONTENTS LABCORP HOLDINGS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and Shares in Millions, Except Per Share Data) 2023 During the year ended December 31, 2023, the Company acquired several businesses and related assets for cash of approximately $671.5.
For the year ended December 31, 2023, the Company recognized a partial plan settlement charge of $10.9 as a component of Other, net in the Company’s Consolidated Statements of Operations. The amounts recognized in Accumulated other comprehensive loss in the Company’s Consolidated Balance Sheets are as follows: U. S. Plans Non-U.S.
For the year ended December 31, 2025, and 2023, the Company recognized a partial plan settlement charge of $11.1 and $10.9, respectively, as a component of Other, net in the Company’s Consolidated Statements of Operations. The amounts recognized in Accumulated other comprehensive loss in the Company’s Consolidated Balance Sheets are as follows: U. S. Plans Non-U.S.
The Company believes all financial institutions holding its cash are of high credit quality and does not believe the Company is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.
The Company maintains Cash and cash equivalents with various major financial institutions. The Company believes all financial institutions holding its cash are of high credit quality and does not believe the Company is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.
Accumulated Other Comprehensive Earnings The components of Accumulated other comprehensive earnings are as follows: Foreign Currency Translation Adjustments Net Benefit Plan Adjustments Accumulated Other Comprehensive Earnings Balance at December 31, 2022 $ (462.3) $ (30.9) $ (493.2) Fortrea Holdings Inc. spin-off 231.6 6.4 238.0 Current year adjustments 183.1 30.1 213.2 Pension settlement charge — (10.9) (10.9) Amounts reclassified from Accumulated other comprehensive earnings (a) — (4.6) (4.6) Tax effect of adjustments — (1.8) (1.8) Balance at December 31, 2023 $ (47.6) $ (11.7) $ (59.3) Current year adjustments (217.1) (2.6) (219.7) Amounts reclassified from Accumulated other comprehensive earnings (a) — 23.3 23.3 Tax effect of adjustments — (5.9) (5.9) Balance at December 31, 2024 $ (264.7) $ 3.1 $ (261.6) (a) The amortization of prior service cost is included in the computation of net periodic benefit cost. 13.
Accumulated Other Comprehensive Loss The components of Accumulated other comprehensive loss were as follows: Foreign Currency Translation Adjustments Net Benefit Plan Adjustments Accumulated Other Comprehensive Loss Balance at December 31, 2022 $ (462.3) $ (30.9) $ (493.2) Fortrea Holdings Inc. spin-off 231.6 6.4 238.0 Current year adjustments 183.1 30.1 213.2 Pension settlement charge — (10.9) (10.9) Amounts reclassified from accumulated other comprehensive earnings (1) — (4.6) (4.6) Tax effect of adjustments — (1.8) (1.8) Balance at December 31, 2023 $ (47.6) $ (11.7) $ (59.3) Current year adjustments (217.1) (2.6) (219.7) Amounts reclassified from Accumulated other comprehensive earnings (1) — 23.3 23.3 Tax effect of adjustments — (5.9) (5.9) Balance at December 31, 2024 $ (264.7) $ 3.1 $ (261.6) Current year adjustments 231.7 16.2 247.9 Pension settlement charge — (11.1) (11.1) Amounts reclassified from Accumulated other comprehensive earnings (1) — (1.9) (1.9) Tax effect of adjustments — (0.9) (0.9) Balance at December 31, 2025 $ (33.0) $ 5.4 $ (27.6) (1) The amortization of prior service cost is included in the computation of net periodic benefit cost.
The following assumed benefit payments under the Company’s post-retirement benefit plan, which reflect expected future service, as appropriate, and which were used in the calculation of projected benefit obligations, are expected to be paid as follows: December 31, 2024 2025 $ 0.5 2026 $ 0.4 2027 $ 0.3 2028 $ 0.3 2029 $ 0.3 Years 2030 to 2034 $ 0.9 Deferred Compensation Plan The Company has Deferred Compensation Plans (DCP) under which certain of its executives may elect to defer up to 100.0% of their annual cash incentive pay and/or up to 50.0% of their annual base salary and/or eligible commissions subject to annual limits established by the U.S. government.
The following assumed benefit payments under the Company’s post-retirement benefit plan, which reflect expected future service, as appropriate, and which were used in the calculation of projected benefit obligations, are expected to be paid as follows: December 31, 2025 2026 $ 0.4 2027 $ 0.3 2028 $ 0.3 2029 $ 0.3 2030 $ 0.2 Years 2031 to 2035 $ 1.0 Deferred Compensation Plan The Company has a DCP under which certain of its executives may elect to defer up to 100.0% of their annual cash incentive pay and/or up to 50.0% of their annual base salary and/or eligible commissions subject to annual limits established by the U.S. government.
Management performed its annual goodwill and indefinite-lived intangible asset impairment testing as of the beginning of the fourth quarter of 2024. The Company elected to perform a quantitative assessment for goodwill and indefinite-lived intangible assets for each of its reporting units.
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 qualitative assessment for goodwill and indefinite-lived intangible assets for each of its reporting units.
COMMITMENTS AND CONTINGENCIES The Company (and/or its subsidiaries and affiliates) is involved from time to time in various claims and legal actions, including arbitrations, class actions, and other litigation (including those described in more detail below), arising in the ordinary course of business. Some of these actions involve claims that are substantial in amount.
Legal Contingencies The Company is involved from time to time in various claims and legal actions, including arbitrations, class actions, and other litigation (including those described in more detail below), arising in the ordinary course of business. Some of these actions involve claims that are substantial in amount.
The Company evaluates other assumptions periodically, such as retirement age, mortality and turnover, and updates them as necessary to reflect the Company’s actual experience and expectations for the future. Differences between actual results and assumptions utilized are recorded in Accumulated other comprehensive income each period. These differences are amortized F-40 Index LABCORP HOLDINGS INC.
The Company evaluates other assumptions periodically, such as retirement age, mortality, and turnover, and updates them as necessary to reflect the Company’s actual experience and expectations for the future. Differences between actual results and assumptions utilized are recorded in Accumulated other comprehensive income each period. These differences are amortized F-41 TABLE OF CONTENTS LABCORP HOLDINGS INC.
Total expense relating to the 401K Plans for the years ended December 31, 2024, 2023, and 2022 was $153.5, $167.6, and $128.2, respectively. Defined Benefit Pension Plans The Company sponsors both funded and unfunded defined benefit pension plans which provide benefits based on various criteria such as years of service and salary.
Total expense relating to the 401K Plans for the years ended December 31, 2025, 2024, and 2023 was $166.1, $153.5, and $167.6, respectively. Defined Benefit Pension Plans The Company sponsors both funded and unfunded defined benefit pension plans which provide benefits based on various criteria such as years of service and salary.
The F-41 Index LABCORP HOLDINGS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and shares in millions, except per share data) primary strategic investment objectives are balancing investment risk and return and monitoring the plan’s liquidity position in order to meet the near-term benefit payment and other cash needs.
The F-42 TABLE OF CONTENTS LABCORP HOLDINGS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and Shares in Millions, Except Per Share Data) primary strategic investment objectives are balancing investment risk and return and monitoring the plan’s liquidity position in order to meet the near-term benefit payment and other cash needs.
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.
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.
The changes in the Company’s shares of Common Stock issued and held in treasury are summarized below: Year Ended December 31, 2024 2023 2022 Beginning balance 83.9 88.2 93.1 Shares issued under employee stock plans 0.6 0.5 0.7 Shares repurchased (1.1) (4.8) (5.6) Ending balance 83.4 83.9 88.2 Share Repurchase Program On July 24, 2024, the Company’s board of directors (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.
The changes in the Company’s shares of Common Stock issued and outstanding are summarized below: Year Ended December 31, 2025 2024 2023 Beginning balance 83.4 83.9 88.2 Shares issued under employee stock plans 0.6 0.6 0.5 Shares repurchased (1.8) (1.1) (4.8) Ending balance 82.2 83.4 83.9 Share Repurchase Program On July 24, 2024, the Company’s Board adopted a 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.
Generally, client sales are recorded on a fee-for-service basis at Dx’s client list price, less any negotiated discount. A portion of client billing is for laboratory management services, collection kits and other non-testing offerings. In these cases, revenue is recognized when services are rendered or delivered.
Generally, client sales are recorded on a fee-for-service basis at Dx’s client list price, less any negotiated discount. A portion of client billing is for laboratory management services, collection kits and other non-testing offerings. In these cases, revenue is recognized when services are rendered or delivered. F-17 TABLE OF CONTENTS LABCORP HOLDINGS INC.
A performance share grant in 2022 represents a three-year award opportunity for the period 2022-2024, and if earned, vests fully (to the extent earned) in the first quarter of 2025.
A performance share grant in 2025, represents a three-year award opportunity for the period of 2025-2027 and, if earned, vests fully (to the extent earned) in the first quarter of 2028.
AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and shares in millions, except per share data) Long-term debt consisted of the following: December 31, 2024 2023 3.60% senior notes due 2025 $ — $ 1,000.0 1.55% senior notes due 2026 500.0 500.0 3.60% senior notes due 2027 600.0 600.0 2.95% senior notes due 2029 650.0 650.0 4.35% senior notes due 2030 650.0 — 2.70% senior notes due 2031 423.2 430.4 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 (42.3) (26.3) AR Facility 300.0 — Note payable 0.3 0.6 Total long-term debt $ 5,331.2 $ 4,054.7 Credit Facilities The Company maintains a senior revolving credit facility, which was amended and restated on January 13, 2023.
AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and Shares in Millions, Except Per Share Data) Long-term debt consisted of the following: December 31, 2025 2024 1.55% senior notes due 2026 $ — $ 500.0 3.60% senior notes due 2027 600.0 600.0 2.95% senior notes due 2029 650.0 650.0 4.35% senior notes due 2030 650.0 650.0 2.70% senior notes due 2031 447.3 423.2 4.55% senior notes due 2032 500.0 500.0 4.80% senior notes due 2034 850.0 850.0 4.70% senior notes due 2045 900.0 900.0 Debt issuance costs (37.7) (42.3) AR facility 525.0 300.0 Note payable — 0.3 Total Long-term debt $ 5,084.6 $ 5,331.2 Credit Facilities The Company maintains a senior revolving credit facility, which was amended and restated on June 27, 2025.
Financial Information of Discontinued Operations Earnings from discontinued operations, net of tax in the Consolidated Statements of Operations reflect the after-tax results of Fortrea’s business and Spin-off-related fees, and do not include any allocation of general corporate overhead expense or interest expense of the Company. F-15 Index LABCORP HOLDINGS INC.
Financial Information of Discontinued Operations Earnings from discontinued operations, net of tax in the Consolidated Statements of Operations reflect the after-tax results of Fortrea’s business and Spin-off-related fees, and do not include any allocation of general corporate overhead expense or interest expense of the Company.
The preliminary valuation of acquired assets and assumed liabilities, include the following: Jefferson Health Enzo BioChem Providence Health and Services - Oregon Tufts Medicine Legacy Other Business Acquisitions Measurement Period Adjustments Amounts Acquired During the Year Ended December 31, 2023 Accounts receivable $ — $ (2.8) $ — $ — $ — $ 2.0 $ 0.2 $ (0.6) Inventories — — 1.3 — — — — 1.3 Prepaid expenses and other — 0.4 — — 0.2 0.3 0.6 1.5 Property, plant and equipment — — 4.7 — 3.3 6.5 (1.5) 13.0 Goodwill 50.8 54.1 50.7 73.8 49.0 18.5 (29.4) 267.5 Intangible assets 57.2 61.1 57.2 83.2 55.2 26.9 19.5 360.3 Other assets 2.2 — — — — 17.9 — 20.1 Total assets acquired 110.2 112.8 113.9 157.0 107.7 72.1 (10.6) 663.1 Accounts payable — — — — — 1.2 — 1.2 Accrued expenses and other — — 3.9 — — 1.2 (8.3) (3.2) Deferred income taxes — — — — — — (2.3) (2.3) Other liabilities — — — — — (4.1) — (4.1) Total liabilities acquired — — 3.9 — — (1.7) (10.6) (8.4) Net assets acquired $ 110.2 $ 112.8 $ 110.0 $ 157.0 $ 107.7 $ 73.8 $ — $ 671.5 Unaudited Pro Forma Information for 2023 Acquisitions Had the aggregate of the Company’s 2023 acquisitions been completed at January 1, 2022, the Company’s pro forma results would have been as follows: Year Ended December 31, 2023 2022 Revenues $ 12,350.1 $ 12,126.3 Earnings from continuing operations $ 397.2 $ 1,030.3 2022 During the year ended December 31, 2022, the Company acquired various businesses and related assets for approximately $1,164.0 in cash (net of cash acquired).
The preliminary valuation of acquired assets and assumed liabilities, include the following: Jefferson Health Enzo BioChem Providence Health and Services - Oregon Tufts Medicine Legacy Other Acquisitions Closed During the Year Ended December 31, 2023 Measurement Period Adjustments Amounts Acquired During the Year Ended December 31, 2023 Accounts receivable $ — $ (2.8) $ — $ — $ — $ 2.0 $ 0.2 $ (0.6) Inventories — — 1.3 — — — — 1.3 Prepaid expenses and other — 0.4 — — 0.2 0.3 0.6 1.5 Property, plant, and equipment — — 4.7 — 3.3 6.5 (1.5) 13.0 Goodwill 50.8 54.1 50.7 73.8 49.0 18.5 (29.4) 267.5 Intangible assets 57.2 61.1 57.2 83.2 55.2 26.9 19.5 360.3 Other assets 2.2 — — — — 17.9 — 20.1 Total assets acquired 110.2 112.8 113.9 157.0 107.7 72.1 (10.6) 663.1 Accounts payable — — — — — 1.2 — 1.2 Accrued expenses and other — — 3.9 — — 1.2 (8.3) (3.2) Deferred income taxes — — — — — — (2.3) (2.3) Other liabilities — — — — — (4.1) — (4.1) Total liabilities acquired — — 3.9 — — (1.7) (10.6) (8.4) Net assets acquired $ 110.2 $ 112.8 $ 110.0 $ 157.0 $ 107.7 $ 73.8 $ — $ 671.5 Unaudited Pro Forma Information for 2023 Acquisitions Had the aggregate of the Company’s 2023 acquisitions, that were accounted for as business combinations, been completed at January 1, 2022, the Company’s pro forma results would have been as follows: Year Ended December 31, 2023 2022 Revenues $ 12,350.1 $ 12,126.3 Earnings from continuing operations $ 397.2 $ 1,030.3 F-23 TABLE OF CONTENTS LABCORP HOLDINGS INC.
The Company maintained two plans in the United States, two plans in the United Kingdom and one in Germany. The two plans in the United States (U.S. Plans) were closed to new entrants and the accrual of service credits at the end of 2009.
The Company maintained two plans in the U.S., two plans in the U.K., and one in Germany. The two plans in the U.S. (U.S. Plans) were closed to new entrants and the accrual of service credits at the end of 2009.
The United Kingdom (UK) pension plan was closed to new entrants and the accrual of service credits for one plan as of December 31, 2002, and the accrual of service credits for the other plan as of December 31, 2019. The German plan was closed to new entrants on December 31, 2009, but participants continue to accrue service credits.
The U.K. pension plan was closed to new entrants and the accrual of service credits for one plan as of December 31, 2002, and the accrual of service credits for the other plan as of December 31, 2019. The German plan was closed to new entrants on December 31, 2009, but participants continue to accrue service credits.
The UK and German plans are aggregated for disclosure as the Non-U.S. Plans. F-38 Index LABCORP HOLDINGS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and shares in millions, except per share data) Net Periodic Benefit Costs The components of the net periodic benefit costs for the defined benefit pension plans are as follows: U. S. Plans Non-U.S.
The U.K. and German plans are aggregated for disclosure as the Non-U.S. Plans. F-39 TABLE OF CONTENTS LABCORP HOLDINGS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and Shares in Millions, Except Per Share Data) Net Periodic Benefit Costs The components of the net periodic benefit costs for the defined benefit pension plans are as follows: U. S.
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.
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.
The fair value of the employee’s purchase right and the assumptions used in its calculation are as follows: Year Ended December 31, 2024 2023 2022 Fair value of the employee’s purchase right $ 47.56 $ 49.19 $ 62.50 Valuation assumptions Risk free interest rate 5.0 % 5.0 % 1.3 % Expected volatility 27.9 % 30.0 % 30.0 % Expected dividend yield 1.3 % 1.4 % 0.9 % 15.
The fair value of the employee’s purchase right and the assumptions used in its calculation are as follows: Year Ended December 31, 2025 2024 2023 Fair value of the employee’s purchase right $ 49.33 $ 47.56 $ 49.19 Valuation assumptions: Risk free interest rate 4.3 % 5.0 % 5.0 % Expected volatility 22.8 % 27.9 % 30.0 % Expected dividend yield 1.2 % 1.3 % 1.4 % 15.
LEASES The Company has operating and finance leases for patient service centers, laboratories and testing facilities, clinical facilities, general office spaces, vehicles, and office and laboratory equipment. Leases have remaining lease terms of less than a year to 20 years, some of which include options to extend the leases for up to 20 years.
LEASES The Company has operating and finance leases for PSCs, laboratories and testing facilities, clinical facilities, general office spaces, vehicles, and office and laboratory equipment. Leases have remaining lease terms of less than a year to approximately 20 years, some of which include options to extend the leases for up to an additional 20 years.
The Company believes that it is in compliance in all material respects with all statutes, regulations, and other requirements applicable to its commercial laboratory operations and biopharma laboratory services. These industries are, however, subject to extensive regulation, and the courts have not interpreted many of the applicable statutes and regulations.
The Company believes that it is in compliance in all material respects with all statutes, regulations, and other requirements applicable to its commercial laboratory operations and drug development support services. The healthcare diagnostics and drug development industries are, however, subject to extensive regulation, and the courts have not interpreted many of the applicable statutes and regulations.
The capitated accounts receivable balance from the Ontario government sponsored healthcare plan was Canadian Dollar 6.4 and 5.5 at December 31, 2024, and 2023, respectively. The portion of the Company’s accounts receivable due from patients comprises the largest portion of credit risk.
The capitated accounts receivable balance from the Ontario government sponsored healthcare plan was CAD 5.8 and 6.4 at December 31, 2025, and 2024, respectively. The portion of the Company’s accounts receivable due from patients comprises the largest portion of credit risk.
The Company’s revenue by segment payers/customer groups is as follows: Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022 North America Europe Other Total North America Europe Other Total North America Europe Other Total Payer/Customer Dx Clients 24 % — % — % 24 % 24 % — % — % 24 % 22 % — % — % 22 % Patients 10 % — % — % 10 % 9 % — % — % 9 % 8 % — % — % 8 % Medicare and Medicaid 8 % — % — % 8 % 8 % — % — % 8 % 8 % — % — % 8 % Third party 36 % — % — % 36 % 36 % — % — % 36 % 39 % — % — % 39 % Total Dx revenues by payer 78 % — % — % 78 % 77 % — % — % 77 % 77 % — % — % 77 % BLS Pharmaceutical, biotechnology and medical device companies 9 % 9 % 4 % 22 % 10 % 9 % 4 % 23 % 10 % 9 % 4 % 23 % Total revenues 87 % 9 % 4 % 100 % 87 % 9 % 4 % 100 % 87 % 9 % 4 % 100 % Revenues in the U.S. were $10,858.3 (83.5%), $10,177.7 (83.7%), and $9,930.3 (83.7%) for the years ended December 31, 2024, 2023, and 2022.
The Company’s revenue by segment payer groups is as follows: Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 North America Europe Other Total North America Europe Other Total North America Europe Other Total Dx: Clients 23 % — % — % 23 % 24 % — % — % 24 % 24 % — % — % 24 % Patients 10 % — % — % 10 % 10 % — % — % 10 % 9 % — % — % 9 % Medicare and Medicaid 8 % — % — % 8 % 8 % — % — % 8 % 8 % — % — % 8 % Third party 37 % — % — % 37 % 36 % — % — % 36 % 36 % — % — % 36 % Total Dx revenues 78 % — % — % 78 % 78 % — % — % 78 % 77 % — % — % 77 % BLS: Pharmaceutical, biotechnology, medical device, and diagnostic companies, and CROs 9 % 9 % 4 % 22 % 9 % 9 % 4 % 22 % 10 % 9 % 4 % 23 % Total Revenues 87 % 9 % 4 % 100 % 87 % 9 % 4 % 100 % 87 % 9 % 4 % 100 % Revenues in the U.S. were $11,650.1 (83.5%), $10,858.3 (83.5%), and $10,177.7 (83.7%) for the years ended December 31, 2025, 2024, and 2023.
On January 23, 2025, the court issued an order awarding Plaintiff post-verdict supplemental damages of $2.6, an ongoing royalty of one hundred dollars and 00/100 cents per test through the life of the patent at issue, pre- and post-judgment interest, and other relief. In January and February 2025, the trial court entered orders denying the Company’s post-trial motions.
On January 23, 2025, the court issued an order awarding Plaintiff post-verdict supplemental damages of $2.6, an ongoing royalty of one hundred dollars and 00/100 cents per test through the life of the patent at issue, pre- and post-judgment interest, and other relief.
The lawsuit alleges that visually impaired patients are unable to use the Company’s touchscreen kiosks at Company patient service centers in violation of the Americans with Disabilities Act and similar California statutes. The lawsuit seeks statutory damages, injunctive relief, and attorney’s fees and costs.
District Court for the Central District of California. The lawsuit alleges that visually impaired patients are unable to use the Company’s touchscreen kiosks at Company PSCs in violation of the Americans with Disabilities Act and similar California statutes. The lawsuit seeks statutory damages, injunctive relief, and attorney’s fees and costs.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (In Millions) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Earnings (Loss) Total Shareholders’ Equity BALANCE AT DECEMBER 31, 2021 $ 8.5 $ — $ 10,456.8 $ (191.9) $ 10,273.4 Net earnings attributable to Labcorp Holdings Inc. — — 1,279.1 — 1,279.1 Other comprehensive loss, net of tax — — — (301.3) (301.3) Dividends declared — — (198.7) — (198.7) Issuance of common stock under employee stock plans — 50.6 — — 50.6 Net share settlement tax payments from issuance of stock to employees — (50.6) — — (50.6) Stock compensation — 144.1 — — 144.1 Purchase of common stock (0.4) (144.1) (955.5) — (1,100.0) BALANCE AT DECEMBER 31, 2022 8.1 — 10,581.7 (493.2) 10,096.6 Net earnings attributable to Labcorp Holdings Inc. — — 418.0 — 418.0 Other comprehensive earnings, net of tax — — — 195.9 195.9 Fortrea Holdings Inc. spin-off — — (1,970.0) 238.0 (1,732.0) Dividends declared — — (256.1) — (256.1) Issuance of common stock under employee stock plans — 55.2 — — 55.2 Net share settlement tax payments from issuance of stock to employees — (40.9) — — (40.9) Stock compensation — 147.3 — — 147.3 Purchase of common stock (0.4) (123.2) (885.4) — (1,009.0) BALANCE AT DECEMBER 31, 2023 7.7 38.4 7,888.2 (59.3) 7,875.0 Net earnings attributable to Labcorp Holdings Inc. — — 746.0 — 746.0 Other comprehensive loss, net of tax — — — (202.3) (202.3) Dividends declared — — (242.9) — (242.9) Issuance of common stock under employee stock plan — 56.2 — — 56.2 Net share settlement tax payments from issuance of stock to employees — (46.4) — — (46.4) Stock compensation — 116.7 — — 116.7 Purchase of common stock (0.1) (162.1) (87.9) — (250.1) BALANCE AT DECEMBER 31, 2024 $ 7.6 $ 2.8 $ 8,303.4 $ (261.6) $ 8,052.2 The accompanying notes are an integral part of these Consolidated Financial Statements.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (In Millions) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Equity BALANCE AT DECEMBER 31, 2022 $ 8.1 $ — $ 10,581.7 $ (493.2) $ 10,096.6 Net earnings attributable to Labcorp Holdings Inc. — — 418.0 — 418.0 Other comprehensive earnings, net of tax — — — 195.9 195.9 Fortrea Holdings Inc. spin-off — — (1,970.0) 238.0 (1,732.0) Dividends declared — — (256.1) — (256.1) Issuance of common stock under employee stock plans — 55.2 — — 55.2 Net share settlement tax payments from issuance of stock to employees — (40.9) — — (40.9) Stock compensation — 147.3 — — 147.3 Purchase of common stock (0.4) (123.2) (885.4) — (1,009.0) BALANCE AT DECEMBER 31, 2023 7.7 38.4 7,888.2 (59.3) 7,875.0 Net earnings attributable to Labcorp Holdings Inc. — — 746.0 — 746.0 Other comprehensive loss, net of tax — — — (202.3) (202.3) Dividends declared — — (242.9) — (242.9) Issuance of common stock under employee stock plans — 56.2 — — 56.2 Net share settlement tax payments from issuance of stock to employees — (46.4) — — (46.4) Stock compensation — 116.7 — — 116.7 Purchase of common stock (0.1) (162.1) (87.9) — (250.1) BALANCE AT DECEMBER 31, 2024 7.6 2.8 8,303.4 (261.6) 8,052.2 Net earnings attributable to Labcorp Holdings Inc. — — 876.5 — 876.5 Other comprehensive earnings, net of tax — — — 234.0 234.0 Dividends declared — — (241.1) — (241.1) Issuance of common stock under employee stock plans 0.1 54.2 — — 54.3 Net share settlement tax payments from issuance of stock to employees — (31.9) — — (31.9) Stock compensation — 125.8 — — 125.8 Purchase of common stock (0.2) (150.9) (298.9) — (450.0) BALANCE AT DECEMBER 31, 2025 $ 7.5 $ — $ 8,639.9 $ (27.6) $ 8,619.8 The accompanying notes are an integral part of these Consolidated Financial Statements.
F-19 Index LABCORP HOLDINGS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and shares in millions, except per share data) 4. BUSINESS ACQUISITIONS AND DISPOSITIONS 2024 During the year ended December 31, 2024, the Company acquired several businesses and related assets for cash of approximately $839.0.
F-21 TABLE OF CONTENTS LABCORP HOLDINGS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and Shares in Millions, Except Per Share Data) 2024 During the year ended December 31, 2024, the Company acquired several businesses and related assets for cash of approximately $839.0.
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. There were no balances outstanding on the Company’s current revolving credit facility at December 31, 2024, or December 31, 2023.
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. There were no balances outstanding on the Company’s current revolving credit facility and $110.2 in outstanding letters of credit on the Company’s subfacility at December 31, 2025.
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 F-27 Index LABCORP HOLDINGS INC.
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.
In the qualitative assessment, the Company considers relevant events and circumstances for each reporting unit, including (i) current year results, (ii) financial performance versus management’s annual and five-year strategic plans, (iii) changes in the reporting unit carrying value since prior year, (iv) industry and market conditions in which the reporting unit operates, (v) macroeconomic conditions, including discount rate changes, and (vi) changes in offerings provided by the reporting unit.
AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and Shares in Millions, Except Per Share Data) In the qualitative assessment, the Company considers relevant events and circumstances for each reporting unit, including (i) current year results, (ii) financial performance versus management’s annual and five-year strategic plans, (iii) changes in the reporting unit carrying value since prior year, (iv) industry and market conditions in which the reporting unit operates, (v) macroeconomic conditions, including discount rate changes, and (vi) changes in offerings provided by the reporting unit.
On August 23, 2024, the Company and a bankruptcy-remote special purpose vehicle (SPV) entered into an accounts receivable securitization facility with PNC Bank, National Association (PNC) with a three-year term (AR Facility).
On August 23, 2024, the Company and a bankruptcy-remote special purpose vehicle (SPV) entered into a $300.0 three-year accounts receivable securitization facility with PNC Bank, National Association (PNC) as administrative agent (AR Facility).
On March 25, 2024, the Company filed a Petition for Rehearing En Banc with the Ninth Circuit. On April 18, 2024, the Ninth Circuit denied the Petition for Rehearing En Banc. On September 13, 2024, the Company filed a petition for Writ of Certiorari with the United States Supreme Court.
On March 25, 2024, the Company filed a Petition for Rehearing En Banc with the Ninth Circuit. On April 18, 2024, the Ninth Circuit denied the Petition for Rehearing En Banc. On September 13, 2024, the Company filed a Petition for Writ of Certiorari with the U.S.
Plans December 31, 2024 2023 2024 2023 Funded status — (deficit) surplus $ (14.4) $ (36.6) $ 5.7 $ (9.8) Recorded as: Other assets $ 18.9 $ — $ 33.9 $ 21.5 Accrued expenses and other $ 2.6 $ 2.5 $ 0.7 $ 0.7 Other liabilities $ 30.7 $ 34.1 $ 27.5 $ 30.6 Assumptions Weighted-average assumptions used to determine net periodic benefit costs are as follows: U.
Plans December 31, 2025 2024 2025 2024 Funded status — (deficit) surplus $ (23.2) $ (14.4) $ 10.3 $ 5.7 Recorded as: Other assets $ 9.8 $ 18.9 $ 39.6 $ 33.9 Accrued expenses and other $ 2.7 $ 2.6 $ 0.8 $ 0.7 Other liabilities $ 30.3 $ 30.7 $ 28.5 $ 27.5 Assumptions Weighted-average assumptions used to determine net periodic benefit costs are as follows: U.
The following table shows a reconciliation of the unrecognized income tax benefits, excluding interest and penalties, from uncertain tax positions: Year Ended December 31, 2024 2023 2022 Beginning balance $ 29.9 $ 37.5 $ 39.6 Increase in reserve for tax positions taken in the current year 2.2 1.8 1.8 Increase in reserve for tax positions taken in a prior period 3.8 10.4 10.6 Decrease in reserve for tax positions taken in a prior period (3.4) (4.0) — Decrease in reserve as a result of settlements (0.1) (7.2) (10.4) Decrease in reserve as a result of lapses in the statute of limitations (0.2) (8.6) (4.1) Ending balance $ 32.2 $ 29.9 $ 37.5 At December 31, 2024, 2023, and 2022, there are $32.2, $29.9 and $37.5, respectively, of tax benefits that, if recognized, would favorably impact the effective income tax rate.
AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and Shares in Millions, Except Per Share Data) The following table shows a reconciliation of the unrecognized income tax benefits, excluding interest and penalties, from uncertain tax positions: Year Ended December 31, 2025 2024 2023 Beginning balance $ 32.2 $ 29.9 $ 37.5 Increase in reserve for tax positions taken in the current year 2.2 2.2 1.8 Increase in reserve for tax positions taken in a prior period 5.5 3.8 10.4 Decrease in reserve for tax positions taken in a prior period (15.4) (3.4) (4.0) Decrease in reserve as a result of settlements — (0.1) (7.2) Decrease in reserve as a result of lapses in the statute of limitations — (0.2) (8.6) Ending balance $ 24.5 $ 32.2 $ 29.9 At December 31, 2025, 2024, and 2023, there are $24.5, $32.2 and $29.9, respectively, of tax benefits that, if recognized, would favorably impact the effective income tax rate.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (In Millions, Except Per Share Data) Years Ended December 31, 2024 2023 2022 Net earnings $ 747.1 $ 419.2 $ 1,280.6 Foreign currency translation adjustments (217.1) 183.1 (336.4) Net benefit plan adjustments 20.7 14.6 44.8 Other comprehensive (loss) earnings before tax (196.4) 197.7 (291.6) Provision for income tax related to items of comprehensive earnings (5.9) (1.8) (9.7) Other comprehensive (loss) earnings, net of tax (202.3) 195.9 (301.3) Comprehensive earnings 544.8 615.1 979.3 Less: Net earnings attributable to the noncontrolling interest (1.1) (1.2) (1.5) Comprehensive earnings attributable to Labcorp Holdings Inc. $ 543.7 $ 613.9 $ 977.8 The accompanying notes are an integral part of these Consolidated Financial Statements.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (In Millions) Years Ended December 31, 2025 2024 2023 Net earnings $ 877.7 $ 747.1 $ 419.2 Foreign currency translation adjustments 231.7 (217.1) 183.1 Net benefit plan adjustments 3.2 20.7 14.6 Other comprehensive earnings (loss) before tax 234.9 (196.4) 197.7 Provision for income tax related to items of comprehensive earnings (0.9) (5.9) (1.8) Other comprehensive earnings (loss), net of tax 234.0 (202.3) 195.9 Comprehensive earnings 1,111.7 544.8 615.1 Less: Net earnings attributable to the noncontrolling interest (1.2) (1.1) (1.2) Comprehensive earnings attributable to Labcorp Holdings Inc. $ 1,110.5 $ 543.7 $ 613.9 The accompanying notes are an integral part of these Consolidated Financial Statements.
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 for which the Company is the primary beneficiary.
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 up to $700.0, subject to the satisfaction of certain conditions. The SPV is a variable interest entity for which the Company is the primary beneficiary.
Such value is recognized as an expense over the service period and the Company’s determination of whether it is probable that the performance targets will be achieved. At the end of each reporting period, the Company reassesses the probability of achieving performance targets.
Such value is recognized as an expense over the service period and the Company’s determination of whether it is probable that the performance targets will be achieved. At the end of each reporting period, the Company reassesses the probability of achieving performance targets. Forfeitures are recognized as a reduction of expense in earnings in the period in which they occur.
The contracts are short-term in nature and the fair value of these contracts is based on market prices for comparable contracts. Fair Value of Financial Instruments Fair value measurements for financial assets and liabilities are determined based on the assumptions that a market participant would use in pricing an asset or liability.
Fair Value of Financial Instruments Fair value measurements for financial assets and liabilities are determined based on the assumptions that a market participant would use in pricing an asset or liability.
FAIR VALUE MEASUREMENTS The Company’s population of financial assets and liabilities subject to fair value measurements were as follows: Fair Value Measurements at December 31, 2024 Consolidated Balance Sheets Classification Fair Value at December 31, 2024 Using Fair Value Hierarchy Level 1 Level 2 Level 3 Noncontrolling interest put Noncontrolling interest $ 14.3 $ — $ 14.3 $ — Cross currency swaps Accrued expenses and other/Other liabilities $ 142.7 $ — $ 142.7 $ — Interest rate swaps Other liabilities $ 76.8 $ — $ 76.8 $ — Cash surrender value of life insurance policies Other assets, net $ 102.1 $ — $ 102.1 $ — Deferred compensation asset Other assets, net $ 35.7 $ — $ 35.7 $ — Deferred compensation liability Other liabilities $ 132.5 $ — $ 132.5 $ — Contingent consideration Accrued expenses and other/Other liabilities $ 10.8 $ — $ — $ 10.8 Fair Value Measurements at December 31, 2023 Consolidated Balance Sheets Classification Fair Value at December 31, 2023 Using Fair Value Hierarchy Level 1 Level 2 Level 3 Noncontrolling interest put Noncontrolling interest $ 15.5 $ — $ 15.5 $ — Cross currency swaps Accrued expenses and other/Other liabilities $ 109.0 $ — $ 109.0 $ — Interest rate swaps Other liabilities $ 69.6 $ — $ 69.6 $ — Cash surrender value of life insurance policies Other assets, net $ 95.4 $ — $ 95.4 $ — Deferred compensation asset Other assets, net $ 21.1 $ — $ 21.1 $ — Deferred compensation liability Other liabilities $ 107.4 $ — $ 107.4 $ — Contingent consideration Accrued expenses and other/Other liabilities $ 66.1 $ — $ — $ 66.1 Fair Value Measurement of Level 3 Liabilities Contingent Consideration Balance at January 1, 2023 $ 77.4 Cash payments and adjustments (11.3) Balance at December 31, 2023 66.1 Cash payments and adjustments (55.3) Balance at December 31, 2024 $ 10.8 The Company has a noncontrolling interest put related to its Ontario subsidiary that has been classified as mezzanine equity in the Company’s Consolidated Balance Sheets.
FAIR VALUE MEASUREMENTS The Company’s population of financial assets and liabilities subject to fair value measurements were as follows: Fair Value Measurements December 31, 2025 Consolidated Balance Sheets Classification Fair Value at December 31, 2025 Using Fair Value Hierarchy Level 1 Level 2 Level 3 Noncontrolling interest put Noncontrolling interest $ 16.9 $ — $ 16.9 $ — Cross currency swaps Other liabilities $ 274.0 $ — $ 274.0 $ — Interest rate swaps Other liabilities $ 52.7 $ — $ 52.7 $ — Cash surrender value of life insurance policies Other assets, net $ 99.6 $ — $ 99.6 $ — Deferred compensation asset Other assets, net $ 53.1 $ — $ 53.1 $ — Deferred compensation liability Other liabilities $ 150.5 $ — $ 150.5 $ — Contingent consideration Accrued expenses and other/Other liabilities $ 50.0 $ — $ — $ 50.0 Fair Value Measurements December 31, 2024 Consolidated Balance Sheets Classification Fair Value at December 31, 2024 Using Fair Value Hierarchy Level 1 Level 2 Level 3 Noncontrolling interest put Noncontrolling interest $ 14.3 $ — $ 14.3 $ — Cross currency swaps Other liabilities $ 142.7 $ — $ 142.7 $ — Interest rate swaps Other liabilities $ 76.8 $ — $ 76.8 $ — Cash surrender value of life insurance policies Other assets, net $ 102.1 $ — $ 102.1 $ — Deferred compensation asset Other assets, net $ 35.7 $ — $ 35.7 $ — Deferred compensation liability Other liabilities $ 132.5 $ — $ 132.5 $ — Contingent consideration Accrued expenses and other/Other liabilities $ 10.8 $ — $ — $ 10.8 Fair Value Measurement of Level 3 Liabilities Contingent Consideration Balance at December 31, 2023 $ 66.1 Cash payments and adjustments (55.3) Balance at December 31, 2024 10.8 Cash payments and adjustments (4.6) Additions from business acquisitions 43.8 Balance at December 31, 2025 $ 50.0 The Company has a noncontrolling interest put option related to its Ontario subsidiary that has been classified as mezzanine equity in the Company’s Consolidated Balance Sheets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

87 edited+37 added−106 removed40 unchanged
Biggest changeIn addition, the Company may be adversely affected by other risks of operations in foreign countries, including, but not limited to: changes in reimbursement by foreign governments for services provided by the Company; compliance with export controls and trade regulations; changes in tax policies or other foreign laws; compliance with foreign labor and employee relations laws and regulations; restrictions on currency repatriation; judicial systems that less strictly enforce contractual rights; countries that do not have clear or well-established laws and regulations concerning issues relating to commercial laboratory testing or drug development services; countries that provide less protection for intellectual property rights; and procedures and actions affecting approval, production, pricing, reimbursement and marketing of its offerings.
Biggest changeRisks include changes in reimbursement by foreign governments, export controls, trade regulations, tax policies, labor laws, and currency repatriation restrictions. Some jurisdictions may lack clear legal frameworks or strong enforcement of contractual and intellectual property rights. The Company may also face challenges related to regulatory approval, pricing, reimbursement, and marketing of its services abroad.
The Company believes that operating results for any particular quarter are not necessarily a meaningful indication of future results. While fluctuations in the Company’s quarterly operating results could negatively or positively affect the market price of the Company’s common stock, these fluctuations may not be related to the Company’s future overall operating performance.
The Company believes that results of operations for any particular quarter are not necessarily a meaningful indication of future results. While fluctuations in the Company’s quarterly results of operations could negatively or positively affect the market price of the Company’s common stock, these fluctuations may not be related to the Company’s future overall operating performance.
In May 2023, the court awarded Ravgen additional enhanced damages in the amount of $100.0 million, and in January 2025, the court awarded Raygen post-verdict supplemental damages of $2.6 million, an ongoing royalty of $100 per test through the life of the patent as issue, pre- and post-judgement interest, and other relief.
In May 2023, the court awarded Ravgen additional enhanced damages in the amount of $100.0 million, and in January 2025, the court awarded Ravgen post-verdict supplemental damages of $2.6 million, an ongoing royalty of $100 per test through the life of the patent as issue, pre- and post-judgement interest, and other relief.
Such activities are required for the development of new medicines and medical devices under regulatory regimes in the U.S., Europe, Japan, and other countries.
Such activities are typically required for the development of new medicines and medical devices under regulatory regimes in the U.S., Europe, Japan, and other countries.
In addition, the success of the Company’s early discovery, clinical, and commercial laboratories also depend on employing and retaining qualified and experienced professionals, including specialists, who perform laboratory research activities and testing services. The same is true for patient-facing staff with specialized training required to perform activities related to specimen collection or clinical research activities.
In addition, the success of the Company’s early discovery, clinical, and commercial laboratories also depends on employing and retaining qualified and experienced professionals, including specialists, who perform laboratory research activities and testing services. The same is true for patient-facing staff with specialized training required to perform activities related to specimen collection or clinical research activities.
Legal actions can result in 41 Index substantial monetary damages as well as damage to the Company’s reputation with customers, which could have a material adverse effect upon its business. The failure to successfully obtain, maintain, and enforce intellectual property rights and defend against challenges to the Company’s intellectual property rights could adversely affect the Company.
Legal actions can result in substantial monetary damages as well as damage to the Company’s reputation with customers, which could have a material adverse effect upon its business. The failure to successfully obtain, maintain, and enforce intellectual property rights and defend against challenges to the Company’s intellectual property rights could adversely affect the Company.
Even if the Spin-off and certain related transactions otherwise qualify for tax-free treatment under Section 355 of the Code, they may result in corporate-level taxable gain to the Company if there is a 50% or greater change in ownership, by vote or value, of shares of the Company’s stock, Fortrea’s stock, or the stock of a successor of either occurring as part of a plan or series of related transactions that includes the Spin-off, which is generally presumed to include any acquisitions or issuances of stock within two years of the Spin-off.
Even if the Spin-off and certain related transactions otherwise qualify for tax-free treatment under Section 355 of the Code, they may result in corporate-level gain to the Company if there is a 50% or greater change in ownership, by vote or value, of the shares of the Company’s stock, Fortrea’s stock, or the stock of a successor of either occurring as part of a plan or series of related transactions that includes the Spin-off, which is generally presumed to include any acquisitions or issues of stock within two years of the Spin-off.
The Company operates in parts of the world where corruption may be common and where anti-corruption laws may conflict to some degree with local customs and practices. The Company maintains an anti-corruption 39 Index program including policies, procedures, training and safeguards in the engagement and management of third parties acting on the Company’s behalf.
The Company operates in parts of the world where corruption may be common and where anti-corruption laws may conflict to some degree with local customs and practices. The Company maintains an anti-corruption program including policies, procedures, training, and safeguards in the engagement and management of third parties acting on the Company’s behalf.
Dx’s inability to retain its existing relationships with those physicians as they become part of healthcare systems and networks and/or to create new relationships could impact its ability to successfully grow its business. Damage or disruption to the Company’s facilities or operations therein could adversely affect the Company’s business.
Dx’s inability to retain its existing relationships with those physicians as they become part of healthcare systems and networks and/or create new relationships could impact its ability to successfully grow and maintain its business, which could adversely affect the Company’s business. Damage or disruption to the Company’s facilities or operations therein could adversely affect the Company’s business.
BLS may also be required to agree to contract provisions with clinical site selection or its customers related to the conduct of clinical trials, and BLS could 42 Index be materially and adversely affected if it were required to indemnify a site or customer against claims pursuant to such contract terms.
BLS may also be required to agree to contract provisions with clinical site selection or its customers related to the conduct of clinical trials, and BLS could be materially and adversely affected if it were required to indemnify a site or customer against claims pursuant to such contract terms.
The Company’s success in maintaining a leadership position in genomic and other advanced testing technologies will depend, in part, on its ability to develop, acquire or license new and improved technologies on favorable terms and to obtain 31 Index appropriate coverage and reimbursement for these technologies.
The Company’s success in maintaining a leadership position in genomic and other advanced testing technologies will depend, in part, on its ability to develop, acquire, or license new and improved technologies on favorable terms and to obtain appropriate coverage and reimbursement for these technologies.
Increased regulations and restrictions on the import of research animals into various countries, as well as limitations of supply could impact BLS’s ability to conduct preclinical research and could have an adverse effect on BLS’s financial condition, results of operations, and cash flows.
Increased or changed regulations and restrictions on the import of research animals into various countries, as well as limitations of supply could impact BLS’s ability to conduct preclinical research and could have an adverse effect on BLS’s financial condition, results of operations, and cash flows.
Changes in key management, or the ability to attract, develop, and retain qualified personnel, as a result of increased competition for talent, wage growth, or other market factors, could lead to strategic and operational challenges and uncertainties, distractions of management from other key initiatives, and inefficiencies and increased costs, any of which could adversely affect the Company’s business, financial condition, results of operations, and cash flows.
Changes to personnel in key roles and critical positions, and the ability to attract, develop, and retain qualified personnel, as a result of increased competition for talent, wage growth, or other market factors, could lead to strategic and operational challenges and uncertainties, distractions of management from other key initiatives, and inefficiencies and increased costs, any of which could adversely affect the Company’s business, financial condition, results of operations, and cash flows.
BLS could be materially and adversely affected if it were required to pay damages or bear the costs of defending any claim that is not covered by a contractual indemnification provision, or in the event that a party which must indemnify it does not fulfill its indemnification obligations, or in the event that BLS is not successful in limiting its liability or in the event that the damages and costs exceed BLS’s insurance coverage.
BLS could be materially and adversely affected if it were required to pay 31 TABLE OF CONTENTS damages or bear the costs of defending any claim that is not covered by a contractual indemnification provision, or in the event that a party which must indemnify it does not fulfill its indemnification obligations, or in the event that BLS is not successful in limiting its liability or in the event that the damages and costs exceed BLS’s insurance coverage.
The Company’s operating results may vary significantly from quarter to quarter and are influenced by factors over which the Company has little control, such as: • changes in the global economy; • currency exchange rate fluctuations; • the commencement, completion, delay or cancellation of large projects or contracts or groups of projects; • the progress of ongoing projects; • adverse weather, natural disasters, geopolitical events, public health crises, hostilities or acts of terrorism, acts of vandalism, disruption to supply chains, inaccessibility of natural resources, and other events beyond the Company’s control; • the timing of and costs associated with completed acquisitions or other events; and • changes in the utilization mix of the Company’s services.
The Company’s results of operations may vary significantly from quarter to quarter and are influenced by factors over which the Company has little control, such as: • changes in the global economy, including the imposition of tariffs; • currency exchange rate fluctuations; • the commencement, completion, delay, or cancellation of large projects or contracts or groups of projects; • the progress of ongoing projects; • adverse weather, natural disasters, geopolitical events, public health crises, hostilities or acts of terrorism, acts of vandalism, disruption to supply chains, inaccessibility of natural resources, and other events beyond the Company’s control; • the timing of and costs associated with completed acquisitions or other events; and • changes in the utilization mix of the Company’s services.
Anti-corruption laws in the countries where the Company conducts business, including the FCPA, UK Bribery Act, and similar laws in other jurisdictions, prohibit companies and their intermediaries from engaging in bribery including improperly offering, promising, paying or authorizing the giving of anything of value to individuals or entities for the purpose of corruptly obtaining or retaining business.
Anti-corruption laws in the countries where the Company conducts business, including the FCPA, U.K. Bribery Act, and similar laws in other jurisdictions, prohibit companies and their intermediaries from engaging in bribery including improperly offering, promising, paying, or authorizing the giving of anything of value to individuals or entities for the purpose of corruptly obtaining or retaining business.
In addition, acts of vandalism and other acts by animal rights activists who object to the use of animals in drug development could have an adverse effect on the Company. Animal populations may suffer diseases that can damage BLS’s inventory, harm its reputation, or result in other liability.
In addition, acts of vandalism and 29 TABLE OF CONTENTS other acts by animal rights activists who object to the use of animals in drug development could have an adverse effect on the Company. Animal populations may suffer diseases that can damage BLS’s inventory, harm its reputation, or result in other liability.
Increased regulations and restrictions on the import of research animals, limitations of supply of research animals, and actions of animal rights activists may have an adverse effect on the Company. BLS’s preclinical services utilize animals in preclinical testing of the safety and efficacy of drugs and devices.
Increased regulations and restrictions on the import of research animals, limitations of supply of research animals, and actions of animal rights activists may have an adverse effect on the operations of BLS or the Company. BLS’s preclinical services utilize animals in preclinical testing of the safety and efficacy of drugs and devices.
Needlestick Safety and Prevention Act, could result in fines, penalties and loss of licensure, and have a material adverse effect upon the Company.
Needlestick Safety and Prevention Act, could result in fines, penalties and loss of licensure, and have a material adverse effect on the Company.
Since January 1, 2020, the Company has invested net cash of approximately $3.4 billion in strategic business acquisitions. However, the Company cannot assure that it will be able to identify acquisition targets that are attractive to the Company or that are of a large enough size to have a meaningful impact on the Company’s operating results.
Since January 1, 2021, the Company has invested net cash of approximately $3.8 billion in strategic business acquisitions. However, the Company cannot assure that it will be able to identify acquisition targets that are attractive to the Company or that are of a large enough size to have a meaningful impact on the Company’s results of operations.
Failure to comply with the regulations of pharmaceutical and medical device regulators, such as the FDA, the Medicines and Healthcare products Regulatory Agency in the United Kingdom, the European Union, the European Medicines Agency, the National Medical Products Administration in China, and the Pharmaceuticals and Medical Devices Agency in Japan, could result in fines, penalties, and sanctions against BLS and have a material adverse effect upon the Company.
Failure to comply with the regulations of pharmaceutical and medical device regulators, such as the FDA, the Medicines and Healthcare products Regulatory Agency in the U.K., the EU, the European Medicines Agency, the National Medical Products Administration in China, and the Pharmaceuticals and Medical Devices Agency in Japan, could result in fines, penalties, and sanctions against BLS and have a material adverse effect upon the Company.
The loss of key management personnel or the inability to attract, retain, and develop experienced and qualified employees, at the Company’s clinical laboratories, drug development, and diagnostic facilities, and increased costs related to such personnel and employees, could adversely affect the business.
The loss of personnel in key roles and critical positions or the inability to attract, retain, and develop experienced and qualified employees, at the Company’s clinical laboratories, drug development, and diagnostic facilities, and increased costs related to such personnel and employees, could adversely affect the business.
Changes in government regulation or in practices relating to the pharmaceutical, biotechnology, or medical device industries could decrease the need for certain services that BLS provides. BLS assists pharmaceutical, biotechnology, and medical device companies in navigating the regulatory approval process.
Changes in government regulation or in practices relating to the pharmaceutical, biotechnology, or medical device industries could decrease the need for certain services that BLS provides. BLS supports pharmaceutical, biotechnology, and medical device companies in navigating the regulatory approval and post-approval compliance requirements process.
Additionally, future labor agreements, or renegotiation of labor agreements or provisions of labor agreements, or changes in labor or employment laws, could compromise its service reliability and significantly increase its costs, which could have a material adverse effect upon the Company’s business.
Additionally, future labor agreements, renegotiations of labor agreements, or changes in labor or employment laws, could compromise its service reliability and significantly increase its costs, which could have a material adverse effect on the Company’s business.
Operations may be disrupted and adversely impacted by events beyond the Company’s control, including natural disasters, adverse weather, geopolitical events, public health crises, acts of terrorism, disruption to supply chain, and inaccessibility of natural resources.
Operations may be disrupted and adversely impacted by events beyond the Company’s control, including natural disasters, adverse weather, geopolitical events, public health crises, supply chain disruptions, and inaccessibility of natural resources.
The Company’s level of indebtedness and debt service requirements could adversely affect the Company’s liquidity, results of operations and business. At December 31, 2024, indebtedness on the Company’s outstanding senior notes totaled approximately $6.2 billion in aggregate principal, of which $1.0 billion is payable within the next 12 months.
The Company’s level of indebtedness and debt service requirements could adversely affect the Company’s liquidity, results of operations, and business. At December 31, 2025, the indebtedness on the Company’s outstanding senior notes totaled $5.2 billion in aggregate principal, of which $500.0 million is payable within the next 12 months.
An inability to attract, retain, and develop experienced and qualified personnel, including key management personnel, and increased personnel costs, could adversely affect the Company’s business.
An inability to attract, retain, and develop experienced and qualified personnel, including personnel in key roles and critical positions, and increased personnel costs, could adversely affect the Company’s business.
Similarly, application of artificial intelligence to testing could reduce demand for the Company’s services, or competitors could adopt use of these technologies and derive benefits from them sooner than the Company.
Similarly, application of AI to testing could reduce demand for the Company’s services, or competitors could adopt use of these technologies and derive benefits from them sooner than the Company, which could adversely affect the Company’s business.
The Company is also a party to credit agreements relating to a $1.0 billion revolving credit facility. 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 a leverage ratio within certain limits.
The Company is also party to credit agreements relating to a $1.0 billion revolving credit facility subject to negative financial covenants limiting subsidiary indebtedness and certain other covenants typical for investment-grade-rated borrowers, and the Company is required to maintain a leverage ratio within certain limits. The Company’s level of indebtedness could adversely affect its business.
A failure to establish, update, or perform in accordance with those systems or processes could adversely affect the Company’s business operations, resulting in the loss of customers, loss or suspension of licensure or certifications, imposition of sanctions or other penalties, damage to the Company’s reputation, or other adverse effects.
A failure to establish, update, or perform in accordance with those systems or processes could result in the loss of customers, loss or suspension of licensure or certifications, or imposition of sanctions or other penalties, among other things, which could adversely affect the Company’s business and reputation.
Disruption of supply and services has impacted and could continue to impact or have a material adverse effect on the Company’s business. A failure to identify suitable acquisition targets and successfully close and integrate acquisitions could have a material adverse effect on the Company’s business objectives and its revenues and profitability.
A failure to identify suitable acquisition targets and successfully close and integrate acquisitions could have a material adverse effect on the Company’s business objectives and its revenues and profitability.
In addition, compliance with future legislation could impose additional requirements on the Company, which may be costly. Failure of the Company or its third-party service providers to comply with privacy and data security laws and regulations could result in fines, penalties and damage to the Company’s reputation with customers and have a material adverse effect upon the Company’s business.
Failure of the Company or its third-party service providers to comply with national security, privacy and data security laws and regulations could result in fines, penalties and damage to the Company’s reputation with customers and have a material adverse effect upon the Company’s business.
Increased competition, including price competition, could have an adverse effect on the Company’s revenues and profitability. As further described in Item 1 and Item 1A of Part I of this Annual Report, both Dx and BLS operate in competitive industries.
Increased competition, including price competition, could have an adverse effect on the Company’s revenues and profitability. As further described in Item 1 and Item 1A of Part I of this Annual Report, both Dx and BLS operate in highly competitive industries and selection of a commercial laboratory or a drug development partner is based on a number of competitive factors.
The success of the Company is dependent in part on the efforts of key members of its management team. Success in maintaining the Company’s leadership position in genomic and other advanced testing and diagnostic technologies will depend in part on the Company’s ability to attract and retain skilled research professionals.
Success in maintaining the Company’s leadership position in genomic and other advanced testing and diagnostic technologies will depend in part on the Company’s ability to attract and retain skilled research professionals.
If the Company does not meet the evolving and varied preferences and requirements of governmental authorities and others on these matters, the Company could experience reduced demand for its offerings, loss of customers, and other negative impacts on the Company’s business and results of operations.
If the Company does not meet the evolving and varied preferences and requirements of governmental authorities and others on these matters, the Company could experience reduced demand for its offerings, loss of customers, and other negative impacts on the Company’s business and results of operations. 30 TABLE OF CONTENTS Risks Related to Legal Matters Adverse results in material litigation matters could have a material adverse effect on the Company’s business.
The Company might not be able to engage in certain desirable capital-raising or strategic transactions. The Company’s ability to engage in certain transactions could be limited or restricted in order to preserve, for U.S. federal income tax purposes, the tax-free qualification of the Fortrea spin-off and certain related transactions under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code.
To preserve, for U.S. federal income tax purposes, the tax-free qualification of the Spin-off and certain related transactions under Sections 355 and 368(a)(1)(D) of the U.S. Internal Revenue Code, the Company may be limited or restricted in pursing certain transactions.
Foreign currency exchange fluctuations could have an adverse effect on the Company’s business. The Company has business and operations outside the U.S., and BLS derives a significant portion of its revenues from international operations. Since the Company’s Consolidated Financial Statements are denominated in U.S. dollars, fluctuations in exchange rates from period to period will have an impact on reported results.
Foreign currency exchange fluctuations could have an adverse effect on the Company’s business. The Company operates internationally and BLS derives a significant portion of its revenues from non-U.S. operations. Since the Company’s Consolidated Financial Statements are denominated in USD, fluctuations in foreign currency exchange rates may impact reported financial results, especially when costs and revenues are denominated in different currencies.
Increased approval and use of such test kits could lead to increased testing by physicians in their offices or by patients at home, which could affect the Company’s market for laboratory testing services and negatively impact its revenues.
Increased approval and use of such test kits could lead to increased testing by physicians in their offices or by patients at home, which could affect the Company’s market for laboratory testing services and negatively impact its revenues. 23 TABLE OF CONTENTS Changes or disruption in services, supplies, or transportation provided by third parties have impacted, and could in the future materially impact, the Company’s operations and business.
In addition, a reduction in tests ordered or specimens submitted by existing customers, a decrease in demand for the Company’s services from existing customers, or the loss of existing contracts, without offsetting growth in its customer base, could impact the Company’s ability to successfully grow its business and could have a material adverse effect on the Company’s revenues and profitability.
A decline in test orders or specimen volume from existing customers, or the loss of existing contracts without offsetting growth in its customer base, could impact the Company’s ability to successfully grow its business and could have a material adverse effect on the Company’s revenues and profitability.
From time to time, manufacturers discontinue or recall reagents, test kits, or instruments used by the Company to perform laboratory testing. Such discontinuations or recalls could adversely affect the Company’s costs, testing volume and revenue. The commercial laboratory industry is subject to changing technology and the introduction of new and improved test offerings.
Furthermore, from time to time, manufacturers discontinue or recall reagents, test kits, or instruments used by the Company to perform laboratory testing. Such discontinuations or recalls could adversely impact the Company’s costs, testing volume and revenue.
Also, the Company may incur substantial additional costs and become subject to litigation and enforcement actions if the Company fails to comply with legal requirements affecting its workforce and labor practices, including laws and regulations related to wage and hour practices, Office of Federal Contract Compliance Programs compliance, and unlawful workplace harassment and discrimination.
Also, the Company may incur substantial additional costs and become subject to litigation and enforcement actions if the Company fails to comply with legal requirements affecting its workforce and labor practices, including laws and regulations related to wage and hour practices, Office of Federal Contract Compliance Programs compliance, and unlawful workplace harassment and discrimination. 24 TABLE OF CONTENTS Continued and increased consolidation of pharmaceutical, biotechnology and medical device companies, health systems, physicians and other customers could adversely affect the Company’s business.
The Company’s uses of financial instruments to limit its exposure to interest rate and currency exchange fluctuations could expose it to risks and financial losses that may adversely affect the Company’s financial condition, liquidity and results of operations.
These factors could significantly affect BLS’s results of operations, financial condition, and cash flows, which could have an adverse effect on the Company’s business. 25 TABLE OF CONTENTS The Company’s uses of financial instruments to limit its exposure to interest rate and currency exchange fluctuations could expose it to risks and financial losses that may adversely affect the Company’s financial condition, liquidity, and results of operations.
Noncompliance with these laws could result in the imposition of fines, penalties, or orders to stop certain activities, and potentially expose the Company to actions for the wrongful use or disclosure of health information or other personal information.
Failure to comply could materially and adversely affect the Company’s business and reputation, result in the imposition of fines, penalties, or orders to stop certain activities, and potentially expose the Company to actions for the wrongful use or disclosure of personal information.
Changes in tax laws and regulations could result in material changes to the domestic and foreign taxes that the Company is required to provide for and pay. In addition, the Company is subject to regular audits with respect to its various tax returns and processes in the jurisdictions in which it operates.
Changes in tax laws and regulations could materially affect the Company’s tax obligations. In addition, the Company is subject to regular audits with respect to its various tax returns and processes in jurisdictions in which it operates.
To avoid realizing such taxable gain, the Company may be restricted or limited in its capital-raising or in the strategic transactions that it elects to pursue during such time period. The spin-off of Fortrea may not achieve the intended results. On June 30, 2023, the Company completed the previously announced spin-off of Fortrea.
To avoid realizing such taxable gain, the Company may be restricted or limited in its capital raising or in the strategic transactions that it elects to pursue during such time period.
Discontinuation or recalls of products used in the performance of testing, failure to develop or acquire licenses for new or improved testing technologies, or the Company’s customers using new technologies to replace offerings currently provided by the Company could adversely affect its business.
Failure to develop or acquire licenses for new or improved testing technologies, or the Company’s customers using new technologies to replace offerings currently provided by the Company could adversely affect its business. The commercial laboratory industry is subject to changing technology and the introduction of new and improved test offerings.
In addition to any risks related to the counterparties, there can be no assurances that the Company’s hedging activity will be effective in insulating it from the risks associated with the underlying transactions, that the Company would not have been better off without entering into these hedges, or that the Company will not have to pay additional amounts upon settlement.
In addition to any risk related to the counterparties, there can be no assurance that this hedging strategy will be effective in insulating the Company from the risk associated with the underlying transactions or that the Company will not have to pay additional amounts upon settlement.
Risks Related to Financial Matters The Company bears financial risk for contracts that, including for reasons beyond the Company’s control, may be underpriced, subject to cost overruns, delayed, or terminated or reduced in scope. The Company has many contracts that are structured as fixed-price for fixed-contracted services or fee-for-service with a cap.
Risks Related to Financial Matters The Company bears financial risk for contracts that, including for reasons beyond the Company’s control, may be underpriced, subject to cost overruns, delayed, or terminated or reduced in scope. The Company enters into fixed-price and capped fee-for-service contracts, bearing financial risk if costs exceed estimates or pricing is insufficient.
The use of AI and machine learning tools in our operations and the services of our third-parties may introduce risks that could adversely affect our business, financial condition, and reputation. The Company and its third parties leverage AI and machine learning tools to increase productivity and innovation.
Remote work arrangements further elevate exposure to cyber risks. 27 TABLE OF CONTENTS The use of AI and machine learning tools in the Company’s operations and the services of third-parties may introduce risks that could adversely affect the Company’s business, financial condition, and reputation.
For example, in October 2020, Ravgen Inc. filed a patent infringement lawsuit against the Company alleging infringement of two Ravgen-owned U.S. patents. In September 2022, a jury rendered a verdict in favor of Ravgen on the remaining patent at issue and awarded damages of $272.0 million.
In September 2022, a jury rendered a verdict in favor of Ravgen on the remaining patent at issue and awarded damages of $272.0 million.
To limit the Company’s exposure to interest rate fluctuations and currency exchange fluctuations, it has entered into, and in the future may enter into for these or other purposes, financial swaps, or hedging arrangements, with various financial counterparties.
To limit the Company’s exposure to interest rate and currency exchange fluctuations, the Company enters into financial swaps and hedging arrangements, with various counterparties.
A material increase in Dx’s days sales outstanding level, which could be caused by multiple reasons due to the complexity of billing for laboratory services, could have an adverse effect on the Company’s business, including potentially increasing its bad debt rate and decreasing its cash flows.
Billing for laboratory services is a complex process due to varying billing requirements across different payers, including physicians, patients, health plans, Medicare, and Medicaid. A material increase in Dx’s days sales outstanding level, driven by billing complexity or otherwise, could have an adverse effect on the Company’s business, including potentially increasing the Company’s bad debt rate and reducing cash flows.
Natural disasters, such as adverse weather, fires, earthquakes, power shortages and outages, geopolitical events, such as terrorism, war, political instability, or other conflict, public health crises and disease epidemics and pandemics, criminal activities, disruptions to supply chains, inaccessibility of natural resources, and other disruptions or events beyond the Company’s control could negatively affect the Company’s operations.
Natural disasters (e.g., severe weather, fires, and earthquakes), geopolitical events (e.g., terrorism, war, and political instability), public health crises, criminal activity, supply chain disruptions, and other events beyond the Company’s control could negatively affect the Company’s operations.
Even if the Company is able to successfully integrate the operations of companies and businesses that it acquires in the future, the Company may not be able to realize the benefits that it expects from such acquisitions. 32 Index Unfavorable labor environments, union strikes, work stoppages, union or works council negotiations, or failure to comply with labor or employment laws could adversely affect the Company’s operations and have a material adverse effect upon the Company’s business.
Unfavorable labor environments, union strikes, work stoppages, union or works council negotiations, or failure to comply with labor or employment laws could adversely affect the Company’s operations and have a material adverse effect upon the Company’s business.
A significant increase in the Company’s days sales outstanding could have an adverse effect on the Company’s business, including its cash flow, by increasing its bad debt or decreasing its cash flow. Billing for laboratory services is a complex process.
Loss, reduction, or delay of large or multiple contracts could materially adversely affect BLS’s business, results of operations, financial condition, and cash flows. A significant increase in the Company’s days sales outstanding could have an adverse effect on the Company’s business, including by increasing its bad debt or decreasing its cash flow.
The Company strongly disagrees with the verdict, based on a number of legal factors, and will vigorously defend the lawsuit through the appeal process. On June 4, 2021, the Company also instituted proceedings before the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office challenging the validity of the Ravgen patent at issue in the trial.
The Company strongly disagrees with the verdict, based on a number of legal factors, and will vigorously defend the lawsuit through the appeal process.
Risks Related to the Company’s Business and Operations Including Global Economic and Geopolitical Factors General or macro-economic factors and significant fluctuations in economic conditions in the U.S. and globally may have a material adverse effect upon the Company.
Risks Related to the Company’s Business and Operations General or macro-economic factors and significant fluctuations in economic conditions in the U.S. and globally may have a material adverse effect on the Company. The Company’s business depends on sustained demand for diagnostic testing and biopharma laboratory services by patients, physicians, hospitals, MCOs, CROs, pharmaceutical, biotechnology, medical device companies, and others.
Such results could harm BLS’s reputation or have an adverse effect on BLS’s financial condition, results of operations, and cash flows. Failure to conduct animal research in compliance with animal welfare laws and regulations could result in sanctions and/or remedies against BLS and have a material adverse effect upon the Company.
Failure to conduct animal research in compliance with animal welfare laws and regulations could result in sanctions and/or remedies against BLS and have a material adverse effect on the Company. BLS’s preclinical research activities must comply with animal welfare laws in the jurisdictions where it operates, including the AWA and similar regulations in the U.K., the EU, and China.
Although BLS does not face the same level of complexity in its billing processes, it could also experience delays in billing or collection, and a material increase in BLS’s days sales outstanding could have an adverse effect on the Company’s business, including potentially decreasing its cash flows. BLS’s revenues depend on the pharmaceutical, biotechnology and medical device industries.
While BLS faces less billing complexity, delays in billing or collections could similarly have an adverse effect on the Company’s business, including potentially decreasing cash flows. BLS’s revenues depend on R&D spending by companies in the pharmaceutical, biotechnology and medical device industries.
Additionally, bank payment processes could become unavailable which could temporarily impact the Company’s ability to conduct business with suppliers and pay its employees on a timely basis. Any inability to access or delay in accessing these funds could adversely affect the Company’s business and financial condition.
Additionally, bank payment processes could become unavailable which could temporarily impact the Company’s ability to operate, pay employees, or meet obligations on a timely basis.
The Spin-off poses risks and challenges that could impact the Company’s business, including, but not limited to, the failure to receive tax-free treatment for U.S. federal income purposes, and potential exposure to unexpected claims, liabilities, or costs under the Company’s agreements with Fortrea in connection with the Spin-off. 35 Index Risks Related to Technology and Cybersecurity Failure to maintain the security of customer-related information or compliance with security requirements could damage the Company’s reputation with customers, cause it to incur substantial additional costs and become subject to litigation and enforcement actions.
Risks Related to Technology and Cybersecurity Failure to maintain the security of customer-related information or compliance with security requirements could damage the Company’s reputation with customers, cause it to incur substantial additional costs and become subject to litigation and enforcement actions.
Many of the Company’s offerings and processes rely on intellectual property, including patents, copyrights, trademarks, and trade secrets. In some cases, that intellectual property is owned by another party and licensed to the Company, sometimes exclusively. The value of the Company’s intellectual property relies in part on the Company’s ability to maintain its proprietary rights to such intellectual property.
The Company relies on intellectual property—including patents, copyrights, trademarks, and trade secrets—to support many of its offerings and processes. Some of this intellectual property is licensed from third parties, including on an exclusive basis. The Company’s ability to maintain and enforce its proprietary rights, prevent infringement, and defend claims of infringement is critical to its operations.
The EU IVDR, where applicable to BLS’s services, could impact BLS’s ability to support trials, result in increased costs and administrative and legal actions, and have an adverse effect. Failure to comply with U.S., state, local, or international environmental, health and safety laws and regulations, including the U.S. Occupational Safety and Health Administration Act and the U.S.
Compliance with these evolving international frameworks may increase costs and affect the Company’s ability to support clinical trials and offer laboratory services. Failure to comply with U.S., state, local, or international environmental, health and safety laws and regulations, including the U.S. Occupational Safety and Health Administration Act and the U.S.
The business operations of BLS’s clinical and preclinical laboratories also require the import, export and use of medical devices, in vitro diagnostic devices, reagents, and human and animal biological products. Such activities are subject to numerous applicable local and international regulations with which BLS must comply.
The Company’s preclinical and central laboratory operations must comply with applicable standards, including GLP, GCP, and for certain services, cGMP. These operations also involve the import, export, and use of medical devices, reagents, and biological products, which are subject to extensive local and international regulations.
In some countries, the Company’s success will depend in part on its ability to form relationships with local partners. The Company’s inability to identify appropriate partners or reach mutually satisfactory arrangements could adversely affect the business and operations. International operations may increase the Company’s exposure to liabilities under applicable anti-corruption laws.
Operating internationally can lead to unanticipated costs, including those related to compliance, staffing, collections, and managing local operations. In certain countries, success may depend on forming relationships with local partners, and failure to do so could adversely affect the Company’s business and operations. International operations may increase the Company’s exposure to liabilities under applicable anti-corruption laws.
In addition, BLS’s services periodically experience periods of increased price competition that may have an adverse effect on the segment’s profitability and consolidated revenues and net earnings.
In addition, BLS’s services are subject to increased price competition that may have an adverse effect on the segment’s profitability and consolidated revenues and net earnings. Dx’s or BLS’s inability to compete effectively with other businesses as it relates to certain competitive factors, including the factors mentioned above, could have an adverse effect on the Company’s revenues and profitability.
This risk includes, but is not limited to, the potential that government enforcement authorities may take a contrary position with respect to the Eliminating Kickbacks in Recovery Act, given the lack of associated regulations to clarify or add exceptions. Such occurrences, regardless of their outcome, could damage the Company’s reputation and adversely affect important business relationships.
Although the Company believes it is in material compliance with applicable requirements, government authorities may take a contrary position. This includes potential interpretations of laws such as the Eliminating Kickbacks in Recovery Act, which currently lacks clarifying regulations or exceptions. Any enforcement action, regardless of outcome, could harm the Company’s reputation and disrupt key business relationships.
Significant changes in global economic conditions, and an increase in the costs of goods and services, could negatively impact testing volumes, the demand for biopharma laboratory services, cash collections, profitability, and the availability and cost of credit. 29 Index Pressures on and uncertainty surrounding the U.S. federal government’s budget, and potential changes in budgetary priorities, could adversely affect the funding for government programs that comprise a portion of the Company’s revenues.
Pressure on and uncertainty surrounding the U.S. federal government budget and potential changes in budgeting priorities could adversely affect the funding for government programs that comprise a portion of the Company’s revenue.
The Company bears the financial risk if these contracts are underpriced or if contract costs exceed estimates. Such underpricing or significant cost overruns could have an adverse effect on the Company’s business, results of operations, financial condition, and cash flows. Many of BLS’s contracts may be terminated or reduced in scope either immediately or upon notice.
Such underpricing or significant cost overruns could have an adverse effect on the Company’s business, results of operations, financial condition, and cash flows. Many BLS contracts may be terminated or reduced in scope, including for reasons such as safety issues, undesired product results, insufficient clinical trial or investigator enrollment, customer decisions to halt development, or failure to perform contractual obligations.
A compromise of the Company’s systems, or those of the Company's third-party service providers and vendors, that results in customer personal information being obtained or altered by unauthorized persons, or the Company’s third party's failure to comply with security requirements, including but not limited to security standards for payment cards (e.g., the Payment Card Industry Data Security Standard), could adversely affect the Company’s reputation with its customers and others, as well as the Company’s results of operations, financial condition and liquidity.
A compromise of the Company’s or a vendor’s systems that results in confidential information being acquired, accessed, or changed by unauthorized persons, or failure to meet security standards, such as the HIPAA security regulations and the Payment Card Industry Data Security Standard, could harm the Company’s reputation, operations, financial condition, and liquidity, and may result in litigation, fines, or regulatory actions.
Cybersecurity incidents and unauthorized access to the Company's or its customers’ data could harm the Company’s reputation and adversely affect its business. The Company has previously experienced and expects to continue to experience attempts by unauthorized parties to compromise the Company’s cybersecurity controls, like the 2018 ransomware attack.
Cybersecurity incidents and unauthorized access to the Company's or its customers’ data could harm the Company’s reputation and adversely affect its business. The Company continues to face cybersecurity threats, including ransomware attempts, data breaches, and phishing and social engineering attempts targeting its systems and its employees, and those of third-party vendors.
The Company could face significant monetary damages and penalties and/or exclusion from government programs if it violates anti-fraud and abuse laws. The Company is subject to extensive government regulation at the federal, state, and local levels in the U.S. and other countries where it operates.
The Company is subject to comprehensive regulation at the federal, state, and local levels in the U.S., as well as in other countries where it operates. Noncompliance with laws governing billing practices, financial relationships, and other healthcare-related activities could result in civil or criminal penalties, exclusion from Medicare and Medicaid, and restrictions on the use of the Company’s laboratories.
The Company also works with third-party service providers and vendors that provide technology systems and services that are used in connection with the receipt, storage, transmission, and processing of customer personal and financial information.
The Company collects, stores, transmits, and processes personal and financial information, and works with third-party service providers in connection with such data processing activities.
The sanction for failure to comply with CLIA requirements may be suspension, revocation, or limitation of a laboratory’s CLIA certificate, which is necessary to conduct business, as well as significant fines and/or criminal penalties. In addition, the Company is subject to regulation under state law.
The commercial laboratory testing industry is subject to broad regulation in the U.S. and internationally. In the U.S. CLIA requires certification for virtually all clinical laboratories. Noncompliance with CLIA may result in suspension, revocation, or limitation of a laboratory’s certificate, and the ability to bill government and other payers, as well as significant fines or criminal penalties.
There can be no assurance that the Company will be able to maintain its existing debt ratings, and failure to do so could adversely affect the Company’s cost of funds, liquidity and access to capital markets. The Company’s quarterly operating results may vary.
The Company may incur additional long-term debt, which could further increase its obligations and business restrictions. Additionally, major debt rating agencies regularly assess the Company’s debt, and there is no assurance that the Company will be able to maintain its existing debt ratings and a failure to do so could raise funding costs and limit access to capital.
The Company may be required to make changes to its business practices and to incur additional costs associated with compliance with these evolving and complex regulations. The Company’s international operations could subject it to additional risks and expenses that could adversely impact the business or results of operations.
The Company’s international operations could subject it to additional risks and expenses that could adversely impact the business or results of operations. The Company’s international operations are subject to foreign laws and regulations that differ from those in the U.S. Noncompliance may result in penalties, restrictions, and reputational harm.
For additional information about the AMCA Incident, see Note 15 Commitments and Contingencies to the Consolidated Financial Statements of Part III of the Annual Report. Failure in the Company’s information technology systems or delays or failures in the development and implementation of new systems or updates or enhancements to existing systems could disrupt the Company’s operations or customer relationships.
For example, the AMCA Incident (as defined below under “Cybersecurity” in Item 1C) resulted in costs, pending and threatened litigation, and regulatory inquiries. For additional information about the AMCA Incident, see Note 15 Commitments and Contingencies to the Consolidated Financial Statements of Part III of the Annual Report.
The Company’s level of indebtedness and debt service requirements could adversely affect its business. In particular, it 34 Index could increase the Company’s vulnerability to sustained, adverse macroeconomic weakness, limit its ability to obtain further financing or refinance existing debt at maturity, and limit its ability to pursue certain operational and strategic opportunities, including large acquisitions.
In particular, such indebtedness could increase the Company’s vulnerability to sustained, adverse macro-economic downturns, limit financing flexibility, and limit its ability to pursue certain operational and strategic opportunities, including large acquisitions. Higher interest rates and changes in debt ratings could increase borrowing costs and reduce access to capital. Additional debt or credit arrangements may further restrict operations and liquidity.
If the Company and its third-party service providers do not comply with existing or new laws and regulations related to protecting the privacy and security of personal or health information, it could be subject to monetary fines, civil penalties, litigation, or criminal sanctions. In the U.S., the Health Insurance Portability and Accountability Act of 1996, the U.S.
The Company and its third-party service providers are subject to numerous federal, state, and international laws governing national security, and the privacy and security of personal and health information. Noncompliance may result in fines, penalties, litigation, or criminal sanctions. In the U.S., HIPAA imposes detailed requirements on the use, disclosure, and safeguarding of PHI.
On April 29, 2024, the FDA released a final rule purporting to clarify its authority to regulate LDTs as medical devices under the federal Food, Drug, and Cosmetic Act, under which it will phase out its general enforcement discretion approach for LDTs under a four-year period subject to certain continuing enforcement discretion policies.
Historically, LDTs offered by high-complexity laboratories have been regulated under CLIA without FDA oversight. However, on April 29, 2024, the FDA issued a final rule asserting authority to regulate LDTs as medical devices, initiating a four-year phase-out of its prior enforcement discretion.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company engages in a risk monitoring process through its Office of Information Security (OIS) within the Information Technology organization that seeks to identify the likelihood and impact of threats to its systems and data, and assesses the effectiveness of the controls in place.
Biggest changeThrough its OIS within the Information Technology organization, the Company engages in a risk-based monitoring and assessment process that analyzes potential business impact of cybersecurity threats to its systems and data, and assesses the effectiveness of the controls in place. The Company has implemented a formal cybersecurity governance program aligned to elements of the NIST Cybersecurity Framework and the SCF.
The Audit Committee of the board of directors is responsible for oversight and review of the Company’s cybersecurity and other information technology risks, controls, and procedures, including the potential impact of such risks on the Company’s business, financial results, operations, and reputation, as well as the Company’s plans to mitigate cybersecurity risks and to respond to cybersecurity incidents.
The Audit Committee of the Board is responsible for oversight and review of the Company’s cybersecurity and other information technology risks, controls, and procedures, including the potential impact of such risks on the Company’s business, financial results, operations, and reputation, as well as the Company’s plans to mitigate cybersecurity risks and to respond to cybersecurity incidents.
Governance The Company’s board of directors has oversight responsibility for the Company’s enterprise risk management process and it delegates oversight responsibility for certain significant functional areas of risk management to the board’s committees.
Governance The Company’s Board has oversight responsibility for the Company’s enterprise risk management process and it delegates oversight responsibility for certain significant functional areas of risk management to the board’s committees.
“Risk Factors” of this Annual Report, which disclosures are incorporated by reference herein. 43 Index In July 2018, the Company experienced a ransomware incident which affected certain Dx information technology systems. The incident also temporarily affected certain other information technology systems involved in conducting Company-wide operations.
“Risk Factors” of this Annual Report, which disclosures are incorporated by reference herein. In July 2018, the Company experienced a ransomware incident which affected certain Dx information technology systems. The incident also temporarily affected certain other information technology systems involved in conducting Company-wide operations.
The IR Plan outlines incident response requirements, reporting processes, protocols for incident evaluation, and procedures for notifying and escalating information to the Company’s senior management, and the Board and/or appropriate Board committees, as applicable. The IR Plan is reviewed, tested, and updated under the leadership of the Company’s Chief Information and Technology Officer (CITO) and Chief Information Risk Officer (CIRO).
The IR Plan outlines incident response requirements, reporting processes, protocols for incident evaluation, and procedures for notifying and escalating information to the Company’s senior management, and the Board and/or appropriate Board committees, as applicable. The IR Plan is reviewed, tested, and updated under the leadership of the Company’s CITO and CIRO.
With the assistance of these frameworks and standards, the Company assesses risks from cybersecurity threats, monitors its information systems for potential vulnerabilities, assesses those systems pursuant to the Company’s cybersecurity policies, control standards, and control procedures, and implements appropriate mitigation measures. Mitigation of identified threats and vulnerabilities may be delayed.
With the assistance of these frameworks and standards, the Company assesses risks from cybersecurity threats, monitors its information systems for potential vulnerabilities, assesses those systems pursuant to the Company’s cybersecurity policies, control standards, and control procedures, and implements appropriate mitigation measures.
The CITO and CIRO together lead efforts to design, implement and operate controls deemed appropriate for the management of Company information assets and systems. OIS manages the policies, control procedures, and control standards designed to identify, detect, protect against, respond to, and recover from cybersecurity threats and cybersecurity incidents.
The CITO and CIRO together lead efforts to design, implement, and operate controls deemed appropriate for the management of cybersecurity risks. OIS manages the policies, control procedures, and control standards designed to identify, protect against, respond to, and recover from cybersecurity threats and cybersecurity incidents. 33 TABLE OF CONTENTS
Cybersecurity Incident Impact The Company describes whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect it, including its business and operating results, financial condition, and impact on the Company’s reputation and customer relationships under the “Risks Related to Technology and Cybersecurity” heading and subheadings thereunder in Part I, Item 1A.
The Company performs due diligence on third parties that have access to its systems, data, or facilities that house such systems or data, and it monitors cybersecurity threats identified through such due diligence. 32 TABLE OF CONTENTS Cybersecurity Incident Impact The Company describes whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect it, including its business and operating results, financial condition, and impact on the Company’s reputation and customer relationships under the “Risks Related to Technology and Cybersecurity” heading and subheadings thereunder in Part I, Item 1A.
Accordingly, the Company invests in the development and implementation of cybersecurity policies, control standards, and control procedures, including a risk management and assessment program, security and event monitoring capabilities, an incident response plan, and other detection, prevention, and protection capabilities, including practices and tools to monitor and mitigate external and insider threats.
Accordingly, the Company maintains an enterprise-wide cybersecurity risk management program and invests in cybersecurity policies, control standards, and control procedures, including risk assessment activities, security and event monitoring capabilities, an IR plan, and other detection, prevention, and protection capabilities designed to monitor and mitigate external and insider threats.
Consistent with business requirements, components of the Company’s information technology and controls are assessed by independent third parties against various frameworks and standards.
Consistent with business requirements, components of the Company’s information technology enlivenment and control activities are assessed by independent third parties against various frameworks and standards. The Company uses the results of these assessments to inform risk prioritization and remediation planning.
The Company has implemented an Incident Response Plan (IR Plan), which is aligned to its overall crisis management program. The IR Plan provides a framework for responding to and managing cybersecurity incidents.
Incident Response and Resilience The Company has implemented an IR Plan, which is integrated with the Company’s enterprise crisis management, business continuity, and disaster recovery programs. The IR Plan provides a framework for responding to and managing cybersecurity incidents and is designed to support timely escalation, coordinated decision-making, and effective recovery.
The Company has implemented a formal cybersecurity program aligned to the Secure Controls Framework (SCF), a cybersecurity and privacy framework that consolidates and maps controls across multiple regulations, standards, and best practices. The Company’s program includes the evaluation of the cybersecurity posture of third-party suppliers and vendors that have access to the Company’s data or information technology systems.
The governance program integrates controls from various regulations, standards, and best practices and supports a structured approach to identifying, protecting against, detecting, responding to, and recovering from cybersecurity threats. The Company’s program includes the evaluation of the cybersecurity posture of third-party suppliers and vendors that have access to the Company’s data or information technology systems.
The Company’s cybersecurity team also provides enterprise-wide cybersecurity training for employees to maintain and continuously improve the Company’s mitigation against human-driven risk. Cybersecurity training is conducted annually, in addition to periodic simulations and exercises to test the efficacy of this training, and expanded training is required for specific roles.
Employee Training The Company’s cybersecurity team provides enterprise-wide cybersecurity training for employees to maintain and continuously improve the Company’s mitigation against human-driven risk. Cybersecurity training is conducted annually, with supplemental and role-based training required for personnel with elevated system access or responsibilities.
Engagement with External Cybersecurity Professionals The Company engages with third parties to assess the effectiveness of, and assist with, its cybersecurity risk and response systems and processes. These third parties include cybersecurity assessors, consultants, and professionals who help identify, verify, and validate cybersecurity risks and support mitigation or incident response plans as needed.
These third parties include cybersecurity assessors, consultants, and professionals who help identify, verify, and validate cybersecurity risks and support mitigation as appropriate.
Removed
The Company performs due diligence on third parties that have access to its systems, data, or facilities that house such systems or data, and it monitors cybersecurity threat risks identified through such due diligence.
Added
The Company also conducts periodic simulations and awareness activities designed to reinforce expected behaviors and reduce the likelihood of cybersecurity incidents. Engagement with External Cybersecurity Professionals The Company engages with third parties to assess the effectiveness of, and assist with, its cybersecurity risk and response systems and processes.
Removed
This group includes a cybersecurity operations team that is responsible for the information technology security monitoring and incident response activities, the latter covering the response coordination to cybersecurity incidents under the leadership and pursuant to the direction of the CIRO. OIS also oversees the Company’s cybersecurity training program for employees. 44 Index

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Nature of Occupancy Primary Facilities: Mechelen, Belgium Leased Shanghai, China (2) Leased/Owned Muenster, Germany Owned Bangalore, India Leased Kawagoe, Japan Leased Singapore Leased Geneva, Switzerland (2) Owned/Leased Eye, United Kingdom Owned Harrogate, United Kingdom Owned Huntingdon, United Kingdom Owned Shardlow, United Kingdom Owned York, United Kingdom Leased Los Angeles, California Leased Greenfield, Indiana Owned Indianapolis, Indiana Leased Bedford, Massachusetts Owned Ann Arbor, Michigan Leased Somerset, New Jersey Owned Denver, Pennsylvania Leased Brentwood, Tennessee Leased Chantilly, Virginia Leased Madison, Wisconsin Owned All of the Company’s primary facilities have been built or improved for the purpose of providing commercial laboratory testing or biopharma laboratory services.
Biggest changeLocation Nature of Occupancy Mechelen, Belgium Leased Shanghai, China (2) Leased/Owned Munster, Germany Owned Bangalore, India Leased Singapore Leased Geneva, Switzerland (2) Owned/Leased Eye, United Kingdom Owned Harrogate, United Kingdom Owned Huntingdon, United Kingdom Owned Shardlow, United Kingdom Owned York, United Kingdom Leased Greenfield, Indiana Owned Indianapolis, Indiana Leased Bedford, Massachusetts Owned Ann Arbor, Michigan Leased Somerset, New Jersey Owned Denver, Pennsylvania Leased Chantilly, Virginia Leased Madison, Wisconsin Owned All of the Company’s primary facilities have been built or improved for the purpose of providing commercial laboratory testing or biopharma laboratory services.
The Company believes that if it were unable to renew a lease or if a lease were to be terminated on any of the facilities it presently leases, it could find alternate space at competitive market rates and readily relocate its operations to such new locations without material disruption to its operations. Item 3.
The Company believes that if it were unable to renew a lease or if a lease were to be terminated on any of the facilities it presently leases, it could find alternate space at competitive market rates and readily relocate its operations to such new location without material disruption to its operations. Item 3.
Location Nature of Occupancy Primary Facilities: Birmingham, Alabama Leased Phoenix, Arizona Owned Los Angeles, California Leased Monrovia, California Leased San Diego, California Leased San Francisco, California (2) Leased Shelton, Connecticut Leased Tampa, Florida Leased South Bend, Indiana Leased Wichita, Kansas Leased Baltimore, Maryland Leased Holyoke, Massachusetts Leased Westborough, Massachusetts Leased Troy, Michigan Leased St.
Location Nature of Occupancy Birmingham, Alabama Leased Phoenix, Arizona Owned Los Angeles, California Leased Monrovia, California Leased San Diego, California Leased San Francisco, California (2) Leased Shelton, Connecticut Leased Tampa, Florida Leased South Bend, Indiana Leased Wichita, Kansas Leased Baltimore, Maryland Leased Holyoke, Massachusetts Leased Westborough, Massachusetts Leased Troy, Michigan Leased St.
The table below summarizes certain information as to BLS’s principal operating and administrative facilities at December 31, 2024.
The table below summarizes certain information as to BLS’s principal operating and administrative facilities at December 31, 2025.
Item 2. PROPERTIES The Company’s corporate headquarters are located in Burlington, North Carolina, and include facilities that are both owned and leased. Dx operates through a network of patient service centers, branches, rapid response laboratories, primary laboratories, and specialty laboratories. The table below summarizes certain information as to Dx’s principal operating and administrative facilities at December 31, 2024.
Item 2. PROPERTIES The Company’s corporate headquarters are located in Burlington, North Carolina, and include facilities that are both owned and leased. Dx operates through a network of PSCs, branches, rapid response laboratories, primary laboratories, and specialty laboratories. The table below summarizes certain information as to Dx’s principal operating and administrative facilities at December 31, 2025.
LEGAL PROCEEDINGS See Note 15 Commitments and Contingencies to the Consolidated Financial Statements. Item 4. MINE SAFETY DISCLOSURES Not applicable. 46 Index PART II
LEGAL PROCEEDINGS See Note 15 Commitments and Contingencies to the Consolidated Financial Statements. Item 4. MINE SAFETY DISCLOSURES Not applicable. 35 TABLE OF CONTENTS PART II
Paul, Minnesota Owned Raritan, New Jersey Owned Burlington, North Carolina (5) Owned/Leased Research Triangle Park, North Carolina (3) Leased Dublin, Ohio Owned Tulsa, Oklahoma Leased Brentwood, Tennessee Leased Dallas, Texas Leased Houston, Texas Leased Herndon, Virginia Leased Seattle, Washington Leased Spokane, Washington (2) Leased Oak Creek, Wisconsin Leased 45 Index BLS operates on a global scale.
Paul, Minnesota Owned Raritan, New Jersey Owned Burlington, North Carolina (5) Owned/Leased Research Triangle Park, North Carolina (3) Leased Dublin, Ohio Owned Tulsa, Oklahoma Leased Brentwood, Tennessee Leased Dallas, Texas Leased Houston, Texas Leased Herndon, Virginia Leased Seattle, Washington Leased Spokane, Washington Leased Oak Creek, Wisconsin Leased 34 TABLE OF CONTENTS BLS operates globally.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+0 added−3 removed0 unchanged
Biggest changeComparison of Cumulative Total Return 12/2019 12/2020 12/2021 12/2022 12/2023 12/2024 Labcorp Holdings Inc. $ 100.00 $ 120.32 $ 185.74 $ 140.40 $ 159.82 $ 163.37 S&P 500 Index $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 S&P 500 Health Care Index $ 100.00 $ 113.45 $ 143.09 $ 140.29 $ 143.18 $ 146.87 Issuer Purchases of Equity Securities (all amounts in millions, except per share amounts) The following table sets forth information with respect to purchases of shares of the Company’s Common Stock made during the quarter ended December 31, 2024, by or on behalf of the Company: Total Number of Shares Repurchased Average Price Paid Per Share Total Number of Shares Repurchased as Part of Publicly Announced Program Maximum Dollar Value of Shares that May Yet Be Repurchased Under the Program October 1 - October 31 — $ — — $ 1,355.4 November 1 - November 30 0.3 $ 240.63 0.3 $ 1,280.4 December 1 - December 31 — $ — — $ 1,280.4 0.3 $ 240.63 0.3 During the year ended December 31, 2024, the Company purchased 1.1 shares of its Common Stock at an average price per share of $219.57 for a total cost of $250.1.
Biggest changeFor the purpose of this graph, the distribution of 100% of the outstanding Common Stock of Fortrea to the Company’s shareholders, pursuant to which Fortrea became an independent company, is treated as a non-taxable cash dividend of $33.11 per share, an amount equal to the opening price of Fortrea common stock when it began trading on June 20, 2023, that was deemed reinvested in the Company’s Common Stock at the closing price on June 20, 2023. 12/2020 12/2021 12/2022 12/2023 12/2024 12/2025 Labcorp Holdings Inc. $ 100.00 $ 154.37 $ 116.69 $ 132.83 $ 135.77 $ 150.19 S&P 500 Index $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 S&P 500 Health Care Index $ 100.00 $ 126.13 $ 123.67 $ 126.21 $ 129.46 $ 148.36 Issuer Purchases of Equity Securities (dollars and shares in millions, except per share amounts) The following table sets forth information with respect to purchases of shares of the Company’s Common Stock made during the quarter ended December 31, 2025, by or on behalf of the Company: Total Number of Shares Repurchased Average Price Paid Per Share Total Number of Shares Repurchased as Part of Publicly Announced Program Maximum Dollar Value of Shares that May Yet Be Repurchased Under the Program October 1 - October 31 0.3 $ 261.69 0.3 $ 983.4 November 1 - November 30 0.5 $ 256.68 0.5 $ 862.9 December 1 - December 31 0.1 $ 263.71 0.1 $ 830.4 0.9 $ 259.27 0.9 During the year ended December 31, 2025, the Company purchased 1.8 shares of its Common Stock at an average price per share of $254.17 for a total cost of $450.0.
There can be no assurance that the Company will continue to pay quarterly cash dividends at the current rate or at all. 47 Index Common Stock Performance The graph below shows the cumulative total return assuming an investment of $100 on December 31, 2019, in each of the Company’s Common Stock, the Standard & Poor’s, (S&P) 500 Index and the S&P 500 Health Care Index, and assuming that all dividends were reinvested.
There can be no assurance that the Company will continue to pay quarterly cash dividends at the current rate or at all. 36 TABLE OF CONTENTS Common Stock Performance The graph below shows the cumulative total return assuming an investment of $100 on December 31, 2020, in each of the Company’s Common Stock, the S&P 500 Index, and the S&P 500 Health Care Index, and assuming that all dividends were reinvested.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s common stock, par value $0.10 per share, or Common Stock, trades on the New York Stock Exchange or NYSE under the symbol “LH”. Holders On February 24, 2025, there were approximately 1,038 holders of record of the Common Stock.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s common stock, par value $0.10 per share, or Common Stock, trades on the New York Stock Exchange under the symbol “LH”. Holders On February 23, 2026, there were approximately 1,032 holders of record of the Common Stock.
At the end of 2024, the Company had outstanding authorization from its Board to purchase up to $1,280.4 maximum value of the Company’s Common Stock. The repurchase authorization has no expiration date.
At December 31, 2025, the Company had outstanding authorization from its Board to purchase up to $830.4 maximum value of the Company’s Common Stock. The repurchase authorization has no expiration date.
The Company expects common dividend declarations, if made, to occur in January, April, July, and October with payment dates in March, June, September and December, and are subject to Board approval.
For the year ended December 31, 2025, the Company paid $240.7 million in Common Stock dividends. The Company expects common dividend declarations, if made, to occur in January, April, July, and October with payment dates in March, June, September, and December, and are subject to Board approval.
During the year ended December 31, 2023, the Company purchased 4.8 shares of its Common Stock at an average price per share of $206.85 for a total cost of $1,000.0. 48 Index Item 6. [RESERVED]
During the year ended December 31, 2024, the Company purchased 1.1 shares of its Common Stock at an average price per share of $219.57 for a total cost of $250.1. Item 6. [RESERVED] 37
Transfer Agent The transfer agent for the Company’s Common Stock is Equiniti Trust Company, LLC, 48 Wall Street, Floor 23, New York, NY 10005, telephone: 800-468-9716, website: www.https://equiniti.com/us/. Dividends The Company initiated a quarterly dividend beginning in the second quarter of 2022.
Transfer Agent The transfer agent for the Company’s Common Stock is Equiniti Trust Company, LLC, 48 Wall Street, Floor 23, New York, NY 10005, telephone: 800-468-9716, website: https://www.equiniti.com/us/. Dividends The Company’s ability to pay dividends is primarily dependent on earnings from operations, the adequacy of capital and the availability of liquid assets for distribution.
Removed
The Company’s ability to pay dividends is primarily dependent on earnings from operations, the adequacy of capital and the availability of liquid assets for distribution. For the year ended December 31, 2024, the Company paid $243.1 million in Common Stock dividends.
Removed
For the purpose of this graph, the distribution of 100% of the outstanding Common Stock of Fortrea to the Company’s shareholders, pursuant to which Fortrea became an independent company, is treated as a non-taxable cash dividend of $33.11 per share, an amount equal to the opening price of Fortrea common stock when it began trading on June 20, 2023, that was deemed reinvested in the Company’s Common Stock at the closing price on June 20, 2023.
Removed
When the Company repurchases shares, the amount paid to repurchase the shares in excess of the par or stated value is allocated to additional paid-in-capital unless subject to limitation or the balance in additional paid-in-capital is exhausted. Remaining amounts are recognized as a reduction in retained earnings.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

68 edited+21 added−27 removed49 unchanged
Biggest changeOperating Results by Segment Year Ended December 31, 2024 2023 Change Dx segment operating income $ 1,606.3 $ 1,591.3 0.9 % Dx segment operating margin 15.8 % 16.9 % (1.1) % BLS segment operating income 458.9 396.3 15.8 % BLS segment operating margin 15.7 % 14.3 % 1.4 % Segment operating income 2,065.2 1,987.6 3.9 % General corporate and unallocated expenses (670.8) (644.1) 4.1 % Amortization of intangibles and other assets (256.4) (219.8) 16.7 % Restructuring and other charges (46.0) (49.1) (6.3) % Goodwill and other asset impairments (5.3) (349.0) (98.5) % Total operating income $ 1,086.7 $ 725.6 49.8 % 51 Index 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.
Biggest changeProvision for Income Taxes Year Ended December 31, 2025 2024 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. 40 TABLE OF CONTENTS Results of Operations by Segment Year Ended December 31, 2025 2024 Change Dx segment operating income $ 1,779.9 $ 1,606.3 10.8 % Dx segment operating margin 16.4 % 15.8 % 0.5 % (1) BLS segment operating income 498.5 458.9 8.6 % BLS segment operating margin 16.1 % 15.7 % 0.4 % Segment operating income 2,278.4 2,065.2 10.3 % General corporate and unallocated expenses (482.2) (670.8) (28.1) % Amortization of intangibles and other assets (280.0) (256.4) 9.2 % Restructuring and other charges (127.2) (46.0) 176.5 % Goodwill and other asset impairments (4.3) (5.3) (18.9) % Total Operating income $ 1,384.7 $ 1,086.7 27.4 % (1) Amount does not cross-foot due to rounding.
There can be no assurance that the estimates and assumptions used in the Company’s goodwill and indefinite-lived intangible asset impairment testing performed as of the beginning of the fourth quarter of 2024 will prove to be accurate predictions of the future, if, for example, (i) the businesses do not perform as projected, (ii) overall economic conditions in 2024 or future years vary from current assumptions (including changes in discount rates), (iii) business conditions or strategies for a specific reporting unit change from current assumptions, including loss of major customers, (iv) investors require higher rates of return on equity investments in the marketplace, or (v) enterprise values of comparable publicly traded companies, or actual sales transactions of comparable companies, were to decline, resulting in lower multiples of revenues and earnings before interest, taxes, depreciation, and amortization.
There can be no assurance that the estimates and assumptions used in the Company’s goodwill and indefinite-lived intangible asset impairment testing performed as of the beginning of the fourth quarter of 2025 will prove to be accurate predictions of the future, if, for example, (i) the businesses do not perform as projected, (ii) overall economic conditions in 2025 or future years vary from current assumptions (including changes in discount rates), (iii) business conditions or strategies for a specific reporting unit change from current assumptions, including loss of major customers, (iv) investors require higher rates of return on equity investments in the marketplace, or (v) enterprise values of comparable publicly traded companies, or actual sales transactions of comparable companies, were to decline, resulting in lower multiples of revenues and earnings before interest, taxes, depreciation, and amortization.
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.
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.
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.
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 42 TABLE OF CONTENTS 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.
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 53 Index 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).
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).
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 56 Index on the technical merits of the associated tax position.
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.
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 .
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.
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, 2025, the Company had outstanding authorization from its Board to purchase up to $830.4 maximum value of Common Stock.
At December 31, 2024, there was $4,073.2 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.
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.
Management performed its annual goodwill and indefinite-lived intangible asset impairment testing as of the beginning of the fourth quarter of 2024. The Company elected to perform a quantitative assessment for goodwill and indefinite-lived intangible assets for each of its reporting units.
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 qualitative assessment for goodwill and indefinite-lived intangible assets for each of its reporting units.
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. The Company’s principal source of liquidity is operating cash flow, supplemented by proceeds from debt offerings.
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.
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.
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.
Cash and cash equivalents consist of highly liquid instruments, such as time deposits and other money market investments, which have original maturities of three months or less. 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.
Cash and cash equivalents consist of highly liquid instruments, such as time deposits and other money market investments, which have original maturities of three months or less. Cash Flows from Operating Activities 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 Company’s critical accounting policies arise in conjunction with the following: • Revenue recognition; • Business combinations; • Income taxes; • Goodwill and indefinite-lived assets; and • Legal contingencies. 54 Index Revenue Recognition Dx Within the Dx segment, a revenue transaction is initiated when Dx receives a requisition form to perform a diagnostic test.
The Company’s critical accounting policies arise in conjunction with the following: • Revenue recognition; • Business combinations; • Income taxes; • Goodwill and indefinite-lived intangible assets; and • Legal contingencies. 43 TABLE OF CONTENTS Revenue Recognition Dx Within the Dx segment, a revenue transaction is initiated when Dx receives a requisition form to perform a diagnostic test.
Any remaining adjustments to revenue are recorded at the time of final collection and settlement. These adjustments are not material to Dx’s results of operations in any period presented. BLS 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.
These adjustments are not material to Dx’s results of operations in any period presented. BLS 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 7.0% increase in revenues for the year ended December 31, 2024, as compared to the corresponding period in 2023, was primarily due to organic revenue of 3.9%, acquisitions, net of divestitures of 2.8%, and favorable foreign currency translation of 0.2%.
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 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.
The increase was primarily due to organic growth and LaunchPad savings, 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.
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.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL (dollars in millions) For the year ended December 31, 2024, the Company’s revenues were $13,008.9, an increase of 7.0% from $12,161.6 for the corresponding period in 2023.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL (dollars in millions) For the year ended December 31, 2025, the Company’s revenues were $13,951.7, an increase of 7.2% from $13,008.9 for the corresponding period in 2024.
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.
Cash Flows from Financing Activities 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.
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.
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.
The majority of Dx’s third-party revenue is reimbursed on a fee-for-service basis. These payers are billed at Dx’s established list price and revenue is recorded net of contractual discounts. The majority of Dx’s MCO revenues are recorded based upon contractually negotiated fee schedules with revenues for non-contracted MCOs recorded based on historical reimbursement experience.
These payers are billed at Dx’s established list price and revenue is recorded net of contractual discounts. The majority of Dx’s MCO revenues are recorded based upon contractually negotiated fee schedules with revenues for non-contracted MCOs recorded based on historical reimbursement experience. Third-party reimbursement is also received through capitation agreements with MCOs and IPAs.
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.
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.
The repurchase authorization has no expiration date. For the year ended December 31, 2024, the Company paid $243.1 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 repurchase authorization has no expiration date. For the year ended December 31, 2025, the Company paid $240.7 in Common Stock dividends. 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.
Revenues Year Ended December 31, 2024 2023 Change Dx $ 10,144.3 $ 9,415.1 7.7 % BLS 2,922.6 2,774.2 5.3 % Intercompany eliminations and other (58.0) (27.7) 109.4 % Total $ 13,008.9 $ 12,161.6 7.0 % Dx revenues for the year ended December 31, 2024, were $10,144.3, an increase of 7.7% compared to revenues of $9,415.1 in the corresponding period in 2023.
Revenues Year Ended December 31, 2025 2024 Change Dx $ 10,876.5 $ 10,144.3 7.2 % BLS 3,098.2 2,922.6 6.0 % Intercompany eliminations and other (23.0) (58.0) 60.4 % Total $ 13,951.7 $ 13,008.9 7.2 % 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 in revenues was primarily due to organic growth of 4.3% and favorable foreign currency translation of 1.1%. 49 Index Cost of Revenues Year Ended December 31, 2024 2023 Change Cost of revenues $ 9,384.5 $ 8,796.7 6.7 % 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.
The increase in revenues was primarily due to organic growth of 4.0% and favorable foreign currency translation of 2.0%. 38 TABLE OF CONTENTS Cost of Revenues Year Ended December 31, 2025 2024 Change Cost of revenues $ 9,939.2 $ 9,384.5 5.9 % 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.
Amortization of Intangibles and Other Assets Year Ended December 31, 2024 2023 Change Amortization of intangibles and other assets $ 256.4 $ 219.8 16.7 % The increase in amortization of intangibles and other assets primarily reflects additional amortization for assets acquired subsequent to December 31, 2023.
Amortization of Intangibles and Other Assets Year Ended December 31, 2025 2024 Change Amortization of intangibles and other assets $ 280.0 $ 256.4 9.2 % The increase in amortization of intangibles and other assets primarily reflects additional amortization for assets acquired subsequent to December 31, 2024.
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%. BLS revenues for the year ended December 31, 2024, were $2,922.6, an increase of 5.3% over revenues of $2,774.2 in the corresponding period in 2023.
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.
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.
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 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.
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 2024, the Company, LCAH and U.S.
Anticipated write-offs are recorded as adjustments to revenue at an amount considered necessary to record the segment’s revenue at its net realizable value. In addition to contractual discounts, other adjustments including anticipated payer denials and other external factors that could affect the collectability of its receivables are considered when determining revenue and the net receivable amount.
In addition to contractual discounts, other adjustments including anticipated payer denials and other external factors that could affect the collectability of its receivables are considered when determining revenue and the net receivable amount. Any remaining adjustments to revenue are recorded at the time of final collection and settlement.
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.
Cash Flows from Investing Activities 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 41 TABLE OF CONTENTS year ended December 31, 2024.
In summary the Company’s cash flows were as follows: Year Ended December 31, 2024 2023 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) Effect of exchange rate on changes in cash and cash equivalents (17.0) 9.9 Net cash impact from discontinued operations — 1,600.4 Net change in cash and cash equivalents $ 981.9 $ 106.8 Cash and Cash Equivalents Cash and cash equivalents at December 31, 2024, and 2023 totaled $1,518.7 and $536.8, respectively.
In summary the Company’s cash flows were as follows: Year Ended December 31, 2025 2024 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 (decrease) increase in cash and cash equivalents $ (986.4) $ 981.9 Cash and Cash Equivalents Cash and cash equivalents at December 31, 2025, and 2024, totaled $532.3 and $1,518.7, respectively.
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, 2024, were primarily due to the decommissioning of an information system and a robotic asset.
Equity Method Income, Net Year Ended December 31, 2024 2023 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 Year Ended December 31, 2025 2024 Change 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.
When the agreed upon reimbursement is based solely on an established rate per member, revenue is not impacted by the volume of testing performed. Under a capitation pool arrangement, the aggregate value of an established rate per member is distributed based on the volume and complexity of the procedures performed by laboratories participating in the agreement.
Under a capitation pool arrangement, the aggregate value of an established rate per member is distributed based on the volume and complexity of the procedures performed by laboratories participating in the agreement. Dx recognizes revenue monthly, based upon the established capitation rate or anticipated distribution from a capitated pool.
Fixed-price contracts are typically recognized as revenue over time based on a proportional-performance basis, using either input or output methods that are specific to the service provided.
These contracts generally take the form of fixed-price or fee-for-service arrangements subject to pricing adjustments based on changes in scope. Fixed-price contracts are typically recognized as revenue over time based on a proportional-performance basis, using either input or output methods that are specific to the service provided.
The following are descriptions of the Dx payer portfolios: Clients 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.
The following are descriptions of the Dx payer portfolios: Clients 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.
Selling, General and Administrative Expenses Year Ended December 31, 2024 2023 Change Selling, general and administrative expenses $ 2,230.0 $ 2,021.4 10.3 % 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.
Selling, General, and Administrative Expenses Year Ended December 31, 2025 2024 Change Selling, general, and administrative expenses $ 2,216.3 $ 2,230.0 (0.6) % 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.
Third-party reimbursement is also received through capitation agreements with MCOs and IPAs. Under capitated agreements, revenue is recognized based on a negotiated per-member, per-month payment for an agreed upon menu of tests, or based upon the proportionate share earned by Dx from a capitation pool.
Under capitated agreements, revenue is recognized based on a negotiated per-member, per-month payment for an agreed upon menu of tests, or based upon the proportionate share earned by Dx from a capitation pool. When the agreed upon reimbursement is based solely on an established rate per member, revenue is not impacted by the volume of testing performed.
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 57 Index by unfavorable or unforeseen changes which could impact the existing assumptions used in the impairment analysis.
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. 46 TABLE OF CONTENTS 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.
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.
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.
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).
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).
Dx recognizes revenue monthly, based upon the established capitation rate or anticipated distribution from a capitated pool. Dx has a formal process to estimate implicit price concessions for uncollectable accounts. The majority of Dx’s collection risk is related to accounts receivable from both insured and uninsured patients who are unwilling or unable to pay.
Dx has a formal process to estimate implicit price concessions for uncollectable accounts. The majority of Dx’s collection risk is related to accounts receivable from both insured and uninsured patients who are unwilling or unable to pay. Anticipated write-offs are recorded as adjustments to revenue at an amount considered necessary to record the segment’s revenue at its net realizable value.
In addition to contractual discounts, other adjustments including anticipated payer denials are considered when determining net revenue. Any remaining adjustments to revenue are recorded at the time of final collection and settlement. These adjustments are not material to Dx’s results of operations in any period presented . Third Party Third party includes revenue related to MCOs.
Any remaining adjustments to revenue are recorded at the time of final collection and settlement. These adjustments are not material to Dx’s results of operations in any period presented . Third Party Third party includes revenue related to MCOs. The majority of Dx’s third-party revenue is reimbursed on a fee-for-service basis.
Capital expenditures in 2024 were 3.8% of revenues, primarily in connection with projects to support growth in the Company’s core businesses.
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.
Restructuring and Other Charges Year Ended December 31, 2024 2023 Change Restructuring and other charges $ 46.0 $ 49.1 (6.3) % 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 comprised of $43.0 in severance and other personnel costs and $5.9 in facility-related costs primarily associated with general integration activities.
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, 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.
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.
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.
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. If a price list is not available, BLS will estimate the transaction price using either market prices or an “expected cost plus margin” approach.
If a price list is not available, BLS will estimate the transaction price using either market prices or an “expected cost plus margin” approach. The total contract value is estimated at the beginning of the contract, and is equal to the amount expected to be billed to the customer.
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. Capital expenditures were $489.9 and $453.6 for the years ended December 31, 2024, and 2023, respectively.
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.
Business Combinations The Company accounts for business combination transactions under the acquisition method of accounting and reports the results of operations of the acquired entities from its respective date of acquisition. Assets acquired are recorded at their estimated fair values as of the acquisition date.
Amortization of assets from sales commissions is included in Selling, general, and administrative expenses in the Consolidated Statements of Operations. Business Combinations The Company accounts for business combination transactions under the acquisition method of accounting and reports the results of operations of the acquired entities from its respective date of acquisition.
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 55 Index 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 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.
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.
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.
Estimated fair values are based on various valuation methodologies, including an income approach using primarily discounted cash flow techniques for the customer relationships intangible assets. The aforementioned income methods utilize management’s estimates of future operating results and cash flows discounted using a weighted-average cost of capital that reflects market participant assumptions.
The aforementioned income methods utilize management’s estimates of future operating results and cash flows discounted using a weighted-average cost of capital that reflects market participant assumptions. The excess of the fair value of the consideration conveyed over the fair value of the assets acquired are recorded as goodwill.
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, 2023, the Company recorded net restructuring charges of $49.1. The charges were comprised of $33.4 in severance and other personnel costs and $22.3 in facility-related costs primarily associated with general integration activities.
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.
Other, Net Year Ended December 31, 2024 2023 Change Other, net $ 60.2 $ 15.5 288.4 % 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.
Other, Net Year Ended December 31, 2025 2024 Change Other, net $ (55.0) $ 60.2 (191.4) % 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.
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.
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%.
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. Other Commercial Commitments The Company has debt instruments outstanding.
Credit Ratings 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.
Generally, client revenues are recorded on a fee-for-service basis at Dx’s client list price, less any negotiated discount. A portion of client billing is for laboratory management services, collection kits and other non-testing offerings. In these cases, revenue is recognized when services are rendered or delivered.
A portion of client billing is for laboratory management services, collection kits and other non-testing offerings. In these cases, revenue is recognized when services are rendered or delivered. Patients This portfolio includes revenue from uninsured patients and member cost-share for insured patients (e.g., coinsurance, deductibles, and non-covered services).
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.
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.
Dx bills insured patients as directed by their health plan and after consideration of the fees and terms associated with an established health plan contract. Medicare and Medicaid This portfolio relates to fee-for-service revenue from traditional Medicare and Medicaid programs. Net revenue from these programs is based on the fee schedule established by the related government authority.
Uninsured patients are billed based upon Dx’s patient fee schedules, net of any discounts negotiated with physicians on behalf of their patients. Dx bills insured patients as directed by their health plan and after consideration of the fees and terms associated with an established health plan contract.
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.
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.
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.
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.
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. 50 Index Interest Expense Year Ended December 31, 2024 2023 Change Interest expense $ 208.3 $ 199.6 4.4 % 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.
The charges were adjusted by the reversal of previously established liabilities of $2.9. 39 TABLE OF CONTENTS Interest Expense Year Ended December 31, 2025 2024 Change Interest expense $ 224.1 $ 208.3 7.6 % For the year ended December 31, 2025, interest expense increased 7.6% as compared with the corresponding period in 2024.
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.
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 12-month period following the close of each transaction. On June 30, 2023, the Company completed the Spin-off.
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. 52 Index On September 23, 2024, LCAH (the Issuer) entered into a base indenture with U.S.
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.
Removed
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.
Added
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.
Removed
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.
Added
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.
Removed
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.
Added
However, the Company currently believes any such reduction would not likely have a material impact on its results of operations in future periods.
Removed
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%.
Added
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.
Removed
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.
Added
This decrease was primarily due to operational efficiencies and the impact from revenue growth, including the performance of Invitae.
Removed
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.
Added
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−0 removed7 unchanged
Biggest changeIn May 2021, to hedge against changes in the fair value portion of the Company’s long-term debt, the Company entered into fixed-to-variable interest rate swap agreements for the 2.70% senior notes due 2031 with an aggregate notional value of $500.0 and variable interest rates based on three-month London Interbank Offered Rate (LIBOR), which changed to Secured Overnight Financing Rate (SOFR) in 2023, plus 1.0706%.
Biggest changeIn May 2021, to hedge against changes in the fair value portion of the Company’s long-term debt, the Company entered into fixed-to-variable interest rate swap agreements for the 2.70% senior notes due 2031 with an aggregate notional value of $500.0 and variable interest rates currently based on the three-month SOFR, plus 1.0706%. Item 8.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK (dollar in millions) Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange rates, interest rates and other relevant market rate or price changes.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK (dollar amounts in millions) Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange rates, interest rates and other relevant market rate or price changes.
The Company’s Consolidated Financial Statements are reported in USD and, accordingly, fluctuations in exchange rates will affect the translation of revenues and expenses denominated in foreign currencies into USD for purposes of reporting the Company’s consolidated financial results. In 2024 and 2023, the most significant currency exchange rate exposures were to the Canadian Dollar, Swiss Franc, Euro, and British Pound.
The Company’s Consolidated Financial Statements are reported in USD and, accordingly, fluctuations in exchange rates will affect the translation of revenues and expenses denominated in foreign currencies into USD for purposes of reporting the Company’s consolidated financial results. In 2025 and 2024, the most significant currency exchange rate exposures were to the CAD, Swiss Franc, Euro, and British Pound.
Accumulated currency translation adjustments recorded as a separate component of Shareholders’ equity were $(217.1) and $183.1 for the years ended December 31, 2024, and 2023, respectively. The Company does not have significant operations in countries in which the economy is considered to be highly inflationary.
Accumulated currency translation adjustments recorded as a separate component of Shareholders’ equity were $231.7 and $(217.1) for the years ended December 31, 2025, and 2024, respectively. The Company does not have significant operations in countries in which the economy is considered to be highly inflationary.
Excluding the impacts from any outstanding or future hedging transactions, a hypothetical change of 10% in average exchange rates used to translate all foreign currencies to USD would have impacted income before income taxes for 2024 by approximately $27.4.
Excluding the impacts from any outstanding or future hedging transactions, a hypothetical change of 10% in average exchange rates used to translate all foreign currencies to USD would have impacted income before income taxes for 2025 by approximately $31.7.
At December 31, 2024, the Company had 12 open foreign exchange forward contracts with various amounts maturing monthly through January 2025 with a notional value totaling approximately $302.4. At December 31, 2023, the Company had 9 open foreign exchange forward contracts with various amounts maturing monthly through January 2024 with a notional value totaling approximately $305.8.
At December 31, 2025, the Company had eight open foreign exchange forward contracts with various amounts maturing monthly through January 2026 with a notional value totaling approximately $238.0. At December 31, 2024, the Company had 12 open foreign exchange forward contracts with various amounts maturing monthly through January 2025 with a notional value totaling approximately $302.4.
The Company does not hold or issue derivative financial instruments for trading purposes. 58 Index Foreign Currency Exchange Rates Approximately 13.7% and 12.9% of the Company’s revenues for the year ended December 31, 2024, and 2023, respectively, were denominated in currencies other than the U.S. dollar (USD).
The Company does not hold or issue derivative financial instruments for trading purposes. 47 TABLE OF CONTENTS Foreign Currency Exchange Rates Approximately 13.5% and 13.7% of the Company’s revenues for the year ended December 31, 2025, and 2024, respectively, were denominated in currencies other than the USD.
Added
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements of the Company required in this item are set forth beginning on page F-1 of this Annual Report on Form 10-K. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.

Other LH 10-K year-over-year comparisons