Labcorp Holdings (LH) 10-K risk factor changes: FY2021 vs FY2021

A [removed: further spread] [added: resurgence] of COVID-19, including the rise of variants, and the Company’s initiatives to help limit the spread of the illness, [removed: continue to] [added: could] impact the Company’s ability to carry out its business as usual, which could materially adversely impact its business and financial condition.

In addition, technological resources may [removed: be] [added: become] strained due to the number of remote users.

The Company [removed: expects to continue to incur] [added: incurred] additional [removed: costs, which may be significant, as it continues] [added: costs] to implement operational changes in response to this pandemic.

[removed: Further, the] [added: The] COVID-19 pandemic [removed: has disrupted] [added: disrupted,] and [added: along with other economic factors, a resurgence in COVID-19] could continue to [removed: disrupt] [added: disrupt,] the Company’s supply chain, including [removed: by impacting] its ability to secure test collection [removed: supplies, equipment] and testing supplies [removed: for its facilities,] [added: and equipment and] personal protective equipment for its [removed: employees in its testing locations, PSCs, and drug development clinics.][added: employees.]

[removed: Additionally, if the pandemic continues for an extended period] [added: If there is a resurgence] of [removed: time,] the [added: pandemic, the] Company may be forced to prioritize its application of resources to the continued mitigation of COVID-19, at the expense of other potentially profitable opportunities or initiatives, such as [removed: through] the development of new products or selected business acquisitions.

Despite the [removed: Company's] [added: Company’s] efforts to [removed: obtain adequate clinical trial kit and testing supplies] [added: respond to] and [removed: expand] [added: mitigate the impact of COVID-19 on] its [removed: capacity to make clinical trials collection kits] [added: business] and [removed: perform clinical trials testing,] [added: operations since] the [removed: Company may not be successful in meeting] [added: global pandemic was declared on March 11, 2020,] the [removed: increased demand,] [added: failure of the Company to appropriately] and [added: adequately respond as] the [added: effects of the pandemic continue may cause the] Company’s customers and other stakeholders [removed: may] [added: to] perceive the Company’s responses to the pandemic as insufficient, [removed: inadequate] [added: inadequate,] or not equivalent to or better than competitors, including with respect to the availability of testing, collection kits, and the amount of time it takes for delivery of test results or fulfillment of kit orders.

Factors that may be out of the Company’s control, such as the availability of equipment, supplies, and key personnel and geographical changes in demand, may impact the Company’s ability to meet customer demand and [removed: the Company's other responses to the COVID-19 pandemic, and] may have an adverse effect on the Company’s operations.

The first phase of reductions pursuant to PAMA came into effect on January 1, 2018, and will continue annually subject to certain [added: delays in implementation and] phase-in limits through [removed: 2025,] [added: 2026,] and without limitations for subsequent periods.

Failure [added: of the Company or its third-party service providers] to comply with privacy and 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.

If the Company [removed: does] [added: 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 or criminal sanctions.

In the U.S., the Health Insurance Portability and Accountability Act of 1996 (HIPAA) privacy and security regulations, including the expanded requirements under U.S. Health Information Technology for Economic and Clinical Health Act [added: (HITECH), establish comprehensive standards with respect to the use and disclosure of protected health information (PHI), by covered entities, in addition to setting standards to protect the confidentiality, integrity and security of PHI.]

[removed: The Company's inability to identify appropriate partners or] reach mutually satisfactory arrangements could adversely affect the business and operations.

The Company maintains an anti-corruption program including policies, procedures, training and safeguards in the [added: engagement and management of third parties acting on the Company’s behalf.]

Failure to comply with the regulations of pharmaceutical and medical device regulatory agencies, such as the FDA, the Medicines and Healthcare Products Regulatory Agency in the United Kingdom (U.K.), the European Medicines Agency, the National Medical Products Administration in China (NMPA), and the Pharmaceuticals and Medical Devices Agency in Japan, could result in [added: fines, penalties, and] sanctions [removed: and/or remedies] against DD and have a material adverse effect upon the Company.

[removed: Actions] [added: Increased regulations and restrictions on the import] of [added: research animals, limitations of supply of research animals, and actions of] animal rights activists may have an adverse effect on the Company.

DD's preclinical services utilize animals in preclinical testing of the safety and efficacy of [removed: drugs.][added: drugs and devices.]

[removed: Acts] [added: 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.

DD complies with licensing and registration requirement standards set by these [removed: laws and regulations in the jurisdictions in which it conducts animal research.]

U.S. [removed: FDA] [added: Food and Drug Administration (FDA)] regulation of diagnostic products, increased FDA regulation of laboratory-developed tests (LDTs), and regulation by other countries of diagnostic products could result in increased costs and the imposition of fines or penalties, and could have a material adverse effect upon the Company’s business.

The FDA enforces laws and regulations that govern the development, testing, manufacturing, performance, labeling, advertising, marketing, distribution, and surveillance of diagnostic products, and it regularly inspects and reviews the [added: manufacturing processes and product performance of diagnostic products.]

In 2014, the FDA issued draft guidance describing how it intended to discontinue its enforcement discretion policy and begin regulating LDTs as medical devices; however, that draft guidance has not been finalized, and [added: the] FDA has instead continued its enforcement discretion policy and has indicated that it intends to work with Congress to enact comprehensive legislative reform of diagnostics oversight.

Even without issuance of a finalized LDT oversight framework, in light of the April 4, 2019, FDA warning letter issued to Inova Genomics Laboratory related to certain LDTs that Inova offered, as well as the February 2020 pharmacogenetics [removed: statement,] [added: statement and the failure to pass diagnostic reform legislation in 2022,] there may be an increased risk of FDA enforcement actions for laboratory tests offered by companies without FDA clearance or approval.

For example, the European Union In Vitro Diagnostics Regulation (Regulation (EU) 2017/746 (EU IVDR)), [removed: scheduled to become] [added: which became] applicable [added: on] May 26, 2022, establishes a new legislative framework for in vitro diagnostic devices [removed: including] [added: that are used in certain circumstances, and includes] a rule-based classification and quality and safety standards.

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. Needlestick Safety and Prevention Act, could result in [removed: fines and] [added: fines,] penalties and loss of licensure, and have a material adverse effect upon the [removed: Company’s business.][added: Company.]

Risks Related to the Company's [removed: Business][added: Business Including Global Economic and Sociopolitical Factors]

General or macro-economic factors in the U.S. and globally may have a material adverse effect upon the Company, and [removed: a] significant [removed: deterioration] [added: fluctuations] in the [removed: economy] [added: economy, recession, inflation and an increase in the costs of goods and services] could negatively impact testing volumes, drug development services, cash [removed: collections] [added: collections, profitability] and the availability [added: and cost] of credit.

In addition, uncertainty in the credit markets [added: and fluctuations in interest rates] could reduce the availability [added: and increase the cost] of credit and impact the Company’s ability to meet its financing needs in the future.

[removed: Healthcare reform and] [added: Continued] changes [removed: to related] [added: in healthcare reimbursement models and] products (e.g., health insurance exchanges), changes in government payment and reimbursement systems, or changes in payer mix, including an increase in [removed: capitated reimbursement mechanisms] [added: third-party benefits management] and [removed: evolving delivery] [added: value-based payment] models, could have a material adverse effect on the Company's revenues, profitability and cash flow.

[removed: In addition, some] [added: Some] MCOs use capitation rates to fix the cost of laboratory testing services for their enrollees.

[removed: The] Company makes significant efforts to obtain adequate compensation for its services in its capitated arrangements.

For the year ended December 31, [removed: 2021,] [added: 2022,] such capitated contracts accounted for approximately $332.3 million, or 3.2%, of Dx's revenues.

The percentage of Medicaid beneficiaries enrolled in Managed Medicaid plans has also [removed: increased, and is expected to continue to increase;] [added: increased;] however, changes to, or repeal of, the Patient Protection and Affordable Care Act (ACA) may continue to affect coverage, reimbursement, and utilization of laboratory services, as well as administrative requirements, in ways that are currently unpredictable.

The Company has [removed: also] [added: periodically] experienced delays in the pricing and implementation of coding and billing changes among various payers, including Medicaid, Medicare and commercial carriers.

While limited changes are expected to be implemented in [removed: 2021,] [added: 2023,] the Company typically expects some delays in pricing and reimbursement as new codes are introduced.

In addition, [removed: some] [added: an increasing number of] MCOs are implementing, directly or through third parties, various types of laboratory benefit management programs that may include [removed: lab] [added: laboratory] networks, utilization management tools (such as prior authorization and/or prior notification), and claims edits, which may impact coverage or reimbursement for commercial laboratory tests.

CMS used that private market data to calculate weighted median prices for each test (based on applicable current procedural technology (CPT) codes) to represent the new CLFS rates beginning in 2018, subject to certain phase-in [removed: limits,][added: limits.]

As a result of the Protecting Medicare and American Farmers from Sequester Cuts Act that became law in December 2021, the data reporting requirements and Medicare reimbursement cuts that would have occurred under PAMA in 2022 were delayed by one additional year, and the Company [removed: will] [added: did] not experience incremental reimbursement rate impact due to PAMA in 2022.

For [removed: 2023-2025,] [added: 2024-2026,] a test price cannot be reduced by more than 15.0% per year.

The process of data reporting and repricing will be repeated every three years for Clinical Diagnostic Laboratory Tests (CDLTs) beginning in [removed: 2023.][added: 2024.]

CFLS rates for [removed: 2026] [added: 2027] and subsequent periods will not be subject to phase-in limits.

Fluctuations in the global economy, including inflation and the risk of short- or long-term recession, inflation and an increase in the costs of goods and services have impacted and in the future could have continued or greater negative impact on the demand for diagnostic testing and drug development services, the ability of customers to pay for services rendered, and the Company’s profitability.

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An increase in the use of such programs could lead to increased denial of claims, extended appeals, and reduced revenue.

The

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In 2022, limited coding and billing changes were implemented.

As a result of the Consolidated Appropriations Act, 2023, which became law in December 2022, the data reporting requirements and Medicare reimbursement cuts that would have occurred under PAMA in 2023 were delayed by one additional year, and the Company will not experience an incremental reimbursement rate impact due to PAMA in 2023.

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The Company may face increased competition from health system laboratories, due to physicians within those systems directing their testing to the health system laboratory and away from the Company, and as those laboratories seek to expand their testing volume from unaffiliated physicians in their service areas.

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cap.

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Additionally, the Company's cost of funds could increase due to the impact of increases in prevailing interest rates on its variable rate debt and should the Company refinance existing debt at maturity or obtain further financing.

Risks Related to the Planned Spin-off of the Company’s Clinical Development and Commercialization Services Business

The planned spin-off of the Company’s Clinical Development and Commercialization Services business may not be completed on the terms or timeline currently contemplated, if at all, and may not achieve the intended results.

The Company is pursuing a spin-off of its wholly owned Clinical Development and Commercialization Services (CDCS) business, which includes the parts of its DD segment focused on providing Phase I-IV clinical trial management, market access, and technology solutions to pharmaceutical and biotechnology organizations, which would result in two independent, publicly traded companies.

Unanticipated issues including, but not limited to, the failure to obtain regulatory approval, obtain appropriate assurances regarding the tax-free nature of the spin-off, or have the Form 10 registration statement that will be filed with the SEC declared effective on a timely basis or at all, could delay, prevent, or otherwise adversely affect the planned spin-off.

There can be no assurance that the conditions of the spin-off will be satisfied or that Company will be able to complete the spin-off on the terms or on the anticipated timeline, or at all.

The Company expects that pursuing and implementing the spin-off will continue to require significant expenses and management time and effort, may divert management’s attention from the Company and CDCS' ongoing business operations and may adversely impact relationships with customers, suppliers, employees, and other business counterparties.

The Company may experience delays, business disruption, increased costs, including from lost synergies or from restructuring transactions, negative market reaction to the announcement and planning for the transaction, change in market receptiveness to effect transactions in the capital markets, and other challenges during or following the spin-off, which could adversely affect the Company’s business, financial condition, and results of operations.

The Company may also experience increased challenges in attracting, retaining, and motivating key personnel during the pendency of the spin-off and following its completion, which could harm the Company’s business.

The Company anticipates that, consistent with any applicable legal and tax requirements, there will be ongoing transitional and commercial arrangements to provide for a seamless delivery of services to the customers

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and other stakeholders of the independent companies following the spin-off, but those arrangements may not meet the intended objectives, which could negatively impact the Company’s and CDCS’ business, including relationships with customers and other business counterparties.

Further, if the planned spin-off is completed, the anticipated benefits of the transaction may not be realized within the expected time periods or at all.

Failure to implement the planned spin-off effectively or the negative reaction of customers, the Company’s employees, and other stakeholders could also result in a decline in value of one or both of the companies.

Changes, including changes in interpretation, in payer regulations, policies or approvals, or changes in laws, regulations or policies in the U.S. or globally, may adversely affect the Company.

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The Company's inability to identify appropriate partners or

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Increased regulations and restrictions on the import of research animals into various countries, as well as limitations of supply, such as those the Company and others experienced in 2022 due to market factors in certain global regions, could impact DD’s ability to conduct preclinical research and could have an adverse effect on DD’s financial condition, results of operations, and cash flows.

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laws and regulations in the jurisdictions in which it conducts animal research.

The EU IVDR, where applicable to DD's services, could impact DD's ability to support trials, result in increased costs and administrative and legal actions, and have an adverse effect.

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measures.

In addition, the Company faces increased cybersecurity risks due to the number of employees that continue to work remotely, which increased significantly as a result of the COVID-19 pandemic, and which remains at levels higher than prior to the pandemic as a result of changes in the workplace and to management and employee expectations.

The Company has incurred additional costs in order to provide for the safety of its employees and the continuity of its operations, including increased frequency of deep cleaning and sanitation at each of its physical locations, additional safety training and processes, enhanced hygiene practices and materials, flexible and remote working where possible, and allowing for greater social distancing for the Company’s employees who must work on-site.

Additionally, the Company has made a number of changes at the Company’s patient service centers (PSCs) for the comfort and safety of the patients, many of which have also increased costs for the Company.

For example, the Company set aside the first business hour of every day for vulnerable patients, launched a mobile check-in process that allows patients to wait for their appointment from within their car or other nearby location, and increased sanitation and disinfection in check-in areas, waiting rooms, bathrooms, and hallways with CDC-approved disinfectants.

The Company faces increased cybersecurity risks due to the number of employees that are working remotely in regions impacted by stay-at-home orders.

The Company may also be subject to increased cyber-attacks, such as phishing attacks by threat actors using the attention placed on the pandemic as a method for targeting the Company's personnel.

During 2020 and 2021, the Company diverted resources to developing and enhancing the accessibility of COVID-19 testing, while at the same time taking certain steps with respect to its business strategy in order to increase cash flexibility.

For example, in 2020 the Company temporarily suspended its share repurchase program, applied a heightened threshold to acquisition

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activity, and delayed some of its non-COVID-19 related capital expenditures.

These measures, and any other measures the Company has taken and will continue to take to mitigate COVID-19, may be insufficient to ensure the financial stability of the Company, or may have other adverse impacts on the Company’s business, results of operations, cash flows, and financial position.

On March 11, 2020, the outbreak of COVID-19 was declared a global pandemic and containment and mitigation measures were recommended; six days prior to this characterization, the Company announced the availability of its Labcorp 2019 Novel Coronavirus (COVID-19) PCR test, which detects the presence of the underlying virus that causes COVID-19, for use with patients who meet current guidance for evaluation of infection with COVID-19.

Through 2020 and 2021, the Company launched multiple options to expand access to COVID-19 PCR and antibody testing, and introduced a series of innovations to increase test capacity, throughput, and efficiency to maximize the use of supplies.

The Company performed approximately 30 million PCR tests and 4 million antibody tests in 2021, and has maintained the capacity to perform 275,000 PCR tests and 300,000 antibody tests per day.

The Company's testing capacity remains dependent on access to multiple testing platforms and the availability of equipment and testing supplies and key personnel.

The Company's central laboratory business has also seen a significant increase in demand for sample collection supplies and kits and for clinical trials testing, which has put some pressure on the Company's supply chain and caused some delays in delivery of kit orders and clinical trial testing result delivery.

The success of the Company is dependent in part on the efforts of its management team and employees, and the COVID-19 pandemic could divert or hinder the Company’s human capital resources, which may adversely affect the Company’s operations.

The Company’s management team and employees have been acutely focused on efforts to respond to and mitigate COVID-19, including developing COVID-19 Testing.

The Company has maintained its capacity to perform COVID-19 Testing and maintain the time for delivering test results.

The Company’s management team continues to work closely with federal and state authorities, health officials, clients, and other key constituencies to make testing available to patients.

These response efforts have required, and will continue to require, a large investment of time and resources that would otherwise be focused on the development and growth of the Company.

Further, the Company's ability to maintain and expand testing capacity depends upon maintaining and expanding its employee population.

If the Company’s management team or employees become unavailable due to illness or from other related factors, its operations could be materially adversely affected.

The ongoing COVID-19 pandemic has created significant volatility, uncertainty, and economic disruption that could have an adverse impact on the Company’s financial position.

While the Company believes that it maintains a solid financial position, including a strong balance sheet, investment grade ratings, and significant access to credit, the sweeping nature of the ongoing COVID-19 pandemic has created cascading effects, all of which are difficult to predict.

The Company may also experience greater than normal impact due to fluctuations in foreign exchange rates and interest rates, decreased sales volumes, changes in employment rates and health insurance coverage, the speed of the anticipated recovery, the ability of its customers to pay for its services, and governmental and business reactions to the pandemic, all of which are highly uncertain and cannot be predicted.

In March of 2020, the Company implemented several measures in order to increase cash flexibility in light of these economic uncertainties, including temporarily suspending its share repurchase program, applying a heightened threshold to acquisition activity, and delaying some of its non-COVID-19 related capital expenditures.

In October of 2020, the Company reinstituted its share repurchase program.

If the pandemic creates further disruptions or turmoil in the credit and financial markets, the Company’s ability to access capital on favorable terms and continue to meet its liquidity needs in the future could be adversely impacted which may have other adverse impacts on the Company’s business, results of operations, cash flows, and financial position.

Changes in payer regulations or policies (or in the interpretation of current regulations or policies), insurance regulations or approvals, or changes in other laws, regulations or policies in the U.S., may adversely affect U.S. governmental and third-party coverage or reimbursement for clinical laboratory testing and may have a material adverse effect upon the Company.

(HITECH), establish comprehensive standards with respect to the use and disclosure of protected health information (PHI), by covered entities, in addition to setting standards to protect the confidentiality, integrity and security of PHI.

engagement and management of third parties acting on the Company’s behalf.

manufacturing processes and product performance of diagnostic products.

A significant downturn in the economy could negatively impact the demand for diagnostic testing and drug development services, as well as the ability of customers to pay for services rendered.

For additional risks, see “Risk Factors - Risks Related to the COVID-19 Pandemic” in Part I - Item 1A.

In 2020, limited coding and billing changes were implemented beyond those specifically related to COVID-19 Testing.

which were revised by Congress in 2019 and 2020.

CLFS rates for Advanced Diagnostic Laboratory Tests (ADLTs) will be updated annually.

On December 13, 2016, the 21st Century Cures Act was signed into law.

This Act provides funding designed to increase government spending on certain drug development initiatives; contains several provisions designed to help make the drug development process more streamlined and efficient; and allows the FDA to increase staffing to support drug, medical product and device development, review and regulation.

These provisions should be helpful to CROs, including DD, and their customers to the extent that they capitalize on the use of data, adaptive trial designs, real-world evidence, biomarkers and other development tools that are accepted by the FDA.

Acquisition and divestiture impact is considered for a [removed: twelve month] [added: twelve-month] period following the close of each transaction.

In March 2021, the Company announced the undertaking of a comprehensive review by its [removed: Board] [added: board of directors (the Board)] and management team of [removed: Labcorp's] [added: the Company's] structure and capital allocation strategy.

In December 2021, the Company announced the Board's conclusion, as well as actions that the management team and the Board [removed: are taking] [added: would take] to enhance shareholder returns.

These actions [removed: include:][added: have included:]

- authorizing a [removed: $2,500.0] [added: $2.50 billion] share repurchase program.

- implementing a new LaunchPad business process improvement initiative, targeting savings of $350.0 [removed: over the next three years;][added: million through 2025;]

- providing additional business insights through enhanced disclosures beginning with [removed: Labcorp's] [added: the Company's] results for the first quarter of 2022; and

- continuing a commitment to profitable growth through investments in science, innovation, and new [removed: technologies.][added: technologies; and]

The updated capital allocation plan [removed: enables] [added: is designed to enable] the Company to continue investment in key growth [removed: areas, including oncology, Alzheimer's disease, autoimmune disorders, and women's health.][added: areas.]

This plan is [removed: designed] [added: expected] to fuel growth through innovation by using [removed: Labcorp's unparalleled] [added: the Company's unique] data and insights to bring scientific advancements—both [removed: Labcorp-developed] [added: those developed internally] and those [removed: of other] [added: developed by outside companies and] scientists—to market at scale.

For discussion of [removed: 2020] [added: 2021] results and comparison with [removed: 2019] [added: 2020] 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 fiscal year ended December 31, [removed: 2020.][added: 2021.]

Years ended December 31, [removed: 2021] [added: 2022] and [removed: 2020][added: 2021]

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | Change | | |

| Intercompany eliminations | | | [removed: (88.2)] [added: (36.9)] | | | | | | [removed: (152.6)] [added: (88.2)] | | | | | | [removed: (42.2)] [added: 58.2] | | % |

The [removed: 15.3% increase] [added: 7.7% decrease] in revenues for the year ended December 31, [removed: 2021,] [added: 2022,] as compared [removed: with] [added: to] the corresponding period in [removed: 2020] [added: 2021] was [removed: primarily] due to [added: lower] organic [removed: growth of 13.8%, acquisitions] [added: revenue] of [removed: 0.7%] [added: 7.5%] and [removed: favorable] [added: unfavorable] foreign currency translation of [removed: 0.9%,] [added: 1.0%,] partially offset by [removed: the disposition] [added: acquisitions net] of [removed: a business] [added: divestitures] of [removed: 0.1%.][added: 0.8%.]

Dx revenues for the year ended December 31, [removed: 2021,] [added: 2022,] were [removed: $10,363.6, an increase] [added: $9,203.5, a decrease] of [removed: 12.0% over] [added: 11.2% compared to] revenues of [removed: $9,253.4] [added: $10,363.6] in the corresponding period in [removed: 2020.][added: 2021.]

The [removed: 10.9% increase] [added: 12.1% decrease] in organic revenue was due to a [removed: 11.2% contribution from organic Base Business,] [added: 15.6% decrease in COVID-19 Testing,] partially offset by a [removed: 0.3% decline in COVID-19 Testing.][added: 3.4% contribution from organic Base Business.]

[removed: Dx total] [added: Total] volume, measured by requisitions, [removed: increased] [added: decreased] by [removed: 10.9%] [added: 7.5%] as organic volume [removed: increased] [added: decreased] by [removed: 10.5%] [added: 8.4%] and acquisition volume contributed growth of [removed: 0.5%.][added: 0.8%.]

DD revenues for the year ended December 31, [removed: 2021,] [added: 2022,] were [removed: $5,845.5, an increase] [added: $5,710.2, a decrease] of [removed: 19.8%] [added: 2.3%] over revenues of [removed: $4,877.7] [added: $5,845.5] in the corresponding period in [removed: 2020.][added: 2021.]

The [removed: increase] [added: decrease] in revenues was [added: primarily] due to [removed: organic Base Business growth of 19.2%, the benefit of acquisitions of 0.7%, favorable] [added: unfavorable] foreign currency translation of [removed: 1.8%, partially offset by] [added: 2.6% and] lower COVID-19 Testing [removed: performed through its Central Laboratories] [added: of 0.6%, partially offset by organic base] business [added: growth] of [removed: 1.6%] [added: 0.5%,] and [removed: a business disposition] [added: acquisitions net] of [removed: 0.2%.][added: divestitures of 0.3%.]

| Cost of revenues | | | $ | [removed: 10,496.6] [added: 10,491.7] | | | | | $ | [removed: 9,025.7] [added: 10,496.6] | | | | | [removed: 16.3] [added: —] | | % |

| Cost of revenues as a % of revenues | | | [removed: 65.1] [added: 70.5] | | % | | | | [removed: 64.6] [added: 65.1] | | % | | | | | | |

Cost of revenues [removed: increased 16.3%] [added: were flat] in [removed: 2021] [added: 2022] as compared with [removed: 2020] [added: 2021] and increased as a percentage of revenues to [removed: 65.1%] [added: 70.5%] in [removed: 2021] [added: 2022] as compared to [removed: 64.6%] [added: 65.1%] in [removed: 2020.][added: 2021.]

| Selling, general and administrative expenses | | | $ | [removed: 1,952.1] [added: 1,996.6] | | | | | $ | [removed: 1,729.3] [added: 1,952.1] | | | | | [removed: 12.9] [added: 2.3] | | % |

| SG&A as a % of revenues | | | [removed: 12.1] [added: 13.4] | | % | | | | [removed: 12.4] [added: 12.1] | | % | | | | | | |

Selling, general and administrative expenses as a percentage of revenues [removed: decreased] [added: increased] to [removed: 12.1%] [added: 13.4%] in [removed: 2021] [added: 2022] compared to [removed: 12.4%] [added: 12.1%] in [removed: 2020.][added: 2021.]

The [removed: decrease] [added: increase] in selling, general and administrative expenses as a percentage of revenues is primarily due to [removed: the leveraging of the organic revenue growth] [added: a decrease in higher margin COVID-19 Testing] and [removed: the impact of] [added: higher personnel costs, partially offset by] LaunchPad savings.

| Goodwill and other asset impairments | | | $ | [removed: —] [added: 271.5] | | | | | $ | [removed: 462.1] [added: —] | | | | | [removed: N/A] [added: 100.0%] | | |

[removed: The] [added: Based on the quantitative impairment assessment performed in the same manner as the Company's annual quantitative assessment, the] Company concluded that the fair value was less than carrying value for [removed: two of its] [added: the early development] reporting [removed: units] [added: unit] and recorded [added: a] goodwill impairment of [removed: $418.7 and $3.7 for] [added: $260.0 in the] DD [removed: and Dx, respectively.][added: segment.]

[removed: | Amortization] [added: Amortization] of [removed: intangibles] [added: Intangibles] and [removed: other assets | | | $ | 369.6 | | | | | $ | 275.4 | | | | | 34.2 | | % |][added: Other Assets]

[removed: In addition,] [added: The decrease in] amortization [added: of intangibles and other assets for the year ended December 31, 2022 is primarily due to $88.4 in amortization] acceleration of certain intangible assets related to trade names as a result of the Company's rebranding initiative [removed: of $88.4 and $27.5 were] recognized [removed: for] [added: during 2021, partially offset by] the [removed: years ended December 31, 2021 and 2020, respectively.][added: impact of acquisitions.]

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | Change | | | [removed: | | |]

| Restructuring and other charges | | | $ | [removed: 43.1] [added: 83.8] | | | | | $ | [removed: 40.6] [added: 43.1] | | | | | [removed: 6.1] [added: 94.5] | | % | | | |

During 2021, the Company recorded net restructuring charges of [removed: $43.1; $18.6 within Dx and $24.5 within DD.][added: $43.1.]

During [removed: 2020,] [added: 2022,] the Company recorded net restructuring charges of [removed: $40.6; $15.3 within Dx and $25.3 within DD.][added: $83.8.]

The charges were comprised of [removed: $14.1] [added: $39.3] in severance and other personnel [removed: costs and $17.4 for facility, operating lease right-of-use and equipment impairments, and $18.9] [added: costs, $45.7] in [removed: facility closures and] [added: facility-related costs primarily associated with] general integration activities.

The charges were offset by the reversal of previously established liability of [removed: $0.6 and $9.2] [added: $0.3] in unused severance [removed: costs] and [added: $0.9 in unused] facility-related [removed: costs, respectively.][added: costs.]

| Interest expense | | | $ | [removed: 212.1] [added: 180.3] | | | | | $ | [removed: 207.4] [added: 212.1] | | | | | [removed: 2.3] [added: (15.0)] | | % |

The [removed: increase] [added: decrease] in interest expense for [removed: 2021] [added: 2022] as compared with the corresponding period in [removed: 2020] [added: 2021] is primarily due to the costs of redeeming the [added: outstanding] 3.20% [added: senior notes due February 1, 2022] and [added: the] 3.75% notes [added: due August 23, 2022] and issuing the new senior [removed: notes,] [added: notes in 2021 and lower outstanding debt] partially offset by [removed: lower debt and lower] [added: a higher average] cost of [removed: debt.][added: debt in 2022.]

| Equity method income, net | | | $ | [removed: 26.5] [added: 5.4] | | | | | $ | [removed: 2.9] [added: 26.5] | | | | | [removed: 812.6] [added: (79.7)] | | % |

During the year ended December 31, 2022, the Company's revenues were $14.9 billion, a decrease of 7.7% from $16.1 billion in 2021.

The decrease was due to lower organic revenue of 7.5% and foreign currency translation of 1.0%, partially offset by acquisitions net of divestitures of 0.8%.

The 7.5% decrease in organic revenue was due to a 10.0% decrease in COVID-19 Testing, partially offset by a 2.5% increase in the Company's organic Base Business.

- initiating a dividend in the second quarter of 2022, as well as subsequent dividends paid in the third and fourth quarters of 2022, with total dividend payments for 2022 in the amount of $195.2 million;

As part of this program, $1.0 billion was repurchased under an accelerated share repurchase plan in 2021, and a total of $1.1 billion of stock was repurchased in 2022, representing approximately 4.7 million shares;

On July 28, 2022, the Company announced that it would pursue a planned spin-off of its Clinical Development and Commercialization Services (CDCS) business, as further discussed below.

Spin-Off of the Company's CDCS Business

On July 28, 2022, the Company announced that the Board authorized the Company to pursue a spin-off of the Company’s wholly owned CDCS business to its shareholders through a tax-free transaction.

The planned spin-off will result in two independent companies, each poised for strong, sustainable growth.

On January 9, 2023, Thomas (Tom) Pike joined the Company as president and chief executive officer of its DD Clinical Development business unit, and when the planned spin-off is complete, Mr. Pike will become the chief executive officer and chairman of the board of directors of the independent, publicly listed company.

On February 9, 2023, the Company announced that the name of the CDCS business will become Fortrea in connection with the planned spin-off.

The Company is targeting completion of the planned spin-off in mid-2023.

The planned spin-off will be subject to the satisfaction of certain customary conditions, including, among others, the receipt of final approval by the Company's Board, the receipt of appropriate assurances regarding the tax-free nature of the separation and effectiveness of any required filings with the U.S. Securities and Exchange Commission (SEC).

There can be no assurances regarding the ultimate timing of the transaction or that the spin-off will be completed.

When the transaction is complete, the resulting companies will be Labcorp, comprising the Company’s routine and esoteric labs, central labs and early development research labs, and Fortrea, a global contract research organization (CRO) providing Phase I-IV clinical trial management, market access and technology solutions to pharmaceutical and biotechnology organizations.

The planned spin-off is expected to provide each company with:

- strengthened strategic flexibility and operational focus to pursue specific market opportunities and better meet customer needs;

- focused capital structures and capital allocation strategies to drive innovation and growth;

- a more targeted investment opportunity for different investor bases; and

- the ability to align its particular incentive compensation with its financial performance.

Following the planned spin-off, the Company believes that Labcorp will be positioned to:

- invest in R&D and innovation to develop and launch diagnostic advancements globally in key clinical areas including oncology, Alzheimer's, and autoimmune and liver disease through organic and inorganic opportunities;

- bring together its global health and patient data and provide insights to enable customers to innovate;

- utilize its worldwide laboratory network to serve a broad, growing and global customer base including pharmaceutical and biotechnology companies, physicians, health systems, consumers, and other start-ups and laboratories that require lab services or diagnostic testing; and

- launch innovative tests globally, providing patients, physicians, health systems and pharmaceutical companies with access to its advanced science, technology and diagnostic capabilities.

Following the planned spin-off, the Company believes that Fortrea will be positioned to:

- capitalize on growth opportunities across Phases I-IV clinical trials and extend its leadership in oncology, cell and gene therapy, rare disease, and other emerging therapeutic areas;

- increase agility with large pharmaceutical and biotechnology clients to better serve customers and advance life-saving therapies;

- access to unique data sets and insights through an arrangement with the Company for a defined period of time which will enable Fortrea to provide enhanced trial execution and a differentiated value proposition;

- invest in capabilities, technologies, diverse talent and innovation to enhance trial execution and better serve all of its customers; and

- implement a capital structure that is tailored to support its growth strategy and enhance stakeholder value.

The planned spin-off is intended to qualify as a tax-free transaction for U.S. federal income tax purposes.

See “Risk Factors - Risks Related to the Planned Spin-off of the Company’s Clinical Development and Commercialization Services Business.”

Unless otherwise indicated, the disclosure in this Annual Report assumes that Clinical Development and Commercialization Services business will be with the Company for the full year.

COVID-19 Outlook

While the Company anticipates that COVID-19 will continue impacting its business in 2023 and potentially beyond, the Company expects a continued decline in demand for COVID-19 Testing, with the potential for increases in demand at different times and across different geographies.

As a result, COVID-19 Testing demand in 2023 is not predicted to match 2022 levels.

| Dx | | | $ | 9,203.5 | | | | | $ | 10,363.6 | | | | | (11.2) | | % |

| DD | | | 5,710.2 | | | | | | 5,845.5 | | | | | | (2.3) | | % |

| Total | | | $ | 14,876.8 | | | | | $ | 16,120.9 | | | | | (7.7) | | % |

During the year ended December 31, 2021, the Company's revenues grew by 15.3%, due to organic growth of 13.8%, acquisitions of 0.7% and favorable foreign currency translation of 0.9%, partially offset by the disposition of a business of 0.1%.

The 13.8% increase in organic revenues includes a 14.0% contribution from Company's organic Base Business and a 0.2% decrease in COVID-19 Testing.

The review reflected the Board's and management team's view that the

Company's value was not appropriately reflected in its stock price.

As a part of this review, the Board and management worked with outside advisors, held extensive discussions with third parties, and considered a wide range of options, including significant acquisitions, divestitures, spinning off businesses, as well as spinning and merging those businesses with strategic partners.

Ultimately, the Board unanimously concluded that the Company's existing structure is in the best interest of all stakeholders at this time and represents compelling opportunities to grow and create significant shareholder value.

- initiating a dividend in the second quarter of 2022, with a target dividend payout ratio of between 15% to 20% of adjusted earnings;

As part of this program, $1,000.0 is being repurchased under an accelerated share repurchase plan that is expected to be complete by the end of April 2022.

On December 13, 2021, the Company entered into the ASR Agreements with the Financial Institutions to repurchase approximately $1,000.0 in the aggregate of the Common Stock, as part of the Company’s Common Stock repurchase program;

| Dx | | | $ | 10,363.6 | | | | | $ | 9,253.4 | | | | | 12.0 | | % |

| DD | | | 5,845.5 | | | | | | 4,877.7 | | | | | | 19.8 | | % |

| Total | | | $ | 16,120.9 | | | | | $ | 13,978.5 | | | | | 15.3 | | % |

The 13.8% increase in organic revenues includes a 14.0% contribution from the Company's organic Base Business and a 0.2% decrease in COVID-19 Testing.

The increase in revenues was due to organic growth of 10.9%, acquisitions of 0.7%, and foreign currency translation of 0.4%.

The organic volume growth is due to demand for organic Base Business of 10.5%, partially offset by a 0.1% reduction of COVID-19 Testing.

Price/mix increased by 1.1% due to organic Base Business of 0.6%,

[Index](#ic2f3f2bd1a624e5db07ef484c4e34304_7)

acquisitions of 0.3%, and favorable foreign currency translation of 0.4%, partially offset by a 0.2% decline from COVID-19 Testing.

This increase was primarily due to COVID-19 Testing partially offset by Base Business recovery.

During 2021, the Company incurred special charges of $25.1 of acquisition and divestiture related costs, $13.3 in COVID-related costs, $6.3 in management transition costs, $18.2 in retention bonuses, $8.6 of non-capitalized costs associated with the implementation of a major system as part of its LaunchPad business process improvement initiative, and $24.3 related to miscellaneous other items.

These items increased selling, general and administrative expenses by $95.8.

Excluding these charges, selling, general and administrative expenses as a percentage of revenues were 11.5% for the year ended December 31, 2021.

The decrease in selling, general and administrative expenses, excluding the above items, as a percentage of revenues is primarily due to leveraging the Company's infrastructure on higher revenue.

During 2020, the Company incurred special charges of $28.3 of acquisition and divestiture related costs, $10.4 in COVID-related costs, $14.6 in management transition costs, and $1.3 of non-capitalized costs associated with the implementation of a major system as part of its LaunchPad business process improvement initiative, partially offset by $2.7 in other miscellaneous items.

These items increased selling, general and administrative expenses by $51.9.

Excluding these charges, selling, general and administrative expenses as a percentage of revenues were 12.0% for the year ended December 31, 2020.

During 2020, the Company recorded goodwill and other asset impairment charges of $462.1, $450.5 within DD and $11.6 within Dx.

Additional impairment of identifiable intangible and tangible assets of $31.8 and $7.9 was recorded for DD and Dx, respectively, for impairment of a tradename, software, customer relationships, technology assets and a note receivable.

Amortization Expense

| Dx | | | $ | 117.1 | | | | | $ | 104.9 | | | | | 11.7 | | % |

| DD | | | 252.5 | | | | | | 170.5 | | | | | | 48.0 | | % |

The increase in amortization of intangibles and other assets from 2020 through 2021 primarily reflects the impact of acquisitions partially offset by impairment of intangible assets recorded in fiscal 2020.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

During the year ended December 31, 2021, the Company recorded investment gains of $61.8 which were partially offset by a loss on a sale of a business of $6.2.

During the year ended December 31, 2020, the Company adjusted certain investments due to the negative impact of the COVID-19 global pandemic.

| | | | 2021 | | | | | | 2020 | | |

In 2021, the Company's effective tax rate of 23.9% was favorable as compared to the 2020 tax rate of 29.8%.

This was primarily related to impairment charges recorded during 2020 that were not deductible, finalization of tax audits, and the geographic mix of earnings.

| Dx operating income | | | $ | 2,988.5 | | | | | $ | 2,634.9 | | | | | 13.4 | | % |

Approximately [removed: 15.3%] [added: 14.7%] and [removed: 10.7%] [added: 15.3%] of the Company's revenues for the year ended December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively, were denominated in currencies other than the U.S. dollar (USD).

In both [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the most significant currency exchange rate exposures were to the Canadian dollar, Swiss franc, euro and British pound.

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 [removed: 2021] [added: 2022] by approximately [removed: $31.0.][added: $26.9.]

Gross accumulated currency translation adjustments recorded as a separate component of shareholders’ equity were [removed: $(104.6)] [added: $(336.4)] and [removed: $264.1] [added: $(104.6)] at December 31, [removed: 2021,] [added: 2022,] and [removed: 2020,] [added: 2021,] respectively.

At December 31, 2021, the Company had 28 open foreign exchange forward contracts with various amounts maturing monthly through January [removed: 2021] [added: 2022] with a notional value totaling approximately $600.7.

At December 31, [removed: 2020,] [added: 2022,] the Company had [removed: 31] [added: 27] open foreign exchange forward contracts with various amounts maturing monthly through January [removed: 2021] [added: 2023] with a notional value totaling approximately [removed: $601.2.][added: $629.5.]

The Company is party to USD to Swiss Franc cross-currency swap agreements with a notional amount of $600.0, maturing in [removed: 2022] [added: 2024] and 2025, as a hedge against the impact of foreign exchange movements on its net investment in its Swiss Franc functional currency subsidiary.

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[removed: LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES][added: | Net earnings attributable to Laboratory Corporation of America Holdings | | | — | | | | | | — | | | | | | 1,556.1 | | | | | | | | | | | | — | | | | | | 1,556.1 | | |]

| | | | [removed: December] [added: December] 31, [removed: 2021] [added: 2022] | | | | | | [removed: December] [added: December] 31, [removed: 2020] [added: 2021] | | | [added: | | | December 31, 2020 | | |]

| Cash and cash equivalents | | | $ | [removed: 1,472.7] [added: 430.0] | | | | | $ | [removed: 1,320.8] [added: 1,472.7] | |

| Accounts receivable, net | | | [removed: 2,261.5] [added: 2,222.0] | | | | | | [removed: 2,479.8] [added: 2,261.5] | | |

| Unbilled services | | | [removed: 716.8] [added: 795.4] | | | | | | [removed: 536.8] [added: 716.8] | | |

| Supplies inventory | | | [removed: 401.4] [added: 470.6] | | | | | | [removed: 423.2] [added: 401.4] | | |

| Prepaid expenses and other | | | [removed: 478.1] [added: 707.0] | | | | | | [removed: 364.8] [added: 478.1] | | |

| Total current assets | | | [removed: 5,330.5] [added: 4,625.0] | | | | | | [removed: 5,125.4] [added: 5,330.5] | | |

| Property, plant and equipment, net | | | [removed: 2,815.4] [added: 2,956.2] | | | | | | [removed: 2,729.6] [added: 2,815.4] | | |

| Goodwill, net | | | [removed: 7,958.9] [added: 8,121.0] | | | | | | [removed: 7,751.5] [added: 7,958.9] | | |

| Intangible assets, net | | | [removed: 3,735.5] [added: 3,946.9] | | | | | | [removed: 3,961.1] [added: 3,735.5] | | |

| Joint venture partnerships and equity method investments | | | [removed: 60.9] [added: 65.7] | | | | | | [removed: 73.5] [added: 60.9] | | |

| Deferred income taxes | | | [removed: 21.6] [added: 7.6] | | | | | | [removed: 20.6] [added: 21.6] | | |

| Other assets, net | | | [removed: 462.6] [added: 432.7] | | | | | | [removed: 410.0] [added: 462.6] | | |

| Total assets | | | $ | [removed: 20,385.4] [added: 20,155.1] | | | | | $ | [removed: 20,071.7] [added: 20,385.4] | |

| Accounts payable | | | $ | [removed: 621.3] [added: 934.8] | | | | | $ | [removed: 638.9] [added: 621.3] | |

| Accrued expenses and other | | | [removed: 1,404.1] [added: 1,068.8] | | | | | | [removed: 1,357.7] [added: 1,404.1] | | |

| Unearned revenue | | | [removed: 558.5] [added: 582.1] | | | | | | [removed: 506.5] [added: 558.5] | | |

| Short-term operating lease liabilities | | | [removed: 187.0] [added: 185.5] | | | | | | [removed: 192.0] [added: 187.0] | | |

| Short-term finance lease liabilities | | | [removed: 10.5] [added: 6.0] | | | | | | [removed: 6.7] [added: 10.5] | | |

| Short-term borrowings and current portion of long-term debt | | | [removed: 1.5] [added: 301.3] | | | | | | [removed: 376.7] [added: 1.5] | | |

| Total current liabilities | | | [removed: 2,782.9] [added: 3,078.5] | | | | | | [removed: 3,078.5] [added: 2,782.9] | | |

| Long-term debt, less current portion | | | [removed: 5,416.5] [added: 5,038.8] | | | | | | [removed: 5,419.0] [added: 5,416.5] | | |

| Operating lease liabilities | | | [removed: 642.5] [added: 679.7] | | | | | | [removed: 677.6] [added: 642.5] | | |

| Financing lease liabilities | | | [removed: 84.6] [added: 83.6] | | | | | | [removed: 84.4] [added: 84.6] | | |

| Deferred income taxes and other tax liabilities | | | [removed: 762.9] [added: 736.2] | | | | | | [removed: 828.5] [added: 762.9] | | |

| Other liabilities | | | [removed: 402.0] [added: 422.8] | | | | | | [removed: 526.4] [added: 402.0] | | |

| Total liabilities | | | [removed: 10,091.4] [added: 10,039.6] | | | | | | [removed: 10,614.4] [added: 10,091.4] | | |

| Noncontrolling interest | | | [removed: 20.6] [added: 18.9] | | | | | | [removed: 20.7] [added: 20.6] | | |

| Common stock, [removed: 93.1] [added: 88.2] and [removed: 97.5] [added: 93.1] shares outstanding at December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively | | | [removed: 8.5] [added: 8.1] | | | | | | [removed: 9.0] [added: 8.5] | | |

| Retained earnings | | | [removed: 10,456.8] [added: 10,581.7] | | | | | | [removed: 9,479.2] [added: 10,456.8] | | |

| Accumulated other comprehensive loss | | | [removed: (191.9)] [added: (493.2)] | | | | | | [removed: (161.9)] [added: (191.9)] | | |

| Total shareholders’ equity | | | [removed: 10,273.4] [added: 10,096.6] | | | | | | [removed: 9,436.6] [added: 10,273.4] | | |

| Total liabilities and shareholders’ equity | | | $ | [removed: 20,385.4] [added: 20,155.1] | | | | | $ | [removed: 20,071.7] [added: 20,385.4] | |

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Revenues | | | $ | [removed: 16,120.9] [added: 14,876.8] | | | | | $ | [removed: 13,978.5] [added: 16,120.9] | | | | | $ | [removed: 11,554.8] [added: 13,978.5] | |

| Cost of revenues | | | [removed: 10,496.6] [added: 10,491.7] | | | | | | [removed: 9,025.7] [added: 10,496.6] | | | | | | [removed: 8,302.3] [added: 9,025.7] | | |

| Gross profit | | | [removed: 5,624.3] [added: 4,385.1] | | | | | | [removed: 4,952.8] [added: 5,624.3] | | | | | | [removed: 3,252.5] [added: 4,952.8] | | |

| Selling, general and administrative expenses | | | [removed: 1,952.1] [added: 1,996.6] | | | | | | [removed: 1,729.3] [added: 1,952.1] | | | | | | [removed: 1,624.5] [added: 1,729.3] | | |

| Amortization of intangibles and other assets | | | [removed: 369.6] [added: 259.3] | | | | | | [removed: 275.4] [added: 369.6] | | | | | | [removed: 243.2] [added: 275.4] | | |

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

| Less: Net earnings attributable to the noncontrolling interest | | | (1.5) | | | | | | (2.2) | | | | | | (0.9) | | |

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

| Dividends declared | | | — | | | | | | — | | | | | | (198.7) | | | | | | | | | | | | — | | | | | | (198.7) | | |

| 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 | |

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

| Net earnings | | | $ | 1,280.6 | | | | | $ | 2,379.5 | | | | | $ | 1,557.0 | |

| Goodwill and other asset impairments | | | 271.5 | | | | | | — | | | | | | 462.1 | | |

| Dividends paid | | | (195.2) | | | | | | — | | | | | | — | | |

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

The accounting matters assessed included, but were not limited to, the Company’s implicit price

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

The balance was CAD 7.2 at December 31, 2021.

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the impairment is the difference between the carrying amount and the fair value of the asset.

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

fifteen years, generally five years.

Goodwill and Indefinite-lived Intangibles

Management performed its annual goodwill and intangible asset impairment testing as of the beginning of the fourth quarter of 2022.

The Company elected to perform the qualitative assessment for goodwill and intangible assets for the domestic Dx reporting units, and a quantitative assessment for all of the DD reporting units, and the Canadian reporting unit which includes indefinite-lived assets consisting of acquired Canadian licenses.

Based upon the results of the qualitative and quantitative assessments, the Company concluded that the fair values of each of its reporting units, as of October 1, 2022, were greater than the carrying values.

For the early development reporting unit, which is part of the DD segment, the fair value of the business exceeded the book value by approximately 10%.

In December 2022, a significant supplier of the early development reporting unit was no longer able to provide critical testing supplies resulting in an expectation of lower near term revenue and profitability and potential higher future costs.

Based on this information, management prepared a new forecast and updated the impairment testing valuations as of December 31, 2022.

Based on the quantitative impairment assessment performed in the same manner as the Company's annual quantitative assessment, the Company concluded that the fair value was less than carrying value for the early development reporting unit and recorded a goodwill impairment of $260.0 in the DD segment.

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

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

Accordingly, there can be no assurance that the estimates and assumptions made for the purposes of the goodwill impairment analysis will prove to be accurate predictions of future performance.

It is possible that the Company's conclusions regarding impairment or recoverability of goodwill or intangible assets in any reporting unit could change in future periods.

There can be no assurance that the estimates and assumptions used in the Company's goodwill and intangible asset impairment testing performed as of the beginning of the fourth quarter of 2022 or at the end of the year 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 2023 or future years

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

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 EBITDA.

Intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the impairment is the difference between the carrying amount and the fair value of the asset.

If the recognition threshold is met, the Company recognizes a tax benefit

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

| | | | | | | | | | | | |

| Additional paid-in capital | | | — | | | | | | 110.3 | | |

[Index](#ic2f3f2bd1a624e5db07ef484c4e34304_7)

| BALANCE AT DECEMBER 31, 2018 | | | $ | 11.7 | | | | | $ | 1,451.1 | | | | | $ | 7,156.7 | | | | | $ | (1,108.1) | | | | | $ | (463.1) | | | | | $ | 7,048.3 | |

| Retirement of treasury stock | | | (2.4) | | | | | | (1,145.8) | | | | | | — | | | | | | 1,148.2 | | | | | | — | | | | | | — | | |

| Purchase of common stock | | | (0.3) | | | | | | (449.7) | | | | | | — | | | | | | — | | | | | | — | | | | | | (450.0) | | |

| Stock compensation | | | 153.7 | | | | | | 111.7 | | | | | | 107.0 | | |

| Loss on sale of business | | | — | | | | | | — | | | | | | 13.2 | | |

| Proceeds from term loan | | | — | | | | | | — | | | | | | 850.0 | | |

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

As part of the Company's rebranding initiative announced in December 2020, the Company changed the names of its segments, which were previously referred to as LabCorp Diagnostics and Covance Drug Development.

The Company assessed certain

Long-Lived Assets

Recoverability of assets to be held and used is determined by the Company at the level for which there are identifiable cash flows by comparison of the carrying amount of the assets to future undiscounted net cash flows before interest expense and income taxes expected to be generated by the assets.

Impairment, if any, is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets (based on market prices in an active market or on discounted cash flows).

Assets to be disposed of are reported at the lower of the carrying amount or fair value.

See Note 17 Derivative Instruments and Hedging Activities for the Company’s objectives in using derivative instruments and the effect of derivative instruments and related hedged items on the Company’s financial position, financial performance and cash flows.

shareholders’ equity.

Revision to Prior Period Financial Statements

During the fourth quarter of the year ended December 31, 2021, the Company identified an immaterial error in its previously issued financial statements related to the recording of a deferred tax liability on unremitted foreign earnings that should have been released in 2015.

The correction of the error resulted in a decrease in Deferred income taxes and other tax liabilities of $76.9 and an increase to Retained earnings of $76.9 for all prior periods presented in the accompanying consolidated financial statements.

The misstatement had no impact on net earnings, comprehensive earnings, or cash flows from operating, investing, or financing activities in any of the periods presented herein.

Management determined that the impact of this error is not quantitatively or qualitatively material to the previously issued annual and interim financial statements using the guidance of SEC Staff Accounting Bulletin (SAB) No. 99, *Materiality,* and SAB No. 108, *Considering the Effect of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements*.

Previously reported balances, including those on the statement of changes in shareholders' equity and in the notes to the consolidated financial statements have been revised for the adjustment.

The majority of DD's contracts contain a single performance obligation.

total contract value.

| Allowance for credit losses as of December 31, 2019 | | | $ | 19.0 | | | | | $ | 2.3 | | | | | $ | — | | | | | $ | 21.3 | |

| Current expected credit losses opening balance impact on retained earnings | | | 1.8 | | | | | | 0.2 | | | | | | 5.0 | | | | | | 7.0 | | |

| Credit loss expense | | | 7.0 | | | | | | 9.0 | | | | | | 0.7 | | | | | | 16.7 | | |

| Write offs | | | (5.7) | | | | | | (0.2) | | | | | | — | | | | | | (5.9) | | |

The excess of the

| | | | 2020 | | | 2019 | | | | | |

*2019*

On June 3, 2019, the Company's DD segment acquired Envigo's nonclinical contract research services business, expanding DD's global nonclinical drug development capabilities with additional locations and resources.

Additionally, the Company divested the CRP business, which was a part of the DD segment, to Envigo.

As part of this sale, DD entered into a multi-year, renewable supply agreement with Envigo.

The Company paid cash consideration of $601.0, received a floating rate secured note of $110.0, and recorded a loss on the sale of CRP of $12.2.

The Company funded the transaction through the new term loan facility entered into in 2019 concurrently with the transaction.

| | | | | | | | | | | | | | | | | | | | | |

For the fiscal year ended December 31, [removed: 2021][added: 2022]

As of June 30, [removed: 2021,] [added: 2022,] the aggregate market value of the common stock held by non-affiliates of the registrant was approximately [removed: $24.8] [added: $20.2] billion, based on the closing price on such date of the registrant’s common stock on the New York Stock Exchange.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: [removed: 93.4] [added: 88.5] million shares as of February [removed: 24, 2022.][added: 27, 2023.]

Portions of the Registrant’s Notice of Annual Meeting and Proxy Statement to be filed no later than 120 days following December 31, [removed: 2021,] [added: 2022,] are incorporated by reference into Part III.

| | | | [Summary of Material [removed: Risks](#ic2f3f2bd1a624e5db07ef484c4e34304_10)] [added: Risks](#i9affef4b263d4c7097546e2ee7326a4a_10)] | | | [removed: [4](#ic2f3f2bd1a624e5db07ef484c4e34304_10)] [added: [4](#i9affef4b263d4c7097546e2ee7326a4a_10)] | | |

| Item 1. | | | [removed: [Business](#ic2f3f2bd1a624e5db07ef484c4e34304_19)] [added: [Business](#i9affef4b263d4c7097546e2ee7326a4a_19)] | | | [removed: [9](#ic2f3f2bd1a624e5db07ef484c4e34304_19)] [added: [10](#i9affef4b263d4c7097546e2ee7326a4a_19)] | | |

| Item 1A. | | | [Risk [removed: Factors](#ic2f3f2bd1a624e5db07ef484c4e34304_73)] [added: Factors](#i9affef4b263d4c7097546e2ee7326a4a_73)] | | | [removed: [34](#ic2f3f2bd1a624e5db07ef484c4e34304_73)] [added: [35](#i9affef4b263d4c7097546e2ee7326a4a_73)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#ic2f3f2bd1a624e5db07ef484c4e34304_76)] [added: Comments](#i9affef4b263d4c7097546e2ee7326a4a_76)] | | | [removed: [49](#ic2f3f2bd1a624e5db07ef484c4e34304_76)] [added: [50](#i9affef4b263d4c7097546e2ee7326a4a_76)] | | |

| Item 2. | | | [removed: [Properties](#ic2f3f2bd1a624e5db07ef484c4e34304_79)] [added: [Properties](#i9affef4b263d4c7097546e2ee7326a4a_79)] | | | [removed: [50](#ic2f3f2bd1a624e5db07ef484c4e34304_79)] [added: [51](#i9affef4b263d4c7097546e2ee7326a4a_79)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#ic2f3f2bd1a624e5db07ef484c4e34304_82)] [added: Proceedings](#i9affef4b263d4c7097546e2ee7326a4a_82)] | | | [removed: [51](#ic2f3f2bd1a624e5db07ef484c4e34304_82)] [added: [52](#i9affef4b263d4c7097546e2ee7326a4a_82)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#ic2f3f2bd1a624e5db07ef484c4e34304_85)] [added: Disclosures](#i9affef4b263d4c7097546e2ee7326a4a_85)] | | | [removed: [51](#ic2f3f2bd1a624e5db07ef484c4e34304_85)] [added: [52](#i9affef4b263d4c7097546e2ee7326a4a_85)] | | |

| Item 5. | | | [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity [removed: Securities](#ic2f3f2bd1a624e5db07ef484c4e34304_91)] [added: Securities](#i9affef4b263d4c7097546e2ee7326a4a_91)] | | | [removed: [52](#ic2f3f2bd1a624e5db07ef484c4e34304_91)] [added: [53](#i9affef4b263d4c7097546e2ee7326a4a_91)] | | |

| Item 6. | | | [Selected Financial [removed: Data](#ic2f3f2bd1a624e5db07ef484c4e34304_94)] [added: Data](#i9affef4b263d4c7097546e2ee7326a4a_94)] | | | [removed: [53](#ic2f3f2bd1a624e5db07ef484c4e34304_94)] [added: [54](#i9affef4b263d4c7097546e2ee7326a4a_94)] | | |

| Item 7. | | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ic2f3f2bd1a624e5db07ef484c4e34304_97)] [added: Operations](#i9affef4b263d4c7097546e2ee7326a4a_97)] | | | [removed: [53](#ic2f3f2bd1a624e5db07ef484c4e34304_97)] [added: [54](#i9affef4b263d4c7097546e2ee7326a4a_97)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#ic2f3f2bd1a624e5db07ef484c4e34304_109)] [added: Risk](#i9affef4b263d4c7097546e2ee7326a4a_109)] | | | [removed: [63](#ic2f3f2bd1a624e5db07ef484c4e34304_109)] [added: [65](#i9affef4b263d4c7097546e2ee7326a4a_109)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#ic2f3f2bd1a624e5db07ef484c4e34304_112)] [added: Data](#i9affef4b263d4c7097546e2ee7326a4a_112)] | | | [removed: [64](#ic2f3f2bd1a624e5db07ef484c4e34304_112)] [added: [65](#i9affef4b263d4c7097546e2ee7326a4a_112)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#ic2f3f2bd1a624e5db07ef484c4e34304_115)] [added: Disclosure](#i9affef4b263d4c7097546e2ee7326a4a_115)] | | | [removed: [64](#ic2f3f2bd1a624e5db07ef484c4e34304_115)] [added: [66](#i9affef4b263d4c7097546e2ee7326a4a_115)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#ic2f3f2bd1a624e5db07ef484c4e34304_118)] [added: Procedures](#i9affef4b263d4c7097546e2ee7326a4a_118)] | | | [removed: [64](#ic2f3f2bd1a624e5db07ef484c4e34304_118)] [added: [66](#i9affef4b263d4c7097546e2ee7326a4a_118)] | | |

| Item 9B. | | | [Other [removed: Information](#ic2f3f2bd1a624e5db07ef484c4e34304_121)] [added: Information](#i9affef4b263d4c7097546e2ee7326a4a_121)] | | | [removed: [65](#ic2f3f2bd1a624e5db07ef484c4e34304_121)] [added: [66](#i9affef4b263d4c7097546e2ee7326a4a_121)] | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#ic2f3f2bd1a624e5db07ef484c4e34304_2294)] [added: Inspections](#i9affef4b263d4c7097546e2ee7326a4a_124)] | | | [removed: [65](#ic2f3f2bd1a624e5db07ef484c4e34304_2294)] [added: [66](#i9affef4b263d4c7097546e2ee7326a4a_124)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#ic2f3f2bd1a624e5db07ef484c4e34304_127)] [added: Governance](#i9affef4b263d4c7097546e2ee7326a4a_130)] | | | [removed: [66](#ic2f3f2bd1a624e5db07ef484c4e34304_127)] [added: [67](#i9affef4b263d4c7097546e2ee7326a4a_130)] | | |

| Item 11. | | | [Executive [removed: Compensation](#ic2f3f2bd1a624e5db07ef484c4e34304_130)] [added: Compensation](#i9affef4b263d4c7097546e2ee7326a4a_133)] | | | [removed: [66](#ic2f3f2bd1a624e5db07ef484c4e34304_130)] [added: [67](#i9affef4b263d4c7097546e2ee7326a4a_133)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ic2f3f2bd1a624e5db07ef484c4e34304_133)] [added: Matters](#i9affef4b263d4c7097546e2ee7326a4a_136)] | | | [removed: [66](#ic2f3f2bd1a624e5db07ef484c4e34304_133)] [added: [67](#i9affef4b263d4c7097546e2ee7326a4a_136)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#ic2f3f2bd1a624e5db07ef484c4e34304_136)] [added: Independence](#i9affef4b263d4c7097546e2ee7326a4a_139)] | | | [removed: [66](#ic2f3f2bd1a624e5db07ef484c4e34304_136)] [added: [67](#i9affef4b263d4c7097546e2ee7326a4a_139)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#ic2f3f2bd1a624e5db07ef484c4e34304_139)] [added: Services](#i9affef4b263d4c7097546e2ee7326a4a_142)] | | | [removed: [66](#ic2f3f2bd1a624e5db07ef484c4e34304_139)] [added: [67](#i9affef4b263d4c7097546e2ee7326a4a_142)] | | |

| Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#ic2f3f2bd1a624e5db07ef484c4e34304_145)] [added: Schedules](#i9affef4b263d4c7097546e2ee7326a4a_148)] | | | [removed: [67](#ic2f3f2bd1a624e5db07ef484c4e34304_145)] [added: [68](#i9affef4b263d4c7097546e2ee7326a4a_148)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#ic2f3f2bd1a624e5db07ef484c4e34304_148)] [added: Summary](#i9affef4b263d4c7097546e2ee7326a4a_151)] | | | [removed: [71](#ic2f3f2bd1a624e5db07ef484c4e34304_148)] [added: [71](#i9affef4b263d4c7097546e2ee7326a4a_151)] | | |

a.The ongoing COVID-19 pandemic has created significant volatility, uncertainty, and economic disruption that could have an adverse effect on the Company’s business and financial [removed: position.][added: position, human capital resources, and reputation if the Company’s continued response is not appropriate or is perceived by customers to be inadequate.]

[removed: g.Failure] [added: g.Increased regulations and restrictions on the import and supply of research animals, actions of animal rights activists, diseases in research animal populations, and the failure] to conduct animal research in compliance with [removed: animal welfare] [added: applicable] laws and regulations could [removed: result in fines, penalties, and sanctions and] have a material adverse effect upon the Company.

h.U.S. Food and Drug Administration (FDA), European Union and other regulation of diagnostic products and medical [removed: devices and increased FDA regulation of] [added: devices, including] laboratory-developed [removed: tests (LDTs)] [added: tests,] could result in increased costs, fines, and penalties.

Risks Related to the Company’s [removed: Business][added: Business Including Global Economic and Geopolitical Factors]

a.General or macro-economic factors in the [removed: U.S.] [added: United States (U.S.)] and globally may have a material adverse effect upon the Company, and [removed: a] significant [removed: deterioration] [added: fluctuations] in the [removed: economy] [added: economy, inflation and an increase in the costs of goods and services] could negatively impact testing volumes, drug development services, cash collections, [added: profitability,] and the availability [added: and cost] of credit.

[removed: b.Healthcare reform and] [added: d.Continued] changes [removed: to related] [added: in healthcare reimbursement models and] products, changes in government payment and reimbursement systems, or changes in payer mix, including an increase in [removed: capitated reimbursement mechanisms] [added: third-party benefits management programs] and [removed: evolving delivery] [added: value-based payment] models, could have a material adverse effect on the Company's revenues, profitability, and cash flow.

[removed: c.Changes] [added: e.Changes] in government regulation or in practices relating to the pharmaceutical, biotechnology or medical device industries could decrease the need for certain services that the Company provides.

[removed: d.Increased] [added: f.Increased] competition, including price competition, could have an adverse effect on the Company’s revenues and profitability.

[removed: e.Failure] [added: g.Failure] to obtain and retain new customers, the loss of existing customers or material contracts, or a reduction in services or tests ordered or specimens submitted by existing customers, or the inability to retain existing and/or create new relationships with health systems could impact the Company’s ability to successfully grow its business.

[removed: f.Discontinuation] [added: h.Discontinuation] or recalls of existing testing products, failure to develop or acquire licenses for new or improved testing technologies, [removed: and competition from] [added: or the Company's customers using] new [removed: products and] technologies [added: to perform their own tests,] could adversely affect the Company’s business.

[removed: g.Operations] [added: b.Operations] may be disrupted and adversely impacted by the effects of adverse weather, natural disasters, geopolitical events, public health crises, hostilities or acts of terrorism, acts of vandalism, [added: disruption to supply chains, access to natural resources,] and other catastrophic events outside of the Company's control.

[removed: h.Changes] [added: i.Changes] or disruption in services, supplies, or transportation provided by third parties could adversely affect the Company’s business.

[removed: i.A] [added: j.A] failure to identify and successfully close and integrate strategic acquisition targets could have a material adverse effect on the Company's business objectives and its revenues and profitability.

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

| | | | [Part I](#i9affef4b263d4c7097546e2ee7326a4a_16) | | | | | |

| | | | [Part II](#i9affef4b263d4c7097546e2ee7326a4a_88) | | | | | |

| | | | [Part III](#i9affef4b263d4c7097546e2ee7326a4a_127) | | | | | |

| | | | [Part IV](#i9affef4b263d4c7097546e2ee7326a4a_145) | | | | | |

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

m.Damage or disruption to the Company's facilities could adversely affect the Company's business.

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

Risks Related to the Planned Spin-off of the Company's Clinical Development and Commercialization Services Business

a.

The planned spin-off of the Company’s Clinical Development and Commercialization Services business may not be completed on the terms or timeline currently contemplated, if at all, and may not achieve the intended results.

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

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45.risks associated with the impact, timing, expected benefits and costs, or terms of the planned spin-off of the Company’s Clinical Development and Commercialization Services (CDCS) business, which includes the parts of its DD segment focused on providing Phase I-IV clinical trial management, market access, and technology solutions to pharmaceutical and biotechnology organizations, including but not limited to (i) uncertainties as to the completion and timing of the transaction; (ii) the failure to obtain appropriate assurances regarding the tax-free nature of the spin-off; (iii) the failure to obtain receipt of required regulatory approvals; (iv) the effect of the announcement or pendency of the transaction on the Company’s business relationships, operating results, and business generally; (v) unexpected issues that arise in the continued planning for the transaction; (vi) the failure to have the Form 10 registration statement that will be filed with the SEC declared effective on a timely basis, or at all; (vii) risks that the proposed transaction disrupts current plans and operations of Labcorp or CDCS; (viii) potential difficulties attracting or retaining Company or CDCS employees as a result of the spin-off announcement, pendency or completion of the spin-off; (ix) risks related to diverting management’s attention from the Company and CDCS’ ongoing business operations; (x) the ability of the Company to successfully separate CDCS operations from the Company’s ongoing operations; (xi) market receptiveness to effect transactions in the capital markets; and (xii) market reaction to the announcement and planning for the transaction; and

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

Base Business includes the Company's business operations except for COVID-19 Testing.

- initiating a dividend in the second quarter of 2022, as well as subsequent dividends paid in the third and fourth quarters of 2022, with total dividend payments for 2022 in the amount of $195.2 million;

On July 28, 2022, the Company announced that it would pursue a planned spin-off of its Clinical Development and Commercialization Services (CDCS) business, as further discussed below.

Spin-Off of the Company's CDCS Business

On July 28, 2022, the Company announced that the Board authorized the Company to pursue a spin-off of the Company’s wholly owned CDCS business to its shareholders through a tax-free transaction.

The planned spin-off will result in two independent companies, each poised for strong, sustainable growth.

On January 9, 2023, Thomas (Tom) Pike joined the Company as president and chief executive officer of its DD Clinical Development business unit, and when the planned spin-off is complete, Mr. Pike will become the chief executive officer and chairman of the board of directors of the independent,

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

publicly listed company.

On February 9, 2023, the Company announced that the name of the CDCS business will become Fortrea in connection with the planned spin-off.

The Company is targeting completion of the planned spin-off in mid-2023.

The planned spin-off will be subject to the satisfaction of certain customary conditions, including, among others, the receipt of final approval by the Company's Board, the receipt of appropriate assurances regarding the tax-free nature of the separation and effectiveness of any required filings with the U.S. Securities and Exchange Commission (SEC).

There can be no assurances regarding the ultimate timing of the transaction or that the spin-off will be completed.

When the transaction is complete, the resulting companies will be Labcorp, comprising the Company’s routine and esoteric labs, central labs and early development research labs, and Fortrea, a global contract research organization (CRO) providing Phase I-IV clinical trial management, market access and technology solutions to pharmaceutical and biotechnology organizations.

The planned spin-off is expected to provide each company with:

- strengthened strategic flexibility and operational focus to pursue specific market opportunities and better meet customer needs;

- focused capital structures and capital allocation strategies to drive innovation and growth;

- a more targeted investment opportunity for different investor bases; and

- the ability to align its particular incentive compensation with its financial performance.

Following the planned spin-off, the Company believes that Labcorp will be positioned to:

- invest in R&D and innovation to develop and launch diagnostic advancements globally in key clinical areas including oncology, Alzheimer's, and autoimmune and liver disease through organic and inorganic opportunities;

[Index](#ic2f3f2bd1a624e5db07ef484c4e34304_7)

| | | | [Part I](#ic2f3f2bd1a624e5db07ef484c4e34304_16) | | | | | |

| | | | [Part II](#ic2f3f2bd1a624e5db07ef484c4e34304_88) | | | | | |

| | | | [Part III](#ic2f3f2bd1a624e5db07ef484c4e34304_124) | | | | | |

| | | | [Part IV](#ic2f3f2bd1a624e5db07ef484c4e34304_142) | | | | | |

b.If the Company does not continue to respond appropriately to the ongoing COVID-19 pandemic, or if the Company’s customers do not perceive its response to be adequate, the Company could suffer damage to its reputation, which could adversely affect its business.

c.The success of the Company is dependent in part on the efforts of its management team and employees, and the COVID-19 pandemic could divert or hinder the Company’s human capital resources.

m.Global economic conditions and government and regulatory changes, including, but not limited to, those arising from the United Kingdom's (U.K.) exit from the European Union (EU), could adversely affect the Company’s business and results of operations.

Given these uncertainties, one

The review reflected the Board's and management team's view that the Company's value was not appropriately reflected in its stock price.

As a part of this review, the Board and management worked with outside advisors, held extensive discussions with third parties, and considered a wide range of options, including significant acquisitions, divestitures, spinning off businesses, as well as spinning and merging those businesses with strategic partners.

Ultimately, the Board unanimously concluded that the Company's existing structure is in the best interest of all stakeholders at this time and represents compelling opportunities to grow and create significant shareholder value.

- initiating a dividend in the second quarter of 2022, with a target dividend payout ratio of between 15 to 20% of adjusted earnings;

Labcorp delivers world-class diagnostics solutions, brings innovative medicines to patients faster, and uses technology to improve the delivery of care.

To do so, Labcorp is focusing these efforts across the following strategic priorities:

*1.Leveraging the Company's Diagnostic and Drug Development Capabilities*

Together, Dx’s and DD’s core capabilities and scientific and technological expertise empower the Company to create compelling solutions for clients and patients.

The Company’s collective strength allows it to help pharmaceutical, biotechnology, and medical device partners design better clinical studies, execute those studies faster through enhanced patient recruitment, take greater advantage of virtual and hybrid study options, and satisfy post-market surveillance requirements.

For example, insights gained through diagnostics support drug development operations by assisting in the identification of patterns in disease progression, as well as individuals who would benefit from enrollment in certain clinical trials.

Further, the Company's connections with a broad and diverse range of patients and healthcare providers allow it to both expand clinical trial participation opportunities to typically underrepresented communities, and to make clinical trials a viable treatment option for patients whose current treatment options may be limited or inadequate.

In addition, the Company can advance companion and complementary diagnostics and other precision medicine innovations that match patients with targeted treatments based on genomics and other individual characteristics due to the experience, resources and data harnessed by both Dx and DD.

Through comprehensive integration of those capabilities, the Company has a unique opportunity to extend its position as a market leader in the development and commercialization of new therapies and tests by providing data, insights, and answers for doctors, drug developers, and the public.

Digitalization enabled many of the Company's employees to transition to remote work in the early stages of the COVID-19 pandemic and maintain their remote work environment in 2021 with no discernible loss of productivity.

Digitalization is also helping to reduce physical, study-related paperwork, which generates positive emissions impacts.

In addition, the Company enhanced its digital capabilities through the acquisition of Ovia Health, a leading digital platform trusted by millions of individuals for family planning, pregnancy, and parenting support.

Intensify Customer Focus*

In an

For example, in 2021, the Company began deploying the Labcorp Diagnostic Assistant, which delivers comprehensive lab results and clinical insights directly to the point of care.

In April 2021, the Company opened an automated clinical trial kit production line in Belgium, doubling the automated production capacity of its industry leading central laboratory services business.

The Company announced the opening of a new, integrated bioanalytical laboratory in Singapore during the fourth quarter of 2021, expanding customer access in the Asia-Pacific region.

The Company also continued improving the patient experience in its U.S. PSCs, focusing its efforts to create a seamless digital journey from appointment scheduling to easier access to results.

The Company will continue to explore and implement further actions to improve the experience for its customers.

Fortify the Company's Position as an Oncology Leader*

However, it remains an area of great unmet medical need.

To harness the breadth of the Company's unique capabilities and further address this need, the Company formed an oncology business unit and launched an enterprise oncology platform in 2021.

The Company is expanding its leadership in oncology through the introduction of new tests, strategic partnerships, acquisitions, and customer wins in clinical trials.

The Company capitalized on a previous investment in OmniSeq, announcing in July 2021 that it exercised its option to acquire the remaining ownership interest.

PGDx offers the only diagnostic kit cleared by the FDA for pan-solid cancer comprehensive tumor profiling using a 500+ gene panel.

The acquisition of PGDx closed in February 2022.

The Company’s work in oncology has created meaningful business relationships across the healthcare ecosystem that it plans to enhance and grow.

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

[Index](#ic2f3f2bd1a624e5db07ef484c4e34304_7)

The table below summarizes certain information as to Dx's principal operating and administrative facilities as of December 31, [removed: 2021.][added: 2022.]

| Spokane, Washington [removed: (3)] [added: (2)] | | | Leased | | |

The table below summarizes certain information as to DD's principal operating and administrative facilities as of December 31, [removed: 2021.][added: 2022.]

| Wichita, Kansas | | | Leased | | |

| Troy, Michigan | | | Leased | | |

| Tulsa, Oklahoma | | | Leased | | |

| Oak Creek, Wisconsin | | | Leased | | |

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

[Index](#ic2f3f2bd1a624e5db07ef484c4e34304_7)

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

[Index](#ic2f3f2bd1a624e5db07ef484c4e34304_7)

On February [removed: 24, 2022,] [added: 27, 2023,] there were approximately [removed: 1,322] [added: 1,249] holders of record of the Common Stock.

[removed: In December 2021, the] [added: The] Company [removed: announced that it plans to initiate] [added: initiated] a quarterly dividend beginning in the second quarter of 2022.

The graph below shows the cumulative total return assuming an investment of $100 on December 31, [removed: 2016,] [added: 2017,] in each of the Company’s Common Stock, the Standard & Poor’s, or S&P Composite-500 Stock Index and the S&P 500 Health Care Index, or Peer Group, and assuming that all dividends were reinvested.

| | | | [removed: 12/2016] [added: 12/2017] | | | | | | [removed: 12/2017] [added: 12/2018] | | | | | | [removed: 12/2018] [added: 12/2019] | | | | | | [removed: 12/2019] [added: 12/2020] | | | | | | [removed: 12/2020] [added: 12/2021] | | | | | | [removed: 12/2021] [added: 12/2022] | | |

[removed: ][added: ]

The following table sets forth information with respect to purchases of shares of the Company’s [removed: Common Stock] [added: common stock] made during the quarter ended December 31, [removed: 2021,] [added: 2022,] by or on behalf of the [removed: Company, inclusive of amounts paid in respect of the accelerated share repurchase agreements (collectively, the ASR Agreements) for which the Company received 80% of the shares calculated at the price at the inception of the Agreements:][added: Company:]

At the end of [removed: 2020,] [added: 2021,] the Company had outstanding authorization from the [removed: board of directors (Board)] [added: Board] to purchase [removed: $800.0] [added: $1,631.5] of Company common stock.

[removed: On December 8,] [added: During the fourth quarter of] 2021, the Board adopted a new share repurchase plan authorizing repurchase of up to $2,500.0 of the Company's shares in addition to the remaining amount outstanding under the previous plan.

On December 13, 2021, the Company entered into [removed: the] ASR Agreements with Goldman Sachs & Co. LLC and Barclays Bank PLC [removed: (collectively, the Financial Institutions)] to repurchase [removed: approximately $1,000.0 in] the [removed: aggregate of the] Company’s common stock (Common Stock), as part of the Company’s [removed: Common Stock] [added: common stock] repurchase program.

During the [removed: first 11 months of 2021,] [added: year ended December 31, 2022,] the Company purchased [removed: 2.5] [added: 4.7] shares of its common stock at an average price of [removed: $270.55] [added: $233.48] for a total cost of [removed: $668.5.][added: $1,100.0.]

Under the ASR [removed: Agreements in December 2021,] [added: Agreements,] $1,000.0 was paid to the banks [added: in December 2021] and the Company received 80% of the shares calculated at the price at the inception of the Agreements, approximately 2.7 shares.

At the end of [removed: 2021,] [added: 2022,] the Company had outstanding authorization from the Board to purchase up to [removed: $1,631.5] [added: $531.5] of the Company's common stock.

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, 2022, the Company paid $195.2 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.

There can be no assurance that the Company will continue to pay quarterly cash dividends at the current rate or at all.

| Laboratory Corporation of America Holdings | | | $ | 100.00 | | | | | $ | 79.22 | | | | | $ | 106.06 | | | | | $ | 127.61 | | | | | $ | 196.98 | | | | | $ | 148.91 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 95.62 | | | | | $ | 125.72 | | | | | $ | 148.85 | | | | | $ | 191.58 | | | | | $ | 156.88 | |

| S&P 500 Health Care Index | | | $ | 100.00 | | | | | $ | 106.47 | | | | | $ | 128.64 | | | | | $ | 145.93 | | | | | $ | 184.07 | | | | | $ | 180.47 | |

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

| October 1 - October 31 | | | 0.9 | | | | | | $ | 211.91 | | | | | 0.9 | | | | | | $ | 635.5 | |

| November 1 - November 30 | | | 0.5 | | | | | | 225.65 | | | | | | 0.5 | | | | | | 531.5 | | |

| December 1 - December 31 | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| | | | 1.4 | | | | | | $ | 216.48 | | | | | 1.4 | | | | | | $ | 531.5 | |

When the forward contract was settled during 2022, the Company received 0.9 shares, which were retired in 2022.

On February 7, 2023, the board of directors adopted a new share repurchase plan authorizing up to $1,000.0 of the Company's shares in addition to the remaining amount outstanding under the previous plan.

The repurchase authorization has no expiration.

The Company has not historically paid dividends on its Common Stock.

| Laboratory Corporation of America Holdings | | | $ | 100.00 | | | | | $ | 124.25 | | | | | $ | 98.43 | | | | | $ | 131.77 | | | | | $ | 158.55 | | | | | $ | 244.75 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 121.83 | | | | | $ | 116.49 | | | | | $ | 153.17 | | | | | $ | 181.35 | | | | | $ | 233.41 | |

| S&P 500 Health Care Index | | | $ | 100.00 | | | | | $ | 122.08 | | | | | $ | 129.97 | | | | | $ | 157.04 | | | | | $ | 178.15 | | | | | $ | 224.71 | |

[Index](#ic2f3f2bd1a624e5db07ef484c4e34304_7)

| October 1 - October 31 | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 131.5 | |

| November 1 - November 30 | | | — | | | | | | — | | | | | | — | | | | | | 131.5 | | |

| December 1 - December 31 | | | 2.7 | | | | | | 307.16 | | | | | | 2.7 | | | | | | 1,631.5 | | |

| | | | 2.7 | | | | | | $ | 307.16 | | | | | 2.7 | | | | | | | | |

When the forward contract is settled during the first half of 2022, and the Company receives the remaining shares, an additional adjustment to Common Stock and additional paid-in-capital / retained earnings will be recorded.

The specific number of shares that the Company ultimately will repurchase under the ASR Agreements will be based generally on the average of the daily volume-weighted average price per share of the Common Stock during a repurchase period, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR Agreements.

The ASR Agreements contain provisions customary for agreements of this type, including provisions for adjustments to the transaction terms, the circumstances generally under which the ASR Agreements may be accelerated, extended or terminated early by the Financial Institutions and various acknowledgments, representations and warranties made by the parties to one another.

The initial shares received under the ASR have been removed from the outstanding share count and the final settlement is expected to be completed by the end of April 2022.

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

There have been no changes in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the quarter ended December 31, [removed: 2021,] [added: 2022,] that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company's management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

Based on this assessment, the Company's management determined that, as of December 31, [removed: 2021,] [added: 2022,] the Company maintained effective internal control over financial reporting.

Deloitte and Touche LLP, an independent registered public accounting firm, who audited and reported on the consolidated financial statements of the Company included in this Annual Report, also audited the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] as stated in its report, which is included herein immediately preceding the Company’s audited financial statements.

[Index](#ic2f3f2bd1a624e5db07ef484c4e34304_7)

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

[Index](#ic2f3f2bd1a624e5db07ef484c4e34304_7)

The information required by the item regarding directors is incorporated by reference to the Company’s Definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the Annual Meeting of Stockholders to be held in [removed: 2022] [added: 2023] (the [removed: 2022] [added: 2023] Proxy Statement) under the caption Election of Directors.

Information regarding executive officers is incorporated by reference to the Company’s [removed: 2022] [added: 2023] Proxy Statement under the caption Executive Officers.

Information concerning the Company’s Audit Committee, including the designation of audit committee financial experts [removed: and information regarding compliance with Section 16(a) of the Exchange Act responsive to this item] is incorporated by reference to the Company’s [removed: 2022] [added: 2023] Proxy Statement under the captions Corporate Governance and Delinquent Section 16(a) Reports, respectively.

Information concerning the Company's code of ethics is incorporated by reference to the Company's [removed: 2022] [added: 2023] Proxy Statement under the caption Corporate Governance Policies and Procedures.

The information required by this item is incorporated by reference to information in the [removed: 2022] [added: 2023] Proxy Statement under the captions “Executive Compensation” and “Director Compensation.”

Except for the above referenced footnote, the information called for by this item is incorporated by reference to information in the [removed: 2022] [added: 2023] Proxy Statement under the captions “Security Ownership of Certain Beneficial Holders and Management,” “Compensation Discussion & Analysis” and “Executive Compensation.”

The information required by this item is incorporated by reference to information in the [removed: 2022] [added: 2023] Proxy Statement under the captions “Board Independence” and “Related Party Transactions.”

The information required by this item is incorporated by reference to information in the [removed: 2022] [added: 2023] Proxy Statement under the caption “Fees to Independent Registered Public Accounting Firm.”

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

[Index](#ic2f3f2bd1a624e5db07ef484c4e34304_7)

| 3.2 | | | [Amended and Restated By-Laws of the Company, adopted and effective July 7, 2020 (incorporated by reference herein to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, [removed: 2020. and Restated By-Laws of the Company.](https://www.sec.gov/Archives/edgar/data/920148/000092014820000043/amendedandrestatedbyla.htm)] [added: 2020).](https://www.sec.gov/Archives/edgar/data/920148/000092014820000043/amendedandrestatedbyla.htm)] | | | | | |

| 4.3 | | | [removed: [Second] [added: [Sixth] Supplemental Indenture, dated as of November [removed: 19, 2010,] [added: 1, 2013,] between the Company and U.S. Bank National Association, as trustee, including the form of the [removed: 2020] [added: 2023] Notes (incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on November [removed: 19, 2010).](http://www.sec.gov/Archives/edgar/data/920148/000092014810000110/ex_4-3.htm)] [added: 1, 2013).](http://www.sec.gov/Archives/edgar/data/920148/000119312513422088/d619416dex43.htm)] | | | | | |

| [removed: 4.4] [added: 4.6] | | | [removed: [Third] [added: [Eleventh] Supplemental Indenture, dated as of August [removed: 23, 2012,] [added: 22, 2017,] between the Company and U.S. Bank National Association, as trustee, including the form of the [removed: 2017] [added: 2024] Notes (incorporated [removed: herein] by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on August [removed: 23, 2012).](http://www.sec.gov/Archives/edgar/data/920148/000119312512365977/d401488dex42.htm)] [added: 22, 2017).](http://www.sec.gov/Archives/edgar/data/920148/000119312517264395/d427802dex42.htm)] | | | | | |

| 4.5 | | | [removed: [Fourth] [added: [Tenth] Supplemental Indenture, dated as of [removed: August 23, 2012,] [added: January 30, 2015,] between the Company and U.S. Bank National Association, as trustee, including the form of the [removed: 2022] [added: 2045] Notes (incorporated herein by reference to Exhibit [removed: 4.3] [added: 4.5] to the Company’s Current Report on Form 8-K filed on [removed: August 23, 2012).](http://www.sec.gov/Archives/edgar/data/920148/000119312512365977/d401488dex43.htm)] [added: January 30, 2015).](http://www.sec.gov/Archives/edgar/data/920148/000119312515026832/d860928dex45.htm)] | | | | | |

| [removed: 4.6] [added: 4.8] | | | [removed: [Fifth] [added: [Thirteenth] Supplemental Indenture, dated as of November [removed: 1, 2013,] [added: 25, 2019,] between the Company and U.S. Bank National Association, as trustee, including the form of the [removed: 2018] [added: 2024] Notes (incorporated herein by reference to Exhibit 4.2 to the [removed: Company’s] [added: Company's] Current Report on Form 8-K filed on November [removed: 1, 2013).](http://www.sec.gov/Archives/edgar/data/920148/000119312513422088/d619416dex42.htm)] [added: 25, 2019).](http://www.sec.gov/Archives/edgar/data/920148/000119312519300013/d839349dex42.htm)] | | | | | |

| [removed: 4.7] [added: 4.9] | | | [removed: [Sixth] [added: [Fourteenth] Supplemental Indenture, dated as of November [removed: 1, 2013,] [added: 25, 2019,] between the Company and U.S. Bank National Association, as trustee, including the form of the [removed: 2023] [added: 2029] Notes (incorporated herein by reference to Exhibit 4.3 to the [removed: Company’s] [added: Company's] Current Report on Form 8-K filed on November [removed: 1, 2013).](http://www.sec.gov/Archives/edgar/data/920148/000119312513422088/d619416dex43.htm)] [added: 25, 2019).](http://www.sec.gov/Archives/edgar/data/920148/000119312519300013/d839349dex43.htm)] | | | | | |

| [removed: 4.8] [added: 4.4] | | | [removed: [Seventh] [added: [Ninth] Supplemental Indenture, dated as of January 30, 2015, between the Company and U.S. Bank National Association, as trustee, including the form of the [removed: 2020] [added: 2025] Notes (incorporated herein by reference to Exhibit [removed: 4.2] [added: 4.4] to the Company’s Current Report on Form 8-K filed on January 30, [removed: 2015).](http://www.sec.gov/Archives/edgar/data/920148/000119312515026832/d860928dex42.htm)] [added: 2015).](http://www.sec.gov/Archives/edgar/data/920148/000119312515026832/d860928dex44.htm)] | | | | | |

| [removed: 4.9] [added: 4.7] | | | [removed: [Eighth] [added: [Twelfth] Supplemental Indenture, dated as of [removed: January 30, 2015,] [added: August 22, 2017,] between the Company and U.S. Bank National Association, as trustee, including the form of the [removed: 2022] [added: 2027] Notes (incorporated [removed: herein] by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on [removed: January 30, 2015).](http://www.sec.gov/Archives/edgar/data/920148/000119312515026832/d860928dex43.htm)] [added: August 22, 2017).](http://www.sec.gov/Archives/edgar/data/920148/000119312517264395/d427802dex43.htm)] | | | | | |

| 4.10 | | | [removed: [Ninth] [added: [Fifteenth] Supplemental Indenture, dated as of [removed: January 30, 2015,] [added: May 26, 2021,] between the Company and U.S. Bank National Association, as trustee, including the form of the [removed: 2025 Notes (incorporated] [added: 2026 Notes](https://www.sec.gov/Archives/edgar/data/0000920148/000119312521173705/d149828dex42.htm) [(incorporated] herein by reference to Exhibit [removed: 4.4] [added: 4.2] to the [removed: Company’s] [added: Company's] Current Report on Form 8-K filed on [removed: January 30, 2015).](http://www.sec.gov/Archives/edgar/data/920148/000119312515026832/d860928dex44.htm)] [added: May 26, 2021).](http://www.sec.gov/Archives/edgar/data/920148/000119312519300013/d839349dex42.htm)] | | | | | |

| 4.11 | | | [removed: [Tenth] [added: [Sixteenth] Supplemental Indenture, dated as of [removed: January 30, 2015,] [added: May 26, 2021,] between the Company and U.S. Bank National Association, as trustee, including the form of the [removed: 2045 Notes (incorporated] [added: 2031 Notes](https://www.sec.gov/Archives/edgar/data/0000920148/000119312521173705/d149828dex43.htm) [(incorporated] herein by reference to Exhibit [removed: 4.5] [added: 4.3] to the [removed: Company’s] [added: Company's] Current Report on Form 8-K filed on [removed: January 30, 2015).](http://www.sec.gov/Archives/edgar/data/920148/000119312515026832/d860928dex45.htm)] [added: May 26, 2021).](http://www.sec.gov/Archives/edgar/data/920148/000119312519300013/d839349dex42.htm)] | | | | | |

| [removed: 4.18*] [added: 4.12] | | | [Description of the Registrant's securities registered pursuant to Section 12 of the Securities Exchange Act of [removed: 1934.](https://www.sec.gov/Archives/edgar/data/920148/000092014821000018/exhibit416descriptionofreg.htm)] [added: 1934 (incorporated by reference to Exhibit 4.18 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021).](https://www.sec.gov/Archives/edgar/data/920148/000092014821000018/exhibit416descriptionofreg.htm)] | | | | | |

| [removed: 10.5+] [added: 10.6+] | | | [Laboratory Corporation of America Holdings Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.22 the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004).](http://www.sec.gov/Archives/edgar/data/920148/000092014805000049/defcomp_ex10-22.htm) | | | | | |

| [removed: 10.6+] [added: 10.7+] | | | [First Amendment to the Laboratory Corporation of America Holdings Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004).](http://www.sec.gov/Archives/edgar/data/920148/000092014805000049/defcompamend_ex10-23.htm) | | | | | |

| [removed: 10.7+] [added: 10.8+] | | | [Second Amendment to the Laboratory Corporation of America Holdings Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2005).](http://www.sec.gov/Archives/edgar/data/920148/000092014805000161/ex10-8_defcomp.htm) | | | | | |

| [removed: 10.8+] [added: 10.5+] | | | [Third Amendment to the Laboratory Corporation of America Amended and Restated New Pension Equalization Plan (incorporated herein by reference Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2005).](http://www.sec.gov/Archives/edgar/data/920148/000092014805000161/exhibit10-6.htm) | | | | | |

| [removed: 10.11+] [added: 10.13+] | | | [Laboratory Corporation of America Holdings [removed: 2008 Stock] [added: 2016 Omnibus] Incentive Plan (incorporated [removed: herein] by reference [added: herein] to [removed: Annex III] [added: Exhibit 10.1] to the Company’s [removed: Definitive Proxy Statement] [added: Current Report] on [removed: Schedule 14A] [added: Form 8-K] filed on [removed: March 25, 2008).](http://www.sec.gov/Archives/edgar/data/920148/000119312508064635/ddef14a.htm)] [added: May 16, 2016).](http://www.sec.gov/Archives/edgar/data/920148/000119312516591935/d169343dex101.htm)] | | | | | |

| [removed: 10.12+] [added: 10.14+] | | | [removed: [Amendment to Laboratory] [added: [Laboratory] Corporation of America Holdings [removed: 2008] [added: 2016 Employee] Stock [removed: Incentive] [added: Purchase] Plan (incorporated [removed: herein] by reference [added: herein] to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May [removed: 7, 2008).](http://www.sec.gov/Archives/edgar/data/920148/000092014808000150/exhibit10-2.htm)] [added: 16, 2016).](http://www.sec.gov/Archives/edgar/data/920148/000119312516591935/d169343dex102.htm)] | | | | | |

| [removed: 10.13+] [added: 10.17+] | | | [removed: [Laboratory] [added: [Executive Employment Agreement, dated June 4, 2019, by and between Laboratory] Corporation of America Holdings [removed: 2012 Omnibus Incentive Plan] [added: and Adam H. Schechter] (incorporated [removed: herein] by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on [removed: May 2, 2012).](https://www.sec.gov/Archives/edgar/data/920148/000092014812000065/exhibit101toform8-k.htm)] [added: June 5, 2019).](http://www.sec.gov/Archives/edgar/data/920148/000119312519165518/d758193dex101.htm)] | | | | | |

| [removed: 10.15] [added: 10.16] | | | [Amendment No. 1, dated as of May 7, 2020, to the [removed: Second Amended and Restated] [added: Term Loan] Credit Agreement, dated [removed: September 15, 2017 (originally dated as of December 21, 2011),] [added: June 3, 2019,] among the Company, Bank of America, N.A. as administrative agent, and the lenders party [removed: thereto] [added: thereto.] (incorporated herein by reference to Exhibit [removed: 10.2] [added: 10.1] to the Company’s Quarterly Report on Form 10-Q filed on May 8, [removed: 2020).](https://www.sec.gov/Archives/edgar/data/920148/000092014820000029/exhibit102amendment.htm)] [added: 2020).](https://www.sec.gov/Archives/edgar/data/920148/000092014820000029/exhibit101amendment.htm)] | | | | | |

| [removed: 10.16] [added: 10.11] | | | [Third Amended and Restated Credit Agreement, dated as of April 30, 2021, among the Company, Bank of America N.A., as administrative agent, and the lenders party thereto (incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on May 4, 2021).](https://www.sec.gov/Archives/edgar/data/920148/000092014821000041/labcorp-thirdarcreditagree.htm) | | | | | |

| [removed: 10.19] [added: 10.15] | | | [Term Loan Credit Agreement, dated June 3, 2019, by and among Laboratory Corporation of America Holdings, Bank of America, N.A., as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 3, 2019).](https://www.sec.gov/Archives/edgar/data/920148/000119312519164256/d755218dex101.htm) | | | | | |

| [removed: 10.20] [added: 10.12*] | | | [Amendment No. 1, dated as of [removed: May 7, 2020,] [added: January 13, 2023,] to the [removed: Term Loan] [added: Third Amended and Restated] Credit [removed: Agreement,] [added: Agreement (originally] dated [removed: June 3, 2019,] [added: as of April 30, 2021),] among the Company, Bank of America, [removed: N.A.] [added: N.A.,] as administrative agent, and [removed: the] lenders party [removed: thereto. (incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 8, 2020).](https://www.sec.gov/Archives/edgar/data/920148/000092014820000029/exhibit101amendment.htm)] [added: thereto.](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit1012thirdarcreditag.htm)] | | | | | |

| [removed: 10.22*+] [added: 10.19+] | | | [Amended and Restated Master Senior Executive Severance [removed: Plan.](https://www.sec.gov/Archives/edgar/data/920148/000092014821000018/exhibit1021amendedandresta.htm)] [added: Plan (incorporated by reference to 10.22 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021).](https://www.sec.gov/Archives/edgar/data/920148/000092014821000018/exhibit1021amendedandresta.htm)] | | | | | |

| 16.2 | | | [removed: [L](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000920148/000092014821000021/lh-20201102.htm)[etter] [added: [Letter] of [removed: Pricewaterhouse](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000920148/000092014821000021/lh-20201102.htm)[Coopers](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000920148/000092014821000021/lh-20201102.htm) [LLP](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000920148/000092014821000021/lh-20201102.htm)[,] [added: PricewaterhouseCoopers LLP,] dated March 3, 2021 [removed: (inco](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000920148/000092014821000021/lh-20201102.htm)[rporated] [added: (incorporated] by reference [removed: to](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000920148/000092014821000021/lh-20201102.htm) [Exhibit 1](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000920148/000092014821000021/lh-20201102.htm)[6.1] to [added: Exhibit 16.1 to] the [removed: Company's](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000920148/000092014821000021/lh-20201102.htm) [Current] [added: Company's Current] Report on Form 8-K/A filed on [removed: M](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000920148/000092014821000021/lh-20201102.htm)[arch] [added: March] 3, 2021).](https://www.sec.gov/ix?doc=/Archives/edgar/data/0000920148/000092014821000021/lh-20201102.htm) | | | | | |

| 21* | | | [List of Subsidiaries of the [removed: Company](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/exhibit212021.htm)] [added: Company](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit212022.htm)] | | |

| 23.1* | | | [Consent of Deloitte & Touche LLP, an independent registered public accounting [removed: firm](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/exhibit2312021.htm)] [added: firm](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit2312022.htm)] | | |

| 23.2* | | | [Consent of PricewaterhouseCoopers LLP, an independent [removed: registered] [added: register] public accounting [removed: firm](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/exhibit2322021.htm)] [added: firm](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit2322022.htm)] | | |

| 24.1* | | | [Power of Attorney of Kerrii B. [removed: Anderson](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/exhibit2412021.htm)] [added: Anderson](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit2412022.htm)] | | |

| 24.2* | | | [Power of Attorney of Jean-Luc [removed: Bélingard](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/exhibit2422021.htm)] [added: Bélingard](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit2422022.htm)] | | |

| 24.3* | | | [Power of Attorney of Jeffrey A. [removed: Davis](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/exhibit2432021.htm)] [added: Davis](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit2432022.htm)] | | |

| 24.4* | | | [Power of Attorney of D. Gary Gilliland, M.D., [removed: Ph.D.](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/exhibit2442021.htm)] [added: Ph.D.](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit2442022.htm)] | | |

| [removed: 24.5*] [added: 24.6*] | | | [Power of Attorney of Garheng Kong, M.D., [removed: Ph.D.](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/exhibit2452021.htm)] [added: Ph.D.](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit2462022.htm)] | | |

| [removed: 24.6*] [added: 24.7*] | | | [Power of Attorney of Peter M. [removed: Neupert](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/exhibit2462021.htm)] [added: Neupert](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit2472022.htm)] | | |

| [removed: 24.7*] [added: 24.8*] | | | [Power of Attorney of Richelle P. [removed: Parham](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/exhibit2472021.htm)] [added: Parham](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit2482022.htm)] | | |

| [removed: 24.8*] [added: 24.9*] | | | [Power of Attorney of Kathryn E. [removed: Wengel](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/exhibit2482021.htm)] [added: Wengel](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit2492022.htm)] | | |

| [removed: 24.9*] [added: 24.10*] | | | [Power of Attorney of R. Sanders Williams, [removed: M.D.](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/exhibit2492021.htm)] [added: M.D.](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit24102022.htm)] | | |

| 31.1* | | | [Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule [removed: 15d-14(a)](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/lh10-kex3112021.htm)] [added: 15d-14(a)](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/lh10-kex3112022.htm)] | | |

| 31.2* | | | [Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule [removed: 15d-14(a)](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/lh10-kex3122021.htm)] [added: 15d-14(a)](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/lh10-kex3122022.htm)] | | |

| 32* | | | [Written Statement of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section [removed: 1350)](https://www.sec.gov/Archives/edgar/data/920148/000092014822000015/lh10-kex322021.htm)] [added: 1350)](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/lh10-kex322022.htm)] | | |

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

| 10.18*+ | | | [Executive Employment Agreement, dated January 4, 2023, by and between Laboratory Corporation of America and Thomas Pike.](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit1018thomaspikeemplo.htm) | | | | | |

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

| 24.5* | | | [Power of Attorney of Kirsten M. Kliphouse](https://www.sec.gov/Archives/edgar/data/920148/000092014823000017/exhibit2452022.htm) | | |

[Index](#i9affef4b263d4c7097546e2ee7326a4a_7)

| | | | | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 4.12 | | | [Eleventh Supplemental Indenture, dated as of August 22, 2017, between the Company and U.S. Bank National Association, as trustee, including the form of the 2024 Notes (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on August 22, 2017).](http://www.sec.gov/Archives/edgar/data/920148/000119312517264395/d427802dex42.htm) | | | | | |

[Index](#ic2f3f2bd1a624e5db07ef484c4e34304_7)

| 4.13 | | | [Twelfth Supplemental Indenture, dated as of August 22, 2017, between the Company and U.S. Bank National Association, as trustee, including the form of the 2027 Notes (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on August 22, 2017).](http://www.sec.gov/Archives/edgar/data/920148/000119312517264395/d427802dex43.htm) | | | | | |

| 4.14 | | | [Thirteenth Supplemental Indenture, dated as of November 25, 2019, between the Company and U.S. Bank National Association, as trustee, including the form of the 2024 Notes (incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on November 25, 2019).](http://www.sec.gov/Archives/edgar/data/920148/000119312519300013/d839349dex42.htm) | | | | | |

| 4.15 | | | [Fourteenth Supplemental Indenture, dated as of November 25, 2019, between the Company and U.S. Bank National Association, as trustee, including the form of the 2029 Notes (incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on November 25, 2019).](http://www.sec.gov/Archives/edgar/data/920148/000119312519300013/d839349dex43.htm) | | | | | |

| 4.16 | | | [Fifteenth Supplemental Indenture, dated as of May 26, 2021, between the Company and U.S. Bank National Association, as trustee, including the form of the 2026 Notes](https://www.sec.gov/Archives/edgar/data/0000920148/000119312521173705/d149828dex42.htm) [(incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on](http://www.sec.gov/Archives/edgar/data/920148/000119312519300013/d839349dex42.htm) [May 26, 2021](http://www.sec.gov/Archives/edgar/data/920148/000119312519300013/d839349dex42.htm)[).](http://www.sec.gov/Archives/edgar/data/920148/000119312519300013/d839349dex42.htm) | | | | | |

| 4.17 | | | [Sixteenth Supplemental Indenture, dated as of May 26, 2021, between the Company and U.S. Bank National Association, as trustee, including the form of the 2031 Notes](https://www.sec.gov/Archives/edgar/data/0000920148/000119312521173705/d149828dex43.htm) [(incorporated herein by reference to Exhibit 4.](http://www.sec.gov/Archives/edgar/data/920148/000119312519300013/d839349dex42.htm)[3](http://www.sec.gov/Archives/edgar/data/920148/000119312519300013/d839349dex42.htm) [to the Company's Current Report on Form 8-K filed on May 26, 2021).](http://www.sec.gov/Archives/edgar/data/920148/000119312519300013/d839349dex42.htm) | | | | | |

| 10.14 | | | [Second Amended and Restated Credit Agreement, dated as of September 15, 2017, (originally dated as of December 21, 2011), among the Company, Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer, Wells Fargo Bank, National Association as Syndication Agent and L/C Issuer, Credit Suisse AG, Cayman Islands Branch as Documentation Agent and L/C Issuer, the Bank of Tokyo-Mitsubishi UFJ, LTD., Barclays Bank PLC, Credit Suisse AG, Cayman Islands Branch, KeyBank National Association, PNC Bank, National Association, TD Bank, N.A., and U.S. Bank National Association, as Documentation Agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC and Credit Suisse Securities (USA) LL as Joint Lead Arrangers and Joint Book Managers, and the lenders named therein (incorporated herein by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-Q filed on November 2, 2017).](https://www.sec.gov/Archives/edgar/data/920148/000092014817000112/exhibit103q32017.htm) | | | | | |

| 10.17+ | | | [Laboratory Corporation of America Holdings 2016 Omnibus Incentive Plan (incorporated by reference herein to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 16, 2016).](http://www.sec.gov/Archives/edgar/data/920148/000119312516591935/d169343dex101.htm) | | | | | |

| 10.18+ | | | [Laboratory Corporation of America Holdings 2016 Employee Stock Purchase Plan (incorporated by reference herein to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 16, 2016).](http://www.sec.gov/Archives/edgar/data/920148/000119312516591935/d169343dex102.htm) | | | | | |

| 10.21+ | | | [Executive Employment Agreement, dated June 4, 2019, by and between Laboratory Corporation of America Holdings and Adam H. Schechter (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 5, 2019).](http://www.sec.gov/Archives/edgar/data/920148/000119312519165518/d758193dex101.htm) | | | | | |

| Dated: | | | February [removed: 25, 2022] [added: 28, 2023] | | | | | | | | |

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the registrant on February [removed: 25, 2022] [added: 28, 2023] in the capacities indicated.

| [Report of Independent Registered Public Accounting Firm Deloitte & Touche [removed: LLP](#ic2f3f2bd1a624e5db07ef484c4e34304_157)] [added: LLP](#i9affef4b263d4c7097546e2ee7326a4a_160)] | | | PCAOB ID No. | | | 34 | | | [removed: F-[2](#ic2f3f2bd1a624e5db07ef484c4e34304_157)] [added: F-[2](#i9affef4b263d4c7097546e2ee7326a4a_160)] | | |

| [Report of Independent Registered Public Accounting Firm PricewaterhouseCoopers [removed: LLP](#ic2f3f2bd1a624e5db07ef484c4e34304_2143)] [added: LLP](#i9affef4b263d4c7097546e2ee7326a4a_163)] | | | PCAOB ID No. | | | 238 | | | F-6 | | |

| [Consolidated Balance [removed: Sheets](#ic2f3f2bd1a624e5db07ef484c4e34304_160)] [added: Sheets](#i9affef4b263d4c7097546e2ee7326a4a_166)] | | | | | | | | | [removed: F-[7](#ic2f3f2bd1a624e5db07ef484c4e34304_160)] [added: F-[7](#i9affef4b263d4c7097546e2ee7326a4a_166)] | | |

| [Consolidated Statements of [removed: Operations](#ic2f3f2bd1a624e5db07ef484c4e34304_166)] [added: Operations](#i9affef4b263d4c7097546e2ee7326a4a_172)] | | | | | | | | | [removed: F-[8](#ic2f3f2bd1a624e5db07ef484c4e34304_166)] [added: F-[8](#i9affef4b263d4c7097546e2ee7326a4a_172)] | | |

| [Consolidated Statements of Comprehensive [removed: Earnings](#ic2f3f2bd1a624e5db07ef484c4e34304_169)] [added: Earnings](#i9affef4b263d4c7097546e2ee7326a4a_175)] | | | | | | | | | [removed: F-[9](#ic2f3f2bd1a624e5db07ef484c4e34304_169)] [added: F-[9](#i9affef4b263d4c7097546e2ee7326a4a_175)] | | |

| [Consolidated Statements of Changes in Shareholders' [removed: Equity](#ic2f3f2bd1a624e5db07ef484c4e34304_172)] [added: Equity](#i9affef4b263d4c7097546e2ee7326a4a_178)] | | | | | | | | | [removed: F-[10](#ic2f3f2bd1a624e5db07ef484c4e34304_172)] [added: F-[10](#i9affef4b263d4c7097546e2ee7326a4a_178)] | | |

| [Consolidated Statements of Cash [removed: Flows](#ic2f3f2bd1a624e5db07ef484c4e34304_175)] [added: Flows](#i9affef4b263d4c7097546e2ee7326a4a_181)] | | | | | | | | | [removed: F-[11](#ic2f3f2bd1a624e5db07ef484c4e34304_175)] [added: F-[11](#i9affef4b263d4c7097546e2ee7326a4a_181)] | | |

| [Notes to Consolidated Financial [removed: Statements](#ic2f3f2bd1a624e5db07ef484c4e34304_178)] [added: Statements](#i9affef4b263d4c7097546e2ee7326a4a_184)] | | | | | | | | | [removed: F-[12](#ic2f3f2bd1a624e5db07ef484c4e34304_178)] [added: F-[12](#i9affef4b263d4c7097546e2ee7326a4a_184)] | | |

We have audited the accompanying consolidated balance sheet of Laboratory Corporation of America Holdings and subsidiaries (the “Company”) as of December 31, [added: 2022 and] 2021, the related consolidated statements of operations, comprehensive earnings, changes in shareholders’ equity, and cash flows for [added: each of] the [removed: year] [added: two years in the period] ended December 31, [removed: 2021,] [added: 2022,] and the related notes (collectively referred to as the “financial statements”).

In our opinion, the [added: consolidated] financial statements present fairly, in all material respects, the [removed: financial position of the Company as of December 31, 2021, and the] results of [removed: its] operations and [removed: its] cash flows [added: of the Company] for the year ended December 31, [removed: 2021,] [added: 2020] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] based on criteria established in [removed: Internal] [added: *Internal] Control – Integrated Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 25, 2022,] [added: 28, 2023,] expressed an unqualified opinion on the Company’s internal control over financial reporting.

Our responsibility is to express an opinion on the Company’s [added: consolidated] financial statements based on our audit.

We conducted our [removed: audit] [added: audits] in accordance with the standards of the PCAOB.

Our audit included performing procedures to assess the risks of material misstatement of the [added: consolidated] financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the [added: consolidated] financial statements.

Within the Drug Development [added: (DD)] segment, the Company provides [removed: clinical development and commercialization services] [added: Phase I] through [removed: the performance of] [added: Phase IV] clinical [removed: trial services for which revenue is recognized as] [added: development] services [removed: are performed.][added: to pharmaceutical, biotechnology, and medical device companies worldwide.]

[removed: Most] [added: The majority] of the [added: Company's] contracts [removed: associated with these services are long term in nature and constitute] [added: contain] a single performance [removed: obligation (e.g., management of a clinical trial),] [added: obligation,] as the Company provides a significant service of integrating all promises in the contract and the promises are highly interdependent and interrelated with one another.

Given the judgments necessary to [removed: estimate total expected contract costs for purposes of] [added: recognize] revenue [removed: recognition] for [removed: full-service clinical trial] [added: fixed-price] contracts [removed: which] [added: that] use [removed: the cost-to-cost method,] [added: an input method based on estimated total costs,] auditing such estimates required extensive audit effort due to the complexity of these contracts and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.