Laboratory Corporation of America Holdings LH · USD

. BUSINESS SEGMENT INFORMATIONThe following table is a summary of segment information for the year ended December 31, 2025, 2024, and 2023. The “management approach” has been used to present the following segment information. This approach is based upon the way the management of the Company organizes segments within an enterprise for making operating decisions and assessing performance. Financial information is reported on the basis that it is used internally by the CODM for evaluating segment performance and deciding how to allocate resources to segments. The Company’s chief executive officer has been identified as the CODM.The Company’s CODM uses segment operating income to evaluate segment performance and to allocate resources. This segment performance measure excludes the amortization of intangibles and other assets, restructuring and other charges, goodwill and other asset impairments, and certain corporate charges for items such as transaction costs, and other special items. Other operating expenses are comprised primarily of rent, maintenance, sendout testing, utilities, travel and entertainment, and other segment expenses, including shipping costs for Dx. Segment asset information is not presented because it is not used by the CODM.Year Ended December 31, 2025Revenues:DxBLSIntercompany eliminations and otherLHIRevenues$10,876.5 $3,098.2 $(23.0)$13,951.7 Operating Earnings:Labor4,687.6 1,221.6 Supplies2,357.0 478.5 Shipping costs398.8 Depreciation258.8 116.0 Other operating expenses1,793.2 384.8 Segment operating income$1,779.9 $498.5 $2,278.4 General corporate and unallocated expenses(482.2)Amortization of intangibles and other assets(280.0)Restructuring and other charges(127.2)Goodwill and other asset impairments(4.3)Total Operating income1,384.7 Other (expense) income:Interest expense(224.1)Investment income15.2 Equity method loss, net(13.3)Other, net(55.0) Earnings from operations before income taxes$1,107.5 Year Ended December 31, 2024Revenues:DxBLSIntercompany eliminations and otherLHIRevenues$10,144.3 $2,922.6 $(58.0)$13,008.9 Operating Earnings:Labor4,438.7 1,165.3 Supplies2,209.6 441.9 Shipping costs365.8 Depreciation259.0 122.6 Other operating expenses1,630.7 368.1 Segment operating income$1,606.3 $458.9 $2,065.2 General corporate and unallocated expenses(670.8)Amortization of intangibles and other assets(256.4)Restructuring and other charges(46.0)Goodwill and other asset impairments(5.3)Total Operating income1,086.

REVENUESDescription of RevenuesDx attributes revenues to a geographical region based upon where the diagnostic test is performed, while BLS attributes revenues to a geographical region based upon where the services are performed. The Company’s revenue by segment payer groups is as follows:Year Ended December 31, 2025Year Ended December 31, 2024Year Ended December 31, 2023North AmericaEuropeOtherTotalNorth AmericaEuropeOtherTotalNorth AmericaEuropeOtherTotalDx: Clients23 %— %— %23 %24 %— %— %24 %24 %— %— %24 % Patients10 %— %— %10 %10 %— %— %10 %9 %— %— %9 % Medicare and Medicaid8 %— %— %8 %8 %— %— %8 %8 %— %— %8 % Third party37 %— %— %37 %36 %— %— %36 %36 %— %— %36 %Total Dx revenues78 %— %— %78 %78 %— %— %78 %77 %— %— %77 %BLS: Pharmaceutical, biotechnology, medical device, and diagnostic companies, and CROs9 %9 %4 %22 %9 %9 %4 %22 %10 %9 %4 %23 %Total Revenues87 %9 %4 %100 %87 %9 %4 %100 %87 %9 %4 %100 %Revenues in the U.S. were $11,650.1 (83.5%), $10,858.3 (83.5%), and $10,177.7 (83.7%) for the years ended December 31, 2025, 2024, and 2023.The following is a description of the current revenue recognition policies of the Company:Dx RevenuesDx offers a comprehensive menu of frequently requested and specialty diagnostic tests through an integrated network of primary and specialty laboratories across the U.S. In addition to diagnostic testing along with occupational and wellness testing for employers and forensic deoxyribonucleic acid analysis, Dx also offered a range of other testing services.Within the Dx segment, a majority of the revenue transactions are initiated when Dx receives a requisition form to perform a diagnostic test. The information provided on the requisition form is used to determine the party that will be billed for the testing performed and the expected reimbursement. Dx recognizes revenue and satisfies its performance obligation for services rendered when the testing process is complete and the associated results are reported. The Dx segment also enters into agreements that have monthly and non-testing-based fees which are recognized each month as the services are provided.Revenues are distributed among four payer portfolios: clients, patients, Medicare and Medicaid, and third party. Dx considers negotiated discounts and anticipated adjustments, including historical collection experience for the payer portfolio, when revenues are recorded. Dx has a formal process to estimate implicit price concessions for uncollectable accounts.

COMMITMENTS AND CONTINGENCIESCommitmentsThe Company has a noncancelable contract with a vendor to purchase inventory supplies pursuant to which the Company is obligated to make expected total future minimum payments of $129.2, including $34.7 in 2026, $20.5 in 2027, and $74.0 in 2028.Legal ContingenciesThe Company is involved from time to time in various claims and legal actions, including arbitrations, class actions, and other litigation (including those described in more detail below), arising in the ordinary course of business. Some of these actions involve claims that are substantial in amount. These matters include, but are not limited to, intellectual property disputes, commercial and contract disputes, professional liability claims, employee-related matters, transaction-related disputes, securities and corporate law matters, and inquiries, including subpoenas and other civil investigative demands, from governmental agencies, Medicare or Medicaid payers, and MCOs reviewing billing practices or requesting comment on allegations of billing irregularities that are brought to their attention through billing audits or third parties. The Company receives civil investigative demands or other inquiries from various governmental bodies in the ordinary course of its business. Such inquiries can relate to the Company or other parties, including physicians and other health care providers. The Company works cooperatively to respond to appropriate requests for information.The Company also is named from time to time in suits brought under the qui tam provisions of the False Claims Act and comparable state laws. These suits typically allege that the Company has made false statements and/or certifications in connection with claims for payment from U.S. federal or state healthcare programs. The suits may remain under seal (hence, unknown to the Company) for some time while the government decides whether to intervene on behalf of the qui tam plaintiff. Such claims are an inevitable part of doing business in the healthcare field today.The Company believes that it is in compliance in all material respects with all statutes, regulations, and other requirements applicable to its commercial laboratory operations and drug development support services. The healthcare diagnostics and drug development industries are, however, subject to extensive regulation, and the courts have not interpreted many of the applicable statutes and regulations.

DEBTShort-term borrowings and the current portion of long-term debt consisted of the following:December 31,202520243.60% senior notes due 2025$— $1,000.0 1.55% senior notes due 2026500.0 — Debt issuance costs(0.2)(0.1)Current portion of note payable0.3 0.4 Total Short-term borrowings and current portion of long-term debt$500.1 $1,000.3 Long-term debt consisted of the following:December 31,202520241.55% senior notes due 2026$— $500.0 3.60% senior notes due 2027600.0 600.0 2.95% senior notes due 2029650.0 650.0 4.35% senior notes due 2030650.0 650.0 2.70% senior notes due 2031447.3 423.2 4.55% senior notes due 2032500.0 500.0 4.80% senior notes due 2034850.0 850.0 4.70% senior notes due 2045900.0 900.0 Debt issuance costs(37.7)(42.3)AR facility525.0 300.0 Note payable— 0.3 Total Long-term debt$5,084.6 $5,331.2 Credit FacilitiesThe Company maintains a senior revolving credit facility, which was amended and restated on June 27, 2025. It consists of a five-year revolving facility in the principal amount of up to $1,000.0, with the option of increasing the facility by up to an additional $500.0, subject to certain conditions, including obtaining additional commitments from new or existing lenders. The revolving credit facility also provides for a subfacility of up to $100.0 for swing line borrowings and a subfacility of up to $150.0 for issuances of letters of credit. Borrowings under the revolving credit facility bear interest at a floating rate equal to either (i) a SOFR-based rate plus a margin ranging from 0.805% to 1.300% or (ii) a base rate plus a margin ranging from 0.0% to 0.300%, in each case depending on the Company’s long-term debt ratings. The Company is required to pay a facility fee quarterly on the aggregate amount of commitments under the revolving credit facility, at a per annum rate ranging from 0.070% to 0.200%, depending on the Company’s long term debt ratings, regardless of usage. The revolving credit facility is permitted to be used for general corporate purposes, including working capital, capital expenditures, funding of share repurchases and certain other payments, acquisitions, and other investments. There were no balances outstanding on the Company’s current revolving credit facility and $110.2 in outstanding letters of credit on the Company’s subfacility at December 31, 2025. At December 31, 2025, the effective interest rate on the revolving credit facility was 4.73%. The revolving credit facility expires in June 2030.

INCOME TAXESThe sources of Earnings from continuing operations before income taxes, classified between domestic and foreign entities, are as follows:Year Ended December 31,202520242023Domestic$728.9 $629.7 $504.0 Foreign378.6 329.8 64.9 Total Earnings from continuing operations before income taxes$1,107.5 $959.5 $568.9 The components of income tax expense attributable to continuing operations are as follows: Year Ended December 31, 202520242023Current tax expense: Federal$64.6 $125.9 $183.1 State12.5 46.2 38.9 Foreign55.1 60.4 44.6 $132.2 $232.5 $266.6 Deferred tax expense (benefit): Federal$83.1 $(6.3)$(63.1)State15.9 (11.1)(31.6)Foreign(1.4)(2.7)16.6 97.6 (20.1)(78.1) Total Provision for income taxes$229.8 $212.4 $188.5 The effective tax rates on earnings before income taxes are reconciled to statutory U.S. income tax rates as follows:Year Ended December 31,202520242023Amount%Amount%Amount%Statutory U.S. rate$232.6 21.0 %$201.5 21.0 %$119.5 21.0 %State and local income taxes, net of federal income tax effects (1)24.3 2.2 %23.4 2.4 %2.7 0.5 %Foreign tax effects:Canada:Deferred tax adjustments0.4 — %0.5 0.1 %9.9 1.7 %Other1.1 0.1 %(2.5)(0.3)%3.3 0.6 %Germany:Deferred tax adjustments(0.2)— %(0.2)— %(6.8)(1.2)%Other1.1 0.1 %1.1 0.1 %5.8 1.0 %United Kingdom:Goodwill impairment— — %— — %39.1 6.9 %Deferred tax adjustments0.3 — %— — %12.9 2.3 %Other(0.3)— %(0.4)— %5.1 0.8 %Switzerland:Foreign rate differential(16.9)(1.5)%(16.0)(1.7)%(16.1)(2.8)%Other2.7 0.2 %3.8 0.4 %0.6 0.1 %Other foreign jurisdictions(0.4)— %(0.3)— %1.0 0.2 %Enactment of new tax laws— — %— — %— — %Effect of cross-border tax laws:Other3.0 0.3 %4.5 0.5 %2.1 0.4 %Tax credits:R&D tax credits(16.2)(1.5)%(18.0)(1.9)%(13.2)(2.3)%Other(1.1)(0.1)%(0.7)(0.1)%(1.3)(0.2)%Valuation allowances0.5 — %(1.4)(0.1)%— — %Nontaxable or nondeductible items:Goodwill impairment— — %— — %18.1 3.2 %Officer compensation8.3 0.7 %6.9 0.7 %9.9 1.7 %Worthless stock loss— — %— — %(14.8)(2.6)%Other5.3 0.5 %7.5 0.8 %5.7 1.0 %Changes in unrecognized tax benefits(8.3)(0.7)%1.9 0.2 %(1.0)(0.2)%Other adjustments:Deferred tax adjustments0.1 — %3.2 0.3 %6.4 1.1 %Other(6.5)(0.6)%(2.4)(0.3)%(0.4)(0.1)%Effective tax rate$229.8 20.7 %$212.4 22.1 %$188.5 33.

LEASESThe Company has operating and finance leases for PSCs, laboratories and testing facilities, clinical facilities, general office spaces, vehicles, and office and laboratory equipment. Leases have remaining lease terms of less than a year to approximately 20 years, some of which include options to extend the leases for up to an additional 20 years.The components of lease expense were as follows:Year Ended December 31, 202520242023Operating lease cost$240.7 $220.9 $202.6 Finance lease cost: Amortization of ROU assets$5.5 $7.5 $7.1 Interest on lease liabilities3.6 4.4 4.8 Total finance lease cost$9.1 $11.9 $11.9 Supplemental cash flow information related to leases was as follows:Year Ended December 31, 202520242023Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used from operating leases$(245.1)$(229.7)$(209.7) Operating cash flows used from finance leases$(3.6)$(4.4)$(4.8) Financing cash flows used from finance leases$(8.8)$(11.9)$(12.6) ROU assets obtained in exchange for lease obligations: Operating leases$63.0 $226.8 $106.4 Finance leases$0.2 $23.9 $2.3 Supplemental balance sheet information related to leases was as follows:December 31,20252024Operating Leases:Operating lease ROU assets (included in Property, plant, and equipment, net)$803.9 $784.5 Short-term operating lease liabilities$191.1 $184.6 Operating lease liabilities682.6 676.3 Total operating lease liabilities$873.7 $860.9 Finance Leases: Finance lease ROU assets (included in Other assets, net)$52.8 $64.1 Short-term finance lease liabilities$4.6 $6.1 Financing lease liabilities63.0 74.3 Total finance lease liabilities$67.6 $80.4 Weighted-average Remaining Lease Term (in Years):Operating leases8.18.2Finance leases14.414.1Weighted-average Discount Rate:Operating leases4.5 %4.4 %Finance leases5.1 %5.2 %Maturities of lease liabilities were as follows:December 31, 2025Operating LeasesFinance Leases2026$224.1 $7.9 2027171.8 7.4 2028126.7 6.8 202992.8 6.5 203079.1 6.4 Thereafter350.9 61.4 Total lease payments1,045.4 96.4 Less imputed interest(171.7)(28.8)Less current portion(191.1)(4.6)Total maturities, due beyond one year$682.6 $63.0 The Company elected, for all classes of underlying assets, to account for lease components and non-lease components as a single lease component.Rent expense for short-term leases for the years ended December 31, 2025, 2024, and 2023 amounted to $37.7, $31.1, $31.9, respectively.

The purchase price allocations for these acquisitions were preliminary at December 31, 2025. The valuation of acquired assets and assumed liabilities included the following:BioReference Health (2025)Community Health Systems Inc.Other Acquisitions Closed During the Year Ended December 31, 2025Measurement Period AdjustmentsAmounts Acquired During Year Ended December 31, 2025Cash and cash equivalents$— $— $0.2 $— $0.2 Accounts receivable— — 0.6 — 0.6 Inventories— — 0.9 — 0.9 Property, plant, and equipment— — 7.9 (0.8)7.1 Goodwill105.8 91.4 90.6 10.4 298.2 Intangible assets119.2 103.1 100.8 (23.3)299.8 Total assets acquired225.0 194.5 201.0 (13.7)606.8 Accrued expenses and other32.5 — 25.3 (20.6)37.2 Lease liabilities— — 3.0 — 3.0 Other liabilities— — 2.5 6.9 9.4 Total liabilities acquired32.5 — 30.8 (13.7)49.6 Net assets acquired192.5 194.5 170.2 — 557.2 Escrow payments for pending acquisitions25.0 Cash paid for acquisitions$192.5 $194.5 $170.2 $— $582.

BUSINESS ACQUISITIONS AND DISPOSITIONS2025During the year ended December 31, 2025, the Company acquired various businesses and related assets for approximately $582.0, net of cash acquired. The preliminary purchase considerations for these acquisitions were allocated under the acquisition method of accounting to the estimated fair market value of the net assets acquired. A residual amount of tax deductible goodwill, including measurement period adjustments relating to prior acquisitions, of $298.2 was recorded at December 31, 2025. The purchase price allocations for these acquisitions were preliminary at December 31, 2025. The valuation of acquired assets and assumed liabilities included the following:BioReference Health (2025)Community Health Systems Inc.Other Acquisitions Closed During the Year Ended December 31, 2025Measurement Period AdjustmentsAmounts Acquired During Year Ended December 31, 2025Cash and cash equivalents$— $— $0.2 $— $0.2 Accounts receivable— — 0.6 — 0.6 Inventories— — 0.9 — 0.9 Property, plant, and equipment— — 7.9 (0.8)7.1 Goodwill105.8 91.4 90.6 10.4 298.2 Intangible assets119.2 103.1 100.8 (23.3)299.8 Total assets acquired225.0 194.5 201.0 (13.7)606.8 Accrued expenses and other32.5 — 25.3 (20.6)37.2 Lease liabilities— — 3.0 — 3.0 Other liabilities— — 2.5 6.9 9.4 Total liabilities acquired32.5 — 30.8 (13.7)49.6 Net assets acquired192.5 194.5 170.2 — 557.2 Escrow payments for pending acquisitions25.0 Cash paid for acquisitions$192.5 $194.5 $170.2 $— $582.2 Intangible assets recognized from business acquisitions that closed during the year ended December 31, 2025, including the related measurement period adjustments, and their respective weighted-average amortization periods are as follows:AmountWeighted-average Amortization Period(in Years)Customer relationships$262.3 15.0Non-compete agreements53.6 4.9 Total$315.9 On September 17, 2024, the Company announced that it entered into an agreement with Cinven, Inc. to acquire a 15% minority interest in SYNLAB, a leader in medical diagnostic services and specialty testing in Europe, for approximately $151.6 (€140.4). The transaction closed in March 2025 and is accounted for as an equity method investment within the Company’s Consolidated Financial Statements.On September 15, 2025, the Company entered into an agreement with Empire City Laboratories, Inc. to acquire select clinical laboratory assets, which serves the New York Tri-State area.