Laboratory Corporation of America Annual Report 2021

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FY2021 Annual Report · Laboratory Corporation of America

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[☒] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2021

[☐] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______ to ______

Commission file number - 1-11353

LABORATORY CORPORATION OF AMERICA HOLDINGS
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

358 South Main Street

Burlington,

North Carolina

(Address of principal executive offices)

13-3757370
(I.R.S. Employer Identification No.)

27215
(Zip Code)

(Registrant's telephone number, including area code) 336-229-1127

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, $0.10 par value

Trading Symbol
LH

Name of exchange on which registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [X] No [ ].

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X].

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ].

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes [X] No [ ].

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company”
in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Non-accelerated filer

☒ Accelerated filer
☐ Smaller reporting company
Emerging growth company

☐
☐
☐

Index

If emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued
its audit report. Yes ☒ No [ ].

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [☐] No [X].

As of June 30, 2021, the aggregate market value of the common stock held by non-affiliates of the registrant was approximately $24.8 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: 93.4 million shares as of
February 24, 2022.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K into which the document is incorporated:

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

Index

Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.

Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.

Item 10.
Item 11.
Item 12.
Item 13.
Item 14.

Item 15.
Item 16.

Summary of Material Risks

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures

Index

Part I

Part II

Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
Selected Financial Data
Management's Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Part III

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services

Exhibits and Financial Statement Schedules
Form 10-K Summary

Part IV

Page

9
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50
51
51

52
53
53
63
64
64
64
65
65

66
66
66
66
66

67
71

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Summary of Material Risks

Laboratory Corporation of America Holdings together with its subsidiaries (Labcorp or the Company) is subject to a variety of risks and uncertainties,
including risks that could have a material adverse effect on its business, consolidated financial condition, revenues, results of operations, profitability,
reputation, and cash flows. This summary should be read together with the more detailed description of the risks that the Company deems material described
under “Risk Factors” in Item 1A of this Annual Report on Form 10-K (Annual Report) and should not be relied upon as an exhaustive summary of the
material risks facing the Company’s business. In addition to the following summary, investors should carefully consider all of the information set forth in this
Annual Report before deciding to invest in any of the Company’s securities. The risks below are not the only ones that the Company faces. Additional risks
not presently known to the Company, or that it presently deems immaterial, may also negatively impact the Company. This Annual Report also includes
forward-looking statements, immediately following this risk summary, that involve risks or uncertainties. The Company’s results could differ materially from
those anticipated in these forward-looking statements as a result of certain factors, including the risks described below and elsewhere.

Risks Related to the COVID-19 Pandemic

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 position.
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.
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.

Risks Related to Regulatory and Compliance Matters

Changes in payer regulations or policies, insurance regulations or approvals, or changes in or interpretations of, other laws, regulations or policies in
the U.S. or globally may have a material adverse effect upon the Company.
The Company could face significant monetary damages and penalties and/or exclusion from government programs if it violates anti-fraud and abuse
laws.
The Company’s business could be harmed from the loss or suspension of a license or imposition of fines or penalties under, or future changes in, or
interpretations of, the law or regulations of the Clinical Laboratory Improvement Act of 1967, and the Clinical Laboratory Improvement
Amendments of 1988 (CLIA), or those of Medicare, Medicaid or other national, state, or local agencies in the U.S. and other countries where the
Company operates laboratories.
Failure 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.
The Company’s international operations could subject it to additional risks and expenses that could have a material adverse impact on the business or
results of operations, including exposure to liabilities under tax, trade, anti-corruption, and data privacy laws.
Failure to comply with the regulations of drug regulatory agencies could result in fines, penalties, and sanctions and have a material adverse effect
upon the Company.
Failure to conduct animal research in compliance with animal welfare laws and regulations could result in fines, penalties, and sanctions and have a
material adverse effect upon the Company.
U.S. Food and Drug Administration (FDA), European Union and other regulation of diagnostic products and medical devices and increased FDA
regulation of laboratory-developed tests (LDTs) could result in increased costs, fines, and penalties.
Failure to comply with national, 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 fines and penalties.

Risks Related to the Company’s Business

General or macro-economic factors in the U.S. and globally may have a material adverse effect upon the Company, and a significant deterioration in
the economy could negatively impact testing volumes, drug development services, cash collections, and the availability of credit.
Healthcare reform and changes to related products, changes in government payment and reimbursement systems, or changes in payer mix, including
an increase in capitated reimbursement mechanisms and evolving delivery models, could have a material adverse effect on the Company's revenues,
profitability, and cash flow.
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.
Increased competition, including price competition, could have an adverse effect on the Company’s revenues and profitability.

Index

h.
i.

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.
Discontinuation or recalls of existing testing products, failure to develop or acquire licenses for new or improved testing technologies, and
competition from new products and technologies could adversely affect the Company’s business.
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, and other catastrophic events outside of the Company's control.
Changes or disruption in services, supplies, or transportation provided by third parties could adversely affect the Company’s business.
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.
Continued and increased consolidation of managed care organizations (MCOs), pharmaceutical, biotechnology and medical device companies,
health systems, physicians, and other customers could adversely affect the Company's business.
Unproductive labor environment, union strikes, work stoppages, union or works council negotiations, or failure to comply with labor or employment
laws could adversely affect the Company's operations and have a material adverse effect upon the Company's business.
An inability to attract and retain experienced and qualified personnel, including key management personnel, could adversely affect the Company’s
business.

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.

Risks Related to Financial Matters

d.
e.

The Company bears financial risk for contracts that, including for reasons beyond the Company's control, may be underpriced, subject to cost
overruns, delayed, terminated or reduced in scope.
A significant increase in the Company’s days sales outstanding could have an adverse effect on the Company’s business, including its cash flow, by
increasing its bad debt or decreasing its cash flow.
The Company's Drug Development segment revenues depend on the pharmaceutical, biotechnology and medical device industries, including those
industries' R&D spending, ability to raise capital, reimbursement from governmental programs or commercial payers, and trends and other economic
conditions affecting those industries.
Foreign currency exchange fluctuations could have a material adverse effect on the Company’s business.
The Company’s uses of financial instruments to limit its exposure to interest rate and currency fluctuations could expose it to risks and financial
losses that may adversely affect the Company’s financial condition, liquidity, and results of operations.
The Company’s level of indebtedness could adversely affect the Company’s liquidity, results of operations and business.

Risks Related to Technology and Cybersecurity

Failure to maintain the security of information relating to the Company, or its customers, patients, or vendors, whether as a result of cybersecurity
attacks on the Company’s information systems or otherwise, could damage the Company’s reputation, cause it to incur substantial additional costs,
result in litigation and enforcement actions, and materially adversely affect the Company’s business and operating results.
Failure or delays in the Company’s information technology systems, including the failure to develop and implement updates and enhancements to
those systems, could disrupt the Company’s operations or customer relationships.
The Company depends on third parties to provide services critical to the Company's business, and depends on them to comply with applicable laws
and regulations. Breaches of the information technology systems of third parties could have a material adverse effect on the Company's operations.

Risks Related to Legal Matters

a.
b.

Adverse results in material litigation matters could have a material adverse effect upon the Company’s business.
The failure to successfully obtain, maintain and enforce intellectual property rights and defend against challenges to the Company’s intellectual
property rights could adversely affect the Company.
Changes in tax laws and regulations or the interpretation of such may have a significant impact on the financial position, results of operations and
cash flows of the Company.
If the Company fails to perform contract research services in accordance with contractual requirements and regulatory standards, the Company could
be subject to significant costs or liability.

Index

FORWARD-LOOKING STATEMENTS

In this Annual Report, the Company makes, and from time to time may otherwise make in its public filings, press releases and discussions by Company
management, forward-looking statements concerning the Company’s operations, performance and financial condition, as well as its strategic objectives. Some
of these forward-looking statements relate to future events and expectations and can be identified by the use of forward-looking words such as “believes”,
“expects”, “may”, “will”, “should”, “seeks”, “approximately”, “intends”, “plans”, “estimates”, or “anticipates” or the negative of those words or other
comparable terminology. Such forward-looking statements speak only as of the time they are made and are subject to various risks and uncertainties and the
Company claims the protection afforded by the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Actual results could differ materially from those currently anticipated due to a number of factors in addition to those discussed elsewhere herein, including in
the “Summary of Material Risks” above and in the “Risk Factors” section of this Annual Report, and in the Company’s other public filings, press releases,
and discussions with Company management, including:

changes in government and third-party payer regulations, reimbursement, or coverage policies or other future reforms in the U.S. healthcare system
(or in the interpretation of current regulations), new insurance or payment systems, including state, regional or private insurance cooperatives (e.g.,
health insurance exchanges) affecting governmental and third-party coverage or reimbursement for commercial laboratory testing, including the
impact of the U.S. Protecting Access to Medicare Act of 2014 (PAMA);

significant monetary damages, fines, penalties, assessments, refunds, repayments, damage to the Company's reputation, unanticipated compliance
expenditures, and/or exclusion or debarment from or ineligibility to participate in government programs, among other adverse consequences, arising
from enforcement of anti-fraud and abuse laws and other laws applicable to the Company in jurisdictions in which the Company conducts business;

significant fines, penalties, costs, unanticipated compliance expenditures, and/or damage to the Company’s reputation arising from the failure to
comply with applicable privacy and security laws and regulations, including the U.S. Health Insurance Portability and Accountability Act of 1996,
the U.S. Health Information Technology for Economic and Clinical Health Act, the European Union's General Data Protection Regulation and
similar laws and regulations in jurisdictions in which the Company conducts business;

loss or suspension of a license or imposition of fines or penalties under, or future changes in, or interpretations of applicable licensing laws or
regulations regarding the operation of clinical laboratories and the delivery of clinical laboratory test results, including, but not limited to, the U.S.
Clinical Laboratory Improvement Act of 1967 and the U.S. Clinical Laboratory Improvement Amendments of 1988 and similar laws and regulations
in jurisdictions in which the Company conducts business;

penalties or loss of license arising from the failure to comply with applicable occupational and workplace safety laws and regulations, including the
U.S. Occupational Safety and Health Administration requirements, the U.S. Needlestick Safety and Prevention Act, and similar laws and regulations
in jurisdictions in which the Company conducts business;

fines, unanticipated compliance expenditures, suspension of manufacturing, enforcement actions, damage to the Company's reputation, injunctions,
or criminal prosecution arising from failure to maintain compliance with current good manufacturing practice regulations and similar requirements
of various regulatory agencies in jurisdictions in which the Company conducts business;

sanctions or other remedies, including fines, unanticipated compliance expenditures, enforcement actions, injunctions or criminal prosecution arising
from failure to comply with the Animal Welfare Act or applicable national, state and local laws and regulations in jurisdictions in which the
Company conducts business;

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

changes in applicable government regulations or policies affecting the approval, availability of, and the selling and marketing of diagnostic tests,
drug development, or the conduct of drug development and medical device and diagnostic studies and trials, including regulations and policies of the
U.S. Food and Drug Administration, the U.S. Department of Agriculture, the Medicine and Healthcare products Regulatory Agency in the United
Kingdom, the National Medical Products Administration in China, the Pharmaceutical and Medical Devices Agency in Japan, the European
Medicines Agency, the European Union and similar regulations and policies of agencies in other jurisdictions in which the Company conducts
business;

10.

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

Index

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

24.

25.

26.

27.

28.

29.

30.

31.

liabilities that result from the failure to comply with corporate governance requirements;

increased competition, including price competition, potential reduction in rates in response to price transparency initiatives and consumerism,
competitive bidding and/or changes or reductions to fee schedules, and competition from companies that do not comply with existing laws or
regulations or otherwise disregard compliance standards in the industry;

changes in payer mix or payment structure or process, including insurance carrier participation in health insurance exchanges, an increase in
capitated reimbursement mechanisms, the impact of clearinghouses on the claims reimbursement process, the impact of a shift to consumer-driven
health plans or plans carrying an increased level of member cost-sharing, and adverse changes in payer reimbursement or payer coverage policies
(implemented directly or through a third-party utilization management organization) related to specific diagnostic tests, categories of testing or
testing methodologies;

failure to retain or attract MCO business as a result of changes in business models, including risk based or network approaches, out-sourced
laboratory network management or utilization management companies, or other changes in strategy or business models by MCOs;

failure to obtain and retain new customers, an unfavorable change in the mix of testing services ordered, or a reduction in tests ordered, specimens
submitted, or services requested by existing customers, and delays in payments from customers;

consolidation and convergence of customers, competitors, and suppliers, potentially causing material shifts in insourcing, utilization, pricing,
reimbursement and supply chain access;

failure to effectively develop and deploy new systems, system modifications or enhancements required in response to evolving market and business
needs;

customers choosing to insource services that are or could be purchased from the Company;

failure to identify, successfully close and effectively integrate and/or manage acquisitions of new businesses or failure to maintain key customers
and/or employees as a result of uncertainty surrounding the integration of acquisitions;

inability to achieve the expected benefits and synergies of newly-acquired businesses, including due to items not discovered in the due diligence
process, and the impact on the Company's cash position, levels of indebtedness and stock price;

termination, loss, delay, reduction in scope or increased costs of contracts, including large contracts and multiple contracts;

liability arising from errors or omissions in the performance of testing services, contract research services or other contractual arrangements;

changes or disruption in the provision or transportation of services or supplies provided by third parties; or their termination for failure to follow the
Company's performance standards and requirements;

damage or disruption to the Company's facilities;

damage to the Company's reputation, loss of business, or other harm from acts of animal rights activists or potential harm and/or liability arising
from animal research activities;

adverse results in litigation matters;

inability to attract and retain experienced and qualified personnel or the loss of significant personnel as a result of illness, increased competition for
talent, wage growth, or other market factors;

failure to develop or acquire licenses for new or improved technologies, such as point-of-care testing, mobile health technologies, and digital
pathology, or potential use of new technologies by customers and/or consumers to perform their own tests;

substantial costs arising from the inability to commercialize newly licensed tests or technologies or to obtain appropriate coverage or reimbursement
for such tests;

failure to obtain, maintain, and enforce intellectual property rights for protection of the Company's products and services and defend against
challenges to those rights;

scope, validity, and enforceability of patents and other proprietary rights held by third parties that may impact the Company's ability to develop,
perform, or market the Company's products or services or operate its business;

Index

32.

33.

34.

35.

36.

37.

38.

39.

40.

41.

42.

43.

44.

45.

business interruption, receivables impairment, delays in cash collection impacting days sales outstanding, supply chain disruptions or inventory
obsolescence, increases in material cost or other operating costs, or other impacts on the business due to natural disasters, including adverse weather,
fires and earthquakes; political crises, including terrorism and war; public health crises and disease epidemics and pandemics; changes in the global
economy; and other events outside of the Company's control;

discontinuation or recalls of existing testing products;

a failure in the Company's information technology systems, including with respect to testing turnaround time and billing processes, or the failure of
the Company or its third-party suppliers and vendors to maintain the security of business information or systems or to protect against cybersecurity
attacks such as denial of service attacks, malware, ransomware, and computer viruses, or delays or failures in the development and implementation
of the Company’s automation platforms, any of which could result in a negative effect on the Company’s performance of services, a loss of business
or increased costs, damages to the Company’s reputation, significant litigation exposure, an inability to meet required financial reporting deadlines,
or the failure to meet future regulatory or customer information technology, data security and connectivity requirements;

business interruption, increased costs, and other adverse effects on the Company's operations due to the unionization of employees, union strikes,
work stoppages, general labor unrest or failure to comply with labor or employment laws;

failure to maintain the Company's days sales outstanding levels, cash collections (in light of increasing levels of patient responsibility), profitability
and/or reimbursement arising from unfavorable changes in third-party payer policies, payment delays introduced by third-party utilization
management organizations, and increasing levels of patient payment responsibility;

impact on the Company's revenues, cash collections, and the availability of credit for general liquidity or other financing needs arising from a
significant deterioration in the economy or financial markets or in the Company's credit ratings by Standard & Poor's and/or Moody's;

failure to maintain the expected capital structure for the Company, including failure to maintain the Company's investment grade rating, or leverage
ratio covenants under its revolving credit facility;

changes in reimbursement by foreign governments and foreign currency fluctuations;

inability to obtain certain billing information from physicians, resulting in increased costs and complexity, a temporary disruption in receipts, and
ongoing reductions in reimbursements and revenues;

expenses and risks associated with international operations, including, but not limited to, compliance with the U.S. Foreign Corrupt Practices Act,
the U.K. Bribery Act, other applicable anti-corruption laws and regulations, trade sanction laws and regulations, and economic, political, legal and
other operational risks associated with foreign jurisdictions;

failure to achieve expected efficiencies and savings in connection with the Company's business process improvement initiatives;

changes in tax laws and regulations or changes in their interpretation;

global economic conditions and government and regulatory changes; and

effects, duration, and severity of the ongoing COVID-19 pandemic, including the impact on operations, personnel, supplies, liquidity, and
collections, as well as the impact of past or future actions or omissions by the Company or governments in response to the COVID-19 pandemic
including, but not limited to, emerging government vaccine and testing mandates and policies, and damage to the Company's reputation or loss of
business resulting from the perception of the Company's response to the COVID-19 pandemic, including the availability and accuracy and timeliness
of delivery of any tests that the Company develops, collaborates on or provides for the detection of COVID-19, and the availability and timeliness of
its drug development services.

Except as may be required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statements,

whether as a result of new information, future events or otherwise. Given these uncertainties, one
should not put undue reliance on any forward-looking statements.

Index

Item 1. BUSINESS

PART I

Labcorp is a leading global life sciences company that provides vital information to help doctors, hospitals, pharmaceutical companies, researchers, and
patients make clear and confident decisions. By leveraging its unparalleled diagnostics and drug development capabilities, the Company provides insights and
accelerates innovations to improve health and improve lives. With more than 75,500 employees, the Company serves clients in more than 100 countries.

Through its Labcorp Diagnostics (Dx) and Labcorp Drug Development (DD) segments, the Company provides diagnostic, drug development, and
technology-enabled solutions for more than 160 million patient encounters per year, or more than 3 million per week. In addition, the Company's world-class
central laboratory, preclinical, and clinical development businesses support clinical trial activity in approximately 100 countries. The Company's capabilities
enable it to play a leading role in advancing healthcare across the globe, and to provide crucial, ongoing support for the response to the COVID-19 pandemic.

The significant reach, breadth, and advancement of the Company's offerings have resulted in revenue growth of 39.5%, and operating income growth of
145.0%, from 2019 through 2021. The Company believes that its diversified offerings across DD and Dx help to balance the impact of changes in the global
economic and healthcare systems, as well as the continued impact of the COVID-19 pandemic.

For the period ended December 31, 2021, the Company generated revenues of $16,120.9 million, diluted earnings per share of $24.39, and had a total

operating cash flow of $3,109.6 million.

The Company believes that science, technology, and innovation drive its continued success, differentiate the Company, and are foundational to its future.

They are critical to the Company's ability to carry out its mission to improve health and improve lives.

Strategic Review of Company Structure and Capital Allocation Strategy

In March 2021, the Company announced the undertaking of a comprehensive review by its board of directors (the Board) and management team of
Labcorp's structure and capital allocation strategy. 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. In December 2021, the Company
announced the Board's conclusion, as well as actions that the management team and the Board are taking to enhance shareholder returns. These actions
include:

•
•

initiating a dividend in the second quarter of 2022, with a target dividend payout ratio of between 15 to 20% of adjusted earnings;
authorizing a $2.50 billion share repurchase program. As part of this program, $1.0 billion is being repurchased under an accelerated share repurchase
plan that is expected to be complete by the end of April 2022;
implementing a new LaunchPad business process improvement initiative, targeting savings of $350.0 million over the next three years;
providing a longer-term outlook in connection with the announcement of the Company's 2021 year-end results in addition to the Company's annual
guidance;
providing additional business insights through enhanced disclosures beginning with Labcorp's results for the first quarter of 2022; and
continuing a commitment to profitable growth through investments in science, innovation, and new technologies.

Management and the Board are committed to continuing to evaluate all avenues for enhancing shareholder value.

The updated capital allocation plan enables the Company to continue investment in key growth areas, including oncology, Alzheimer's disease,
autoimmune disorders, and women's health. This plan is expected to fuel growth through innovation by using Labcorp's unparalleled data and insights to
bring scientific advancements—both Labcorp-developed and those of other scientists—to market at scale. It reflects the Board's confidence in the Company's
strong balance sheet and cash flow generation profile, as well as the Board's commitment to deploying capital to enhance value for shareholders, patients,
providers, and pharmaceutical customers worldwide.

Enterprise Strategy

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

Index

The Company is expanding its important role in the rapidly evolving healthcare market by strengthening its market-leading positions across its portfolio of
capabilities, growing strategic opportunities that drive new business, and differentiating its unique offerings, capabilities, and financial performance. 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.

2. Embedding Data and Digitalization Throughout the Company's Business

The healthcare and life sciences industries remain among the most significantly impacted by technological advancements. By maximizing the use of
advances in artificial intelligence, data, digitalization, and analytics, the Company strives to improve operating efficiency and create new, differentiated
products and services that the Company believes will help its customers and deliver better care to patients.

The Company is using artificial intelligence to better identify and predict trends such as the timing and location of demand shifts for certain tests. In doing
so, the Company is supporting an efficient use of supplies, staffing, and the Company’s advanced logistics used to route testing to the most appropriate
laboratories and quickly deliver results. Artificial intelligence capabilities and advanced logistics continue to play an important role in the Company’s
response to periods of heightened demand for COVID-19 polymerase chain reaction (PCR) testing.

The Company creates, and has access to, significant volumes of data. By applying advanced analytics, the Company can help its customers improve their
processes and reach better outcomes. The Company’s repository of test results help study sponsors assess patients' eligibility for clinical trials more quickly
and accurately, enroll those patients faster, shorten the time needed for regulatory submission, and accelerate the availability of new medicines. Data is also
being used by the Company to advance science and the public's understanding of certain treatments and illnesses, including chronic kidney disease.

Digitalization continues to be an area of focus for the Company as it responds to the use of technology-enabled tools and services by healthcare providers,
patients and pharmaceutical companies for absorbing, handling, and disseminating information. These services include decentralized clinical trials, which
offer the potential to remove barriers that may have slowed or prevented studies from being conducted in the past. Decentralized clinical trials can also make
trial participation an option for more people, including individuals from underrepresented populations. 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 the U.S., the Company continues to improve its patients' experience in patient service centers (PSCs) by creating a seamless digital journey from
appointment scheduling to results delivery. With an average of 3 million patients served in a given week, the Company strives to enhance their experience
using its digital channels. 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.

3. Intensify Customer Focus

Labcorp serves a broad range of customers, including managed care organizations (MCOs), pharmaceutical, biotechnology, medical device and
diagnostics companies, governmental agencies, physicians and other healthcare providers, hospitals and health systems, employers, patients and consumers,
contract research organizations (CROs), and independent clinical laboratories. The Company prioritizes a consistent, coordinated focus across all aspects of
its operations, placing the customer at the center of its services, with the objective of becoming the customer's primary partner for solutions to their needs. In
an

Index

effort to provide a leading customer experience, the Company seeks customer feedback, communicates best practices and lessons learned, and provides robust
employee training with respect to the needs of its customers.

Labcorp routinely introduces new products and services that benefit its customers. 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.

4. Fortify the Company's Position as an Oncology Leader

The field of oncology receives significant investment in research, development, and treatment. However, it remains an area of great unmet medical need.

The Company believes the diagnosis and treatment of cancer will be the fastest-growing therapeutic area in the near future.

With the increased adoption of precision medicine, health and cancer care providers are relying on advanced testing to identify patients who will benefit
from new, targeted treatments and therapies that are more effective and often have fewer side effects than chemotherapy and other traditional treatments. 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. By focusing its diagnostic and drug development services on the fight against cancer, the Company is delivering
targeted solutions that power better decisions and improved patient outcomes.

The Company is expanding its leadership in oncology through the introduction of new tests, strategic partnerships, acquisitions, and customer wins in
clinical trials. In 2021, the Company launched OmniSeq INSIGHT, a comprehensive genomic and immune profiling, tissue-based test that integrates next-
generation sequencing (NGS) technology. The Company capitalized on a previous investment in OmniSeq, announcing in July 2021 that it exercised its
option to acquire the remaining ownership interest. In addition, the Company enhanced its precision diagnostic portfolio and its ability to increase access to
oncology care globally by agreeing in late 2021 to acquire Personal Genome Diagnostics (PGDx), a provider of comprehensive liquid biopsy and tissue-based
genomic products and services. 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.

5. Pursue Opportunities with Short- and Long-Term and High-Growth Potential

The Company has a long history of disciplined use of capital to invest in the growth of the business. The Company has made significant investments in the
deployment of new technologies through both licensing and internal research and development, as well as strategic and tuck-in acquisitions in oncology,
women's health, autoimmune disorders, diagnostic testing, and other important areas. Labcorp has also invested in establishing collaborative partnerships with
other leading companies and organizations that share the Company’s goals and expectations.

The Company continually evaluates its business and the broader healthcare and life sciences markets to proactively identify and assess:

•
•
•
•
•

potential growth opportunities;
business areas that might not support continued growth and should be revamped or divested;
acquisition targets that meet its criteria for quality, value, and return on investment;
new products that would successfully integrate with or extend the Company’s offerings; and
a balanced formula for capital allocation.

Through a continued focus on these priorities, reinforced through the Company's review of its structure and capital allocation strategy that concluded in
December 2021, Labcorp expects to be in an optimal position to make disciplined choices that maximize shareholder value, better protect the Company from
market fluctuations and outside impacts, and fuel significant and profitable short- and long-term revenue growth.

COVID-19 Pandemic Response

The Company has been intensely focused on supporting the fight against COVID-19 since the earliest stages of the pandemic, and it continues to play a

substantial role in ongoing response efforts.

Index

Diagnostic Testing and Clinical Trial Leadership

In 2021, the Company further expanded access to testing for COVID-19 and aided pharmaceutical companies in the development of critical COVID-19

vaccines and therapies by harnessing its diagnostic and drug development capabilities.

®
The Company received FDA Emergency Use Authorization (EUA) for multiple innovations during the year, including the use of its Pixel by Labcorp
COVID-19 test home collection kit for children ages 2-17. The Company was granted FDA EUA for a combined home collection kit enabling individuals as
young as 2 years of age to simultaneously be tested for COVID-19 and influenza A/B. It also received FDA EUA for observed self-collection of COVID-19
PCR tests in its PSCs, providing flexibility and convenience for individuals who want the certainty of a PCR test or need PCR test results for work, travel, or
other purposes. These achievements built on the Company's first COVID-19-related FDA EUA, which was received on March 16, 2020, for COVID-19 PCR
testing. Labcorp was the first commercial laboratory in the U.S. to launch and receive an EUA for such testing. The Company also received FDA EUA in
April 2020 for the Pixel by Labcorp COVID-19 test home collection kit, and in December 2020 for over-the-counter purchase of these home collection kits.

Labcorp's additional contributions to the pandemic response in 2021 included:

•
•

•
•
•

assisting in the identification and monitoring of COVID-19 variants and spikes in confirmed cases;
facilitating mass vaccination programs and expanding access to at-home test collections for underserved populations through partnerships at the state and
local level;
partnering with the U.S. Department of Health and Human Services (HHS) to raise awareness of monoclonal antibody therapies;
facilitating access to at-home COVID-19 test collection kits in retail stores such as Walgreens, and through on-demand delivery services; and
introducing new test options and building on the Company's portfolio of antibody testing.

The Company maintained its ability to quickly scale-up COVID-19 PCR testing capacity throughout the year, even during periods of reduced demand. In
doing so, the Company was able to immediately and effectively respond to surges in positive cases and testing needs. The Company performed approximately
30 million COVID-19 PCR tests and 4 million antibody tests in 2021, and since the start of the pandemic has performed approximately 61.5 million COVID-
19 PCR tests and 8 million antibody tests.

In addition, the Company's expertise and understanding of COVID-19, developed through its diagnostic offerings, has allowed it to become a leader in
supporting clinical trials of COVID-19 treatments and vaccines. By the end of 2021, the Company won approximately 700 COVID-19 trial and study
opportunities, ranging from small, nonclinical programs to late-stage clinical trials.

Base Business

The Company's non-COVID-19 testing business (Base Business) continued its recovery in 2021. Base Business was negatively impacted in the first and
second quarters of 2020, began to recover in the third quarter of 2020 and experienced a flattening in Base Business recovery in the fourth quarter of 2020.
Patients continued their return to pre-pandemic healthcare routines in 2021, and the Company's pharmaceutical and biotechnology customers resumed their
important research and development work. Throughout 2021, the Company's Base Business recovery helped to more than offset a decrease in PCR and
antibody COVID-19 testing (COVID-19 Testing).

COVID-19 Outlook

COVID-19 has had, and continues to have, an extensive impact on the global health and economic environments. The Company continues to closely
monitor the impact of the COVID-19 pandemic on all aspects of its business, given continued unpredictability, corresponding state, local and federal
government restrictions and policies, the continued emergence of new variants that may cause increases in cases that may impact the Company, and the
potential for shifts in customer behavior.

While the Company anticipates that COVID-19 will continue to impact its business in 2022 and potentially beyond, the Company expects that increases in
vaccination rates and booster shots, the development of new therapeutics and greater availability of rapid COVID-19 tests should result in a continued,
significant 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 is not predicted to match 2021 levels.

Capital Allocation

The Company believes it has a strong track record of deploying capital to investments that enhance the Company's business and return capital to

shareholders.

Index

During 2021, the Company invested $496.9 million in strategic business acquisitions. The acquisitions have expanded the Company’s service offerings,
expanded its customer and revenue mix, and strengthened and broadened the scope of its geographic presence. The Company continues to evaluate
acquisition opportunities that leverage the Company’s core competencies, complement existing scientific and technological capabilities, increase the
Company’s presence in key geographic, therapeutic and strategic areas, and meet or exceed the Company’s financial criteria.

During 2021, the Company repurchased 5.2 million shares of its common stock at an average price of $282.05 for a total cost of $1,668.5 million, which
included $1,000.0 million paid in respect of an Accelerated Share Repurchase (ASR) program for which the Company received 80% of the shares calculated
at the price at the inception of the ASR Agreements. At the end of 2021, the Company had outstanding authorization from the Board to purchase $1,631.5 of
Company common stock. The repurchase authorization has no expiration date.

During 2021, capital expenditures were $460.4 million. The Company also repaid $1,000.0 million of its Senior Notes along with $375.0 million of the
outstanding 2019 Term Loan, and also issued $1,000.0 million of new Senior Notes. The Company expects capital expenditures in 2022 to be approximately
4.0% of revenues, primarily in connection with projects to support growth in the Company's core businesses, facility expansion and updates, projects related
to its new LaunchPad initiative, and further acquisition integration initiatives.

The Company will continue to evaluate all opportunities for strategic deployment of capital in light of market conditions.

Seasonality and External Factors

The Company experiences seasonality across its business. For example, testing volume generally declines during the year-end holiday period and other
major holidays and can also decline due to inclement weather or natural disasters. Declines in testing volume reduce revenues, operating margins and cash
flows. Operations are also impacted by changes in the global economy, exchange rate fluctuations, political and regulatory changes, the progress of ongoing
studies and the startup of new studies, as well as the level of expenditures made by the pharmaceutical, biotechnology and medical device industries in R&D.
As discussed in more detail elsewhere in Item 1, COVID-19 impacted the Company in 2021. This impact included the effect of the Company’s response to
the virus through its testing and drug development services, as well as the effect of COVID-19 on the global economy and demand for the Company’s non-
COVID-19 services.

In 2021, approximately 15.3% of the Company's revenues were billed in currencies other than the U.S. dollar, with the Swiss franc, British pound,
Canadian dollar, and the euro representing the largest components of its currency exposure. Given the seasonality and changing economic factors impacting
the business, comparison of the results for successive quarters may not accurately reflect trends or results for the full year.

Company Reporting

The Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports are
made available free of charge through the Investor Relations section of the Company’s website at www.labcorp.com as soon as reasonably practicable after
such material is electronically filed with, or furnished to, the U.S. Securities and Exchange Commission (SEC). Additionally, the SEC maintains a website at
http://www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, including the Company, that file
electronically with the SEC.

The matters discussed in this “Business” section should be read in conjunction with the Consolidated Financial Statements found in Item 8 of Part II of
this Annual Report, which include additional financial information about the Company. This Annual Report includes forward-looking statements that involve
risks or uncertainties. The Company’s results could differ materially from those anticipated in these forward-looking statements as a result of certain factors,
including the risk factors described in Item 1A of Part I of this Annual Report and elsewhere. For more information about forward-looking statements, see
“Forward-Looking Statements” included prior to Part I in this Annual Report.

Index

The Company's Business

The Company experienced growth across all key financial metrics in 2021.

In Millions, Except Per Share Data

Revenues
Gross profit
Operating income
Net earnings attributable to Laboratory Corporation of America Holdings
Cash flows from operating activities
Basic earnings per common share
Diluted earnings per common share

Years Ended December 31,
2020
2021

16,120.9
5,624.3
3,259.5
2,377.3
3,109.6
24.60
24.39

$
$
$
$
$
$
$

13,978.5
4,952.8
2,445.4
1,556.1
2,135.3
15.99
15.88

$
$
$
$
$
$
$

The Company reports its business in two segments, Dx and DD. In 2021, Dx and DD contributed 64% and 36%, respectively, of revenues to the Company,
and in 2020 contributed 65% and 35%, respectively. Nearly all of Dx’s revenues are generated in the U.S., with a smaller portion in Canada and a relatively
small amount in the rest of the world. DD’s revenues are nearly evenly split between the U.S. and the rest of the world, with approximately 48% derived from
the U.S. and approximately 52% from other countries. Although this allocation of revenues provides some protection from economic shifts in any one
country, it is still heavily tilted towards the U.S. As a result, the Company continues to actively explore new and expanded business opportunities outside the
U.S. to further diversify its sources of revenues. The Company's revenues by segment payers/customer groups and by geography for the years ended
December 31, 2021, 2020 and 2019 are as follows:

For the Year Ended
December 31, 2021

For the Year Ended
December 31, 2020

For the Year Ended
December 31, 2019

North
America

Europe

Other

Total

North
America

Europe

Other

Total

North
America

Europe

Other

Total

17 %

6 %

7 %

34 %

— % — %

17 %

6 %

7 %

34 %

20 %

6 %

7 %

32 %

— %

20 %

6 %

7 %

32 %

64 %

— % — %

64 %

65 %

— %

65 %

17 %
8 %

8 %
27 %

60 %

— % — %
— % — %

17 %
8 %

8 %
27 %

— % — %

60 %

17 %

13 %

6 %

36 %

17 %

11 %

7 %

35 %

21 %

12 %

7 %

40 %

Payer/Customer
Dx

Clients

Patients
Medicare and
Medicaid

Third party
Total Dx revenues
by payer

DD
Pharmaceutical,
biotechnology and
medical device
companies

Total revenues

81 %

13 %

6 % 100 %

82 %

11 %

7 %

100 %

81 %

12 %

7 % 100 %

During 2021, the Dx segment generated $10,363.6 million in total revenues and $2,988.5 million in operating income, resulting in an operating margin of

Dx Segment

28.8%.

In Millions

Revenues
Operating income

Year Ended December 31,
2020
2021

$
$

10,363.6
2,988.5

$
$

9,253.4
2,634.9

Dx is an independent clinical laboratory business. It offers a comprehensive menu of frequently requested core testing and specialty testing through an
integrated network of primary and specialty laboratories across the U.S. This network is supported by a sophisticated information technology system, with
more than 80,000 electronic interfaces to deliver test results, nimble and efficient logistics, and local labs offering rapid response testing.

Dx also provides patient access points that are strategically and conveniently located throughout the U.S., including nearly 2,000 PSCs and more than
6,000 in-office phlebotomists located in customer offices and facilities. Although testing for healthcare purposes and customers who provide healthcare
services represents the most significant portion of the clinical laboratory industry, clinical laboratories also perform testing for other purposes and customers,
including employment and occupational testing, DNA testing to determine parentage and to assist in immigration eligibility determinations, environmental

Index

testing, wellness testing, toxicology testing, pain management testing, and medical drug monitoring. Dx offers an expansive test menu that includes a wide
range of clinical, anatomic pathology, genetic and genomic tests, and regularly adds new tests and improves the methodology of existing tests to enhance
patient care. Dx also offers consumer-initiated wellness testing available online through its Labcorp OnDemand™ platform. The Pixel by Labcorp COVID-
19 PCR and combined COVID-19 + flu at-home collection kits are also available through Labcorp OnDemand. Dx typically processes tests for more than 3
million patient encounters each week.

As part of an ongoing commitment to be an efficient and high-value provider of laboratory services, beginning in 2015, Dx implemented a comprehensive
business process improvement initiative known as LaunchPad. The initiative was designed to reengineer the Company's systems and processes to create a
sustainable and more efficient business model, and to improve the experience of all stakeholders. Dx achieved its goals for the initial phase of LaunchPad of
delivering both short- and long-term savings, and of implementing system and process improvements that are expected to continue generating benefits for the
foreseeable future. Dx subsequently extended LaunchPad, adding new enterprise-wide projects and establishing the initiative as an ongoing continuous
improvement program. Dx’s LaunchPad initiative delivered approximately $200 million in net savings for the period of late 2018 through the end of 2021. As
mentioned above in Part I of this Annual Report, the Company is implementing a new, enterprise-wide LaunchPad initiative, targeting savings of $350
million beginning in 2022 and ending in 2024.

The Dx business can be categorized into the following components:

Service

Key Features

Testing Operations and

Productivity

Testing and Related

Services

Development of New

Tests

Technology-Enabled

Services and Support

• Network of PSCs offering specimen collection services
• Comprehensive, nimble supply chain for transferring specimens across the entire life cycle of a patient sample
• 1-2 day turnaround time for most test results, with the vast majority of results delivered electronically to healthcare

providers and to patients who have a Labcorp Patient™ account

• Rigorous standard of quality - 22 regional/specialty labs hold ISO 15189 certification

• Standard Testing Services - frequently-ordered tests used in regular patient care include blood chemistry analyses,
urinalyses, blood cell counts, thyroid tests, PAP tests, hemoglobin A1C, prostate-specific antigen (PSA), tests for
sexually transmitted diseases (e.g. chlamydia, gonorrhea, trichomoniasis and human immunodeficiency (HIV), and
hepatitis C (HCV)), vitamin D, microbiology cultures and procedures, and alcohol and other substance abuse tests
• Specialty Testing Services - industry leader in gene-based and esoteric testing; advanced tests target specific diseases

and use new technologies; services include anatomic pathology/oncology, cardiovascular disease, coagulation, diagnostic
genetics, endocrinology, infectious disease, women's health, pharmacogenetics, parentage and donor testing,
occupational testing services, medical drug monitoring services, chronic disease programs, and kidney stone prevention

• Dx offers a range of health and wellness services to employers and MCOs, including health fairs, on-site and at-home

testing, vaccinations and health screenings

• Approximately 50 new tests launched in 2021
• Active diagnostics and therapeutics research division: more than 700 studies, articles, and presentations produced in

2021

• Continuous investing, internally and externally, in new testing technologies and advanced testing capabilities

A range of services and support using proprietary technologies to improve the customer and patient experience and

provide convenient access to data and analytics, including:

• Nearly 6.5 million enhanced clinical decision support (CDS) reports delivered to physicians and health systems
• Online and mobile applications improving the patient experience by allowing patients to schedule PSC visits, check-in

upon arrival, complete documentation, access test results, and manage their accounts

• Online applications for MCOs and accountable care organizations (ACOs) to obtain test results and population and

health management data

Index

Effect of U.S. Market Changes on the Clinical Laboratory Business

The delivery of, and reimbursement for, healthcare continues to change in the U.S., impacting all stakeholders, including the clinical laboratory business.
Medicare (which principally serves patients who are 65 and older), Medicaid (which principally serves low-income patients) and insurers have increased their
efforts to control the cost, utilization and delivery of healthcare services. Measures to regulate healthcare delivery in general and clinical laboratories in
particular have resulted in reduced prices, added costs and decreased test utilization for the clinical laboratory industry by imposing new, increasingly
complex regulatory and administrative requirements. The government also has continued to adjust the Medicare and Medicaid fee schedules at the national
and local level, and the Company believes that pressure to reduce government reimbursement will continue.

Fees for most laboratory services reimbursed by Medicare are established in the Clinical Laboratory Fee Schedule (CLFS) and fees for other testing
reimbursed by Medicare, primarily related to pathology, are covered by the Physician Fee Schedule (PFS). During 2021, approximately 8.5% of Dx’s revenue
was reimbursed under the CLFS (8.8% in 2020), and approximately 0.4% was reimbursed under the PFS (0.4% in 2020). Over the past several years, Dx has
experienced governmental reimbursement reductions as a direct result of several Congressional acts and regulatory initiatives. These laws include provisions
designed to control healthcare expenses reimbursed by government programs through a combination of reductions to fee schedules, incentives to physicians
to participate in alternative payment models such as risk-sharing, and new methods to establish and adjust fees.

The most significant of these developments was the Protecting Access to Medicare Act (PAMA), which became law on April 1, 2014, and which went
into effect on January 1, 2018. Beginning in 2018, under PAMA, the Centers for Medicare and Medicaid Services (CMS) of the U.S. Department of Health
and Human Services (HHS) set the CLFS using the weighted median of reported private payer prices paid to certain laboratories that receive a majority of
their Medicare revenue from the CLFS and PFS and that bill Medicare under their own National Provider Identifier (NPI). Applicable labs, including Dx,
were required to begin reporting their test-specific private payer payment amounts to CMS during the first quarter of 2017. 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 limits. For 2018-2020, a test price could not be reduced by more than 10.0% per year. PAMA resulted in a net reduction in
reimbursement revenue of approximately $245.0 million between 2018-2020 from all payers affected by the CLFS.

Due to enactment of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed by Congress on March 27, 2020, the Medicare
reimbursement cuts that would have occurred under PAMA in 2021 were delayed by one year. In 2021, Dx realized an increase of approximately $0.3 million
in PFS revenue as a result of the provisions included in the Omnibus Appropriations and Coronavirus Relief Package. In 2021, Dx realized an additional
increase of approximately $5.8 million in aggregate Medicare reimbursement associated with the suspension of sequestration through December of 2021, as a
result of provisions included in the Omnibus Appropriations and Coronavirus Relief Package that were extended as a result of an Act to Prevent Across-the-
Board Direct Spending Cuts.

On December 10, 2021, President Biden signed into law S. 610, the Protecting Medicare and American Farmers from Sequester Cuts Act, which delayed
by one additional year the data reporting requirements and Medicare reimbursement cuts that would have occurred under PAMA in 2022. In 2022, Dx
anticipates that it will realize a decrease of approximately $0.4 million in PFS revenue, driven by reductions in reimbursement for flow cytometry procedures
and a decrease of approximately $10.0 million in aggregate Medicare reimbursement associated with the phased in reinstitution of sequestration as a result of
provisions included in the Protecting Medicare and American Farmers from Sequester Cuts Act.

The Protecting Medicare and American Farmers from Sequester Cuts Act also included mitigations to several other non-PAMA Medicare cuts in addition
to delaying Medicare reimbursement cuts under PAMA. It delayed the 4% Medicare cuts that would otherwise have occurred in 2022 under statutory “pay-as-
you-go,” or PAYGO, rules to offset the cost of the American Rescue Plan Act by one year. In addition, it delayed the resumption of the 2% Medicare
sequestration until April 1, 2022, and reduces to 0.75% the previous 3.75% reduction to PFS reimbursement that was scheduled for 2022. To offset the cost,
the Medicare sequestration is increased to 2.25% for January-June of 2030, and to 3.0% for July-December 2030.

Pursuant to PAMA, for 2023-2025, a test price cannot be reduced by more than 15.0% per year. CLFS rates for 2026 and subsequent periods will not be
subject to phase-in limits. The phase-in of rates for Clinical Diagnostic Laboratory Tests (CDLTs) established in 2018 will continue in 2023. New CLFS rates
will be established in 2024 based on data from 2019 to be reported in 2023. New CLFS rates will be established in 2027 based on data from 2025 to be
reported in 2026. CLFS rates for Advanced Diagnostic Laboratory Tests will be updated annually.

The American Clinical Laboratory Association (ACLA) has filed a federal civil action challenging the legal basis for the data collection methodology

CMS used to derive the data from which the median prices were calculated. Since the initial data

Index

collection, CMS has revised its PAMA regulations to increase the number of hospital outreach labs that will be required to report private market data in future
collections. Reports by the U.S. Government Accountability Office (GAO), the HHS Office of Inspector General (OIG), and the Medicare Payment Advisory
Commission (MedPAC) on PAMA implementation have identified certain instances of actual or potential increased Medicare expenditures under PAMA, as
well as potential alternative methodologies for data collection under PAMA, which could result in further efforts to amend PAMA by Congress.

ACLA continues to work with Congress on potential legislative reform of PAMA, which if adopted could reduce the negative impact of PAMA as
currently implemented by CMS. Under the Laboratory Access for Beneficiaries (LAB) Act, MedPAC was required to conduct a study and make
recommendations to Congress on ways to improve data collection, reporting, and rate setting under PAMA to achieve, in a less burdensome manner, CLFS
rates that accurately and fairly reflect private market rates. MedPAC's June 2021 report to Congress included an analysis of potential statistical sampling
methodologies that could accomplish that objective, and ACLA has incorporated the concept in PAMA reform proposals to Congress. The Company supports
the ongoing efforts to prevent or lessen the negative impact of the changes to the CLFS pursuant to PAMA, and the full impact of those efforts, and what the
long-term effect will be on the CLFS rates is not yet known.

Further healthcare reform could occur in 2022, including changes to the Patient Protection and Affordable Care Act (ACA) and Medicare reform, as well
as administrative requirements that may continue to affect coverage, reimbursement, and utilization of laboratory services in ways that are currently
unpredictable.

In addition, market-based changes have affected and will continue to affect the clinical laboratory business. Reimbursement from commercial payers for
diagnostic testing may shift away from traditional, fee-for-service models to alternatives, including value-based, bundled pay-for-performance, and other risk-
sharing payment models. The growth of the managed care sector and consolidation of MCOs present various challenges and opportunities to Dx and other
clinical laboratories. Dx's ability to attract and retain MCO customers has become even more important as the impact of various healthcare reform initiatives
continues, including expanded health insurance exchanges and ACOs.

The Company serves many MCOs. These organizations have different contracting philosophies, which are influenced by the design of their products.
Some MCOs contract with a limited number of clinical laboratories and engage in direct negotiation of rates. Other MCOs adopt broader networks with
generally uniform fee structures for participating clinical laboratories. In some cases, those fee structures are specific to independent clinical laboratories,
while the fees paid to hospital-based and physician-office laboratories may be different, and are typically higher. MCOs may also offer Managed Medicare or
Managed Medicaid plans. In addition, some MCOs use capitation rates to fix the cost of laboratory testing services for their enrollees. Under a capitated
reimbursement arrangement, the clinical laboratory receives a per-member, per-month payment for an agreed upon menu of laboratory tests, or based upon
the proportionate share earned by Dx from a capitation pool. When the agreed upon reimbursement is based solely on an established rate per member, revenue
is not impacted by the volume of testing performed. Under a capitation pool arrangement, the aggregate value of an established rate per member is distributed
based on the volume and complexity of the procedures performed by laboratories participating in the agreement. For the year ended December 31, 2021,
capitated contracts with MCOs accounted for approximately $332.3 million, or 3.2%, of Dx's revenues.

In addition to reductions in test reimbursement, the Company also anticipates potential declines in test volumes as a result of increased controls over the
utilization of laboratory services by Medicare, Medicaid, and other third-party payers, particularly MCOs. MCOs are implementing, directly or through third
parties, various types of laboratory benefit management programs, which may include lab networks, utilization management tools (such as prior authorization
and/or prior notification), and claims edits, which impact coverage and reimbursement of clinical laboratory tests. Some of these programs address clinical
laboratory testing broadly, while others are focused on certain types of testing, including molecular, genetic and toxicology testing. In addition, continued
movement by patients into consumer-driven health plans may have an impact on the utilization of laboratory testing. Test volumes in 2022 could also decline
compared to 2021 and 2020 if demand for SARS-CoV-2 testing declines.

Despite the overall negative market changes regarding reimbursement discussed above, the Company believes that the volume of clinical laboratory
testing is positively influenced by several factors, including the expansion of Medicaid, managed care, and private insurance exchanges. In addition, the
Company believes that increased knowledge of the human genome and continued innovation in laboratory medicine will continue to foster greater
appreciation of the value of gene-based diagnostic assays. Additional factors that may lead to future volume growth include an increase in the number and
types of tests that are readily available (due to advances in technology and increased cost efficiencies) for the diagnosis of disease, and the general aging of
the U.S. population. Periodic infectious disease outbreaks such as the SARS-CoV-2 virus also have the potential to generate additional testing volume in the
future. The Company also believes that it and other large, independent clinical laboratory testing companies will be able to increase their share of the overall
clinical laboratory testing market due to a number of market factors, primarily related to a continued drive to improve outcomes and reduce costs across the
healthcare system, including but not limited to greater price transparency required under new “surprise billing” laws and regulations requiring

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disclosure of hospital charges. Dx believes that its enhanced and growing esoteric menu of tests, leading position with companion diagnostics, broad
geographic footprint, and operating efficiency provide a strong platform for growth.

During 2021, the DD segment generated $5,845.5 million in total revenue and $547.7 million in operating income, resulting in an operating margin of

DD Segment

9.4%.

In Millions

Revenues
Operating income

Year Ended December 31,
2020
2021

$
$

5,845.5
547.7

$
$

4,877.7
37.3

DD provides end-to-end drug development, medical device and companion diagnostic development solutions from early-stage research to clinical
development and commercial market access. Its customers are comprised of pharmaceutical, biotechnology, medical device, and diagnostic companies across
the world. With a global network of operations, DD offers deep expertise in early development and clinical trials in each therapeutic area. DD collaborated on
82% of the novel drugs and therapeutic products approved in 2021 by the U.S. FDA, including 63% of those specific to oncology and 95% of those specific
to rare and orphan diseases. Through its industry-leading central laboratory business, it supports clinical trial activity in approximately 100 countries.

Service

Key Features

• Lead optimization: connects early discovery activities to regulated pre-clinical studies
• Analytical services: bioanalytical testing services offering appropriate dose and frequency of drug administration
• Safety assessment: general, genetic, and immunotoxicology services; nonclinical pathology; safety pharmacology
services; preclinical medical device services; respiratory services; and developmental and reproductive toxicology
(DART) studies

Preclinical Services

• Chemistry manufacturing services: robust, cost-effective solutions in the areas of safety, identity, strength, quality, and

Central Laboratory Services

Clinical Development and
Commercialization Services

purity assessments for biologics

• Early phase development solutions: focused, multidisciplinary teams of experts that craft integrated solutions to

identify and develop lead drug candidates and reduce development challenges

• Crop protection and chemical testing: Consulting services for chemical manufacturers and other firms engaged in the

development of modern crop protection technology

• Clinical laboratory services for individuals participating in clinical studies
• Provided to biopharmaceutical customers through its global network of central laboratories in the U.S., Europe, and Asia
• Operates world's largest automated clinical trial sample collection kit production line that enables kits to be produced

with 5.5 sigma precision

• Six ISO 15189-certified laboratories
• Collaborated with more than 65 clients on more than 265 companion diagnostic projects in 2021

• Comprehensive range of services including the full-service delivery of Phase I through IV clinical studies, along with a

wide offering of functional service provider solutions

• Dedicated group experienced in conduct of trials for medical devices and diagnostics to provide services for expanding

market in medical devices

• Leader in clinical pharmacology
• Wide range of commercialization solutions including life cycle management and post-approval studies
• Market access solutions

Proprietary digital tools and services providing customers with greater access to key insights and results, as well as improved
trial management, enhanced transparency, quality, and speed of clinical trials, resulting in reduced costs and increased market
potential for customers:

Technology Solutions

• Patient-facing software applications supporting virtual, hybrid, and traditional trials
• Metrics and benchmarking applications for trial performance monitoring and optimization
• Award-winning informatics software suite for risk-based quality management across clinical trials
• Patient randomization and Clinical Supply Management

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Rebranding

In December 2020, the Company announced the evolution of its brand to signify the pivotal role the Company's capabilities play in society as a source of
health answers. It underscores the Company's commitment to science and data, moving with urgency, empowering better health outcomes, and breakthrough
and transformative approaches to patient care using the Company's diverse and global expertise. As part of the rebranding, the Company introduced a new
company logo and associated its business unit brands with the Labcorp name. The Company’s drug development segment, formerly referred to as Covance
Drug Development, became Labcorp Drug Development in June 2021. The Company's diagnostics segment, formerly referred to as LabCorp Diagnostics,
transitioned to Labcorp Diagnostics and a new logo in 2021.

Human Capital

Mission and Culture

Labcorp believes in the power of science to change lives. The Company’s culture centers around its mission to improve health and improve lives. The
Company's more than 75,500 employees serve clients in over 100 countries. They are essential to the Company’s ability to innovate and advance science and
technology to empower patients, providers, and pharmaceutical companies to make clear and confident decisions. Labcorp’s employees are also critical to its
ongoing support of the COVID-19 pandemic response through diagnostic testing and its work to aid pharmaceutical companies in the development of
vaccines and treatments. Engaging the collective expertise and passion of its employees is vital to achieving the Company’s mission, which permeates its
performance-driven, collaborative, inclusive, customer-centered, and inquisitive culture.

Workforce Demographics

The Company’s success depends on its sustained ability to attract, develop, and retain a highly specialized and skilled global workforce. Management
believes that the Company has good working relationships with its employees. Employees are globally dispersed, with 75% in the U.S. and Canada, 12% in
Asia, 13% in Europe, the Middle East, and Africa, and less than 1% in Latin America. Of the Company’s global workforce, 90% of employees are full time,
and 10% are part time. Four percent of Labcorp’s global workforce is employed under a collective bargaining agreement. Depending on business demand and
the talent-hiring environment, Labcorp supplements up to 12% of its workforce with contingent workers.

The challenges of 2021, felt globally, also presented the Company with significant challenges in acquiring and retaining talent. Despite these obstacles,
Labcorp’s global workforce increased by more than 4%. The majority of Labcorp's hires are sourced through an internal talent acquisition team. In addition,
the Company continues to grow its workforce through mergers and acquisitions. The Company implemented significant investments to retain talent and
enable the organization to meet the business needs for growth, which are discussed further in the section below on “Compensation and Benefits.”

Throughout the pandemic, a significant portion of Labcorp’s employees have been working diligently to serve patients and customers. To ensure the safety
and welfare of our employees, the majority of employees who do not work with patients, animals, in labs, or in logistics, continue to work remotely. This
includes call center employees, customer service teams, sales teams, and corporate and functional teams. Going forward, the Company expects that a
significant number of employees will continue working remotely, or through hybrid, in-office and remote work arrangements. The Company believes that
flexibility in work location and arrangements expands the pool from which it can source experienced and valuable talent.

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Diversity and Inclusion

Labcorp's diverse, global talent is core to its ability to innovate and meet patient and customer needs. The Company believes that the diversity of its

employees and its inclusive programs contribute to a healthy, productive, and respectful work environment.

Workforce Diversity Profile:

Gender, Ethnicity, and Race

Global Workforce by GENDER

U.S. Workforce by GENDER

U.S. Workforce by RACE & ETHNICITY

The Company has a Diversity and Inclusion (D&I) strategic framework, with three overarching pillars of focus: empowering inclusive leadership;
developing and sustaining a diverse talent pipeline; and creating an environment for engagement across the Company and in its communities. Labcorp’s D&I
strategy is designed as a continuing journey to maintain and further evolve its inclusive workforce consistent with the changing dynamics of the global
workforce. Highlights of actions supporting the Company’s D&I framework that it believes will foster a more inclusive environment and strengthen its
culture include:

•

the launch of an unconscious bias training program designed to improve self-awareness of personal biases. The program was rolled out globally to
all of the Company's people leaders, with over 6,000 completing the training in 2021;
a formal mentoring initiative that includes a Reverse Diverse Mentoring program that received the Gold Award in the category of Best Advance in
Mentoring to Develop Diverse Leaders from the Brandon Hall Group;
a first-ever virtual women's summit for executive women leaders. This event, called the Power of Women, is part of the Company's leadership
development programs for women that include specific offerings for mid-level and senior leaders;
the introduction of additional Employee Resource Groups (ERGs). ERGs are led by employee volunteers and are important resources to foster cross-
company connections, encourage belonging, support career development, and champion employee voices. The Company now has eight unique
ERGs with more than 70 chapters in 11 countries. Each ERG has executive sponsorship from senior leadership.

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The Company was named to FORTUNE magazine's 2022 List of World's Most Admired Companies, making the annual list for the fourth time. Labcorp
also made the Forbes 2021 list of World's Best Employers for the second consecutive year. In addition, the Company was named to Fast Company's list of the
World's Most Innovative Companies for 2021. In 2021 and 2022, the Company was recognized for the fourth and fifth consecutive years as a Best Place to
Work for LGBTQ+ Equality, with a perfect score on the Human Rights Campaign Foundation's Corporate Equality Index. The Index is the nation's foremost
benchmarking survey and report on corporate policies and practices related to LGBTQ+ workplace equality.

The Company has also implemented opportunities for greater engagement between employees and management, including quarterly town halls that are
held virtually and open to all employees, interaction with front-line employees on visits to the Company facilities, and town halls with employees in business
units. In early 2022, the Company initiated a Voice of the Employee Survey.

Compensation

As the Company’s business becomes increasingly complex, global, and dynamic, the Company believes that its compensation and benefits programs must
be competitive and flexible to attract and retain the caliber of talent needed to continue to move the business forward. In 2021, the Company faced unique
challenges to growing and maintaining its global workforce. The Company believes that its ability to expand the workforce in 2021 evidences that the
Company's compensation and benefit strategies are market competitive and support the business needs to attract and retain talent.

The Company continually monitors market activity and employee movement within and outside of the core life sciences industry to maintain

competitiveness, given the dynamic business environment and labor market challenges it faces.

Labcorp’s employees met the unique challenges faced by patients and clients as the COVID-19 pandemic continued in 2021. The Company invested more

than $120 million to recognize and reward our global workforce, with particular focus placed on frontline workers. These investments included:

•
•

$51 million in market-based pay adjustments, including an increase in the minimum wage for all non-union employees in the U.S. to $15 per hour;
$21 million to increase base wages up to an additional 1.5% to encourage participation in the 401(k) retirement savings plan for 37,000 U.S.
employees earning less than $75,000 per year;
$35 million in two separate, global “gratitude” bonuses for more than 61,500 employees; and
$14 million in retention payments to employees in key global positions to encourage continued career development with the Company.

Employee Wellness

The Company also continued investing in the health and wellness of its global workforce, with particular emphasis on improving its U.S. health benefits

program for employees. The Company’s efforts on this front included:

•

•
•

•

no annual cost increase for the payroll contributions in its U.S. Healthy Value medical, dental and vision insurance plans, impacting approximately
36,000 covered employees and more than 30,000 dependents. For approximately 26,000 employees in the U.S. earning less than $50,000 per year,
the Company further reduced the cost of monthly medical insurance contributions by $240 per year;
adding company-paid disability insurance coverage for short- and long-term disability for all U.S. employees;
providing up to $4,560 in annual medical plan contribution discounts for over 36,000 employees and their spouses for committing to and maintaining
a healthy and tobacco-free lifestyle;
encouraging health and wellness education and activities by providing up to $1,000 in Health Reimbursement Account contributions to
approximately 31,000 employees and their spouses or partners. This included $100 for COVID-19 vaccines and $50 for Flu vaccines;
reimbursing up to $300 in fitness-related costs for approximately 16,000 employees.

The Company continually educates its workforce on health issues of importance. For example, the Company provided a series of videos throughout 2021
from its medical experts covering the facts, safety, and effectiveness of the COVID-19 vaccines. Further, the Company has also prioritized continuous
education on the importance of mental well-being, through communications and resources made available to all employees. The Company believes that its
investments in compensation and wellness are crucial to maintaining competitive positioning and a productive and engaged workforce.

Development and Training

To meet the needs of patients and clients in the evolving and competitive diagnostics and drug development markets, the Company is committed to

creating a work environment that supports a focus on the continuous development and training of its

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employees. With this focus, the Company believes it is well-positioned in the long term to meet the demands of the regulatory environment and accelerate its
ability to innovate and develop talent in a highly skilled and competitive talent market.

Labcorp's curriculum has three primary focus areas: regulatory training, technical training, and professional development. Regulatory training is required
by laws and regulations for the Company to operate in certain areas within the life sciences industry and in certain jurisdictions. Technical training and
professional development enable the Company to compete more effectively in the life sciences industry.

The Company maintains an extensive library of over 46,000 courses that are available virtually within its global learning management system. In 2021,
Labcorp employees completed over 3.2 million hours of training, primarily consisting of regulatory and technical training. In addition, due to the Company’s
access to sensitive and personally identifiable information, employees completed over 1.3 million IT security training courses, representing more than
300,000 total hours, with the goal of maintaining IT system safety and security for clients and patients.

Labcorp also invests in the professional development of its talent, and in retaining our best employees for future internal opportunities. In 2021, employees

completed more than 65,000 hours of professional development.

Challenges in the talent labor market have reinforced the need to offer new and engaging learning resources. In 2021, the Company expanded its approach
to tuition assistance, helping an additional 500 employees complete college degrees in the life science and healthcare fields. In addition, Labcorp added new
relationships with leading learning partners that provide open, online courses. These partners provide video courses, job aides, and short, self-paced learning
taught by industry experts.

Health and Safety

The nature of the Company's business requires employees to work directly with patients and animals. This includes the handling, processing, and testing
of human or animal specimens on a daily basis. As the health and safety of employees is a primary concern, the Company has established numerous employee
health and safety protocols, including engineering and administrative controls, policies, procedures, processes, and training to minimize the potential for, and
the severity of, work-related injuries and illnesses.

In 2021, the Company reorganized its Environment, Health and Safety (EHS) function, combining Dx and DD programs to enable consistency and
common policies, procedures, and areas of focus. The Company was able to maintain its work-related injury rate per 100 employees at a low 1.6, and to
reduce its work-related lost work injury rate per 100 employees by 40%, from 0.5 to 0.3. The Company also implemented a common Corporate EHS Audit
process, allowing it to assess locations against common expectations and performance criteria. In response to COVID-19, the Company modified the audit
format so that it could be effectively performed virtually.

While COVID-19 presented continued challenges, the Company minimized the impact on staff and operations through careful planning and consistent
global implementation of precautionary measures. These measures included additional cleaning and sanitization, social distancing, the use of protective
equipment such as facemasks, face shields and respirators, the increased utilization of work from home, and leveraging video and communications
technology.

Employee Giving

The Labcorp Charitable Foundation, a private, charitable 501(c)(3) organization established by the Company, invested in more than 70 programs in 2021
that align with the Company’s strategic mission to improve health and improve lives. The Foundation’s funding supports the focus areas of health, education,
and community across the globe.

In addition, the Company's employees took advantage of many opportunities to support charitable causes and make a positive impact in their communities.

Annually, U.S. colleagues have the opportunity to automatically direct a portion of each paycheck to one or more of six selected charities through the
Employee Giving Campaign: the American Cancer Society, American Heart Association, American Diabetes Association, American Red Cross (Disaster
Relief), United Way, and the National Urban League. Employee contributions support these charities to provide needed services in their local communities
and across the nation.

The Company's global colleagues also support the local communities where they live and work. For example, as India endured a second, severe wave of
positive COVID-19 cases, Labcorp’s India Crisis Management Team helped 2,398 employees and their families get vaccinated. Additionally, in celebration of
Earth Day, Labcorp colleagues in China took an active part in the American Chamber of Commerce Shanghai Annual E-waste Drive, in which employees
donated personal electronics that they no longer use. The donated equipment was distributed to schools throughout rural communities in China to improve
access to technology.

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Customers

The Company provides its services to a broad range of customers across Dx and DD. The primary customer groups serviced by the Company include:

• Health Plans. The Company serves many health plans, including MCOs and other health insurance providers, each of which operate on a national,
regional, or local basis. In certain locations, health plans may delegate to independent physician associations (IPAs) or other alternative delivery systems
(e.g., ACOs) the ability to negotiate for services on behalf of certain members.

• Pharmaceutical, Biotechnology, Medical Device, and Diagnostics Companies. The Company provides development services to hundreds of
pharmaceutical, biotechnology, medical device, and diagnostics companies, ranging from the world's largest multi-nationals to emerging, small and mid-
market companies.

• Physicians and Other Healthcare Providers. Physicians who require clinical laboratory testing for their patients are a primary source of requests for Dx's

testing services.

• Hospitals and Health Systems. The Company provides hospitals and health systems with services ranging from core and specialty testing to supply chain
and technical support services, and the opportunity to be a research partner for participation in studies and clinical trials with DD. In some cases, a
hospital’s on-site laboratory may be operated or managed by an outside contractor or independent laboratory, including the Company.

• Other Customers. The Company serves a broad range of other customers, including, but not limited to, governmental agencies, employers, patients and

consumers, CROs, crop protection and chemical companies, academic institutions, independent clinical laboratories, and retailers.

Sales, Marketing, and Customer Service

The Company offers its services through a sales force focused on serving the specific needs of customers in different market segments. The Company's

sales force is responsible for both new sales and for customer retention and relationship building.

For Dx, these market segments generally include primary care, women's health, specialty medicine (e.g., infectious diseases, endocrinology,
gastroenterology, and rheumatology), oncology, ACOs, and hospitals and health systems, with different representatives focused on each segment to better
understand and respond to the unique needs of each clinical area. The DD global sales organization provides customer coverage across the pharmaceutical,
biotechnology, and medical device industries for services including lead optimization, preclinical safety assessment, analytical services, clinical trials, central
laboratories, biomarkers, and companion diagnostics, market access and technology solutions. As part of the Company's ongoing strategic priority to
maximize the value of its unique leadership in both diagnostics and drug development, sales representatives from each business segment work together on
outreach to potential customers of each business, including hospitals and health systems that may purchase testing and participate in clinical trials, or
pharmaceutical, biotechnology or medical device companies whose studies may benefit from use of Dx’s specialty testing or network of PSCs.

In mid-2021, Labcorp launched its “In Pursuit of Answers” campaign to emphasize the Company's commitment to its customers and the dedication of its

employees. This campaign also highlights the Company's impact on public health, its new, unified brand, and its critical role in the fight against COVID-19.

Market Opportunity

The Company believes that in 2021, the U.S. clinical laboratory testing industry generated revenues of more than $80 billion. The clinical laboratory
industry consists primarily of three types of providers: hospital-based laboratories, physician-office laboratories, and independent clinical and anatomical
pathology laboratories, such as those operated by Dx.

The clinical laboratory business is intensely competitive. CMS has estimated that, as of January 2022, there were 9,254 hospital-based laboratories,
131,238 physician-office laboratories, and 8,430 independent clinical and anatomic pathology laboratories in the U.S. Dx competes with all of those
laboratories.

Dx believes that the selection of a laboratory is primarily based on the following factors, all of which the Company believes it competes favorably in:

•
•
•
•

quality, timeliness, and consistency in reporting test results;
reputation of the laboratory in the medical community or field of specialty;
contractual relationships with MCOs;
service capability and convenience;

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•
•
•

number and type of tests performed;
connectivity solutions offered; and
pricing of the laboratory’s services.

Dx believes that consolidation in the clinical laboratory testing business will continue. In addition, Dx believes that it and other large, independent clinical
laboratory testing companies will be able to increase their share of the overall clinical laboratory testing market due to a number of factors, including cost
efficiencies afforded by large-scale automated testing, mergers and acquisitions of complementary businesses, changes in payment models to performance
and value-based reimbursement to deliver better outcomes at lower cost, and the increasing importance of large, integrated service networks. In addition, legal
restrictions on physician referrals and physician ownership of laboratories, as well as ongoing regulation of laboratories, are expected to continue to
contribute to the ongoing consolidation of the industry.

Drug development services companies like DD are also referred to as CROs and typically derive substantially all of their revenue from research and

development (R&D), as well as marketing expenditures, of the pharmaceutical, biotechnology and medical device industries.

Outsourcing of R&D services to CROs has increased in the past, and is expected to continue increasing in the future. Increasing pressures to improve
return on investment, to increase R&D productivity, to stay abreast of scientific advances and to comply with stringent government regulations and attempts
to reduce and control the price of prescription drugs have all contributed to this outsourcing to CROs. A CRO provides clients with flexibility in aligning
resources to demand. In the face of mounting complexity, the investment and amount of time required to develop new products are significant and have been
increasing. These trends create opportunities for DD and other CROs that can help make the development process more efficient.

The drug development industry has many participants ranging from hundreds of small providers to a limited number of large CROs with global
capabilities. DD competes against these small and large CROs, as well as in-house departments of pharmaceutical, biotechnology, medical device and
diagnostic companies, and to a lesser extent, selected academic research centers, universities and teaching hospitals.

DD believes that customers selecting a CRO often consider the following factors, all of which the Company believes it competes favorably in:

•
•
•
•
•
•
•
•
•
•
•
•
•
•

•
•
•
•

reputation for quality and regulatory compliance;
efficient, timely performance;
expertise and experience in operations;
application of technology and innovation;
specific therapeutic and scientific expertise;
data and analytical capabilities;
post-approval and market access services;
ability to recruit patients;
scope of service offerings;
strengths in various geographic markets;
price;
quality of facilities;
quality of relationships, including investigator and patient;
ability to manage large-scale clinical trials both domestically and internationally, including the recruitment of appropriate and sufficient clinical trial
subjects;
size and scale;
decentralized clinical trial capabilities;
ability to develop companion diagnostics; and
access to talent.

Quality

Dx and DD have comprehensive quality systems and processes appropriate for their respective businesses. The Company's quality programs are overseen
by Dx's National Office of Quality, DD’s Global Regulatory Compliance and Quality Assurance Unit, DD's clinical trial services global vendor management
department, DD's central laboratory services expanded laboratory management services department, and the Company's global supply chain management
department and project management staff. The Company has procedures for monitoring its internal performance, as well as that of its vendors, suppliers, and
other key stakeholders. In addition, various groups and departments within the Company provide oversight to monitor and control

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vendor products and performance, and play an essential role in the Company’s approach to quality through improvements in processes and automation.

Virtually all facets of the Company’s services are subject to quality programs and procedures, including accuracy and reproducibility of tests; turnaround
time; customer service; data integrity; patient satisfaction; and billing. The Company’s quality programs include measures that compare current performance
against desired performance goals to monitor critical aspects of service to its customers and patients. This includes licensing, credentialing, training and
competency of professional and technical staff, and internal auditing. In addition to the Company's own quality programs, the Company’s laboratories,
facilities and processes are subject to on-site regulatory agency inspections and accreditation evaluations, in addition to surveys and proficiency testing, by
local or national government agencies; independent external accrediting programs; and inspections and audits by customers.

Twenty eight of the Company's laboratories have received ISO-15189 accreditation, demonstrating that they meet international standards for quality and

technical competence.

Information Systems

The Company is committed to developing and commercializing technology-enabled solutions to support its operations and provide better care. The
Company operates standard platforms for its core business services and its financial and reporting systems. These standard systems provide consistency
within workflows and information as well as a high level of system availability, security, and stability. The primary laboratory systems include standardized
support for molecular diagnostics, digital pathology and enhanced specialty laboratory solutions. The Company's centralized information systems are
responsible for operational efficiencies, enabling the Company to achieve consistent, structured, and standardized operating results and effective patient care.

In addition, the information systems used by Dx and DD are discussed in more detail in the sections dedicated to each of those segments.

Intellectual Property Rights

The Company relies on a combination of patents, trademarks, copyrights, trade secrets, and nondisclosure and non-competition agreements to establish
and protect its proprietary technology. The Company has filed and obtained numerous patents in the U.S. and abroad, and regularly files patent applications,
when appropriate, to establish and protect its proprietary technology. Occasionally, the Company also licenses U.S. and non-U.S. patents, patent applications,
technology, trade secrets, know-how, copyrights or trademarks owned by others. The Company believes, however, that no single patent, technology,
trademark, intellectual property asset or license is material to its business as a whole.

Patents covering the Company's technologies are subject to challenges. Issued patents may be successfully challenged, invalidated, circumvented, or
declared unenforceable so that patent rights would not create an effective competitive barrier. In addition, the laws of some countries may not protect
proprietary rights to the same extent as do the laws of the U.S.

Parties may file claims asserting that the Company's technologies infringe on their intellectual property. The Company cannot predict whether parties will
assert such claims against it, or whether those claims will harm its business. If the Company is forced to defend against such claims, the Company could face
costly litigation and diversion of management’s attention and resources. As result of such disputes, the Company may have to develop costly non-infringing
technology or enter into licensing agreements. These agreements, if necessary, may require financial or other terms that could have an adverse effect on the
Company's business and financial condition.

Regulation and Reimbursement

General

Because the Company operates in a number of distinct environments and in a variety of locations worldwide, it is subject to numerous, and sometimes
overlapping, regulatory requirements. Both the clinical laboratory industry and the drug development business are subject to significant governmental
regulation at the national, state and local levels. As described below, these regulations concern licensure and operation of clinical laboratories, claim
submission and reimbursement for laboratory services, healthcare fraud and abuse, drug development services, security and confidentiality of health
information, quality, and environmental and occupational safety.

Regulation of Clinical Laboratories

Virtually all clinical laboratories operating in the U.S. must be certified by the federal government or by a federally approved accreditation agency. In most
cases, that certification is regulated by CMS through CLIA, which requires that applicable clinical laboratories meet quality assurance, quality control, and
personnel standards. Laboratories also must undergo

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proficiency testing and are subject to inspections. Clinical laboratories in locations other than the U.S. are generally subject to comparable regulation in their
respective jurisdictions.

Standards for testing under CLIA are based on the complexity of the tests performed by the laboratory, with tests classified as “high complexity,”
“moderate complexity,” or “waived.” Laboratories performing high-complexity testing are required to meet more stringent requirements than moderate-
complexity laboratories. Laboratories performing only waived tests, which are tests determined by the FDA to have a low potential for error and requiring
little oversight, may apply for a certificate of waiver exempting them from most CLIA requirements. All major and many smaller Company facilities hold
CLIA certificates to perform high-complexity testing. The Company's remaining smaller testing sites hold CLIA certificates to perform moderate-complexity
testing or a certificate of waiver. The sanctions for failure to comply with CLIA requirements include suspension, revocation, or limitation of a laboratory's
CLIA certificate, which is necessary to conduct business; cancellation or suspension of the laboratory's approval to receive Medicare and/or Medicaid
reimbursement; as well as significant fines and/or criminal penalties. The loss or suspension of a CLIA certification, imposition of a fine or other penalties, or
future changes in the CLIA law or regulations (or interpretation of the law or regulations) could have a material adverse effect on the Company.

The Company is also subject to state and local laboratory regulation. CLIA provides that a state may adopt laboratory regulations different from or more
stringent than those under federal law, and a number of states have implemented their own laboratory regulatory requirements. State laws may require that
laboratory personnel meet certain qualifications, specify certain quality controls, or require maintenance of certain records.

The Company believes that it is in compliance in all material respects with all laboratory requirements applicable to its laboratories operating both within
the U.S. and in other countries. The Company's laboratories have continuing programs to maintain operations in compliance with all such regulatory
requirements, but no assurances can be given that the Company's laboratories will pass all future licensure or certification inspections.

FDA and Other Regulatory Agency Laws and Regulations

Various regulatory agencies, including CMS and the FDA in the U.S., regulate the development, testing, manufacturing, labeling, advertising, marketing,
distribution, storage, import, export, performance, and surveillance of diagnostic and therapeutic products and services, including certain products and
services offered by the Company and the development of therapeutic products that comprise the majority of DD’s business. The FDA and other regulatory
agencies periodically inspect and review the manufacturing processes and product performance of diagnostic and therapeutic products, while CMS, certain
state programs, and accreditation entities inspect and review the facilities, personnel, and procedures of clinical laboratories and their laboratory operations.
The FDA and other regulatory agencies also periodically inspect clinical study sites and CROs that conduct clinical trials, including test facilities that perform
tests on samples from human subjects enrolled in such clinical studies of drugs, biologics, and medical devices. These agencies have the authority to take
various administrative and legal actions for noncompliance, such as fines, withdrawal of product approval, warning or untitled letters, seizures, recalls,
injunctions, and other civil and criminal sanctions.

Since 2014, there have been ongoing discussions and advocacy between stakeholders, including the clinical laboratory industry, the FDA, and Congress,
about potential FDA regulation of laboratory-developed tests (LDTs), which are assays developed and performed in-house by clinical laboratories and can be
made available to the public without pre-market review by the FDA (although COVID-19 diagnostic PCR LDTs have been subject to FDA pre-market
requirements as a consequence of the national health emergency). Various regulatory and legislative proposals are under consideration, including some that
could increase general FDA oversight of clinical laboratories and LDTs. The outcome and ultimate impact of such proposals on the Company is difficult to
predict at this time.

There are similar national and regional regulatory agencies, and regulations, in the jurisdictions outside of the U.S. in which the Company operates. For
example, the European Union In Vitro Diagnostics Regulation (Regulation (EU) 2017/746 (EU IVDR)), scheduled to become applicable May 26, 2022,
establishes a new legislative framework for in vitro diagnostic devices including a rule-based classification and quality and safety standards. The Company
continues to assess and prepare for compliance with the EU IVDR, where applicable.

DD’s laboratory facilities and Dx's clinical laboratory facilities that perform testing in support of clinical trials, must conform to a range of standards and
regulations, including good laboratory practice (GLP) and good clinical practice (GCP), good manufacturing practice (cGMP), human subject protection and
investigational product exemption regulations, and quality system regulation (QSR) requirements, as applicable. The preclinical and clinical studies that the
Company conducts are subject to periodic inspections by the FDA as well as other regulatory agencies in the jurisdictions outside the U.S. in which the
Company operates, which may include, without limitation, the Medicines and Healthcare products Regulatory Agency (MHRA) in the U.K., the European
Medicines Agency, the National Medical Products Administration in China, and the Pharmaceuticals and Medical Devices Agency in Japan, to determine
compliance with GLP and GCP as well as other

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applicable standards and regulations. If a regulatory agency determines during an inspection that the Company’s equipment, facilities, laboratories,
operations, or processes do not comply with applicable regulations and GLP and/or GCP standards, the regulatory agency may issue a formal notice, which
may be followed by a warning letter if observations are not addressed satisfactorily. Noncompliance may result in, among other things, unanticipated
compliance expenditures, or the regulatory agency seeking civil, criminal or administrative sanctions and/or remedies against the Company, including
suspension of its operations.

Additionally, certain DD services and activities, such as chemistry, manufacturing, and controls (CMC) services and manufacturing of investigational
medicinal products for use in certain Phase I studies managed by DD, must conform to cGMP. DD is subject to periodic inspections by the FDA and the
MHRA, as well as other regulatory agencies in the jurisdictions outside the U.S. in which the Company operates, in order to assess, among other things,
cGMP compliance. If a regulatory agency identifies deficiencies during an inspection, it may issue a formal notice, which may be followed by a warning
letter if observations are not addressed satisfactorily. Failure to maintain compliance with cGMP regulations and other applicable requirements of various
regulatory agencies could result in, among other things, fines, warnings or untitled letters, unanticipated compliance expenditures, suspension of
manufacturing, enforcement actions, product seizures or recalls, injunctions, or criminal prosecution.

Some Dx products are regulated by the FDA as medical devices. The FDA defines a medical device in part as an instrument, apparatus, implement,
machine, contrivance, implant, in vitro reagent, or other similar or related article which is intended for the diagnosis of disease or other conditions or in the
cure, mitigation, treatment, or prevention of disease in man. FDA regulates the development, testing, manufacturing, marketing, post‑market surveillance,
distribution, advertising and labeling of products classified as medical devices separate from clinical diagnostic testing services offered under CLIA
requirements. FDA regulatory requirements include: all of the relevant elements of the Quality System Regulation (which requires manufacturers to follow
stringent design, testing, control, documentation and other quality assurance procedures), labeling regulations, restrictions on promotion and advertising,
Medical Device Reporting regulations (which requires the manufacturer to report to the FDA if its device may have caused or contributed to a death or
serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur), the Reports of Corrections and
Removals regulations (which requires manufacturers to report certain recalls and field actions to the FDA), and other post-market requirements.

To ensure compliance with regulatory requirements, medical device manufacturers are subject to market surveillance and periodic, pre-scheduled and
unannounced inspections by the FDA. Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may
include sanctions, operating restrictions, partial suspension or total shutdown of production; refusal to grant clearance or approvals of new devices;
withdrawal of clearance or approval; and civil or criminal prosecution.

Animal Welfare Laws and Regulations

The conduct of animal research at DD’s facilities in the U.S. must be in compliance with the Animal Welfare Act (AWA), which governs the care and use
of warm-blooded animals for research in the U.S. other than laboratory rats, mice, and chickens, and is enforced through periodic inspections by the U.S.
Department of Agriculture (USDA). The AWA establishes facility standards regarding several aspects of animal welfare, including housing, ventilation,
lighting, feeding and watering, handling, veterinary care, and recordkeeping. DD complies with licensing and registration requirement standards set by the
USDA and similar agencies in foreign jurisdictions such as the European Union, the U.K., and China for the care and use of regulated species. If the USDA
determines that DD’s equipment, facilities, laboratories or processes do not comply with applicable AWA standards, it may issue an inspection report
documenting the deficiencies and setting deadlines for any required corrective actions. The USDA may impose fines, suspend and/or revoke licenses and
registrations, or confiscate research animals. Other countries where the Company conducts business have similar laws and regulations with which the
Company must also comply. In addition, certain of DD’s animal-related activities may be subject to regulation by the U.S. Centers for Disease Control and
Prevention (CDC), the Office of Laboratory Animal Welfare of the National Institutes of Health, the U.S. Fish and Wildlife Service, and similar organizations
in other jurisdictions.

Payment for Clinical Laboratory Services

In 2021, Dx derived approximately 10.1% of its revenue directly from traditional Medicare and Medicaid programs. In addition, Dx's other commercial
laboratory testing business that is not directly related to Medicare or Medicaid nevertheless depends significantly on continued participation in these programs
and in other government healthcare programs, in part because customers often want a single laboratory to perform all of their testing services. In recent years,
both governmental and private-sector payers have made efforts to contain or reduce healthcare costs, including reducing reimbursement for clinical laboratory
services.

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Reimbursement under the Medicare PFS is capped at different rates in each Medicare Administrative Contractor's jurisdiction. Pursuant to PAMA,
reimbursement under the CLFS is set at a national rate that is updated every three years for most tests. State Medicaid programs are prohibited from paying
more than the Medicare fee schedule limit for clinical laboratory services furnished to Medicaid recipients. Laboratories primarily bill and are reimbursed by
Medicare and Medicaid directly for covered tests performed on behalf of Medicare and Medicaid beneficiaries. For beneficiaries that participate in Managed
Medicare and Managed Medicaid plans, laboratory bills are submitted to and paid by MCOs that manage those plans. Approximately 8.5% of Dx's revenue is
reimbursed directly by Medicare under the CLFS.

Many pathology services performed by Dx are reimbursed by Medicare under the PFS. The PFS assigns relative value units to each procedure or service,
and a conversion factor is applied to calculate the reimbursement. The PFS is also subject to adjustment on an annual basis. Such adjustments can impact both
the conversion factor and relative value units. The Sustainable Growth Rate (SGR), the formula previously used to calculate the fee schedule conversion
factor, would have resulted in significant decreases in payment for most physician services for each year since 2003. However, Congress intervened
repeatedly to prevent these payment reductions, and the conversion factor was increased or frozen for the subsequent year. The Medicare Access and CHIP
Reauthorization Act of 2015 (MACRA) permanently replaced the SGR formula and transitioned PFS reimbursement to a value-based payment system.
MACRA retroactively avoided a 21.2% reduction in PFS reimbursement that had been scheduled for April 1, 2015, and provided for PFS conversion factor
increases of 0.5% from July 1, 2015 to December 31, 2015, and 0.5% in each of years 2016-2019, followed by no updates for 2020-2025, and updates that
vary based on participation in alternative payment models in subsequent years. These changes to the conversion factor may be offset by reductions to the
relative value units, as was the case with the 2016 PFS reductions. For 2022, Congress increased the conversion factor by 3.0% over the amount announced in
the final rule, instead of allowing a 3.75% reduction to take effect. Approximately 0.4% of Dx's revenue is reimbursed under the PFS.

In addition to changes in reimbursement rates, Dx is also impacted by changes in coverage policies for laboratory tests and annual CPT coding revisions.
Medicare, Medicaid and private payer diagnosis code requirements and payment policies negatively impact Dx's ability to be paid for some of the tests it
performs. Further, some payers require additional information to process claims, employ third-party utilization management tools, or have implemented prior
authorization policies which delay or prohibit payment. In 2021, there were limited coding and billing changes. While limited changes are expected to be
implemented in 2022, the Company typically expects some delays in pricing and reimbursement as new codes are introduced.

Future changes in national, state and local laws and regulations (or in the interpretation of current regulations) affecting government payment for clinical

laboratory testing could have a material adverse effect on the Company.

Further healthcare reform could occur in 2022, including changes to the ACA and Medicare reform, as well as administrative requirements that may

continue to affect coverage, reimbursement, and utilization of laboratory services in ways that are currently unpredictable.

Privacy, Security and Confidentiality of Health Information and Other Personal Information

In the U.S., the Health Insurance Portability and Accountability Act of 1996 (HIPAA) was designed to address issues related to the security and
confidentiality of health information and to improve the efficiency and effectiveness of the healthcare system by facilitating the electronic exchange of
information in certain financial and administrative transactions. These regulations apply to health plans and healthcare providers that conduct standard
transactions electronically and healthcare clearinghouses (covered entities). Six such regulations include: (i) the Transactions and Code Sets Rule; (ii) the
Privacy Rule; (iii) the Security Rule; (iv) the Standard Unique Employer Identifier Rule; (v) the National Provider Identifier Rule; and (vi) the Health Plan
Identifier Rule. The Company believes that it is in compliance in all material respects with each of the HIPAA Rules identified above.

The Privacy Rule regulates the use and disclosure of protected health information (PHI) by covered entities. It also sets forth certain rights that an
individual has with respect to his or her PHI maintained by a covered entity, such as the right to access or amend certain records containing PHI or to request
restrictions on the use or disclosure of PHI. The Privacy Rule requires covered entities to contractually bind third parties, known as business associates, in the
event that they perform an activity or service for or on behalf of the covered entity that involves the creation, receipt, maintenance, or transmission of PHI.

On February 6, 2014, CMS and HHS published final regulations that amended the HIPAA Privacy Rule to provide individuals (or their personal
representatives) with the right to receive copies of their test reports from laboratories subject to HIPAA, or to request that copies of their test reports be
transmitted to designated third parties.

On December 12, 2018, HHS issued a request for information (RFI) seeking input from the public on how the HIPAA regulations and the Privacy Rule, in
particular, could be modified to amend existing, or impose additional, obligations relating to the processing of PHI. Subsequent to the RFI, on January 21,
2021, HHS published a notice of proposed rulemaking (NPRM) containing potential modifications to the Privacy Rule addressing standards that may impede
the transition to value-based

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healthcare and strengthen individuals' rights to access their health information. The public comment period for the NPRM was closed on May 6, 2021. The
Company is monitoring the NPRM process. If modifications to the Privacy Rule are adopted, they may impact the Company's compliance obligations under
HIPAA.

The U.S. Health Information Technology for Economic and Clinical Health Act (HITECH), which was enacted in February 2009, with regulations
effective on September 23, 2013, strengthened and expanded the HIPAA Privacy and Security Rules and their restrictions on use and disclosure of PHI.
HITECH includes, but is not limited to, prohibitions on exchanging PHI for remuneration and additional restrictions on the use of PHI for marketing.
HITECH also fundamentally changes a business associate’s obligations by imposing a number of Privacy Rule requirements and a majority of Security Rule
provisions directly on business associates that were previously only directly applicable to covered entities. Moreover, HITECH requires covered entities to
provide notice to individuals, HHS, and, as applicable, the media when unsecured PHI is breached, as that term is defined by HITECH. Business associates
are similarly required to notify covered entities of a breach.

The administrative simplification provisions of HIPAA mandate the adoption of standard unique identifiers for healthcare providers. The intent of these
provisions is to improve the efficiency and effectiveness of the electronic transmission of health information. The National Provider Identifier Rule requires
that all HIPAA-covered healthcare providers, whether they are individuals or organizations, must obtain an NPI to identify themselves in standard HIPAA
transactions. NPI replaces the unique provider identification number and other provider numbers previously assigned by payers and other entities for the
purpose of identifying healthcare providers in standard electronic transactions.

The Health Plan Identifier (HPID) was a unique identifier designed to furnish a standard way to identify health plans in electronic transactions. CMS
published the final rule adopting the HPID for health plans required by HIPAA on September 12, 2012. Effective October 31, 2014, CMS announced a delay,
until further notice, in enforcement of regulations pertaining to health plan enumeration and use of the HPID in HIPAA transactions adopted in the HPID final
rule. On October 28, 2019, CMS published a final rule rescinding the adopted standard unique HPID and implementation specifications and requirements for
its use and other entity identifier and implementation specifications for its use, effective December 27, 2019. This delay remains in effect. The Company will
continue to monitor future developments related to the HPID and respond accordingly.

Violations of the HIPAA provisions could result in civil and/or criminal penalties, including significant fines and up to 10 years in prison. HITECH also
significantly strengthened HIPAA enforcement by increasing the civil penalty amounts that may be imposed, requiring HHS to conduct periodic audits to
confirm compliance and authorizing state attorneys general to bring civil actions seeking either injunctions or damages in response to violations of the HIPAA
privacy and security regulations that affect the privacy of state residents.

The total cost associated with meeting the ongoing requirements of HIPAA and HITECH is not expected to be material to the Company’s operations or

cash flows. However, future regulations and interpretations of HIPAA and HITECH could impose significant costs on the Company.

On May 1, 2020, HHS published a final rule making the information blocking provisions (Information Blocking Rules) of the 21 Century Cures Act
effective on November 2, 2020. On November 4, 2020, HHS extended the effective date of the Information Blocking Rules to April 5, 2021. The Information
Blocking Rules prohibit covered actors, including healthcare providers, from engaging in activity that is likely to interfere with the access, exchanges, or use
of electronic health information (EHI) unless such activity falls into one of eight exceptions. The Information Blocking Rules provide for civil monetary
penalties for noncompliance by healthcare IT vendors and, separately, “appropriate disincentives” for noncompliance by healthcare providers. The Company
believes that it is in compliance in all material respects with the requirements of the Information Blocking Rules.

In addition to the regulations described above, numerous other data protection, privacy and similar laws govern the confidentiality, security, use, and
disclosure of personal information. These laws vary by jurisdiction, but they most commonly regulate or restrict the collection, use, and disclosure of medical
and financial information and other personal information. In the U.S., some state laws are more restrictive and, therefore, are not preempted by HIPAA.
Penalties for violation of these laws may include sanctions against a laboratory's licensure, as well as civil and/or criminal penalties.

Congress and state legislatures also have been implementing new legislation relating to privacy and data protection. For example, on June 28, 2018, the
California legislature passed the California Consumer Privacy Act (CCPA), which became effective January 1, 2020. The CCPA created transparency
requirements and granted California residents several new rights with regard to their personal information. In addition, in November 2020, California voters
approved the California Privacy Rights Act (CPRA) ballot initiative, which introduced significant amendments to the CCPA and established and funded a
dedicated California privacy regulator, the California Privacy Protection Agency (CPPA). The amendments introduced by the CPRA go into effect on January
1, 2023, and new implementing regulations are expected to be introduced by the CPPA. Failure to comply with the CCPA may result in, among other things,
significant civil penalties and injunctive relief, or potential

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statutory or actual damages. In addition, California residents have the right to bring a private right of action in connection with certain types of incidents.
These claims may result in significant liability and potential damages. Other states have passed legislation similar to the CCPA, including the Virginia
Consumer Data Protection Act (VCDPA), effective January 1, 2023, and the Colorado Privacy Act (CPA), effective July 1, 2023. Both the VCDPA and CPA
heavily mirror the principles and requirements of the CCPA; however, neither provides for a private right of action. The Company implemented processes to
manage compliance with the CCPA and continues to assess the impact of the CPRA, VCDPA, and CPA on the Company’s business as additional information
and guidance becomes available.

Effective August 14, 2020, the Substance Abuse and Mental Health Services Administration of HHS (SAMHSA) announced the finalization of proposed
changes to the Confidentiality of Substance Use Disorder Patient Records regulation, 42 Code of Federal Regulations Part 2. This regulation protects the
confidentiality of patient records relating to the identity, diagnosis, prognosis, or treatment that are maintained in connection with the performance of any
federally assisted program or activity relating to substance use disorder education, prevention, training, treatment, rehabilitation, or research. Under the
regulation, patient identifying information may only be released with the individual’s written consent, subject to certain limited exceptions. The latest changes
to this regulation seek to better facilitate care coordination, while maintaining more stringent confidentiality of substance use disorder information. The
Company adopted changes to its policies and procedures necessary for compliance.

The European Union General Data Protection Regulation (GDPR) Regulation (EU) 2016/679, became effective May 25, 2018, replacing Directive
95/46/EC. The GDPR established requirements applicable to the use and transfer of personal data and imposes penalties for noncompliance of up to the
greater of €20 million or 4% of worldwide revenue. The GDPR requires transparency with regard to the means and purposes of processing of personal data;
collection of consent to process personal data in certain circumstances; the ability to provide records of processing upon request by a supervisory authority or
data controller; implementation of appropriate technical and organizational measures to maintain security of personal data; notification of personal data
breaches to supervisory authorities, data controllers, and individuals within expedient time frames; and performance of data protection impact assessments for
certain processing activities. The GDPR also provides individual data subjects with certain rights, where applicable, including the right of access, the right to
rectification, the right to be forgotten, the right to restrict or object to processing, and the right to data portability. The GDPR requires that personal data may
only be transferred outside of the European Union to a country that offers an adequate level of data protection under standards set by the European Union, or
where such transfer is otherwise pursuant to a legal framework approved by the European Union. On July 16, 2020, the Court of Justice of the European
Union (CJEU) released its decision in Data Protection Commission v. Facebook Ireland Limited, Maximillian Schrems (Schrems II), which invalidated the
EU-U.S. Privacy Shield as a legal framework for the transfer of personal data outside of the European Union, and suggesting additional safeguards for the use
of Standard Contractual Clauses (SCCs) as a legal framework for the transfer of personal data outside of the European Union. On June 4, 2021, the European
Commission release updated SCCs, which, in part, adopted many of the additional safeguards highlighted in the Schrems II decision. Companies using SCCs
for the transfer of personal data outside of the European Union are required to use the new SCCs for new transfers of personal data as of September 27, 2021,
and for all transfers of personal data as of December 27, 2022. The Company has established processes and frameworks to manage compliance with the
GDPR and other global privacy and data protection requirements, and to manage preparation for future enacted regulations. Compliance could impose
significant costs on the Company.

In addition to the GDPR, numerous other countries have laws governing the collection, use, disclosure, and transmission (including cross-border transfer)
of personal information, including medical information. The legislative and regulatory landscape for privacy and data protection is complex and continually
evolving. Data protection regulations have been enacted or updated in regions where the Company does business including in Asia, Latin America, and
Europe, and in countries such as Canada, India, and the UK. Failure to comply with these regulations may result in, among other things, civil, criminal and
contractual liability, fines, regulatory sanctions and damage to the Company’s reputation.

Fraud and Abuse Laws and Regulations

Existing U.S. laws governing federal healthcare programs, including Medicare and Medicaid, as well as similar state laws, impose a variety of broadly
described fraud and abuse prohibitions on healthcare providers, including clinical laboratories. These laws are interpreted liberally and enforced aggressively
by multiple government agencies, including the U.S. Department of Justice, OIG and various state agencies. Historically, the clinical laboratory industry has
been the focus of major governmental enforcement initiatives. The U.S. government's enforcement efforts have been conducted under regulations such as
HIPAA, which includes several provisions related to fraud and abuse enforcement, including the establishment of a program to coordinate and fund U.S., state
and local law enforcement efforts, and the Deficit Reduction Act of 2005, which includes requirements directed at Medicaid fraud, including increased
spending on enforcement and financial incentives for states to adopt false claims act provisions similar to the U.S. False Claims Act. Amendments to the
False Claims Act, and other enhancements to the U.S. fraud and abuse laws enacted as part of the ACA, have further increased fraud and abuse enforcement

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efforts and compliance risks. For example, the ACA established an obligation to report and refund overpayments from Medicare or Medicaid within 60 days
of identification (whether or not paid through any fault of the recipient); failure to comply with this requirement can give rise to additional liability under the
False Claims Act and Civil Monetary Penalties statute.

The U.S. Anti-Kickback Statute prohibits knowingly providing anything of value in return for, or to induce the referral of, Medicare, Medicaid or other
U.S. federal healthcare program business. Violations can result in imprisonment, fines, penalties, and/or exclusion from participation in U.S. federal
healthcare programs. The OIG has published “safe harbor” regulations that specify certain arrangements that are protected from prosecution under the Anti-
Kickback Statute if all conditions of the relevant safe harbor are met. Failure to fit within a safe harbor does not necessarily constitute a violation of the Anti-
Kickback Statute; rather, the arrangement would be subject to scrutiny by regulators and prosecutors and would be evaluated on a case-by-case basis. Many
states have their own Medicaid anti-kickback laws, and several states also have anti-kickback laws that apply to all payers (i.e., not just government
healthcare programs).

From time to time, the OIG issues alerts and other guidance on certain practices in the healthcare industry that implicate the Anti-Kickback Statute or
other fraud and abuse laws. OIG Special Fraud Alerts and Advisory Opinions relevant to the Company set forth a number of practices allegedly engaged in by
some clinical laboratories and healthcare providers that raise issues under the U.S. fraud and abuse laws, including the Anti-Kickback Statute. These practices
include: (i) providing employees to furnish valuable services for physicians (other than collecting patient specimens for testing) that are typically the
responsibility of the physicians’ staff; (ii) offering or providing discounted laboratory services billed to referral sources in return for referrals of other tests
that are billed to U.S. federal healthcare programs; (iii) providing free testing to physicians’ managed care patients in situations where the referring physicians
benefit from such reduced laboratory utilization; (iv) providing free pickup and disposal of biohazardous waste for physicians for items unrelated to a
laboratory’s testing services; (v) providing general-use facsimile machines or computers to physicians that are not exclusively used in connection with the
laboratory services; (vi) providing free testing for healthcare providers, their families and their employees (i.e., so-called “professional courtesy” testing); (vii)
rental of space in physician offices by equipment suppliers or other healthcare entities to which the physicians make referrals; (viii) compensation paid by
laboratories to physicians for blood specimen processing and for submitting patient data to registries; and (ix) remuneration provided to physicians and other
health care professionals by pharmaceutical and medical device companies in connection with company-sponsored speaker programs.

In addition to the Anti-Kickback Statute, in October 2018, the U.S. enacted the Eliminating Kickbacks in Recovery Act of 2018 (EKRA), as part of the
Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act). EKRA is an all-payer
anti-kickback law that makes it a criminal offense to pay any remuneration to induce referrals to, or in exchange for, patients using the services of a recovery
home, a substance use clinical treatment facility, or laboratory. Although it appears that EKRA was intended to reach patient brokering and similar
arrangements to induce patronage of substance use recovery and treatment, the language in EKRA is broadly written. As drafted, an EKRA prohibition on
incentive compensation to sales employees is inconsistent with the federal anti-kickback statute and regulations, which permit payment of employee incentive
compensation, a practice that is common in the industry. Significantly, EKRA permits the U.S. Department of Justice to issue regulations clarifying EKRA’s
exceptions or adding additional exceptions, but such regulations have not yet been issued, and there is no additional DOJ or other government guidance to
indicate how and to what extent it will be applied and enforced in the industry. The Company is working through its trade association to address the scope of
EKRA.

Under another U.S. statute, known as the Stark Law or “physician self-referral” prohibition, physicians who have a financial or a compensation
relationship with a commercial laboratory may not, unless an exception applies, refer Medicare or Medicaid patients for testing to the laboratory, regardless of
the intent of the parties. Similarly, laboratories may not bill Medicare or Medicaid for services furnished pursuant to a prohibited self-referral. There are
several Stark Law exceptions that are relevant to arrangements involving clinical laboratories, including: i) fair market value compensation for the provision
of items or services; ii) payments by physicians to a laboratory for commercial laboratory services; iii) ancillary services (including laboratory services)
provided within the referring physician's own office, if certain criteria are satisfied; iv) physician investment in a company whose stock is traded on a public
exchange and has stockholder equity exceeding $75.0 million; and v) certain space and equipment rental arrangements that are set at a fair market value rate
and satisfy other requirements. Many states have their own self-referral laws as well, which in some cases apply to all patient referrals, not just government
reimbursement programs.

In December 2020, the OIG and CMS published final rules to amend the regulations implementing the Anti-Kickback Statute and the Stark Law,
respectively. The amendments were primarily intended to alleviate perceived impediments to coordinated care and value-based compensation arrangements
through new safe harbors to the Anti-Kickback Statute and new exceptions to the Stark Law, and have varying degrees of applicability to laboratories. The
CMS final rule incorporates laboratories and permits support for value-based arrangements, under certain conditions for purposes of the Stark Law. However,
the OIG final rule generally excludes laboratories from protection under the Anti-Kickback Statute safe harbors for

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value-based arrangements.

There are a variety of other types of U.S. and state fraud and abuse laws, including laws prohibiting submission of false or fraudulent claims and that
require certain companies to disclose payments and other transfers of value to certain healthcare professionals and providers. The Company seeks to conduct
its business in compliance with all U.S. and state fraud and abuse laws. The Company is unable to predict how these laws will be applied in the future, and no
assurances can be given that its arrangements will not be subject to scrutiny under such laws. Sanctions for violations of these laws may include exclusion
from participation in Medicare, Medicaid, and other U.S. or state healthcare programs, significant criminal and civil fines and penalties, and loss of licensure.
Any exclusion from participation in a U.S. healthcare program, or material loss of licensure, arising from any action by any federal or state regulatory or
enforcement authority, would likely have a material adverse effect on the Company's business. In addition, any significant criminal or civil penalty resulting
from such proceedings could have a material adverse effect on the Company's business.

Enrollment and re-enrollment in U.S. healthcare programs, including Medicare and Medicaid, are subject to certain program integrity requirements
intended to protect the programs from fraud, waste, and abuse. In September 2019, CMS published a final rule implementing program integrity enhancements
to provider enrollment requiring Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) providers and suppliers to disclose on an enrollment
application or a revalidation application any current or previous direct or indirect affiliation with a provider or supplier that (1) has uncollected debt; (2) has
been or is subject to a payment suspension under a federal health care program; (3) has been or is excluded by the OIG from Medicare, Medicaid, or CHIP; or
(4) has had its Medicare, Medicaid, or CHIP billing privileges denied or revoked. This rule permits CMS to deny enrollment based on such an affiliation
when CMS determines that the affiliation poses an undue risk of fraud, waste, or abuse. CMS is phasing in this new affiliation disclosure requirement.

In November 2021, CMS published a final rule for the 2022 Medicare Physician Fee Schedule, which included further program integrity requirements.
CMS finalized its proposal to expand the categories of parties within the purview of the denial and revocation provisions to include excluded administrative
or management services personnel who furnish services payable by a federal healthcare program, such as a billing specialist, accountant, or human resources
specialist. CMS also codified the billing privilege deactivation rebuttal process, under which a provider or supplier would have 15 calendar days from receipt
of written notice of a deactivation to submit a rebuttal, and CMS could, in its discretion, extend the 15-day period to account for certain special situations. In
addition, CMS defined factors it would use to determine whether revocation or suspension of billing privileges is appropriate due to a pattern or practice of
non-compliant billing, which would be: (a) the percentage of submitted claims that were denied during the period under consideration; (b) whether the
provider or supplier has any history of final adverse actions and the nature of any such actions; (c) the type of billing non-compliance and the specific facts
surrounding said non-compliance (to the extent this can be determined); and (d) any other information regarding the provider's or supplier's specific
circumstances that CMS deems relevant to the determination. This is a reduction in the number of factors that were previously considered and a revision of
some previous factors.

Environment, Health, and Safety

The Company is subject to licensing and requirements under laws and regulations relating to the protection of the environment, and employee health and
safety. These laws and regulations include the safe handling, use, transportation and disposal of potentially infectious and hazardous materials; the assessment
of potential work-related risks and establishment of work practice and engineering controls, and providing protective clothing and equipment, training, and
medical surveillance; designed to minimize risk to employee health and safety and the environment.

The Company is committed to reducing its carbon footprint. Labcorp participates in the Carbon Disclosure Project (CDP) and the EcoVadis sustainable
procurement rating processes and has committed to submitting a Science Based Target by the end of 2022. Energy-saving measures at Company facilities
include for example, installation of more efficient boilers, chillers, ventilation systems and LED lighting, engaging in waste-to-energy disposition, and
reducing waste going to landfills. Funding for these and similar projects continued through 2021 and are continuing in 2022.

The Company seeks to comply with all relevant environment, employee health and safety laws and regulations. Failure to comply could subject the

Company to various administrative and/or other enforcement actions.

Drug Testing

Drug testing for public sector employees is regulated by the SAMHSA, which has established detailed performance and quality standards that laboratories
must meet to be approved to perform drug testing on employees of U.S. government contractors and certain other entities. To the extent that the Company’s
laboratories perform such testing, each must be certified as meeting SAMHSA standards. The Company’s laboratories in Research Triangle Park, North
Carolina; Raritan, New Jersey; Houston, Texas; Southaven, Mississippi; and St. Paul, Minnesota are all SAMHSA certified.

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Controlled Substances

DD handles controlled substances as part of the services it provides in preclinical testing and clinical trials. The use of controlled substances in testing for
drugs of abuse is regulated by the U.S. Drug Enforcement Administration. The Company seeks to conduct its business in compliance with these regulations as
applicable. Violations of these rules may result in criminal and civil fines and penalties.

Compliance Program

The Company maintains a comprehensive, global compliance program that includes ongoing evaluation and monitoring of its compliance with the laws
and regulations of the U.S. and the other countries in which it has operations. The objective of the Company’s compliance program is to develop, implement,
monitor, and update compliance safeguards, as appropriate. Although the Company is subject to a broad range of regulations, its compliance program has a
particular focus on regulations related to healthcare fraud and abuse, anti-kickback, physician self-referral, government reimbursement programs, anti-
bribery/anti-corruption, anti-human trafficking, and trade sanctions, among others. Emphasis is placed on developing and implementing compliance policies
and guidelines, personnel training programs, monitoring and auditing activities, and providing systems for reporting and investigation of potential or actual
compliance concerns. The compliance program demonstrates the Company's commitment to conducting business at the highest standards of ethical conduct
and integrity.

The Company seeks to conduct its business in compliance with all statutes, regulations, and other requirements applicable to its clinical laboratory
operations and drug development business. The clinical laboratory industry and drug development industries are, however, subject to extensive regulation,
and many of these statutes and regulations have not been interpreted by the courts. In addition, the applicability or interpretation of statutes and regulations
may not be clear in light of emerging changes in clinical testing science, healthcare technology, and healthcare organizations. Applicable statutes and
regulations may be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that would materially adversely affect the Company.
Potential sanctions for violation of these statutes and regulations include significant civil and criminal penalties, fines, exclusion from participation in
governmental healthcare programs, and the loss of various licenses, certificates, and authorizations necessary to operate, as well as potential liabilities from
third-party claims, all of which could have a material adverse effect on the Company’s business.

Information Security

Information security is one of the Company's top priorities. Securing personal and health information is critical to the Company’s business operations and
to future growth, as the Company is committed to using technology to improve the delivery of care. A security breach could have a material adverse
operational, financial, regulatory, and reputational impact to the Company. The Company employs a secure technology framework that enables continuous
operations of laboratory devices, computers, and communications systems. The Company has experienced and expects to continue to confront attempts by
cybercriminals who seek access to its systems and data.

The Company uses state-of-the art tools and advanced analytics to proactively identify and protect against potential information system disruptions and
breaches; to monitor, test and secure key networks and services; and to facilitate prompt resumption of operations if a system disruption or interruption
should occur. The Company has implemented policies and procedures designed to comply with global laws and regulations related to the privacy and
security of personal and health information. Additionally, the Company maintains a comprehensive behavior management and communications program,
which addresses the human element of cybersecurity by providing staff with extensive awareness, education, and training to help prevent cybercrime from
succeeding through human error.

The Company is exposed to risks related to information security arising from the information technology systems and operations of third parties,
including the Company's vendors and partners. Therefore, a stringent process is followed for evaluating the cybersecurity status of vendors or third parties
that will have access to the Company's data or information technology systems. The Company also carries cybersecurity and business interruption insurance.

Over the past several years, the Company has significantly increased its investment in cybersecurity technology and training to help protect its
information technology systems and operations in response to the ever-evolving cyber threat landscape. Additional resources will be dedicated as needed to
expand the Company’s ability to investigate and remediate any cybersecurity vulnerabilities, and to manage any impact of a cybersecurity event on its
business and operations.

In July 2018, the Company experienced a ransomware incident which affected certain Dx information technology systems. The incident temporarily
affected certain other information technology systems involved in conducting Company-wide operations. An investigation determined that the ransomware
did not and could not transfer patient or client data outside of Company systems and that there was no theft or misuse of patient or client data.

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On May 14, 2019, Retrieval-Masters Credit Bureau, Inc. d/b/a/ American Medical Collections Agency (AMCA), an external collection agency, notified
the Company about a security incident AMCA experienced that may have involved certain personal information about some of the Company's patients (the
AMCA Incident). The Company is involved in pending and threatened litigation related to the AMCA Incident, as well as various government and
regulatory inquiries and processes. For additional information about the AMCA Incident, see Note 14 Commitments and Contingencies to the Consolidated
Financial Statements.

Item 1A. Risk Factors

Investors should carefully consider all of the information set forth in this Annual Report, including the following risk factors, before deciding to invest in
any of the Company’s securities. The risks below are not the only ones that the Company faces. Additional risks not presently known to the Company, or that
it presently deems immaterial, may also negatively impact the Company. The Company’s business, consolidated financial condition, revenues, results of
operations, profitability, reputation or cash flows could be materially impacted by any of these factors.

Risks Related to the COVID-19 Pandemic

The effects of the outbreak of the COVID-19 pandemic could have material adverse impacts on the Company’s business, results of operations, cash
flows, and financial position.

The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business. Fluctuations in the number of COVID-19 cases
typically result in corresponding fluctuations in the Company's COVID-19 PCR and antibody testing (COVID-19 Testing) volumes and its Base Business
(operations except for COVID-19 Testing), and may have a negative effect on the Company's business and financial performance. Given the continued
unpredictability pertaining to the COVID-19 pandemic, the impact on the Company's business continues to be uncertain and depends on a number of evolving
factors that the Company may not be able to predict or effectively respond to.

A further spread of COVID-19, including the rise of variants, and the Company’s initiatives to help limit the spread of the illness, continue to impact the
Company’s ability to carry out its business as usual, which could materially adversely impact its business and financial condition. 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.
Increased levels of remote access create additional opportunities for cybercriminals to exploit vulnerabilities, and employees may be more susceptible to
phishing and social engineering attempts. 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. In addition, technological resources may be strained due to the number
of remote users.

Adverse changes in government and third-party payer regulations, reimbursement, or coverage policies (or in the interpretation of current regulations)

relating to COVID-19 testing could materially impact the Company's results of operations, cash flows and financial position.

The Company expects to continue to incur additional costs, which may be significant, as it continues to implement operational changes in response to this
pandemic. Further, the COVID-19 pandemic has disrupted and could continue to disrupt the Company’s supply chain, including by impacting its ability to
secure test collection supplies, equipment and testing supplies for its facilities, personal protective equipment for its employees in its testing locations, PSCs,
and drug development clinics. For similar reasons, the COVID-19 pandemic has also adversely impacted, and may continue to adversely impact, third parties
that are critical to the Company’s business, including vendors, suppliers, and business partners. These developments, and others that are difficult or
impossible to predict, could materially impact the Company’s business, financial results, cash flows, and financial position.

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. Additionally, if the pandemic continues for an extended period of time, 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 through the development of new products or selected business acquisitions.

If the Company does not 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.

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. Despite
the Company's efforts to obtain adequate clinical trial kit and testing supplies and expand its capacity to make clinical trials collection kits and perform
clinical trials testing, the Company may not be successful in meeting the increased demand, and the Company’s customers and other stakeholders may
perceive the Company’s responses to the pandemic as insufficient, 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 the Company's other responses to the COVID-19 pandemic, and may have an adverse effect on the Company’s
operations. Any such disruptions could result in negative publicity, and the Company could suffer damage to its reputation, which could adversely affect its
business, results of operations, cash flows, and financial position.

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.

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Risks Related to Regulatory and Compliance Matters

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.

U.S. and state government payers, such as Medicare and Medicaid, as well as insurers, including MCOs, have increased their efforts to control the cost,
utilization and delivery of healthcare services. From time to time, Congress has considered and implemented changes in Medicare fee schedules in
conjunction with budgetary legislation. The first phase of reductions pursuant to PAMA came into effect on January 1, 2018, and will continue annually
subject to certain phase-in limits through 2025, and without limitations for subsequent periods. Further reductions due to changes in policy regarding
coverage of tests or other requirements for payment, such as prior authorization, diagnosis code and other claims edits, may be implemented from time to
time. Reimbursement for pathology services performed by Dx is also subject to statutory and regulatory reduction. Reductions in the reimbursement rates and
changes in payment policies of other third-party payers may occur as well. Such changes in the past have resulted in reduced payments as well as added costs
and have decreased test utilization for the commercial laboratory industry by adding more complex new regulatory and administrative requirements. Further
changes in third-party payer regulations, policies, or laboratory benefit or utilization management programs may have a material adverse effect on Dx's
business. Actions by federal and state agencies regulating insurance, including healthcare exchanges, or changes in other laws, regulations, or policies may
also have a material adverse effect upon Dx's business.

The Company could face significant monetary damages and penalties and/or exclusion from government programs if it violates anti-fraud and abuse
laws.

The Company is subject to extensive government regulation at the federal, state, and local levels in the U.S. and other countries where it operates. The
Company’s failure to meet governmental requirements under these regulations, including those relating to billing practices and financial relationships with
physicians, hospitals, and health systems could lead to civil and criminal penalties, exclusion from participation in Medicare and Medicaid and possible
prohibitions or restrictions on the use of its laboratories. While the Company believes that it is in material compliance with all statutory and regulatory
requirements, there is a risk that government authorities might take a contrary position. This risk includes, but is not limited to, the potential that government
enforcement authorities may take a contrary position with respect to the Eliminating Kickbacks in Recovery Act, given the lack of associated regulations to
clarify or add exceptions. Such occurrences, regardless of their outcome, could damage the Company’s reputation and adversely affect important business
relationships.

The Company’s business could be harmed from the loss or suspension of a license or imposition of a fine or penalties under, or future changes in, or
interpretations of, the law or regulations of CLIA, Medicare, Medicaid or other national, state or local agencies in the U.S. and other countries
where the Company operates laboratories.

The commercial laboratory testing industry is subject to extensive U.S. regulation, and many of these statutes and regulations have not been interpreted by
the courts. CLIA extends federal oversight to virtually all clinical laboratories operating in the U.S. by requiring that they be certified by the federal
government or by a federally approved accreditation agency. The sanction for failure to comply with CLIA requirements may be suspension, revocation or
limitation of a laboratory’s CLIA certificate, which is necessary to conduct business, as well as significant fines and/or criminal penalties. In addition, the
Company is subject to regulation under state law. State laws may require that laboratories and/or laboratory personnel meet certain qualifications, specify
certain quality controls or require maintenance of certain records. The Company also operates laboratories outside of the U.S. and is subject to laws governing
its laboratory operations in the other countries where it operates.

Applicable statutes and regulations could be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that would adversely
affect the Company's business. Potential sanctions for violation of these statutes and regulations include significant fines and the suspension or loss of various
licenses, certificates and authorizations, which could have a material adverse effect on the Company’s business. In addition, compliance with future
legislation could impose additional requirements on the Company, which may be costly.

Failure 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 does 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

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(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.

HIPAA restricts the Company’s ability to use or disclose PHI, without patient authorization, for purposes other than payment, treatment or healthcare
operations (as defined by HIPAA), except for disclosures for various public policy purposes and other permitted purposes outlined in the privacy regulations.
HIPAA and HITECH provide for significant fines and other penalties for wrongful use or disclosure of PHI in violation of the privacy and security
regulations, including potential civil and criminal fines and penalties. The regulations establish a complex regulatory framework on a variety of subjects,
including:

•

•
•
•
•

the circumstances under which the use and disclosure of PHI are permitted or required without a specific authorization by the patient, including, but not
limited to, treatment purposes, activities to obtain payments for the Company’s services, and its healthcare operations activities;
a patient’s rights to access, amend and receive an accounting of certain disclosures of PHI;
the content of notices of privacy practices for PHI;
administrative, technical and physical safeguards required of entities that use or receive PHI; and
the protection of computing systems maintaining electronic PHI.

The Company has implemented policies and procedures designed to comply with the HIPAA privacy and security requirements as applicable. The privacy
and security regulations establish a “floor” and do not supersede state laws that are more stringent. Therefore, the Company is required to comply with both
additional federal privacy and security regulations and varying state privacy and security laws. In addition, federal and state laws that protect the privacy and
security of patient information may be subject to enforcement and interpretations by various governmental authorities and courts, resulting in complex
compliance issues. For example, the Company could incur damages under state laws, including pursuant to an action brought by a private party for the
wrongful use or disclosure of health information or other personal information.

The Company may also be required to comply with the data privacy and security laws of other countries in which it operates or with which it transfers
and receives data. For example, the EU's General Data Protection Regulation (GDPR), which took effect May 25, 2018, created a range of compliance
obligations for subject companies and imposes penalties for noncompliance of up to the greater of €20 million or 4% of worldwide revenue. The Company
has established processes and frameworks to manage compliance with the GDPR. Potential fines and penalties in the event of a violation of the GDPR could
have a material adverse effect on the Company’s business and operations. In addition, similar data protection regulations addressing access, use, disclosure
and transfer of personal data have been enacted or updated in regions where the Company does business, including in Asia, Latin America, and Europe. The
Company expects to make changes to its business practices and to incur additional costs associated with compliance with these evolving and complex
regulations.

The Company's international operations could subject it to additional risks and expenses that could adversely impact the business or results of
operations.

The Company's international operations expose it to risks from potential failure to comply with foreign laws and regulations that differ from those under
which the Company operates in the U.S. In addition, the Company may be adversely affected by other risks of expanded operations in foreign countries,
including, but not limited to, changes in reimbursement by foreign governments for services provided by the Company; compliance with export controls and
trade regulations; changes in tax policies or other foreign laws; compliance with foreign labor and employee relations laws and regulations; restrictions on
currency repatriation; judicial systems that less strictly enforce contractual rights; countries that do not have clear or well-established laws and regulations
concerning issues relating to commercial laboratory testing or drug development services; countries that provide less protection for intellectual property
rights; and procedures and actions affecting approval, production, pricing, reimbursement and marketing of products and services. Further, international
operations could subject the Company to additional expenses that the Company may not fully anticipate, including those related to enhanced time and
resources necessary to comply with foreign laws and regulations, difficulty in collecting accounts receivable and longer collection periods, and difficulties
and costs of staffing and managing foreign operations. In some countries, the Company's success will depend in part on its ability to form relationships with
local partners. The Company's inability to identify appropriate partners or reach mutually satisfactory arrangements could adversely affect the business and
operations.

Expanded international operations may increase the Company’s exposure to liabilities under the anti-corruption laws.

Anti-corruption laws in the countries where the Company conducts business, including the U.S. Foreign Corrupt Practices Act (FCPA), U.K. Bribery Act,
and similar laws in other jurisdictions, prohibit companies and their intermediaries from engaging in bribery including improperly offering, promising, paying
or authorizing the giving of anything of value to individuals or entities for the purpose of corruptly obtaining or retaining business. The Company operates in
some parts of the world where corruption may be common and where anti-corruption laws may conflict to some degree with local customs and practices. The
Company maintains an anti-corruption program including policies, procedures, training and safeguards in the

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engagement and management of third parties acting on the Company’s behalf. Despite these safeguards, the Company cannot guarantee protection from
corrupt acts committed by employees or third parties associated with the Company. Violations or allegations of violations of anti-corruption laws could have a
significant adverse effect on the business or results of operations.

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 sanctions and/or remedies against DD and have a
material adverse effect upon the Company.

The operation of DD's preclinical laboratory facilities and clinical trial operations must conform to good laboratory practice (GLP) and good clinical
practice (GCP), as applicable, as well as all other applicable standards and regulations, as further described in Item 1 of Part I of this Annual Report. The
business operations of DD’s clinical and preclinical laboratories also require the import, export and use of medical devices, in vitro diagnostic devices,
reagents, and human and animal biological products. Such activities are subject to numerous applicable local and international regulations with which DD
must comply. If DD does not comply, DD could potentially be subject to civil, criminal or administrative sanctions and/or remedies, including suspension of
its ability to conduct preclinical and clinical studies, and to import or export to or from certain countries, which could have a material adverse effect upon the
Company.

Additionally, certain DD services and activities must conform to current good manufacturing practice (cGMP), as further described in Item 1 of Part I of
this Annual Report. Failure to maintain compliance with GLP, GCP, or cGMP regulations and other applicable requirements of various regulatory agencies
could result in warning or untitled letters, fines, unanticipated compliance expenditures, suspension of manufacturing, and civil, criminal or administrative
sanctions and/or remedies against DD, including suspension of its laboratory operations, which could have a material adverse effect upon the Company.

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 drugs. Such activities are required for the development of new
medicines and medical devices under regulatory regimes in the U.S., Europe, Japan, and other countries. Acts of vandalism and other acts by animal rights
activists who object to the use of animals in drug development could have an adverse effect on the Company.

Animal populations may suffer diseases that can damage DD's inventory, harm its reputation, or result in other liability.

It is important that research products be free of diseases, including infectious diseases. The presence of diseases can distort or compromise the quality of
research results, cause loss of animals in DD’s inventory, result in harm to humans or outside animal populations if the disease is not contained to animals in
inventory, or result in other losses. Such results could harm DD’s reputation or have an adverse effect on DD's financial condition, results of operations, and
cash flows.

Failure to conduct animal research in compliance with animal welfare laws and regulations could result in sanctions and/or remedies against DD
and have a material adverse effect upon the Company.

The conduct of animal research at DD’s facilities must be in compliance with applicable laws and regulations in the jurisdictions in which those activities
are conducted. These laws and regulations include the U.S. Animal Welfare Act (AWA), which governs the care and use of warm-blooded animals for
research in the U.S. other than laboratory rats, mice and chickens, and is enforced through periodic inspections by the U.S. Department of Agriculture
(USDA). The AWA establishes facility standards regarding several aspects of animal welfare, including housing, ventilation, lighting, feeding and watering,
handling, veterinary care, and recordkeeping. Similar laws and regulations apply in other jurisdictions in which DD conducts animal research, including the
UK, EU, and China. DD complies with licensing and registration requirement standards set by these laws and regulations in the jurisdictions in which it
conducts animal research. If an enforcement agency determines that DD’s equipment, facilities, laboratories or processes do not comply with applicable
standards, it may issue an inspection report documenting the deficiencies and setting deadlines for any required corrective actions. For noncompliance, the
agency may take action against DD that may include fines, suspension and/or revocation of animal research licenses, or confiscation of research animals.

U.S. 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 has regulatory responsibility for instruments, test kits, reagents and other devices used by clinical laboratories. 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

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manufacturing processes and product performance of diagnostic products. Dx’s point-of-care testing devices are subject to regulation by the FDA.

Since the 1990s, the FDA has asserted that it has authority to regulate LDTs as medical devices, but has exercised enforcement discretion to refrain from
systematic regulation of LDTs. 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 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. As such, LDTs developed by high
complexity clinical laboratories are currently generally offered as services to health care providers under the CLIA regulatory framework administered by
CMS, without the requirement for FDA clearance or approval. There are other regulatory and legislative proposals that would increase general FDA oversight
of clinical laboratories and LDTs. The outcome and ultimate impact of such proposals on the business is difficult to predict at this time. On February 20,
2020, the FDA issued a statement with a table of pharmacogenetic associations setting forth certain gene-drug interactions that the agency has determined are
supported by the scientific literature to help ensure that claims being made for pharmacogenetic tests are grounded in sound science, thereby reducing the risk
of enforcement actions with respect to LDTs offering claims consistent with the table. The FDA noted that while it is committed to work with Congress on
new comprehensive diagnostic oversight reform legislation, it could still take enforcement actions under the current medical device framework regarding
diagnostic claims the agency determines not to be sufficiently supported. 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
statement, there may be an increased risk of FDA enforcement actions for laboratory tests offered by companies without FDA clearance or approval.

Current FDA regulation of the Company’s diagnostic products and the potential for future increased regulation of the Company’s LDTs in the future could
result in increased costs and administrative and legal actions for noncompliance, including warning letters, fines, penalties, product suspensions, product
recalls, injunctions, and other civil and criminal sanctions, which could have a material adverse effect upon the Company.

Regulation of diagnostics products in jurisdictions outside the U.S. in which the Company operates may impact laboratory testing offered by the Company
in both Dx and DD. For example, the European Union In Vitro Diagnostics Regulation (Regulation (EU) 2017/746 (EU IVDR)), scheduled to become
applicable May 26, 2022, establishes a new legislative framework for in vitro diagnostic devices including 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 fines and penalties and loss of licensure,
and have a material adverse effect upon the Company’s business.

As previously discussed in Item 1 of Part I of this Annual Report, the Company is subject to licensing and regulation under laws and regulations relating
to the protection of the environment and human health and safety, including laws and regulations relating to the handling, transportation and disposal of
medical specimens, infectious and hazardous waste and radioactive materials, as well as regulations relating to the safety and health of laboratory employees.
Failure to comply with these laws and regulations could subject the Company to denial of the right to conduct business, fines, criminal penalties and/or other
enforcement actions that would have a material adverse effect on its business. In addition, compliance with future legislation could impose additional
requirements on the Company that may be costly.

Risks Related to the Company's Business

The Company’s operations are dependent upon ongoing demand for diagnostic testing and drug development services by patients, physicians, hospitals,
MCOs, pharmaceutical, biotechnology and medical device companies and others. 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. In addition, uncertainty in the credit
markets could reduce the availability of credit and impact the Company’s ability to meet its financing needs in the future. For additional risks, see “Risk
Factors - Risks Related to the COVID-19 Pandemic” in Part I - Item 1A.

Healthcare reform and changes to related products (e.g., health insurance exchanges), changes in government payment and reimbursement systems,
or changes in payer mix, including an increase in capitated reimbursement mechanisms and evolving delivery models, could have a material adverse
effect on the Company's revenues, profitability and cash flow.

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Dx's testing services are billed to MCOs, Medicare, Medicaid, physicians and physician groups, hospitals, patients and employer groups. Most testing
services are billed to a party other than the physician or other authorized person who ordered the test. Increases in the percentage of services billed to
government and MCOs could have an adverse effect on the Company’s revenues.

Capitation shifts the risk of increased test utilization (and the underlying mix of testing services) to the commercial laboratory provider. The Company
makes significant efforts to obtain adequate compensation for its services in its capitated arrangements. For the year ended December 31, 2021, such capitated
contracts accounted for approximately $332.3 million, or 3.2%, of Dx's revenues.

The Company's ability to attract and retain MCOs is critical given the impact of healthcare reform, related products and expanded coverage (e.g. health
insurance exchanges and Medicaid expansion) and evolving value-based care and risk-based reimbursement delivery models (e.g., accountable care
organizations (ACOs) and Independent Physician Associations (IPAs)).

A portion of the managed care fee-for-service revenues is collectible from patients in the form of deductibles, coinsurance and copayments. As patient

cost-sharing has been increasing, the Company's collections may be adversely impacted.

In addition, Medicare and Medicaid and private insurers have increased their efforts to control the cost, utilization and delivery of healthcare services,
including commercial laboratory services. Measures to regulate healthcare delivery in general, and clinical laboratories in particular, have resulted in reduced
prices, added costs and decreased test utilization for the commercial laboratory industry by increasing complexity and adding new regulatory and
administrative requirements. Pursuant to legislation passed in late 2003, the percentage of Medicare beneficiaries enrolled in Managed Medicare plans has
increased. The percentage of Medicaid beneficiaries enrolled in Managed Medicaid plans has also increased, and is expected to continue to increase; 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. Further healthcare reform could adversely affect laboratory
reimbursement from Medicare, Medicaid or commercial carriers.

The Company has also experienced delays in the pricing and implementation of coding and billing changes among various payers, including Medicaid,
Medicare and commercial carriers. While some delays were expected, payer policy changes in coverage have had a negative impact on revenue, revenue per
requisition, and margins and cash flows. In 2020, limited coding and billing changes were implemented beyond those specifically related to COVID-19
Testing. While limited changes are expected to be implemented in 2021, the Company typically expects some delays in pricing and reimbursement as new
codes are introduced.

In addition, some MCOs are implementing, directly or through third parties, various types of laboratory benefit management programs that may include
lab 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. Some of these programs address commercial laboratory testing broadly, while others are focused on certain
types of testing such as molecular, genetic and toxicology testing.

The Company expects the efforts to impose reduced reimbursement, more stringent payment policies, and utilization and cost controls by government and
other payers to continue. If Dx cannot offset additional reductions in the payments it receives for its services by reducing costs, increasing test volume, and/or
introducing new services and procedures, it could have a material adverse effect on the Company’s revenues, profitability and cash flows. In 2014, Congress
passed PAMA, requiring Medicare to change the way payment rates are calculated for tests paid under the CLFS, and to base the payment on the weighted
median of rates paid by private payers. On June 23, 2016, CMS issued a final rule to implement PAMA that required applicable laboratories, including Dx, to
begin reporting their test-specific private payer payment amounts to CMS during the first quarter of 2017. CMS exercised enforcement discretion to permit
reporting for an additional 60 days, through May 30, 2017. 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 limits,

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which were revised by Congress in 2019 and 2020. For 2018-2020, a test price could not be reduced by more than 10% per year. As a result of provisions
included within the CARES Act, PAMA rate reductions for 2021 were suspended, and therefore the Company did not experience any incremental
reimbursement rate impact due to PAMA in 2021. 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 will not experience incremental reimbursement rate impact due to PAMA in 2022.

For 2023-2025, 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 2023. CFLS rates for 2026 and subsequent periods will not be subject to phase-in limits. The
phase-in of rates for CDLTs established in 2018 will continue in 2023. New CLFS rates will be established in 2024 based on data from 2019 to be reported in
2023. New CLFS rates will be established in 2027 based on data from 2025 to be reported in 2026. CLFS rates for Advanced Diagnostic Laboratory Tests
(ADLTs) will be updated annually.

CMS published its initial proposed CLFS rates under PAMA for 2018-2020 on September 22, 2017. Following a public comment period, CMS made
adjustments and published final CLFS rates for 2018-2020 on November 17, 2017, with additional adjustments published on December 1, 2017. For 2020, the
Company realized a net reduction in reimbursement of approximately $72.01 million from all payers affected by the CLFS (approximately $107.0 million in
2019). 2021 and 2022 PAMA rates were frozen as described above. Unless implementation of PAMA is further delayed or changed, an additional reduction of
approximately $100.0 million is expected for 2023, from all payers affected by the CLFS.

Healthcare reform legislation also contains numerous regulations that will require the Company, as an employer, to implement significant process and
record-keeping changes to be in compliance. These changes increase the cost of providing healthcare coverage to employees and their families. Given the
limited release of regulations to guide compliance, as well as potential changes to the ACA, the exact impact to employers, including the Company, is
uncertain.

Changes in government regulation or in practices relating to the pharmaceutical, biotechnology, or medical device industries could decrease the need
for certain services that DD provides.

DD assists pharmaceutical, biotechnology and medical device companies in navigating the regulatory approval process. Changes in regulations such as a
relaxation in regulatory requirements or the introduction of simplified approval procedures, or an increase in regulatory requirements that DD has difficulty
satisfying or that make its services less competitive, could eliminate or substantially reduce the demand for its services. Also, if government efforts to contain
drug and medical product and device costs impact profits from such items, or if health insurers were to change their practices with respect to reimbursement
for those items, some of DD’s customers may spend less, or reduce their growth in spending on R&D.

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.

In addition, implementation of healthcare reform legislation that adds costs could limit the profits that can be made from the development of new drugs
and medical products and devices. This could adversely affect R&D expenditures by such companies, which could in turn decrease the business opportunities
available to DD both in the U.S. and other countries. New laws or regulations may create a risk of liability, increase DD costs or limit service offerings
through DD.

Increased competition, including price competition, could have a material adverse effect on the Company’s revenues and profitability.

As further described in Item 1 of Part I of this Annual Report, both Dx and DD operate in highly competitive industries. The commercial laboratory
business is intensely competitive both in terms of price and service. Pricing of laboratory testing services is often one of the most significant factors used by
physicians, third-party payers and consumers in selecting a laboratory. As a result of significant consolidation in the commercial laboratory industry, larger
commercial laboratory providers are able to increase cost efficiencies afforded by large-scale automated testing. This consolidation results in greater price
competition. Dx may be unable to increase cost efficiencies sufficiently, if at all, and as a result, its net earnings and cash flows could be negatively impacted
by such price competition. The Company may also face increased competition from companies that do not comply with existing laws or regulations or
otherwise disregard compliance standards in the industry. Additionally, the Company may also face changes in fee schedules, competitive bidding for
laboratory services, or other actions or pressures reducing payment schedules as a result of increased or additional competition.

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Competitors in the CRO industry range from hundreds of smaller CROs to a limited number of large CROs with global capabilities. DD’s main
competition consists of these small and large CROs, as well as in-house departments of pharmaceutical, biotechnology and medical device companies and, to
a lesser extent, select universities and teaching hospitals. DD’s services have from time to time experienced periods of increased price competition that had an
adverse effect on a segment's profitability and consolidated revenues and net income. There is competition among CROs for both customers and potential
acquisition candidates. Additionally, few barriers to entering the CRO industry further increases possible new competition.

These competitive pressures may affect the attractiveness or profitability of Dx’s and DD’s services, and could adversely affect the financial results of the

Company.

To maintain and grow its business, the Company needs to obtain and retain new customers and business partners. In addition, a reduction in tests ordered
or specimens submitted by existing customers, a decrease in demand for the Company's services from existing customers, or the loss of existing contracts,
without offsetting growth in its customer base, could impact the Company's ability to successfully grow its business and could have a material adverse effect
on the Company’s revenues and profitability. The Company competes primarily on the basis of the quality of services, reporting and information systems,
reputation in the medical community and the drug development industry, the pricing of services and ability to employ qualified personnel. The Company's
failure to successfully compete on any of these factors could result in the loss of existing customers, an inability to gain new customers and a reduction in the
Company's business.

Discontinuation or recalls of existing testing products; failure to develop or acquire licenses for new or improved testing technologies; or the
Company’s customers using new technologies to perform their own tests could adversely affect the Company’s business.

From time to time, manufacturers discontinue or recall reagents, test kits or instruments used by the Company to perform laboratory testing. Such

discontinuations or recalls could adversely affect the Company’s costs, testing volume and revenue.

The commercial laboratory industry is subject to changing technology and new product introductions. The Company’s success in maintaining a leadership
position in genomic and other advanced testing technologies will depend, in part, on its ability to develop, acquire or license new and improved technologies
on favorable terms and to obtain appropriate coverage and reimbursement for these technologies. The Company may not be able to negotiate acceptable
licensing arrangements, and it cannot be certain that such arrangements will yield commercially successful diagnostic tests. If the Company is unable to
license these testing methods at competitive rates, its research and development (R&D) costs may increase as a result. In addition, if the Company is unable to
license new or improved technologies to expand its esoteric testing operations, its testing methods may become outdated when compared with the Company’s
competition, and testing volume and revenue may be materially and adversely affected.

In addition, advances in technology may lead to the development of more cost-effective technologies such as point-of-care testing equipment that can be
operated by physicians or other healthcare providers (including physician assistants, nurse practitioners and certified nurse midwives, generally referred to
herein as physicians) in their offices or by patients themselves without requiring the services of freestanding clinical laboratories. Development of such
technology and its use by the Company’s customers could reduce the demand for its laboratory testing services and the utilization of certain tests offered by
the Company and negatively impact its revenues.

Currently, most commercial laboratory testing is categorized as high or moderate complexity, and thereby is subject to extensive and costly regulation
under CLIA. The cost of compliance with CLIA makes it impractical for most physicians to operate clinical laboratories in their offices, and other laws limit
the ability of physicians to have ownership in a laboratory and to refer tests to such a laboratory. Manufacturers of laboratory equipment and test kits could
seek to increase their sales by marketing point-of-care of laboratory equipment to physicians and by selling test kits approved for home or physician office
use to both physicians and patients. Diagnostic tests approved for home use are automatically deemed to be “waived” tests under CLIA and may be performed
in physician office laboratories as well as by patients in their homes with minimal regulatory oversight. Other tests meeting certain FDA criteria also may be
classified as “waived” for CLIA purposes. The FDA has regulatory responsibility over instruments, test kits, reagents and other devices used by clinical
laboratories, and it has taken responsibility from the U.S. Centers for Disease Control and Prevention for classifying the complexity of tests for CLIA
purposes. Increased approval of “waived” test kits could lead to increased testing by physicians in their offices or by patients at home, which could affect the
Company’s market for laboratory testing services and negatively impact its revenues.

Operations may be disrupted and adversely impacted by the effects of adverse weather, other natural disasters, geopolitical events, public health
crises, and other events outside of the Company's control.

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Natural disasters, such as adverse weather, fires, earthquakes, power shortages and outages, geopolitical events, such as terrorism, war, political instability,
or other conflict, criminal activities, public health crises, such as coronavirus (COVID-19) and disease epidemics and pandemics, and other disruptions or
events outside of the Company’s control could negatively affect the Company’s operations. Any of these events may result in a temporary decline of volumes
in both segments. In addition, such events may temporarily interrupt the Company’s ability to transport specimens, the Company's ability to efficiently
commence studies, the Company’s ability to utilize information technology systems, the Company’s ability to utilize certain laboratories, and/or the
Company’s ability to receive material from its suppliers. Such events can also affect customer operations and thereby impact testing volume. Long-term
disruptions in the infrastructure and operations caused by such events (particularly involving locations in which the Company has operations), could harm the
Company's operating results. For additional risks, see “Risk Factors - Risks Related to the COVID-19 Pandemic” in Part I - Item 1A.

Changes or disruption in services or supplies provided by third parties, including transportation, could adversely affect the Company’s business.

The Company depends on third parties to provide services critical to the Company’s business. Although the Company has a significant proprietary
network of ground and air transport capabilities, certain of the Company's businesses are heavily reliant on third-party ground and air travel for transport of
clinical trial and diagnostic testing supplies and specimens, research products, and people. A significant disruption to these travel systems, or the Company's
access to them, could have a material adverse effect on the Company's business. The Company is also reliant on an extensive network of third-party suppliers
and vendors of certain services and products, including for certain animal populations. Disruptions to the continued supply, or increases in costs, of these
services, products, or animal populations may arise from export/import restrictions or embargoes, political or economic instability, pressure from animal
rights activists, adverse weather, natural disasters, public health crises, transportation disruptions, cyber attacks, or other causes, as well as from termination
of relationships with suppliers or vendors for their failure to follow the Company’s performance standards and requirements. Disruption of supply could have
a material adverse effect on the Company’s business.

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.

Part of the Company's strategy involves deploying capital in investments that enhance the Company's business, which includes pursuing strategic
acquisitions to strengthen the Company's scientific capabilities and enhance therapeutic expertise, enhance esoteric testing and global drug development
capabilities, and increase presence in key geographic areas. Since 2016, the Company has invested net cash of approximately $4.2 billion in strategic business
acquisitions. However, the Company cannot assure that it will be able to identify acquisition targets that are attractive to the Company or that are of a large
enough size to have a meaningful impact on the Company's operating results. Furthermore, the successful closing and integration of a strategic acquisition
entails numerous risks, including, among others:

failure to maintain the quality of services that such companies have historically provided;

failure to obtain regulatory clearance, including due to antitrust concerns;
loss of key customers or employees;

•
•
• difficulty in consolidating redundant facilities and infrastructure and in standardizing information and other systems;
• unidentified regulatory problems;
•
• unanticipated costs and other liabilities;
• potential liabilities related to litigation including the acquired companies;
• potential periodic impairment of goodwill and intangible assets acquired;
coordination of geographically separated facilities and workforces; and
•
the potential disruption of the ongoing business and diversion of management's resources.
•

The Company cannot assure that current or future acquisitions, if any, or any related integration efforts will be successful, or that the Company's business
will not be adversely affected by any future acquisitions, including with respect to revenues and profitability. Even if the Company is able to successfully
integrate the operations of businesses that it may acquire in the future, the Company may not be able to realize the benefits that it expects from such
acquisitions.

Continued and increased consolidation of MCOs, pharmaceutical, biotechnology and medical device companies, health systems, physicians and
other customers could adversely affect the Company's business.

Many healthcare companies and providers, including MCOs, pharmaceutical, biotechnology and medical device companies, health systems and physician
practices are consolidating through mergers, acquisitions, joint ventures and other types of transactions and collaborations. In addition to these more
traditional horizontal mergers that involve entities that previously competed against each other, the healthcare industry is experiencing an increase in vertical
mergers, which involve entities that previously did not offer competing goods or services. As the healthcare industry consolidates, competition to

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provide goods and services may become more intense, and vertical mergers may give those combined companies greater control over more aspects of
healthcare, including increased bargaining power. This competition and increased customer bargaining power may adversely affect the price and volume of
the Company’s services.

In addition, as the broader healthcare industry trend of consolidation continues, including the acquisition of physician practices by health systems,
relationships with hospital-based health systems and integrated delivery networks are becoming more important. Dx has a well-established base of
relationships with those systems and networks, including collaborative agreements. Dx's inability to retain its existing relationships with those physicians as
they become part of healthcare systems and networks and/or to create new relationships could impact its ability to successfully grow its business.

Unproductive labor environments, union strikes, work stoppages, Works Council negotiations, or failure to comply with labor or employment laws
could adversely affect the Company's operations and have a material adverse effect upon the Company's business.

The Company is a party to a limited number of collective bargaining agreements with various labor unions and is subject to employment and labor laws
and unionization activity in the U.S. Similar employment and labor obligations exist across other countries in which it conducts business, including
appropriate engagement with Works Councils in Europe. Disputes with regard to the terms of labor agreements or obligations for consultation, potential
inability to negotiate acceptable contracts with these unions, unionization activity, or a failure to comply with labor or employment laws could result in,
among other things, labor unrest, strikes, work stoppages, slowdowns by the affected workers, fines and penalties. If any of these events were to occur, or
other employees were to become unionized, the Company could experience a significant disruption of its operations or higher ongoing labor costs, either of
which could have a material adverse effect upon the Company's business. Additionally, future labor agreements, or renegotiation of labor agreements or
provisions of labor agreements, or changes in labor or employment laws, could compromise its service reliability and significantly increase its costs, which
could have a material adverse effect upon the Company's business. Also, the Company may incur substantial additional costs and become subject to litigation
and enforcement actions if the Company fails to comply with legal requirements affecting its workforce and labor practices, including laws and regulations
related to wage and hour practices, Office of Federal Contract Compliance Programs (OFCCP) compliance, and unlawful workplace harassment and
discrimination.

An inability to attract and retain experienced and qualified personnel, including key management personnel, could adversely affect the Company’s
business.

The loss of key management personnel or the inability to attract and retain experienced and qualified employees at the Company’s clinical laboratories,
drug development, and diagnostic facilities could adversely affect the business. The success of the Company is dependent in part on the efforts of key
members of its management team. Success in maintaining the Company’s leadership position in genomic and other advanced testing and diagnostic
technologies will depend in part on the Company’s ability to attract and retain skilled research professionals. In addition, the success of the Company’s early
discovery, clinical and commercial laboratories also depend on employing and retaining qualified and experienced professionals, including specialists, who
perform laboratory research activities and testing services. The same is true for patient-facing staff with specialized training required to perform activities
related to specimen collection or clinical research activities. In the future, if competition for the services of these professionals increases, the Company may
not be able to continue to attract and retain individuals in its markets. Changes in key management, or the ability to attract and retain qualified personnel, as a
result of increased competition for talent, wage growth, or other market factors, could lead to strategic and operational challenges and uncertainties,
distractions of management from other key initiatives, and inefficiencies and increased costs, any of which could adversely affect the Company’s business,
financial condition, results of operations, and cash flows.

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

The Company could be adversely impacted due to the consequences of changes in the economy, governments or regulations across the globe. On January

31, 2020 the U.K. withdrew from its membership of the EU (often referred to as Brexit). The EU and the U.K. reached an agreement in December 2020.

This type of development or other government or regulatory change could depress economic activity, which could adversely impact the Company’s
business, financial condition and results of operations. This could include long-term volatility in the currency markets and long-term detrimental effects on
the value of affected currencies.

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

Many of the Company’s facilities could be difficult to replace in a short period of time. Any event that causes a disruption of the operation of these
facilities might impact the Company's ability to provide services to customers and, therefore, could have a material adverse effect on the Company's financial
condition, results of operations, and cash flows.

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Risks Related to Financial Matters

The Company bears financial risk for contracts that, including for reasons beyond the Company's control, may be underpriced, subject to cost
overruns, delayed, or terminated or reduced in scope.

The Company has many contracts that are structured as fixed-price for fixed-contracted services or fee-for-service with a cap. The Company bears the
financial risk if these contracts are underpriced or if contract costs exceed estimates. Such underpricing or significant cost overruns could have an adverse
effect on the Company's business, results of operations, financial condition and cash flows.

Many of DD’s contracts, in particular, provide for services on a fixed-price or fee-for-service with a cap basis and they may be terminated or reduced in

scope either immediately or upon notice. Cancellations may occur for a variety of reasons, including:

•
failure of products to satisfy safety requirements;
• unexpected or undesired results of the products;
insufficient clinical trial subject enrollment;
•
insufficient investigator recruitment;
•
•
a customer's decision to terminate the development of a product or to end a particular study; and
• DD’s failure to perform its duties properly under the contract.

Although its contracts often entitle it to receive the costs of winding down the terminated projects, as well as all fees earned up to the time of termination,

the loss, reduction in scope or delay of a large contract or the loss, delay or conclusion of multiple contracts could materially adversely affect DD.

A significant increase in Dx's or DD's days sales outstanding could have an adverse effect on the Company’s business, including its cash flow, by
increasing its bad debt or decreasing its cash flow.

Billing for laboratory services is a complex process. Laboratories bill many different payers, including doctors, patients, hundreds of insurance companies,
Medicare, Medicaid and employer groups, all of which have different billing requirements. In addition to billing complexities, Dx has experienced an increase
in patient responsibility as a result of managed care fee-for-service plans that continue to increase patient deductibles, coinsurance and copayments, or
implement restrictive coverage or administrative policies that can further increase patient costs. Dx expects this trend to continue. A material increase in Dx’s
days sales outstanding level could have an adverse effect on the Company's business, including potentially increasing its bad debt rate and decreasing its cash
flows. Although DD does not face the same level of complexity in its billing processes, it could also experience delays in billing or collection, and a material
increase in DD’s days sales outstanding could have an adverse effect on the Company’s business, including potentially decreasing its cash flows.

DD’s revenues depend on the pharmaceutical, biotechnology and medical device industries.

DD’s revenues depend greatly on the expenditures made by the pharmaceutical, biotechnology and medical device industries in R&D. In some instances,
these companies are reliant on their ability to raise capital in order to fund their R&D projects. These companies are also reliant on reimbursement for their
products from government programs and commercial payers. Accordingly, economic factors and industry trends affecting DD’s customers in these industries
may also affect DD. If these companies were to reduce the number of R&D projects they conduct or outsource, whether through the inability to raise capital,
reductions in reimbursement from governmental programs or commercial payers, industry trends, economic conditions or otherwise, DD could be materially
adversely affected.

Foreign currency exchange fluctuations could have an adverse effect on the Company’s business.

The Company has business and operations outside the U.S., and DD derives a significant portion of its revenues from international operations. Since the
Company's consolidated financial statements are denominated in U.S. dollars, fluctuations in exchange rates from period to period will have an impact on
reported results. In addition, DD may incur costs in one currency related to its services or products for which it is paid in a different currency. As a result,
factors associated with international operations, including changes in foreign currency exchange rates, could significantly affect DD's results of operations,
financial condition and cash flows.

The Company’s uses of financial instruments to limit its exposure to interest rate and currency fluctuations could expose it to risks and financial
losses that may adversely affect the Company’s financial condition, liquidity and results of operations.

To reduce the Company’s exposure to interest rate fluctuations and currency exchange fluctuations, it has entered into, and in the future may enter into for
these or other purposes, financial swaps, or hedging arrangements, with various financial counterparties. In addition to any risks related to the counterparties,
there can be no assurances that the Company’s hedging

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activity will be effective in insulating it from the risks associated with the underlying transactions, that the Company would not have been better off without
entering into these hedges, or that the Company will not have to pay additional amounts upon settlement.

The Company’s level of indebtedness could adversely affect the Company’s liquidity, results of operations and business.

At December 31, 2021, indebtedness on the Company's outstanding Senior Notes totaled approximately $5,450.0 million in aggregate principal. The
Company is also a party to credit agreements relating to a $1.0 billion revolving credit facility. Under the revolving credit facility, the Company is subject to
negative covenants limiting subsidiary indebtedness and certain other covenants typical for investment-grade-rated borrowers, and the Company is required to
maintain a leverage ratio within certain limits.

The Company’s level of indebtedness could adversely affect its business. In particular, it could increase the Company’s vulnerability to sustained, adverse
macroeconomic weakness, limit its ability to obtain further financing, and limit its ability to pursue certain operational and strategic opportunities, including
large acquisitions.

The Company may also enter into additional transactions or credit facilities, including other long-term debt, which may increase its indebtedness and result
in additional restrictions upon the business. In addition, major debt rating agencies regularly evaluate the Company's debt based on a number of factors. There
can be no assurance that the Company will be able to maintain its existing debt ratings, and failure to do so could adversely affect the Company's cost of
funds, liquidity and access to capital markets.

The Company's quarterly operating results may vary.

The Company's operating results, may vary significantly from quarter to quarter and are influenced by factors over which the Company has little control,

such as:

•
•
•
•
•
•
•

changes in the general global economy;
exchange rate fluctuations;
the commencement, completion, delay or cancellation of large projects or contracts or groups of projects;
the progress of ongoing projects;
weather;
the timing of and charges associated with completed acquisitions or other events; and
changes in the utilization mix of the Company's services.

The Company believes that operating results for any particular quarter are not necessarily a meaningful indication of future results. While fluctuations in
the Company's quarterly operating results could negatively or positively affect the market price of the Company's common stock, these fluctuations may not
be related to the Company's future overall operating performance.

Risks Related to Technology and Cybersecurity

Failure to maintain the security of customer-related information or compliance with security requirements could damage the Company’s
reputation with customers, cause it to incur substantial additional costs and become subject to litigation and enforcement actions.

The Company receives and stores certain personal and financial information about its customers. In addition, the Company depends upon the secure
transmission of confidential information over public networks, including information permitting cashless payments. The Company also works with third-
party service providers and vendors that provide technology systems and services that are used in connection with the receipt, storage, and transmission of
customer personal and financial information. A compromise in the Company’s security systems, or those of the Company's third-party service providers and
vendors, that results in customer personal information being obtained by unauthorized persons, or the Company’s or a third party's failure to comply with
security requirements for financial transactions, including security standards for payment cards (e.g., the Payment Card Industry Data Security Standard),
could adversely affect the Company’s reputation with its customers and others, as well as the Company’s results of operations, financial condition and
liquidity. It could also result in litigation against the Company and the imposition of fines and penalties. For example, in connection with the AMCA Incident
the Company has incurred, and expects to continue to incur, costs, and the Company is involved in pending and threatened litigation, as well as various
government and regulatory inquiries and processes. For additional information about the AMCA Incident, see Note 14 Commitments and Contingencies to
the Consolidated Financial Statements.

Failure in the Company’s information technology systems or delays or failures in the development and implementation of updates or enhancements
to those systems could significantly increase testing turnaround time or delay billing processes and otherwise disrupt the Company’s operations or
customer relationships.

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The Company’s operations and customer relationships depend, in part, on the continued performance of its information technology systems. Despite
network security measures and other precautions the Company has taken, its information technology systems are potentially vulnerable to physical or
electronic break-ins, computer viruses and similar disruptions. In addition, the Company may experience system failures or interruptions as it integrates the
information technology systems of newly acquired businesses. Sustained system failures or interruption of the Company’s systems in one or more of its
operations could disrupt the Company’s ability to process laboratory requisitions, perform testing, provide test results or drug development data in a timely
manner and/or bill the appropriate party. Failure of the Company’s information technology systems could adversely affect the Company’s business,
profitability and financial condition.

Hardware and software failures, delays in the operation of computer and communications systems, the failure to implement new systems or system
enhancements to existing systems, and cybersecurity breaches may harm the Company.

The Company's success depends on the efficient and uninterrupted operation of its computer and communications systems. A failure of the network or
data-gathering procedures could impede the processing of data, delivery of databases and services, customer orders and day-to-day management of the
business and could result in the corruption or loss of data. While certain operations have appropriate disaster recovery plans in place, there currently are not
redundant facilities everywhere in the world to provide information technology capacity in the event of a system failure. Despite any precautions the
Company may take, damage from fire, floods, hurricanes, power loss, telecommunications failures, computer viruses, break-ins, cybersecurity breaches and
similar events at the Company's various computer facilities could result in interruptions in the flow of data to the servers and from the servers to customers. In
addition, any failure by the computer environment to provide required data communications capacity could result in interruptions in service. In the event of a
delay in the delivery of data, the Company could be required to transfer data collection operations to an alternative provider of server-hosting services. Such a
transfer could result in delays in the ability to deliver products and services to customers. Additionally, significant delays in the planned delivery of system
enhancements, or improvements and inadequate performance of the systems once they are completed could damage the Company's reputation and harm the
business.

Security breaches and unauthorized access to the Company's or its customers’ data could harm the Company’s reputation and adversely affect its
business.

The Company has experienced and expects to continue to experience attempts by computer programmers and hackers to attack and penetrate the
Company’s layered security controls, like the 2018 ransomware attack. The Company has also experienced and expects to continue to experience similar
attempts to attack and penetrate the systems of third-party suppliers and vendors to whom the Company has provided data, like the 2019 AMCA data breach.
These attempts, if successful, could result in the misappropriation or compromise of personal information or proprietary or confidential information stored
within the Company's systems or within the systems of third parties, create system disruptions or cause shutdowns. External actors are developing and
deploying viruses, worms and other malicious software programs that attack the Company’s systems, the systems of third-parties, or otherwise exploit any
security vulnerabilities. Outside parties may also attempt to fraudulently induce employees to take actions, including the release of confidential or sensitive
information or to make fraudulent payments through illegal electronic spamming, phishing, spear phishing, or other tactics. The Company has robust
information security procedures and other safeguards in place, including evaluating the cybersecurity status of third-party suppliers and vendors that will have
access to the Company’s data or information technology systems, which are monitored and routinely tested internally and by external parties. However,
because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized
until launched against a target, the Company may be unable to anticipate all of these techniques or to implement adequate preventive measures. In addition, as
cyber threats continue to evolve, the Company may be required to expend additional resources to continue to enhance the Company’s information security
measures or to investigate and remediate any information security vulnerabilities. The Company’s remediation efforts may not be successful and could result
in interruptions, delays or cessation of service. This could also impact the cost and availability of cyber insurance to the Company. Breaches of the
Company’s or third parties' security measures and the unauthorized dissemination of personal, proprietary or confidential information about the Company or
its customers or other third parties could expose customers’ private information. Such breaches could expose customers to the risk of financial or medical
identity theft or expose the Company or other third parties to a risk of loss or misuse of this information, result in litigation and potential liability for the
Company, damage the Company’s brand and reputation or otherwise harm the Company’s business. Any of these disruptions or breaches of security could
have a material adverse effect on the Company’s business, regulatory compliance, financial condition and results of operations.

The Company depends on third parties to provide services critical to the Company's business, and depends on them to comply with applicable laws
and regulations. Additionally, any breaches of the information technology systems of third parties could have a material adverse effect on the
Company's operations.

The Company depends on third parties to provide services critical to the Company's business, including supplies, ground

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and air transport of clinical and diagnostic testing supplies and specimens, research products, and people, among other services. Third parties that provide
services to the Company are subject to similar risks related to security of customer-related information and compliance with U.S., state, local, or international
environmental, health and safety, and privacy and security laws and regulations as the Company. Any failure by third parties to comply with applicable laws,
or any failure of third parties to provide services more generally, could have a material impact on the Company, whether because of the loss of the ability to
receive services from the third parties, legal liability of the Company for the actions or inactions of third parties, or otherwise.

In addition, third parties to whom the Company outsources certain services or functions may process personal data, or other confidential information of the
Company. A breach or cyber attack affecting these third parties, like the AMCA Incident, could also harm the Company's business, results of operations and
reputation.

Risks Related to Legal Matters

Adverse results in material litigation matters could have a material adverse effect upon the Company’s business.

The Company may become subject in the ordinary course of business to material legal actions related to, among other things, intellectual property
disputes, contract disputes, data and privacy issues, professional liability and employee-related matters. The Company may also receive inquiries and requests
for information from governmental agencies and bodies, including Medicare or Medicaid payers, requesting comment and/or information on allegations of
billing irregularities, billing and pricing arrangements, or privacy practices that are brought to its attention through audits or third parties. Legal actions could
result in substantial monetary damages as well as damage to the Company’s reputation with customers, which could have a material adverse effect upon its
business.

The failure to successfully obtain, maintain and enforce intellectual property rights and defend against challenges to the Company’s intellectual
property rights could adversely affect the Company.

Many of the Company’s services, products and processes rely on intellectual property, including patents, copyrights, trademarks and trade secrets. In some
cases, that intellectual property is owned by another party and licensed to the Company, sometimes exclusively. The value of the Company’s intellectual
property relies in part on the Company’s ability to maintain its proprietary rights to such intellectual property. If the Company is unable to obtain or maintain
the proprietary rights to its intellectual property, if it is unable to prevent attempted infringement against its intellectual property, or if it is unable to defend
against claims that it is infringing on another party’s intellectual property, the Company could be adversely affected. These adverse effects could include the
Company having to abandon, alter and/or delay the deployment of products, services or processes that rely on such intellectual property; having to procure
and pay for licenses from the holders of intellectual property rights that the Company seeks to use; and having to pay damages, fines, court costs and
attorney's fees in connection with intellectual property litigation.

Changes in tax laws and regulations or the interpretation of such may have a significant impact on the financial position, results of operations and
cash flows of the Company.

U.S. and foreign governments continue to review, reform and modify tax laws, including with respect to the Organisation for Economic Co-operation and
Development’s base erosion and profit shifting initiative. Changes in tax laws and regulations could result in material changes to the domestic and foreign
taxes that the Company is required to provide for and pay.

In addition, the Company is subject to regular audits with respect to its various tax returns and processes in the jurisdictions in which it operates. Errors or
omissions in tax returns, process failures or differences in interpretation of tax laws by tax authorities and the Company may lead to litigation, payments of
additional taxes, penalties and interest.

Contract research services in the drug development industry create liability risks.

In contracting to work on drug development trials and studies, DD faces a range of potential liabilities, including:

• Errors or omissions that create harm to clinical trial subjects during a trial or to consumers of a drug after the trial is completed and regulatory approval

of the drug has been granted;

• General risks associated with clinical pharmacology facilities, including negative consequences from the administration of drugs to clinical trial

participants or the professional malpractice of clinical pharmacology physicians;

• Risks that animals in DD’s facilities may be infected with diseases that may be harmful and even lethal to themselves and humans despite preventive

measures contained in DD's business policies, including those for the quarantine and handling of imported animals; and

• Errors and omissions during a trial or study that may undermine the usefulness of a trial or study, or data from the trial or study or that may delay the

entry of a drug to the market.

DD contracts with physicians, also referred to as investigators, to conduct the clinical trials to test new drugs on clinical trial subjects. These tests can

create a risk of liability for personal injury or death to clinical trial subjects resulting from negative

Index

reactions to the drugs administered or from professional malpractice by third party investigators.

While DD endeavors to include in its contracts provisions entitling it to be indemnified and entitling it to a limitation of liability, these provisions are not
always successfully obtained and, even if obtained, do not uniformly protect DD against liability arising from certain of its own actions. DD could be
materially and adversely affected if it were required to pay damages or bear the costs of defending any claim that is not covered by a contractual
indemnification provision, or in the event that a party which must indemnify it does not fulfill its indemnification obligations, or in the event that DD is not
successful in limiting its liability or in the event that the damages and costs exceed DD's insurance coverage. DD may also be required to agree to contract
provisions with clinical trial sites or its customers related to the conduct of clinical trials, and DD could be materially and adversely affected if it were
required to indemnify a site or customer against claims pursuant to such contract terms. There can be no assurance that DD will be able to maintain sufficient
insurance coverage on acceptable terms.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Index

Item 2. PROPERTIES

The Company's corporate headquarters are located in Burlington, North Carolina, and include facilities that are both owned and leased.

Labcorp Diagnostics (Dx) operates through a network of patient service centers, branches, rapid response laboratories, primary laboratories, and specialty

laboratories. The table below summarizes certain information as to Dx's principal operating and administrative facilities as of December 31, 2021.

Location
Primary Facilities:
Birmingham, Alabama
Phoenix, Arizona
Los Angeles, California
Monrovia, California
San Diego, California
San Francisco, California
Shelton, Connecticut
Tampa, Florida
South Bend, Indiana
Westborough, Massachusetts
St. Paul, Minnesota
Raritan, New Jersey
Burlington, North Carolina (5)
Research Triangle Park, North Carolina (3)
Dublin, Ohio
Brentwood, Tennessee
Dallas, Texas
Houston, Texas
Herndon, Virginia
Seattle, Washington
Spokane, Washington (3)

Nature of Occupancy

Leased
Owned
Leased
Leased
Leased
Leased
Leased
Leased
Leased
Leased
Owned
Owned
Owned/Leased
Leased
Owned
Leased
Leased
Leased
Leased
Leased
Leased

Index

Labcorp Drug Development (DD) operates on a global scale. The table below summarizes certain information as to DD's principal operating and

administrative facilities as of December 31, 2021.

Location
Primary Facilities:
Mechelen, Belgium
Beijing, China
Shanghai, China (2)
Muenster, Germany
Pune, India
Bangalore, India
Singapore
Geneva, Switzerland
Eye, United Kingdom
Harrogate, United Kingdom
Huntingdon, United Kingdom
Leeds, United Kingdom
Maidenhead, United Kingdom
Shardlow, United Kingdom
York, United Kingdom
San Francisco, California
Daytona Beach, Florida
Greenfield, Indiana
Indianapolis, Indiana
Bedford, Massachusetts
Ann Arbor, Michigan
Minneapolis, Minnesota
Princeton, New Jersey
Somerset, New Jersey
Dallas, Texas
Chantilly, Virginia
Madison, Wisconsin

Nature of Occupancy

Leased
Leased
Owned/Leased
Owned
Leased
Leased
Leased
Owned
Owned
Owned
Owned
Owned
Leased
Owned
Leased
Leased
Leased
Owned
Leased
Owned
Leased
Leased
Leased
Owned
Leased
Leased
Owned

All of the Company’s primary laboratory and drug development facilities have been built or improved for the purpose of providing commercial laboratory
testing or drug development services. The Company believes that these existing facilities and plans for expansion are suitable and adequate and will provide
sufficient production capacity for the Company's currently foreseeable level of operations. The Company believes that if it were unable to renew a lease or if a
lease were to be terminated on any of the facilities it presently leases, it could find alternate space at competitive market rates and readily relocate its
operations to such new locations without material disruption to its operations.

Item 3. LEGAL PROCEEDINGS

See Note 14 Commitments and Contingencies to the Consolidated Financial Statements.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Index

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF

PART II

EQUITY SECURITIES

Market Information

The Company's common stock, par value $0.10 per share, or Common Stock, trades on the New York Stock Exchange or NYSE under the symbol “LH.”

Holders

On February 24, 2022, there were approximately 1,322 holders of record of the Common Stock.

Transfer Agent

The transfer agent for the Company's Common Stock is American Stock Transfer & Trust Company, Shareholder Services, 6201 Fifteenth Avenue,

Brooklyn, NY 11219, telephone: 800-937-5449, website: www.amstock.com.

Dividends

The Company has not historically paid dividends on its Common Stock. In December 2021, the Company announced that it plans to initiate a quarterly

dividend beginning in the second quarter of 2022.

Common Stock Performance

The graph below shows the cumulative total return assuming an investment of $100 on December 31, 2016, 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.

Comparison of Cumulative Total Return

Laboratory Corporation of America Holdings
S&P 500 Index
S&P 500 Health Care Index

$
$
$

100.00 $
100.00 $
100.00 $

124.25 $
121.83 $
122.08 $

98.43 $
116.49 $
129.97 $

131.77 $
153.17 $
157.04 $

158.55 $
181.35 $
178.15 $

244.75
233.41
224.71

12/2016

12/2017

12/2018

12/2019

12/2020

12/2021

Index

Issuer Purchases of Equity Securities (all amounts in millions, except per share amounts)

The following table sets forth information with respect to purchases of shares of the Company’s Common Stock made during the quarter ended
December 31, 2021, by or on behalf of the 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:

October 1 - October 31
November 1 - November 30
December 1 - December 31

Total Number
of Shares
Repurchased

—
—
2.7
2.7

Average Price

Paid Per Share
$

—
—
307.16
307.16

Total Number of Shares

Repurchased as Part of Publicly
Announced Program

Maximum Dollar Value of Shares tha
May Yet Be Repurchased Under the
Program

—
—
2.7
2.7

131.5
131.5
1,631.5

At the end of 2020, the Company had outstanding authorization from the board of directors (Board) to purchase $800.0 of Company common stock. On
December 8, 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 the ASR Agreements with Goldman Sachs & Co.
LLC and Barclays Bank PLC (collectively, the Financial Institutions) to repurchase approximately $1,000.0 in the aggregate of the Company’s common stock
(Common Stock), as part of the Company’s Common Stock repurchase program. The repurchase authorization has no expiration date.

During the first 11 months of 2021, the Company purchased 2.5 shares of its common stock at an average price of $270.55 for a total cost of $668.5.
Under the ASR Agreements in December 2021, $1,000.0 was paid to the banks and the Company received 80% of the shares calculated at the price at the
inception of the Agreements, approximately 2.7 shares. 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.

When the Company repurchases shares, the amount paid to repurchase the shares in excess of the par or stated value is allocated to additional paid-in-
capital unless subject to limitation or the balance in additional paid-in-capital is exhausted. Remaining amounts are recognized as a reduction in retained
earnings. At the end of 2021, the Company had outstanding authorization from the Board to purchase up to $1,631.5 of the Company's common stock.

Item 6. SELECTED FINANCIAL DATA

Not applicable.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (in millions)

General

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

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

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

Strategic Review of Company Structure and Capital Allocation Strategy

In March 2021, the Company announced the undertaking of a comprehensive review by its Board and management team of Labcorp's structure and capital

allocation strategy. 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. In December
2021, the Company announced the Board's conclusion, as well as actions that the management team and the Board are taking to enhance shareholder returns.
These actions include:

•
•

initiating a dividend in the second quarter of 2022, with a target dividend payout ratio of between 15% to 20% of adjusted earnings;
authorizing a $2,500.0 share repurchase program. 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;
implementing a new LaunchPad business process improvement initiative, targeting savings of $350.0 over the next three years;
providing a longer-term outlook in connection with the announcement of the Company's 2021 year-end results in addition to the Company's annual
guidance;
providing additional business insights through enhanced disclosures beginning with Labcorp's results for the first quarter of 2022; and
continuing a commitment to profitable growth through investments in science, innovation, and new technologies.

Management and the Board are committed to continuing to evaluate all avenues for enhancing shareholder value.

The updated capital allocation plan enables the Company to continue investment in key growth areas, including oncology, Alzheimer's disease,
autoimmune disorders, and women's health. This plan is designed to fuel growth through innovation by using Labcorp's unparalleled data and insights to
bring scientific advancements—both Labcorp-developed and those of other scientists—to market at scale. It reflects the Board's confidence in the Company's
strong balance sheet and cash flow generation profile, as well as the Board's commitment to deploying capital to enhance value for shareholders, patients,
providers, and pharmaceutical customers worldwide.

Results of Operations

The following tables present the financial measures that management considers to be the most significant indicators of the Company's performance. For
discussion of 2020 results and comparison with 2019 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, 2020.

Years ended December 31, 2021 and 2020

Revenues

Dx
DD
Intercompany eliminations

Total

2020

Years Ended December 31,
2021
10,363.6 $
5,845.5
(88.2)
16,120.9 $

9,253.4
4,877.7
(152.6)
13,978.5

Change

12.0 %
19.8 %
(42.2)%

15.3 %

The 15.3% increase in revenues for the year ended December 31, 2021, as compared with the corresponding period in 2020 was primarily 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 the Company's organic Base Business and a 0.2% decrease in COVID-19 Testing.

Dx revenues for the year ended December 31, 2021, were $10,363.6, an increase of 12.0% over revenues of $9,253.4 in the corresponding period in 2020.
The increase in revenues was due to organic growth of 10.9%, acquisitions of 0.7%, and foreign currency translation of 0.4%. The 10.9% increase in organic
revenue was due to a 11.2% contribution from organic Base Business, partially offset by a 0.3% decline in COVID-19 Testing.

Dx total volume, measured by requisitions, increased by 10.9% as organic volume increased by 10.5% and acquisition volume contributed growth of
0.5%. 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

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

DD revenues for the year ended December 31, 2021, were $5,845.5, an increase of 19.8% over revenues of $4,877.7 in the corresponding period in 2020.
The increase in revenues was due to organic Base Business growth of 19.2%, the benefit of acquisitions of 0.7%, favorable foreign currency translation of
1.8%, partially offset by lower COVID-19 Testing performed through its Central Laboratories business of 1.6% and a business disposition of 0.2%.

Cost of Revenues

Cost of revenues
Cost of revenues as a % of revenues

Years Ended December 31,
2021

2020

10,496.6

65.1 %

9,025.7

64.6 %

Change

16.3 %

Cost of revenues increased 16.3% in 2021 as compared with 2020 and increased as a percentage of revenues to 65.1% in 2021 as compared to 64.6% in

2020. This increase was primarily due to COVID-19 Testing partially offset by Base Business recovery.

Selling, General and Administrative Expenses

Selling, general and administrative expenses
SG&A as a % of revenues

Years Ended December 31,
2021

2020

1,952.1

12.1 %

1,729.3

12.4 %

Change

12.9 %

Selling, general and administrative expenses as a percentage of revenues decreased to 12.1% in 2021 compared to 12.4% in 2020. The decrease in selling,
general and administrative expenses as a percentage of revenues is primarily due to the leveraging of the organic revenue growth and the impact of
LaunchPad savings.

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.

Goodwill and Other Asset Impairments

Goodwill and other asset impairments

Years Ended December 31,
2021

2020

— $

462.1

Change
N/A

During 2020, the Company recorded goodwill and other asset impairment charges of $462.1, $450.5 within DD and $11.6 within Dx. The Company
concluded that the fair value was less than carrying value for two of its reporting units and recorded goodwill impairment of $418.7 and $3.7 for DD and Dx,
respectively. 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. There were no goodwill and other asset impairments for the year
ended December 31, 2021.

Index

Amortization Expense

Dx
DD

Amortization of intangibles and other assets

Years Ended December 31,

2021

2020

Change

117.1 $
252.5
369.6 $

104.9
170.5
275.4

11.7 %
48.0 %
34.2 %

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. In addition, amortization acceleration of certain intangible assets related to trade names as a result of
the Company's rebranding initiative of $88.4 and $27.5 were recognized for the years ended December 31, 2021 and 2020, respectively.

Restructuring and Other Charges

Restructuring and other charges

Years Ended December 31,
2021

2020

Change

43.1 $

40.6

6.1 %

During 2021, the Company recorded net restructuring charges of $43.1; $18.6 within Dx and $24.5 within DD. The charges were comprised of $16.3 in
severance and other personnel costs and $28.0 in facility closures, lease terminations, and general integration activities. The charges were offset by the
reversal of previously established liability of $0.4 and $0.8 in unused severance costs and facility-related costs, respectively.

During 2020, the Company recorded net restructuring charges of $40.6; $15.3 within Dx and $25.3 within DD. The charges were comprised of $14.1 in
severance and other personnel costs and $17.4 for facility, operating lease right-of-use and equipment impairments, and $18.9 in facility closures and general
integration activities. The charges were offset by the reversal of previously established liability of $0.6 and $9.2 in unused severance costs and facility-related
costs, respectively.

Interest Expense

Interest expense

Years Ended December 31,

2021

2020

Change

212.1 $

207.4

2.3 %

The increase in interest expense for 2021 as compared with the corresponding period in 2020 is primarily due to the costs of redeeming the 3.20% and

3.75% notes and issuing the new senior notes, partially offset by lower debt and lower cost of debt.

Equity Method Income, Net

Equity method income, net

Years Ended December 31,

2021

2020

Change

26.5 $

2.9

812.6 %

Equity method income, net represents the Company's ownership share in joint venture partnerships along with equity investments in other companies in
the health care industry. The increase in income for 2021 as compared with the corresponding period in 2020 was primarily due to the write off or write down
of certain of the Company's investments in 2020, which was primarily due to the negative impact of the COVID19 global pandemic, and increased
profitability of the Company's joint ventures in 2021.

Other, Net

Other, net

Years Ended December 31,
2021

2020

Change

42.5 $

(32.1)

231.8 %

The change in Other, net for the year ended December 31, 2021, as compared to the year ended December 31, 2020, was primarily due to investment
activity. 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. In addition, foreign currency transaction losses of $4.4 and $10.1 were recognized for the years ended December 31, 2021 and 2020, respectively.

Index

Income Tax Expense

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

Years Ended December 31,

2021

2020

747.1
23.9 %

662.1
29.8 %

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.

Operating Results by Segment

Dx operating income
Dx operating margin
DD operating income
DD operating margin
General corporate expenses

Total operating income

Years Ended December 31,
2021

2020

$
$

2,988.5

28.8 %
547.7

9.4 %

(276.7)
3,259.5

$
$

2,634.9

28.5 %
37.3

0.8 %

(226.8)
2,445.4

Change

13.4 %
0.3 %
1,371.0 %
8.6 %
22.0 %
33.3 %

Dx operating income was $2,988.5 for the year ended December 31, 2021, an increase of 13.4% over operating income of $2,634.9 in the corresponding
period of 2020 and an increase of 270 basis points in operating margin year-over-year. The increase in operating income and margin were primarily due to a
recovery in the Base Business, partially offset by a decrease in COVID-19 Testing and higher personnel costs. The Company achieved its goal to deliver
approximately $200 million of net savings from its three-year Diagnostics LaunchPad initiative by the end of 2021.

DD operating income was $547.7 for the year ended December 31, 2021, an increase of 1,371.0% from operating income of $37.3 in the corresponding
period of 2020. The increase was primarily due to goodwill and other asset impairments in 2020, and organic Base Business growth and LaunchPad savings,
partially offset by lower COVID-19 Testing and higher personnel costs in 2021. The Company continues to develop and execute new LaunchPad programs to
support profitable growth in DD.

General corporate expenses are comprised primarily of administrative services such as executive management, human resources, legal, finance, corporate
affairs, and information technology. Corporate expenses were $276.7 for the year ended December 31, 2021, an increase of 22.0% over corporate expenses of
$226.8 in the corresponding period of 2020. The increase in corporate expenses in 2021 is primarily due to higher incentive based compensation resulting
from the financial performance of the Company.

Liquidity, Capital Resources and Financial Position

The Company's strong cash-generating capability and financial condition typically have provided ready access to capital markets. The Company's
principal source of liquidity is operating cash flow, supplemented by proceeds from debt offerings. The Company's senior unsecured revolving credit facility
is further discussed in Note 10 Debt to the Company's Consolidated Financial Statements.

Management’s discussion and analysis of cash flows for the year ended December 31, 2020 compared to the year ended December 31, 2019 may be found
in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations, Liquidity, Capital Resources and Financial Position”
section of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

In summary the Company's cash flows were as follows:

Net cash provided by operating activities
Net cash used for investing activities
Net cash used for financing activities
Effect of exchange rate on changes in cash and cash equivalents

Net change in cash and cash equivalents

For the Year Ended December 31,
2020

2021

2019

3,109.6 $
(884.6)
(2,065.8)
(7.3)
151.9 $

2,135.3 $
(643.2)
(517.4)
8.6
983.3 $

1,444.7
(1,283.1)
(252.7)
1.8
(89.3)

Index

Cash and Cash Equivalents

Cash and cash equivalents at December 31, 2021 and 2020 totaled $1,472.7 and $1,320.8, respectively. Cash and cash equivalents consist of highly liquid

instruments, such as time deposits and other money market investments, which have original maturities of three months or less.

Cash Flows from Operating Activities

During the year ended December 31, 2021, the Company's operations provided $3,109.6 of cash as compared to $2,135.3 in 2020. The $974.3 increase in

cash provided from operations in 2021 as compared with the corresponding 2020 period was primarily due to higher earnings and favorable working capital.

Cash Flows from Investing Activities

Net cash used by investing activities for the year ended December 31, 2021 was $884.6 as compared to net cash used by investing activities of $643.2 for
the year ended December 31, 2020. The $241.4 increase in net cash used by investing activities for the year ended December 31, 2021, was primarily due to a
year over year increase of $229.3 in cash paid for acquisitions. The Company had proceeds of 42.1 from the sale of assets and disposition of businesses
during 2020 in comparison to $87.3 during 2021. Capital expenditures were $460.4 and $381.7 for the years ended December 31, 2021 and 2020,
respectively. Capital expenditures in 2021 were 2.9% of revenues, primarily in connection with projects to support growth in the Company's core businesses.
The Company intends to continue to pursue acquisitions to drive growth, to make important investments in its business, including in information technology,
and to improve efficiency and enable the execution of the Company's mission. Such expenditures are expected to be funded by cash flow from operations or,
as needed, through borrowings under debt facilities, including the Company's revolving credit facility or any successor facility. The Company expects capital
expenditures in 2022 to be approximately 4.0% of revenues, primarily in connection with projects to support growth in the Company's core businesses,
facility updates, projects related to LaunchPad, and further acquisition integration initiatives.

Cash Flows from Financing Activities

Net cash used in financing activities for the year ended December 31, 2021 was $2,065.8 compared to cash used in financing activities of $517.4 for the
year ended December 31, 2020. This movement in cash within financing activities for 2021, as compared to 2020, was primarily a result of $1,668.5 in share
repurchases in 2021 compared to $100.0 in 2020.

On May 26, 2021, the Company issued new senior notes representing $1,000.0 in debt securities and consisting of $500.0 aggregate principal amount of
1.55% senior notes due 2026 and $500.0 aggregate principal amount of 2.70% senior notes due 2031. Interest on these notes is payable semi-annually in
arrears on June 1 and December 1 of each year, commencing on December 1, 2021. Net proceeds from the offering of these notes were $989.4 after deducting
underwriting discounts and other expenses of the offering. The net proceeds were used to redeem, prior to maturity, the Company's outstanding 3.20% senior
notes due February 1, 2022 and 3.75% senior notes due August 23, 2022.

During the second quarter of 2021, the Company entered into fixed-to-variable interest rate swap agreements for its 2.70% senior notes due 2031 with an
aggregate notional amount of $500.0 and variable interest rates based on three-month LIBOR plus 1.0706%. These instruments are designated as hedges
against changes in the fair value of a portion of the Company's long-term debt. The aggregate fair value of $2.9 at December 31, 2021, was included as a
component of other long-term assets and added to the reported value of the senior notes.

On April 30, 2021, the Company amended and restated its revolving credit facility. It consists of a five-year revolving facility in the principal amount of
up to $1,000.0, with the option of increasing the facility by up to an additional $500.0, subject to the agreement of one or more new or existing lenders to
provide such additional amounts and certain other customary conditions. The Company is required to pay a facility fee on the aggregate commitments under
the revolving credit facility, at a per annum rate ranging from 0.100% to 0.225%, depending on the Company’s debt ratings. Borrowings under the revolving
credit facility will accrue interest at a per annum rate equal to, at the Company’s election, either (x) a LIBOR rate plus a margin ranging from 0.775% to
1.275% or (y) a base rate plus a margin ranging from 0% to 0.275%, in each case, depending on the Company’s debt ratings.

On August 17, 2020, the Company redeemed the remaining $412.2 of its 4.625% Senior Notes due November 15, 2020, using available cash on hand. The
Company exited the remaining fixed-to-variable interest rate swap agreement in August 2020, in connection with this redemption and recorded a gain of $1.6
on the extinguishment. The gain was included in Other, net on the Consolidated Statement of Operations.

The Company continues to evaluate its outstanding debt portfolio to take advantage of market conditions that would allow the Company to reduce its

interest rate or financing risk and provide a lower long-term borrowing cost.

Index

Under the Company's revolving credit facility, the Company is subject to negative covenants limiting subsidiary indebtedness and certain other covenants
typical for investment grade-rated borrowers and the Company is required to maintain certain leverage ratios. The Company was in compliance with all
covenants under the revolving credit facility at December 31, 2021, and expects that it will remain in compliance with its existing debt covenants for the next
twelve months.

During 2021, the Company repurchased 5.2 shares of its Common Stock at an average price of $282.05 for a total cost of $1,668.5, which included
$1,000.0 paid in respect of an ASR for which the Company received 80% of the shares calculated at the price at the inception of the Agreements. At the end
of 2021, the Company had outstanding authorization from the Board to purchase $1,631.5 of Company common stock. The repurchase authorization has no
expiration date.

Credit Ratings

The Company’s investment grade debt ratings from Moody’s and Standard & Poor's (S&P) contribute to its ability to access capital markets.

Contractual Cash Obligations

Operating lease obligations
Contingent future licensing and royalty payments (a)
Purchase obligations
Finance lease obligations
Scheduled interest payments on Senior Notes
Long-term debt (b)

Total contractual cash obligations (c) (d) (e) (f)

Total

Payments Due by Period
Short-term

Long-term

829.5
41.8
45.2
95.1
1,662.8
5,418.0
8,092.4

187.0
6.2
27.4
10.5
181.0
1.5
413.6

642.5
35.6
17.8
84.6
1,481.8
5,416.5
7,678.8

(a) Contingent future licensing payments will be made if certain events take place, such as the launch of a specific test, the transfer of certain technology, and

the achievement of specified revenue milestones.

(b) The table does not include obligations under the Company’s pension and postretirement benefit plans, which are included in Note 15 Pension and
Postretirement Plans to Consolidated Financial Statements. Benefits under the Company's postretirement medical plan are paid when claims are
submitted for payment, the timing of which is not practicable to estimate.

(c) The table does not include the Company’s reserve for unrecognized tax benefits. The Company had a $58.9 reserve for unrecognized tax benefits,

including interest and penalties, at December 31, 2021, which is included in Note 12 Income Taxes to Consolidated Financial Statements.

(d) Excludes amount of debt issuance costs included in the long-term debt balance.

(e) The table does not include obligations related to the Company's ASR Agreements which are discussed in Note 11 Preferred Stock and Common

Shareholder's Equity to the Consolidated Financial Statements.

(f) This table does not include obligations for venture fund commitments which totaled $13.2 at December 31, 2021, and are subject to calls from the

individual venture funds

Off-Balance Sheet Arrangements

The Company does not have transactions or relationships with “special purpose” entities, and the Company does not have any off-balance sheet financing

other than normal operating leases and letters of credit.

Other Commercial Commitments

As of December 31, 2021, the Company provided letters of credit aggregating approximately $79.8, primarily in connection with certain insurance

programs which are renewed annually.

The contractual value of the noncontrolling interest put in the Company's Ontario subsidiary totaled $16.3 and $16.2 at December 31, 2021, and 2020,

respectively, and has been classified as mezzanine equity in the Company's consolidated balance sheet.

Based on current and projected levels of cash flows from operations, coupled with availability under its revolving credit facility, the Company believes it
has sufficient liquidity to meet both its anticipated short-term and long-term cash needs; however, the Company continually reassesses its liquidity position in
light of market conditions and other relevant factors.

Index

Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reported periods. While the Company believes these estimates are reasonable and consistent,
they are by their very nature estimates of amounts that will depend on future events. Accordingly, actual results could differ from these estimates. The
Company’s Audit Committee periodically reviews the Company’s significant accounting policies. The Company’s critical accounting policies arise in
conjunction with the following:

Revenue recognition;
Business combinations;
Income taxes; and

•
•
•
• Goodwill and indefinite-lived assets.

Revenue Recognition

Within the Dx segment, a revenue transaction is initiated when Dx receives a requisition order 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. 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.

The following are descriptions of the Dx payer portfolios:

Clients

Client payers represent the portion of Dx’s revenue related to physicians, hospitals, health systems, accountable care organizations (ACOs), employers and
other entities where payment is received exclusively from the entity ordering the testing service. Generally, client revenues are recorded on a fee-for-service
basis at Dx’s client list price, less any negotiated discount. A portion of client billing is for laboratory management services, collection kits and other non-
testing services or products. In these cases, revenue is recognized when services are rendered or delivered.

Patients

This portfolio includes revenue from uninsured patients and member cost-share for insured patients (e.g., coinsurance, deductibles and non-covered
services). Uninsured patients are billed based upon Dx’s patient fee schedules, net of any discounts negotiated with physicians on behalf of their patients. Dx
bills insured patients as directed by their health plan and after consideration of the fees and terms associated with an established health plan contract.

Medicare and Medicaid

This portfolio relates to fee-for-service revenue from traditional Medicare and Medicaid programs. Net revenue from these programs is based on the fee
schedule established by the related government authority. In addition to contractual discounts, other adjustments including anticipated payer denials are
considered when determining net revenue. Any remaining adjustments to revenue are recorded at the time of final collection and settlement. These
adjustments are not material to Dx’s results of operations in any period presented.

Third Party

Third party includes revenue related to MCOs. The majority of Dx's third-party revenue is reimbursed on a fee-for-service basis. These payers are billed at
Dx's established list price and revenue is recorded net of contractual discounts. The majority of Dx’s MCO revenues are recorded based upon contractually
negotiated fee schedules with revenues for non-contracted MCOs recorded based on historical reimbursement experience.

Third-party reimbursement is also received through capitation agreements with MCOs and independent physician associations (IPAs). Under capitated
agreements, revenue is recognized based on a negotiated per-member, per-month payment for an agreed upon menu of tests, or based upon the proportionate
share earned by Dx from a capitation pool. When the agreed upon reimbursement is based solely on an established rate per member, revenue is not impacted
by the volume of testing performed. Under a capitation pool arrangement, the aggregate value of an established rate per member is distributed based on

Index

the volume and complexity of the procedures performed by laboratories participating in the agreement. Dx recognizes revenue monthly, based upon the
established capitation rate or anticipated distribution from a capitated pool.

Dx has a formal process to estimate implicit price concessions for uncollectable accounts. The majority of Dx's collection risk is related to accounts
receivable from both insured and uninsured patients who are unwilling or unable to pay. Anticipated write-offs are recorded as adjustments to revenue at an
amount considered necessary to record the segment's revenue at its net realizable value. In addition to contractual discounts, other adjustments including
anticipated payer denials and other external factors that could affect the collectability of its receivables are considered when determining revenue and the net
receivable amount. Any remaining adjustments to revenue are recorded at the time of final collection and settlement. These adjustments are not material to
Dx's results of operations in any period presented.

The nature of DD’s obligations includes agreements to provide preclinical services, to manage a full clinical trial, provide services for a specific phase of a
trial, or provide research products to the customer. DD provides these services predominantly to pharmaceutical, biotechnology and medical device
companies worldwide. A majority of DD’s revenues are earned under contracts that range in duration from a few months to many years. These contracts
generally take the form of fee-for-service or fixed-price arrangements subject to pricing adjustments based on changes in scope. The total contract value is
estimated at the beginning of the contract, and is equal to the amount expected to be billed to the customer. Other payments and billing adjustments may also
factor into the calculation of total contract value, such as the reimbursement of out-of-pocket costs and volume-based rebates.

The majority of DD's contracts contain a single performance obligation. For contracts that include multiple performance obligations, DD allocates the
contract value to the goods and services based on a customer price list, if available. If a price list is not available, DD will estimate the transaction price using
either market prices or an “expected cost plus margin” approach.

Fee-for-service contracts are typically priced based on transaction volume or time and materials. For volume based contracts the contract value is entirely
variable and revenue is recognized as the specific product or service is completed. For services billed based on time and materials, revenue is recognized
using the right to invoice practical expedient.

Fixed-price contracts are typically recognized as revenue over time based on a proportional-performance basis, using either input or output methods that
are specific to the service provided. In an output method, revenue is determined by dividing the actual units of output achieved by the total units of output
required under the contract and multiplying that percentage by the total contract value. When using an input method, revenue is recognized by dividing the
actual units of input incurred by the total units of input budgeted in the contract, and multiplying that percentage by the total contract value. The estimate of
total units of input at completion requires significant judgment and estimates are based on various assumptions of events that often span several years. These
estimates are reviewed periodically and any adjustments are recognized on a cumulative catch-up basis in the period they become known.

Contracts are often modified to account for changes in contract specifications and requirements. Generally, when contract modifications create new
performance obligations, the modification is considered to be a separate contract and revenue is recognized prospectively. When contract modifications
change existing performance obligations, the impact on the existing transaction price and measure of progress for the performance obligation to which it
relates is generally recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.

Most contracts are terminable with or without cause by the customer, either immediately or upon notice. These contracts often require payment to DD of
expenses to wind-down the study or project, fees earned to date and, in some cases, a termination fee or a payment to DD of some portion of the fees or
profits that could have been earned by DD under the contract if it had not been terminated early. Termination fees are included in revenues when services are
performed and realization is assured.

Business Combinations

The Company accounts for business combination transactions under the acquisition method of accounting and reported the results of operations of the
acquired entities from its respective date of acquisition. Assets acquired were recorded at their estimated fair values as of the acquisition date. Estimated fair
values were based on various valuation methodologies, including an income approach using primarily discounted cash flow techniques for the customer
relationships intangible assets. The aforementioned income methods utilize management's estimates of future operating results and cash flows discounted
using a weighted-average cost of capital that reflects market participant assumptions. The excess of the fair value of the consideration conveyed over the fair
value of the assets acquired was recorded as goodwill. The goodwill reflects management's expectations of the ability to gain access to and penetrate the
acquired entities' historical patient base and the benefits of being able to leverage operational efficiencies with favorable growth opportunities based on
positive demographic trends in the market.

Index

Income Taxes

The Company accounts for income taxes utilizing the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and for tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date. The Company does not recognize a tax benefit, unless the Company concludes that it is
more likely than not that the benefit will be sustained on audit by the taxing authority based solely on the technical merits of the associated tax position. If the
recognition threshold is met, the Company recognizes a tax benefit measured at the largest amount of the tax benefit that the Company believes is greater than
50% likely to be realized. The Company records interest and penalties in income tax expense.

Goodwill and Indefinite-Lived Assets

The Company assesses goodwill and indefinite-lived intangibles for impairment at least annually or whenever events or changes in circumstances indicate
that the carrying amount of such assets may not be recoverable. The annual impairment test for goodwill includes an option to perform a qualitative
assessment of whether it is more likely than not that a reporting unit's fair value is less than its carrying value. Reporting units are businesses with discrete
financial information that is available and reviewed by management. If the Company determines that it is more likely than not that the fair value of a reporting
unit is less than its carrying value, then the Company performs the quantitative goodwill impairment test. The Company may also choose to bypass the
qualitative assessment for any reporting unit in its goodwill assessment and proceed directly to performing the quantitative assessment. The Company
recognizes an impairment charge for the amount by which the reporting unit's carrying amount exceeds its fair value.

In the qualitative assessment, the Company considers relevant events and circumstances for each reporting unit, including (i) current year results, (ii)
financial performance versus management’s annual and five-year strategic plans, (iii) changes in the reporting unit carrying value since prior year, (iv)
industry and market conditions in which the reporting unit operates, (v) macroeconomic conditions, including discount rate changes, and (vi) changes in
products or services offered by the reporting unit. If applicable, performance in recent years is compared to forecasts included in prior quantitative valuations.
Based on the results of the qualitative assessment, if the Company concludes that it is not more likely than not that the fair value of the reporting unit is less
than its carrying values of the reporting unit, then no quantitative assessment is performed.

The quantitative assessment includes the estimation of the fair value of each reporting unit as compared to the carrying value of the reporting unit. The
Company estimates the fair value of a reporting unit using both income-based and market-based valuation methods. The income-based approach is based on
the reporting unit's forecasted future cash flows that are discounted to the present value using the reporting unit's weighted average cost of capital. For the
market-based approach, the Company utilizes a number of factors such as publicly available information regarding the market capitalization of the Company
as well as operating results, business plans, market multiples, and present value techniques. Based upon the range of estimated values developed from the
income and market-based methods, the Company determines the estimated fair value for the reporting unit. If the estimated fair value of the reporting unit
exceeds the carrying value, the goodwill is not impaired and no further review is required.

The income-based fair value methodology requires management's assumptions and judgments regarding economic conditions in the markets in which the
Company operates and conditions in the capital markets, many of which are outside of management's control. At the reporting unit level, fair value estimation
requires management's assumptions and judgments regarding the effects of overall economic conditions on the specific reporting unit, along with assessment
of the reporting unit's strategies and forecasts of future cash flows. Forecasts of individual reporting unit cash flows involve management's estimates and
assumptions regarding:

• Annual cash flows, on a debt-free basis, arising from future revenues and profitability, changes in working capital, capital spending and income taxes

for at least a five-year forecast period.

• A terminal growth rate for years beyond the forecast period. The terminal growth rate is selected based on consideration of growth rates used in the

forecast period, historical performance of the reporting unit and economic conditions.

• A discount rate that reflects the risks inherent in realizing the forecasted cash flows. A discount rate considers the risk-free rate of return on long-
term treasury securities, the risk premium associated with investing in equity securities of comparable companies, the beta obtained from the
comparable companies and the cost of debt for investment grade issuers. In addition, the discount rate may consider any company-specific risk in
achieving the prospective financial information.

Index

Under the market-based fair value methodology, judgment is required in evaluating market multiples and recent transactions. Management believes that
the assumptions used for its impairment tests are representative of those that would be used by market participants performing similar valuations of the
reporting units.

Based upon the revised forecasted revenues and operating income following the declaration of the COVID-19 global pandemic, management concluded
there was a triggering event and updated its annual 2019 goodwill impairment testing as of March 31, 2020, for certain of its DD reporting units and Dx
reporting units. Based on the quantitative impairment assessment performed in the same manner as its annual quantitative assessment, the Company
concluded that the fair value was less than carrying value for two of its reporting unit and recorded a goodwill impairment of $418.7 for DD and $3.7 for Dx.

Management performed its annual goodwill and intangible asset impairment testing as of the beginning of the fourth quarter of 2021. The Company
elected to perform the qualitative assessment for goodwill and intangible assets for the domestic Dx reporting units and all of the DD reporting units and a
quantitative assessment for the Canadian reporting unit and its 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, 2021, were greater than
the carrying values.

Although the Company believes that the current assumptions and estimates used in its goodwill analysis are reasonable, supportable, and appropriate,
continued efforts to maintain or improve the performance of these businesses could be impacted by unfavorable or unforeseen changes which could impact
the existing assumptions used in the impairment analysis. Various factors could reasonably be expected to unfavorably impact existing assumptions: primarily
delays in new customer bookings and the related delay in revenue from new customers, increases in customer termination activity or increases in operating
costs. In addition, given the ongoing and rapidly changing nature of the COVID-19 pandemic, there is significant uncertainty regarding the duration and
severity of the pandemic as well as any future government restrictions, which may unfavorably impact existing assumptions. 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.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK (in millions)

Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange rates, interest rates and other
relevant market rate or price changes. In the ordinary course of business, the Company is exposed to various market risks, including changes in foreign
currency exchange and interest rates, and the Company regularly evaluates the exposure to such changes. The Company addresses its exposure to market
risks, principally the market risks associated with changes in foreign currency exchange rates and interest rates, through a controlled program of risk
management that includes, from time to time, the use of derivative financial instruments such as foreign currency forward contracts, cross currency swaps and
interest rate swap agreements. The Company does not hold or issue derivative financial instruments for trading purposes.

Foreign Currency Exchange Rates

Approximately 15.3% and 10.7% of the Company's revenues for the year ended December 31, 2021 and 2020, respectively, were denominated in
currencies other than the U.S. dollar (USD). The Company's financial statements are reported in USD and, accordingly, fluctuations in exchange rates will
affect the translation of revenues and expenses denominated in foreign currencies into USD for purposes of reporting the Company's consolidated financial
results. In both 2021 and 2020, 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 2021 by approximately $31.0. Gross accumulated currency translation
adjustments recorded as a separate component of shareholders’ equity were $(104.6) and $264.1 at December 31, 2021, and 2020, respectively. The Company
does not have significant operations in countries in which the economy is considered to be highly inflationary.

The Company earns revenue from service contracts over a period of several months and, in some cases, over a period of several years. Accordingly,
exchange rate fluctuations during this period may affect the Company's profitability with respect to such contracts. The Company is also subject to foreign
currency transaction risk for fluctuations in exchange rates during the period of time between the consummation and cash settlement of transactions. The
Company limits its foreign currency transaction risk through exchange rate fluctuation provisions stated in some of its contracts with customers, or it may
hedge transaction risk with foreign currency forward contracts. At December 31, 2021, the Company had 28 open foreign exchange forward contracts with
various amounts maturing monthly through January 2021 with a notional value totaling approximately $600.7. At December 31, 2020, the Company had 31
open foreign exchange forward contracts with various amounts maturing monthly through January 2021 with a notional value totaling approximately $601.2.

Index

The Company is party to USD to Swiss Franc cross-currency swap agreements with a notional amount of $600.0, maturing in 2022 and 2025, as a hedge

against the impact of foreign exchange movements on its net investment in its Swiss Franc functional currency subsidiary.

Interest Rates

Some of the Company's debt is subject to interest at variable rates. As a result, fluctuations in interest rates affect the Company's financial results. The
Company attempts to manage interest rate risk and overall borrowing costs through an appropriate mix of fixed and variable rate debt including the utilization
of derivative financial instruments, primarily interest rate swaps.

Borrowings under the Company's term loan credit facilities and revolving credit facility are subject to variable interest rates, unless fixed through interest

rate swaps or other agreements.

In May, 2021, to hedge against changes in the fair value portion of the Company's long-term debt, the Company entered into fixed-to-variable interest rate
swap agreements for the 2.70% senior notes due 2031 with an aggregate notional value of $500.0 and variable interest rates based on three-month LIBOR
plus 1.0706%.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of the Company required in this item are set forth beginning on page F-1 of this Annual Report on Form 10-K.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this Annual Report, the Company carried out under the supervision and with the participation of the Company’s
management, including the Company’s principal executive officer and principal financial officer, an evaluation of the effectiveness of the Company's
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based upon this
evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were
effective as of the end of the period covered by this Annual Report.

Changes in Internal Control over Financial Reporting

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, 2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial
reporting.

Report of Management on Internal Control over Financial Reporting

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-

15(f) and 15d-15(f) under the Securities Exchange Act of 1934).

The internal control over financial reporting at the Company was designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the U.S. Internal control over
financial reporting includes those policies and procedures that:

•

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
Company;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting
principles generally accepted in the U.S.;
provide reasonable assurance that receipts and expenditures of the Company are being made only in accordance with authorization of management
and directors of the Company; and
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a
material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Index

The Company's management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021. Management
based this assessment on criteria for effective internal control over financial reporting described in “Internal Control - Integrated Framework 2013” issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, the Company's management determined that,
as of December 31, 2021, the Company maintained effective internal control over financial reporting. Management reviewed the results of its assessment with
the Audit Committee of the Company’s Board.

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, 2021,
as stated in its report, which is included herein immediately preceding the Company’s audited financial statements.

Item 9B. OTHER INFORMATION

None.

Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

None.

Index

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

PART III

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 2022 (the 2022 Proxy Statement) under the
caption Election of Directors. Information regarding executive officers is incorporated by reference to the Company’s 2022 Proxy Statement under the caption
Executive Officers. Information concerning the Company’s Audit Committee, including the designation of audit committee financial experts and information
regarding compliance with Section 16(a) of the Exchange Act responsive to this item is incorporated by reference to the Company’s 2022 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 2022 Proxy Statement under the caption Corporate Governance Policies and Procedures.

Item 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to information in the 2022 Proxy Statement under the captions “Executive

Compensation” and “Director Compensation.”

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER

MATTERS

See Note 13 Stock Compensation Plans to the Consolidated Financial Statements for a discussion of the Company’s Stock Compensation Plans. Except
for the above referenced footnote, the information called for by this item is incorporated by reference to information in the 2022 Proxy Statement under the
captions “Security Ownership of Certain Beneficial Holders and Management,” “Compensation Discussion & Analysis” and “Executive Compensation.”

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated by reference to information in the 2022 Proxy Statement under the captions “Board Independence”

and “Related Party Transactions.”

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference to information in the 2022 Proxy Statement under the caption “Fees to Independent

Registered Public Accounting Firm.”

Index

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) List of documents filed as part of this Annual Report:

PART IV

(1)

Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm included herein:

See Index on page F-1

(2)

Financial Statement Schedules:

All schedules are omitted as they are inapplicable or the required information is furnished in the Consolidated Financial
Statements or notes thereto.

(3)

Index to and List of Exhibits

3.1

3.2

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

Amended and Restated Certificate of Incorporation of the Company dated May 24, 2001 (incorporated herein by reference
to Exhibit 3.1 to the Company’s Registration Statement on Form S-3, filed with the Commission on October 19, 2001, File
No. 333-71896).
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, 2020. and Restated By-Laws
of the Company.
Specimen of the Company’s Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2001).
Indenture, dated as of November 19, 2010, between the Company and U.S. Bank National Association, as trustee
(incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on November 19,
2010).
Second Supplemental Indenture, dated as of November 19, 2010, between the Company and U.S. Bank National
Association, as trustee, including the form of the 2020 Notes (incorporated herein by reference to Exhibit 4.3 to the
Company’s Current Report on Form 8-K filed on November 19, 2010).
Third Supplemental Indenture, dated as of August 23, 2012, between the Company and U.S. Bank National Association, as
trustee, including the form of the 2017 Notes (incorporated herein by reference to Exhibit 4.2 to the Company’s Current
Report on Form 8-K filed on August 23, 2012).
Fourth Supplemental Indenture, dated as of August 23, 2012, between the Company and U.S. Bank National Association,
as trustee, including the form of the 2022 Notes (incorporated herein by reference to Exhibit 4.3 to the Company’s Current
Report on Form 8-K filed on August 23, 2012).
Fifth Supplemental Indenture, dated as of November 1, 2013, between the Company and U.S. Bank National Association,
as trustee, including the form of the 2018 Notes (incorporated herein by reference to Exhibit 4.2 to the Company’s Current
Report on Form 8-K filed on November 1, 2013).
Sixth Supplemental Indenture, dated as of November 1, 2013, between the Company and U.S. Bank National Association,
as trustee, including the form of the 2023 Notes (incorporated herein by reference to Exhibit 4.3 to the Company’s Current
Report on Form 8-K filed on November 1, 2013).
Seventh Supplemental Indenture, dated as of January 30, 2015, between the Company and U.S. Bank National
Association, as trustee, including the form of the 2020 Notes (incorporated herein by reference to Exhibit 4.2 to the
Company’s Current Report on Form 8-K filed on January 30, 2015).
Eighth Supplemental Indenture, dated as of January 30, 2015, between the Company and U.S. Bank National Association,
as trustee, including the form of the 2022 Notes (incorporated herein by reference to Exhibit 4.3 to the Company’s Current
Report on Form 8-K filed on January 30, 2015).
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 2025 Notes (incorporated herein by reference to Exhibit 4.4 to the Company’s Current
Report on Form 8-K filed on January 30, 2015).
Tenth Supplemental Indenture, dated as of January 30, 2015, between the Company and U.S. Bank National Association,
as trustee, including the form of the 2045 Notes (incorporated herein by reference to Exhibit 4.5 to the Company’s Current
Report on Form 8-K filed on January 30, 2015).
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).

Index

4.13

4.14

4.15

4.16

4.17

4.18*
+
10.1

+
10.2

+
10.3

+
10.4

+
10.5

+
10.6

+
10.7

+
10.8

+
10.9

+
10.10

+
10.11

+
10.12

+
10.13

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).
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).
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).
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 (incorporated herein by reference to Exhibit 4.2 to the Company's Current
Report on Form 8-K filed on May 26, 2021).
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 (incorporated herein by reference to Exhibit 4.3 to the Company's Current
Report on Form 8-K filed on May 26, 2021).
Description of the Registrant's securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
National Health Laboratories Incorporated Pension Equalization Plan (incorporated herein by reference to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 1992).
Laboratory Corporation of America Holdings Amended and Restated New Pension Equalization Plan (incorporated herein
by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2004).
First Amendment to the Laboratory Corporation of America Holdings Amended and Restated New Pension Equalization
Plan (incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the period
ended September 30, 2004).
Second Amendment to the Laboratory Corporation of America Holdings Amended and Restated New Pension
Equalization Plan (incorporated herein by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2004).
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).
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).
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).
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).
Third Amendment to the Laboratory Corporation of America Holdings Deferred Compensation Plan (incorporated herein
by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2006).
Fourth Amendment to the Laboratory Corporation of America Holdings Deferred Compensation Plan (incorporated herein
by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2007).
Laboratory Corporation of America Holdings 2008 Stock Incentive Plan (incorporated herein by reference to Annex III to
the Company’s Definitive Proxy Statement on Schedule 14A filed on March 25, 2008).
Amendment to Laboratory Corporation of America Holdings 2008 Stock Incentive Plan (incorporated herein by reference
to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 7, 2008).
Laboratory Corporation of America Holdings 2012 Omnibus Incentive Plan (incorporated herein by reference to Exhibit
10.1 to the Company’s Current Report on Form 8-K filed on May 2, 2012).

Index

10.14

10.15

10.16

+
10.17

+
10.18

10.19

10.20

+
10.21

10.22
16.1

16.2

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).

Amendment No. 1, dated as of May 7, 2020, to the Second Amended and Restated Credit Agreement, dated September 15,
2017 (originally dated as of December 21, 2011), among the Company, Bank of America, N.A. as administrative agent,
and the lenders party thereto (incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form
10-Q filed on May 8, 2020).
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).
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).
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).
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).
Amendment No. 1, dated as of May 7, 2020, to the Term Loan Credit Agreement, dated June 3, 2019, 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 8, 2020).
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).
Amended and Restated Master Senior Executive Severance Plan.
Letter of PricewaterhouseCoopers LLP, dated November 5, 2020 (incorporated by reference to Exhibit 16.1 to the
Company’s Current Report on Form 8-K filed on November 5, 2020).
Letter of PricewaterhouseCoopers LLP, dated March 3, 2021 (incorporated by reference to Exhibit 16.1 to the Company's
Current Report on Form 8-K/A filed on March 3, 2021).

Index

21*
23.1*
23.2*
24.1*
24.2*
24.3*
24.4*
24.5*
24.6*
24.7*
24.8*
24.9*

31.1*
31.2*
32*

List of Subsidiaries of the Company
Consent of Deloitte & Touche LLP, an independent registered public accounting firm
Consent of PricewaterhouseCoopers LLP, an independent registered public accounting firm
Power of Attorney of Kerrii B. Anderson
Power of Attorney of Jean-Luc Bélingard
Power of Attorney of Jeffrey A. Davis
Power of Attorney of D. Gary Gilliland, M.D., Ph.D.
Power of Attorney of Garheng Kong, M.D., Ph.D.
Power of Attorney of Peter M. Neupert
Power of Attorney of Richelle P. Parham
Power of Attorney of Kathryn E. Wengel
Power of Attorney of R. Sanders Williams, M.D.

Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)
Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)
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 1350)

101.INS*
101.SCH*
101.CAL*
101.DEF*
101.LAB*
101.PRE*
104*

Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded
within the Inline XBRL document.
Inline XBRL Taxonomy Extension Schema
Inline XBRL Taxonomy Extension Calculation Linkbase
Inline XBRL Taxonomy Extension Definition Linkbase
Inline XBRL Taxonomy Extension Label Linkbase
Inline XBRL Taxonomy Extension Presentation Linkbase
Cover Page Interactive Data File (embedded within the Inline XBRL document)

*
+

Filed or furnished herewith, as required
Management contracts or compensatory plans or arrangements

Index

Item 16. FORM 10-K SUMMARY

None.

Index

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

LABORATORY CORPORATION OF AMERICA HOLDINGS
Registrant

By:

/s/ ADAM H. SCHECHTER
Adam H. Schechter
President and Chief Executive Officer

Dated: February 25, 2022

Index

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 25, 2022 in the capacities indicated.

Signature

Title

/s/ ADAM H. SCHECHTER
Adam H. Schechter

/s/ GLENN A. EISENBERG
Glenn A. Eisenberg

/s/ PETER J. WILKINSON
Peter J. Wilkinson

*
Kerrii B. Anderson

*
Jean-Luc Bélingard

*
Jeffrey A. Davis

*
D. Gary Gilliland, M.D., Ph.D.

*
Garheng Kong, M.D., Ph.D.

*
Peter M. Neupert

*
Richelle Parham

*
Kathryn E. Wengel

*
R. Sanders Williams, M.D.

President and Chief Executive Officer

(Principal Executive Officer)

Executive Vice President, Chief Financial Officer

(Principal Financial Officer)

Senior Vice President and Chief Accounting Officer

(Principal Accounting Officer)

Director

* Sandra van der Vaart, by her signing her name hereto, does hereby sign this Annual Report on behalf of the directors of the Registrant after whose typed
names asterisks appear, pursuant to powers of attorney duly executed by such directors and filed with the Securities and Exchange Commission.
By:

/s/ Sandra van der Vaart
Sandra van der Vaart
Attorney-in-fact

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm Deloitte & Touche
LLP

PCAOB ID No.

Report of Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP

PCAOB ID No.

238

Consolidated Financial Statements:

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Earnings

Consolidated Statements of Changes in Shareholders' Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

F-1

Page

F-2

F-6

F-7

F-8

F-9

F-10

F-11

F-12

Index

Report of Independent Registered Public Accounting Firm

To the shareholders and Board of Directors of Laboratory Corporation of America Holdings

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Laboratory Corporation of America Holdings and subsidiaries (the “Company”) as of
December 31, 2021, the related consolidated statements of operations, comprehensive earnings, changes in shareholders’ equity, and cash flows for the year
ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly,
in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year ended
December 31, 2021, 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, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2022, expressed an unqualified opinion on the
Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial
statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or
required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved
our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the
financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.

Revenue Recognition for Full-Service Clinical Trial Contracts— Refer to Note 2 to the financial statements

Critical Audit Matter Description

Within the Drug Development segment, the Company provides clinical development and commercialization services through the performance of clinical trial
services for which revenue is recognized as services are performed. Most of the contracts associated with these services are long term in nature and constitute
a single performance obligation (e.g., management of a clinical trial), 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. Revenue recognition is measured on a proportional-performance basis using
costs as the input measure of progress, meaning revenue is recognized based on the proportion of actual costs incurred to total costs expected to complete the
contract. The Company reviews and revises estimated total costs to satisfy the performance obligation throughout the life of the contract, with adjustments to
revenue resulting from such revisions being recorded in the period in which the change in estimate is determined.

F-2

Index

Given the judgments necessary to estimate total expected contract costs for purposes of revenue recognition for full-service clinical trial contracts which use
the cost-to-cost method, 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.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s estimates of total contract costs for purposes of revenue recognition for full-service clinical trial contracts
which use the proportional-performance method included the following, among others:

• We tested the effectiveness of controls over long-term contract revenue, including those over the estimates of total contract costs related to the

performance obligation.

• We selected a sample of long-term contracts and performed the following:

◦

◦
◦

Evaluated whether the contracts were properly included in management’s calculation of long-term contract revenue based on the terms and
conditions of each contract, including whether continuous transfer of control to the customer occurred as progress was made toward
fulfilling the performance obligation.
Compared the transaction prices to the consideration expected to be received based on current rights and obligations under the contracts and
any contract modifications that were agreed upon with the customers.
Evaluated management’s identification of distinct performance obligations by assessing whether the underlying services were highly
interdependent and interrelated.
Tested the accuracy and completeness of the total contract costs incurred to date for the performance obligation.
Evaluated the estimates of total contract cost for the performance obligation by:

– Comparing costs incurred to date to the costs management estimated to be incurred to date.
– Assessing management’s ability to achieve the estimates of total contract cost by performing corroborating inquiries with the
Company’s project managers and project financial analysts and comparing the estimates to management’s work plans and cost
estimates.

– Comparing management’s estimates for the selected contracts to historical experience and original budgets, when applicable.

◦

Tested the mathematical accuracy of management’s calculation of revenue for the performance obligation.

• We evaluated management’s ability to accurately estimate total contract costs and revenue by comparing actual costs to management’s historical

estimates for performance obligations that have been fulfilled.

Valuation of Labcorp Diagnostics Segment (Dx) Net Accounts Receivable— Refer to Note 2 to the financial statements

Critical Audit Matter Description

The Company recognizes Dx revenue and accounts receivable net of negotiated discounts and anticipated adjustments, including historical collection
experience for each of its four payer portfolios (clients, patients, Medicare & Medicaid, and third party). Management has a formal process to estimate
implicit price concessions for uncollectable accounts. Anticipated write-offs are recorded as adjustments to revenue at an amount considered necessary to
record revenue at its net realizable value. In addition to negotiated contractual discounts, other adjustments including anticipated payer denials and other
external factors that could affect the collectability of its receivables are considered when determining revenue and the net receivable amount.

Given the significant judgment and estimates necessary to determine the net realizable value of accounts receivable related to the Dx segment, auditing such
estimates required extensive audit effort and a high degree of auditor judgment when performing audit procedures and evaluating the results of those
procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to Dx Net Accounts Receivable included the following, among others:
• We tested the effectiveness of controls over the valuation of net accounts receivable.
• We evaluated management’s methodology for recording Dx net accounts receivable by performing a retrospective comparison of actual cash

collected to the prior year estimate of net accounts receivable.

• We developed an independent estimate of net accounts receivable by taking into consideration historical collections, write-offs, and other relevant

internal and external factors.

• We tested the completeness and accuracy of underlying historical data used as an input to management’s methodology and our independent estimate.

F-3

Index

/s/DELOITTE & TOUCHE LLP
Raleigh, North Carolina
February 25, 2022

We have served as the Company’s auditor since 2021.

F-4

Index

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Laboratory Corporation of America Holdings

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Laboratory Corporation of America Holdings and subsidiaries (the “Company”) as of
December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as
of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated
financial statements as of and for the year ended December 31, 2021, of the Company and our report dated February 25, 2022, expressed an unqualified
opinion on those financial statements.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting, included in the accompanying Report of Management on Internal Control over Financial Reporting. Our
responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

/s/ DELOITTE & TOUCHE LLP
Raleigh, North Carolina
February 25, 2022

F-5

Index

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Laboratory Corporation of America Holdings

Opinion on the Financial Statements

We have audited the consolidated balance sheet of Laboratory Corporation of America Holdings and its subsidiaries (the “Company”) as of December 31,
2020, and the related consolidated statements of operations, comprehensive earnings, changes in shareholders' equity and cash flows for each of the two years
in the period ended December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the
consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its
operations and its cash flows for each of the two years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in
the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s
consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error
or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
Raleigh, North Carolina
February 25, 2021, except for the effects of the revision discussed in Note 1 to the consolidated financial statements, as to which the date is February 25, 2022

We served as the Company's auditor from 1997 to 2021.

F-6

Index

PART I – FINANCIAL INFORMATION

Item 1. Financial Information

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Millions)

December 31,
2021

December 31,
2020

ASSETS
Current assets:

Cash and cash equivalents
Accounts receivable, net
Unbilled services
Supplies inventory
Prepaid expenses and other
Total current assets

Property, plant and equipment, net
Goodwill, net
Intangible assets, net
Joint venture partnerships and equity method investments
Deferred income taxes
Other assets, net

Total assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:

Accounts payable
Accrued expenses and other
Unearned revenue
Short-term operating lease liabilities
Short-term finance lease liabilities
Short-term borrowings and current portion of long-term debt
Total current liabilities

Long-term debt, less current portion
Operating lease liabilities
Financing lease liabilities
Deferred income taxes and other tax liabilities
Other liabilities
Total liabilities
Commitments and contingent liabilities
Noncontrolling interest
Shareholders’ equity

Common stock, 93.1 and 97.5 shares outstanding at December 31, 2021 and 2020, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total shareholders’ equity

Total liabilities and shareholders’ equity

The accompanying notes are an integral part of these consolidated financial statements.

F-7

1,472.7 $
2,261.5
716.8
401.4
478.1
5,330.5
2,815.4
7,958.9
3,735.5
60.9
21.6
462.6
20,385.4 $

621.3 $

1,404.1
558.5
187.0
10.5
1.5
2,782.9
5,416.5
642.5
84.6
762.9
402.0
10,091.4

20.6

8.5
—
10,456.8
(191.9)
10,273.4
20,385.4 $

1,320.8
2,479.8
536.8
423.2
364.8
5,125.4
2,729.6
7,751.5
3,961.1
73.5
20.6
410.0
20,071.7

638.9
1,357.7
506.5
192.0
6.7
376.7
3,078.5
5,419.0
677.6
84.4
828.5
526.4
10,614.4

20.7

9.0
110.3
9,479.2
(161.9)
9,436.6
20,071.7

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Millions, Except Per Share Data)

Revenues
Cost of revenues
Gross profit
Selling, general and administrative expenses
Amortization of intangibles and other assets
Goodwill and other asset impairments
Restructuring and other charges
Operating income
Other income (expense):
Interest expense
Equity method income, net
Investment income
Other, net
Earnings before income taxes
Provision for income taxes
Net earnings
Less: Net earnings attributable to the noncontrolling interest

Net earnings attributable to Laboratory Corporation of America Holdings

Basic earnings per common share
Diluted earnings per common share

The accompanying notes are an integral part of these consolidated financial statements.

F-8

Years Ended December 31,
2020

2021

2019

$
$

16,120.9 $
10,496.6
5,624.3
1,952.1
369.6
—
43.1
3,259.5

(212.1)
26.5
10.2
42.5
3,126.6
747.1
2,379.5
(2.2)
2,377.3 $

13,978.5 $
9,025.7
4,952.8
1,729.3
275.4
462.1
40.6
2,445.4

(207.4)
2.9
10.3
(32.1)
2,219.1
662.1
1,557.0
(0.9)
1,556.1 $

24.60 $
24.39 $

15.99 $
15.88 $

11,554.8
8,302.3
3,252.5
1,624.5
243.2
—
54.6
1,330.2

(240.7)
9.8
8.8
(3.2)
1,104.9
280.0
824.9
(1.1)
823.8

8.42
8.35

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In Millions, Except Per Share Data)

Net earnings
Foreign currency translation adjustments
Net benefit plan adjustments
Other comprehensive earnings (loss) before tax
Provision (benefit) for income tax related to items of comprehensive earnings
Other comprehensive earnings (loss), net of tax
Comprehensive earnings
Less: Net earnings attributable to the noncontrolling interest

Comprehensive earnings attributable to Laboratory Corporation of America Holdings

The accompanying notes are an integral part of these consolidated financial statements.

F-9

Years Ended December 31,
2020

2021

2019

2,379.5 $
(104.6)
91.7
(12.9)
(17.1)
(30.0)
2,349.5
(2.2)
2,347.3 $

1,557.0 $
264.1
(65.7)
198.4
12.1
210.5
1,767.5
(0.9)
1,766.6 $

824.9
104.4
(17.4)
87.0
3.7
90.7
915.6
(1.1)
914.5

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(In Millions)

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Treasury
Stock

Accumulated
Other
Comprehensive
Earnings (Loss)

Total
Shareholders’
Equity

BALANCE AT DECEMBER 31, 2018
Net earnings attributable to Laboratory Corporation of America Holdings
Other comprehensive earnings (loss), net of tax
Issuance of common stock under employee stock plans
Net share settlement tax payments from issuance of stock to employees
Stock compensation
Retirement of treasury stock
Purchase of common stock
BALANCE AT DECEMBER 31, 2019
Adoption of credit loss accounting standard
Net earnings attributable to Laboratory Corporation of America Holdings
Other comprehensive earnings (loss), net of tax
Issuance of common stock under employee stock plans
Net share settlement tax payments from issuance of stock to employees
Stock compensation
Purchase of common stock
BALANCE AT DECEMBER 31, 2020
Net earnings attributable to Laboratory Corporation of America Holdings
Other comprehensive earnings (loss), net of tax
Issuance of common stock under employee stock plan
Net share settlement tax payments from issuance of stock to employees
Stock compensation
Purchase of common stock

11.7
—
—
—
—
—
(2.4)
(0.3)

9.0
—
—
—
—
—
—
—

9.0
—
—
—
—
—
(0.5)

1,451.1
—
—
64.7
(0.5)
107.0
(1,145.8)
(449.7)

26.8
—
—
—
55.9
(34.5)
111.7
(49.6)

110.3
—
—
51.7
(47.4)
153.7
(268.3)

7,156.7
823.8
—
—
—
—
—
—

7,980.5
(7.0)
1,556.1
—
—
—
—
(50.4)

9,479.2
2,377.3
—
—
—
—
(1,399.7)

BALANCE AT DECEMBER 31, 2021

8.5

—

10,456.8

The accompanying notes are an integral part of these consolidated financial statements.

F-10

(1,108.1)
—
—
—
(40.1)
—
1,148.2
—

—
—
—
—
—
—
—
—

—
—
—
—
—
—
—

—

(463.1)
—
90.7
—
—
—
—
—

(372.4)
—
—
210.5
—
—
—
—

(161.9)
—
(30.0)
—
—
—
—

7,048.3
823.8
90.7
64.7
(40.6)
107.0
—
(450.0)

7,643.9
(7.0)
1,556.1
210.5
55.9
(34.5)
111.7
(100.0)

9,436.6
2,377.3
(30.0)
51.7
(47.4)
153.7
(1,668.5)

10,273.4

(191.9)

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)

Years Ended December 31,
2020

2021

2019

CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
Stock compensation
Loss on sale of business
Operating lease right-of-use asset expense
Goodwill and other asset impairments
Deferred income taxes
Other, net
Change in assets and liabilities (net of effects of acquisitions and divestitures):
(Increase) decrease in accounts receivable
Increase in unbilled services
(Increase) decrease in inventory
Increase in prepaid expenses and other
Decrease in accounts payable
Increase in deferred revenue
Increase (decrease) in accrued expenses and other
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
Purchase of investments
Proceeds from sale of assets
Proceeds from sale or distribution of investments
Proceeds from exit from swaps
Proceeds from sale of business
Acquisition of businesses, net of cash acquired
Net cash used for investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Senior Notes offerings
Payments on Senior Notes
Proceeds from term loan
Payments on term loan
Proceeds from revolving credit facilities
Payments on revolving credit facilities
Net share settlement tax payments from issuance of stock to employees
Net proceeds from issuance of stock to employees
Purchase of common stock
Other
Net cash used for financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

The accompanying notes are an integral part of these consolidated financial statements.

F-11

2,379.5 $

1,557.0 $

824.9

745.1
153.7
—
194.9
—
(75.9)
(24.0)

222.0
(179.2)
2.8
(68.2)
(10.2)
45.0
(275.9)
3,109.6

(460.4)
(27.8)
87.3
13.2
—
—
(496.9)
(884.6)

624.7
111.7
—
200.3
462.1
(47.0)
83.4

(913.4)
(42.5)
(196.6)
(5.4)
(5.3)
48.4
257.9
2,135.3

(381.7)
(40.1)
42.1
1.0
3.1
—
(267.6)
(643.2)

1,000.0
(1,000.0)
—
(375.0)
—
—
(47.4)
51.7
(1,668.5)
(26.6)
(2,065.8)
(7.3)
151.9
1,320.8
1,472.7 $

—
(412.2)
—
—
151.7
(151.7)
(34.5)
55.9
(100.0)
(26.6)
(517.4)
8.6
983.3
337.5
1,320.8 $

577.2
107.0
13.2
194.1
—
29.2
(6.5)

(64.1)
(59.0)
(21.9)
(42.6)
(12.8)
38.1
(132.1)
1,444.7

(400.2)
(27.5)
7.7
11.2
—
1.7
(876.0)
(1,283.1)

1,050.0
(687.9)
850.0
(1,002.0)
495.0
(495.0)
(40.6)
64.7
(450.0)
(36.9)
(252.7)
1.8
(89.3)
426.8
337.5

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Financial Statement Presentation

Laboratory Corporation of America Holdings (Labcorp or the Company) is a leading global life sciences company that provides vital information to
help doctors, hospitals, pharmaceutical companies, researchers, and patients make clear and confident decisions. By leveraging its strong diagnostics and drug
development capabilities, the Company provides insights and accelerates innovations to improve health and improve lives. With over 75,500 employees, the
Company serves clients in more than 100 countries.

The Company reports its business in two segments, Labcorp Diagnostics (Dx) and Labcorp Drug Development (DD). 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. For further financial information about these segments, including information for each of the last three fiscal
years regarding revenue, operating income, and other important information, see Note 19 Business Segment Information to the Consolidated Financial
Statements. In 2021, Dx and DD contributed 64% and 36%, respectively, of revenues to the Company, and in 2020 contributed 65% and 35%, respectively.

The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries for which it exercises control. Long-term
investments in affiliated companies in which the Company exercises significant influence, but which it does not control, are accounted for using the equity
method. Investments in which the Company does not exercise significant influence (generally, when the Company has an investment of less than 20% and no
representation on the investee's board of directors) are accounted for at fair value or at cost minus impairment adjusted for observable price changes in orderly
transactions for an identical or similar investment of the same issuer for those investments that do not have readily determinable fair values. All significant
inter-company transactions and accounts have been eliminated. The Company does not have any variable interest entities or special purpose entities whose
financial results are not included in the consolidated financial statements.

The financial statements of the Company's operating foreign subsidiaries are measured using the local currency as the functional currency. Assets and
liabilities are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average monthly exchange rates prevailing
during the year. Resulting translation adjustments are included in “Accumulated other comprehensive income.”

Reimbursable Out-of-Pocket Expenses

DD pays on behalf of its customers certain out-of-pocket costs for which the Company is reimbursed at cost, without mark-up or profit. Out-of-pocket

costs paid by DD are reflected in cost of revenues, while the reimbursements received are reflected in revenues in the consolidated statements of operations.

Cost of Revenues

Cost of revenue includes direct labor and related benefit charges, reimbursable expenses, other direct costs, shipping and handling fees, and an allocation
of facility charges and information technology costs. Selling, general and administrative expenses consist primarily of administrative payroll and related
benefit charges, advertising and promotional expenses, administrative travel and an allocation of facility charges and information technology costs. Cost of
advertising is expensed as incurred.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the Company to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reported periods. Significant estimates include implicit price concessions, revenue estimates,
the allowances for doubtful accounts, deferred tax assets, fair values of acquired assets and assumed liabilities in business combinations, fair value of
goodwill and indefinite-lived intangible assets, amortization lives for acquired intangible assets, and accruals for self-insurance reserves, litigation reserves
and pensions. Actual results could differ from those estimates.

The extent to which the COVID-19 pandemic has and will continue to impact the Company’s business and financial results depend on numerous evolving
factors including, but not limited to: the magnitude and duration of the COVID-19 pandemic, the impact to worldwide macroeconomic conditions including
interest rates, employment rates and health insurance coverage, the speed of the anticipated recovery, and governmental and business reactions to the
pandemic. The Company assessed certain

F-12

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the
Company and the unknown future impacts of COVID-19 as of December 31, 2021, and through the date of this Annual Report. The accounting matters
assessed included, but were not limited to, the Company’s implicit price concessions and credit losses, equity investments, and the carrying value of goodwill
and other long-lived assets. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could impact the
Company’s consolidated financial statements in future reporting periods.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts

receivable.

The Company maintains cash and cash equivalents with various major financial institutions. The total cash and cash equivalent balances that exceeded the

balances insured by the Federal Deposit Insurance Commission, were approximately $1,471.0 and $1,319.4 at December 31, 2021, and 2020, respectively.

Substantially all of the Company’s accounts receivable are with companies in the healthcare or pharmaceutical industry and individuals. However,
concentrations of credit risk are mitigated due to the number of the Company’s customers as well as their dispersion across many different geographic
regions.

Although Dx has receivables due from U.S. and state governmental agencies, the Company does not believe that such receivables represent a credit risk
since the related healthcare programs are funded by U.S. and state governments, and payment is primarily dependent upon submitting appropriate
documentation. Accounts receivable balances (gross) from Medicare and Medicaid were $94.5 and $109.8 at December 31, 2021, and 2020, respectively.

For the Company's operations in Ontario, Canada, the Ontario Ministry of Health and Long-Term Care (Ministry) determines who can establish a licensed
community medical laboratory and caps the amount that each of these licensed laboratories can bill the government sponsored healthcare plan. The Ontario
government-sponsored healthcare plan covers the cost of commercial laboratory testing performed by the licensed laboratories. The provincial government
discounts the annual testing volumes based on certain utilization discounts and establishes an annual maximum it will pay for all community laboratory tests.
The agreed-upon reimbursement rates are subject to Ministry review at the end of year and can be adjusted (at the government's discretion) based upon the
actual volume and mix of test work performed by the licensed healthcare providers in the province during the year. The capitated accounts receivable
balances from the Ontario government sponsored healthcare plan were CAD 7.2 and CAD 0.6 at December 31, 2021, and 2020, respectively.

The portion of the Company's accounts receivable due from patients comprises the largest portion of credit risk. At December 31, 2021, and 2020,
receivables due from patients represented approximately 16.7% and 13.9% of the Company's consolidated gross accounts receivable, respectively. The
Company applies assumptions and judgments including historical collection experience and reasonable and supportable forecasts for assessing collectability
and determining allowances for doubtful accounts for accounts receivable from patients.

Earnings per Share

Basic earnings per share is computed by dividing net earnings attributable to Laboratory Corporation of America Holdings by the weighted average
number of common shares outstanding. Diluted earnings per share is computed by dividing net earnings including the impact of dilutive adjustments by the
weighted average number of common shares outstanding plus potentially dilutive shares, as if they had been issued at the earlier of the date of issuance or the
beginning of the period presented. Potentially dilutive common shares result primarily from the Company’s outstanding stock options, restricted stock awards,
performance share awards, and accelerated share repurchases.

The following represents a reconciliation of basic earnings per share to diluted earnings per share:

Basic earnings per share

Stock options and stock awards

Diluted earnings per share

2021

2020

2019

Income

Per Share
Amount

Income

Per Share
Amount

Income

Per Share
Amount

2,377.3
—
2,377.3

96.7 $
0.8
97.5 $

24.60 $

24.39 $

1,556.1
—
1,556.1

97.3 $
0.7
98.0 $

15.99 $

15.88 $

823.8
—
823.8

97.9 $
0.7
98.6 $

8.42

8.35

F-13

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

The following table summarizes the potential common shares not included in the computation of diluted earnings per share because their impact would

have been antidilutive:

Stock options

Stock Compensation Plans

Years Ended December 31,
2020
0.2

2021
0.1

2019
0.2

The Company measures stock compensation cost for all equity awards at fair value on the date of grant and recognizes compensation expense over the
service period for awards expected to vest. The fair value of restricted stock units is determined based on the number of shares granted and the quoted price of
the Company’s common stock on the grant date. The grant date fair value of performance awards is based on a Monte Carlo simulated fair value for the
relative (as compared to the peer companies) total shareholder return component of the performance awards. Such value is recognized as an expense over the
service period, net of estimated forfeitures and the Company's determination of whether it is probable that the performance targets will be achieved. At the
end of each reporting period, the Company reassesses the probability of achieving performance targets. The estimation of equity awards that will ultimately
vest requires judgment and the Company considers many factors when estimating expected forfeitures, including types of awards, employee class, and
historical experience. Forfeitures are recognized as a reduction of compensation expense in earnings in the period in which they occur.

See Note 13 Stock Compensation Plans for assumptions used in calculating compensation expense for the Company’s stock compensation plans.

Cash Equivalents

Cash and cash equivalents consist of highly liquid instruments, such as commercial paper, time deposits, and other money market instruments, which have

maturities when purchased of three months or less.

Supplies Inventory

Inventories, consisting primarily of purchased laboratory and customer supplies and finished goods, are stated at the lower of cost (first-in, first-out) or net
realizable value. Supplies accounted for $371.5 and $403.6 and finished goods accounted for $29.9 and $19.6 of total inventory at December 31, 2021, and
2020, respectively. The Company's inventory reserve balance was $40.1 and $20.2, as of December 31, 2021 and 2020, respectively.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Depreciation and amortization expense is computed on all classes of assets based on their estimated

useful lives, as indicated below, using the straight-line method.

Buildings and building improvements
Machinery and equipment
Furniture and fixtures
Software

Years

10 -
3
5
3

-
-
-

35
10
10
5

Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the related leases. Expenditures for repairs and
maintenance are charged to operations as incurred. Retirements, sales and other disposals of assets are recorded by removing the cost and accumulated
depreciation from the related accounts with any resulting gain or loss reflected in the consolidated statements of operations.

Capitalized Software Costs

The Company capitalizes purchased software that is ready for service and capitalizes software development costs incurred on significant projects starting
from the time that the preliminary project stage is completed and the Company commits to funding a project until the project is substantially complete and the
software is ready for its intended use. Capitalized costs include direct material and service costs and payroll and payroll-related costs. Research and
development (R&D) costs and other computer software maintenance costs related to software development are expensed as incurred. Capitalized software
costs are amortized using the straight-line method over the estimated useful life of the underlying system ranging from three to fifteen years, generally five
years. Amortization begins once the underlying system is substantially complete and ready for its intended use.

F-14

Index

Long-Lived Assets

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

The Company assesses goodwill and indefinite-lived intangibles for impairment at least annually or whenever events or changes in circumstances indicate
that the carrying amount of such assets may not be recoverable. The annual impairment test for goodwill includes an option to perform a qualitative
assessment of whether it is more likely than not that a reporting unit's fair value is less than its carrying value. Reporting units are businesses with discrete
financial information that is available and reviewed by management. If the Company determines that it is more likely than not that the fair value of a reporting
unit is less than its carrying value, then the Company performs the quantitative goodwill impairment test. The Company may also chose to bypass the
qualitative assessment for any reporting unit in its goodwill assessment and proceed directly to performing the quantitative assessment. The Company
recognizes an impairment charge for the amount by which the reporting unit's carrying amount exceeds its fair value.

Long-lived assets, other than goodwill and indefinite-lived assets, are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amounts may not be recoverable. 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.

Intangible Assets

Intangible assets are amortized on a straight-line basis over the expected periods to be benefited, as set forth in the table below, such as legal life for

patents and technology and contractual lives for non-compete agreements.

Customer relationships
Patents, licenses and technology
Non-compete agreements
Trade names

Debt Issuance Costs

Years

10 -
-
3
-
3
-
1

36
15
5
15

The costs related to the issuance of debt are capitalized, netted against the related debt for presentation purposes and amortized to interest expense over

the terms of the related debt.

Professional Liability

The Company is self-insured (up to certain limits) for professional liability claims arising in the normal course of business, generally related to the testing
and reporting of laboratory test results. The Company estimates a liability that represents the ultimate exposure for aggregate losses below those limits. The
liability is based on assumptions and factors for known and incurred but not reported claims, including the frequency and payment trends of historical claims.

F-15

Index

Leases

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

All leases with a lease term greater than 12 months, regardless of lease type classification, are recorded as an obligation on the balance sheet with a
corresponding right-of-use asset. Both finance and operating leases are reflected as liabilities on the commencement date of the lease based on the present
value of the lease payments to be made over the lease term. Right-of-use assets are valued at the initial measurement of the lease liability, plus any initial
direct costs or rent prepayments, minus lease incentives and any deferred lease payments. The classification will determine whether lease expense is
recognized based on an effective interest method or on a straight-line basis over the term of the lease.

A certain number of these leases contain rent escalation clauses either fixed or adjusted periodically for inflation or market rates that are factored into the
Company's determination of lease payments. The Company also has variable lease payments that do not depend on a rate or index, for items such as volume
purchase commitments, which are recorded as variable cost when incurred. As most of the Company's leases do not provide an implicit rate, the Company
estimates an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar
borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. The Company uses this rate to discount payments to
present value. Some operating leases contain renewal options, some of which also include options to early terminate the leases. The exercise of these options
is at the Company's discretion and the Company evaluates each renewal option to determine if it is reasonably possible to be exercised and should be included
in the accounting lease term. See Note 5 Leases to the Consolidated Financial Statements.

Income Taxes

The Company accounts for income taxes utilizing the asset and liability method. Under this method deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and for tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date. The Company does not recognize a tax benefit unless the Company concludes that it is
more likely than not that the benefit will be sustained on audit by the taxing authority based solely on the technical merits of the associated tax position. If the
recognition threshold is met, the Company recognizes a tax benefit measured at the largest amount of the tax benefit that the Company believes is greater than
50% likely to be realized. The Company records interest and penalties in income tax expense.

Derivative Financial Instruments

Interest rate swap agreements, which have been used by the Company from time to time in the management of interest rate exposure, are accounted for at

fair value.

Cross currency swap agreements, which have been used by the Company to hedge exposure of its net investment in a foreign subsidiary denominated in

non-U.S. currency, are accounted for at 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.

Fair Value of Financial Instruments

Fair value measurements for financial assets and liabilities are determined based on the assumptions that a market participant would use in pricing an
asset or liability. A three-tiered fair value hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted
prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2), and (iii)
unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3).

Research and Development

The Company expenses R&D costs as incurred.

Foreign Currencies

For subsidiaries outside of the U.S. that operate in a local currency environment, income and expense items are translated to U.S. dollars at the monthly
average rates of exchange prevailing during the period, assets and liabilities are translated at period-end exchange rates and equity accounts are translated at
historical exchange rates. Translation adjustments are accumulated in a separate component of shareholders’ equity in the consolidated balance sheets and are
included in the determination of comprehensive income in the consolidated statements of comprehensive earnings and consolidated statements of changes in

F-16

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

shareholders’ equity. Transaction gains and losses are included in the determination of net income in the consolidated statements of operations.

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.

2. REVENUES

Description of Revenues

Dx attributes revenues to a geographical region based upon where the diagnostic test is performed, while DD attributes revenues to a geographical region
based upon where the services are performed. The Company's revenue by segment payers/customer groups for the years ended December 31, 2021, 2020 and
2019 is as follows:

Year Ended
December 31, 2021

For the Year Ended
December 31, 2020

For the Year Ended
December 31, 2019

North
America

Europe

Other

Total

North
America

Europe

Other

Total

North
America

Europe

Other

Total

17 %
6 %

7 %
34 %

— %
— %

17 %
6 %

7 %
34 %

64 %

— %

64 %

20 %
6 %

7 %
32 %

65 %

— %
— %

20 %
6 %

7 %
32 %

— %

65 %

17 %
8 %

8 %
27 %

60 %

— %
— %

17 %
8 %

8 %
27 %

— %

60 %

17 %

13 %

6 %

36 %

17 %

11 %

7 %

35 %

21 %

12 %

7 %

40 %

Payer/Customer
Dx
Clients
Patients
Medicare and
Medicaid
Third party
Total Dx revenues
by payer

DD
Pharmaceutical,
biotechnology and
medical device
companies

Total revenues

81 %

13 %

6 % 100 %

82 %

11 %

7 %

100 %

81 %

12 %

7 %

100 %

Revenues in the U.S. were $12,566.2 (77.9%), $11,192.3 (80.1%) and $8,981.3 (77.7%) for the years ended December 31, 2021, 2020, and 2019.

The following is a description of the current revenue recognition policies of the Company:

Dx Revenues

Dx is an independent clinical laboratory business. It 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 DNA analysis, Dx also offered a range of other testing services.

F-17

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

The following are descriptions of the Dx payer portfolios:

Clients

Client payers represent the portion of Dx’s revenue related to physicians, hospitals, health systems, accountable care organizations (ACOs), employers and
other entities where payment is received exclusively from the entity ordering the testing service. Generally, client sales are recorded on a fee-for-service basis
at Dx’s client list price, less any negotiated discount. A portion of client billing is for laboratory management services, collection kits and other non-testing
services or products. In these cases, revenue is recognized when services are rendered or delivered.

Patients

This portfolio includes revenue from uninsured patients and member cost-share for insured patients (e.g., coinsurance, deductibles and non-covered
services). Uninsured patients are billed based upon Dx’s patient list fee schedules, net of any discounts negotiated with physicians on behalf of their patients.
Dx bills insured patients as directed by their health plan and after consideration of the fees and terms associated with an established health plan contract.

Medicare and Medicaid

This portfolio relates to fee-for-service revenue from traditional Medicare and Medicaid programs. Revenue from these programs is based on the fee
schedule established by the related government authority. In addition to contractual discounts, other adjustments including anticipated payer denials are
considered when determining revenue. Any remaining adjustments to revenue are recorded at the time of final collection and settlement. These adjustments
are not material to Dx’s results of operations in any period presented.
Third Party

Third party includes revenue related to MCOs. The majority of Dx's third-party revenue is reimbursed on a fee-for-service basis. These payers are billed at
Dx's established list price and revenue is recorded net of contractual discounts. The majority of Dx’s MCO sales are recorded based upon contractually
negotiated fee schedules with sales for non-contracted MCOs recorded based on historical reimbursement experience.

In addition to contractual discounts, other adjustments including anticipated payer denials are considered when determining revenue. Any remaining
adjustments to revenue are recorded at the time of final collection and settlement. These adjustments are not material to Dx’s results of operations in any
period presented.

DD Revenues

DD is a CRO business that provides end-to-end drug development services. DD provides these services predominantly to pharmaceutical, biotechnology
and medical device companies worldwide. A majority of DD’s revenues are earned under contracts that range in duration from a few months to several years.
These contracts generally take the form of fee-for-service or fixed-price arrangements subject to pricing adjustments based on changes in scope. The total
contract value is estimated at the beginning of the contract, and is equal to the amount expected to be billed to the customer. Other payments and billing
adjustments may also factor into the calculation of the total contract value, such as the reimbursement of out-of-pocket costs and volume-based rebates.

F-18

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

total contract value. When using an input method, revenue is recognized by dividing the actual units of input incurred by the total units of input budgeted in
the contract, and multiplying that percentage by the total contract value. The estimate of total units of input at completion requires significant judgment and
the estimates are based on various assumptions of events that often span several years. These estimates are reviewed periodically and any adjustments are
recognized on a cumulative catch-up basis in the period they become known.

DD Contract costs

DD incurs sales commissions in the process of obtaining contracts with customers, which are recoverable through the service fees in the contract. Sales
commissions that are payable upon contract award are recognized as assets and amortized over the expected contract term, along with related payroll tax
expense. The amortization of commission expense is based on the weighted average contract duration for all commissionable awards in the respective
business in which the commission expense is paid, which approximates the period over which goods and services are transferred to the customer. The
amortization period of sales commissions ranges from approximately 1-5 years, depending on the business. For businesses that enter primarily short-term
contracts, the Company applies the practical expedient which allows costs to obtain a contract to be expensed when incurred if the amortization period of the
assets that would otherwise have been recognized is one year or less. Amortization of assets from sales commissions is included in selling, general, and
administrative expense.

DD incurs costs to fulfill contracts with customers, which are recoverable through the service fees in the contract. Contract fulfillment costs include
software implementation costs and setup costs for certain services. These costs are recognized as assets and amortized over the expected term of the contract
to which the implementation relates, which is the period over which services are expected to be provided to the customer. This period typically ranges from 2-
5 years. Amortization of deferred contract fulfillment costs is included in cost of goods sold.

Sales commission assets
Deferred contract fulfillment costs

Total

December 31, 2021
36.2
14.4
50.6

December 31, 2020
32.6
12.6
45.2

Amortization related to sales commission assets and associated payroll taxes for the years ended December 31, 2021, 2020, and 2019 was $27.5, $23.2
and $21.2, respectively. Amortization related to deferred contract fulfillment costs for the years ended December 31, 2021, 2020 and 2019 was $14.2, $10.1
and $8.7, respectively. Impairment expense related to contract costs was immaterial to the Company’s consolidated statement of operations. The Company
applies the practical expedient to not recognize the effect of financing in its contracts with customers, when the difference in timing of payment and
performance is one year or less.

Accounts Receivable, Unbilled Services and Unearned Revenue

Differences in the timing of revenue recognition and associated billing and cash collections result in recording accounts receivable, unbilled services and
unearned revenue in the consolidated balance sheet. Payments received in advance of services being provided are contract liabilities recognized as unearned
revenue. Revenue recognized in advance of billing are recognized as unbilled services and the majority of our unbilled services represent unbilled receivables.
Once a customer is invoiced, the contract asset is reduced for the amount billed, and a corresponding accounts receivable is recognized. All contract assets are
billable to customers within one year from the respective balance sheet date. The following table provides information about accounts receivables, unbilled
services, and unearned revenue from contracts with customers:

F-19

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Dx accounts receivable
DD accounts receivable
Less DD allowance for doubtful accounts

Accounts receivable

Gross unbilled services
Less reserve for unbilled services

Unbilled services

Unearned revenue

December 31, 2021
1,193.8
1,089.2
(21.5)
2,261.5

730.8
(14.0)
716.8

558.5

December 31, 2020
1,515.5
986.4
(22.1)
2,479.8

548.1
(11.3)
536.8

506.5

Revenue recognized during the period, that was included in the unearned revenue balance at the beginning of the period, for the years ended December 31,

2021, 2020, and 2019 was $319.4, $262.6, and 250.2, respectively.

Credit Loss Rollforward

With the adoption of the current expected credit loss standard in 2020, the Company estimates future expected losses on accounts receivable, unbilled services
and notes receivable over the remaining collection period of the instrument. The rollforward for the allowance for credit losses for the year ended
December 31, 2021, is as follows:

Allowance for credit losses as of December 31, 2019
Current expected credit losses opening balance impact on retained earnings
Credit loss expense
Write offs
Allowance for credit losses as of December 31, 2020
Credit loss expense
Write offs

Ending allowance for credit losses

Performance Obligations Under Long-Term Contracts

Accounts
Receivable

Unbilled
Services

Note and Other
Receivables

Total

19.0 $
1.8
7.0
(5.7)
22.1 $
3.8
(4.4)
21.5 $

2.3 $
0.2
9.0
(0.2)
11.3 $
2.7
(0.1)
13.9 $

— $
5.0
0.7
—
5.7 $
(5.0)
—
0.7 $

21.3
7.0
16.7
(5.9)
39.1
1.5
(4.5)
36.1

Long-term contracts at the Company consist primarily of fully managed clinical studies within the DD segment. The amount of existing performance
obligations under such long-term contracts unsatisfied as of December 31, 2021, and 2020, was $5,757.5 and $5,128.4, respectively. The Company expects to
recognize approximately 40.0% of the remaining performance obligations as of December 31, 2021, as revenue over the next 12 months, and the balance
thereafter. The Company's long-term contracts generally range from 1 to 8 years.

The Company applied the practical expedient and does not disclose information about remaining performance obligations that have original expected
durations of one year or less. The Company also did not disclose information about remaining performance obligations when the variable consideration was
related to a wholly unsatisfied performance obligation within a series of obligations.

Within DD, revenue of $69.8 and $80.9 was recognized during the year ended December 31, 2021, and December 31, 2020, respectively, from
performance obligations that were satisfied in previous periods. This revenue comes primarily from adjustments related to changes in scope, and to a lesser
extent changes in estimates in full service clinical studies.

3. BUSINESS ACQUISITIONS AND DISPOSITIONS

2021

During the year ended December 31, 2021, the Company acquired various businesses and related assets for approximately $496.9 in cash (net of cash
acquired). The purchase consideration for all acquisitions year to date has been allocated to the estimated fair market value of the net assets acquired,
including approximately $198.5 in identifiable intangible assets and a residual amount of non-tax-deductible goodwill of approximately $298.4. The
amortization periods for intangible assets acquired from these transactions range from 11 to 15 years for customer relationships, 5 to 10 years for patents and
technology, 5 years for non-compete agreements, and 5 years for trade names. These acquisitions were made primarily to extend the Company's geographic
reach in important market areas and enhance the Company's scientific differentiation. The excess of the

F-20

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

fair value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. The goodwill reflects the Company's
expectations to utilize the acquired businesses’ workforce and established relationships and the benefits of being able to leverage operational efficiencies with
favorable growth opportunities in these markets. A summary of the net assets acquired in 2021 for these businesses is included below:

Amounts Acquired During Year Ended December

31, 2021

Accounts receivable
Unbilled services
Inventories
Prepaid expenses and other
Property, plant and equipment
Goodwill
Intangible assets
Total assets acquired
Accounts payable
Accrued expenses and other
Unearned revenue
Other liabilities
Total liabilities acquired

Net assets acquired

10.8
3.2
1.6
3.0
56.6
298.4
198.5
572.1
2.5
3.9
6.6
62.2
75.2
496.9

The purchase price allocation for several transactions are still preliminary and subject to change. The areas of the purchase price allocation that are not yet
finalized relate primarily to intangible assets, goodwill, and the impact of finalizing deferred taxes. Accordingly, adjustments may be made as additional
information is obtained about the facts and circumstances that existed as of the valuation date. Any adjustments will be recorded in the period in which they
are identified.

Unaudited Pro Forma Information for 2021 Acquisitions

Had the aggregate of the Company's 2021 acquisitions been completed as of January 1, 2020, the Company's pro forma results would have been as follows:

Revenues
Net earnings attributable to Laboratory Corporation of America Holdings

2020

Years Ended December 31,

2021

2020

16,216.6
2,378.3

14,112.8
1,554.5

During the year ended December 31, 2020, the Company acquired various businesses and related assets for approximately $267.6 in cash (net of cash
acquired). The purchase consideration for all acquisitions year to date has been allocated to the estimated fair market value of the net assets acquired,
including approximately $121.3 in identifiable intangible assets and a residual amount of non-tax-deductible goodwill of approximately $166.2. The
amortization periods for intangible assets acquired from these businesses range from 12 to 15 years for customer relationships. These acquisitions were made
primarily to extend the Company's geographic reach in important market areas and enhance the Company's scientific differentiation. The excess of the fair
value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. The goodwill reflects the Company's expectations
to utilize the acquired businesses’ workforce and established relationships and the benefits of being able to leverage operational efficiencies with favorable
growth opportunities in these markets. A summary of the net assets acquired in 2020 for these businesses is included below:

F-21

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Accounts receivable
Unbilled services
Property, plant and equipment
Goodwill
Intangible assets
Total assets acquired
Accounts payable
Accrued expenses and other
Unearned revenue
Other liabilities
Total liabilities acquired

Net assets acquired

Amounts Acquired During Year Ended December
31, 2020

4.9
2.4
1.3
166.2
121.3
296.1
0.9
22.4
1.1
4.1
28.5
267.6

Unaudited Pro Forma Information for 2020 Acquisitions
Had the aggregate of the Company's 2020 acquisitions been completed as of January 1, 2019, the Company's pro forma results would have been as follows:

Revenues
Net earnings attributable to Laboratory Corporation of America Holdings

2019

Years Ended December 31,

2020

2019

14,032.7
1,564.6

11,717.5
837.6

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.

Purchase Price Allocation for

Envigo

Net Assets Acquired
Cash and cash equivalents
Accounts receivable
Unbilled services
Inventories
Prepaid expenses and other
Property, plant and equipment
Deferred income taxes
Goodwill
Customer relationships
Trade name and trademarks
Other assets
Total assets acquired
Accounts payable
Accrued expenses and other
Unearned revenue
Other liabilities
Total liabilities acquired
Net Envigo assets acquired
Floating rate secured note receivable due 2022

Total

F-22

$
$
$

11.3
12.1
25.6
4.5
10.8
128.4
25.2
376.6
140.8
0.6
9.9
745.8
15.2
10.4
49.9
69.3
144.8
601.0
110.0
711.0

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

The purchase consideration for Envigo has been allocated to the estimated fair market value of the net assets acquired, including approximately $141.4 in
identifiable intangible assets and a residual amount of non-tax-deductible goodwill of approximately $376.6. The amortization period for intangible assets
acquired is 11 years for customer relationships.

The Envigo transaction contributed $124.2 and $17.9 of revenues and operating income, respectively, during the year ended December 31, 2020. The

divested CRP business contributed operating income of $5.5 and $13.2 for the years ended December 31, 2019 and 2018, respectively.

During the year ended December 31, 2019, in addition to the Envigo transaction, the Company acquired various businesses and related assets for
approximately $286.4 in cash (net of cash acquired). The purchase consideration for all acquisitions has been allocated to the estimated fair market value of
the net assets acquired, including approximately $184.3 in identifiable intangible assets and a residual amount of non-tax-deductible goodwill of
approximately $115.1. These acquisitions were made primarily to extend the Company's geographic reach in important market areas, enhance the Company's
scientific differentiation and to expand the breadth and scope of the Company's CRO services. The excess of the fair value of the consideration conveyed over
the fair value of the net assets acquired was recorded as goodwill. The goodwill reflects the Company's expectations to utilize the acquired businesses’
workforce and established relationships and the benefits of being able to leverage operational efficiencies with favorable growth opportunities in these
markets.

Unaudited Pro Forma Information for 2019 Acquisitions

Had the aggregate of the Company's 2019 acquisitions been completed as of January 1, 2019, the Company's pro forma results would have been as follows:

Revenues
Net earnings attributable to Laboratory Corporation of America Holdings

4. RESTRUCTURING AND OTHER CHARGES

Year Ended December 31, 2019

11,742.5
831.4

During 2021, the Company recorded net restructuring charges of $43.1; $18.6 within Dx and $24.5 within DD. The charges were comprised of $16.3 in
severance and other personnel costs and $28.0 in facility-related costs primarily associated with general integration activities. The charges were offset by the
reversal of previously established liability of $0.4 in unused severance and $0.8 in unused facility-related costs.

During 2020, the Company recorded net restructuring charges of $40.6; $15.3 within Dx and $25.3 within DD. The charges were comprised of $14.1 in
severance and other personnel costs $17.4 for facility, operating lease right-of-use and equipment impairments, and $18.9 in facility closures and general
integration activities. The charges were offset by the reversal of previously established liability of $0.6 and $9.2 in unused severance costs and facility-related
costs, respectively.

During 2019, the Company recorded net restructuring charges of $54.6; $26.7 within Dx and $27.9 within DD. The charges were comprised of $32.9 in
severance and other personnel costs and $24.9 in facility-related costs primarily associated with general integration activities. The charges were offset by the
reversal of previously established liability of $1.7 in unused severance and $1.5 in unused facility-related costs.

F-23

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

The following represents the Company’s restructuring activities for the period indicated:

Balance as of December 31, 2019
Restructuring charges
Impairment of facility related assets
Reduction of prior restructuring accruals
Cash payments and other adjustments
Balance as of December 31, 2020
Restructuring charges
Reduction of prior restructuring accruals
Cash payments and other adjustments

Balance as of December 31, 2021
Current
Non-current

Severance and

Other
Employee Costs
$

Severance and

Other
Employee Costs
$

Lease and Other
Facility Costs

2.7
5.5
7.5
(2.8)
(12.5)
0.4
11.0
(0.2)
(10.9)
0.3

0.5
5.2
—
(0.1)
(5.3)
0.3
7.8
—
(7.1)
1.0

5.5
8.9
—
(0.5)
(11.5)
2.4
8.5
(0.4)
(7.2)
3.3

Lease and Other
Facility Costs

Total

4.7
13.4
9.9
(6.4)
(16.9)
4.7
17.0
(0.6)
(17.3)
3.8

13.4
33.0
17.4
(9.8
(46.2
7.8
44.3
(1.2
(42.5
8.4

6.8
1.6
8.4

The non-current portion of the restructuring liabilities is expected to be paid out over 4.8 years. Cash payments and other adjustments include the
reclassification of profit sharing, pension, and holiday accrual.

5. LEASES

The Company has operating and finance leases for patient service centers, laboratories and testing facilities, clinical facilities, general office spaces,
vehicles, and office and laboratory equipment. Leases have remaining lease terms of less than a year to 12 years, some of which include options to extend the
leases for up to 15 years.

The components of lease expense were as follows:

Operating lease cost

Finance lease cost:
Amortization of right-of-use assets
Interest on lease liabilities
Total finance lease cost

Supplemental cash flow information related to leases was as follows:

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases

ROU assets obtained in exchange for lease obligations:
Operating leases
Finance leases

For the Year Ended

December 31, 2021

December 31, 2020

220.7 $

215.4

9.4 $
5.4
14.8 $

11.2
4.7
15.9

For the Year Ended

December 31, 2021

December 31, 2020

(219.6) $
(5.4)
(13.1)

164.6 $
—

(213.8)
(4.7)
(15.2)

185.9
—

F-24

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Supplemental balance sheet information related to leases was as follows:

Operating Leases
Operating lease ROU assets (included in Property, plant and equipment, net)

Short-term operating lease liabilities
Operating lease liabilities
Total operating lease liabilities
Finance Leases
Finance lease ROU assets (included in Other assets)

Short-term finance lease liabilities
Financing lease liabilities

Total finance lease liabilities

Weighted Average Remaining Lease Term
Operating leases
Finance leases

Weighted Average Discount Rate
Operating leases
Finance leases

Maturities of lease liabilities are as follows:

Year Ended December 31, 2021
2022
2023
2024
2025
2026
Thereafter
Total lease payments
Less imputed interest
Less current portion

Total maturities, due beyond one year

December 31, 2021

December 31, 2020

746.3

187.0
642.5
829.5

81.7

10.5
84.6
95.1

8.4
15.5

3.0 %
5.6 %

789.8

192.0
677.6
869.6

79.7

6.7
84.4
91.1

7.6
15.9

3.3 %
5.1 %

Operating Leases

Finance Leases

204.0 $
159.4
110.7
85.3
70.4
325.5
955.3 $
(125.8)
(187.0)
642.5 $

12.3
12.3
10.9
8.9
8.1
93.8
146.3
(51.2)
(10.5)
84.6

Rent expense for short term leases with a term less than one year for the years ended December 31, 2021, 2020, and 2019 amounted to $19.5, $6.8, $10.6,
respectively. The Company has variable lease payments that do not depend on a rate index, primarily for purchase volume commitments, which are recorded
as variable cost when incurred. Total variable payments for the year ended December 31, 2021, 2020 and 2019 were $28.4, $26.7, and $20.8, respectively.

6. PROPERTY, PLANT AND EQUIPMENT, NET

Land
Buildings and building improvements
Machinery and equipment
Software
Leasehold improvements
Furniture and fixtures
Construction in progress
Operating lease ROU assets

Less accumulated depreciation

December 31,
2021

December 31,
2020

101.4 $
954.4
1,670.4
840.1
459.9
111.9
344.2
746.3
5,228.6
(2,413.2)
2,815.4 $

99.4
879.9
1,522.3
857.5
440.0
112.2
231.6
789.8
4,932.7
(2,203.1)
2,729.6

F-25

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Depreciation expense and amortization of property, plant and equipment was $375.6, $349.3 and $321.5 for 2021, 2020 and 2019, respectively, including

software amortization of $82.4, $84.7, and $90.4 for 2021, 2020 and 2019, respectively.

7. GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill (net of impairment) for the years ended December 31, 2021 and 2020 are as follows:

Balance as of January 1
Goodwill acquired during the year
Dispositions
Impairment
Foreign currency impact and other adjustments to
goodwill
Balance at end of year

Total

December 31,
2021

December 31,
2020

December 31,
2021

December 31,
2020

December 31,
2021

December 31,
2020

3,800.2 $
245.1
—
—

0.9
4,046.2 $

3,721.5 $
75.8
—
(3.7)

6.6
3,800.2 $

3,951.3 $
53.3
—
—

(91.9)
3,912.7 $

4,143.5 $
90.4
—
(418.7)

136.1
3,951.3 $

7,751.5 $
298.4
—
—

(91.0)
7,958.9 $

7,865.0
166.2
—
(422.4)

142.7
7,751.5

The components of identifiable intangible assets are as follows:

Customer relationships
Patents, licenses and technology
Non-compete agreements
Trade names
Land use rights
Canadian licenses
In process research and development

December 31, 2021

December 31, 2020

Gross
Carrying
Amount

Accumulated
Amortization

Net
Carrying
Amount

Gross
Carrying
Amount

Accumulated
Amortization

Net
Carrying
Amount

4,336.0 $
484.6
70.2
19.8
10.4
493.5
9.1
5,423.6 $

(1,362.1) $
(267.4)
(35.5)
(15.5)
(7.6)
—
—

(1,688.1) $

2,973.9 $
217.2
34.7
4.3
2.8
493.5
9.1
3,735.5 $

4,643.3 $
434.7
109.6
401.8
10.9
489.8
—
6,090.1 $

(1,534.9) $
(252.6)
(70.7)
(263.9)
(6.9)
—
—

(2,129.0) $

3,108.4
182.1
38.9
137.9
4.0
489.8
—
3,961.1

During 2020, the Company recorded goodwill and other asset impairment charges of $462.1, $450.5 within DD and $11.6 within Dx. The Company
concluded that the fair value was less than the carrying value for two of its reporting units and recorded goodwill impairment of $418.7 and $3.7 for DD and
Dx, respectively. This is the cumulative goodwill impairment for the Company through December 31, 2021. Additional impairment of identifiable intangible
and tangible assets of $31.8 and $7.9 was recorded for DD and Dx, respectively, in 2020, for impairment of a tradename, software, customer relationships,
and technology assets.

As part of the rebranding initiative, the Company reduced the estimated useful life of its trade name assets to reflect their anticipated use through

December 2021. This change in estimated useful life resulted in accelerated amortization of $88.4 and $27.5 in 2021 and 2020.

Fully amortized intangible assets were written off during 2021.

A summary of amortizable intangible assets acquired during 2021, and their respective weighted average amortization periods are as follows:

Customer relationships
Patents, licenses and technology
Non-compete agreements
Trade name
In process research and development

Amount

Weighted Average
Amortization Period

142.9
36.1
5.8
4.6
9.1
198.5

14.1
5.0
5.0
5.0
N/A

11.3

Amortization of intangible assets, including amortization of the Canadian license recorded in other assets, was $369.6, $275.4 and $243.2 in 2021, 2020

and 2019, respectively. The Company recorded purchase accounting adjustments and impairment

F-26

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

losses through amortization expense of $0.4 in 2019. Amortization expense of intangible assets is estimated to be $237.9 in fiscal 2022, $234.6 in fiscal 2023,
$230.0 in fiscal 2024, $217.8 in fiscal 2025, $208.5 in fiscal 2026, and $2,021.9 thereafter.

8. ACCRUED EXPENSES AND OTHER

Employee compensation and benefits
Accrued taxes payable
Accrued pass through expenses
Other

9. OTHER LIABILITIES

Defined-benefit plan obligation
Deferred compensation plan obligation
Other

10. DEBT

December 31, 2021

December 31, 2020

735.5 $
239.6
149.1
279.9
1,404.1 $

623.2
374.8
96.0
263.7
1,357.7

December 31, 2021

December 31, 2020

136.5 $
104.4
161.1
402.0 $

220.5
89.2
216.7
526.4

Short-term borrowings and current portion of long-term debt at December 31, 2021, and 2020 consisted of the following:

2019 term loan
Debt issuance costs
Current portion of note payable

Total short-term borrowings and current portion of long-term debt

Long-term debt at December 31, 2021, and 2020 consisted of the following:

3.75% senior notes due 2022
3.20% senior notes due 2022
4.00% senior notes due 2023
3.25% senior notes due 2024
3.60% senior notes due 2025
1.55% senior notes due 2026
3.60% senior notes due 2027
2.70% senior notes due 2031
4.70% senior notes due 2045
2.30% senior notes due 2024
2.95% senior notes due 2029
Debt issuance costs
Note payable

Total long-term debt

Credit Facilities

December 31, 2021

December 31, 2020

—
—
1.5
1.5 $

375.0
(0.4)
2.1
376.7

December 31, 2021

December 31, 2020

—
—
300.0
600.0
1,000.0
500.0
600.0
502.9
900.0
400.0
650.0
(41.0)
4.6
5,416.5 $

500.0
500.0
300.0
600.0
1,000.0
—
600.0
—
900.0
400.0
650.0
(37.1)
6.1
5,419.0

On June 3, 2019, the Company entered into a $850.0 term loan (the 2019 Term Loan). The Company fully repaid the remaining 2019 Term Loan balance

during the first quarter of 2021.

The Company also maintains a senior revolving credit facility, which was amended and restated on April 30, 2021. It consists of a five-year revolving
facility in the principal amount of up to $1,000.0, with the option of increasing the facility by up to an additional $500.0, subject to the agreement of one or
more new or existing lenders to provide such additional amounts and certain other customary conditions. The 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. The Company is required to pay a
facility fee on the aggregate commitments under the revolving credit facility, at a per annum rate ranging from 0.10% to 0.25%, depending

F-27

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

on the Company's debt ratings. The revolving credit facility is permitted to be used for general corporate purposes, including working capital, capital
expenditures, funding of share repurchases and certain other payments, acquisitions, and other investments. There were no balances outstanding on the
Company's current revolving credit facility at December 31, 2021, or December 31, 2020. As of December 31, 2021, the effective interest rate on the
revolving credit facility was 1.10%. The credit facility expires on April 30, 2026.

Under the Company's term loan facilities and the revolving credit facility, the Company is subject to negative covenants limiting subsidiary indebtedness
and certain other covenants typical for investment grade-rated borrowers and the Company is required to maintain certain leverage ratios. The Company was
in compliance with all covenants in its term loans and the revolving credit facility at December 31, 2021, and expects that it will remain in compliance with
its existing debt covenants for the next twelve months.

The Company’s availability of $1,000.0 at December 31, 2021, under its revolving credit facility is not encumbered by any of the Company's outstanding

letters of credit. There were $79.8 in outstanding letters of credit as of December 31, 2021.

Senior Notes

On May 26, 2021, the Company issued new senior notes representing $1,000.0 in debt securities consisting of $500.0 aggregate principal amount of
1.55% senior notes due 2026 and $500.0 aggregate principal amount of 2.70% senior notes due 2031. Interest on these notes is payable semi-annually in
arrears on June 1 and December 1 of each year, commencing on December 1, 2021. Net proceeds from the offering of these notes were $989.4 after deducting
underwriting discounts and other expenses of the offering. The net proceeds were used, along with cash on hand, to redeem, prior to maturity, the Company's
outstanding 3.20% senior notes due February 1, 2022 and 3.75% senior notes due August 23, 2022.

During the second quarter of 2021, the Company entered into fixed-to-variable interest rate swap agreements for its 2.70% senior notes due 2031 with an
aggregate notional amount of $500.0 and variable interest rates based on three-month LIBOR plus 1.0706% to hedge against changes in the fair value of a
portion of the Company's long-term debt. These interest rate swaps are included in other long-term assets and added to the value of the senior notes with an
aggregate fair value of $2.9 at December 31, 2021.

On August 17, 2020 the Company redeemed the remaining $412.2 of its 4.625% Senior Notes due November 15, 2020, using available cash on hand. The
Company exited the remaining fixed-to-variable interest rate swap agreement in August 2020, in connection with this redemption and recorded a gain of $1.6
on the extinguishment. The gain was included in Other, net on the Consolidated Statement of Operations.

The scheduled payments of long-term debt at the end of 2021 are summarized as follows:

2022
2023
2024
2025
2026
Thereafter
Total scheduled payments
Less long-term debt issuance costs
Total long-term debt
Less current portion

Long-term debt, due beyond one year

1.5
300.0
1,000.0
1,000.0
500.0
2,657.5
5,459.0
(41.0)
5,418.0
(1.5)
5,416.5

11. PREFERRED STOCK AND COMMON SHAREHOLDERS’ EQUITY

The Company is authorized to issue up to 265.0 shares of common stock, par value $0.10 per share. The Company is authorized to issue up to 30.0 shares

of preferred stock, par value $0.10 per share. There were no preferred shares outstanding as of December 31, 2021 and 2020.

F-28

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

The changes in common shares issued and held in treasury are summarized below:

Common Shares Issued

Common stock issued at January 1
Common stock issued under employee stock plans
Common stock issued upon conversion of zero-coupon subordinated notes
Retirement of treasury stock
Purchase of common stock

Common stock issued at December 31

2021

2020

2019

97.5
0.8
—
—
(5.2)
93.1

97.2
0.9
—
—
(0.6)
97.5

122.4
1.2
0.1
(23.6)
(2.9)
97.2

The Company’s treasury shares are recorded at aggregate cost. During 2019, the board of directors approved the retirement of all current treasury shares

and future shares received in settlement of tax liabilities related to restricted stock vesting.

Share Repurchase Program

On December 8, 2021, the board of directors adopted a new share repurchase plan authorizing 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 accelerated share repurchase agreements
(collectively, the ASR Agreements) with two different banks, Goldman Sachs & Co. LLC and Barclays Bank PLC (collectively, the Financial Institutions), to
repurchase $1,000.0 in the aggregate of the Company’s common stock (Common Stock), as part of the Company’s Common Stock repurchase program. The
remaining repurchase authorization has no expiration date.

During 2021, the Company repurchased 5.2 shares of its common stock at an average price of $282.05 for a total cost of $1,668.5, which included
$1,000.0 paid in respect of an ASR for which the Company received 80% of the shares calculated at the price at the inception of the Agreements. At final
settlement, the Company may be entitled to receive additional shares of its common stock from the Financial Institutions or it may be required to make a
payment. If the Company are obligated to make a payment, it may elect to satisfy such obligation in cash or shares of its common stock. 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.

When the Company repurchases shares, the amount paid to repurchase the shares in excess of the par or stated value is allocated to additional paid-in-
capital unless subject to limitation or the balance in additional paid-in-capital is exhausted. Remaining amounts are recognized as a reduction in retained
earnings. At the end of 2021, the Company had outstanding authorization from the board of directors to purchase up to $1,631.5 of the Company's common
stock. The repurchase authorization has no expiration date.

F-29

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Accumulated Other Comprehensive Earnings

The components of accumulated other comprehensive earnings are as follows:

Balance at December 31, 2019
Current year adjustments
Amounts reclassified from accumulated other comprehensive earnings (a)
Tax effect of adjustments
Balance at December 31, 2020

Current year adjustments
Pension settlement charge
Amounts reclassified from accumulated other comprehensive earnings (a)
Tax effect of adjustments

Balance at December 31, 2021

Foreign
Currency
Translation
Adjustments

Net
Benefit
Plan
Adjustments

Accumulated
Other
Comprehensive
Earnings

(285.4)
264.1
—
—
(21.3) $

(104.6)
—
—
—
(125.9) $

(87.0)
(72.9)
7.2
12.1
(140.6) $
101.7
(3.7)
(6.3)
(17.1)
(66.0) $

(372.4)
191.2
7.2
12.1
(161.9)
(2.9)
(3.7)
(6.3)
(17.1)
(191.9)

(a) The amortization of prior service cost is included in the computation of net periodic benefit cost. Refer to Note 15 Pension and Postretirement Plans for
additional information regarding the Company's net periodic benefit cost.

12. INCOME TAXES

The sources of income before taxes, classified between domestic and foreign entities are as follows:

Domestic
Foreign

Total pre-tax income

2021

2020

2019

2,580.6 $
546.0
3,126.6 $

1,846.5 $
372.5
2,219.1 $

784.4
320.5
1,104.9

The provisions (benefits) for income taxes in the accompanying consolidated statements of operations consist of the following:

Current:
Federal
State
Foreign

Deferred:
Federal
State
Foreign

Years Ended December 31,
2020

2021

2019

545.5 $
171.9
107.7
825.1 $

(64.6) $
(13.7)
0.3
(78.0)
747.1 $

455.3 $
172.8
81.0
709.1 $

(6.7) $
(28.1)
(12.2)
(47.0)
662.1 $

126.7
40.2
83.9
250.8

38.2
2.5
(11.5)
29.2
280.0

F-30

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

The effective tax rates on earnings before income taxes are reconciled to statutory U.S. income tax rates as follows:

Statutory U.S. rate
State and local income taxes, net of U.S. Federal income tax effect
Foreign earnings taxed at lower rates than the statutory U.S. rate
Restructuring and acquisition items
Impairment of assets
GILTI
Other

Effective rate

Years Ended December 31,
2020

2021

2019

21.0 %
3.9
(0.5)
—
—
—
(0.5)
23.9 %

21.0 %
5.3
(0.4)
—
4.0
(0.1)
—
29.8 %

21.0 %
3.2
(0.1)
0.7
—
1.1
(0.6)
25.3 %

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

December 31, 2021

December 31, 2020

Deferred tax assets:

Accounts receivable
Employee compensation and benefits
Operating lease liability
Acquisition and restructuring reserves
Tax loss carryforwards
Other

Less: valuation allowance

Deferred tax assets, net of valuation allowance

Deferred tax liabilities:
Right of use asset
Intangible assets
Property, plant and equipment
Other

Total gross deferred tax liabilities

Net deferred tax liabilities

22.3
145.2
176.3
19.1
184.5
92.7
640.1
(149.2)
490.9

(166.9)
(823.8)
(143.9)
(47.6)
(1,182.2)
(691.3)

20.0
115.6
187.6
22.6
206.8
126.8
679.4
(167.6)
511.8

(179.5)
(835.5)
(203.9)
(46.3)
(1,265.2)
(753.4)

The table below provides a rollforward of the valuation allowance.

Beginning balance
Additions charged to expense
Reductions and other adjustments

Ending balance

December 31, 2021

December 31, 2020

December 31, 2019

167.6 $
6.8
(25.2)
149.2 $

145.4 $
5.8
16.4
167.6 $

156.9
—
(11.5)
145.4

The Company has U.S. federal tax loss carryforwards of approximately $155.7, which expire periodically through 2036, as well as post 2017 carryovers
of $0.1 that are limited to 80% of taxable income and have an indefinite carryover. The utilization of tax loss carryforwards is limited due to change of
ownership rules; however, at this time, the Company expects to fully utilize substantially all U.S. federal tax loss carryforwards with the exception of
approximately $3.9 for which a full valuation allowance has been provided. The Company has U.S. state tax loss carryforwards of $439.2, which also expire
periodically through 2038, and on which a valuation allowance of $367.2 has been provided. In addition to federal and state tax loss carryforwards, the
Company has other federal and state attribute carry forwards of $141.4. These attribute carryforwards have indefinite lives and a valuation allowance of
$99.1. The Company has foreign tax loss carryforwards of $96.2 which have an indefinite life and on which a valuation allowance of $11.0 has been
provided, as well as foreign tax loss carryforwards of $444.0 which expire periodically through 2034 that have a full valuation allowance. In addition to the
foreign net operating losses, the Company has a foreign capital loss carryforward of $15.5. The foreign capital loss carryforward has an indefinite life and has
a full valuation allowance.

The valuation allowance decreased from $167.6 in 2020 to $149.2 in 2021 primarily due to utilization of state tax attributes and foreign net operating

losses.

F-31

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Unrecognized income tax benefits were $52.4 and $48.8 at December 31, 2021, and 2020, respectively. It is anticipated that the amount of the
unrecognized income tax benefits will change within the next 12 months; however, these changes are not expected to have a significant impact on the results
of operations, cash flows or the financial position of the Company.

The Company recognizes interest and penalties related to unrecognized income tax benefits in income tax expense. Accrued interest and penalties related
to uncertain tax positions totaled $6.5 and $8.3 as of December 31, 2021, and 2020, respectively. During the years ended December 31, 2021, 2020 and 2019,
the Company recognized $1.6, $4.4 and $2.0, respectively, in interest and penalties expense, which was offset by a benefit from reversing previous accruals
for interest and penalties of $3.4, $3.0 and $5.8, respectively. As of December 31, 2021 and 2020 interest expense of $0.0, and $1.4, respectively, was added
to accrued interest from the opening balance sheet of an acquisition.

The following table shows a reconciliation of the unrecognized income tax benefits, excluding interest and penalties, from uncertain tax positions for the

years ended December 31, 2021, 2020 and 2019:

Balance as of January 1
Increase in reserve for tax positions taken in the current year
Increase in reserve from an acquisition's opening balance sheet
Decrease in reserve as a result of payments
Decrease in reserve as a result of lapses in the statute of limitations

Balance as of December 31

2021

2020

2019

48.8 $
31.1
—
(7.1)
(20.4)
52.4 $

31.7 $
17.3
8.2
(0.3)
(8.1)
48.8 $

18.0
10.3
8.4
(0.8)
(4.2)
31.7

Also included in the balance of unrecognized tax benefits as of December 31, 2021, 2020 and 2019, are $0.9, $2.1 and $0.0, respectively, of tax benefits
that, if recognized, would result in adjustments to other tax accounts, primarily deferred taxes. As of December 31, 2021, 2020 and 2019 there are $51.5,
$46.7 and $31.7, respectively, of tax benefits that, if recognized would favorably affect the effective income tax rate.

The Company has substantially concluded all U.S. federal income tax matters for years through 2017. Substantially all material state and local and foreign

income tax matters have been concluded through 2014 and 2010, respectively.

The Company has various state and foreign income tax examinations ongoing throughout the year. The Company believes adequate provisions have been

recorded related to all open tax years.

As a result of the TCJA, the Company was effectively taxed on all of its previously unremitted foreign earnings. The TCJA also enacts a territorial tax
system that allows, for the most part, tax-free repatriation of foreign earnings. The Company still considers the earnings of its foreign subsidiaries to be
permanently reinvested, but if repatriation were to occur the Company would be required to accrue U.S. taxes, if any, and remit applicable withholding taxes
as appropriate. The Company has unremitted earnings and profits of $1,291.8 and $702.4 that are permanently reinvested in its foreign subsidiaries as of
December 31, 2021, and 2020, respectively. A determination of the amount of the unrecognized deferred tax liability related to these undistributed earnings is
not practicable due to the complexity and variety of assumptions necessary based on the manner in which the undistributed earnings would be repatriated.

13. STOCK COMPENSATION PLANS

Stock Incentive Plans

In 2016, the shareholders approved the Laboratory Corporation of America Holdings 2016 Omnibus Incentive Plan (the Plan). Under the Plan, as of

December 31, 2021, there are 8.9 shares authorized for issuance and 4.3 shares available for grant.

Stock Options

The following table summarizes grants of non-qualified options made by the Company to officers, key employees, and non-employee directors under all
plans. Stock options are generally granted at an exercise price equal to or greater than the fair market price per share on the date of grant. Also, for each grant,
options vest ratably over a period of three years on the anniversaries of the grant date, and have a contractual exercise period of 10 years subject to their
earlier expiration or termination.

F-32

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Changes in options outstanding under the plans for the period indicated were as follows:

Outstanding at December 31, 2020

Granted
Exercised
Canceled

Outstanding at December 31, 2021
Exercisable at December 31, 2021

Number of
Options

Weighted-Average
Exercise Price
per Option

Weighted-Average
Remaining
Contractual Term

Aggregate
Intrinsic
Value

0.5
0.1
(0.1)
—
0.5
0.3

148.39
233.39
87.88
—
169.03
153.09

6.9
6.1

$
$

70.1
48.1

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on
the last trading day of 2021 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders
had all option holders exercised their options on December 31, 2021.

Cash received by the Company from option exercises, the actual tax benefit realized for the tax deductions and the aggregate intrinsic value of options

exercised from option exercises under all share-based payment arrangements during the years ended December 31, 2021, 2020, and 2019 were as follows:

Cash received by the Company
Tax benefits realized
Aggregate intrinsic value

2021

2020

2019

$
$
$

6.8 $
1.7 $
13.4 $

17.5 $
4.6 $
18.5 $

27.6
6.9
24.5

The following table shows the weighted average grant-date fair values of options issued during the respective year and the weighted average assumptions

that the Company used to develop the fair value estimates:

Fair value per option
Weighted average expected life (in years)
Risk free interest rate
Expected volatility
Expected dividend yield

2021

2020

2019

62.18

40.06

33.70

6.0
0.6 %
28.6 %
N/A

6.0
1.5 %
20.3 %
N/A

6.0
2.1 %
20.4 %
N/A

The Black Scholes model incorporates assumptions to value stock-based awards. The risk-free interest rate for periods within the contractual life of the
option is based on a zero-coupon U.S. government instrument over the contractual term of the equity instrument. Expected volatility of the Company’s stock
is based on historical volatility of the Company’s stock. The Company estimates expected option terms through an analysis of actual, historical post-vesting
exercise, cancellation and expiration behavior by employees and projected post-vesting activity of outstanding options. Groups of employees and non-
employee directors that have similar exercise behavior with regard to option exercise timing and forfeiture rates are considered separately for valuation
purposes. For 2021, 2020 and 2019, expense related to the Company’s stock option plan totaled $3.6, $3.4 and $5.9, respectively, and is included in selling,
general and administrative expenses.

Restricted Stock, Restricted Stock Units and Performance Shares

The Company grants restricted stock, restricted stock units, and performance shares (non-vested shares) to officers and key employees and grants
restricted stock and restricted stock units to non-employee directors. Restricted stock and units typically vest annually in equal one-third increments beginning
on the first anniversary of the grant. A performance share grant in 2019 represents a three-year award opportunity for the period 2019-2021, and if earned,
vests fully (to the extent earned) in the first quarter of 2022. A performance share grant in 2020 represents a three-year award opportunity for the period of
2020-2022 and, if earned, vests fully (to the extent earned) in the first quarter of 2023. A performance share grant in 2021 represents a three-year award
opportunity for the period of 2021-2023 and, if earned, vests fully (to the extent earned) in the first quarter of 2024. Performance share awards are subject to
certain earnings per share, revenue, and total shareholder return targets, the achievement of which may increase or decrease the number of shares which the
grantee earns and therefore receives upon vesting. Unearned restricted stock and performance share compensation is amortized to expense, when probable,
over the applicable vesting periods. For 2021, 2020, and 2019, total restricted stock, restricted stock unit, and performance share compensation expense was
$135.4, $98.1 and $91.2, respectively.

F-33

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

The following table shows a summary of non-vested shares for the year ended December 31, 2021:

Non-vested at January 1, 2021
Granted
Vested
Canceled

Non-vested at December 31, 2021

Unrecognized Compensation Cost

Number of
Shares

Weighted-Average
Grant Date Fair Value

1.3 $
0.6
(0.6)
(0.1)
1.2 $

170.04
264.84
169.47
195.39
212.83

As of December 31, 2021, there was $155.2 of total unrecognized compensation cost related to non-vested stock options, restricted stock, restricted stock
unit and performance share-based compensation arrangements granted under the Company's stock incentive plans. That cost is expected to be recognized over
a weighted average period of 2.0 years and will be included in cost of revenues and selling, general and administrative expenses.

Employee Stock Purchase Plan

Under the 2016 Employee Stock Purchase Plan, the Company is authorized to issue 1.8 shares of common stock. The plan permits substantially all U.S.
employees to purchase a limited number of shares of Company stock at 85% of market value. The Company issues shares to participating employees semi-
annually in January and July of each year. Approximately 0.2, 0.3 and 0.2 shares were purchased by eligible employees in 2021, 2020 and 2019, respectively.
For 2021, 2020 and 2019, expense related to the Company’s employee stock purchase plan was $14.6, $10.3 and $9.9, respectively.

The Company uses the Black-Scholes model to calculate the fair value of the employee’s purchase right. The fair value of the employee’s purchase right

and the assumptions used in its calculation are as follows:

Fair value of the employee’s purchase right
Valuation assumptions
Risk free interest rate
Expected volatility
Expected dividend yield

2021

2020

2019

59.89

35.49

31.84

0.1 %
0.3

—

0.1 %
0.3

—

1.9 %
0.2

—

14. COMMITMENTS AND CONTINGENT LIABILITIES

The Company is involved from time to time in various claims and legal actions, including arbitrations, class actions, and other litigation (including those
described in more detail below), arising in the ordinary course of business. Some of these actions involve claims that are substantial in amount. These matters
include, but are not limited to, intellectual property disputes; commercial and contract disputes; professional liability claims; employee-related 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. Therefore, the applicable statutes and regulations could be
interpreted or applied by a prosecutorial, regulatory, or judicial authority in a manner that would adversely affect the Company. Potential sanctions for
violation of these

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Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

statutes and regulations include significant civil and criminal penalties, fines, the loss of various licenses, certificates and authorizations, additional liabilities
from third-party claims, and/or exclusion from participation in government programs.

Many of the current claims and legal actions against the Company are in preliminary stages, and many of these cases seek an indeterminate amount of
damages. The Company records an aggregate legal reserve, which is determined using calculations based on historical loss rates and assessment of trends
experienced in settlements and defense costs. In accordance with FASB Accounting Standards Codification Topic 450 “Contingencies,” the Company
establishes reserves for judicial, regulatory, and arbitration matters outside the aggregate legal reserve if and when those matters present loss contingencies
that are both probable and estimable and would exceed the aggregate legal reserve. When loss contingencies are not both probable and estimable, the
Company does not establish separate reserves.

The Company is unable to estimate a range of reasonably probable loss for the proceedings described in more detail below in which damages either have
not been specified or, in the Company's judgment, are unsupported and/or exaggerated and (i) the proceedings are in early stages; (ii) there is uncertainty as to
the outcome of pending appeals or motions; (iii) there are significant factual issues to be resolved; and/or (iv) there are novel legal issues to be presented. For
these proceedings, however, the Company does not believe, based on currently available information, that the outcomes will have a material adverse effect on
the Company's financial condition, though the outcomes could be material to the Company's operating results or cash flows for any particular period,
depending, in part, upon the operating results for such period.

As previously reported, the Company responded to an October 2007 subpoena from the U.S. Department of Health & Human Services Office of Inspector
General's regional office in New York. On August 17, 2011, the U.S. District Court for the Southern District of New York unsealed a False Claims Act
lawsuit, United States of America ex rel. NPT Associates v. Laboratory Corporation of America Holdings, which alleges that the Company offered
UnitedHealthcare kickbacks in the form of discounts in return for Medicare business. The Plaintiff's Third Amended Complaint further alleges that the
Company's billing practices violated the False Claims Acts of 14 states and the District of Columbia. The lawsuit seeks actual and treble damages and civil
penalties for each alleged false claim, as well as recovery of costs, attorney's fees, and legal expenses. The Company's Motion to Dismiss was granted in
October 2014 and Plaintiff was granted the right to replead. On January 11, 2016, Plaintiff filed a motion requesting leave to file an amended complaint under
seal and to vacate the briefing schedule for the Company's Motion to Dismiss, while the government reviewed the amended complaint. The Court granted the
motion and vacated the briefing dates. Plaintiff then filed the Amended Complaint under seal. On August 24, 2021, the U.S. government filed a notice
indicating that it did not intend to intervene in the matter. On October 27, 2021, the Fourth Amended Complaint was unsealed. The Fourth Amended
Complaint is similar to the Third Amended Complaint in that it alleges that the Company offered UnitedHealthcare kickbacks in the form of discounts in
return for Medicare and Medicaid business, and it further alleges that the Company unlawfully charged Medicare amounts substantially in excess of its
alleged usual charges. Similar to the Third Amended Complaint, the Fourth Amended Complaint alleges violations of the federal False Claims Act and the
False Claims Act of 14 states and the District of Columbia. The Company will vigorously defend the lawsuit.

In addition, the Company has received various other subpoenas since 2007 related to Medicaid billing. In October 2009, the Company received a
subpoena from the State of Michigan Department of Attorney General seeking documents related to its billing to Michigan Medicaid. The Company
cooperated with this request. In October 2013, the Company received a Civil Investigative Demand from the State of Texas Office of the Attorney General
requesting documents related to its billing to Texas Medicaid. The Company cooperated with this request. On October 5, 2018, the Company received a
second Civil Investigative Demand from the State of Texas Office of the Attorney General requesting documents related to its billing to Texas Medicaid. The
Company cooperated with this request. On January 26, 2021, the Company was notified that a qui tam Petition was pending under seal in the District Court,
250th Judicial District, Travis County, Texas, and that the State of Texas has intervened. On April 14, 2021, the Petition was unsealed. The Petition alleges
that the Company submitted claims for reimbursement to Texas Medicaid that were higher than permitted under Texas Medicaid’s alleged “best price”
regulations, and that the Company offered remuneration to Texas health care providers in the form of discounted pricing for certain laboratory testing services
in exchange for the providers’ referral of Texas Medicaid business to the Company. The Petition seeks actual and double damages and civil penalties, as well
as recovery of costs, attorney's fees, and legal expenses. The Company will vigorously defend the lawsuit.

On August 31, 2015, the Company was served with a putative class action lawsuit, Patty Davis v. Laboratory Corporation of America, et al., filed in the
Circuit Court of the Thirteenth Judicial Circuit for Hillsborough County, Florida. The complaint alleges that the Company violated the Florida Consumer
Collection Practices Act by billing patients who were collecting benefits under the Workers' Compensation Statutes. The lawsuit seeks injunctive relief and
actual and statutory damages, as well as recovery of attorney's fees and legal expenses. In April 2017, the Circuit Court granted the Company’s Motion for
Judgment on the Pleadings. The Plaintiff appealed the Circuit Court’s ruling to the Florida Second District Court of Appeal. On

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Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

October 16, 2019, the Court of Appeal reversed the Circuit Court’s dismissal, but certified a controlling issue of Florida law to the Florida Supreme Court. On
February 17, 2020, the Florida Supreme Court accepted jurisdiction of the lawsuit. The Court held oral arguments on December 9, 2020. The Company will
vigorously defend the lawsuit.

In December 2014, the Company received a Civil Investigative Demand issued pursuant to the U.S. False Claims Act from the U.S. Attorney's Office for
South Carolina, which requested information regarding alleged remuneration and services provided by the Company to physicians who also received draw
and processing/handling fees from competitor laboratories Health Diagnostic Laboratory, Inc. (HDL) and Singulex, Inc. (Singulex). The Company cooperated
with the request. On April 4, 2018, the U.S. District Court for the District of South Carolina, Beaufort Division, unsealed a False Claims Act lawsuit, United
States of America ex rel. Scarlett Lutz, et al. v. Laboratory Corporation of America Holdings, which alleges that the Company's financial relationships with
referring physicians violate federal and state anti-kickback statutes. The Plaintiffs' Fourth Amended Complaint further alleges that the Company conspired
with HDL and Singulex in violation of the Federal False Claims Act and the California and Illinois insurance fraud prevention acts by facilitating HDL's and
Singulex's offers of illegal inducements to physicians and the referral of patients to HDL and Singulex for laboratory testing. The lawsuit seeks actual and
treble damages and civil penalties for each alleged false claim, as well as recovery of costs, attorney's fees, and legal expenses. Neither the U.S. government
nor any state government has intervened in the lawsuit. The Company filed a Motion to Dismiss seeking the dismissal of the claims asserted under the
California and Illinois insurance fraud prevention statutes, the conspiracy claim, the reverse False Claims Act claim, and all claims based on the theory that
the Company performed medically unnecessary testing. On January 16, 2019, the Court entered an order granting in part and denying in part the Motion to
Dismiss. The Court dismissed the Plaintiffs' claims based on the theory that the Company performed medically unnecessary testing, the claims asserted under
the California and Illinois insurance fraud prevention statutes, and the reverse False Claims Act claim. The Court denied the Motion to Dismiss as to the
conspiracy claim. On March 12, 2021, the Company filed a Motion for Summary Judgment related to all remaining claims. On June 16, 2021, the Court
denied the Company’s Motion for Summary Judgment. The Company will vigorously defend the lawsuit.

Prior to the Company's acquisition of Sequenom, Inc. (Sequenom) between August 15, 2016 and August 24, 2016, six putative class-action lawsuits were
filed on behalf of purported Sequenom stockholders (captioned Malkoff v. Sequenom, Inc., et al., No. 16-cv-02054- JAH-BLM, Gupta v. Sequenom, Inc., et
al., No. 16-cv-02084-JAH-KSC, Fruchter v. Sequenom, Inc., et al., No. 16-cv-02101- WQH-KSC, Asiatrade Development Ltd. v. Sequenom, Inc., et al., No.
16-cv-02113-AJB-JMA, Nunes v. Sequenom, Inc., et al., No. 16-cv-02128-AJB-MDD, and Cusumano v. Sequenom, Inc., et al., No. 16-cv-02134-LAB-JMA)
in the U.S. District Court for the Southern District of California challenging the acquisition transaction. The complaints asserted claims against Sequenom and
members of its board of directors (the Individual Defendants). The Nunes action also named the Company and Savoy Acquisition Corp. (Savoy), a wholly
owned subsidiary of the Company, as defendants. The complaints alleged that the defendants violated Sections 14(e), 14(d)(4) and 20 of the Securities
Exchange Act of 1934 by failing to disclose certain allegedly material information. In addition, the complaints in the Malkoff action, the Asiatrade action, and
the Cusumano action alleged that the Individual Defendants breached their fiduciary duties to Sequenom shareholders. The actions sought, among other
things, injunctive relief enjoining the merger. On August 30, 2016, the parties entered into a Memorandum of Understanding (MOU) in each of the above-
referenced actions. On September 6, 2016, the Court entered an order consolidating for all pre-trial purposes the six individual actions described above under
the caption In re Sequenom, Inc. Shareholder Litig., Lead Case No. 16-cv-02054-JAH-BLM, and designating the complaint from the Malkoff action as the
operative complaint for the consolidated action. On November 11, 2016, two competing motions were filed by two separate stockholders (James Reilly and
Shikha Gupta) seeking appointment as lead plaintiff under the terms of the Private Securities Litigation Reform Act of 1995. On June 7, 2017, the Court
entered an order declaring Mr. Reilly as the lead plaintiff and approving Mr. Reilly's selection of lead counsel. The parties agree that the MOU has been
terminated. The Plaintiffs filed a Consolidated Amended Class Action Complaint on July 24, 2017, and the Defendants filed a Motion to Dismiss, which
remains pending. On March 13, 2019, the Court stayed the action in its entirety pending the U.S. Supreme Court's anticipated decision in Emulex Corp. v.
Varjabedian. On April 23, 2019, however, the U.S. Supreme Court dismissed the writ of certiorari in Emulex as improvidently granted. The Company will
vigorously defend the lawsuit.

On March 10, 2017, the Company was served with a putative class action lawsuit, Victoria Bouffard, et al. v. Laboratory Corporation of America
Holdings, filed in the U.S. District Court for the Middle District of North Carolina. The complaint alleges that the Company's patient list prices unlawfully
exceed the rates negotiated for the same services with private and public health insurers in violation of various state consumer protection laws. The lawsuit
also alleges breach of implied contract or quasi-contract, unjust enrichment, and fraud. The lawsuit seeks statutory, exemplary, and punitive damages,
injunctive relief, and recovery of attorney's fees and costs. In May 2017, the Company filed a Motion to Dismiss Plaintiffs' Complaint and Strike Class
Allegations; the Motion to Dismiss was granted in March 2018 without prejudice. On October 10, 2017, a second putative class action lawsuit, Sheryl
Anderson, et al. v. Laboratory Corporation of America Holdings, was filed in the U.S. District

F-36

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Court for the Middle District of North Carolina. The complaint contained similar allegations and sought similar relief to the Bouffard complaint, and added
additional counts regarding state consumer protection laws. On August 10, 2018, the Plaintiffs filed an Amended Complaint, which consolidated the Bouffard
and Anderson actions. On September 10, 2018, the Company filed a Motion to Dismiss Plaintiffs' Amended Complaint and Strike Class Allegations. On
August 16, 2019, the Court entered an order granting in part and denying in part the Motion to Dismiss the Amended Complaint, and denying the Motion to
Strike the Class Allegations. On August 26, 2021, Plaintiffs filed a Motion for Class Certification. On December 29, 2021, a related lawsuit, Nathaniel J.
Nolan, et al. v. Laboratory Corporation of America Holdings, was filed in the U.S. District Court for the Middle District of North Carolina. The complaint
alleges that the Company's patient acknowledgement of estimated financial responsibility form is misleading. The lawsuit seeks a declaratory judgement
under the consumer protection laws of Nevada and Florida that the form is materially misleading and deceptive, an injunction barring the use of the form,
damages on behalf of an alleged class, and attorney's fees and expenses. The Company will vigorously defend the lawsuits.

On April 1, 2019, Covance Research Products was served with a Grand Jury Subpoena issued by the Department of Justice (DOJ) in Miami, Florida
requiring the production of documents related to the importation into the United States of live non-human primate shipments originating from or transiting
through China, Cambodia, and/or Vietnam from April 1, 2014 through March 28, 2019. The Company is cooperating with the DOJ.

On May 14, 2019, Retrieval-Masters Creditors Bureau, Inc. d/b/a American Medical Collection Agency (AMCA), an external collection agency, notified
the Company about a security incident AMCA experienced that may have involved certain personal information about some of the Company’s patients (the
AMCA Incident). The Company referred patient balances to AMCA only when direct collection efforts were unsuccessful. The Company’s systems were not
impacted by the AMCA Incident. Upon learning of the AMCA Incident, the Company promptly stopped sending new collection requests to AMCA and
stopped AMCA from continuing to work on any pending collection requests from the Company. AMCA informed the Company that it appeared that an
unauthorized user had access to AMCA’s system between August 1, 2018, and March 30, 2019, and that AMCA could not rule out the possibility that
personal information on AMCA’s system was at risk during that time period. Information on AMCA’s affected system from the Company may have included
name, address, and balance information for the patient and person responsible for payment, along with the patient’s phone number, date of birth, referring
physician, and date of service. The Company was later informed by AMCA that health insurance information may have been included for some individuals,
and because some insurance carriers utilize the Social Security Number as a subscriber identification number, the Social Security Number for some
individuals may also have been affected. No ordered tests, laboratory test results, or diagnostic information from the Company were in the AMCA affected
system. The Company notified individuals for whom it had a valid mailing address. For the individuals whose Social Security Number was affected, the
notice included an offer to enroll in credit monitoring and identity protection services that was provided free of charge for 24 months.

Twenty-three putative class action lawsuits were filed against the Company related to the AMCA Incident in various U.S. District Courts. Numerous
similar lawsuits have been filed against other health care providers who used AMCA. These lawsuits have been consolidated into a multidistrict litigation in
the District of New Jersey. On November 15, 2019, the Plaintiffs filed a Consolidated Class Action Complaint in the U.S. District Court of New Jersey. On
January 22, 2020, the Company filed Motions to Dismiss all claims. The consolidated Complaint generally alleges that the Company did not adequately
protect its patients’ data and failed to timely notify those patients of the AMCA Incident. The Complaint asserts various causes of action, including but not
limited to negligence, breach of implied contract, unjust enrichment, and the violation of state data protection statutes. The Complaint seeks damages on
behalf of a class of all affected Company customers. On December 16, 2021, the Court granted in part and denied in part the Company's Motion to Dismiss.
The Company will vigorously defend the remaining claims in the multi-district litigation.

The Company was served with a shareholder derivative lawsuit, Raymond Eugenio, Derivatively on Behalf of Nominal Defendant, Laboratory
Corporation of America Holdings v. Lance Berberian, et al., filed in the Court of Chancery of the State of Delaware on April 23, 2020. The complaint asserts
derivative claims on the Company’s behalf against the Company’s board of directors and certain executive officers. The complaint generally alleges that the
defendants failed to ensure that the Company utilized proper cybersecurity safeguards and failed to implement a sufficient response to data security incidents,
including the AMCA Incident. The complaint asserts derivative claims for breach of fiduciary duty and seeks relief including damages, certain disclosures,
and certain changes to the Company’s internal governance practices. On June 2, 2020, the Company filed a Motion to Stay the lawsuit due to its overlap with
the multi-district litigation referenced above. On July 2, 2020, the Company filed a Motion to Dismiss. On July 14, 2020, the Court entered an order staying
the lawsuit pending the resolution of the multi-district litigation. The lawsuit will be vigorously defended.

Certain governmental entities have requested information from the Company related to the AMCA Incident. The Company received a request for

information from the Office for Civil Rights (OCR) of the Department of Health and Human

F-37

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Services. On April 28, 2020, OCR notified the Company of the closure of its inquiry. The Company has also received requests from a multi-state group of
state Attorneys General and is cooperating with these requests for information.

On January 31, 2020, the Company was served with a putative class action lawsuit, Luke Davis and Julian Vargas, et al. v. Laboratory Corporation of
America Holdings, filed in the U.S. District Court for the Central District of California. The lawsuit alleges that visually impaired patients are unable to use
the Company's touchscreen kiosks at Company patient service centers in violation of the Americans with Disabilities Act and similar California statutes. The
lawsuit seeks statutory damages, injunctive relief, and attorney's fees and costs. On March 20, 2020, the Company filed a Motion to Dismiss Plaintiffs'
Complaint and to Strike Class Allegations. In August 2020, the Plaintiffs filed an Amended Complaint. On April 26, 2021, the Plaintiffs and the Company
each filed Motions for Summary Judgment and the Plaintiffs filed a Motion for Class Certification. The Company will vigorously defend the lawsuit.

On May 14, 2020, the Company was served with a putative class action lawsuit, Jose Bermejo v. Laboratory Corporation of America (Bermejo I) filed in
the Superior Court of California, County of Los Angeles Central District, alleging that certain non-exempt California-based employees were not properly
compensated for driving time or properly paid wages upon termination of employment. The Plaintiff asserts these actions violate various California Labor
Code provisions and Section 17200 of the Business and Professional Code. The lawsuit seeks monetary damages, civil penalties, and recovery of attorney’s
fees and costs. On June 15, 2020, the lawsuit was removed to the U.S. District Court for the Central District of California. On June 16, 2020, the Company
was served with a Private Attorney General Act lawsuit by the same plaintiff in Jose Bermejo v. Laboratory Corporation of America (Bermejo II), filed in the
Superior Court of California, County of Los Angeles Central District, alleging that certain Company practices violated California Labor Code penalty
provisions related to unpaid and minimum wages, unpaid overtime, unpaid mean and rest break premiums, untimely payment of wages following separation
of employment, failure to maintain accurate pay records, and non-reimbursement of business expenses. The second lawsuit seeks to recover civil penalties
and recovery of attorney's fees and costs. On October 28, 2020, the court issued an order staying proceedings in Bermejo II pending resolution of Bermejo I.
The second lawsuit seeks to recover civil penalties and recovery of attorney's fees and costs. The Company will vigorously defend both lawsuits.

On August 14, 2020, the Company was served with a Subpoena Duces Tecum issued by the State of Colorado Office of the Attorney General requiring the

production of documents related to urine drug testing in all states. The Company is cooperating with this request.

On October 2, 2020, the Company was served with a putative class action lawsuit, Peterson v. Laboratory Corporation of America Holdings, filed in the
U.S. District Court for the Northern District of New York, alleging claims for a failure to properly pay service representatives compensation for all hours
worked and overtime under the Fair Labor Standards Act, as well as notice and recordkeeping claims under the New York Labor Code. On February 21,
2021, Plaintiff filed an amended complaint reiterating allegations of violations of the Fair Labor Standards Act and New York Labor Code, but narrowing the
scope of the putative class to only those service representatives employed by the Company within the State of New York. The lawsuit sought monetary
damages, liquidated damages, equitable and injunctive relief, and recovery of attorney's fees and costs. On December 17, 2021, the Court approved settlement
of the lawsuit and entered its dismissal.

On October 5, 2020, the Company was served with a putative class action lawsuit, Williams v. Labcorp Employer Services, Inc. et al, filed in the Superior
Court of California, County of Los Angeles, alleging that certain non-exempt California-based employees were not properly compensated for work and
overtime hours, not properly paid meal and rest break premiums, not reimbursed for certain business-related expenses, not properly paid for driving or wait
times, and received inaccurate wage statements. The Plaintiff also asserts claims for unfair competition under Section 17200 of the Business and Professional
Code. On November 4, 2020, the lawsuit was removed to the U.S. District Court for the Central District of California. The lawsuit seeks monetary damages,
liquidated damages, civil penalties, and recovery of attorney's fees and costs. On June 24, 2021, the District Court remanded the case to the Superior Court of
California, County of Los Angeles on the grounds that potential damages did not meet the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d),
jurisdictional threshold. The Company will vigorously defend the lawsuit.

On June 14, 2021, a single plaintiff filed a Private Attorney General Act lawsuit, Becker v. Laboratory Corporation of America, in the Superior Court of
California, County of Orange, alleging various violations of the California Labor Code, including that the Plaintiff was not properly compensated for work
and overtime hours, not properly paid meal and rest break premiums, not reimbursed for certain business-related expenses, and received inaccurate wage
statements. The lawsuit seeks monetary damages, civil penalties, and recovery of attorney’s fees and costs. The Company will vigorously defend the lawsuit.

On March 1, 2021, the Company was served with a putative class action lawsuit, Foy v. Laboratory Corporation of America Holdings d/b/a Labcorp

Diagnostics, filed in the U.S. District Court for the Middle District of North Carolina, alleging claims

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Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

for failure to properly pay service representatives employed outside of California and New York for all hours worked and overtime compensation under the
Fair Labor Standards Act. The lawsuit sought monetary damages, liquidated damages, equitable and injunctive relief, and recovery of attorney’s fees and
costs. The lawsuit was dismissed without prejudice in June 2021, but the Plaintiff is a named party in the Tabacchino lawsuit.

On October 14, 2021, a putative class action lawsuit, Tabacchino v. Laboratory Corporation of America Holdings, was filed in the Supreme Court of New
York, Nassau County, alleging claims for a failure to properly pay service representatives compensation for all hours worked and overtime under the Fair
Labor Standards Act and the New York Labor Code, as well as notice and recordkeeping claims under the New York Labor Code. The lawsuit seeks monetary
damages, liquidated damages, civil penalties, equitable and injunctive relief, and recovery of attorney's fees and costs. On December 16, 2021, the Court
issued an order approving the parties' settlement. A stipulation of discontinuance with prejudice will be filed upon the conclusion of the settlement claims
process.

On November 23, 2021, the Company was served with a single plaintiff Private Attorney General Act lawsuit, Poole v. Laboratory Corporation of
America, filed in the Superior Court of California, County of Kern, alleging various violations of the California Labor Code, including that Plaintiff was not
properly paid wages owed, not properly paid meal and rest break premiums, not reimbursed for certain business related expenses, and other allegations
including the untimely payment of wages and receipt of inaccurate wage statements. The lawsuit seeks monetary damages, civil penalties, and recovery of
attorney's fees and costs. The case was removed to the U.S. District Court for the Eastern District of California. The Company will vigorously defend the
lawsuit.

On February 7, 2022, the Company was served with a Subpoena Duces Tecum issued by the DOJ in Camden, New Jersey requiring the production of

documents related to non-invasive prenatal screening tests. The Company will cooperate with the DOJ.

Under the Company's present insurance programs, coverage is obtained for catastrophic exposure as well as those risks required to be insured by law or
contract. The Company is responsible for the uninsured portion of losses related primarily to general, professional and vehicle liability, certain medical costs
and workers' compensation. The self-insured retentions are on a per-occurrence basis without any aggregate annual limit. Provisions for losses expected under
these programs are recorded based upon the Company's estimates of the aggregated liability of claims incurred.

15. PENSION AND POSTRETIREMENT PLANS

Defined Contribution Retirement Plans

The Company has various U.S. defined contribution retirement plans (401K Plans). Under these 401K Plans, employees can contribute a portion of their
salary to the plan and the Company makes minimum non-elective contributions, discretionary contributions, and matching contributions, depending on the
terms of the specific plan. On January 1, 2021, all of the 401K Plans were modified to provide for 100% match of employee contributions up to 5% of their
salary. Total expense, for the years ended December 31, 2021, 2020, and 2019, was $168.9, $141.8 and $139.5, respectively.

Defined Benefit Pension Plans

The Company sponsors both funded and unfunded defined benefit pension plans which provide benefits based on various criteria such as years of service

and salary. The Company maintained two plans in the United States, three plans in the United Kingdom and one in Germany.

The two plans in the United States (U.S. Plans) were closed to new entrants and the accrual of service credits at the end of 2009. The U.K. pension plans
were closed to new entrants and the accrual of service credits for one plan as of December 31, 2002, and the accrual of service credits for the other two plans
as of December 31, 2019. The German plan was closed to new entrants on December 31, 2009 but participants continue to accrue service credits. The U.K.
and German plans are aggregated for disclosure as the Non-U.S. Plans.

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Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Net Periodic Benefit Costs

The components of the net periodic benefit costs for the defined benefit pension plans are as follows:

Service cost for benefits earned
Interest cost on benefit obligation
Expected return on plan assets
Net amortization and deferral
Expected participant contributions
Settlements

Defined-benefit plan costs

U. S. Plans

Non-U.S. Plans

Year ended December 31,

2021

2020

2019

2021

2020

2019

3.9
8.3
(17.3)
10.0
—
3.7
8.6

5.1
11.1
(14.9)
9.7
—
—
11.0

4.1
13.9
(15.1)
10.9
—
—
13.8

2.4
8.1
(16.3)
2.1
—
—
(3.7)

2.1
10.9
(16.6)
0.4
(0.1)
—
(3.3)

5.7
10.9
(15.0
—
(1.2
—
0.4

Service costs are the only component of net periodic benefit costs recorded within Operating income. For the year ended December 31, 2021, the

Company recognized a partial plan settlement charge of $3.7 as a component of Other, net.

The amounts recognized in accumulated other comprehensive earnings are as follows:

Net actuarial loss in accumulated other comprehensive earnings

66.9 $

108.8 $

58.8 $

99.7

Change in Projected Benefit Obligation

The change in the projected benefit obligation as of December 31, 2021, and December 31, 2020, is as follows:

U. S. Plans

Non-U.S. Plans

2021

Year ended December 31,
2021
2020

2020

Balance at beginning of the year

Service cost
Interest cost
Actuarial (gain) loss
Benefits and administrative expenses paid

Foreign currency exchange rate changes

Balance at end of the year

U.S. Plans

Non-U.S. Plans

2021

369.8
3.9
8.3
(18.0)
(30.7)
—

333.3

Year Ended December 31,
2021
2020

355.5
5.1
11.1
24.7
(26.6)
—

369.8

690.1
2.4
8.1
(34.7)
(22.2)
(9.9)

633.8

2020

590.7
2.1
10.9
80.5
(20.0)
25.9

690.1

The accumulated benefit obligation as of December 31, 2021 and 2020 was $333.3 and $369.8, respectively for the U.S. Plans and $633.8 and $690.1,

respectively for the Non-U.S. Plans.

Change in Fair Value of Plan Assets

The change in plan assets as of December 31, 2021, and December 31, 2020, is as follows:

Balances at beginning of the year
Company contributions
Participant contributions
Actual return on plan assets
Benefits and administrative expenses paid
Foreign currency exchange rate changes

Fair value of plan assets at end of year

U.S. Plans

Non-U.S. Plans

2021

300.9
—
—
27.5
(28.5)
—
299.9

Year Ended December 31,
2021
2020

262.1
33.1
—
32.3
(26.6)
—
300.9

535.6
14.3
—
22.3
(21.7)
(5.9)
544.6

2020

491.
13.
0.
32.
(19.
17.
535.

F-40

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Change in Funded Status and Reconciliation of Amounts Recorded in the Balance Sheet

The change in the funded status of the plan and a reconciliation of such funded status to the amounts reported in the consolidated balance sheet as of

December 31, 2021, and December 31, 2020, is as follows:

Funded status

Recorded as:
Other assets
Accrued expenses and other
Other liabilities

U.S. Plans

Non-U.S. Plans

$
$

2021

33.4

13.4
2.4
44.4

Year Ended December 31,
2021
2020

$
$

68.9

—
2.3
66.6

89.2

0.6
88.6

2020

154.5

0.6
153.9

Assumptions

Weighted average assumptions used to determine net periodic benefit costs are as follows:

Discount rate
Salary increases
Expected long term rate of return
Cash balance interest credit rate

U. S. Plans

Non-U.S. Plans

Year ended December 31,

2021

2020

2019

2021

2020

2019

2.4 %
N/A
6.0 %
4.0 %

3.3 %
N/A
6.0 %
4.0 %

4.3 %
N/A
6.5 %
4.0 %

1.1 %
2.0 %
3.1 %
N/A

1.7 %
3.1 %
3.5 %
N/A

2.2 %
2.7 %
4.2 %
N/A

A one percentage point decrease or increase in the discount rate would have resulted in a respective increase or decrease in 2021 retirement plan expense
of $1.7 for the U.S. Plans. A one percentage point decrease or increase in the discount rate would have resulted in a respective increase or decrease in 2021
retirement plan expense of $2.4 for the Non-U.S. Plans.

Weighted average assumptions used to determine net periodic benefit obligations are as follows:

Discount rate
Salary increases

U. S. Plans

Non-U.S. Plans

Year ended December 31,

2021

2020

2021

2020

2.8 %
N/A

2.3 %
N/A

1.8 %
2.0 %

1.2 %
2.0 %

The discount rate is determined using the weighted-average yields on high-quality fixed income securities that have maturities consistent with the timing
of benefit payments. Lower discount rates increase the size of the benefit obligation and generally increase pension expense in the following year; higher
discount rates reduce the size of the benefit obligation and generally reduce subsequent-year pension expense.

The expected return on plan assets is the estimated long-term rate of return that will be earned on the investments used to fund the pension obligations. To
determine this rate, the Company considers the composition of plan investments, historical returns earned, and expectations about the future. Actual asset
over/under performance compared to expected returns will respectively decrease/increase unrecognized loss. The change in the unrecognized loss will change
amortization cost in upcoming periods. A one percentage point increase or decrease in the expected return on plan assets would have resulted in a
corresponding change in 2021 pension expense of $2.9 for the U.S. Plans. A one percentage point increase or decrease in the expected return on plan assets
would have resulted in a corresponding change in 2021 pension expense of $5.4 for the Non-U.S. Plans.

The salary increase assumptions are used to estimate the annual rate at which pay of plan participants will grow. If the rate of growth assumed increases,
the size of the pension obligations will increase, as will the amount recorded in Accumulated other comprehensive income (loss) in the Company's
Consolidated Statement of Financial Position and amortized into earnings in subsequent periods.

F-41

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

The Company evaluates other assumptions periodically, such as retirement age, mortality and turnover, and updates them as necessary to reflect the
Company's actual experience and expectations for the future. Differences between actual results and assumptions utilized are recorded in Accumulated other
comprehensive income each period. These differences are amortized into earnings over the remaining average future service of active participating employees
or the expected life of inactive participants, as applicable.

Plan Assets

The fair values of the assets at December 31, 2021, and 2020, by asset category are as follows:

Asset Category
U.S Plans
Cash and cash equivalents
U.S. equity index funds
International equity index funds
Real estate
General bond index funds

Total fair value

Non U.S. Plans
Cash and cash equivalents
Annuities
Pooled investment funds

Total fair value

Asset Category
U.S Plans
Cash and cash equivalents
U.S. equity index funds
International equity index funds
Real estate index fund
General bond index funds

Total fair value

Non U.S. Plans
Cash and cash equivalents
Annuities
Pooled investment funds

Total fair value

Level of Valuation
Input

Fair Value

Investments valued using NAV
per share

Total

Level 1

Level 1
Level 3

Level of Valuation
Input

Level 1

Level 1
Level 3

4.3 $
—
—
—
—
4.3 $

19.5 $
97.9
—
117.4 $

— $
52.5
22.1
7.6
213.4
295.6 $

— $
—
427.2
427.2 $

Fair Value

Investments valued using NAV
per share

Total

13.0 $
—
—
—
—
13.0 $

6.8 $

58.7
—
65.5 $

— $

105.5
45.7
15.0
121.7
287.9 $

— $
—
470.1
470.1 $

4.3
52.5
22.1
7.6
213.4
299.9

19.5
97.9
427.2
544.6

13.0
105.5
45.7
15.0
121.7
300.9

6.8
58.7
470.1
535.6

The fair market value of index funds and pooled investment funds are valued using the net asset value (NAV) unit price provided by the fund
administrator. The NAV is based on the value of the underlying assets owned by the fund. The fair value of annuity investments are based on discounted cash
flow techniques using unobservable valuation inputs such as discount rates and actuarial mortality tables.

Fair Value Measurement of Level 3 Pension Assets
Balance at January 1, 2020
Actual return on plan assets
Balance at December 31, 2020
Actual return on plan assets

Balance at December 31, 2021

Annuities

30.
28.
58.
39.
97.

Investment Policies
Plan fiduciaries of various plans set investment policies and strategies, based on consultation with professional advisors, and oversee investment

allocation, which includes selecting investment managers and setting long-term strategic targets. The

F-42

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

primary strategic investment objectives are balancing investment risk and return and monitoring the plan’s liquidity position in order to meet the near-term
benefit payment and other cash needs. Target allocation percentages are established at an asset class level by plan fiduciaries. Target allocation ranges are
guidelines, not limitations, and occasionally plan fiduciaries will approve allocations above or below a target range.

The weighted average asset allocation of the plan assets as of December 31, 2021, by asset category is as follows:

Equity securities
Debt securities
Annuities
Real estate
Other

The weighted average target asset allocation of the plan assets is as follows:

Equity securities
Debt securities
Annuities
Real estate
Other

Pension Funding and Cash Flows

December 31, 2021

U.S. Plans

Non-U.S. Plans

24.9 %
71.2 %
— %
2.5 %
1.4 %

35.2 %
40.1 %
18.0 %
3.1 %
3.6 %

U.S. Plans
to
17.0%
61.0%
to
— % to
0.5 % to
— % to

32.5 %
81.0 %
— %
4.3 %
5.0 %

Non U.S. Plans
to
to
to
to
to

40.0%
45.0%
20.0%
10.0%
5.0%

30.0%
35.0%
10.0%
—%
—%

The Company expects to make approximately $19.3 in required contributions to its defined benefit pension plans during 2022. The Company targets
funding the minimum required contributions but may make additional contributions into the pension plans in 2022, depending upon factors such as how the
funded status of those plans change or to reduce the administrative costs of the plan.

The estimated benefit payments, which were used in the calculation of projected benefit obligations, are expected to be paid as follows:

2022
2023
2024
2025
2026
Years 2027 to 2036

U. S. Plans

Non-U. S. Plans

27.1 $
26.3
25.7
25.6
24.8
111.3

16.5
17.1
18.5
18.4
19.8
107.3

Post-employment Retiree Health and Welfare Plan

The Company sponsors a post-employment retiree health and welfare plan for the benefit of eligible employees at certain U.S. subsidiaries who retire
after satisfying service and age requirements. This plan is funded on a pay-as-you-go basis and the cost of providing these benefits is shared with the retirees.

Post-retirement Medical Plan

The Company assumed obligations under a subsidiary's post-retirement medical plan. Coverage under this plan is restricted to a limited number of
existing employees of the subsidiary. This plan is unfunded and the Company’s policy is to fund benefits as claims are incurred. The effect on operations of
the post-retirement medical plan is shown in the following table:

Service cost for benefits earned
Interest cost on benefit obligation
Net amortization and deferral

Post-retirement medical plan costs

Year ended December 31,
2020

2021

2019

— $
0.1
0.3
0.4 $

— $
0.2
0.4
0.6 $

—
0.3
0.4
0.7

F-43

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Amounts included in accumulated other comprehensive earnings consist of unamortized net loss of $0.8 and $1.6.

A summary of the changes in the accumulated post-retirement benefit obligation follows:

Balance at January 1

Interest cost on benefit obligation
Actuarial loss
Benefits paid

Balance at December 31

Recorded as:
Accrued expenses and other
Other liabilities

2021

2020

6.2 $
0.1
(0.5)
(0.6)
5.2 $

0.7 $
4.5
5.2 $

6.5
0.2
—
(0.5)
6.2

0.8
5.4
6.2

The weighted-average discount rates used in the calculation of the accumulated post-retirement benefit obligation were 2.7% and 2.3% as of December 31,

2021, and 2020, respectively. The healthcare cost trend rate was removed due to the expectation of future funding to be at the same level as the previous
year's funding.

The following assumed benefit payments under the Company's post-retirement benefit plan, which reflect expected future service, as appropriate, and

which were used in the calculation of projected benefit obligations, are expected to be paid as follows:
2022
2023
2024
2025
2026
Years 2027 and thereafter

Deferred Compensation Plan

0.7
0.6
0.6
0.5
0.4
1.3

The Company has Deferred Compensation Plans (DCP) under which certain of its executives may elect to defer up to 100.0% of their annual cash incentive
pay and/or up to 50.0% of their annual base salary and/or eligible commissions subject to annual limits established by the U.S. government. The DCP
provides executives a tax efficient strategy for retirement savings and capital accumulation without significant cost to the Company. The Company makes no
contributions to the DCP. Amounts deferred by a participant are credited to a bookkeeping account maintained on behalf of each participant, which is used for
measurement and determination of amounts to be paid to a participant, or his or her designated beneficiary, pursuant to the terms of the DCP. The amounts
accrued under these plans were $104.4 and $89.2 at December 31, 2021, and 2020, respectively. Deferred amounts are the Company's general unsecured
obligations and are subject to claims by the Company's creditors. The Company's general assets may be used to fund obligations and pay DCP benefits.

16. FAIR VALUE MEASUREMENTS

The Company’s population of financial assets and liabilities subject to fair value measurements as of December 31, 2021, and 2020 were as follows:
Fair Value Measurements as of
December 31, 2021
Using Fair Value Hierarchy

Fair Value as of
December 31, 2021

Noncontrolling interest put
Cross currency swaps
Interest rate swaps
Cash surrender value of life insurance policies
Deferred compensation liability
Investment in equity securities
Contingent consideration

Balance Sheet Classification
Noncontrolling interest
Other liabilities, net
Other assets, net
Other assets, net
Other liabilities
Other current assets
Other liabilities

F-44

Level 1

Level 2

Level 3

16.3 $
32.8
2.9
106.4
104.4
10.9
21.9

— $
—
—
—
—
10.9
—

16.3 $
32.8
2.9
106.4
104.4
—
—

—
—
—
—
—
—
21.9

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Noncontrolling interest put
Cross currency swaps liability
Cash surrender value of life insurance policies
Deferred compensation liability
Contingent consideration

Fair Value Measurement of Level 3 Liabilities
Balance at January 1, 2020
Addition
Cash payments and adjustments
Balance at December 31, 2020
Addition
Cash payments and adjustments

Balance at December 31, 2021

Balance Sheet Classification
Noncontrolling interest
Other liabilities
Other assets, net
Other liabilities
Other liabilities

Fair Value as of
December 31, 2020

Fair Value Measurements as of
December 31, 2020
Using Fair Value Hierarchy

Level 1

Level 2

Level 3

16.2 $
40.4
90.6
89.2
13.9

— $
—
—
—
—

16.2 $
40.4
90.6
89.2
—

—
—
—
—
13.9

Contingent Consideration

9.9
10.8
(6.8)
13.9
9.1
(1.1)
21.9

The Company has a noncontrolling interest put related to its Ontario subsidiary that has been classified as mezzanine equity in the Company’s condensed
consolidated balance sheets. The noncontrolling interest put is valued at its contractually determined value, which approximates fair value. During the year
ended December 31, 2021, the carrying value of the noncontrolling interest put decreased by $0.2 for foreign currency translation.

The Company offers certain employees the opportunity to participate in a DCP. A participant's deferrals are allocated by the participant to one or more of
16 measurement funds, which are indexed to externally managed funds. From time to time, to offset the cost of the growth in the participant's investment
accounts, the Company purchases life insurance policies, with the Company named as beneficiary of the policies. Changes in the cash surrender value of the
life insurance policies are based upon earnings and changes in the value of the underlying investments, which are typically invested in a similar manner to the
participants' allocations. Changes in the fair value of the DCP obligation are derived using quoted prices in active markets based on the market price per unit
multiplied by the number of units. The cash surrender value and the DCP obligations are classified within Level 2 because their inputs are derived principally
from observable market data by correlation to the hypothetical investments.

Contingent accrued earn-out business acquisition consideration liabilities for which fair values are measured as Level 3 instruments. These contingent
consideration liabilities were recorded at fair value on the acquisition date and are remeasured quarterly based on the then assessed fair value and adjusted if
necessary. The increases or decreases in the fair value of contingent consideration payable can result from changes in anticipated revenue levels and changes
in assumed discount periods and rates. As the fair value measure is based on significant inputs that are not observable in the market, they are categorized as
Level 3.

The carrying amounts of cash and cash equivalents, accounts receivable, income taxes receivable, and accounts payable are considered to be
representative of their respective fair values due to their short-term nature. The fair market value of the Senior Notes, based on market pricing, was
approximately $5,841.1 and $6,121.8 as of December 31, 2021, and 2020, respectively. The Company's note and debt instruments are considered Level 2
instruments, as the fair market values of these instruments are determined using other observable inputs.

17. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company addresses its exposure to market risks, principally the market risk associated with changes in interest rates and currency exchange rates,
through a controlled program of risk management that includes, from time to time, the use of derivative financial instruments. The Company does not hold or
issue derivative financial instruments for trading purposes. The Company does not believe that its exposure to market risk is material to the Company’s
financial position or results of operations.

Interest Rate Swap

During the second quarter of 2021, the Company entered into fixed-to-variable interest rate swap agreements for its 2.70% senior notes due 2031 with an

aggregate notional amount of $500.0 and variable interest rates based on three-month LIBOR

F-45

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

plus 1.0706%. These agreements were designated as hedges against changes in the fair value of a portion of the Company's long-term debt. The aggregate fair
value of $2.9 at December 31, 2021, was included as a component of other long-term assets and added to the reported value of the senior notes.

During the third quarter of 2013, the Company entered into two fixed-to-variable interest rate swap agreements for the 4.625% Senior Notes due 2020
with an aggregate notional amount of $600.0 and variable interest rates based on one-month LIBOR plus 2.298% to hedge against changes in the fair value of
a portion of the Company's long-term debt. The Company exited one of these swap arrangements in December 2019 in connection with the redemption of
$187.9 of the 4.625% Senior Notes due 2020. The Company exited the remaining fixed-to-variable interest rate swap agreement in August 2020, in
connection with the redemption of the remaining $412.2 of its 4.625% Senior Notes due November 15, 2020, and recorded a gain of $1.6 on the
extinguishment. The gain was included in Other, net on the Consolidated Statement of Operations.

These derivative financial instruments are accounted for as fair value hedges which increased or decreased the value of the Senior Notes with the offset
being recorded as a component of other long-term assets or liabilities, as applicable. As the specific terms and notional amounts of the derivative financial
instruments match those of the fixed-rate debt being hedged, the derivative instruments are assumed to be perfectly effective hedges and accordingly, there is
no impact to the Company's consolidated statements of operations. Cash flows from the interest rate swaps are including in operating activities.

Foreign Currency Forward Contracts

The Company periodically enters into foreign currency forward contracts, which are recognized as assets or liabilities at their fair value. These contracts
do not qualify for hedge accounting and the changes in fair value are recorded directly to earnings. The contracts are short-term in nature and the fair value of
these contracts is based on market prices for comparable contracts. The fair value of these contracts is not significant as of December 31, 2021 and 2020.

Cross Currency Swaps

During the fourth quarter of 2018, the Company entered into six USD to Swiss Franc cross-currency swap agreements with an aggregate notional value of
$600.0 and which are accounted for as a hedge against the impact of foreign exchange movements on its net investment in a Swiss Franc functional currency
subsidiary. Of the notional value, $300.0 matures in 2022 and $300.0 matures in 2025. These cross currency swaps maturing in 2022 and 2025 with an
aggregate fair value of $20.6 and $12.2 as of December 31, 2021, respectively, are included in other long-term liabilities. These cross currency swaps
maturing in 2022 and 2025 with an aggregate fair value of $26.0 and $14.4 as of December 31, 2020, respectively, are included in other long-term liabilities.
Changes in the fair value of the cross-currency swaps are recorded as a component of the foreign currency translation adjustment in accumulated other
comprehensive income in the Consolidated Balance Sheet until the hedged item is recognized in earnings. The cumulative amount of the fair value hedging
adjustment included in the current value of the cross currency swaps is $(32.8) for the year ended December 31, 2021, and was recognized as currency
translation within the Consolidated Statement of Comprehensive Earnings. There were no amounts reclassified from the Consolidated Statement of
Comprehensive Earnings to the Consolidated Statement of Operations during the year ended December 31, 2021.

The table below presents the fair value of derivatives on a gross basis and the balance sheet classification of those instruments:

Balance Sheet Caption

Asset

Liability

U.S. Dollar
Notional

Asset

Liability

U.S. Dollar
Notional

December 31, 2021
Fair Value of Derivative

December 31, 2020
Fair Value of Derivative

Derivatives Designated as Hedging Instruments
Interest rate swap
Cross currency swaps

Other assets, net/Other liabilities
Other liabilities

2.9
—

—
32.8

500.0
600.0

—
—

—
40.4

—
600.0

F-46

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

The table below provides information regarding the location and amount of pretax (gains) losses of derivatives designated in fair value hedging

relationships:

Amount included in other comprehensive
income
Year Ended December 31,
2020

2019

2021

Amounts reclassified to the
Statement of Operations
Year Ended December 31,
2020

2019

2021

Interest rate swap contracts
Cross currency swaps

$
$

— $
7.6 $

0.8 $
(43.6) $

6.7 $
6.0 $

— $
— $

1.6 $
— $

1.6
—

The Company recognized a gain of $1.6 and $1.6 on the extinguishment of its interest rate swap agreement in the years ended December 31, 2020 and
December 31, 2019, respectively, in connection with the redemption of the 4.625% Senior Notes due 2020. No gains or losses from derivative instruments
classified as hedging instruments have been recognized into income for the year ended December 31, 2021.

18. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental schedule of cash flow information:
Cash paid during period for:
Interest
Income taxes, net of refunds
Disclosure of non-cash financing and investing activities:
Conversion of zero-coupon convertible debt
Assets acquired under finance leases
Change in accrued property, plant and equipment
Floating rate secured note receivable due 2022 from the sale of CRP

19. BUSINESS SEGMENT INFORMATION

Years Ended December 31,
2020

2021

2019

194.7 $

1,000.0

216.6 $
500.0

—
—
11.8
—

—
—
(1.2)
—

248.9
216.8

8.4
48.7
2.7
110.0

The following table is a summary of segment information for the years ended December 31, 2021, 2020, and 2019. 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 chief
operating decision maker (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.

Segment asset information is not presented because it is not used by the CODM at the segment level. Operating earnings (loss) of each segment
represents revenues less directly identifiable expenses to arrive at operating income for the segment. General management and administrative corporate
expenses are included in general corporate expenses below.

Revenues:
Dx
DD
Intercompany eliminations and other
Total revenues

Operating Earnings:
Dx
DD
General corporate expenses
Total operating income

2021

2020

2019

10,363.6
5,845.5
(88.2)
16,120.9

2,988.5
547.7
(276.7)
3,259.5

9,253.4
4,877.7
(152.6)
13,978.5

2,634.9
37.3
(226.8)
2,445.4

7,000.1
4,578.1
(23.4)
11,554.8

1,086.0
411.5
(167.3)
1,330.2

F-47

Index

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)

Depreciation and Amortization
Dx
DD
General corporate

Total depreciation and amortization

Geographic distribution of revenues
North America
Europe
Other

Total revenues

2021

2020

2019

355.8
386.7
2.6
745.1

327.5
295.2
2.0
624.7

301.0
261.1
2.6
564.7

Intercompany
Eliminations
and Other

Total

10,363.6
—
—
10,363.6

2,818.3
2,050.8
976.4
5,845.5

(88.2)
—
—
(88.2)

13,093.7
2,050.8
976.4
16,120.9

Geographic distribution of property, plant and equipment, net
North America
Europe
Other

Total property, plant and equipment, net

Total

1,507.3
—
—
1,507.3

670.2
449.9
188.0
1,308.1

2,177.5
449.9
188.0
2,815.4

20. SUBSEQUENT EVENTS

On February 9, 2022, the Company entered into agreements to create a comprehensive strategic relationship with Ascension, a Catholic, non-profit health
system. Through the expansive strategic collaboration, the Company will manage Ascension’s hospital-based laboratories in 10 states and purchase select
assets of the health system’s outreach laboratory business. This long-term relationship will expand the Company’s clinical laboratory services in several states
across the country while creating opportunities to enhance care across all clinical areas. The arrangement includes acquisition of certain outreach laboratory
assets with a purchase price of $400.0.

On February 18, 2022, the Company closed its acquisition of Personal Genome Diagnostics Inc. (PGDx), a cancer genomics company with a portfolio of
comprehensive liquid biopsy and tissue-based products. The addition of PGDx and its technology complements and accelerates Labcorp’s existing liquid
biopsy capabilities and expands Labcorp’s oncology portfolio of next-generation sequencing (NGS)-based genomic profiling capabilities. Under the terms of
the agreement, Labcorp paid $450.0 in cash at closing and up to an additional $125.0 on achieving future performance milestones.

F-48

Exhibit 21 LIST OF SUBSIDIARIES

1957285 Ontario Inc. dba Quality Underwriting Services
2089729 Ontario, Inc.
2248848 Ontario Inc.
3065619 Nova Scotia Company
3257959 Nova Scotia Company
896988 Ontario Limited
9279-3280 Quebec Inc.
Accupath Diagnostic Laboratories, Inc.
Beacon Laboratory Benefit Solutions, Inc.
CannAmm GP Inc.
CannAmm Limited Partnership
Center for Disease Detection International
Center for Disease Detection, LLC (Delaware)
Center for Disease Detection, LLC (Texas)
Centrex Clinical Laboratories, Inc.
Clearstone Central Laboratories (U.S.) Inc.
Clearstone Holdings (International) Ltd.
Clipper Holdings, Inc.
Colorado Coagulation Consultants, Inc.
Colorado Laboratory Services, LLC
Correlagen Diagnostics, Inc.
Curalab Inc.
Cytometry Associates, Inc.
Czura Thornton (Hong Kong) Limited
DCL Acquisition, Inc.
DCL Medical Laboratories, LLC (FL)
DCL Medical Laboratories, LLC (DE)
DCL Sub LLC
Decision Diagnostics, L.L.C. (aka DaVinici/Medicorp LLC)
Diagnostic Services, Inc.
DIANON Systems, Inc.
DL Holdings Limited Partnership
Dynacare - Gamma Laboratory Partnership
Dynacare Company
Dynacare G.P. Inc.
Dynacare Holdco LLC
Dynacare Laboratories Inc.
Dynacare Laboratories Limited Partnership
Dynacare Northwest Inc.
Dynacare Realty Inc.
DynaLifeDX
DynalifeDX Infrastructure Inc.
Endocrine Sciences, Inc.
Esoterix Genetic Counseling, LLC
Esoterix Genetic Laboratories, LLC
Esoterix, Inc.
Execmed Health Services Inc.
FirstSource Laboratory Solutions, Inc.
Gamma Dynacare Central Medical Laboratories GP Inc.
Gamma Dynacare Central Medical Laboratory Limited Partnership
GDML Medical Laboratories Inc
Health Trans Services Inc.
HHLA Lab-In-An-Envelope, LLC
Home Healthcare Laboratory of America, LLC
IDX Pathology, Inc.
Impact Genetics Corp.

Impact Genetics, Inc.
Kaleida LabCorp, LLC
Lab Delivery Service of New York City, Inc.
LabCorp Belgium Holdings, Inc.
LabCorp BVBA
LabCorp Central Laboratories (Canada) Inc.
LabCorp Central Laboratories (China) Inc.
Labcorp Drug Development Inc. (f-Covance Inc.)
LabCorp Development Company
LabCorp Employer Services, Inc.
LabCorp Health System Diagnostics, LLC
LabCorp Indiana, Inc.
LabCorp Japan, G.K.
LabCorp Limited
LabCorp Michigan, Inc.
LabCorp Nebraska, Inc.
LabCorp Neon Ltd.
LabCorp Neon Switzerland S.à r.l.
LabCorp Specialty Testing Billing Service, Inc.
LabCorp Specialty Testing Group, Inc.
LabCorp Staffing Solutions, Inc.
LabCorp Tennessee, LLC
LabCorp UK Holdings, Ltd.
Laboratoire Bio-Medic Inc.
Laboratory Corporation of America
LabWest, Inc.
LipoScience, Inc.
Litholink Corporation
Medical Neurogenetics, LLC
Medtox Diagnostics, Inc.
Medtox Laboratories, Inc.
MEDTOX Scientific, Inc.
Monogram Biosciences, Inc.
National Genetics Institute
New Brighton Business Center LLC
New Imaging Diagnostics, LLC
New Molecular Diagnostics Ventures LLC
NWT Inc.
Orchid Cellmark ULC
Ovuline, Inc.
PA Labs, Inc.
Path Lab Incorporated
Pathology Associates Medical Lab, LLC
Persys Technology Inc.
Pixel by LabCorp
Princeton Diagnostic Laboratories of America, Inc.
Protedyne Corporation
Saint Joseph-PAML, LLC
Sequenom Biosciences (India) Pvt. Ltd.
Sequenom Center for Molecular Medicine, LLC
Sequenom, Inc.
Southern Idaho Regional Laboratory
SW/DL LLC
Tandem Labs Inc.
The LabCorp Charitable Foundation
Tri-Cities Laboratory, LLC
Viro-Med Laboratories, Inc.
Visiun Inc.

Yakima Medical Arts, Inc.

Labcorp Drug Development Inc. Operating Entities
Chiltern International Limited (CIL)
Chiltern Pesquisa Clinica Ltda
CJB Inc.
Covance (Barbados) Holdings Ltd.
Covance (Barbados) Ltd.
Covance Classic Laboratory Services Inc.
Covance Korea Services Limited
Covance Periapproval Services Inc.
Covance Peru Services S.A.
Fairfax Storage Limited
Havenfern Ltd
Hazpen Trustees Ltd.
Labcorp (Argentina) S.A.
Labcorp (Canada) Inc.
Labcorp (Polska) Sp. z o.o.
Labcorp Asia-Pacific Inc.
Labcorp Austria GmbH
Labcorp Bioanalytical Services LLC
Labcorp Brazil Pharmaceutical Services Limitada
Labcorp Central Laboratory Services Inc.
Labcorp Central Laboratory Services Limited Partnership
Labcorp Central Laboratory Services S.à r.l.
Labcorp Chile Services Limitada
Labcorp Clinical Development (Pty) Ltd
Labcorp Clinical Development AG
Labcorp Clinical Development ApS
Labcorp Clinical Development GmbH
Labcorp Clinical Development Hungaria Consultancy Limited Liability Company
Labcorp Clinical Development Limited
Labcorp Clinical Development Limited
Labcorp Clinical Development Ltd.
Labcorp Clinical Development Private Limited
Labcorp Clinical Development SARL
Labcorp Clinical Development SRL
Labcorp Clinical Development SRL
Labcorp Clinical Development Ukraine LLC
Labcorp Clinical Development, S. DE R. L. De C.V.
Labcorp Clinical Research Unit Inc.
Labcorp Clinical Research Unit Limited
Labcorp Clinical Research, LP
Labcorp CLS Holdings Limited LLC
Labcorp CLS Holdings Partnership LP
Labcorp Colombia Services Ltda.
Labcorp CRU Inc.
Labcorp Data Sciences Ukraine LLC
Labcorp Development (Asia) Pte. Ltd.
Labcorp Development Japan K.K.
Labcorp Development Limited
Labcorp Development Pty Ltd
Labcorp Development S.A.U.
Labcorp Drug Development India Private Limited
Labcorp Early Development Corporation
Labcorp Early Development Laboratories Inc.
Labcorp Early Development Laboratories Limited
Labcorp Early Development Services GmbH

Labcorp Endpoint (UK) Ltd
Labcorp Endpoint Clinical Inc.
Labcorp Endpoint India Private Limited
Labcorp Global Specimen Solutions Inc.
Labcorp Guatemala Services, S.A.
Labcorp Hong Kong Holdings Limited
Labcorp Hong Kong Services Limited
Labcorp International Group Limited
Labcorp International Holdings B.V.
Labcorp International Holdings Limited
Labcorp Latin America Inc.
Labcorp Luxembourg Sarl
Labcorp Neon Luxembourg Sarl
Labcorp New Zealand Limited
Labcorp Peri-Approval and Commercialization Inc.
Labcorp Pharmaceutical Research and Development (Beijing) Co., Ltd.
Labcorp Pharmaceutical Research and Development (Shanghai) Co., Ltd.
Labcorp Research Holdings, LLC
Labcorp Scientific Services & Solutions Private Limited
Labcorp Scientific Services and Solutions, Inc.
Labcorp Services (Thailand) Limited
Labcorp Services Malaysia Sdn. Bdn.
Labcorp Specialty Pharmacy LLC
Labcorp Taiwan Services Limited
Labcorp US Holdings Limited LLC
Labcorp US Holdings Partnership LP
LSR Pension Scheme Limited
Nexigent Inc.
Ockham Development Group (Holdings) UK Ltd
Ockham Europe Limited
PMD Properties, LLC
Reim LLC
SLJK LLC
SnapIoT Europe s.r.l.
SnapIOT, Inc.
SPHN, LLC
Texas Covance GP, Inc.
Theorem Clinical Research Holdings B.V.
Theorem Clinical Research International B.V
Theorem Clinical Research Latin America B.V.
Theorem Clinical Research Pte. Ltd.
Theorem Research Associates, Inc.

Labcorp Drug Development Inc. Inactive Entities
Covance NPA Inc.
Safe Foods International Holdings, LLC
Chiltern Research International (Hong Kong) Limited
Covance Genomics Laboratory LLC
JSG R&D LLC
Covance Clinical Development SRL
Theorem Clinical Research Co., Ltd.
Chiltern Clinical Research (Philippines) Inc
Chiltern International AB
Chiltern International Sro
Chiltern Investigacion Clinica Ltda
Covance Clinical and Periapproval Services LLC
Covance Consulting Limited
Covance CRS Analytics Ltd.

Covance CRS Developments Limited
Covance CRS International Limited
Covance Laboratories Korea Company Limited
Covance Pharma Consulting Limited
IFN Research, LLC
Integrated Development Associates Philippines, Inc
International Food Network LLC
Labcorp Research Limited
Labcorp UK Limited
Sciformix Europe Limited
The National Food Laboratory, LLC

Dynacare non-operating entities identified subsequent to the acquisition of Dynacare Inc. on July 25, 2002
1004679 Ontario Limited
563911 Ontario Limited
794475 Ontario Inc.
829318 Ontario Limited
854512 Ontario Limited
879606 Ontario Limited
900747 Ontario Ltd.
925893 Ontario Limited
942487 Ontario Ltd.
942489 Ontario Ltd.
942491 Ontario Limited
942492 Ontario Ltd.
947342 Ontario Ltd.
949235 Ontario Ltd.
958069 Ontario Inc.
977681 Ontario Inc.
978550 Ontario Ltd.
978551 Ontario Ltd.
Amherstview Medical Centre Developments Inc.
DHG Place Du Centre Clinique
Dynacare Canada Inc.
Dynacare International Inc.
Glen Davis Equities Ltd.
L.R.C. Management Service Inc.
Lawrence-Curlew Medical Centre Inc.
Roselat Developments Limited
St. Joseph's Health Centre
Stockwin Corporation Ltd.
Thistle Place Care Corp.
Toronto Argyro Medical Laboratories Ltd.
Woodstock Medical Arts Building Inc.

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-150704, 333-181107, 333-211324, and 333-211323 on Forms S-8 and
Registration Statement No. 333-234633 on Form S-3 of our reports dated February 25, 2022, relating to the financial statements of Laboratory Corporation of
America Holdings and the effectiveness of Laboratory Corporation of America Holdings’ internal control over financial reporting appearing in this Annual
Report on Form 10-K for the year ended December 31, 2021.

/s/ Deloitte & Touche LLP

Raleigh, North Carolina
February 25, 2022

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-234633) and Form S-8 (No. 333-150704, No. 333-
181107, No. 333-211324 and No. 333-211323) of Laboratory Corporation of America Holdings of our report dated February 25, 2021, except for the effects
of the revision discussed in Note 1 to the consolidated financial statements, as to which the date is February 25, 2022, relating to the financial statements,
which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP
Raleigh, North Carolina
February 25, 2022

Exhibit 24.1

POWER OF ATTORNEY

KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Sandra van der Vaart her true and lawful attorney-in-
fact and agent, with full power of substitution, for her and in her name, place and stead, in any and all capacities, in connection with the Laboratory
Corporation of America Holdings (Corporation) Annual Report on Form 10-K for the year ended December 31, 2021, under the Securities Exchange Act of
1934, as amended, including, without limiting the generality of the foregoing, to sign the Form 10-K in the name and on behalf of the Corporation or on
behalf of the undersigned as a director or officer of the Corporation, and any amendments to the Form 10-K and any instrument, contract, document or other
writing, of or in connection with the Form 10-K or amendments thereto, and to file the same, with all exhibits thereto, and other documents in connection
therewith, including this power of attorney, with the Securities and Exchange Commission and any applicable securities exchange or securities self-regulatory
body, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and purposes as she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agents, each acting alone, or she substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed these presents in this 25th day of February, 2022.

By:

/s/ KERRII B. ANDERSON
Kerrii B. Anderson

Exhibit 24.2

POWER OF ATTORNEY

KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Sandra van der Vaart his true and lawful attorney-in-
fact and agent, with full power of substitution, for him and in his name, place and stead, in any and all capacities, in connection with the Laboratory
Corporation of America Holdings (Corporation) Annual Report on Form 10-K for the year ended December 31, 2021, under the Securities Exchange Act of
1934, as amended, including, without limiting the generality of the foregoing, to sign the Form 10-K in the name and on behalf of the Corporation or on
behalf of the undersigned as a director or officer of the Corporation, and any amendments to the Form 10-K and any instrument, contract, document or other
writing, of or in connection with the Form 10-K or amendments thereto, and to file the same, with all exhibits thereto, and other documents in connection
therewith, including this power of attorney, with the Securities and Exchange Commission and any applicable securities exchange or securities self-regulatory
body, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agents, each acting alone, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed these presents in this 25th day of February, 2022.

By:

/s/ JEAN-LUC BÉLINGARD
Jean-Luc Bélingard

Exhibit 24.3

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has signed these presents in this 25th day of February, 2022.

By:

/s/ JEFFREY A. DAVIS
Jeffrey A. Davis

Exhibit 24.4

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has signed these presents in this 25th day of February, 2022.

By:

/s/ D. GARY GILLILAND, M.D., Ph.D
D. Gary Gilliland, M.D., Ph.D

Exhibit 24.5

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has signed these presents in this 25th day of February, 2022.

By:

/s/ GARHENG KONG, M.D., Ph.D.
Garheng Kong, M.D., Ph.D.

Exhibit 24.6

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has signed these presents in this 25th day of February, 2022.

By:

/s/ PETER M. NEUPERT
Peter M. Neupert

Exhibit 24.7

POWER OF ATTORNEY

KNOWN ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and appoints Sandra van der Vaart her true and lawful attorney-in-
fact and agent, with full power of substitution, for her and in her name, place and stead, in any and all capacities, in connection with the Laboratory
Corporation of America Holdings (Corporation) Annual Report on Form 10-K for the year ended December 31, 2021, under the Securities Exchange Act of
1934, as amended, including, without limiting the generality of the foregoing, to sign the Form 10-K in the name and on behalf of the Corporation or on
behalf of the undersigned as a director or officer of the Corporation, and any amendments to the Form 10-K and any instrument, contract, document or other
writing, of or in connection with the Form 10-K or amendments thereto, and to file the same, with all exhibits thereto, and other documents in connection
therewith, including this power of attorney, with the Securities and Exchange Commission and any applicable securities exchange or securities self-regulatory
body, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and purposes as she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agents, each acting alone, or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has signed these presents in this 25th day of February, 2022.

By:

/s/ RICHELLE P. PARHAM
Richelle P. Parham

Exhibit 24.8

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has signed these presents in this 25th day of February, 2022.

By:

/s/ KATHRYN E. WENGEL
Kathryn E. Wengel

Exhibit 24.9

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has signed these presents in this 25th day of February, 2022.

By:

/s/ R. SANDERS WILLIAMS, M.D.
R. Sanders Williams, M.D.

Exhibit 31.1

Certification

I, Adam H. Schechter, certify that:

1. I have reviewed this Annual Report on Form 10-K of Laboratory Corporation of America Holdings;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant
and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.

Date:

February 25, 2022

By: /s/ ADAM H. SCHECHTER

Adam H. Schechter
Chief Executive Officer
(Principal Executive Officer)

Exhibit 31.2

Certification

I, Glenn A. Eisenberg, certify that:

1. I have reviewed this Annual Report on Form 10-K of Laboratory Corporation of America Holdings;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.

Date:

February 25, 2022

By: /s/ GLENN A. EISENBERG

Glenn A. Eisenberg
Chief Financial Officer
(Principal Financial Officer)

Exhibit 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 1350)

The undersigned, the Chief Executive Officer and the Chief Financial Officer of Laboratory Corporation of America Holdings (Company), each hereby
certifies that, to his knowledge on the date hereof:

(a) the Form 10-K of the Company for the Period Ended December 31, 2021, filed on the date hereof with the Securities and Exchange Commission
(Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b) information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:

/s/ ADAM H. SCHECHTER
Adam H. Schechter
Chief Executive Officer
February 25, 2022

/s/ GLENN A. EISENBERG
Glenn A. Eisenberg
Chief Financial Officer
February 25, 2022

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature
that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Laboratory Corporation of
America Holdings and will be retained by Laboratory Corporation of America Holdings and furnished to the Securities and Exchange Commission or its staff
upon request.