Labcorp(LH) - 2024 Q4 - Annual Report

Revenue and Growth - For the year ended December 31, 2024, the Company's revenues were $13,008.9 million, a 7.0$12,161.6 million in 2023, driven by organic revenue growth of 3.9% and acquisitions contributing 2.8%[304] - The Dx segment revenues increased by 7.7% to $10,144.3 million, with organic revenue growth of 4.1$2,922.6 million, primarily due to organic growth of 4.3% and favorable foreign currency translation of 1.1%[311] - The Company expects continued growth driven by organic demand and strategic acquisitions, with a focus on enhancing operational efficiency[306] Expenses and Costs - Cost of revenues increased by 6.7% to $9,384.5 million, while the cost of revenues as a percentage of revenues decreased to 72.1$2,230.0 million, with SG&A as a percentage of revenues increasing to 17.1% from 16.6%[313] - The Company recorded net restructuring charges of $46.0 million for 2024, a decrease of 6.3$49.1 million in 2023[316] Income and Cash Flow - Operating income for the Company increased by 49.8% to $1,086.7 million, with segment operating income rising to$2,065.2 million, a 3.9% increase[323] - Net cash provided by continuing operating activities was $1,585.8 million, up from$1,202.3 million in 2023, reflecting higher cash earnings[329] - Cash and cash equivalents at December 31, 2024, totaled $1,518.7 million, compared to$536.8 million in 2023[328] Capital Expenditures and Financing - Capital expenditures for 2024 were $489.9 million, representing 3.8$779.9 million, a significant improvement from cash used of $1,559.0 million in 2023, driven by$2,000.0 million in new debt securities[332] - The Company issued $2,000.0 million in debt securities, including$650.0 million of 4.35% senior notes due 2030, with net proceeds of approximately $1,983.0 million used for debt repayment and general corporate purposes[333] Shareholder Returns and Debt - The Company authorized a new share repurchase plan for up to$1,000.0 million, with a total authorization of $1,280.4 million remaining as of December 31, 2024[339] - The Company paid$243.1 million in dividends for 2024 and announced a cash dividend of $0.72 per share for Q1 2025, totaling approximately$61.0 million[340] - Total future payments for debt instruments as of December 31, 2024, amounted to $6,373.9 million, with$1,000.4 million due within 12 months[346] Foreign Currency and Risk Management - Approximately 13.7% of the Company's revenues for the year ended December 31, 2024, were denominated in currencies other than the U.S. dollar (USD) compared to 12.9% in 2023[381] - A hypothetical change of 10% in average exchange rates would have impacted income before income taxes for 2024 by approximately $27.4 million[381] - The Company limits foreign currency transaction risk through exchange rate fluctuation provisions in contracts or hedging with foreign currency forward contracts[382] - The Company manages interest rate risk through a mix of fixed and variable rate debt, including the use of interest rate swaps[384] Financial Instruments and Accounting - The Company had 12 open foreign exchange forward contracts with a notional value totaling approximately$302.4 million as of December 31, 2024[382] - The Company is a party to USD to Swiss Franc cross-currency swap agreements with an aggregate notional amount of $1,200.0 million[383] - The Company accounts for business combinations under the acquisition method, recording acquired assets at their estimated fair values as of the acquisition date[365] - The Company assesses goodwill and indefinite-lived intangible assets for impairment at least annually, with the most recent assessment indicating fair values greater than carrying values[373] - Deferred tax assets and liabilities are recognized for future tax consequences, measured using enacted tax rates expected to apply to taxable income[366] - The Company entered into fixed-to-variable interest rate swap agreements for its 2.70$500.0 million[386] - The variable interest rates are based on three-month LIBOR, which transitioned to SOFR in 2023, plus 1.0706%[386]