10-Q 1 lh-20220630.htm 10-Q lh-20220630
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
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)
Delaware13-3757370
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
358 South Main Street 
Burlington,North Carolina27215
(Address of principal executive offices)(Zip Code)

(Registrant's telephone number, including area code) 336-229-1127
Securities registered pursuant to Section 12(b) of the Exchange Act.

Title of Each Class            Trading Symbol            Name of exchange on which registered
Common Stock, $0.10 par value        LH                New York Stock Exchange

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 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 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 filerAccelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No .

The number of shares outstanding of the issuer's common stock is 90.4 million shares as of July 29, 2022.



INDEX


PART I. FINANCIAL INFORMATION

Item 1.
  
 
 June 30, 2022 and December 31, 2021
  
 
 Three and six months ended June 30, 2022 and 2021
  
Three and six months ended June 30, 2022 and 2021
 
 Three and six months ended June 30, 2022 and 2021
  
 
 Six months ended June 30, 2022 and 2021
  
 
  
Item 2.
  
Item 3.
  
Item 4.

PART II. OTHER INFORMATION

1

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
June 30,
2022
December 31,
2021
ASSETS  
Current assets:  
Cash and cash equivalents$1,068.8 $1,472.7 
Accounts receivable, net 2,216.4 2,261.5 
Unbilled services827.4 716.8 
Supplies inventory436.3 401.4 
Prepaid expenses and other481.9 478.1 
Total current assets5,030.8 5,330.5 
Property, plant and equipment, net2,870.2 2,815.4 
Goodwill, net8,114.0 7,958.9 
Intangible assets, net3,864.9 3,735.5 
Joint venture partnerships and equity method investments57.7 60.9 
Deferred income taxes28.7 21.6 
Other assets, net436.8 462.6 
Total assets$20,403.1 $20,385.4 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable$754.7 $621.3 
Accrued expenses and other1,139.8 1,404.1 
Unearned revenue544.2 558.5 
Short-term operating lease liabilities192.1 187.0 
Short-term finance lease liabilities10.5 10.5 
Short-term borrowings and current portion of long-term debt1.6 1.5 
Total current liabilities2,642.9 2,782.9 
Long-term debt, less current portion5,360.3 5,416.5 
Operating lease liabilities669.4 642.5 
Financing lease liabilities81.9 84.6 
Deferred income taxes and other tax liabilities743.4 762.9 
Other liabilities484.5 402.0 
Total liabilities9,982.4 10,091.4 
Commitments and contingent liabilities
Noncontrolling interest20.0 20.6 
Shareholders’ equity:  
Common stock, 91.0 and 93.1 shares outstanding at June 30, 2022, and December 31, 2021, respectively8.3 8.5 
Additional paid-in capital  
Retained earnings10,897.9 10,456.8 
Accumulated other comprehensive loss(505.5)(191.9)
Total shareholders’ equity10,400.7 10,273.4 
Total liabilities and shareholders’ equity$20,403.1 $20,385.4 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)

Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Revenues$3,696.9 $3,840.7 $7,596.5 $8,002.2 
Cost of revenues2,574.2 2,575.9 5,240.9 5,138.4 
Gross profit1,122.7 1,264.8 2,355.6 2,863.8 
Selling, general and administrative expenses486.0 458.7 950.1 888.5 
Amortization of intangibles and other assets66.4 92.4 133.5 184.5 
Goodwill and other asset impairments  1.2  
Restructuring and other charges44.4 9.6 57.0 28.8 
Operating income525.9 704.1 1,213.8 1,762.0 
Other income (expense):
Interest expense(42.5)(78.3)(84.7)(126.8)
Equity method income, net1.4 8.0 4.8 12.5 
Investment income2.0 2.7 3.1 5.1 
Other, net(10.4)14.1 (20.5)19.6 
Earnings before income taxes476.4 650.6 1,116.5 1,672.4 
Provision for income taxes117.5 182.6 265.5 434.3 
Net earnings358.9 468.0 851.0 1,238.1 
Less: Net earnings attributable to the noncontrolling interest(0.3)(0.6)(0.8)(1.1)
Net earnings attributable to Laboratory Corporation of America Holdings$358.6 $467.4 $850.2 $1,237.0 
Basic earnings per common share$3.89 $4.80 $9.17 $12.69 
Diluted earnings per common share$3.87 $4.76 $9.11 $12.58 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(in millions, except per share data)
(unaudited)

Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Net earnings$358.9 $468.0 $851.0 $1,238.1 
Foreign currency translation adjustments(241.1)43.8 (315.7)(23.0)
Net benefit plan adjustments0.7 2.1 2.9 5.1 
Other comprehensive earnings before tax(240.4)45.9 (312.8)(17.9)
Provision (benefit) for income tax related to items of comprehensive earnings(0.2)(0.6)(0.8)(1.4)
Other comprehensive earnings (loss), net of tax(240.6)45.3 (313.6)(19.3)
Comprehensive earnings118.3 513.3 537.4 1,218.8 
Less: Net earnings attributable to the noncontrolling interest(0.3)(0.6)(0.8)(1.1)
Comprehensive earnings attributable to Laboratory Corporation of America Holdings$118.0 $512.7 $536.6 $1,217.7 

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

4

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS’ EQUITY
(in millions)
(unaudited)
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Earnings (Loss)
Total
Shareholders’
Equity
BALANCE AT DECEMBER 31, 2020$9.0 $110.3 $9,402.3 $(161.9)$9,359.7 
Net earnings attributable to Laboratory Corporation of America Holdings  769.6  769.6 
Other comprehensive earnings (loss), net of tax   (64.6)(64.6)
Issuance of common stock under employee stock plans 24.7   24.7 
Net share settlement tax payments from issuance of stock to employees (28.1)  (28.1)
Stock compensation 28.7   28.7 
Purchase of common stock (68.5)  (68.5)
BALANCE AT MARCH 31, 2021$9.0 $67.1 $10,171.9 $(226.5)$10,021.5 
Net earnings attributable to Laboratory Corporation of America Holdings  467.4  467.4 
Other comprehensive earnings (loss), net of tax   45.3 45.3 
Issuance of common stock under employee stock plans 1.9   1.9 
Net share settlement tax payments from issuance of stock to employees (14.9)  (14.9)
Stock compensation 23.9   23.9 
Purchase of common stock(0.1)(78.0)(221.9) (300.0)
BALANCE AT JUNE 30, 2021$8.9 $ $10,417.4 $(181.2)$10,245.1 
BALANCE AT DECEMBER 31, 2021$8.5 $ $10,456.8 $(191.9)$10,273.4 
Net earnings attributable to Laboratory Corporation of America Holdings  491.6  491.6 
Other comprehensive earnings (loss), net of tax   (73.0)(73.0)
Issuance of common stock under employee stock plans 18.2   18.2 
Net share settlement tax payments from issuance of stock to employees (27.3)  (27.3)
Stock compensation 38.2   38.2 
BALANCE AT MARCH 31, 2022$8.5 $29.1 $10,948.4 $(264.9)$10,721.1 
Net earnings attributable to Laboratory Corporation of America Holdings  358.6  358.6 
Other comprehensive earnings (loss), net of tax   (240.6)(240.6)
Dividends declared  (68.6) (68.6)
Issuance of common stock under employee stock plans 0.9   0.9 
Net share settlement tax payments from issuance of stock to employees (10.1)  (10.1)
Stock compensation 39.4   39.4 
Purchase of common stock(0.2)(59.3)(340.5) (400.0)
BALANCE AT JUNE 30, 2022$8.3 $ $10,897.9 $(505.5)$10,400.7 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
Six Months Ended June 30,
 20222021
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net earnings$851.0 $1,238.1 
Adjustments to reconcile net earnings to net cash provided by operating activities:  
Depreciation and amortization320.6 371.0 
Stock compensation77.6 52.6 
Operating lease right-of-use asset expense97.7 96.3 
Goodwill and other asset impairments1.2  
Deferred income taxes(35.5)(85.5)
Other3.7 2.3 
Change in assets and liabilities (net of effects of acquisitions and divestitures):  
Decrease in accounts receivable21.4 265.0 
Increase in unbilled services(123.9)(100.3)
Increase in supplies inventory(35.7)(17.5)
Increase in prepaid expenses and other(25.9)(31.0)
Increase (decrease) in accounts payable131.9 (44.3)
Increase (decrease) in unearned revenue(6.2)37.7 
Decrease in accrued expenses and other(349.4)(139.6)
Net cash provided by operating activities928.5 1,644.8 
CASH FLOWS FROM INVESTING ACTIVITIES:  
Capital expenditures(260.5)(192.6)
Proceeds from sale of assets1.1 2.7 
Proceeds from sale of business 13.1 
Proceeds from sale or distribution of investments0.4  
Proceeds from exit from swaps3.0  
Investments in equity affiliates(4.7)(11.9)
Acquisition of businesses, net of cash acquired(554.9)(34.1)
Net cash used for investing activities(815.6)(222.8)
CASH FLOWS FROM FINANCING ACTIVITIES:  
Proceeds from senior note offerings 1,000.0 
Payments on senior notes (1,000.0)
Payments on term loan (375.0)
Net share settlement tax payments from issuance of stock to employees(37.4)(43.0)
Net proceeds from issuance of stock to employees19.1 26.6 
Dividends paid(66.7) 
Purchase of common stock(400.0)(368.5)
Other(12.4)(15.6)
Net cash used for financing activities(497.4)(775.5)
Effect of exchange rate changes on cash and cash equivalents(19.4)(4.1)
Net increase (decrease) in cash and cash equivalents(403.9)642.4 
Cash and cash equivalents at beginning of period1,472.7 1,320.8 
Cash and cash equivalents at end of period$1,068.8 $1,963.2 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6

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

1.    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.
The Company reports its business in two segments, Labcorp Diagnostics (Dx) and Labcorp Drug Development (DD). For further financial information about these segments, see Note 11 (Business Segment Information) to the Condensed Consolidated Financial Statements. During the three months ended June 30, 2022, Dx and DD contributed approximately 61% and 39%, respectively, of revenues to the Company. During the six months ended June 30, 2022, Dx and DD contributed approximately 62% and 38%, respectively, of revenues to the Company.
The condensed 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 20.0% 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 significant variable interest entities or special purpose entities whose financial results are not included in the condensed 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 period. Resulting translation adjustments are included in “Accumulated other comprehensive income (loss).”
The accompanying condensed consolidated financial statements of the Company are unaudited. In the opinion of management, all adjustments necessary for a fair statement of results of operations, cash flows, and financial position have been made. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. Interim results are not necessarily indicative of results for a full year. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles.
The condensed consolidated financial statements and notes are presented in accordance with the rules and regulations of the United States (U.S.) Securities and Exchange Commission (SEC) and do not contain certain information included in the Company’s fiscal year 2021 Annual Report on Form 10-K (Annual Report). Therefore, these interim statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report.
Recently Adopted Accounting Guidance
In October 2021, the Financial Accounting Standards Board (FASB) issued a new accounting standard, Accounting Standards Update 2021-08, to improve the accounting for acquired revenue contracts with customers in a business combination. The Company early adopted this standard effective January 1, 2022. The adoption of this standard did not have a material impact on the consolidated financial statements.














7

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
2.    REVENUES
The Company's revenues by segment and by payers/customer groups for the three and six months ended June 30, 2022, and 2021, were as follows:
For the Three Months Ended June 30, 2022For the Three Months Ended June 30, 2021
North AmericaEuropeOtherTotalNorth AmericaEuropeOtherTotal
Payer/Customer
Dx
   Clients18 % % %18 %17 % % %17 %
   Patients7 % % %7 %7 % % %7 %
   Medicare and Medicaid6 % % %6 %6 % % %6 %
   Third party30 % % %30 %31 % % %31 %
Total Dx revenues by payer61 % % %61 %61 % % %61 %
DD
Pharmaceutical, biotechnology and medical device companies19 %13 %7 %39 %23 %12 %4 %39 %
Total revenues80 %13 %7 %100 %84 %12 %4 %100 %
For the Six Months Ended June 30, 2022For the Six Months Ended June 30, 2021
North AmericaEuropeOtherTotalNorth AmericaEuropeOtherTotal
Payer/Customer
Dx
   Clients17 % % %17 %18 % % %18 %
   Patients7 % % %7 %6 % % %6 %
   Medicare and Medicaid6 % % %6 %6 % % %6 %
   Third party32 % % %32 %33 % % %33 %
Total Dx revenues by payer62 % % %62 %63 % % %63 %
DD
Pharmaceutical, biotechnology and medical device companies18 %13 %7 %38 %22 %11 %4 %37 %
Total revenues80 %13 %7 %100 %85 %11 %4 %100 %
Revenues in the U.S. were $2,856.9 (77.3%) and $3,091.3 (80.5%) for the three months ended June 30, 2022, and 2021, respectively, and for the six months ended June 30, 2022, and 2021, were $5,857.5 (77.1%) and $6,537.4 (81.7%), respectively.
DD Contract costs
DD incurs costs to fulfill contracts with customers. Contract fulfillment costs include software implementation costs and setup costs for certain market access solutions.
June 30, 2022December 31, 2021
Sales commission assets$40.2 $36.2 
Deferred contract fulfillment costs15.0 14.4 
Total$55.2 $50.6 
Amortization related to sales commission assets and associated payroll taxes for the three months ended June 30, 2022, and 2021, was $8.7 and $6.4, respectively, and for the six months ended June 30, 2022, and 2021, was $15.9 and $13.3, respectively. Amortization related to deferred contract fulfillment costs for the three months ended June 30, 2022, and 2021, was $2.9 and $3.0, respectively, and was $6.0 and $6.5, respectively, for the six months ended June 30, 2022, and 2021.






8

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
Accounts Receivable, Unbilled Services and Unearned Revenue
The following table provides information about accounts receivable, unbilled services, and unearned revenue from contracts with customers:
June 30, 2022December 31, 2021
Dx accounts receivable$1,066.4 $1,193.8 
DD accounts receivable1,171.3 1,089.2 
Less DD allowance for doubtful accounts(21.3)(21.5)
Accounts receivable$2,216.4 $2,261.5 
Gross unbilled services$838.8 $730.8 
Less reserve for unbilled services(11.4)(14.0)
Unbilled services$827.4 $716.8 
Unearned revenue$544.2 $558.5 
Revenues recognized during the period that were included in the unearned revenue balance at the beginning of the period were $233.6 and $233.0 for the six months ended June 30, 2022, and 2021, respectively.
Credit Loss Rollforward
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 six months ended June 30, 2022, is as follows:
Accounts ReceivableUnbilled ServicesNote and Other ReceivablesTotal
Balance as of December 31, 2021$21.5 $13.9 $0.7 $36.1 
Plus, credit loss expense3.0   3.0 
Less, write offs(3.2)(2.5) (5.7)
Balance as of June 30, 2022$21.3 $11.4 $0.7 $33.4 
Performance Obligations Under Long-Term Contracts
Long-term contracts at the Company consist primarily of fully managed clinical studies within DD. The amount of existing performance obligations unsatisfied under such long-term contracts were $6,132.6 and $5,616.6 as of June 30, 2022, and 2021, respectively. The Company expects to recognize revenue over the remaining contract term of the individual projects, with contract terms generally ranging from 1 to 8 years.
Within DD, revenues of $37.4 and $12.2 were recognized during the three months ended June 30, 2022 and 2021, respectively, and revenues of $69.1 and $28.7 were recognized during the six months ended June 30, 2022 and 2021, respectively, from performance obligations that were satisfied in previous periods. This revenue primarily relates to adjustments related to changes in scope in full service clinical studies, and to a lesser extent, changes in estimates.
3.    BUSINESS ACQUISITIONS
During the six months ended June 30, 2022, the Company acquired several businesses and related assets for approximately $554.9 in cash. The purchase consideration for these acquisitions has been allocated under the acquisition method of accounting to the estimated fair market value of the net assets acquired, including approximately $325.3 in identifiable intangible assets and a residual amount of non-tax deductible goodwill of approximately $332.8. The amortization periods for intangible assets acquired from the businesses range from 5 to 15 years for customer relationships and non-compete agreements. These acquisitions were made primarily to complement and accelerate the Company’s existing liquid biopsy capabilities and enhance the Company's diagnostic footprint and capabilities. The preliminary valuation of acquired assets and assumed liabilities, include the following:
9

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
Amounts Acquired During Six Months Ended June 30, 2022
Accounts receivable$4.1 
Unbilled services2.9 
Inventories2.6 
Prepaid expenses and other1.2 
Property, plant and equipment10.0 
Goodwill332.8 
Intangible assets325.3 
Other assets0.8 
Total assets acquired$679.7 
Accounts payable4.1 
Accrued expenses and other24.1 
Unearned revenue3.3 
Deferred income taxes17.1 
Other liabilities76.2 
Total liabilities acquired124.8 
Net assets acquired$554.9 
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 contingent purchase price valuation, 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.
During the six months ended June 30, 2021, the Company acquired a business and related assets for approximately $34.1 in cash. The purchase consideration for the acquisition in the six months ended June 30, 2021, has been allocated under the acquisition method of accounting to the estimated fair market value of the net assets acquired, including approximately $17.6 in identifiable intangible assets and a residual amount of non-tax deductible goodwill of approximately $15.6. The amortization periods for intangible assets acquired from the business range from 5 to 15 years for customer relationships and non-compete agreements. The acquisition was made primarily to expand the Company's services for hospitals and health system laboratories. 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 business' workforce and established relationships and the benefits of being able to leverage operational efficiencies with favorable growth opportunities in these markets.
4.    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, restricted stock units, and performance share awards.








10

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
The following represents a reconciliation of basic earnings per share to diluted earnings per share:
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
EarningsShares Per Share AmountEarningsShares Per Share AmountEarningsShares Per Share AmountEarningsShares Per Share Amount
Basic earnings per share:            
Net earnings$358.6 92.3 $3.89 $467.4 97.4 $4.80 $850.2 92.7 $9.17 $1,237.0 97.5 $12.69 
Dilutive effect of employee stock options and awards— 0.4  — 0.8  — 0.6  — 0.8  
Net earnings including impact of dilutive adjustments$358.6 92.7 $3.87 $467.4 98.2 $4.76 $850.2 93.3 $9.11 $1,237.0 98.4 $12.58 
Diluted earnings per share represent the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. These potential shares include dilutive stock options and unissued restricted stock awards. 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:
Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Employee stock options and awards0.5 0.1 0.3 0.1 
5.    GOODWILL AND INTANGIBLE ASSETS
The changes in the carrying amount of goodwill for the six months ended June 30, 2022, are as follows:
DxDDTotal
Balance as of December 31, 2021$4,046.2 $3,912.7 $7,958.9 
Goodwill acquired during the period189.7 143.1 332.8 
Foreign currency impact and other adjustments to goodwill(50.7)(127.0)(177.7)
Balance as of June 30, 2022$4,185.2 $3,928.8 $8,114.0 
The Company assesses goodwill and indefinite-lived intangibles for