10-Q 1 lh-20220331.htm 10-Q lh-20220331
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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 March 31, 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 92.7 million shares as of April 28, 2022.



INDEX


PART I. FINANCIAL INFORMATION

Item 1.
  
 
 March 31, 2022 and December 31, 2021
  
 
 Three months ended March 31, 2022 and 2021
  
Three months ended March 31, 2022 and 2021
 
 Three months ended March 31, 2022 and 2021
  
 
 Three months ended March 31, 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)
March 31,
2022
December 31,
2021
ASSETS  
Current assets:  
Cash and cash equivalents$1,233.5 $1,472.7 
Accounts receivable, net 2,239.6 2,261.5 
Unbilled services800.0 716.8 
Supplies inventory440.7 401.4 
Prepaid expenses and other515.7 478.1 
Total current assets5,229.5 5,330.5 
Property, plant and equipment, net2,807.6 2,815.4 
Goodwill, net8,165.8 7,958.9 
Intangible assets, net3,972.5 3,735.5 
Joint venture partnerships and equity method investments62.2 60.9 
Deferred income taxes28.2 21.6 
Other assets, net462.6 462.6 
Total assets$20,728.4 $20,385.4 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable$623.6 $621.3 
Accrued expenses and other1,260.4 1,404.1 
Unearned revenue556.0 558.5 
Short-term operating lease liabilities189.5 187.0 
Short-term finance lease liabilities10.4 10.5 
Short-term borrowings and current portion of long-term debt1.6 1.5 
Total current liabilities2,641.5 2,782.9 
Long-term debt, less current portion5,383.3 5,416.5 
Operating lease liabilities623.7 642.5 
Financing lease liabilities83.2 84.6 
Deferred income taxes and other tax liabilities765.2 762.9 
Other liabilities489.8 402.0 
Total liabilities9,986.7 10,091.4 
Commitments and contingent liabilities
Noncontrolling interest20.6 20.6 
Shareholders’ equity:  
Common stock, 92.9 and 93.1 shares outstanding at March 31, 2022, and December 31, 2021, respectively8.5 8.5 
Additional paid-in capital29.1  
Retained earnings10,948.4 10,456.8 
Accumulated other comprehensive loss(264.9)(191.9)
Total shareholders’ equity10,721.1 10,273.4 
Total liabilities and shareholders’ equity$20,728.4 $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 March 31,
 20222021
Revenues$3,899.6 $4,161.5 
Cost of revenues2,666.7 2,562.5 
Gross profit1,232.9 1,599.0 
Selling, general and administrative expenses464.1 429.8 
Amortization of intangibles and other assets67.1 92.1 
Goodwill and other asset impairments1.2  
Restructuring and other charges12.6 19.2 
Operating income687.9 1,057.9 
Other income (expense):
Interest expense(42.2)(48.5)
Equity method income, net3.4 4.5 
Investment income1.1 2.4 
Other, net(10.1)5.5 
Earnings before income taxes640.1 1,021.8 
Provision for income taxes148.0 251.7 
Net earnings492.1 770.1 
Less: Net earnings attributable to the noncontrolling interest(0.5)(0.5)
Net earnings attributable to Laboratory Corporation of America Holdings$491.6 $769.6 
Basic earnings per common share$5.27 $7.88 
Diluted earnings per common share$5.23 $7.82 

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 March 31,
 20222021
Net earnings$492.1 $770.1 
Foreign currency translation adjustments(74.6)(66.8)
Net benefit plan adjustments2.2 3.0 
Other comprehensive earnings before tax(72.4)(63.8)
Provision (benefit) for income tax related to items of comprehensive earnings(0.6)(0.8)
Other comprehensive earnings (loss), net of tax(73.0)(64.6)
Comprehensive earnings419.1 705.5 
Less: Net earnings attributable to the noncontrolling interest(0.5)(0.5)
Comprehensive earnings attributable to Laboratory Corporation of America Holdings$418.6 $705.0 

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 $9,479.2 $(161.9)$9,436.6 
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 $10,248.8 $(226.5)$10,098.4 
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 

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)
Three Months Ended March 31,
 20222021
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net earnings$492.1 $770.1 
Adjustments to reconcile net earnings to net cash provided by operating activities:  
Depreciation and amortization161.5 183.9 
Stock compensation38.2 28.7 
Operating lease right-of-use asset expense48.9 48.3 
Goodwill and other asset impairments1.2  
Deferred income taxes(19.0)(27.8)
Other(3.6)(3.2)
Change in assets and liabilities (net of effects of acquisitions and divestitures):  
Decrease in accounts receivable20.4 146.7 
Increase in unbilled services(84.5)(42.5)
Increase in supplies inventory(37.4)(4.7)
Increase in prepaid expenses and other(41.1)(51.9)
Decrease in accounts payable(5.5)(16.9)
Increase (decrease) in unearned revenue(2.9)31.8 
Increase (decrease) in accrued expenses and other(212.3)95.1 
Net cash provided by operating activities356.0 1,157.6 
CASH FLOWS FROM INVESTING ACTIVITIES:  
Capital expenditures(117.2)(95.4)
Proceeds from sale of assets1.0 2.6 
Proceeds from sale or distribution of investments0.4  
Investments in equity affiliates(2.2)(5.5)
Acquisition of businesses, net of cash acquired(455.1)(34.1)
Net cash used for investing activities(573.1)(132.4)
CASH FLOWS FROM FINANCING ACTIVITIES:  
Payments on term loan (375.0)
Net share settlement tax payments from issuance of stock to employees(27.3)(28.1)
Net proceeds from issuance of stock to employees18.2 24.7 
Purchase of common stock (68.5)
Other(8.6)(3.2)
Net cash used for financing activities(17.7)(450.1)
Effect of exchange rate changes on cash and cash equivalents(4.4)(5.1)
Net increase (decrease) in cash and cash equivalents(239.2)570.0 
Cash and cash equivalents at beginning of period1,472.7 1,320.8 
Cash and cash equivalents at end of period$1,233.5 $1,890.8 

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 March 31, 2022, Dx and DD contributed approximately 63% and 37% 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 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 months ended March 31, 2022, and 2021, were as follows:
For the Three Months Ended March 31, 2022For the Three Months Ended March 31, 2021
North AmericaEuropeOtherTotalNorth AmericaEuropeOtherTotal
Payer/Customer
Dx
   Clients17 % % %17 %19 % % %19 %
   Patients5 % % %5 %5 % % %5 %
   Medicare and Medicaid6 % % %6 %7 % % %7 %
   Third party35 % % %35 %34 % % %34 %
Total Dx revenues by payer63 % % %63 %65 % % %65 %
DD
Pharmaceutical, biotechnology and medical device companies17 %13 %7 %37 %21 %10 %4 %35 %
Total revenues80 %13 %7 %100 %86 %10 %4 %100 %
Revenues in the U.S. were $3,000.5 (76.9%) and $3,472.5 (83.4%) for the three months ended March 31, 2022, and 2021, 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.
March 31, 2022December 31, 2021
Sales commission assets$38.8 $36.2 
Deferred contract fulfillment costs14.9 14.4 
Total$53.7 $50.6 
Amortization related to sales commission assets and associated payroll taxes for the three months ended March 31, 2022, and 2021, was $7.2 and $6.9, respectively. Amortization related to deferred contract fulfillment costs for the three months ended March 31, 2022, and 2021, was $3.1 and $3.5, respectively.
Accounts Receivable, Unbilled Services and Unearned Revenue
The following table provides information about accounts receivable, unbilled services, and unearned revenue from contracts with customers:
March 31, 2022December 31, 2021
Dx accounts receivable$1,155.2 $1,193.8 
DD accounts receivable1,103.8 1,089.2 
Less DD allowance for doubtful accounts(19.4)(21.5)
Accounts receivable$2,239.6 $2,261.5 
Gross unbilled services$813.2 $730.8 
Less reserve for unbilled services(13.2)(14.0)
Unbilled services$800.0 $716.8 
Unearned revenue$556.0 $558.5 
Revenues recognized during the period, that were included in the unearned revenue balance at the beginning of the period were $163.8 and $152.3 for the three months ended March 31, 2022, and 2021, respectively.



8

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
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 three months ended March 31, 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 expense(0.4)  (0.4)
Less, write offs1.7 0.7  2.4 
Balance as of March 31, 2022$19.4 $13.2 $0.7 $33.3 
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 under such long-term contracts unsatisfied were $6,069.8 and $5,563.4 as of March 31, 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 $31.7 and $16.5 were recognized during the three months ended March 31, 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
On February 18, 2022, the Company closed its acquisition of Personal Genome Diagnostics Inc. (PGDx), a leader in cancer genomics with a portfolio of comprehensive liquid biopsy and tissue-based products, for approximately $455.1 in cash. The purchase considerations for this acquisition have been allocated under the acquisition method of accounting to the estimated fair market value of the net assets acquired, including approximately $270.0 in identifiable intangible assets and a residual amount of non-tax deductible goodwill of approximately $286.2. The amortization period for technology intangible assets acquired from this business is 12 years. The acquisition was made primarily to complement and accelerate the Company’s existing liquid biopsy capabilities and expand the Company’s leading oncology portfolio of next-generation sequencing (NGS)-based genomic profiling capabilities. The transaction includes two milestone earnout payments, with one based on the successful development of the in-process testing and the other based on revenue. The Company has recorded an estimate of $90.0 for this contingent consideration. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired was recorded as goodwill. The preliminary valuation of acquired assets and assumed liabilities, include the following:
Amounts Acquired During Quarter Ended March 31, 2022
Accounts receivable$4.1 
Unbilled services2.9 
Inventories2.6 
Prepaid expenses and other1.2 
Property, plant and equipment9.9 
Goodwill286.2 
Intangible assets270.0 
Other assets3.0 
Total assets acquired$579.9 
Accounts payable4.1 
Accrued expenses and other24.1 
Unearned revenue3.3 
Deferred income taxes17.2 
Other liabilities76.1 
Total liabilities acquired124.8 
Net assets acquired$455.1 
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.
9

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
During the three months ended March 31, 2021, the Company acquired a business and related assets for approximately $34.1 in cash within Dx. The purchase consideration for the acquisition in the three months ended March 31, 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.
On February 9, 2022, the Company entered into agreements to create a comprehensive strategic relationship with Ascension, a national health system. The Company intends to manage Ascension’s hospital-based laboratories and purchase select assets of the health system’s outreach laboratory business. The transactions are subject to customary closing conditions and applicable regulatory approvals. On March 9, 2022, the Company announced it has entered into a strategic laboratory relationship with Prisma Health. The Company will acquire select assets of Prisma Health’s outreach laboratory business.
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.
The following represents a reconciliation of basic earnings per share to diluted earnings per share:
 Three Months Ended March 31,
 20222021
EarningsShares Per Share AmountEarningsShares Per Share Amount
Basic earnings per share:      
Net earnings$491.6 93.2 $5.27 $769.6 97.6 $7.88 
Dilutive effect of employee stock options and awards— 0.8  — 0.9  
Net earnings including impact of dilutive adjustments$491.6 94.0 $5.23 $769.6 98.5 $7.82 
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 March 31,
 20222021
Employee stock options and awards0.3  
5.    GOODWILL AND INTANGIBLE ASSETS
The changes in the carrying amount of goodwill for the three months ended March 31, 2022, are as follows:
DxDDTotal
Balance as of December 31, 2021$4,046.2 $3,912.7 $7,958.9 
Goodwill acquired during the period143.1 143.1 286.2 
Foreign currency impact and other adjustments to goodwill(47.8)(31.5)(79.3)
Balance as of March 31, 2022$4,141.5 $4,024.3 $8,165.8 
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 Company recognizes an impairment charge for the amount by which the reporting unit's carrying amount exceeds its fair value.

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 components of identifiable intangible assets are as follows:
 March 31, 2022December 31, 2021
Gross Carrying AmountAccumulated AmortizationNetGross Carrying AmountAccumulated AmortizationNet
Customer relationships$4,345.7 $(1,407.4)$2,938.3 $4,336.0 $(1,362.1)$2,973.9 
Patents, licenses and technology760.2 (275.5)484.7 484.6 (267.4)217.2 
Non-compete agreements70.2 (38.6)31.6 70.2 (35.5)34.7 
Trade name5.6 (0.6)5.0 19.8 (15.5)4.3 
Land use right10.4 (7.9)2.5 10.4 (7.6)2.8 
Canadian licenses498.8  498.8 493.5  493.5 
In process research and development9.1 (0.3)8.8 9.1  9.1 
Media content5.1 (2.3)2.8    
 $5,705.1 $(1,732.6)$3,972.5 $5,423.6 $(1,688.1)$3,735.5 
Amortization of intangible assets for the three months ended March 31, 2022, and 2021, was $67.1 and $92.1, respectively. The amortization expense for the net carrying amount of intangible assets is estimated to be $191.7 for the remainder of fiscal 2022, $259.9 in fiscal 2023, $255.3 in fiscal 2024, $243.1 in fiscal 2025, $233.3 in fiscal 2026, and $2,707.0 thereafter.
6.    DEBT
Short-term borrowings and the current portion of long-term debt at March 31, 2022, and December 31, 2021, consisted of the following:
March 31,
2022
December 31, 2021
Current portion of note payable1.6 1.5 
Total short-term borrowings and current portion of long-term debt$1.6 $1.5 
Long-term debt at March 31, 2022, and December 31, 2021, consisted of the following:
March 31,
2022
December 31, 2021
4.00% senior notes due 2023300.0 300.0 
3.25% senior notes due 2024600.0 600.0 
2.30% senior notes due 2024400.0 400.0 
3.60% senior notes due 20251,000.0 1,000.0 
1.55% senior notes due 2026500.0 500.0 
3.60% senior notes due 2027600.0 600.0 
2.95% senior notes due 2029650.0 650.0 
2.70% senior notes due 2031468.7 502.9 
4.70% senior notes due 2045900.0 900.0 
Debt issuance costs(39.3)(41.0)
Note payable4.0 4.6 
Total long-term debt$5,383.3 $5,416.5 
Senior Notes
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. 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 liabilities and deducted from the value of the senior notes with an aggregate fair value of $31.3 at March 31, 2022.
11

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
Credit Facilities
The Company maintains a senior revolving credit facility, which was amended and restated on April 30, 2021. It consists of a five-year 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 0.23%, depending 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 as of March 31, 2022 and December 31, 2021. As of March 31, 2022, the effective interest rate on the revolving credit facility was 1.45%. The credit facility expires on April 30, 2026.
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 certain leverage ratios. The Company was in compliance with all covenants in the revolving credit facility at March 31, 2022, 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 March 31, 2022, 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 March 31, 2022.
7.    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 March 31, 2022, and December 31, 2021.
The changes in common shares issued are summarized below:
Issued and Outstanding
Common shares at December 31, 202193.1 
Shares issued under employee stock plans0.4 
Shares repurchased(0.6)
Common shares at March 31, 202292.9 
Share Repurchase Program
During the fourth quarter of 2021, the Company commenced an Accelerated Share Repurchase (ASR) program. At inception, the Company paid $1,000.0 and received 2.7 shares based on a calculation using 80% of the shares calculated at the price at the inception of the ASR agreements with two different banks, Goldman Sachs & Co. LLC (Goldman Sachs) and Barclays Bank PLC (Barclays). The initial shares received under the ASR were removed from the outstanding share count in 2021. In March 2022, the Company received 0.6 shares of its common stock, arising from a partial acceleration with Barclays and a final settlement from Goldman Sachs, based on the average daily volume weighted average price per share of $277.40. On April 1, 2022, the Company received 0.2 shares of its common stock for final settlement from Barclays based on the average volume-weighted average price per share of $275.51. As of March 31, 2022, 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.
Dividends
On December 9, 2021, the Company announced that it was initiating a quarterly dividend in the second quarter of 2022. On April 7, 2022, the Company announced a cash dividend of $0.72 per share of common stock for the second quarter, or approximately $67.6 in the aggregate. The dividend will be payable on June 9, 2022, to stockholders of record of all issued and outstanding shares of common stock as of the close of business on May 19, 2022. The declaration and payment of any future dividends will be at the discretion of the Company's board of directors.




12

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
Accumulated Other Comprehensive Earnings (Loss)
The components of accumulated other comprehensive earnings (loss) are as follows:
Foreign Currency Translation AdjustmentsNet Benefit Plan AdjustmentsAccumulated Other Comprehensive Earnings (Loss)
Balance as of December 31, 2021$(125.9)$(66.0)$(191.9)
Current year adjustments(74.6)3.8 (70.8)
Amounts reclassified from accumulated other comprehensive income (1.6)(1.6)
Tax effect of adjustments (0.6)(0.6)
Balance as of March 31, 2022$(200.5)$(64.4)$(264.9)
8.    COMMITMENTS AND CONTINGENCIES
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; transaction related disputes; securities and corporate law matters; and inquiries, including subpoenas and other civil investigative demands, from governmental agencies, Medicare or Medicaid payers and MCOs reviewing billing practices or requesting comment on allegations of billing irregularities that are brought to their attention through billing audits or third parties. The Company receives civil investigative demands or other inquiries from various governmental bodies in the ordinary course of its business. Such inquiries can relate to the Company or other parties, including physicians and other health care providers. The Company works cooperatively to respond to appropriate requests for information.
The Company also is named from time to time in suits brought under the qui tam provisions of the False Claims Act and comparable state laws. These suits typically allege that the Company has made false statements and/or certifications in connection with claims for payment from U.S. federal or state healthcare programs. The suits may remain under seal (hence, unknown to the Company) for some time while the government decides whether to intervene on behalf of the qui tam plaintiff. Such claims are an inevitable part of doing business in the healthcare field today.
The Company believes that it is in compliance in all material respects with all statutes, regulations, and other requirements applicable to its commercial laboratory operations and drug development support services. The healthcare diagnostics and drug development industries are, however, subject to extensive regulation, and the courts have not interpreted many of the applicable statutes and regulations. 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 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
13

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
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. On February 3, 2022, the Company filed a Motion to Dismiss all claims. 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 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
14

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
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.
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 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. On February 28, 2022, the Company filed a Motion to Dismiss all claims. 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 were 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 alleged that the Company did not adequately protect its patients’ data and failed to timely notify those patients of the AMCA Incident. The Complaint asserted 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 sought 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. On March 31, 2022, the Plaintiffs filed an Amended Complaint alleging claims for negligence, negligence per se, breach of confidence, invasion of privacy, and various state
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LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
statutory claims, including a claim under the California Confidentiality of Medical Information Act. 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 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 meal 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. On February 24, 2022, the parties entered into a Memorandum of Understanding of the terms of a settlement of the Bermejo I and Bermejo II lawsuits, subject to court approval. If approved, the settlement will also resolve the Becker and Poole lawsuits discussed below.
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. A settlement of the Bermejo I and Bermejo II lawsuits, if approved by the court, will resolve the Becker lawsuit.
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
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LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
and costs. The case was removed to the U.S. District Court for the Eastern District of California. A settlement of the Bermejo I and Bermejo II lawsuits, if approved by the court, will resolve the Poole lawsuit.
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 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 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.
There are various other pending legal proceedings involving the Company including, but not limited to, additional employment-related lawsuits, professional liability lawsuits, and intellectual property lawsuits. While it is not feasible to predict the outcome of such proceedings, in the opinion of the Company, either the likelihood of loss is remote and any reasonably possible loss associated with the resolution of such proceedings is not expected to be material to the Company’s financial condition, results of operations, or cash flows, either individually or in the aggregate.
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.
9.     FAIR VALUE MEASUREMENTS
The Company’s population of financial assets and liabilities subject to fair value measurements as of March 31, 2022, and December 31, 2021, is as follows:
Fair Value Measurements as of
March 31, 2022
Balance SheetFair Value as ofUsing Fair Value Hierarchy
 ClassificationMarch 31, 2022Level 1Level 2Level 3
Noncontrolling interest putNoncontrolling interest$16.4 $ $16.4 $ 
Cross currency swapsOther liabilities36.7  36.7  
Interest rate swapsOther liabilities31.3  31.3  
Cash surrender value of life insurance policiesOther assets, net102.0  102.0  
Deferred compensation liabilityOther liabilities103.5  103.5  
Investment in equity securitiesOther current assets5.9 5.9   
Contingent considerationOther liabilities105.2   105.2 
17

LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars and shares in millions, except per share data)
Fair Value Measurements as of
December 31, 2021
Balance SheetFair Value as ofUsing Fair Value Hierarchy
 ClassificationDecember 31, 2021Level 1Level 2Level 3
Noncontrolling interest putNoncontrolling interest$16.3 $ $16.3 $ 
Cross currency swapsOther liabilities32.8  32.8  
Interest rate swapsOther assets, net2.9  2.9  
Cash surrender value of life insurance policiesOther assets, net106.4  106.4  
Deferred compensation liabilityOther liabilities104.4  104.4  
Investment in equity securitiesOther current assets10.9 10.9   
Contingent considerationOther liabilities21.9