Slide 1: Third Quarter 2020 Supplemental Financial Information
THIRD QUARTER 2020 SUPPLEMENTAL FINANCIAL INFORMATION OCTOBER 27, 2020
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation of Laboratory Corporation of America Holdings (the “Company”) contains forward-looking statements, including, but not limited to, statements with respect to expectations for 2020 and the related assumptions, the impact of va
Slide 3: Use of Adjusted Measures
USE OF ADJUSTED MEASURES The Company has provided in this presentation “adjusted” financial information that has not been prepared in accordance with GAAP, including adjusted net income, adjusted EPS (or adjusted net income per share), adjusted operating income, adjusted operating margin, adjusted E
Slide 4: Third Quarter Consolidated Results
THIRD QUARTER CONSOLIDATED RESULTS (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) 3Q20 3Q19 % Change (2) Revenue $3,896.1 $2,928.5 33.0% Adjusted Operating Income (1) $1,155.8 $430.5 168.4% Adjusted Operating Margin 29.7 % 14.7 % 1,500 bps (1) Adjusted EPS $8.41 $2.90 190.0% Operating Cash Flow $786.2
Slide 5: Year-to-Date Consolidated Results
YEAR-TO-DATE CONSOLIDATED RESULTS (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) Nine Months Nine Months Ended 9/30/20 Ended 9/30/19 % Change (2) Revenue $9,488.7 $8,601.4 10.3% Adjusted Operating Income (1) $1,902.4 $1,288.8 47.6% Adjusted Operating Margin 20.0 % 15.0 % 500 bps (1) Adjusted EPS $13.3
Slide 6: Third Quarter Pro Forma Segment Results
THIRD QUARTER PRO FORMA SEGMENT RESULTS (DOLLARS IN MILLIONS) 3Q20 3Q19 % Change Revenue LabCorp Diagnostics $2,704.2 $1,759.2 53.7% Covance Drug Development $1,241.9 $1,175.4 5.7% Total Revenue(1) $3,896.1 $2,928.5 33.0% Adjusted Operating Income(2) LabCorp Diagnostics $1,003.9 $296.3 238.8% Adjust
Slide 7: Year-to-Date Pro Forma Segment Results
YEAR-TO-DATE PRO FORMA SEGMENT RESULTS (DOLLARS IN MILLIONS) Nine Months Nine Months Ended 9/30/20 Ended 9/30/19 % Change Revenue LabCorp Diagnostics (1) $6,098.8 $5,242.1 16.3% Covance Drug Development $3,479.4 $3,376.4 3.0 % Total Revenue(2) $9,488.7 $8,601.4 10.3% Adjusted Operating Income(3) Lab
Slide 8: Select Financial Metrics
SELECT FINANCIAL METRICS (DOLLARS IN MILLIONS) 3Q19 4Q19 1Q20 2Q20 3Q20 Total Depreciation $80.6 $85.1 $82.1 $84.0 $90.1 Total Amortization (1) $61.7 $64.2 $62.3 $60.1 $62.2 (2) Total Adjusted EBITDA $513.6 $509.5 $449.3 $467.2 $1,249.8 (2) Total Debt to Last Twelve Months Adjusted EBITDA 3.3x 3.1x
Slide 9: Covance Drug Development: Select Financial Metrics
COVANCE DRUG DEVELOPMENT: SELECT FINANCIAL METRICS(1) Trailing Twelve Month (TTM) Results Net Orders Net Book-to-Bill TTM Ending September 30, 2020 $6.1 billion 1.31x TTM Ending June 30, 2020 $6.1 billion 1.32x TTM Ending March 31, 2020 $5.8 billion 1.26x TTM Ending December 31, 2019 $5.9 billion 1.
Slide 10: Third Quarter 2020 Revenue Distribution
THIRD QUARTER 2020 REVENUE DISTRIBUTION Segment Distribution Geographic Distribution Covance Drug Development LabCorp 31.5% Diagnostics (1) Rest of World 68.5% 25.3% USA 74.7% (1) Revenues recognized in over 30 currencies; the largest foreign currency accounts for less than 10% of total revenue. 9
Slide 11: Third Quarter 2020 Foreign Exchange Impact to Revenue
THIRD QUARTER 2020 FOREIGN EXCHANGE IMPACT TO REVENUE(1) (DOLLARS IN MILLIONS) Year over Year Dollars % Growth Consolidated Revenue, as Reported $3,896 33.0% Foreign Exchange Impact ($16) (0.5%) Revenue, Constant Currency $3,881 32.5% LabCorp Diagnostics Revenue, as Reported $2,704 53.7% Foreign Exc
Slide 12: Year-to-Date 2020 Foreign Exchange Impact to Revenue
YEAR-TO-DATE 2020 FOREIGN EXCHANGE IMPACT TO REVENUE(1) (DOLLARS IN MILLIONS) Year over Year Dollars % Growth Consolidated Revenue, as Reported $9,489 10.3% Foreign Exchange Impact ($12) (0.1%) Revenue, Constant Currency $9,477 10.2% LabCorp Diagnostics Revenue, as Reported $6,099 16.3% Foreign Exch
Slide 13: Supplemental Information on Price / Mix & Days
SUPPLEMENTAL INFORMATION ON PRICE / MIX & DAYS (1) Price / Mix Versus Revenue Per Requisition (7) Year over Year % Change Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Revenue (2) (2.7%) (2.9%) 0.4% 3.7% (1.2%) (3.9%) 53.7% Volume (in requisitions) (3) 0.4% (1.4%) 0.5% 2.5% (4.4%) (19.5%)
Slide 14: Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – ADJUSTED EBITDA (DOLLARS IN MILLIONS) 3Q19 4Q19 1Q20 2Q20 3Q20 Operating Income $339.9 $336.4 ($192.6) $297.7 $1,047.1 Add: Restructuring and other special charges 14.2 6.2 25.4 6.4 7.1 Other special charges(1) 14.7 15.2 470.8 16.5 39.4 Depreciation 80
Slide 15: Reconciliation of Non-GAAP Income Statement
RECONCILIATION OF NON-GAAP INCOME STATEMENT (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) GAAP Non-GAAP Three Months Ended Three Months Ended September 30, September 30, 2020 2019 2020 2019 Revenues $ 3,896.1 $ 2,928.5 $ 3,896.1 $ 2,928.5 Cost of revenues 2,336.7 2,111.2 2,327.8 2,111.2 Gross profit
Slide 16: Reconciliation of Non-GAAP Income Statement
RECONCILIATION OF NON-GAAP INCOME STATEMENT (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) GAAP Non-GAAP Nine Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Revenues $ 9,488.7 $ 8,601.4 $ 9,488.7 $ 8,601.4 Cost of revenues 6,440.8 6,169.6 6,418.6 6,169.6 Adjustments imp
Slide 17: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES(1) (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) Three Months Ended Nine Months Ended September 30, September 30, Adjusted Operating Income 2020 2019 2020 2019 Operating Income $1,047.1 $ 339.9 $1,152.2 $ 993.8 Amortization of intangibles and other assets
Slide 18: Reconciliation of Non-GAAP Financial Measures – Footnotes
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – FOOTNOTES (a) Amortization of intangible assets acquired as part of business acquisitions. (b) Restructuring and other charges represent amounts incurred in connection with the elimination of redundant positions within the organization in connection wi