LABCORP HOLDINGS INC.LH
LABCORP HOLDINGS INC. Fair Value Disclosure
FAIR VALUE MEASUREMENTS
The Company’s population of financial assets and liabilities subject to fair value measurements were as follows:
| Fair Value Measurements | |||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||
Consolidated Balance Sheets Classification | Fair Value at December 31, 2025 | Using Fair Value Hierarchy | |||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
| Noncontrolling interest put | Noncontrolling interest | $ | 16.9 | $ | — | $ | 16.9 | $ | — | ||||||||||||||||||||
| Cross currency swaps | Other liabilities | $ | 274.0 | $ | — | $ | 274.0 | $ | — | ||||||||||||||||||||
| Interest rate swaps | Other liabilities | $ | 52.7 | $ | — | $ | 52.7 | $ | — | ||||||||||||||||||||
| Cash surrender value of life insurance policies | Other assets, net | $ | 99.6 | $ | — | $ | 99.6 | $ | — | ||||||||||||||||||||
| Deferred compensation asset | Other assets, net | $ | 53.1 | $ | — | $ | 53.1 | $ | — | ||||||||||||||||||||
| Deferred compensation liability | Other liabilities | $ | 150.5 | $ | — | $ | 150.5 | $ | — | ||||||||||||||||||||
| Contingent consideration | Accrued expenses and other/Other liabilities | $ | 50.0 | $ | — | $ | — | $ | 50.0 | ||||||||||||||||||||
| Fair Value Measurements | |||||||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||
Consolidated Balance Sheets Classification | Fair Value at December 31, 2024 | Using Fair Value Hierarchy | |||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
| Noncontrolling interest put | Noncontrolling interest | $ | 14.3 | $ | — | $ | 14.3 | $ | — | ||||||||||||||||||||
| Cross currency swaps | Other liabilities | $ | 142.7 | $ | — | $ | 142.7 | $ | — | ||||||||||||||||||||
| Interest rate swaps | Other liabilities | $ | 76.8 | $ | — | $ | 76.8 | $ | — | ||||||||||||||||||||
| Cash surrender value of life insurance policies | Other assets, net | $ | 102.1 | $ | — | $ | 102.1 | $ | — | ||||||||||||||||||||
| Deferred compensation asset | Other assets, net | $ | 35.7 | $ | — | $ | 35.7 | $ | — | ||||||||||||||||||||
| Deferred compensation liability | Other liabilities | $ | 132.5 | $ | — | $ | 132.5 | $ | — | ||||||||||||||||||||
| Contingent consideration | Accrued expenses and other/Other liabilities | $ | 10.8 | $ | — | $ | — | $ | 10.8 | ||||||||||||||||||||
| Fair Value Measurement of Level 3 Liabilities | Contingent Consideration | |||||||
Balance at December 31, 2023 | $ | 66.1 | ||||||
| Cash payments and adjustments | (55.3) | |||||||
| Balance at December 31, 2024 | 10.8 | |||||||
| Cash payments and adjustments | (4.6) | |||||||
| Additions from business acquisitions | 43.8 | |||||||
| Balance at December 31, 2025 | $ | 50.0 | ||||||
The Company has a noncontrolling interest put option related to its Ontario subsidiary that has been classified as mezzanine equity in the Company’s Consolidated Balance Sheets. The noncontrolling interest put is valued at its contractually determined value, which approximates fair value.
The fair values of derivative financial instruments have been determined based on market value equivalents at the balance sheet date, taking into account the current interest rate environment and therefore were classified as Level 2 measurements in the fair value hierarchy.
The Company offers certain employees the opportunity to participate in an employee funded DCP. A participant’s deferrals are allocated by the participant to one or more of multiple measurement funds, which are indexed to externally managed funds. From time to time, to offset the cost of the growth in the participant’s investment accounts, the Company purchases life insurance policies, with the Company named as beneficiary of the policies. Changes in the cash surrender value of the life insurance policies are based upon earnings and changes in the value of the underlying investments, which are typically invested in a similar manner to the participant’s allocations. Changes in the fair value of the DCP obligation are derived using quoted prices in active markets based on the market price per unit multiplied by the number of units. The cash surrender value and the DCP obligations are classified within Level 2 because their inputs are derived principally from observable market data by correlation to the hypothetical investments.
The Company measured the fair value of contingent consideration liabilities as Level 3 instruments. These contingent consideration liabilities were recorded at fair value on the acquisition date and are remeasured quarterly based on the then
assessed fair value and adjusted if necessary. The increases or decreases in the fair value of contingent consideration payable can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measure is based on significant inputs that are not observable in the market, they are categorized as Level 3.
The carrying amounts of cash and cash equivalents, accounts receivable, income taxes receivable, and accounts payable are considered to be representative of their respective fair values due to their short-term nature. Although recorded at amortized cost on the Company’s Consolidated Balance Sheets, the fair market value of the Company’s senior notes was $4,963.6 and $5,762.6 at December 31, 2025, and 2024, respectively. The Company’s senior notes are considered Level 2 instruments, as the fair market values of these instruments are based on observable market pricing.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 29, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.