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1
Dave King
Chairman and Chief Executive Officer
To Our Shareholders
In 2010, we called our annual strategic planning session with the Board of
Directors “Building Forward.” We chose this name, after much consideration,
to signify the importance of continuing to build for the future while carefully
reviewing our strategy given the dramatic changes in the world around us.
Thus, we examined whether the foundation of our existing business remains
sound and how we should build on it for success in the years ahead.
One thing is certain: the years ahead will be very different from the years
past. The health care reform legislation, known as the Patient Protection and
Affordable Care Act (PPACA), made significant changes to the health care
landscape that will affect LabCorp and our industry for years to come. A
significant expansion of the insured population should, over time, benefit test
volumes and reduce bad debt expense. Reform should also bring a greater
utilization of laboratory tests for screening and early diagnosis of disease,
with concurrent focus on the cost-effectiveness of testing and more consistent
management of utilization. In short, there will be great systemic pressure to
both spend less and provide better care.
At LabCorp we fulfill the commitments we make to physicians, patients and shareholders.
In 2010, even as the country faced challenging economic times, LabCorp achieved strong
financial and operational results, as we turned our plans into action and executed our
strategic objectives.
Our strategy has been to provide the highest quality while maintaining our
position as the low-cost, most efficient provider. We execute that strategy
by focusing on five key priorities:
•฀ ฀Using฀our฀free฀cash฀ow฀to฀make฀acquisitions฀that฀enhance฀our฀
test menu and expand our geographic footprint;
•฀ ฀Moving฀toward฀alternative฀delivery฀models฀for฀lab฀services;
•฀ ฀Improving฀our฀ability฀to฀provide฀actionable฀information฀to฀doctors฀
and patients;
•฀ ฀Continuing฀to฀increase฀our฀efciency฀by฀optimizing฀the฀business฀so฀
that we can maintain our low-cost structure; and
•฀ ฀Bringing฀innovation฀to฀the฀market฀at฀reasonable฀prices.
We believe this strategy positions us well to be successful as the changes
wrought by PPACA unfold.
So how did our 2010 performance stack up against these criteria? Do we
have a strong and durable foundation for Building Forward? The answer is
unequivocally yes.
The numbers say we did a great job growing the business in 2010: we grew
revenue 6.6 percent and Adjusted Earnings Per Share 13.5 percent. We
accomplished this with both organic and acquisition-driven growth. Better
volumes฀in฀the฀second฀half฀of฀the฀year฀reected฀improvement฀in฀the฀economy฀
and continued success in selling more effectively.