LabCorp 2011 Annual Report Download - page 3

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1
LabCorp delivered another strong performance in 2011, made
possible by disciplined execution of our five-pillar strategy to
grow the business and increase shareholder value. These five
strategic pillars are:
•฀฀฀Deploy฀capital฀rst฀to฀acquisitions฀that฀enhance฀our฀footprint฀
and test menu, then to repurchase shares,
•฀฀฀Enhance฀our฀IT฀capabilities฀to฀improve฀the฀physician฀and฀
patient experience,
•฀฀฀Continue฀to฀improve฀efciency฀to฀remain฀the฀most฀efcient฀
and highest-value provider of laboratory services,
•฀฀฀Continue฀scientic฀innovation฀to฀offer฀new฀tests฀at฀reasonable฀
and appropriate pricing, and
•฀฀฀Participate฀in฀the฀development฀of฀alternative฀delivery฀models฀
to improve patient outcomes and reduce the cost of care.
Despite฀a฀macroeconomic฀environment฀that฀remained฀challenging,฀
we achieved our operational and financial goals across a broad range
of฀measures.฀Each฀of฀our฀ve฀pillars฀contributed฀to฀our฀success.
Results In A Nutshell
We generated solid increases in test volumes, revenues and
earnings in 2011, achieving growth both organically and through
strategic฀acquisitions.฀In฀2011,฀LabCorp฀increased฀revenue฀
10.8฀percent,฀to฀$5.5฀billion,฀and฀Adjusted฀Earnings฀Per฀Share฀
Excluding฀Amortization฀by฀6.5฀percent,฀to฀$6.37.฀These฀results฀
are especially noteworthy in a market environment in which total
net฀U.S.฀jobs฀and฀managed฀care฀enrollment,฀two฀key฀metrics฀
for our industry, remained stagnant. Our stock price reached
$100฀per฀share฀before฀concerns฀about฀the฀U.S.฀decit฀and฀the฀
European฀nancial฀system฀dampened฀the฀market฀in฀the฀last฀ve฀
months of the year.
We are proud of these accomplishments. This performance
extended a strong growth record that has been sustained
through฀several฀years฀of฀economic฀distress.฀In฀fact,฀for฀the฀
period 2001 through 2011, LabCorp’s compound annual
growth฀rates฀for฀Revenue,฀Adjusted฀Earnings฀Per฀Share฀
Excluding฀Amortization฀and฀Free฀Cash฀Flow฀Per฀Share฀are฀9.7,฀
15.5฀and฀16.8฀percent,฀respectively1.
We continue to fulfill our core mission – to offer the highest-
quality laboratory testing and most compelling value to our
customers – through successful execution of this well defined,
five-pillar strategy. Let me review our 2011 progress on each
pillar of our strategy.
At LabCorp we fulfill the commitments
we make to physicians, patients and
shareholders. In 2011, 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.
To Our
Shareholders
Dave฀King฀
Chairman฀and฀Chief฀Executive฀Ofcer฀
1 Adjusted฀Earnings฀Per฀Share฀Excluding฀Amortization฀is฀calculated฀by฀excluding฀the฀
effects of the impact of restructuring and other special charges, loss on divestiture
of฀assets฀and฀amortization฀expense฀from฀GAAP฀diluted฀earnings฀per฀share.฀Free฀cash฀
ow฀represents฀cash฀ows฀from฀operations฀less฀capital฀expenditures.฀Free฀Cash฀
Flow฀Per฀Share฀represents฀free฀cash฀ow฀divided฀by฀weighted฀average฀diluted฀shares฀
outstanding.฀For฀a฀reconciliation฀of฀non-GAAP฀nancial฀measures,฀please฀refer฀to฀slides฀
9-11฀of฀the฀Company’s฀8K฀led฀on฀February฀10th,฀2012.