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Discontinued Operations and Disposal Groups
 3 Months Ended
Jun. 30, 2023
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure
2.    DISCONTINUED OPERATIONS
A discontinued operation may include a component or a group of components of the Company's operations. A disposal of a component or a group of components is reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on the Company's operations and financial results when the following occurs: (1) a component (or group of components) meets the criteria to be classified as held for sale; (2) the component or group of components is disposed of by sale; or (3) the component or group of components is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spin-off). For any component classified as held for sale or disposed of by sale or other than by sale, qualifying for presentation as a discontinued operation, the Company reports the results of operations of the discontinued operations (including any gain or loss recognized on the disposal or loss recognized on classification as held for sale of a discontinued operation), less applicable income taxes (benefit), as a separate component in the consolidated statement of operations for current and all prior periods presented. The Company also reports assets and liabilities associated with discontinued operations as separate line items on the consolidated balance sheet for prior periods.
The spin-off of Fortrea from Labcorp was achieved through the Company’s pro-rata distribution of 100% of the outstanding shares of Fortrea common stock to holders of record of Labcorp common stock. Each holder of record of Labcorp common stock received one share of Fortrea common stock for every share of Labcorp common stock held at 5:00 p.m., Burlington, North Carolina, time on June 20, 2023, the record date for the distribution.
In June 2023, Fortrea, prior to the Separation and while a subsidiary of the Company, issued $570.0 of 7.500% senior secured notes due 2030 (the Fortrea Notes). As of June 30, 2023, the initial proceeds were held in escrow for release to Fortrea upon satisfaction of certain conditions, including completion of the Separation. The proceeds from the Fortrea Notes were used to fund cash payments of approximately $1,600.0 to the Company in connection with the Separation. The Company does not guarantee the Fortrea Notes following the Separation. Also in June 2023, Fortrea entered into three floating secured overnight financing rate (SOFR) credit facilities totaling $1,520.0. These are comprised of $450.0 Revolver maturing June 30, 2028; $500.0 Term Loan A maturing June 30, 2028; and $570.0 Term Loan B maturing June 30, 2030.
In connection with the spin-off, all outstanding (vested and unvested) share-based awards of the Company held by Fortrea employees were adjusted and converted into awards of Fortrea common stock. In each case, the award was equitably adjusted or converted in a manner intended to preserve the aggregate intrinsic value of the original Company equity award and, other than regarding performance share awards, the terms of the equity awards, such as vesting dates, generally remain substantially the same. These conversions and adjustments did not materially impact the number of Company share-based awards outstanding. In addition, the Company entered into several agreements with Fortrea on or prior to the Distribution Date that, among other things, provide a framework for the Company’s relationship with Fortrea after the spin-off, including a separation and distribution agreement, a tax matters agreement, an employee matters agreement, and a transition services agreement. These agreements contain the key provisions relating to the spin-off, including provisions relating to the principal intercompany transactions required to effect the spin-off, the conditions to the spin-off and provisions governing the relationship between Fortrea and the Company after the spin-off.
Financial Information of Discontinued Operations
Earnings from Discontinued Operations, Net of Tax in the Consolidated Statements of Operations reflect the after-tax results of Fortrea's business and Separation-related fees, and does not include any allocation of general corporate overhead expense or interest expense of the Company.
The following table summarizes the significant line items included in Earnings from Discontinued Operations, Net of Tax in the Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Revenues$766.5 $773.9 $1,506.6 $1,529.0 
Cost of revenues629.1 593.7 1,244.5 1,198.0 
Gross profit137.4 180.2 262.1 331.0 
Selling, general and administrative expenses85.4 53.6 184.1 95.7 
Amortization of intangibles and other assets16.0 16.6 31.9 33.5 
Restructuring and other charges4.1 12.9 3.0 22.0 
Operating income31.9 97.1 43.1 179.8 
Other income (expense):
Interest expense(0.5)(0.2)(0.5)(0.3)
Investment income0.5 0.3 (1.2)0.6 
Other, net8.3 19.1 4.2 24.7 
Earnings before income taxes40.2 116.3 45.6 204.8 
Provision for income taxes6.3 25.4 6.8 42.9 
Net earnings attributable to Laboratory Corporation of America Holdings$33.9 $90.9 $38.8 $161.9 
The following table summarizes the carrying value of the significant classes of assets and liabilities classified as discontinued operations as of December 31, 2022:
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents$109.4 
Accounts receivable, net 436.5 
Unbilled services583.6 
Prepaid expenses and other96.6 
Total current assets1,226.1 
Property, plant and equipment, net162.1 
Goodwill, net1,997.3 
Intangible assets, net823.3 
Deferred income taxes1.2 
Other assets, net54.3 
Total assets$4,264.3 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$82.6 
Accrued expenses and other281.8 
Unearned revenue271.5 
Short-term operating lease liabilities21.7 
Total current liabilities657.6 
Operating lease liabilities26.8 
Deferred income taxes and other tax liabilities192.8 
Other liabilities21.7 
Total liabilities898.9 
Total shareholders’ equity3,365.4 
Total liabilities and shareholders’ equity$4,264.3