Labcorp Holdings Inc (LH) 2023 Q4 法說會逐字稿

Good day, and welcome to the Laboratory Corporation of America Holdings' Fourth Quarter and Full Year 2023 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.

大家好，歡迎參加美國實驗室控股公司2023年第四季及全年業績電話會議。 （操作員指示）請注意，今天的會議正在錄音中。

I would now like to hand the conference over to your speaker today, Christin O'Donnell, Vice President, Investor Relations. Please go ahead.

現在，我想將會議交給今天的演講嘉賓，投資者關係副總裁克里斯汀·奧唐納 (Christin O'Donnell)。請發言。

Thank you, operator. Good morning, and welcome to LabCorp's Fourth Quarter 2023 Conference Call. As detailed in today's press release, there will be a replay of this conference call available via telephone and Internet. With me today are Adam Schechter, Chairman and Chief Executive Officer; and Glenn Eisenberg, Executive Vice President and Chief Financial Officer.

謝謝接線生。早上好，歡迎參加LabCorp 2023年第四季電話會議。正如今天的新聞稿所述，本次電話會議的回放將透過電話和網路提供。今天與我一起出席的有：董事長兼執行長Adam Schechter；以及執行副總裁兼財務長Glenn Eisenberg。

This morning, in the Investor Relations section of our website at www.labcorp.com, we posted both our press release and an Investor Relations presentation with additional information on our business operations, which include a reconciliation of the non-GAAP financial measures to the most comparable GAAP financial measures both of which are discussed during today's call. Additionally, we are making forward-looking statements. These forward-looking statements include, but are not limited to, statements with respect to the estimated 2024 guidance, and the related assumptions, the recently completed spinoff of Fortrea Holdings, Inc., the impact of various factors on the company's businesses, operating and financial results, cash flows and/or financial condition including the COVID-19 pandemic and global economic and market conditions; future business strategies, expected savings, benefits and synergies from the LaunchPad initiatives and from other acquisitions and other strategic transactions and partnerships and opportunities for future growth.

今天上午，我們在公司網站 www.labcorp.com 的「投資者關係」版塊發布了新聞稿和投資者關係演示文稿，其中包含有關我們業務運營的更多信息，包括非公認會計準則 (Non-GAAP) 財務指標與最具可比性的公認會計準則 (GAAP) 財務指標的對照表，這兩項會議均已在今天的電話會議上進行了討論。此外，我們也做出前瞻性陳述。這些前瞻性陳述包括但不限於：關於預計的2024年業績指引及相關假設的陳述；近期完成的 Fortrea Holdings, Inc. 分拆；各種因素對公司業務、經營和財務業績、現金流和/或財務狀況的影響，包括新冠疫情和全球經濟及市場狀況；未來業務戰略；預期成本節省、LaunchPad 計劃以及其他合作夥伴關係

Each of the forward-looking statements is subject to change based upon various factors, many of which are beyond our control. More information is included in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and in the company's other filings with the SEC. We have no obligation to provide any updates to these forward-looking statements even if our expectations change.

任何前瞻性陳述均可能因各種因素而發生變化，其中許多因素超出我們的控制範圍。更多資訊請參閱我們最新的10-K表格年度報告、後續的10-Q表格季度報告以及公司向美國證券交易委員會提交的其他文件。即使我們的預期發生變化，我們也沒有義務對這些前瞻性陳述進行任何更新。

Now I'll turn the call over to Adam Schechter.

現在我將電話轉給亞當謝克特 (Adam Schechter)。

Thank you, Christin. Good morning, everyone. It's a pleasure to be with you today to discuss our fourth quarter 2023 results and our guidance for 2024.

謝謝，Christin。大家早安。很高興今天能和大家一起討論我們2023年第四季的業績以及2024年的展望。

LabCorp delivered a strong finish to what was a transformational year for the company. Looking back, we executed well on our strategic priorities. We successfully integrated the lab operations of Ascension, one of the largest health systems in the United States. We completed the spin-off of Fortrea our former clinical development and commercialization services business. We announced 6 new laboratory partnerships, reinforcing our position as a partner of choice for health systems and regional local laboratories. And we launched new innovative tests in our focused specialty areas across the business.

LabCorp 為公司轉型之年畫下了圓滿的句點。回顧過去，我們出色地執行了各項戰略重點。我們成功整合了美國最大的醫療系統之一 Ascension 的實驗室運作。我們完成了 Fortrea（原臨床開發和商業化服務業務）的分拆。我們宣布了 6 個新的實驗室合作夥伴關係，鞏固了我們作為醫療系統和區域本地實驗室首選合作夥伴的地位。我們也在公司重點關注的專業領域推出了新的創新檢測。

As we begin 2024, we have momentum in both Diagnostic laboratories and Biopharma laboratory services. We expect to drive continued growth by expanding our base business, finalizing and integrating acquisitions and partnerships by advancing our position in science, technology and innovation. We will continue to focus and lead in oncology, women's health, autoimmune disease and neurology.

2024年伊始，我們在診斷實驗室和生物製藥實驗室服務領域均保持強勁發展勢頭。我們期望透過拓展基礎業務、完成並整合收購與合作關係，以及提升我們在科技創新領域的地位，推動持續成長。我們將繼續專注於腫瘤學、女性健康、自體免疫疾病和神經內科領域，並保持領先地位。

Now turning to the fourth quarter results. LabCorp performed well driven by strong base business revenue growth in both Diagnostics and Biopharma. In the fourth quarter, revenue totaled $3 billion. Adjusted earnings per share was $3.30 and free cash flow from continuing operations, excluding spin-related items was $422 million. Enterprise revenue increased 4% compared to fourth quarter 2022 with diagnostics growing 3%, led by Base Business growth of 8%, and Biopharma growing 7% due to strong performance in central laboratories more than offsetting softness in early development research laboratories. Enterprise Base Business margin was flat compared to the prior year despite being constrained by the mix impact from recently closed hospital partnerships. Looking forward to 2024, we expect strong enterprise revenue growth of 4.7% to 6.5%. We expect margin improvement across both Diagnostics and Biopharma, and we expect adjusted EPS of $14.30 to $15.40, an implied growth rate at the midpoint of 10%. We also expect free cash flow to grow in excess of earnings.

現在來看看第四季的業績。 LabCorp 表現良好，這得益於診斷和生物製藥兩大業務部門強勁的基礎業務收入成長。第四季度，公司總營收達 30 億美元。調整後每股收益為 3.30 美元，持續經營業務產生的自由現金流（不包括分拆相關項目）為 4.22 億美元。企業營收與 2022 年第四季相比成長了 4%，其中診斷業務成長 3%，其中基礎業務成長 8%，而生物製藥業務成長 7%，這得益於中心實驗室的強勁表現，足以抵消早期開發研究實驗室的疲軟。儘管受到近期結束的醫院合作關係帶來的綜合影響，企業基礎業務利潤率與上年持平。展望 2024 年，我們預期企業營收將強勁成長 4.7% 至 6.5%。我們預計診斷和生物製藥業務的利潤率都將提高，我們預計調整後每股收益將在 14.30 美元至 15.40 美元之間，隱含成長率為 10% 的中點。我們也預期自由現金流的成長將超過收益的成長。

In a moment, Glenn will provide more details on our results and our 2024 guidance. Turning to our enterprise strategy. In the fourth quarter, we continued to see positive momentum from our health systems and regional local lab partnership strategy. LabCorp continues to demonstrate that we are a partner of choice with several new health systems and region local laboratory relationships.

Glenn 稍後將詳細介紹我們的業績和 2024 年的預期。接下來談談我們的企業策略。在第四季度，我們的醫療系統和區域本地實驗室合作策略持續保持積極勢頭。 LabCorp 繼續證明我們是首選合作夥伴，我們與多家新的醫療系統和區域本地實驗室建立了合作關係。

This is primarily due to our leadership in science and technology, our dedication to patients and our commitment to quality and efficiency. We announced a strategic partnership with Baystate Health in Western Massachusetts to acquire its outreach laboratory business and select operating assets. We completed the acquisition of select assets from Legacy Health. LabCorp now manages Legacy's inpatient hospital laboratories, serving patients throughout Oregon and Southwest Washington state. And we entered into an agreement to acquire ambulatory lab draw stations and a stat lab from Providence Medical Groups in California.

這主要歸功於我們在科技領域的領先地位、我們對患者的奉獻以及對品質和效率的承諾。我們宣布與馬薩諸塞州西部的Baystate Health建立策略合作夥伴關係，收購其外展實驗室業務和部分營運資產。我們完成了Legacy Health部分資產的收購。 LabCorp目前管理Legacy的住院醫院實驗室，為俄勒岡州和華盛頓州西南部的患者提供服務。此外，我們也與加州的Providence Medical Groups達成協議，收購其門診實驗室抽血站和統計實驗室。

Looking ahead, our M&A pipeline is robust and we remain focused on integrating and expanding our health system and regional local laboratory partnerships. These partnerships are typically accretive in the first year, with margins expanding over time during integration and then return their cost of capital within just a few years.

展望未來，我們的併購專案穩健，我們將繼續專注於整合和擴展我們的醫療系統和區域本地實驗室合作夥伴關係。這些合作關係通常在第一年就能實現增值，利潤率在整合過程中會隨著時間的推移而增長，並在短短幾年內收回資本成本。

Turning now to our progress in science, technology and innovation. In the fourth quarter, Ovia Health by Labcorp announced it will offer a fertility and family-building benefit. This benefit is the first of its kind that will allow employers and health plans to offer customizable solutions to employees and members to support their family building needs. LabCorp announced the availability of an ATN profile, the first blood-based test that combines 3 well researched blood markers to identify and assess biological changes associated with Alzheimer's disease.

現在談談我們在科學、技術和創新方面的進展。第四季度，Labcorp旗下的Ovia Health宣布將提供生育與家庭建設福利。這項福利是同類中首個允許雇主和健康計畫為員工和會員提供客製化解決方案以支持其家庭建設需求的福利。 LabCorp宣布推出ATN分析，這是第一個基於血液的檢測，結合了三種經過充分研究的血液標記物，用於識別和評估與阿茲海默症相關的生物學變化。

Last month, we announced the launch of the new FDA-cleared blood test for risk assessment and clinical management of severe preeclampsia. LabCorp and Hawthorne Effect announced a strategic collaboration to advance decentralized clinical trial capabilities for Pharma, Biotech and Medical Device sponsors. The collaboration is expected to increase patient diversity and inclusion to decrease site burden and to accelerate enrollment in clinical study time lines.

上個月，我們宣布推出經FDA批准的新型血液檢測，用於嚴重子癇前症的風險評估和臨床管理。 LabCorp和Hawthorne Effect宣布達成策略合作，旨在提升製藥、生物技術和醫療器材申辦方的去中心化臨床試驗能力。此次合作預計將提升患者的多元化和包容性，從而減輕試驗中心的負擔，並加速臨床研究的入組進度。

Finally, for our central laboratory customers, we introduced a new sample shopping application to provide enhanced near real-time visibility of specimens within the central lab. This phase is the first of many that will be launched for LabCorp customers. The application allows users to view events in the central lab specimen sample journey for each assigned protocol and to customize how their data is structured.

最後，我們為中心實驗室客戶推出了全新的樣本購物應用程序，旨在增強中心實驗室內樣本的近乎即時的可視性。此階段是 LabCorp 未來將為客戶推出的眾多應用程式的開端。該應用程式允許使用者查看中心實驗室每個指定方案的樣本​​採集流程，並自訂資料結構。

Turning now to the year ahead. We are focused on advancing our growth drivers that are outlined in our September 2023 Investor Day. We plan to continue to be a partner of choice for health systems and regional local laboratories. We will continue to develop, license and ultimately scale specialty testing, including companion diagnostics. We will work to bring our specialty testing to other parts of the world, which increases our global reach by leveraging our scale. For example, we're enabling our central laboratories in China and Geneva to perform liquid biopsy tests for clinical trials. And we are well positioned for long-term success with cell gene therapy and consumerism.

展望未來一年，我們專注於推動在2023年9月投資者日活動中概述的成長動力。我們計劃繼續成為醫療系統和區域本地實驗室的首選合作夥伴。我們將繼續開發、授權並最終擴大專科檢測（包括伴隨診斷）的規模。我們將努力將專科檢測推廣到世界其他地區，利用我們的規模優勢擴大我們的全球影響力。例如，我們正在使位於中國和日內瓦的中心實驗室能夠進行臨床試驗的液體活檢。我們已做好準備，在細胞基因療法和消費主義領域取得長期成功。

We see tremendous opportunity for growth as we continue to focus on bringing new innovation, technology and markets -- and products to market. In closing, 2023 was a strong and transformative year for LabCorp. We executed our strategy at exceptional scale and pace. I want to thank our more than 60,000 employees for their hard work and dedication to customers around the world. This enabled us to enter 2024 with considerable momentum that we intend to capitalize on to drive further value for our customers, our shareholders and our employees as we pursue our mission to improve health and to improve lives.

隨著我們繼續專注於將新的創新、技術和市場以及產品推向市場，我們看到了巨大的成長機會。總而言之，2023年對LabCorp來說是強勁且改變的一年。我們以非凡的規模和速度執行了我們的策略。我要感謝我們6萬多名員工的辛勤工作以及對全球客戶的奉獻。這使我們能夠以強勁的勢頭邁入2024年，我們計劃利用這一勢頭，在追求改善健康和改善生活的使命的同時，為我們的客戶、股東和員工創造更多價值。

With that, I'll turn the call over to Glenn.

說完這些，我將把電話轉給格倫。

Thank you, Adam. Going to start my comments with a review of our fourth quarter results, followed by a discussion of our performance in each segment and conclude with our 2024 full year guidance. For reference, we have also included additional business information that can be found in our supplemental deck on our Investor Relations website. Revenue for the quarter was $3 billion, an increase of 3.5% compared to last year primarily due to organic Base Business growth and the impact from acquisitions, partially offset by lower COVID testing. The Base Business grew 7.4% compared to the Base Business last year, while COVID testing revenue was down 73%. Organically, in constant currency, the Base Business grew 5.2%.

謝謝，亞當。我的評論首先將回顧我們第四季的業績，然後討論我們各部門的業績，最後給出我們2024年全年的業績指引。為了參考，我們還提供了其他業務信息，可在我們投資者關係網站的補充資料中找到。本季營收為30億美元，年增3.5%，這主要得益於基礎業務的有機成長以及收購的影響，但新冠檢測數量的下降部分抵消了這一增長。基礎業務年增7.4%，而新冠檢測收入下降了73%。以固定匯率計算，基礎業務的有機成長為5.2%。

Operating loss for the quarter was $123 million due to an impairment charge of $334 million related to our early development research laboratories business as we've experienced soft biotech markets. In addition, we had $125 million of special charges related to acquisitions, COVID and the spin-off of Fortrea. Excluding these items and amortization, adjusted operating income in the quarter was $395 million or 13% of revenue compared to $413 million or 14.1% last year. The decrease in adjusted operating income and margin was due to lower COVID testing. Base Business margins were in line with last year as the benefit of demand and LaunchPad savings were offset by higher personnel and stranded costs and the mix impact of recently completed hospital partnerships. Our LaunchPad and stranded cost reduction initiatives delivered around $125 million of savings this year consistent with our long-term target of $100 million to $125 million per year.

本季營運虧損為 1.23 億美元，原因是由於我們經歷了疲軟的生物技術市場，與早期開發研究實驗室業務相關的 3.34 億美元減損支出。此外，我們還有 1.25 億美元的與收購、新冠疫情和 Fortrea 剝離相關的特殊費用。不計這些項目和攤銷，本季調整後營運收入為 3.95 億美元，佔營收的 13%，而去年同期為 4.13 億美元，佔 14.1%。調整後營運收入和利潤率的下降是由於新冠檢測減少。基礎業務利潤率與去年持平，因為需求成長和 LaunchPad 節省帶來的好處被更高的人員成本和擱淺成本以及最近完成的醫院合作關係的綜合影響所抵消。我們的 LaunchPad 和擱淺成本削減計畫今年節省了約 1.25 億美元，與我們每年 1 億至 1.25 億美元的長期目標一致。

The adjusted tax rate for the quarter was 19.5% compared to 25.4% last year. The lower adjusted tax rate was primarily due to the geographic mix of earnings and the benefit from increased R&D tax credits. We expect our adjusted tax rate for 2024 to be approximately 23%. Fully diluted EPS for the quarter was a loss of $1.95 due to the early development impairment charge. Adjusted EPS were $3.30 in the quarter, up 8% from last year. Operating cash flow from continuing operations was $580 million in the quarter compared to $607 million a year ago. The reduction in cash flow was due to lower COVID testing.

本季調整後稅率為19.5%，去年同期為25.4%。較低的調整後稅率主要歸因於收益的地理分佈以及研發稅收抵免增加所帶來的收益。我們預計2024年的調整後稅率約為23%。由於早期開發減損支出，本季完全稀釋每股盈餘虧損1.95美元。本季調整後每股收益為3.30美元，較去年同期成長8%。本季持續經營業務產生的經營現金流為5.8億美元，去年同期為6.07億美元。現金流減少是由於新冠檢測減少。

Capital expenditures totaled $165 million in the quarter. For the full year, capital expenditures were 3.7% of revenue, and we expect this to be approximately 3.5% in 2024. Free cash flow from continuing operations for the quarter was $414 million. The company invested $155 million in acquisitions and paid out $61 million in dividends. While we did not use any cash for share repurchases during the quarter, we completed the accelerated share repurchase program, which reduced our share count by approximately 1.1 million shares in the quarter.

本季資本支出總計1.65億美元。全年資本支出佔收入的3.7%，我們預計2024年這一比例約為3.5%。本季持續經營業務的自由現金流為4.14億美元。公司投資1.55億美元用於收購，並支付了6,100萬美元的股息。雖然我們在本季沒有使用任何現金進行股票回購，但我們完成了加速股票回購計劃，導致本季股票數量減少了約110萬股。

At the end of the year, we had $530 million of share repurchase authorization remaining. For the full year, free cash flow from continuing operations, excluding spin-related costs, was $888 million. The company invested $672 million on acquisitions, paid out $254 million in dividends, repurchased $1 billion of stock and paid down $300 million of maturing debt. We continue to have a robust pipeline of potential acquisition opportunities that will supplement our organic growth. In addition, we continue to believe that our share repurchase program is an important part of our capital allocation strategy.

截至年底，我們剩餘的股票回購授權為5.3億美元。全年持續經營業務產生的自由現金流（不包括分拆相關成本）為8.88億美元。公司投資6.72億美元收購，支付2.54億美元股息，回購10億美元股票，償還3億美元到期債務。我們繼續擁有大量潛在收購機會，這將補充我們的有機成長。此外，我們仍然認為，股票回購計畫是我們資本配置策略的重要組成部分。

At year-end, we had $537 million in cash with debt of $5.1 billion. Our leverage was 2.5x gross debt to trailing 12 months adjusted EBITDA.

截至年底，我們擁有5.37億美元現金，負債51億美元。我們的槓桿比率是總負債與過去12個月調整後EBITDA比率的2.5倍。

Now I'll review our segment performance, beginning with Diagnostics Laboratories. Revenue for the quarter was $2.3 billion, an increase of 2.6% compared to last year, with organic growth of 0.8% and acquisitions contributing 1.8%. The Base Business grew organically by 5.7% compared to the Base Business last year, while COVID testing revenue was down 73%. Total volume increased 2.4% compared to last year as organic volume grew 0.3%, which was constrained by lower COVID testing, while acquisition volume contributed 2.1%. Base Business volume grew 5.2% compared to the base business last year as organic volume increased 3.1% while acquisitions contributed 2.2%. Price/mix increased 0.2% versus last year due to an organic Base Business increase that was mostly offset by lower COVID testing. Base Business organic price/mix was up 2.6% compared to the Base Business last year.

現在我將回顧我們各部門的業績，從診斷實驗室開始。本季營收為 23 億美元，比去年成長 2.6%，其中有機成長 0.8%，收購貢獻了 1.8%。與去年的基礎業務相比，基礎業務有機成長了 5.7%，而 COVID 檢測收入下降了 73%。總銷量比去年增長了 2.4%，其中有機銷量增長了 0.3%，但這受到 COVID 檢測減少的限制，而收購銷量貢獻了 2.1%。與去年的基礎業務相比，基礎業務銷量成長了 5.2%，其中有機銷量成長了 3.1%，而收購貢獻了 2.2%。價格/組合比去年上漲了 0.2%，因為基礎業務的有機成長大部分被 COVID 檢測減少所抵消。與去年的基礎業務相比，基礎業務有機價格/組合上漲了 2.6%。

Diagnostics adjusted operating income for the quarter was $354 million or 15.1% of revenue compared to $387 million or 16.9% last year. The decrease in adjusted operating income was due to a reduction in COVID testing. Base Business operating income was up due to the benefit of higher organic demand, acquisitions and LaunchPad savings, which were partially offset by higher personnel costs, including healthcare-related costs. The decrease in margin was due to the reduction in COVID testing and the mix impact from recently closed hospital partnerships, which we expect to improve over time.

本季診斷業務調整後營業收入為3.54億美元，佔營收的15.1%，去年同期為3.87億美元，佔營收的16.9%。調整後營業收入的下降是由於新冠檢測數量的減少。基礎業務營業收入的成長得益於內生需求的增加、收購以及LaunchPad成本的節省，但這些成長被人員成本（包括醫療保健相關成本）的增加部分抵消。利潤率的下降是由於新冠檢測數量的減少以及近期終止的醫院合作關係帶來的綜合影響，我們預計這些影響將隨著時間的推移而改善。

Now I'll review our segment performance of Biopharma Laboratory Services. Revenue for the quarter was $695 million, an increase of 7.1% compared to last year due to an increase in organic revenue of 4% and foreign currency translation of 3.1%. The 7.1% revenue growth was driven by continued strength in Central Labs, which was up 12% while early development was down 2% due to higher-than-normal cancellations.

現在，我將回顧我們生物製藥實驗室服務部門的表現。本季營收為6.95億美元，年增7.1%，這得益於有機收入成長4%以及外幣折算成長3.1%。 7.1%的營收成長得益於中央實驗室業務的持續強勁成長，該業務成長了12%，而早期開發業務則因取消訂單數量高於正常水平而下降了2%。

Biopharma adjusted operating income for the quarter was $109 million or 15.7% of revenue compared to $95 million or 14.7% last year. Adjusted operating income and margin increased due to organic growth and LaunchPad savings, partially offset by higher personnel and stranded costs. We ended the quarter with a backlog of $8.2 billion, and we expect approximately $2.5 billion of this backlog to convert into revenue over the next 12 months. Book-to-bill for the quarter was 1.26 with the trailing 12 months at 1.04.

本季生物製藥業務調整後營業收入為1.09億美元，佔營收的15.7%，去年同期為9,500萬美元，佔營收的14.7%。由於有機成長和LaunchPad專案成本節省，調整後營業收入和利潤率有所增長，但人員增加和閒置成本部分抵消了這一增長。本季末，我們的訂單儲備為82億美元，預計其中約25億美元將在未來12個月內轉化為營收。本季訂單出貨比為1.26，過去12個月為1.04。

Now I'll discuss our 2024 full year guidance, which assumes foreign exchange rates effective as of December 31, 2023, for the full year. The enterprise guidance also includes the impact from currently anticipated capital allocation, with free cash flow targeted for acquisitions, share repurchases and dividends. We expect Enterprise revenue to grow 4.7% to 6.5% compared to 2023. This includes the favorable impact from foreign currency translation of 60 basis points. We expect Diagnostics revenue to be up 3.2% to 4.8% compared to 2023. The impact from lower COVID testing of around $130 million is expected to be offset by the annualization of acquisitions that were completed in 2023.

現在我將討論我們2024年全年業績指引，該指引假設全年外匯匯率以2023年12月31日為準。企業績效指引也涵蓋了目前預期資本配置的影響，其中自由現金流將用於收購、股票回購和股利。我們預期企業業務收入將較2023年成長4.7%至6.5%。這包括外幣折算帶來的60個基點的有利影響。我們預計診斷業務收入將較2023年成長3.2%至4.8%。新冠檢測量下降約1.3億美元的影響預計將被2023年完成的收購的年化收益所抵消。

We expect Biopharma revenue to grow 5.5% to 7.5% compared to 2023. This guidance includes the positive impact from foreign currency translation of 220 basis points. We expect central labs and early development to both grow within the segment guidance range. We expect margins in diagnostics and Biopharma to be up in 2024 versus 2023 driven by top line growth and LaunchPad savings. Our guidance range for adjusted EPS is $14.30 to $15.40 with an implied growth rate at the midpoint of approximately 10%. While we do not guide to quarterly performance, it's worth noting that first quarter earnings will be below typical quarterly seasonality due to weather disruption in January that we expect will impact earnings by $0.10 to $0.15 in the quarter.

我們預計生物製藥業務收入將較2023年成長5.5%至7.5%。該指引包含了220個基點的外幣折算帶來的正面影響。我們預期中心實驗室和早期開發業務的成長均將在各部門指引範圍內。我們預計，在營收成長和LaunchPad成本節省的推動下，診斷業務和生物製藥業務的利潤率將在2024年較2023年有所上升。我們對調整後每股盈餘的指引範圍為14.30美元至15.40美元，中間值隱含成長率約10%。雖然我們不提供季度業績指引，但值得注意的是，由於1月份的天氣影響，第一季的收益將低於典型的季度季節性，我們預計這將對本季收益產生0.10美元至0.15美元的影響。

Free cash flow is expected to be between $1 billion to $1.15 billion, with an implied growth rate at the midpoint of approximately 21%. In summary, we expect to drive continued profitable growth and strong free cash flow generation that will be used for acquisitions that supplement our organic growth, while also returning capital to shareholders through our share repurchase program and dividends.

預計自由現金流將在10億美元至11.5億美元之間，隱含成長率中位數約為21%。總而言之，我們預計將推動持續的獲利成長和強勁的自由現金流生成，這些資金將用於補充我們有機成長的收購，同時也將透過股票回購計畫和股息向股東返還資本。

Operator, we will now take questions.

接線員，我們現在來回答問題。

(Operator Instructions) Our first question comes from Jack Meehan with Nephron Research.

（操作員指示）我們的第一個問題來自 Nephron Research 的 Jack Meehan。

I wanted to start with a question on capital allocation. So last year was obviously a pretty active year for you guys integrating Ascension, doing the spin. It feels like you have a little bit more bandwidth and the cash flow has been strong. I was wondering if you thought there could be any larger deals available either in the independent lab or health system space. Like I know it's tough to come up with something that's Ascension size, but what does the funnel look like?

我想先問一個關於資本配置的問題。去年對於你們整合Ascension、進行業務拓展來說顯然是相當活躍的一年。感覺你們的精力更充沛了，現金流也一直很強勁。我想知道您是否認為在獨立實驗室或醫療系統領域可能會有更大規模的交易。我知道很難想出像Ascension這樣規模的交易，但你們的漏斗是什麼樣的呢？

So if you look at the pipeline for M&A, we have, it remains very strong. As you say, there's not a deal of the size of Ascension necessarily in health systems, but there's quite a few health systems that when you add them up, obviously become meaningful. In fact, if you look at our longer-term guidance, historically, we've said that we have 1% to 2% growth from inorganic means. We have now said we believe it's going to be 1.5% to 2.5%, reflecting that we believe that there is significant opportunity before us. We also mentioned partnerships with regional local laboratories. I think that there could be some additional partnerships in those areas.

所以，如果你看看我們的併購管道，你會發現它仍然非常強勁。正如你所說，醫療系統領域併購規模未必能達到Ascension的水平，但有不少醫療系統，如果把它們加起來，顯然意義重大。事實上，如果你看看我們的長期預期，從歷史上看，我們曾表示，非直接投資的成長率為1%到2%。現在我們表示，我們認為成長率將達到1.5%到2.5%，這反映出我們相信我們面前存在著巨大的機會。我們也提到了與區域本地實驗室的合作。我認為在這些領域可能會有一些額外的合作。

But as I think about capital allocation in general, I first off that we're committed to our dividend. We then look to do as many of these hospital local, regional laboratory deals as we can do because they're so sensible to do. They return our cost of capital very quickly. They're accretive in the first year, and we know how to do them really well. And then, If there's something that is strategic to us in one of our strategic priorities, we would look to do those, albeit we're not looking at anything of massive size. But after that, we then look at our share buybacks, which we continue to believe is a good way to use our funds as well.

但當我思考整體資本配置時，首先，我們致力於分紅。其次，我們會盡可能進行這些醫院本地和區域實驗室的交易，因為這些交易非常合理。它們能快速收回我們的資本成本，並在第一年就實現增值，而且我們知道如何將這些交易做好。然後，如果我們的策略重點中存在對我們具有戰略意義的項目，我們也會考慮去做，儘管我們目前沒有考慮任何大規模的項目。之後，我們會考慮股票回購，我們仍然認為這也是利用資金的好方法。

Yes, Jack, the only thing I'd also add to your comment earlier is that our guidance assumes that again, we're going to generate between $1 billion to $1.15 billion of new free cash flow this coming year, and that we'll redeploy that for capital allocation of M&A buybacks and dividends. But the balance sheet is also strong. We ended the year at 2.5x gross debt to trailing 12 months adjusted EBITDA, and we have a targeted range of 2.5 to 3x. So to your point, if there were attractive opportunities out there on the M&A front, obviously, share repurchases as well, in addition to the free cash flow, we also have additional financial flexibility to pursue those opportunities.

是的，傑克，除了你之前的評論，我唯一想補充的是，我們的業績指引再次假設，我們明年將產生10億至11.5億美元的新自由現金流，並將重新部署這些現金流，用於併購回購和股息的資本配置。不過，我們的資產負債表也很強勁。截至年底，我們的總債務與過去12個月調整後EBITDA比率為2.5倍，我們的目標範圍是2.5倍至3倍。所以，正如你所說，如果在併購方面存在有吸引力的機會，顯然也包括股票回購，那麼除了自由現金流之外，我們還擁有額外的財務靈活性來抓住這些機會。

And can you talk about what -- on the diagnostic side, what realized unit price was in the quarter? What your expectation is for next year? And the reason I ask is I get a lot of questions on the margins in the business. And it feels like we're in this elevated inflationary environment. Just like what do you think -- do you see opportunities to kind of use price more as a lever to offset that?

您能否談談診斷方面，本季的實際單價是多少？您對明年的預期是什麼？我之所以問這個問題，是因為我常被問到關於業務利潤率的問題。感覺我們正處於高通膨環境。您認為，您是否有機會更多地利用價格作為槓桿來抵消通膨的影響？

So Jack, let me first talk about margins, just in general. So if you look at 2023, the margins were basically flat versus prior year. If you look at some of the things that we had to overcome, they were pretty significant, like COVID work that was significantly less this year than the prior year. But in addition to that, the hospital deals that we've done, in particular in the fourth quarter had an impact on our margins. Because although they're accretive in the first year, they're dilutive in the first couple of months as we do the integration until we have the ability to reduce cost to the level that makes sense over time. So we saw some impact from that in the fourth quarter as well. I feel really good about our margin accretion as we go into 2024. And we've said that we expect the margins to increase, but we also expect an increase in each of the businesses, not just Diagnostics, but also Biopharma. Within Biopharma, we expect them to be increased, not just in central laboratories, but also in early development.

傑克，我先來談談整體利潤率。 2023年的利潤率與去年基本持平。我們克服了一些困難，這些困難非常顯著，例如今年的新冠疫情工作量就比去年大幅減少。除此之外，我們完成的醫院交易，尤其是在第四季度，也對我們的利潤率產生了影響。雖然利潤率在第一年有所增長，但在最初的幾個月裡，隨著我們進行整合，利潤率會被稀釋，直到我們有能力將成本降低到合理的水平。因此，我們在第四季也看到了一些影響。隨著2024年的到來，我對利潤率的成長感到非常樂觀。我們之前說過，我們預期利潤率會成長，但我們也預期每個業務的利潤率都會成長，不僅是診斷業務，還有生物製藥業務。在生物製藥領域，我們預期利潤率不僅在中心實驗室，而且在早期研發領域也會成長。

So we continue to look for ways to reduce costs through a LaunchPad initiative. We're committed to reducing costs by $100 million to $125 million this year and each year for the next several years. In addition to that, our volume growth is helping us significantly. In particular, as we see growth in Biopharma, that's going to help us with our margins. Despite the fact that we still have COVID overhang in 2024 versus '23, that we're continuing to improve the margins in our hospital deals, we're expecting to see the margins being accretive and growing this year, which to me is just a good sense of the underlying growth. With particular focus on price, I would say price is net neutral when you look at overall price. There is some benefit to mix, and we continue to see mix helping us there.

因此，我們將繼續透過 LaunchPad 計劃尋找降低成本的方法。我們承諾今年以及未來幾年每年都將成本降低 1 億至 1.25 億美元。此外，我們的銷售成長也對我們幫助很大。尤其是生物製藥業務的成長，這將有助於提高我們的利潤率。儘管與 2023 年相比，2024 年我們仍面臨新冠疫情的影響，但我們仍在持續提高醫院交易的利潤率，預計今年的利潤率將持續增長，這對我來說，是對潛在增長的良好預期。特別關注價格，我認為價格與整體價格相比是淨中性的。混合有一些好處，而且我們持續看到混合對我們有幫助。

Yes, Jack, the thing too, as Adam said, when you think about the Diagnostics business and the benefit, frankly, of seeing PAMA at least deferred out one year, that we expect the margins within Diagnostics to be up in '24 all in, and that's even with the expectation that COVID testing is going to be down. Obviously, the underlying Base Business margin improvement would even be greater than that. And as Adam said, the nice thing is with the growth that we expect, it's demand driven. A lot of it is the volume side. Price/mix is still going to be favorable at a lesser extent than obviously the volume. But with unit prices being relatively flat we have the opportunity, again, to see favorable mix to help drive that improvement.

是的，傑克，正如亞當所說，當你考慮到診斷業務以及坦率地說PAMA至少延期一年的好處時，我們預計診斷業務的利潤率在2024年會上升，即使預計新冠檢測數量會下降。顯然，基礎業務利潤率的提升甚至會更高。正如亞當所說，我們預期的成長是由需求驅動的，這很大程度上取決於銷售量。價格/產品組合仍會有利，但幅度顯然小於銷售量。但由於單位價格相對平穩，我們有機會再次看到有利的產品組合來幫助推動這種改善。

Our next question comes from Kevin Caliendo with UBS.

我們的下一個問題來自瑞銀的 Kevin Caliendo。

On Biopharma, I just want to understand the expectations for margin there and how much of that is improvement in early development. I know you have sort of an easy comp in 1Q versus sort of actual improvement in margin and mix. Can you just talk about the dynamics of that and sort of the cadence of that as we think about the course of the year?

關於生物製藥，我只想了解該領域的利潤預期，以及其中有多少是早期開發階段的改善。我知道你們第一季的業績與利潤率和產品組合的實際改善相比比較容易。您能否談談這方面的動態，以及考慮到全年情況，這種變化的節奏如何？

Yes, I'll talk a little bit, and I'll ask Glenn to provide some additional context. Our Biopharma laboratory service business remains a leader in both segments. We're a leader in central laboratory. We're also a leader in early development. Central laboratory performed very well in the fourth quarter, and we expect it's going to continue to perform well as we look at 5.5% to 7.5% growth in 2024 across the segment. But early development, we expect to continue to improve as we go through the year. And we also expect early development to grow about the same amount as the overall guidance that we're giving for Biopharma.

是的，我會講一點，然後請格倫補充一些背景資訊。我們的生物製藥實驗室服務業務在兩個領域都保持領先地位。我們在中央實驗室領域處於領先地位，在早期開發領域也是如此。中央實驗室在第四季度表現非常出色，我們預計該業務將繼續保持良好表現，並預計2024年整個部門的成長率將達到5.5%至7.5%。但我們預計早期開發業務在今年將持續改善。我們也預期早期開發業務的成長速度將與我們對生物製藥業務的整體預期大致相同。

A lot of the early development growth we expect will be in the second half of the year as we continue to see improvement in ramp-up. Our RFPs look good in both segments. The larger segment, obviously, by far, is the central laboratories. The RFPs look good. Our win rate looks good. Big pharma is continuing to send us a lot of RFPs, I feel great. If you look at early development, the RFPs look good, the win rate looks good. What we've faced are some cancellations that are well above normal levels. And we expect as we go through 2024, that, that will normalize and get us back to the RFPs and the win rate being positive for us and therefore, providing us with growth.

我們預計，隨著我們繼續看到產能提升，許多早期開發成長將在今年下半年實現。我們兩個部門的招標書（RFP）看起來都不錯。顯然，到目前為止，規模較大的部門是中央實驗室。招標書看起來不錯，我們的得標率也不錯。大型製藥公司繼續向我們發送大量招標書，我感覺很棒。如果你看一下早期開發，你會發現招標書看起來不錯，得標率也不錯。我們面臨的是一些項目取消的情況，遠高於正常水平。我們預計，隨著2024年的發展，這種情況將恢復正常，我們的招標書和中標率將恢復正成長，從而為我們帶來成長。

Yes, Kevin, I just would add that when you look at the cadence to your point, one, we expect biopharma margins to be up year-over-year. Given the softness that we experienced, especially in the first half, of 2023 with the supply constraints that we experienced in the early development, in particular, you would expect to see the stronger part of the margin improvement in the first half of the year versus the second, but margins that would still be up year-over-year even as we go through each quarter of the year. And as Adam commented that we expect margin improvement driven across both of our businesses. So we have early development in central lab, both looking at revenue growth within that guidance range of 5.5% to 7.5%. So on good top line growth, LaunchPad savings, we expect to see good margin improvement and to leverage that top line well.

是的，凱文，我只是想補充一點，從你提到的節奏來看，首先，我們預計生物製藥的利潤率將比去年同期成長。考慮到我們經歷的疲軟，尤其是在2023年上半年，以及我們在早期開發過程中遇到的供應限制，你預計上半年的利潤率增長會比下半年更強勁，但即使我們經歷了一年中的每個季度，利潤率仍然會同比增長。正如亞當所說，我們預期利潤率的成長將推動我們兩項業務的利潤率成長。我們在中央實驗室進行了早期開發，兩項業務的收入成長都預期在5.5%到7.5%的指導範圍內。因此，在良好的營收成長和LaunchPad成本節省的基礎上，我們預期利潤率將得到良好的提升，並能充分利用營收成長。

If I can ask a quick follow-up to that. Just the outlook for NHP pricing and sort of your reliability of supply, how does -- what's happening in the marketplace there? We've heard pricing is coming under pressure a little bit. How does that -- how do you anticipate that helps or hurts on the margin front? Like how should we think about that impact?

我想問一下這個問題。 NHP 的定價前景以及你們的供應可靠性如何？市場狀況如何？我們聽說定價有點承壓。您認為這會對利潤率產生什麼影響？還是會造成負面影響？我們該如何看待這種影響？

So Kevin, right now, the supply is not an issue. We have as much supply as we need. I feel very good about as we go through this year and into the future, we have multiple suppliers now. We've certainly seen some of the pricing come down in the market, which is a good thing for us because NHP cost is largely a pass-through for us. We pass the benefit on to our clients. So you might see the revenue come down for us because the cost is coming down, but it shouldn't have any significant impact. In fact, it could help us a little bit when it comes to our margins.

所以凱文，目前供應不是問題。我們有足夠的供應。我對今年以及未來的情況感到非常樂觀，因為我們現在擁有多家供應商。我們確實看到市場價格有所下降，這對我們來說是件好事，因為NHP的成本在很大程度上被我們轉嫁了。我們將利益轉嫁給了客戶。因此，你可能會看到我們的收入因為成本下降而下降，但這應該不會產生任何重大影響。事實上，這可能對我們的利潤率有所幫助。

Our next question comes from Erin Wright with Morgan Stanley.

我們的下一個問題來自摩根士丹利的艾琳賴特。

So how would you characterize the general volume trends and utilization trends relative to pre-COVID and just excluding COVID dynamics, you also mentioned some of the weather impact in the first quarter. How big of an impact is that? And how should we think about just volume dynamics as we head throughout the year in 2024?

那麼，您如何描述與新冠疫情之前相比的整體銷售趨勢和利用率趨勢？排除新冠疫情的影響後，您也提到了第一季的一些天氣影響。這些影響有多大？在2024年全年，我們該如何看待銷售動態？

First of all, I would say we came into 2024 with significant momentum. The Diagnostics Base Business grew 8% in the fourth quarter, Biopharma grew 7.1% in the fourth quarter. So I feel good about the guidance that we're providing for each of those businesses. So for Diagnostics, it's 3.2% to 4.8% midpoint of 4% growth. Biopharma 5.5% to 7.5% and midpoint of 6.5% growth. So very strong revenue growth. We are comfortable also saying that there will be margin improvement in each of those businesses. That's despite the fact that there is going to be an impact in diagnostics from weather, and we expect it to be $0.10 to $0.15 in the first quarter. And therefore, the first quarter will be the hardest quarter for us of 2024. But the numbers that I just gave you and the ranges that I gave you, midpoints, already -- we already know what it was in January. So it already contemplates what happened in January.

首先，我想說，我們以強勁的勢頭邁入2024年。診斷基礎業務在第四季度成長了8%，生物製藥業務在第四季度成長了7.1%。因此，我對我們為每項業務提供的業績指引感到滿意。診斷業務的成長率為3.2%至4.8%，中位數為4%。生物製藥業務的成長率為5.5%至7.5%，中位數為6.5%。因此，我們的營收成長非常強勁。我們也很有信心，每項業務的利潤率都會有所提升。儘管天氣因素會對診斷業務造成影響，但我們預計第一季的利潤率將在0.10美元至0.15美元之間。因此，第一季將是2024年對我們來說最艱難的季度。但我剛才給出的數字以及我給的區間（中位數）——我們已經知道一月份的情況。所以，它已經考慮到了一月的情況。

Yes, Erin, the couple of comments too as well that demand utilization is positive. And frankly, we're kind of at the higher end right now when you look at it year-over-year. When with the guide of, call it, again, midpoint of around 4% for diagnostics kind of organically next year, our normal historical 2/3 volume, 1/3 price/mix is probably a good indication, which still speaks to the fact that volume levels are up nicely. When you compare them to prepandemic levels, we're within the normal range where historically, we would say kind of 1% to 2% from volume on the price side. We're within that 1% to 2% growth rate now.

是的，Erin，還有幾則評論也提到了需求利用率是正數。坦白說，如果以同比來看，我們現在處於較高水平。如果以明年診斷產品有機成長率約4%的中點為參考，我們歷史上正常的2/3銷售量、1/3價格/產品組合水準可能是一個不錯的指標，這仍然說明銷售水準正在穩步上升。如果與疫情前的水平相比，我們處於正常範圍內，歷史上價格方面銷量增長1%到2%。我們現在正處於1%到2%的成長率範圍內。

CAGR organically compared to 2019 kind of on the lower end, but well north of kind of 1% growth. So we're at kind of a normal level right now, a little bit higher expected than historical. And the weather impact that we saw in January to give you kind of the rounded numbers, probably impacted our revenue by around $25 million, and we incrementally, the drop-down on that would be at around 60% margin. So call it around 15-ish of operating income or that $0.10 to $0.15 range that we gave in our prepared remarks from an earnings per share standpoint.

與2019年相比，有機複合年增長率略低，但遠高於1%左右。所以我們目前處於正常水平，預期略高於歷史水平。我們1月份看到的天氣影響，大概是四捨五入的數字，大概影響了我們約2500萬美元的收入，而我們預計，這部分收入的下降幅度約為60%。所以，我們假設這部分收入佔營業利潤的15%左右，或者說，從每股收益的角度來看，我們在準備好的發言稿中給出的0.10美元到0.15美元的區間。

Perfect. And just your quick thoughts on sort of the regulatory environment as it stands now, whether it's LDTs, PAMA, SALSA, do you think PAMA just continues to be pushed out at this point? What are your thoughts there?

太好了。能簡單談談目前監管環境的看法嗎？無論是LDT、PAMA還是SALSA，您認為PAMA目前還會繼續被推行嗎？您對此有何看法？

Erin, we continue to support SALSA, and we continue to be optimistic that SALSA will get passed. We have support from both sides of the aisle and ACLA, our trade organization is working really hard to get that legislation passed. If it doesn't get passed, then we'll try to see if there's a way to get another year of delay.

艾琳，我們繼續支持SALSA法案，並且我們仍然對SALSA法案的通過感到樂觀。我們得到了兩黨的支持，我們的產業組織ACLA（美國音樂演員協會）也在努力推動法案的通過。如果法案無法通過，我們會嘗試再延後一年。

In our guidance, longer-term guidance, we assume that there will be an impact from PAMA. So therefore, we continue to say if not this year, it will be next year. If it's not next year, it will be the following year. Until the SALSA legislation is passed, then I'm not going to take a lot of comfort that it could be another year delay or so forth. We're going to really work hard to have that passed.

在我們的指導意見（長期指導意見）中，我們假設PAMA會產生影響。因此，我們繼續強調，如果今年不影響，明年也會影響。如果明年不影響，那後年也會影響。在SALSA法案通過之前，我不會因為可能還要再拖延一年左右而感到安心。我們將竭盡全力推動法案的通過。

With regard to LDTs, we do not support the FDA's kind of what they're currently thinking about in terms of taking legislation that was created for the device industry and applying it to the diagnostic industry. We were very supportive of VALID and that was legislation that would give FDA oversight of laboratory developed test. We think that's the right path to go. We will continue to work with the trade organization to see if we can make progress there. But we think legislation that is fit for purpose for the diagnostic industry is the right path forward.

關於實驗室診斷測試（LDT），我們不支持FDA目前的想法，即將為設備產業制定的立法應用於診斷產業。我們非常支持VALID法案，該法案將賦予FDA對實驗室開發的檢測進行監管的權力。我們認為這是正確的方向。我們將繼續與該貿易組織合作，看看能否取得進展。但我們認為，真正適合診斷產業的立法才是正確的發展方向。

Our next question comes from Stephanie Davis with Barclays.

我們的下一個問題來自巴克萊銀行的史蒂芬妮戴維斯。

I was hoping you could walk us through what's driving some of your diagnostics market growth being so above market especially on the EPS side. Because I historically attribute some of your above-market growth to the Ascension deal, but I also thought about the lower margin profile. So I guess I'm a little surprised at this level of profitability bifurcation versus your largest peer.

我希望您能解釋一下，是什麼原因導致你們的診斷市場成長如此高於市場水平，尤其是在每股收益方面。因為我過去一直將你們高於市場水平的成長部分歸因於Ascension交易，但我也考慮到了較低的利潤率。所以，與你們最大的同業相比，獲利能力出現如此大的差異，我感到有點驚訝。

Yes. So what I would say, Stephanie, is, number one, we have momentum in the Diagnostics business. And the momentum is coming from our base core business. We see it in both routine and esoteric testing. We have 4 therapeutic categories that we focus on that have higher growth in other specialty areas, and we're going to continue to focus on those areas, oncology, women's health, autoimmune disease and neurology. And I believe that those are going to help us continue to grow because those parts of the market should grow disproportionately as we continue to go into the future. At the same time, there's no doubt that the acceleration of the hospital and local laboratory partnerships has enabled us to grow faster than what we've grown in the past. And the good news is we have a strong pipeline of those as we go into the future. That's why we've raised the longer-term guidance for inorganic growth to 1.5% to 2.5%. Historically, we would have said 1% to 2%. So I think all of those things combined give us momentum when it comes to the diagnostic volume.

是的。 Stephanie，我想說的是，首先，我們的診斷業務發展勢頭強勁。這股勢頭來自我們的核心基礎業務。無論是常規檢測還是特殊檢測，我們都能看到這種勢頭。我們專注於四個治療類別，它們在其他專業領域中成長更快，我們將繼續專注於這些領域：腫瘤學、女性健康、自體免疫疾病和神經病學。我相信這些領域將幫助我們繼續成長，因為隨著我們未來的發展，這些市場領域應該會呈現超乎尋常的成長。同時，毫無疑問，醫院和地方實驗室合作的加速發展，使我們的成長速度超過了過去。好消息是，我們擁有強大的產品線，可以應對未來的發展。因此，我們將長期內生成長預期上調至1.5%至2.5%。而以往，我們的預期是1%至2%。所以我認為所有這些因素結合起來會為我們診斷量帶來動力。

I understand, looking forward to it. And changing gears a little bit for the follow-up. Could you dig a bit more into the Ovia announcement? How much of that was driven by inbound from your existing employer clients versus the decision to expand into the market? And what does this mean in terms of investment list in employer-facing sales or platform tech investments and the like?

我明白，我很期待。接下來我稍微聊聊後續情況。您能否更深入地談談Ovia的公告？這其中有多少是由現有雇主客戶帶來的，有多少是出於拓展市場的考量？這對面向雇主的銷售或平台技術投資等方面的投資清單意味著什麼？

Yes. So if you look at what we've done with Ovia, we think it's a terrific way for us to have a digital capability and a very important core therapeutic areas that we're focused on women's health. And it really is what they've offered a first of its kind of fertility family building benefits that we will be bringing to customers. The service offers, care navigation and concierge services that helps individuals throughout their family-building journey. And we can offer directly to patients if they like. We can offer it to employers. We have a very strong employer group, laboratory employer services. And this is just one of many offerings that we're going to be bringing to the marketplace. But because women's health is so important and because we are so focused on it, this is just another avenue for us to help in the women's health arena.

是的。如果你看看我們與Ovia合作的成果，你會發現它對我們提升數位化能力以及專注於女性健康這一非常重要的核心治療領域來說，是一個絕佳的機會。 Ovia提供的是同類產品中首創的生育家庭建設福利，我們將把這些福利帶給客戶。這項服務提供護理導航和禮賓服務，幫助個人完成家庭建設的整個過程。如果患者願意，我們可以直接向他們提供這些服務。我們也可以為雇主提供這些服務。我們擁有非常強大的雇主團隊和實驗室雇主服務。這只是我們將要推向市場的眾多服務之一。但正因為女性健康如此重要，我們也如此關注它，這將成為我們在女性健康領域提供幫助的另一個途徑。

Our next question comes from Patrick Donnelly with Citi.

我們的下一個問題來自花旗銀行的派崔克唐納利。

Maybe on the Biopharma bookings side, the book-to-bill picked up a little bit from last quarter. I know last quarter, you guys were flagging maybe some elevated cancellations on the emerging biotech side. Can you just kind of let us know what the environment looks like now? How you're feeling about that backdrop, again, just given a little bit of volatility there, and we've seen some biotech IPOs trickle out? How are you feeling about the backdrop? And how should we think about bookings this year?

生物製藥的訂單方面，訂單出貨比可能比上一季略有回升。我知道上個季度，你們預測新興生技領域的訂單取消率可能會上升。能否簡單介紹一下目前的市場環境？考慮到市場波動性，以及一些生技公司陸續IPO，您對目前的情況有何看法？您對目前的情況有何看法？我們該如何看待今年的訂單？

Yes, absolutely. I'll start broadly about our Biopharma business, and then I'll talk about the individual segments as well. So broadly, we had a good quarter of 1.26, which we said in the third quarter, we expected the fourth quarter to be improved and obviously, it was improved. If you look at our trailing 12 months, it's about 1.04. And we believe that, that's -- you want to be around 1.05 to 1.1 and 1.1 is typically what we're targeting. I feel confident we'll be able to get there as we go through this year. We dropped off a really strong quarter in the fourth quarter of 2022.

是的，絕對的。我先大致介紹一下我們的生物製藥業務，然後再談各部門的狀況。總體而言，我們第三季的銷售額達到了1.26，表現不錯。我們在第三季就曾表示，我們預計第四季的銷售額會有所改善，顯然，我們確實有所改善。如果回顧我們過去12個月的業績，銷售額大約是1.04。我們認為，銷售額應該在1.05到1.1之間，而1.1通常是我們的目標。我相信我們今年一定能夠實現這個目標。 2022年第四季度，我們的業績表現非常強勁。

If I break apart the businesses and we start with a much larger business, which is the central laboratory business, our RFPs are very strong. Our book-to-bill is very strong. Our win rate is very strong. We're not seeing as many cancellations as we're seeing in the other part of the business because it's focused more on larger pharma. Although there are some cancellations there. There always are. It's not nearly as large as what we're seeing in early development. In early development, I feel comfortable as we go through 2024 because our RFPs coming into us are still very strong. Our win rate remains good. I feel good about where our win rate is. What's happened here is there's been a lot of cancellations. So I think there's 2 reasons for that. One is, I think with NHP pricing the way it was, some very small biotech companies that got in line, just decided to say we're just not going to do it now. And then I also think that there are other pressures with smaller biotech companies that they're going through financially.

如果我把這些業務分開開來，從規模更大的中央實驗室業務開始，我們的招標書（RFP）非常強勁。我們的訂單出貨比非常高。我們的得標率也很高。我們看到的取消訂單不像其他業務那麼多，因為我們更專注於大型製藥公司。雖然那裡也有一些取消訂單的情況，但總是有的。它遠不及我們在早期開發中看到的那麼大規模。在早期開發方面，我對我們能撐到2024年感到很放心，因為我們收到的招標書仍然非常強勁。我們的中標率仍然很高。我對目前的得標率感到很滿意。現在的情況是有很多取消訂單的情況。所以我認為有兩個原因。一是，我認為由於NHP的定價方式，一些排隊的小型生技公司決定我們現在不做。我還認為小型生物技術公司在財務方面還面臨其他壓力。

As I look at this year, I feel good about both businesses. And in early development, we're actually even seeing a larger amount of our business come from large and middle-sized pharma versus early pharma or early biotech. And I think as we kind of make that transition to get more and more larger pharma in early development, we'll be able to even have a stronger book-to-bill moving forward. But net-net, I feel confident in both of the businesses, the ranges that we provided and where we are today with the book-to-bills.

回顧今年，我對這兩項業務都充滿信心。在早期研發領域，我們實際上看到來自大中型製藥公司的業務比早期製藥公司或早期生技公司的業務量更大。我認為，隨著我們逐步實現轉型，讓越來越多的大型製藥公司參與到早期研發中，我們未來將能夠擁有更強勁的訂單出貨比。但總體而言，我對這兩項業務、我們提供的產品範圍以及我們目前的訂單出貨比都充滿信心。

Yes, Patrick, just one other thing to think through as well. Again, we had a strong fourth quarter, which obviously is very encouraging, but it was still driven more on the central lab side. So while the orders and the RFPs and our win rates for even early development are doing well, it's those cancellations that have impacted it. So as you think about the cadence too for next year, when you look at the Biopharma, expect to be kind of a second half weighted year on the revenue growth. So both businesses, again, within that 5.5% to 7.5% growth, but because of those cancellations, we do expect to see early development, growth rate will be much stronger in the second half than the first, where on the central lab, given the continued strength of its backlog, we expect that normal cadence of improvement each quarter as we go.

是的，派崔克，還有一件事要考慮。我們第四季業績強勁，這顯然非常令人鼓舞，但這主要還是得益於中心實驗室的推動。因此，雖然訂單、招標書（RFP）以及我們早期研發的得標率都表現良好，但正是那些訂單取消的情況影響了業績。所以，考慮到明年的節奏，生物製藥業務預計下半年的收入成長將有所加權。這兩項業務的成長率都在5.5%到7.5%之間，但由於這些訂單取消的情況，我們預計下半年早期研發的成長率將遠高於上半年。而中心實驗室方面，鑑於其積壓訂單的持續強勁，我們預計每季都會保持正常的成長節奏。

And then just a couple of quick ones on the P&L for '24. Glenn, you talked a little bit about the diagnostics margins. Can you talk about what the COVID headwind is? I'm just trying to figure out maybe the core expansion versus the COVID headwind if you have that and then just quickly, the interest expense expectations for the year and how you're thinking about the debt load addressing that at all during '24?

然後，我簡單問一下2024年的損益表。格倫，您剛才談到了診斷業務的利潤率。能談談新冠疫情帶來的不利因素嗎？我想弄清楚核心業務擴張與新冠疫情帶來的不利因素之間的關係，如果有的話。然後，我想快速問一下，您預計今年的利息支出是多少，以及您如何考慮在2024年期間透過債務負擔來應對這些不利因素？

Again, we expect to see margins in both businesses that are up, but specifically in diagnostics, we do expect margins to be up in total diagnostics, albeit slightly up because of the impact, to your point, of COVID still being a headwind and the underlying base business margins doing well. But overall, we would say that we're going to be down around $130 million due to COVID from a margin standpoint. Call it, 20 to 30 basis points of kind of headwind that we're going to get that again will be more than offset by the growth of the business and our LaunchPad initiative.

再次強調，我們預計兩項業務的利潤率都會上升，尤其是在診斷業務方面，我們確實預計整體診斷業務的利潤率會上升，儘管上升幅度很小，因為正如您所說，新冠疫情仍然是一個不利因素，而且基礎業務的利潤率表現良好。但整體而言，從利潤率的角度來看，我們認為新冠疫情將導致我們的利潤率下降約1.3億美元。我們可能會再次面臨20到30個基點的不利因素，但這將被業務成長和我們的LaunchPad計畫所抵消。

When you look at the interest expense, you can effectively take the run rate where we ended the fourth quarter and kind of annualize that and then we do have around $1 billion of debt that's due late in 2024. So we're at $600 million in September, another $400 million in December. So we'll look to refinance it. The absolute debt levels that we have at that $5 billion, $5.1 billion we expect to maintain. So we'll just refinance at obviously slightly higher rates than what will be maturing. So if you wanted to add 10% to the annualized number on top of that to reflect the refinancings at the end of the year, that would be a decent ballpark to be in. And again, the debt load from where we stand, we'll look for refinancing. We commented a little bit earlier that the leverage that we have as a company is still within our targeted range of kind of the 2.5 to 3x, but we're at the lower end.

看看利息支出，你可以有效地計算我們第四季末的運行利率，然後進行年化，我們確實有大約10億美元的債務將於2024年底到期。所以9月的債務是6億美元，12月還有4億美元。所以我們會考慮再融資。我們目前的絕對債務水準是50億美元，預計會維持在51億美元。所以我們的再融資利率顯然會略高於到期利率。所以，如果你想在這個基礎上再增加10%的年化利率來反映年底的再融資情況，那將是一個不錯的估計。再次強調，就我們目前的債務負擔而言，我們會尋求再融資。我們之前提到過，我們公司的槓桿率仍然在2.5到3倍的目標範圍內，但目前處於較低水準。

So obviously, we could potentially use additional leverage, additional debt as we see potential other opportunities to deploy capital above the $1 billion plus of free cash flow that we'll generate this year plus we're sitting on a little bit of excess cash.

因此，顯然，我們可能會使用額外的槓桿和額外的債務，因為我們看到了其他潛在的機會，可以在我們今年產生的 10 億美元以上的自由現金流之上部署資本，而且我們還擁有一些多餘的現金。

Our next question comes from Brian Tanquilut with Jefferies.

我們的下一個問題來自 Jefferies 的 Brian Tanquilut。

So I guess my question, Glenn, as I think about the P&L lines, you got the cost of sales and G&A and factor in labor and obviously LaunchPad. How -- seeing that it outpaced -- both those (inaudible) outpaced revenue growth in Q4. How are we thinking about the -- I hear you about margin improvement this year. So just curious how you think about the labor environment and how that factors into driving margin improvement in terms of like actual dollars and the growth in those P&L lines?

所以，格倫，我的問題是，當我考慮損益表時，您考慮了銷售成本、一般及行政費用，以及人工成本，當然還有 LaunchPad。您怎麼會發現，這兩項（聽不清楚）的成長速度都超過了第四季的營收成長？您怎麼看待今年的利潤率成長？我聽說您提到了利潤率的提高。我很好奇您如何看待勞動環境，以及這些因素如何影響利潤率的提高（以實際美元計算）以及損益表的成長？

Brian, we normally view -- well, one, obviously, it continues to be a tight labor market, but a market that's improved. From an attrition standpoint, we continue to see improvement. But as a company, we're still higher than we were pre-pandemic, and that varies across the segments because actually our biopharma is back to where we've been, and we still see some additional pressure within the diagnostics side, but again, improving. Our general premise is that the labor market inflation for labor is around 3%, you can say 3% to 4%, but within that range. We've always commented that our LaunchPad initiative was really in place to help offset that inflationary pressure. For us, 3% give or take, increase in our labor, call it, merit in particular, would be a little bit over $100 million. And again, we target that $100 million to $125 million a year.

布萊恩，我們通常認為——首先，顯然，勞動市場仍然緊張，但情況有所改善。從人員流失的角度來看，我們持續看到改善。但作為一家公司，我們的員工人數仍然高於疫情前的水平，而且各個部門的情況有所不同，因為我們的生物製藥業務實際上已經恢復到了之前的水平，而診斷業務方面仍然面臨一些額外的壓力，但情況正在好轉。我們的總體假設是，勞動市場的勞動力通膨率約為3%，可以說是3%到4%，但在這個範圍內。我們一直表示，我們的LaunchPad計劃確實有助於抵消這種通膨壓力。對我們來說，3%左右的勞動力成長，尤其是績效工資的成長，將帶來略高於1億美元的收入。我們的目標是每年達到1億到1.25億美元。

So again, we think things are leveling off, if you will, and that part of the margin improvement will be the LaunchPad initiative to help offset those inflationary costs.

因此，我們再次認為情況正在趨於平穩，如果你願意的話，利潤率的提高將部分歸功於 LaunchPad 計劃，以幫助抵消通膨成本。

Understand, and then Glenn, maybe just housekeeping, may I just missed this. But share buybacks, how much are -- how much share buyback activity is baked into the guidance?

明白了。然後，格倫，也許只是一些日常事務，我可能漏掉了這一點。但是股票回購，有多少－有多少股票回購活動被納入了預期？

So what we do guide to is that the free cash flow generation that we have will be used for share repo, M&A and dividends. So it will be across the board would be our expectation. We don't comment about how much is in each of the components, if you will, because it may vary based upon the acquisition opportunities that we see. So -- but it will be blended across. And again, we commented as well that we have some additional balance sheet strength if we wanted to use that for additional M&A or buybacks. But the guidance that we gave in the earnings guidance, if you will, is reflected with all 3 of those capital allocation opportunities.

因此，我們的指導方針是，我們擁有的自由現金流將用於股票回購、併購和股利。因此，我們預計這將是全面的。我們不會評論每個組成部分的佔比，因為它可能會根據我們看到的收購機會而有所不同。所以——但它會混合使用。同樣，我們也提到，如果我們想將其用於額外的併購或回購，我們的資產負債表實力將會增強。但我們在獲利預測中給予的指引，如果你願意的話，應該會反映在這三個資本配置機會中。

Our next question comes from Pito Chickering with Deutsche Bank.

我們的下一個問題來自德意志銀行的 Pito Chickering。

Back on the '24 guidance, the Diagnostics business, can you sort of quantify the margin improvement next year? And any details on the split between SG&A and gross margin and how much is coming from acquisitions improving versus just pure organic improvements?

回到2024財年的指引，診斷業務，您能否量化明年的利潤率提升？能否詳細說明一下銷售、一般及行政費用（SG&A）和毛利率之間的比例？收購帶來的改善和純粹有機的成長分別佔比是多少？

So let me -- I'll give some context, and I'll ask Glenn to add on. So if you look at the Diagnostic business. I'd say the first thing is, if you look at fourth quarter, you saw a very strong revenue growth, about 8%. If you look at margin versus prior year, it was down slightly, about 30 basis points. What drove that primarily was that there were some minor things like increased healthcare costs and so forth. But it was driven primarily by the hospital deals that we did that, although they're accretive in the first year, in the first several months, they're typically dilutive. And we did several of those deals at the end of last year.

那麼，讓我先介紹一下背景狀況，然後請格倫補充。如果您看一下診斷業務，我想說的第一點是，如果您看一下第四季度，您會看到非常強勁的收入成長，大約8%。如果您看一下利潤率，與去年同期相比，它略有下降，大約30個基點。主要原因是一些小因素，例如醫療成本增加等等。但這主要還是由我們進行的醫院交易推動的，雖然這些交易在第一年會增值，但在頭幾個月，它們通常會稀釋利潤。我們在去年年底完成了幾筆這樣的交易。

As we come into this year, we're confident in the margin accretion for several reasons. One is, obviously, PAMA has been delayed. So that would have been a real headwind that we're not facing this year. We pushed that off into 2025. If you look at our volume increases, that's going to help us. The volume is going to be strong. If you look at the hospital deals, we said Ascension would continue to give us some margin improvement over the next several years. Each of the hospital deals get a bit better as we go year-over-year. So we'll get some improvement from the hospital deals continuing to improve. We're also going to be looking to reduce cost across the enterprise, but a significant amount because of the size is in diagnostics of $100 million to $125 million.

進入今年，我們對利潤率的成長充滿信心，原因有幾個。首先，PAMA 法案顯然被推遲了。這本來會對我們造成真正的阻礙，但我們今年沒有遇到。我們把它推遲到了 2025 年。從我們業務量的增加來看，這對我們有幫助。業務量將會非常強勁。從醫院交易來看，我們預計 Ascension 將在未來幾年繼續提升我們的利潤率。隨著我們逐年推進，每筆醫院交易都會有所改善。因此，醫院交易的持續改善將為我們帶來一些改善。我們也將尋求降低整個企業的成本，但由於規模龐大，診斷業務的成本將大幅降低，約 1 億至 1.25 億美元。

And when you look at all those things together with a we're expecting inflation to be about 3%, which is more than a typical rate than it's been in prior years. So if you kind of put all in that for inflation of our people costs and so forth, should be around 3%, 3.5%. You put all those together, and that's why we're confident, but even though we have a headwind from COVID, that's fairly significant of about $130 million, we'll still be able to get some margin improvement in the Diagnostics business.

綜合考慮所有這些因素，我們預期通膨率約為3%，這比往年的平均值要高。所以，如果把所有通膨因素，包括人力成本等等，都算進去，應該在3%到3.5%左右。綜合考慮所有這些因素，我們才充滿信心。即使新冠疫情為我們帶來了約1.3億美元的負面影響，我們仍然能夠提高診斷業務的利潤率。

I think that's right, Pito, that when you look this year as COVID becomes less of an impact, still it impacted. It's kind of being offset by the acquisitions that we did late in the year relates to hospital partnerships. And to your point, the margin is constrained a little bit when we do the in-hospital lab management agreements, but a typical M&A for us that would include hospital labs management tend to be more weighted to, frankly, the acquisition component. Ascension, as we've talked about, we called out one because of its sheer size, but also was disproportionately tied to the in-hospital lab. So less of an impact, a little bit of a headwind but less of an impact. So it's really top line growth, cost controls, LaunchPad business process improvement initiatives is really what's going to help drive the margins across both of our businesses.

皮托，我認為你說得對，今年新冠疫情的影響雖然有所減弱，但仍然有影響。這在一定程度上被我們年底進行的與醫院合作相關的收購所抵消。正如你所說，當我們簽訂院內實驗室管理協議時，利潤率會受到一些限制，但對於我們來說，典型的包含醫院實驗室管理的併購交易，坦白說，往往更側重於收購部分。正如我們之前提到的，Ascension 是其中之一，我們之所以點名它，是因為它規模龐大，而且它與院內實驗室的聯繫也過於緊密。所以它的影響較小，雖然有點阻力，但影響較小。因此，真正有助於提升我們兩家公司利潤率的是營收成長、成本控制以及 LaunchPad 業務流程改善計畫。

And then back on the -- for fourth quarter on the early-stage cancellations. Is there any color sort of why you saw that spike -- was that a single customer? Or is that sort of all the customers and so why you think that should normalize in 2024?

再回到第四季初期取消訂單的情況。您能解釋為什麼會出現這種激增嗎？是單一客戶的情況嗎？還是所有客戶的情況？您認為這種情況在2024年應該會恢復正常嗎？

And it wasn't specific to fourth quarter, although there was an increase in the fourth quarter. We saw it throughout last year. And we think there were several reasons. One, when there was an NHP supply issue, people were getting in line to run their NHP trials well in advance of what we typically would. By the time it was their turn, they would look and say, you know what, we're not going to do that trial, either they reprioritized the pipeline. They decided that NHP costs were higher than what they had budgeted for, they decided just not to move forward at that time.

雖然第四季有所成長，但這並非第四季特有的現象。去年全年都出現了這種情況。我們認為有幾個原因。首先，當NHP出現供應問題時，人們排隊進行NHP試驗的時間比我們通常的時間早得多。等到輪到他們的時候，他們會說，你知道嗎，我們不打算進行這項試驗了，或者他們重新調整了研發管線的優先順序。他們認為NHP的成本高於他們的預算，所以當時就決定不再推進了。

The second thing is the funding in smaller biotech has been more difficult. So they're choosing their trials very carefully in the compounds that they move forward. But as we go forward, we're seeing the RFPs look good as well as our win rates look good. So the cancellations, we believe, are going to normalize. We're also starting to see a shift in our business a bit more towards midsized to larger pharma as some of the smaller biotechs have had those cancellations, they have less cancellations typically than the smaller ones. So that's why we think we're going to see improvement as we go through this year.

第二點是小型生技公司的融資難度加大。因此，他們在選擇推進的化合物進行試驗時非常謹慎。但隨著我們不斷推進，我們看到招標書（RFP）的進展不錯，我們的中標率也很高。因此，我們相信，取消的情況將會正常化。我們也開始看到業務轉移到中型和大型製藥公司，因為一些小型生物技術公司也遭遇了類似的取消，但它們的取消率通常比小型公司低。因此，我們認為今年的情況會有所改善。

Our next question comes from Elizabeth Anderson with Evercore ISI.

我們的下一個問題來自 Evercore ISI 的 Elizabeth Anderson。

So I just want to follow up on that last question. So the shift towards mid-to-larger pharma in early development, is that really solely a function of the cancellation dynamic that you're seeing over the shorter term? Because I thought that maybe one of your prior comments, it seems like that was also maybe more of a strategic shift moving up market there. So any additional color there would be helpful. And then secondarily, on the cost improvements in BLS, I understand what you're saying about the continued revenue improvement there. Are there any other sort of cost improvements as we move further away from the spin or should we sort of think about those cost opportunities as largely you've already done them? And this is really just like an organic opportunity?

所以我想繼續回答最後一個問題。那麼，早期研發階段向中大型製藥公司的轉變，真的只是您在短期內看到的取消動態的結果嗎？因為我認為您之前的評論中提到過，這似乎也更像是一種向高端市場的策略轉變。所以任何補充細節都會有所幫助。其次，關於BLS的成本改進，我理解您所說的持續的收入成長。隨著我們進一步擺脫分拆，還有其他成本改進嗎？或者我們應該考慮那些成本改進機會，因為您基本上已經做過這些了？這真的是一個有機的機會嗎？

Sure. So as I think about the early development business, I've been saying for quite some time that we would like to see a shift towards more mid-to-larger size. And I want to be clear, it's not significant -- it's still more in a smaller biotech than it is to the mid-to-larger size. It's been something that we've been working on for multiple years now, and we're seeing some progress. But also a part of it is that cancellations are occurring more often in the smaller biotech companies. So we were purposely moving in that direction. There is a reason that we're able to move a little bit faster, but we still have work to do there. But over time, I would like to see that mix move more towards midsize to larger pharma.

當然。所以，說到早期開發業務，我一直在說，我們希望看到公司向中大型製藥公司轉型。我想明確一點，這並非意義重大——小型生物科技公司仍然比中大型製藥公司更容易出現這種情況。我們已經在這方面努力了好幾年，現在也看到了一些進展。但部分原因是小型生技公司取消訂單的情況更頻繁。所以我們有意朝著這個方向發展。我們能夠稍微加快速度是有原因的，但我們在這方面仍有許多工作要做。但隨著時間的推移，我希望看到公司業務結構更多地向中型和大型製藥公司轉變。

Elizabeth, also on the cost side for BLS, it's not only the growth, but there are cost opportunities kind of in the post-spin environment. We still have stranded costs that affect our Biopharma business that we're continuing to take out. And obviously, that's getting wrapped in our overall LaunchPad initiative as we talk to the $100 million to $125 million of savings each year. We did take out a meaningful amount of costs that were stranded. We had talked about having a $25 million run rate of cost savings in the fourth quarter, which we achieved. So we'll get the benefit of that going forward, but there's still opportunities to consolidate. We still have a little bit of excess capacity within our early development side of the business. So we're managing that cost and the capacity leaving ample room though, because of the expectation that we're going to start to see good growth in that business as well. But it's not only obviously top line growth, but still opportunities to take some costs out.

伊莉莎白，關於BLS的成本方面，不僅是成長，在分拆後的環境中也存在一些成本削減機會。我們仍然有一些擱淺成本影響著我們的生物製藥業務，我們正在繼續削減這些成本。顯然，這些成本也包含在我們整體的LaunchPad計劃中，我們正在討論每年節省1億到1.25億美元。我們確實削減了相當一部分擱淺成本。我們之前談到第四季的成本節省運行率為2500萬美元，我們做到了。因此，我們將在未來受益，但仍有機會進行整合。我們的早期開發業務仍有一些產能過剩。因此，我們正在管理這些成本和產能，並留出充足的空間，因為我們預計該業務也將開始實現良好的成長。但這顯然不僅關乎營收成長，也仍有機會削減一些成本。

And maybe just one quick follow-up. Anything you can comment on the expected 2024 tax rate?

還有一個快速的後續問題。您對 2024 年的預期稅率有什麼看法？

Yes. So we've kind of guided that we think a 23% adjusted tax rate is reasonable for the company. And what's interesting, if you think about LabCorp today post spin, we actually have a higher percentage of our earnings now that are generated in lower tax rate jurisdictions than we did when we had the clinical business.

是的。所以我們大致認為23%的調整後稅率對公司來說是合理的。有趣的是，如果你回顧一下LabCorp分拆後的現狀，你會發現我們現在在低稅率地區產生的收益比例實際上比我們開展臨床業務時更高。

In addition, we have a higher percentage of R&D. So a higher percentage of R&D benefit than we did when we had clinicals. So overall, while we historically have trended and seen our tax rate decline year-to-year over the last few years, the profile of the company gives us confidence that the 23% rate now is a sustainable rate, plus or minus going forward.

此外，我們的研發投入比例更高。也就是說，研發收益的比例比我們進行臨床試驗時更高。因此，總體而言，雖然我們的稅率在過去幾年呈現逐年下降的趨勢，但公司目前的狀況讓我們有信心，目前23%的稅率是一個可持續的稅率，未來可能會有所增減。

Next question comes from Eric Coldwell with Baird.

下一個問題來自貝爾德的 Eric Coldwell。

Of course, all of my self-proclaimed good questions have just been asked in the last couple of minutes here, but I'm going to dive into that last one on R&D tax credit. Can you tell us what specifically might have happened in the fourth quarter to drive what appears to be some additional upside? And thoughts on legal or regulatory changes in addition to Glenn's comments here about the geographic mix and the higher proportion of revenue associated with businesses that now would get an R&D tax credit.

當然，我自認為好的問題都在過去的幾分鐘裡被問過了，但我打算深入探討最後一個關於研發稅收抵免的問題。您能否告訴我們，第四季具體發生了什麼，推動了看似額外的成長？除了格倫在這裡提到的地域分佈以及現在將獲得研發稅收抵免的企業收入佔比更高的問題之外，您能否談談對法律或監管變化的看法？

I'm just curious on how much of a sustainable impact this might be for favorable long-term tax rate?

我只是好奇這對優惠的長期稅率會產生多大可持續的影響？

So Eric, when you think about the focus of the company, one of the key areas of target is in oncology. And obviously, with PGDX, OmniSeq, other areas that we've acquired as well are more R&D driven than historically LabCorp was. So each year, we continue to make more investments, more opportunities. And with that increased investment come the tax deductibility of that. Obviously, there's still some pending tax laws that are out there. Right now, we're going to amortize that benefit over a number of years. From a cash standpoint, we're kind of prefunding it. So hopefully, we'll get -- that will change and we'll get more.

Eric，說到公司的發展重點，腫瘤學是公司的關鍵目標領域之一。顯然，除了PGDX、OmniSeq之外，我們收購的其他領域也比LabCorp以往更加重視研發。因此，我們每年都會繼續增加投資，創造更多機會。隨著投資的增加，我們還可以享受稅收減免。當然，目前還有一些稅法尚未出爐。目前，我們將分幾年攤還這筆收益。從現金角度來看，我們算是預先籌資。希望情況會有所改變，我們能獲得更多收益。

There's obviously the impact of potentially global minimum taxes that really don't affect us that much, given as we look at where, again, geographically, we generate our earnings really not going to have any meaningful impact. So from a sustainability standpoint, we think that 23% plus or minus rate is a reasonable rate to go forward. But obviously, the more we grow, the more we grow internationally gives us an opportunity to structurally change that maybe a little bit more favorably as well.

顯然，潛在的全球最低稅率對我們影響不大，考慮到我們的獲利來源地，這實際上不會對我們產生任​​何重大影響。因此，從永續發展的角度來看，我們認為23%的上下浮動稅率是合理的。但顯然，我們的成長越快，國際業務的成長就越快，這給了我們一個結構性調整的機會，或許也能帶來更有利的影響。

And Glenn, maybe education on my behalf, but are you seeing R&D tax credits on the CRO side as well, the BLS segment? Or is it mostly or entirely associated with your internal investments in advanced diagnostics and LDTs, things of that sort?

Glenn，也許我指的是教育，但您是否也認為CRO（生技服務）部門（BLS）的研發稅收抵免會有效？或者說，這主要或全部與您在先進診斷和實驗室診斷（LDT）等方面的內部投資有關？

Yes. I mean it's across the board. We have investments that span the entire company. I think the increase that we've been seeing that has been driving the more favorable amount has been driven more on the diagnostics side. But frankly, our oncology spans the enterprise. So everything that we work on and where we work on it and who's working on it, again, we would say is across the enterprise, but more weighted to diagnostics.

是的。我的意思是，它是全方位的。我們的投資涵蓋整個公司。我認為，我們看到的、推動更有利金額成長的成長，更多是在診斷領域。但坦白說，我們的腫瘤學業務涵蓋整個企業。所以我們所做的一切，以及我們在哪裡開展工作，以及誰在參與工作，我們都會說，是涵蓋整個企業的，但診斷業務的權重更大。

And if I could get one more in here. The stranded costs commentary, could you just remind us what you're sharing in terms of what those total costs were, how they phase out? And what happens at the end of 2024 when Fortrea thinks they're going to be completing their biggest TSA transitions, particularly on the IT side. I'm just -- what is the impact to LabCorp over the next handful of quarters and into '25 as you face these stranded costs, but they start to come out? And then what happens at the end of the TSAs?

我想再補充一點。關於擱淺成本的評論，您能否回顧一下您分享的內容，這些總成本是多少，它們是如何逐步取消的？到2024年底，當Fortrea認為他們將完成其最大的TSA轉型，尤其是在IT方面時，會發生什麼？我只是想知道——在接下來的幾季以及2025年，當LabCorp面臨這些擱淺成本，但它們開始顯現出來時，這會對他們產生什麼影響？ TSA結束後會發生什麼事？

Sure, Eric. So from the stranded costs, we commented that we had around $45 million of stranded costs and that our initial target was to take out that $25 million at a run rate this year, which again, we've achieved. So there's more to come. So in the fourth quarter, call it, around a $6 million headwind that we had due to stranded costs that obviously impact margins. As we go forward with the TSA support, so what we're doing to support Fortrea, IT and other areas, that's effectively a pass-through, right? We're providing the service, they're paying us for that service. Once they're fully sustainable on their own and the TSAs would go away, our costs go away because, frankly, most of the costs are contract labor related on the IT side. So when the job is done, those costs are gone overall. But we continue to tackle the other stranded costs as well. So when you look at it, the goal was to have all the TSAs completed within 2 years. I can tell you, Fortrea and LabCorp are both very motivated to see and incentivized to see that transition happen as soon as possible.

當然，埃里克。關於擱淺成本，我們之前提到過，我們有大約4500萬美元的擱淺成本，我們最初的目標是今年按運行率扣除這2500萬美元，現在我們也已經實現了這個目標。所以未來還會有更多。第四季度，由於擱淺成本，我們面臨的阻力約為600萬美元，這顯然會影響利潤率。隨著我們推進TSA支持，也就是我們為Fortrea、IT和其他領域提供支持，這實際上是一種成本轉嫁，對吧？我們提供服務，他們為我們支付服務費。一旦他們完全自給自足，TSA也隨之消失，我們的成本也會隨之減少，因為坦白說，大部分成本都與IT方面的合約工有關。所以，當工作完成後，這些成本大致上就消失了。但我們也在繼續處理其他擱淺成本。所以，我們的目標是在兩年內完成所有TSA。我可以告訴你，Fortrea 和 LabCorp 都非常希望看到這種轉變盡快發生。

The good news is that both are focused on it. We're making good progress. Fortrea is making very good progress, and we would expect to hopefully see those TSAs expire earlier than what we had planned or at least what we had planned for. But again, the costs will go with that.

好消息是，雙方都專注於此。我們正在取得良好進展。 Fortrea 的進展非常好，我們希望這些 TSA 比我們計劃的更早到期，或至少比我們計劃的更早到期。但同樣，成本也會隨之增加。

Our next question comes from Lisa Gill with JPMorgan.

下一個問題來自摩根大通的麗莎吉爾。

I first wanted to start with the guidance range. Glenn, can you help us understand, it's a pretty wide range. What's the low end of the range and what gets you to the upper end of the range would be my first question. And then secondly, I just want to understand managed care contracting and pricing for 2024. You talked about volume and pricing mix, but just curious as to do you have many contracts that are up for renewal? Is there anything that's different when we think about contracting with managed care entities?

我首先想從指導範圍開始。格倫，您能幫我們理解嗎？這個範圍相當廣。我的第一個問題是，這個範圍的下限是多少？上限是多少？其次，我想了解2024年的管理式醫療合約和定價。您談到了數量和定價組合，但我好奇的是，你們有很多合約需要續約嗎？與管理式醫療實體簽訂合約有什麼不同嗎？

Yes. So I'll take the second one first, which is we feel confident in our contracts that we had to put a few in place last year, but this year, there's no major expiration. So we feel good about where we are, and there's not much risk in the guidance range as we go through this year into next. But with regard to the ranges and certain things that go to the upper end of the range, I mean, obviously, (inaudible) -- I'll start with the revenue range. Obviously, the Diagnostic volume looks great, and we're expecting that to continue. The weather is a bit of what's taking us a little bit back to that midpoint. So the weather is $0.10 to $0.15 impact, but the volume continues to be very, very strong. The rate in which we integrate the hospital deals will help us, and we have a very good track record of doing that. But the good news is there's not as much volatility this year as there has been in years in the past with COVID. So I feel good about the range. And in fact, the EPS range, we've narrowed it versus what that means would have been last year or the year before that because there is that volatility.

是的。所以我先說第二個問題，我們對去年簽訂的一些合約很有信心，但今年沒有重大合約到期。所以我們對目前的狀況感到滿意，從今年到明年，在指導範圍內沒有太大風險。至於範圍，以及某些達到範圍上限的因素，我的意思是，顯然，（聽不清楚）──我先從收入範圍說起。顯然，診斷業務的銷售看起來很棒，我們預計這種情況會持續下去。天氣因素在一定程度上使我們的銷量略微回到中間點。天氣的影響在0.10美元到0.15美元之間，但銷售仍然非常強勁。我們整合醫院交易的速度將對我們有所幫助，我們在這方面有著非常良好的記錄。好消息是，今年的波動不像過去幾年新冠疫情那麼劇烈。所以我對這個範圍感到滿意。事實上，由於存在波動性，我們已經將每股盈餘範圍與去年或前年的每股盈餘範圍進行了縮小。

And then I'd say in the Biopharma services business, I would say the strength we have and momentum is great. The thing that we're watching carefully are when the cancellations, in particular in the early development start to come back to more normal.

我想說，在生物製藥服務業務方面，我們的實力和發展勢頭都很棒。我們密切關注的是，尤其是在早期研發階段，專案取消的情況何時會逐漸恢復正常。

And Lisa, I think on Adam's comment that when you look at the profile of LabCorp now that we've spun the clinical development business, it has taken out some of the volatility and variability, if you will. So the guidance ranges really across the businesses and the enterprise are actually a little bit tighter than what we normally do. Obviously, we're just starting out the year, the midpoint, obviously, our guidance is our best expectation that we have realizing, obviously, higher demand would promote more on the upper end or softer demand down below. But needless to say, as we go through the year, we'll continue to tighten the ranges with less time left in the year.

Lisa，我想就Adam的評論來說，當你回顧LabCorp的概況時，我們已經剝離了臨床開發業務，這消除了一些波動性和多變性。因此，我們各個業務和企業的指導範圍實際上比我們通常的要窄一些。顯然，我們才剛開始新的一年，中點指導是我們目前最好的預期，我們意識到，更高的需求顯然會促進高端市場的需求，而低端市場的需求則會減弱。但毋庸置疑，隨著時間的流逝，我們將繼續收緊指導範圍，因為今年剩下的時間已經不多了。

(Operator Instructions) Our next question comes from Derik De Bruin with Bank of America.

（操作員指示）我們的下一個問題來自美國銀行的 Derik De Bruin。

This is John Kim on for Derik. I think a lot of the key questions I had have been answered, but I wanted to ask about the esoteric versus routine testing you've laid out or you reaffirmed your focus on the 4 therapeutic areas and it seems like esoteric had a pretty good growth in the fourth quarter. But going forward, can we continue to expect that high single-digit, low-double-digit growth in esoteric and then the rest of it would be made up in routine?

我是 John Kim，Derik 的節目主持人。我想很多關鍵問題都已經回答了，但我想問一下您之前提到的特殊治療和常規檢測的區別，或者您之前重申了對四大治療領域的關注，而且特殊治療在第四季度似乎取得了不錯的增長。但展望未來，我們能否繼續預期特殊治療的銷售額將維持高個位數或低兩位數的成長，而其餘的成長將由常規治療彌補？

Yes. So if you look at the esoteric testing volume, we continue to have a significant focus on the 4 therapeutic areas that we talked about. And we did, in fact, see in the fourth quarter and the full year that esoteric testing volume grew slightly faster than the routine. But a stronger note that both of them grew strongly, and we expect them to continue to both grow strongly, but we would expect esoteric to grow at a slightly higher rate in both volume and the volume obviously is at higher dollars, so maybe a little bit faster in the dollars.

是的。所以，如果你看一下特製測試量，我們會繼續專注於我們之前提到的四個治療領域。事實上，我們在第四季和全年確實看到特製測試量的成長略快於常規測試。但更值得注意的是，這兩項測試都成長強勁，我們預計它們將繼續保持強勁成長。但我們預計特製測試量的成長速度會略高一些，而且顯然，測試量的成長是以更高的金額計算的，所以以金額計算，可能會更快一些。

And then in terms of pricing, you mentioned that you're expecting mostly flat pricing in 2024. There are no major contract renewals coming up and PAMA has obviously been pushed out. But if I look at the margins between Biopharma and Diagnostics, Biopharma had a pretty strong margin compared to the Diagnostics in the fourth quarter. And you mentioned that there's going to be a slight expansion in Diagnostics. What -- what's going to be the dynamic between the 2 for the full year 2024? Can we -- is the fourth quarter a good jumping off point for the biopharma margins?

然後，關於定價，您提到預計2024年價格基本持平。目前沒有重大合約續簽，PAMA顯然也延後了。但如果我看一下生物製藥和診斷之間的利潤率，就會發現第四季度生物製藥的利潤率比診斷的利潤率相當高。您提到診斷的利潤率會略有成長。那麼，2024年全年，這兩個部門的利潤率會如何改變？第四季是生物製藥利潤率的一個好起點嗎？

I wouldn't use any one quarter for the margins. We expect the margins to actually improve across the business, across both Diagnostics and Biopharma. Diagnostics in the fourth quarter was impacted to some degree by the hospital integrations that we're doing, that there were several new ones. And although they're accretive in the first year, they were dilutive in the first couple of months. We expect that to improve as we go into next year. As we go to next year, there's still a COVID overhang in the Diagnostics business, probably about $130 million or so. But even with that, we expect to get some slight margin improvement in that business and overcome that.

我不會用任何一個季度來衡量利潤率。我們預計整個業務的利潤率都會提高，包括診斷業務和生物製藥業務。第四季度的診斷業務在一定程度上受到了我們正在進行的醫院整合的影響，當時有幾家新的醫院。雖然這些整合在第一年帶來了利潤成長，但在前幾個月卻帶來了稀釋。我們預計這種情況在進入明年後會有所改善。進入明年，診斷業務仍面臨新冠疫情帶來的額外影響，大概約1.3億美元。但即便如此，我們預計該業務的利潤率仍會略有提高，並最終克服這些影響。

So in closing, I know it's the end of the hour. I just want to thank everybody for joining us today. I want to thank our team here at LabCorp for their focus and dedication and everything that they do to serve the patients that we all are trying to do the best we can to improve health and to improve lives, and we look forward to sharing more with you as we go through the year. Thank you.

最後，我知道今天下午的節目快結束了。我只想感謝大家今天加入我們。我要感謝LabCorp團隊的專注和奉獻，以及他們為病人服務所做的一切。我們都在盡力改善患者健康，改善他們的生活。我們期待在新的一年與大家分享更多。謝謝大家。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝您參加今天的會議。今天的節目到此結束。您可以斷開連線了。