Q2 2024 Earnings
Presentation
08.12.2024

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Fortrea Q2’2024 Earnings presentation

FORWARD-LOOKING STATEMENTS & NON-GAAP FINANCIAL MEASURES
Forward-Looking Statements Disclosure. Certain information in this presentation contains “forward-looking” statements. You should not place undue reliance on these statements. Forward-looking
statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include words such as“believe”, “expect”, “approximately”, “anticipate”, “intend”, “plan”, “estimate”, “seek”, “will”, “should”, “could”, “may” or the negative thereof or variations thereon or similar expressions that are
predictions of or indicate future events or trends. These statements are based on certain assumptions that we have made in light of our experience in the industry as well as our perceptions ofhistorical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. As you read and consider this presentation, you should
understand that these statements are not guarantees of performance or results and that actual future results may vary materially. They involve risks, uncertainties and assumptions. Many factors
could affect our actual financial results and could cause actual results to differ materially from those expressed in the forward-looking statements, including among other things, the current positivemarket and customer response to us; our ability to leverage our competitive advantages to achieve or exceed market growth rates; our reliance on our former parent company, Laboratory
Corporation of America Holdings to provide financial reporting and other financial and information for periods prior to the spin-off through the end of the relevant transition agreements, as well as IT,
accounting, finance, legal, human resources, and other services critical to our businesses; our dependence on third parties generally to provide services critical to our businesses throughout thetransition period and beyond; our ability to establish and develop our accounting, enterprise resource planning, and other management systems post the transition period, which could cost more or
take longer than anticipated; our ability to successfully implement our business strategies, improve margins, and execute our long-term value creation strategy; risks and expenses associated with
our international operations and currency fluctuations; our customer or therapeutic area concentrations; any further deterioration in the macroeconomic environment, which could lead to defaults orcancellations by our customers; the risk that our backlog and net new business may not be indicative of our future revenues and we might not realize all of the anticipated future revenue reflected inour backlog; our ability to generate sufficient net new business awards, or if net new business awards are delayed, terminated, reduced in scope, or fail to go to contract; the risk that we mayunderprice our contracts, overrun our cost estimates, or fail to receive approval for, or experience delays in documentation of change orders; our ability to realize the full benefits from the divestitureof Endpoint Clinical and Fortrea Patient Access businesses; and other factors described from time to time in documents that we file with the U.S. Securities and Exchange Commission (the “SEC”),
including any updates or amendments thereof. For a further discussion of the risks relating to our business, see the “Risk Factors” Section of our Annual Report on Form 10-K (the “Form 10-K”), as
filed with the SEC.​
In light of these risks, uncertainties and assumptions, the forward-looking statements contained in this presentation might not prove to be accurate and you should not place undue reliance uponthem. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only
as of the date made, and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures. This presentation contains discussions of certain financial measures, such as EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Net
Debt, Net Leverage and Free Cash Flow, which are non-GAAP financial measures. Non-GAAP financial measures are presented only as a supplement to the Company’s financial statements basedon GAAP. Non-GAAP financial information is provided to enhance understanding of the Company’s financial and operational performance and cash flow, but none of these non-GAAP financial
measures are recognized terms under GAAP, and non-GAAP measures should not be considered in isolation from, or as a substitute analysis for, the Company’s results of operations as determinedin accordance with GAAP. The Company believes these adjusted measures are useful to investors as a supplement to, but not as a substitute for, GAAP measures, in evaluating the Company’s
operational performance and cash-flow. The Company further believes that the use of these non-GAAP financial measures provides an additional tool for investors in evaluating operating results andtrends, growth, indebtedness, cash-flow and shareholder returns, as well as in comparing the Company’s financial results with the financial results of other companies. However, the Company notesthat these adjusted measures may be different from and not directly comparable to the measures presented by other companies. Because not all companies use identical calculations, ourpresentation of these non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. For example, in calculating Adjusted EBITDA, the Company
excludes all the amortization of intangible assets associated with acquired customer relationships and backlog, databases, non-compete agreements and trademarks, trade names and other from
non-GAAP expense and income measures as such amounts can be significantly impacted by the timing and size of acquisitions.

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Fortrea Q2’2024 Earnings presentation2

Fortrea’s Q2’24 Highlights
Doubled Adjusted EBITDA in Q2 vs Q1
Divested non-core businesses; paid down $504M of debt in Q2
Missed book-to-bill target in Q2 on slower biotech decisions. TTM book-to-bill 1.16x

Key wins in top 20 large pharma and biotechs across therapeutic areas
Solid demand environment – value of RFPs increased across both large pharma and biotech,strong pipeline in H2
Sustained focus on cost structure and margin expansion:• ~60% of TSA services1 exited at end of Q2'24• Executing against SG&A reduction roadmap
1 Transition services agreement with former parent
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Fortrea Q2’2024 Earnings presentation3

Fortrea’s Program for Change:
Significant Opportunity to Create Shareholder Value

Leverage Competitive Advantages
to Lay Foundation for Growth in ‘23✓ Leverage existing scale, skills andcapabilities✓ Selective further organic
investments to differentiate✓ World-class customer relationshipdevelopment

Improve Margins & Optimize
the Business in '24✓ Continued execution of growthand operational initiatives

Disciplined Strategy to
Drive Long-term Growth & Margins✓ Positioned for sustained long-term
growth✓ Investing for further differentiation✓ Exit TSAs with fit-for-purpose
infrastructure✓ Operating within industry leading
delivery cost structures✓ Begin to align SG&A to benchmarks✓ Move to 2.5x to 3.0x leverage✓ Improve workforce productivity

Margin optimization program underway to increase EBITDA margins through 2024 and beyond
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Fortrea Q2’2024 Earnings presentation4

Q2’24– Key Financial Highlights
Continuing Operations
Q2 2023

Q2 2024% Change

Revenue$725.1$662.4(8.6)%

Adj. EBITDA 1

$71.9

$55.2

(23.2)%

9.9%

8.3%

Net Income (Loss)$25.0$(99.3)(497.2)%Net Income (Loss) / diluted share$0.28$(1.11)(496.4)%

Adj. Net Income (Loss) 1$46.1$(2.3)(105.0)%Adj. Net Income (Loss) / diluted
share 1

$0.52$(0.03)(105.8)%Ending Backlog$6,977$7,366

5.6%($ in millions, except per share data)% Adj. EBITDA Margin 1

1 Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income/share are non-GAAP financial measures. Please see slides 10 through 13 for a reconciliation to the most comparable GAAP number.
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Cash Flow and Liquidity Profile
Cash Flow 1 and Liquidity($ in millions)$248.1

Less: CAPEX($20.5)Liquidity 3($ in millions)2024

Operating Cash Flow 1

Free Cash Flow 2

Debt and Leverage

YTD Q2$227.6$576.2June 30
2024

Gross Debt 4$1,142.0

Cash 5$126.2

Net Debt 6$1,015.8

Net Leverage 7

4.9x

Net DSO from continuing
operations 8

54 days

1 The cash flows related to discontinued operations have not been segregated and are included in the cash flow-related amounts shown above.
2 Free Cash Flow, a non-GAAP measure, is equal to Operating Cash Flow less Capital Expenditures;
3 Liquidity equals cash plus available borrowing capacity under the $450M revolving credit facility.
4 Debt includes long-term and current notes, term loans and revolving credit facility balance, excluding debt issuance discount and fees.
5 Cash is defined as Cash and Cash Equivalents;
6 Net Debt, a non-GAAP measure, is defined as Debt less Cash;
7 Net leverage, a non-GAAP measure, is defined as Net Debt divided by TTM adj. EBITDA. TTM adj. EBITDA as of June 30, 2024, was $209.4 million. Please see slide 10 for a reconciliation to the most comparable GAAP number for Q2 2024.
8 Net Days Sales Outstanding (DSO) reflects Revenue, net, and is based on accounts receivable and unbilled services, less allowance for credit losses, and unearned revenue. Includes impact of accounts receivable sale under A/R Securitization facility signed in Q2 2024.

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Fortrea Q2’2024 Earnings presentation

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2024 Financial GuidanceContinuing Operations
Q2’24 Actuals

FY’24 Guidance 1(as of August 12th, 2024)($ in millions)

Revenue$662.4$2,700 - $2,750

Adj. EBITDA2$55.2$220 - $240

1 Full-year 2024 guidance measures (other than revenue) are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measure because Fortrea is unable to predict with a reasonable degree of certainty certain items contained in the GAAP
measures without unreasonable efforts. Such items include, but are not limited to, acquisition-related expenses, restructuring and related expenses, stock-based compensation and other items not reflective of Fortrea’s ongoing operations.
2 Adjusted EBITDA is a non-GAAP financial measure. Please see slide 10 for a reconciliation to the most comparable GAAP number for Q2 2024.

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Fortrea Q2’2024 Earnings presentation

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Reduced Debt Through Divestment and Securitization
Debt

Outstandingat Q1’24

DivestiturePrepayment

Securitization
Funding1

Outstandingat Q2’24

7.5% Sr. Notes due 2030

$570.0$0.0$0.0$570.0Term Loan A due 2028

$481.3($64.0)$0.0$417.3

Term Loan B due 2030

$565.7($211.0)($200.0)$154.7

Revolver Outstanding

$29.0

$0.0

($29.0)$0.0

Total Debt Outstanding2$1,646.0($275.0)($229.0)$1,142.0($ in millions)

Reduced Total Debt by $504M and Estimated Annual Total Cash Interest and Securitization Costs by ~$24M
1 The Company’s $300M securitization facility is a sale of Accounts Receivable and does not constitute debt.
2 Debt includes long-term and current notes, term loans and revolving credit facility balance, excluding debt issuance discount and fees.

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Fortrea Q2’2024 Earnings presentation8

Illustrative 2024 Sequential Adjusted EBITDA Margin1 Bridge$m+55 to +75
33% to 45%
220-240~15-25~40-50
165
+28
+104%

55
7

21
27

Q1 24

Service Fee
Revenue Growth

MarginOptimization
Program

Q2 24

Using H1 Run
Rate for FY

1 Adjusted EBITDA Margin is a non-GAAP financial measure. See slide 10 for a reconciliation to the most comparable GAAP number
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Fortrea Q2’2024 Earnings presentation

9

Service Fee
Revenue Growth

Margin Optimization
Program

FY 2024

Net Income to Adjusted EBITDA Reconciliation (Non-GAAP)
Continuing Operations($ in millions)
Adjusted EBITDA from continuing operations:
Net income (loss) from continuing operations
Provision for income taxes
Interest expense, net
Depreciation and amortization 1
EBITDA from continuing operations
Foreign exchange (gain) loss
Restructuring and other charges 2
Stock based compensation
Disposition-related costs 3
One-time spin related costs 4
Customer matter 5
Enabling Services Segment costs not included in discontinued
operations 6
Other 7
Adjusted EBITDA for continuing operations
Adjusted EBITDA Margin from continuing operations:
Revenue from continuing operations
Adjusted EBITDA Margin from continuing operations

Trailing Twelve Months
Ended June 30, 2024

Three Months Ended June 30,
2024
2023

Six Months Ended June 30,
2024
2023

$(243.8)
2.9
148.6
88.3
(4.0)
6.5
34.0
54.2

$(99.3)
10.7
45.2
21.4
(22.0)
1.5
11.0
15.4

$25.0
11.6
0.7
23.4
60.7
(5.2)
3.6
8.8

$(179.1)
14.8
79.5
43.3
(41.5)
6.8
14.4
28.9

$33.0
13.1
0.6
44.3
91.0
0.0
4.2
15.1

1.4
102.2
13.0

1.4
53.9
0.4

0.0
0.0
0.0

1.4
70.9
4.3

0.0
0.0
0.0

17.8

2.5

4.2

7.3

8.7

(15.7)$209.4

(8.9)
$55.2

(0.2)
$71.9

(10.2)$82.3(0.3)$118.7$2,748.0
7.6%$662.48.3%$725.19.9%$1,324.5
6.2%$1,419.0
8.4%

Note: The financial information included herein includes immaterial adjustments to the Company’s previously reported financial information. Please see the Company’s Quarterly Report on Q1 2024 Form 10-Q, when filed with the Securities and Exchange Commission, for more
information regarding these revisions.
1 Includes amortization of intangible assets acquired as part of business acquisitions.
2 Restructuring and other charges represent amounts incurred in connection with the elimination of redundant positions to reduce overcapacity, align resources, and restructure certain operations.
3 Disposition-related costs are short-term incremental costs to support the Transition Services Agreement associated with the sale of the Enabling Services Segment.
4 Represents one-time or incremental costs required to implement capabilities to exit Transition Services Agreement with former parent.
5 As part of working with a customer, the Company has agreed to make concessions and provide discounts and other consideration to the customer as part of a multi-party solution.
6 These adjustments remove the impact of the Enabling Services Segment, which the Company sold in the second quarter of 2024.
7 Includes the recognition of a contingent consideration payment on a sale of a facility recorded in the second quarter of 2024 and income related to services provided under Transition Services Agreements.
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Fortrea Q2’2024 Earnings presentation

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Net Income to Adjusted Net Income Reconciliation (Non-GAAP)
Continuing Operations($ in millions)
Adjusted net income (loss) from continuing operations:
Net income (loss) from continuing operations
Foreign exchange (gain) loss
Amortization 1
2

Restructuring and other charges
Stock based compensation
Disposition-related costs 3
One-time spin related costs 4
Customer matter 5
Enabling Services Segment costs not included in discontinued
operations 6
Other 7
Income tax impact of adjustments 8
Adjusted net income (loss) from continuing operations

Basic shares
Adjusted basic earnings (loss) per share from continuing
operations
Diluted shares
Adjusted diluted earnings (loss) per share from continuing
operations

Three Months Ended June 30,
2024
2023

Six Months Ended June 30,
2024
2023

$(99.3)
1.5

$25.0
(5.2)

$(179.1)
6.8

$33.0
0.0

15.1

15.4

30.4

30.4

11.0
15.4
1.4
53.9
0.4

3.6
8.8
0.0
0.0
0.0

14.4
28.9
1.4
70.9
4.3

4.2
15.1
0.0
0.0
0.0

2.5

4.2

7.3

8.7

(8.9)
4.7
$(2.3)

(0.2)
(5.5)
$46.1

(10.2)
17.7$(7.2)(0.3)(12.0)
$79.1

89.4

88.8

89.3

88.8

$(0.03)$0.52$(0.08)

$0.89

89.4

88.8

89.3

88.8

$(0.03)$0.52$(0.08)$0.89

Note: The financial information included herein includes immaterial adjustments to the Company’s previously reported financial information. Please see the Company’s Quarterly Report on Q1 2024 Form 10-Q, when filed with the Securities and Exchange Commission, for more
information regarding these revisions.
1 Includes amortization of intangible assets acquired as part of business acquisitions.
2 Restructuring and other charges represent amounts incurred in connection with the elimination of redundant positions to reduce overcapacity, align resources, and restructure certain operations.
3 Disposition-related costs are short-term incremental costs to support the Transition Services Agreement associated with the sale of the Enabling Services Segment.
4 Represents one-time or incremental costs required to implement capabilities to exit Transition Services Agreement with former parent.
5 As part of working with a customer, the Company has agreed to make concessions and provide discounts and other consideration to the customer as part of a multi-party solution.
6 These adjustments remove the impact of the Enabling Services Segment, which the Company sold in the second quarter of 2024.
7 Includes the recognition of a contingent consideration payment on a sale of a facility recorded in the second quarter of 2024 and income related to services provided under Transition Services Agreements.
8 Income tax impact of adjustments calculated based on the tax rate applicable to each item.
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2023 Net Income to Adjusted EBITDA Reconciliation (Non-GAAP)
Continuing Operations($ in millions)Three Months Ended
June 30, 2023
September 30, 2023

March 31, 2023

December 31, 2023

Twelve Months Ended
December 31, 2023

Adjusted EBITDA from continuing operations:
Net income (loss) from continuing operations
Provision for income taxes
Interest expense, net
Depreciation and amortization 1
EBITDA from continuing operations
Foreign exchange (gain) loss
Restructuring and other charges 2
Stock based compensation
Disposition-related costs 3
One-time spin related costs 4
Customer matter 5
Enabling Services Segment costs not included indiscontinued operations 6
Other
Adjusted EBITDA for continuing operations

$8.0

$25.0

$(16.1)$(48.6)$(31.7)

1.5
(0.1)
20.9
30.3

11.6
0.7
23.4
60.7

(5.8)
34.6
22.8
35.5

(6.1)
34.5
22.2
2.0

1.2
69.7
89.3
128.5

5.2
0.6
6.3
0.0
0.0
0.0
4.5

(5.2)
3.6
8.8
0.0
0.0
0.0
4.2

1.2
12.7
10.5
0.0
6.1
0.0
5.4

(1.5)
6.9
14.8
0.0
25.2
8.7
5.1

(0.3)
23.8
40.4
0.0
31.3
8.7
19.2

(0.1)
$46.8

(0.2)
$71.9

(3.2)
$68.2

(2.3)
$58.9

(5.8)
$245.8$693.9$725.1$713.8$709.7$2,842.5

6.7%

9.9%

9.6%

8.3%

8.6%

Adjusted EBITDA Margin from continuing operations :Revenue from continuing operations
Adjusted EBITDA Margin from continuing operations

Note: The financial information included herein includes immaterial adjustments to the Company’s previously reported financial information. Please see the Company’s Quarterly Report on Q1 2024 Form 10-Q, when filed with the Securities and Exchange Commission, for more
information regarding these revisions.
1 Includes amortization of intangible assets acquired as part of business acquisitions.
2 Restructuring and other charges represent amounts incurred in connection with the elimination of redundant positions to reduce overcapacity, align resources, and restructure certain operations.
3 There were no disposition-related costs in 2023.
4 Represents one-time or incremental costs required to implement capabilities to exit Transition Services Agreement with former parent.
5 As part of working with a customer, the Company has agreed to make concessions and provide discounts and other consideration to the customer as part of a multi-party solution.
6 These adjustments remove the impact of the Enabling Services Segment, which the Company sold in the second quarter of 2024.
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2023 Net Income to Adjusted Net Income Reconciliation (Non-GAAP)
Continuing Operations($ in millions)
Adjusted net income (loss) from continuing operations:Three Months Ended
June 30, 2023
September 30, 2023

March 31, 2023

December 31, 2023

Twelve Months Ended
December 31, 2023

Net income (loss) from continuing operations

$8.0

$25.0

$(16.1)$(48.6)$(31.7)

Foreign exchange (gain) loss
Amortization 1
Restructuring and other charges 2
Stock based compensation
Disposition-related costs 3
One-time spin related costs 4
Customer matter 5

5.2
15.0
0.6
6.3
0.0
0.0
0.0

(5.2)
15.4
3.6
8.8
0.0
0.0
0.0

1.2
15.3
12.7
10.5
0.0
6.1
0.0

(1.5)
15.2
6.9
14.8
0.0
25.2
8.7

(0.3)
60.9
23.8
40.4
0.0
31.3
8.7

Enabling Services Segment costs not included in discontinued operations 6

4.5

4.2

5.4

5.1

19.2

Other
Income tax impact of adjustments 7
Adjusted net income (loss) from continuing operations

(0.1)
(6.5)
$33.0

(0.2)
(5.5)
$46.1

(3.2)
(11.8)$20.1(2.3)(10.6)$12.9(5.8)(34.4)$112.1

Basic shares 8

88.8

88.8

88.8

88.8

88.8

Adjusted basic earnings (loss) per share from continuing operations

$0.37

$0.52

$0.23

$0.15

$1.26

Diluted shares

88.8

88.8

89.2

89.7

89.0

Adjusted diluted earnings (loss) per share from continuing operations

$0.37

$0.52

$0.23

$0.14

$1.26

Note: The financial information included herein includes immaterial adjustments to the Company’s previously reported financial information. Please see the Company’s Quarterly Report on Q1 2024 Form 10-Q, when filed with the Securities and Exchange Commission, for more
information regarding these revisions.
1 Includes amortization of intangible assets acquired as part of business acquisitions.
2 Restructuring and other charges represent amounts incurred in connection with the elimination of redundant positions to reduce overcapacity, align resources, and restructure certain operations.
3 There were no disposition-related costs in 2023.
4 Represents one-time or incremental costs required to implement capabilities to exit Transition Services Agreement with former parent.
5 As part of working with a customer, the Company has agreed to make concessions and provide discounts and other consideration to the customer as part of a multi-party solution.
6 These adjustments remove the impact of the Enabling Services Segment, which the Company sold in the second quarter of 2024.
7 Income tax impact of adjustments calculated based on the tax rate applicable to each item.
8 On June 30, 2023, the Separation from former parent was effectuated through a pro-rata distribution of one share of the Company's common stock for every share of Labcorp common stock held at the close of business on the record date of June 20, 2023. As a result, on June 30,
2023, the Company had 88.8 M shares of common stock outstanding. This share amount is being utilized for Q1 2023 for the calculation of basic earnings per share for all periods presented through the Separation date. Additionally, there are no dilutive instruments for Q1 2023.
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