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YORK\n----------------------------------- x\nLUCAS DESLANDE, Individually and on Behalf:\nof All Others Similarly Situated, :\n : Civil Action No. 1:25-cv-04630-KPF\n Plaintiff, :\n :\n vs. :\n :\nFORTREA HOLDINGS INC., THOMAS PIKE,:\nand JILL MCCONNELL, :\n :\n Defendants. :\n :\n----------------------------------- x\n\n\n\n\nDEFENDANTS\u2019 REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF THEIR\n MOTION TO DISMISS THE AMENDED COMPLAINT\n\n\n\n\n Susan L. Saltzstein\n Robert A. Fumerton\n Jeffrey S. Geier\n Eryn M. Hughes\n SKADDEN, ARPS, SLATE,\n MEAGHER & FLOM LLP\n One Manhattan West\n New York, New York 10001\n (212) 735-3000\n\n Attorneys for Defendants Fortrea Holdings Inc.,\n Thomas Pike, and Jill McConnell\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 2 of 18\n\n\n\n\n TABLE OF CONTENTS\n\n Page\n\nTABLE OF AUTHORITIES ............................................................................................................ ii\n\nPRELIMINARY STATEMENT........................................................................................................1\n\n A. The PSLRA Safe Harbor Applies ............................................................................1\n\n B. Plaintiffs\u2019 TSA Allegations Fail ..............................................................................3\n\n C. Plaintiffs\u2019 PSP Allegations Fail ...............................................................................5\n\n D. Statements of Corporate Optimism or Opinion Are Not Actionable .......................7\n\n E. Plaintiffs Fail to Adequately Allege Scienter ..........................................................7\n\n F. Plaintiffs Fail to Plead Loss Causation ..................................................................10\n\nCONCLUSION ...............................................................................................................................11\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 3 of 18\n\n\n\n\n TABLE OF AUTHORITIES\n\n CASES Page(s)\n\nIn re Adient plc Securities Litigation,\n No. 18-CV-9116 (RA), 2020 WL 1644018 (S.D.N.Y. Apr. 2, 2020), aff\u2019d sub\n nom. Bristol County Retirement System v. Adient, No. 20-3846-cv, 2022 WL\n 2824260 (2d Cir. 2022) ............................................................................................1, 2, 3, 4\n\nIn re Allergan PLC Securities Litigation,\n No. 18 Civ. 12089 (CM), 2019 WL 4686445 (S.D.N.Y. Sept. 20, 2019) ...........................6\n\nIn re AppHarvest Securities Litigation,\n 684 F. Supp. 3d 201 (S.D.N.Y. 2023)..................................................................................9\n\nArkansas Public Employees Retirement System v. Bristol-Myers Squibb Co.,\n 28 F.4th 343 (2d Cir. 2022) .................................................................................................2\n\nATSI Communications, Inc. v. Shaar Fund, Ltd.,\n 493 F.3d 87 (2d Cir. 2007).................................................................................................11\n\nIn re Avon Securities Litigation,\n No. 19 Civ. 01420 (CM), 2019 WL 6115349 (S.D.N.Y. Nov. 18, 2019) ...........................7\n\nBishins v. CleanSpark, Inc.,\n No. 21 CV 511 (LAP), 2023 WL 112558 (S.D.N.Y. Jan. 5, 2023) ...................................10\n\nBratusov v. Comscore, Inc.,\n No. 19 Civ. 3210 (KPF), 2020 WL 3447989 (S.D.N.Y. June 24, 2020) .............................4\n\nChapman v. Mueller Water Products, Inc.,\n 466 F. Supp. 3d 382 (S.D.N.Y. 2020)..................................................................................9\n\nConstruction Industry & Laborers Joint Pension Trust v. Carbonite, Inc.,\n 22 F.4th 1 (1st Cir. 2021) .....................................................................................................8\n\nCity of Pontiac General Employees\u2019 Retirement System v. Lockheed Martin Corp.,\n 875 F. Supp. 2d 359 (S.D.N.Y. 2012)..................................................................................8\n\nIn re Dentsply Sirona, Inc. Securities Litigation,\n No. 24 Civ. 9083 (NRB), 2026 WL 124581 (S.D.N.Y. Jan. 16, 2026) ...............................9\n\nECA, Local 134 IBEW Joint Pension Trust of Chicago v. JPMorgan Chase Co.,\n 553 F.3d 187 (2d Cir. 2009).................................................................................................7\n\nIn re Fed Ex Corp. Securities Litigation,\n 517 F. Supp. 3d 216 (S.D.N.Y. 2021)..................................................................................4\n\n\n ii\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 4 of 18\n\n\n\n\nGauquie v. Albany Molecular Research, Inc.,\n No. 14 CV 6637 (FB) (SMG), 2016 WL 4007591 (E.D.N.Y. July 26, 2016).....................8\n\nIn re Hi-Crush Partners L.P. Sec. Litig,\n No. 12 Civ. 8557(CM), 2013 WL 6233561 (S.D.N.Y. Dec. 2, 2013) .................................9\n\nJackson v. Abernathy,\n 960 F.3d 94 (2d Cir. 2020)...................................................................................................9\n\nKalnit v. Eichler,\n 264 F.3d 131 (2d Cir. 2001).................................................................................................7\n\nLachman v. Revlon, Inc.,\n 487 F. Supp. 3d 111 (E.D.N.Y. 2020) .................................................................................5\n\nLentell v. Merrill Lynch & Co.,\n 396 F.3d 161 (2d Cir. 2005)...............................................................................................10\n\nMacquarie Infrastructure Corp. v. Moab Partners, L.P.,\n 601 U.S. 257 (2024) .............................................................................................................4\n\nMartinek v. AmTrust Financial Services, Inc.,\n No. 19 Civ. 8030 (KPF), 2020 WL 4735189 (S.D.N.Y. Aug. 14, 2020) ............................2\n\nMeyer v. Jinkosolar Holdings Co.,\n 761 F.3d 245 (2d Cir. 2014).................................................................................................5\n\nNandkumar v. AstraZeneca PLC,\n No. 22-2704-cv, 2023 WL 3477164 (2d Cir. May 16, 2023) ..............................................9\n\nNew Orleans Employees Retirement System v. Celestica, Inc.,\n 455 F. App\u2019x 10 (2d Cir. 2011) .......................................................................................8, 9\n\nNguyen v. New Link Genetics Corp.,\n 297 F. Supp. 3d 472 (S.D.N.Y. 2018), aff\u2019d in part, vacated in part sub nom.\n Abramson v. NewLink Genetics Corp., 965 F.3d 165 (2d Cir. 2020) ..................................7\n\nIn re Nortel Networks Corp. Securities Litigation,\n 238 F. Supp. 2d 613 (S.D.N.Y. 2003)..................................................................................5\n\nNoto v. 22nd Century Group, Inc.,\n 35 F.4th 95 (2d Cir. 2022) .................................................................................................11\n\nIn re NovaGold Resources Inc. Securities Litigation,\n 629 F. Supp. 2d 272 (S.D.N.Y. 2009)..............................................................................2, 4\n\nNovak v. Kasaks,\n 216 F.3d 300 (2d Cir. 2000).................................................................................................8\n\n iii\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 5 of 18\n\n\n\n\nIn re Omega Healthcare Investors, Inc. Securities Litigation,\n 563 F. Supp. 3d 259 (S.D.N.Y. 2021)................................................................................10\n\nIn re Omnicom Group, Inc. Securities Litigation,\n 597 F.3d 501 (2d Cir. 2010)...............................................................................................10\n\nPlymouth Cnty. Ret. Ass\u2019n v. Array Techs. Inc.,\n 2026 WL 810180 (2d Cir. Mar. 24, 2026) ...........................................................................2\n\nPrime Mover Capital Partners L.P. v. Elixir Gaming Technologies, Inc.,\n 548 F. App\u2019x 16 (2d Cir. 2013) ...................................................................................10, 11\n\nRombach v. Chang,\n 355 F.3d 164 (2d Cir. 2004).................................................................................................4\n\nSan Antonio Fire & Police Pension Fund v. Dentsply Sirona,\n 732 F. Supp. 3d 300 (S.D.N.Y. 2024)..................................................................................9\n\nIn re Scholastic Corp. Securities Litigation,\n 252 F.3d 63 (2d Cir. 2001)...................................................................................................5\n\nSEC v. Farnsworth,\n 692 F. Supp. 3d 157 (S.D.N.Y. 2023)..................................................................................8\n\nSet Capital LLC v. Credit Suisse Group AG,\n 996 F.3d 64 (2d Cir. 2021)...................................................................................................4\n\nSetzer v. Omega Healthcare Investors, Inc.,\n 968 F.3d 204 (2d Cir. 2020).................................................................................................4\n\nShemian v. Research In Motion Ltd.,\n No. 11 Civ. 4068(RJS), 2013 WL 1285779 (S.D.N.Y. Mar. 29, 2013), aff\u2019d, 570\n F. App\u2019x 32 (2d Cir. 2014) ..................................................................................................5\n\nSherman v. Abengoa, S.A.,\n 156 F.4th 152 (2d Cir. 2025) ...............................................................................................9\n\nIn re Signet Jewelers Ltd. Securities Litigation,\n No. 16 Civ. 6728 (CM) (RWL), 2019 WL 3001084 (S.D.N.Y. July 10, 2019) ................10\n\nSlayton v. American Express Co.,\n 604 F.3d 758 (2d Cir. 2010).................................................................................................2\n\nIn re Turquoise Hill Resources Ltd. Securities Litigation,\n 625 F. Supp. 3d 164 (S.D.N.Y. 2022)..................................................................................7\n\nWang v. Cloopen Group Holding Ltd.,\n 661 F. Supp. 3d 208 (S.D.N.Y. 2023)..............................................................................2, 6\n\n iv\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 6 of 18\n\n\n\n\nzCap Equity Fund LLC v. LuxUrban Hotels Inc.,\n 792 F. Supp. 3d 407 (S.D.N.Y. 2025)..................................................................................9\n\n\n\n\n v\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 7 of 18\n\n\n\n\n PRELIMINARY STATEMENT\n\n The Opposition1 attempts to convert protected forward-looking statements into\n\nguarantees of future performance by selectively rewriting Fortrea\u2019s disclosures. But Fortrea\n\nnever promised immediate cost savings the instant TSAs were exited, nor did it guarantee that it\n\nwould not discover, years in the future, that PSPs might burn more slowly than expected.\n\nInstead, Fortrea provided forward-looking expectations of future savings as it moved into built-\n\nfor-purpose systems and disclosed its backlog of multi-year contracts. Plaintiffs have not\n\nidentified any actionable misstatement or omission in Fortrea\u2019s actual disclosures. Although the\n\nCourt need not reach additional defects, the Complaint fails to plead particularized facts giving\n\nrise to a strong inference of scienter, or adequately allege loss causation.\n\n ARGUMENT\nA. The PSLRA Safe Harbor Applies\n\n Plaintiffs continue to elide that the statements they challenge concern expected future\n\nSG&A efficiencies, anticipated margin improvements, targeted EBITDA levels, and expected\n\nbenefits from exiting the TSAs\u2014statements that are forward-looking on their face. (Opp. at 15-\n\n17.) That a single vendor relationship (Cognizant) allegedly did not lead to immediate cost\n\nsavings does not make the statements any less forward-looking or make the statements false\n\nwhen made. See In re Adient plc Sec. Litig., 2020 WL 1644018, at *18-19 (S.D.N.Y. Apr. 2,\n\n2020) (statements about projected margin expansion and being \u201con track\u201d were forward-looking\n\neven where based in part on anticipated improvement in one segment), aff\u2019d, Bristol Cnty. Ret.\n\n\n\n\n1\n Capitalized terms have the meanings ascribed to them in Defendants\u2019 Memorandum of Law (ECF No. 64)\n (\u201cBrief\u201d or \u201cBr.\u201d). \u201cOpposition\u201d or \u201cOpp.\u201d refers to Plaintiffs\u2019 Memorandum of Law in Opposition (ECF No.\n 68). All citations and internal quotation marks are omitted, and all emphases in quotations are added, unless\n otherwise indicated.\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 8 of 18\n\n\n\n\nSys. v. Adient, 2022 WL 2824260 (2d Cir. July 20, 2022). Plaintiffs likewise offer no cogent\n\nexplanation as to why Fortrea\u2019s backlog statements are not forward-looking. Their bald assertion\n\nthat backlog would not provide \u201cmeaningful revenue\u201d is unsupported and contrary to the\n\nallegations in the Complaint. (Compare \u00b659-61; with Opp. at 16.)\n\n Contrary to Plaintiffs\u2019 assertions (Opp. at 16), the statements were accompanied by\n\nspecific and directly applicable cautionary language. (Br. at 10; Ex. B at 4, 50.) And, as\n\nexplained, the statements are forward-looking and not rendered false by uncontextualized\n\nallegations concerning short-term budget overruns by a single vendor.2 The cautionary language\n\neasily satisfies the PSLRA requirements. See Plymouth Cnty. Ret. Ass\u2019n v. Array Techs. Inc.,\n\n2026 WL 810180, at *2 (2d Cir. Mar. 24, 2026); Ark. Pub. Emps. Ret. Sys. v. Bristol-Myers\n\nSquibb Co., 28 F.4th 343, 354-55 (2d Cir. 2022).3\n\n Finally, Plaintiffs fail to adequately allege that any Defendant had actual knowledge that\n\nthe forward-looking statements were false when made. (Br. at 11-12.) As explained, Plaintiffs\u2019\n\nconclusory assertions and inferential leaps fail to satisfy the standard for pleading scienter, much\n\nless the \u201cstricter\u201d actual knowledge standard. Slayton v. Am. Express Co., 604 F.3d 758, 773 (2d\n\nCir. 2010).\n\n\n\n\n2\n In re NovaGold Resources Inc. Sec. Litig., 629 F. Supp. 2d 272, 299-301 (S.D.N.Y. 2009) concerned statements\n about cost overruns, not projections about future margin improvements. Wang v. Cloopen Grp. Holding Ltd.,\n 661 F. Supp. 3d 208, 228 (S.D.N.Y. 2023) involved alleged concealment of a key metric that had already\n \u201cplummeted.\u201d\n3\n Martinek v. AmTrust Financial Servs., Inc., 2020 WL 4735189 (S.D.N.Y. Aug. 14, 2020) (Failla, J.) does not\n advance Plaintiffs\u2019 argument. There, the reasons for a company\u2019s decision to delist its stock\u2014administrative\n costs and a new ownership structure\u2014were within defendants\u2019 control and known when they allegedly\n misrepresented their \u201cexpectations.\u201d Id. at *14.\n\n\n 2\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 9 of 18\n\n\n\n\nB. Plaintiffs\u2019 TSA Allegations Fail\n\n Plaintiffs\u2019 Opposition repeats the same mistaken theory that because Labcorp provided\n\nTSA services at cost, exiting the TSAs \u201cwould cause SG&A to improve.\u201d (Opp. at 9.) Plaintiffs,\n\nhowever, identify no actual statement that was false when made, relying instead on hindsight\n\ncriticism that Fortrea\u2019s projections proved too optimistic. See In re Adient, 2020 WL 1644018, at\n\n*13-15.\n\n Among other things, Fortrea explained that improvements in SG&A would \u201ccome in\n\nphases over the next few years\u201d (\u00b6212) and that Fortrea was moving \u201ctowards a more fit-for-\n\npurpose infrastructure\u201d that would generate efficiencies \u201cover time.\u201d (\u00b6\u00b6208, 218, 239, 241; see\n\nalso Br. at 12-16.) Sidestepping the actual disclosures, Plaintiffs recast them, arguing\n\n\u201cDefendants misrepresented that they had developed a plan to decrease Fortrea\u2019s [SG&A] . . . by\n\nthe end of 2024, through exiting \u2018burdensome\u2019 [TSAs].\u201d (Opp. at 1.) But the disclosures\n\nPlaintiffs cite tell a different story: Fortrea was \u201cworking to mitigate\u201d \u201cheadwinds\u201d (\u00b6222), stated\n\nthat \u201cexiting those TSAs at the tail end of this year will give us that opportunity for 2025\u201d\n\n(\u00b6230), and saw \u201csignificant potential to expand margins by reducing SG&A expense as a\n\npercentage of revenue over time once we fully exit the TSA services.\u201d (\u00b6239). Nowhere do\n\nPlaintiffs identify any statement that exiting the TSAs would result in immediate cost savings by\n\nthe end of 2024\u2014nor do they grapple with Defendants\u2019 repeated statements tying margin targets\n\nto revenue growth (\u00b6\u00b6226, 237)\u2014or anything else rendered false by their allegations.\n\n Plaintiffs attempt to manufacture falsity by pointing to Fortrea\u2019s acknowledgment of the\n\nCognizant contract, and that \u201cjust six days later . . . McConnell represented that Fortrea\n\npersonnel had been \u2018tasked with coming back with a replacement system or technology or\n\nprocess [for the TSAs] that [would be] more cost effective.\u2019\u201d (Opp. at 9-10.) There is no\n\ndisconnect. On January 4, 2024, Fortrea explained that Cognizant had been retained to\n 3\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 10 of 18\n\n\n\n\n\u201cfacilitat[e] a smooth switch and the establishment of the global Fortrea infrastructure.\u201d (\u00b6141.)\n\nHiring Cognizant to assist in developing the post-TSA environment is consistent with working to\n\ndevelop more \u201ccost effective\u201d systems for use in that environment.4 Indeed, Plaintiffs\n\nacknowledge there would be a future cost savings from the Cognizant engagement. (\u00b6159.)\n\nAccordingly, Plaintiffs\u2019 allegations are insufficient to state a claim. See In re Adient, 2020 WL\n\n1644018, at *14-15; In re Fed Ex Corp. Sec. Litig., 517 F. Supp. 3d 216, 231-32 (S.D.N.Y.\n\n2021); see also Rombach v. Chang, 355 F.3d 164, 173-74 (2d Cir. 2004).5\n\n Plaintiffs\u2019 alternate theory that there was a duty to disclose that the TSAs supposedly\n\nwould be replaced by similar costs (Opp. at 12) fares no better. The duty to tell the \u201cwhole truth\u201d\n\nextends to facts necessary to make what was said not misleading, not to \u201call the facts that pertain\n\nto a subject.\u201d Setzer v. Omega Healthcare Invs., Inc., 968 F.3d 204, 214 n.15 (2d Cir. 2020). It\n\ndid not require disclosure of alleged budget overages for a short time when discussing future\n\nexpectations from the resultant systems. See Macquarie Infrastructure Corp. v. Moab Partners,\n\nL.P., 601 U.S. 257, 264 (2024); Bratusov v. Comscore, Inc., 2020 WL 3447989, at *10-13\n\n(S.D.N.Y. June 24, 2020) (Failla, J.).\n\n\n\n\n4\n Plaintiffs argue that the decrease in SG&A expense in the first quarter of 2025 cuts against Fortrea\u2019s argument\n because \u201c[e]ven as TSA costs trended down, SG&A as a percentage of revenue remained elevated.\u201d (Opp. at\n 11, n.4.) Plaintiffs\u2019 chart, however, demonstrates that the ratio of SG&A to revenue also fell, consistent with\n Fortrea\u2019s forward looking expectations. (\u00b684.) Plaintiffs also continue to overlook that prior to exiting the TSAs,\n Fortrea was simultaneously paying for legacy TSA services and investing in the development of replacement\n systems. (See Br. at 5-6; Ex. A at 73 tbl. n.4.) As Fortrea ran off the TSAs, it would no longer be paying for two\n systems. And by developing its own fit-for-purpose systems, Fortrea expected the replacement infrastructure to\n be more efficient than the legacy systems that had been designed for a different business.\n5\n Plaintiffs\u2019 cases are inapposite. Set Cap. LLC v. Credit Suisse Grp. AG, 996 F.3d 64, 85 (2d Cir. 2021) involved\n defendants that \u201cknew with virtual certainty\u201d that they planned to trigger an acceleration event. In re NovaGold,\n 629 F. Supp. 2d 272, 279, 300, involved a company that knowingly relied on a false feasibility study while costs\n were \u201cspiraling\u201d to more than double the estimate and then used that study to defeat a hostile takeover and\n launch a secondary IPO. Setzer v. Omega Healthcare Invs., Inc., 968 F.3d 204, 214 n.15 (2d Cir. 2020),\n involved a \u201cconscious decision not to disclose\u201d that the company\u2019s largest tenant\u2019s rental payments were funded\n by a $15 million loan from the company itself.\n\n\n 4\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 11 of 18\n\n\n\n\nC. Plaintiffs\u2019 PSP Allegations Fail\n\n Plaintiffs do not dispute the accuracy of Fortrea\u2019s disclosed backlog figures, nor that\n\nFortrea had contracts extending over multiple years, just as it disclosed. (Br. at 17-18.) Instead,\n\nciting Meyer v. JinkoSolar Holdings Co.,6 they complain that Fortrea should have disclosed that\n\ncertain PSPs allegedly were \u201clate in their lifecycle\u201d with \u201cdiminishing profitability.\u201d (Opp. at\n\n13.)7 This argument fails for multiple reasons.\n\n First, Plaintiffs have not pleaded particularized facts showing that Fortrea knew how\n\nthese projects would perform years in the future. See Shemian v. Rsch. In Motion Ltd., 2013 WL\n\n1285779, at *21 (S.D.N.Y. Mar. 29, 2013) (rejecting omission theory where plaintiffs failed to\n\nplead facts showing defendants then knew of future product defects because securities laws do\n\nnot require corporate officials to be \u201cclairvoyant\u201d), aff\u2019d, 570 F. App\u2019x 32 (2d Cir. 2014); accord\n\nLachman v. Revlon, Inc., 487 F. Supp. 3d 111, 130 (E.D.N.Y. 2020). Plaintiffs attempt to leap\n\nfrom a disclosed review of the backlog before August 2023 to knowledge that there would be a\n\nslower burn on certain contracts in 2025, but they offer no particularized allegation that the pre-\n\nClass Period review identified that future profitability would be lower than forecasted. Plaintiffs\u2019\n\nreliance on In re Nortel Networks Corp. Sec. Litig., 238 F. Supp. 2d 613, 626-28 (S.D.N.Y.\n\n2003), is misplaced. That case involved GAAP violations and an unrecognized $12.5 billion\n\nimpairment where defendants were specifically informed that orders would be significantly\n\nreduced.\n\n\n6\n Meyer involved affirmative statements directly contradicted by known existing environmental violations. 761\n F.3d 245 at 251-52. Here, Plaintiffs do not allege that Fortrea\u2019s accurate backlog disclosures were contradicted\n by any concealed present fact.\n7\n Plaintiffs concede that one of the statements they challenge predates the class period but claim it is nevertheless\n actionable citing In re Scholastic Corp. Sec. Litig., 252 F.3d 63, 72 (2d Cir. 2001). But Scholastic concerned the\n use of a pre-class period statement to show \u201cdefendants had a basis for knowing\u201d statements were false. Id.\n\n\n\n\n 5\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 12 of 18\n\n\n\n\n FE1 does not assist Plaintiffs. (Opp. at 14, 23, citing \u00b6\u00b673-74.) FE1 does not allege that\n\nFortrea\u2019s disclosed backlog figures were inaccurate. FE1\u2019s assertion that the PSPs had \u201clittle\n\nwork left on them\u201d (\u00b673) does not support the inference that the projects were not accurately\n\nreflected in Fortrea\u2019s disclosed metrics and forecasts. FE1\u2019s claim that the PSPs were \u201cnot\n\nproducing enough revenue to carry the Company\u201d (Id.) is beside the point. And FE1\u2019s personal\n\ndesire for \u201cmore color on the Company\u2019s pipeline of new contracts\u201d (\u00b674) concerns sales, not the\n\naccuracy of the disclosed backlog.8\n\n Next, Plaintiffs seek to dismiss Fortrea\u2019s specific warning that backlog is \u201cnot\u201d a\n\n\u201cconsistent indicator of future revenue\u201d and is affected by \u201cthe variable size and duration of\n\nprojects\u201d (Ex. B at 50) as \u201cboilerplate.\u201d (Opp. at 14.) But the risk that materialized in 2025, i.e., a\n\nslower burn, is just the risk about which Fortrea warned. (See Br. at 18.) Plaintiffs do not plead\n\nany particularized facts demonstrating that Fortrea knew at the time it made the challenged\n\nstatements that backlog would perform differently than expected.\n\n Finally, the information Plaintiffs claim should have been disclosed is disconnected from\n\nFortrea\u2019s actual statements regarding the existence of the backlog and that contracts extended\n\nover multiple years\u2014both facts that Plaintiffs do not contest. (See Br. at 19 (citing cases).) That\n\ncertain contracts would later turn out to burn more slowly than expected does not render any of\n\nFortrea\u2019s truthful statements inaccurate or incomplete.9\n\n\n\n8\n Although Plaintiffs are correct that they have alleged that FE1 was employed by Labcorp and Fortrea for 21\n years (Opp. at 14), that does nothing to expand the allegations attributed to FE1, which do not establish the\n falsity of any of Fortrea\u2019s statements about its backlog.\n9\n In re Allergan PLC Sec. Litig. does not support Plaintiffs\u2019 argument. There, Allergan\u2019s implants were already\n \u201cspecifically associated\u201d with lymphoma at higher than market rates when \u201cAllergan\u2019s disclosures suggest[ed]\n the opposite.\u201d 2019 WL 4686445, at *23 (S.D.N.Y. Sept. 20, 2019). Likewise, Wang involved the omission of a\n key metric that had already seriously declined. Wang, 661 F. Supp. 3d at 228. Here, by contrast, Plaintiffs do\n not meaningfully contest the accuracy of Fortrea\u2019s disclosed backlog figures or the multi-year nature of the\n underlying contracts.\n\n\n 6\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 13 of 18\n\n\n\n\nD. Statements of Corporate Optimism or Opinion Are Not Actionable\n\n Plaintiffs\u2019 attempt to recharacterize statements about the \u201cattractive\u201d backlog (\u00b6206),\n\n\u201cconfidence and visibility\u201d into future revenues (\u00b6200), and Fortrea as a \u201clong-term value\n\ncreation opportunity\u201d (\u00b6204) as actionable misrepresentations fails. These are quintessential\n\nstatements of corporate optimism or opinion that could not have misled investors. (See Br. at 20.)\n\nPlaintiffs\u2019 own authority is consistent. See Nguyen v. New Link Genetics Corp., 297 F. Supp. 3d\n\n472, 488-89 (S.D.N.Y. 2018) (expressions of \u201cconfiden[ce]\u201d were inactionable puffery).\n\nLikewise, while Plaintiffs concede that several challenged statements were statements of opinion\n\n(Opp. at 18), they seek to avoid the consequence by conclusorily claiming Defendants knew the\n\nopinions to be false\u2014a theory that fails for the reasons discussed.\n\n Plaintiffs alternatively claim that \u201ccontext\u201d or \u201crepetition\u201d makes the statements more\n\ndefinite. Unlike in the cases they cite, the context of Fortrea\u2019s statements did not provide any\n\nunique reassurance or definiteness that would change their status. See In re Avon Sec. Litig.,\n\n2019 WL 6115349, at *16 (S.D.N.Y. Nov. 18, 2019) (statement of \u201cstrong team in place\u201d when\n\n\u201cth[at] team was currently presiding over the self-inflicted debt crisis\u201d), In re Turquoise Hill Res.\n\nLtd. Sec. Lit., 625 F. Supp. 3d 164, 223 (S.D.N.Y. 2022) (statement of \u201cprogress\u201d contained in\n\nsame release that disclosed delays).\n\nE. Plaintiffs Fail to Adequately Allege Scienter\n\n Plaintiffs concede they have not alleged motive. (Opp. at 24 n.13.) Absent motive, \u201cthe\n\nstrength of the circumstantial allegations must be correspondingly greater.\u201d Kalnit v. Eichler,\n\n264 F.3d 131, 142 (2d Cir. 2001). Plaintiffs do not meet their burden of alleging conduct that is\n\n\u201chighly unreasonable\u201d and \u201crepresents an extreme departure from the standards of ordinary\n\ncare.\u201d ECA, Loc. 134 IBEW Joint Pension Tr. of Chicago v. JPMorgan Chase Co., 553 F.3d 187,\n\n202-03 (2d Cir. 2009).\n\n 7\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 14 of 18\n\n\n\n\n Plaintiffs have not pleaded that Defendants \u201cknew or recklessly disregarded\u201d information\n\ncontradicting their public statements. (Opp. at 19-20.) As explained, purported knowledge that a\n\nsingle vendor was over budget for a short time does not establish the falsity of statements about\n\nexpected future cost savings. (Br. at 24.) Nor does a review of backlog in 2023 establish that\n\nFortrea knew certain PSPs would burn more slowly than forecasted in 2025. (Id. at 17-18.)\n\nPlaintiffs\u2019 allegations stand in contrast to the facts alleged in the cases they cite. See Novak v.\n\nKasaks, 216 F.3d 300, 311-12 (2d Cir. 2000) (defendants knew of and \u201crefused\u201d to mark down\n\n\u201cserious inventory problems\u201d); SEC v. Farnsworth, 692 F. Supp. 3d 157, 187 (S.D.N.Y. 2023)\n\n(Failla, J.) (defendants possessed information, issued communications, and took actions directly\n\n\u201ccontradicting\u201d public statements).\n\n Plaintiffs\u2019 \u201cspecificity\u201d argument fares no better. (Opp. at 19.) Plaintiffs have not\n\nconnected any purported contrary internal information to Fortrea\u2019s statements. Contra City of\n\nPontiac Gen. Emps.\u2019 Ret. Sys. v. Lockheed Martin Corp., 875 F. Supp. 2d 359, 372 (S.D.N.Y.\n\n2012) (projections and performance contradicted by internal information); Gauquie v. Albany\n\nMolecular Rsch., Inc., 2016 WL 4007591, at *2-*3 (E.D.N.Y. July 26, 2016) (guidance after a\n\nknown contamination event had already impaired output); Constr. Indus. & Laborers Joint\n\nPension Tr. v. Carbonite, Inc., 22 F.4th 1, 4, 9 (1st Cir. 2021) (software allegedly \u201cdid not even\n\nwork\u201d); New Orleans Emps. Ret. Sys. v. Celestica Inc., 455 F. App\u2019x 10, 14 (2d Cir. 2011)\n\n(defendants directly informed of inventory buildup).\n\n The FE allegations do not move the needle. Alleged budget overages for one vendor\n\n(FE1) and a three-year cost model (FE2) are consistent with, not contradictory to, Fortrea\u2019s\n\n\n\n\n 8\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 15 of 18\n\n\n\n\ndisclosures. (Br. at 23-24.)10 Plaintiffs have not identified any \u201cspecific information made\n\navailable to the Individual Defendants demonstrating that their statements were false,\u201d as they\n\nacknowledge is necessary. (Opp. at 21.) Plaintiffs\u2019 citations underscore the deficiency. See In re\n\nDentsply Sirona, Inc. Sec. Litig., 2026 WL 124581, at *16 (S.D.N.Y. Jan. 16, 2026) (internal\n\ndatabases and reports contradicted public compliance representations and FDA reporting); cf.\n\nNandkumar v. AstraZeneca PLC, 2023 WL 3477164, at *4 (2d Cir. May 16, 2023)\n\n(distinguishing Celestica where \u201callegations lack[ed] specificity as to what information the\n\nIndividual Defendants allegedly knew\u201d).11\n\n The core operations doctrine (Opp. at 23) cannot independently establish scienter. (See\n\nBr. at 22.) Plaintiffs\u2019 cases confirm the doctrine can only \u201csupport\u201d an already-strong inference.\n\nSee San Antonio Fire & Police Pension Fund v. Dentsply Sirona, 732 F. Supp. 3d 300, 319-20\n\n(S.D.N.Y. 2024); In re Hi-Crush Partners L.P. Sec. Litig, 2013 WL 6233561, at *26 (S.D.N.Y.\n\nDec. 2, 2013). Pike\u2019s resignation adds nothing for the reasons stated in the Brief. (Br. at 22-23.)12\n\nAnd Plaintiffs\u2019 \u201ccorporate scienter\u201d argument is irrelevant because Plaintiffs have failed to plead\n\nscienter to impute to the Company. See Jackson v. Abernathy, 960 F.3d 94, 99 (2d Cir. 2020).\n\n\n\n\n10\n Plaintiffs\u2019 assertion that Defendants \u201capparently concede[] the credibility of AC\u2019s FE allegations\u201d is\n inconsistent with the remainder of the very same sentence, stating that Defendants \u201cthen argue that the FE\n allegations do not establish scienter even if accepted as true.\u201d (Opp. at 22.)\n11\n Plaintiffs cite Sherman v. Abengoa, S.A., 156 F.4th 152, 160, 166-67 (2d Cir. 2025) for the proposition that\n \u201ccommonplace and widely known\u201d allegations suffice, but the allegation credited there was corroborated by an\n audit, a regulatory resolution, and forensic reports. Courts routinely reject uncorroborated \u201ccommon\n knowledge\u201d FE assertions. See Chapman v. Mueller Water Prods., Inc., 466 F. Supp. 3d 382, 399-400\n (S.D.N.Y. 2020); In re AppHarvest Sec. Litig., 684 F. Supp. 3d 201, 244-45 (S.D.N.Y. 2023). Plaintiffs\u2019\n competing citation to AppHarvest is inapposite. There, the \u201ccompany-wide inference\u201d rested on four\n confidential witnesses\u2019 personal knowledge in different roles at different times. Id. at 262-63.\n12\n zCap Equity Fund LLC v. LuxUrban Hotels Inc., 792 F. Supp. 3d 407, 442 (S.D.N.Y. 2025) does not change the\n analysis because the resignation only reinforced already strong allegations of present-tense falsity and a later\n restatement.\n\n\n 9\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 16 of 18\n\n\n\n\n The more compelling inference is a non-fraudulent one: Defendants continuously updated\n\ninvestors about execution challenges and revised margin expectations when appropriate. (See Br.\n\nat 25.)\n\nF. Plaintiffs Fail to Plead Loss Causation\n\n Plaintiffs have not connected the alleged stock drops to a disclosure that revealed any\n\nprior statement to be false. See In re Omega Healthcare Invs., Inc. Sec. Litig., 563 F. Supp. 3d\n\n259, 267 (S.D.N.Y. 2021) (plaintiffs must allege that the later disclosure \u201creveal[ed] to the\n\nmarket the falsity\u201d of the earlier statement and \u201cthat the market reacted negatively\u201d). To the\n\ncontrary, they concede that on November 8, 2024, Fortrea reiterated that exiting the TSAs would\n\nnot immediately reduce SG&A (\u00b6175), but there was no alleged price reaction. (Opp. at 25 n.15.)\n\nThat absence of market reaction undermines any claim that the issue had previously been\n\nconcealed and severs any causal link between that issue and the later alleged declines.\n\n Moreover, the 2Q24 Earnings Call did not partially reveal any fraud, instead disclosing\n\nonly that Fortrea\u2019s post-spin execution challenges were proving more difficult than anticipated.\n\n(Opp. at 25.) See Prime Mover Cap. Partners L.P. v. Elixir Gaming Techs., Inc., 548 F. App\u2019x\n\n16, 18 (2d Cir. 2013). The September 25, 2024 Jefferies report is \u201ca negative . . . characterization\n\nof previously disclosed facts,\u201d not a corrective disclosure. In re Omnicom Grp., Inc. Sec. Litig.,\n\n597 F.3d 501, 512 (2d Cir. 2010). Bishins v. CleanSpark, Inc., 2023 WL 112558, at *12\n\n(S.D.N.Y. Jan. 5, 2023), and In re Signet Jewelers Ltd. Sec. Litig., 2019 WL 3001084, at *17\n\n(S.D.N.Y. July 10, 2019) are not to the contrary because the reports in those cases disclosed\n\npreviously unknown facts. The alleged December declines followed only what Plaintiffs term a\n\nself-imposed quiet period, but silence cannot reveal the falsity of prior statements. See Lentell v.\n\nMerrill Lynch & Co., 396 F.3d 161, 175 n.4 (2d Cir. 2005). Finally, the March 3, 2025 guidance\n\nrevision is not corrective because Plaintiffs do not offer any non-conclusory allegations that\n 10\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 17 of 18\n\n\n\n\nFortrea knew of the supposedly slower burn prior to its disclosure and therefore have not\n\nadequately alleged a revelation of previously concealed facts. See Prime Mover, 548 F. App\u2019x at\n\n18.13\n\n CONCLUSION\n The Complaint should be dismissed with prejudice.14\n\n\n\n Dated: New York, New York Respectfully submitted,\n April 9, 2026\n\n /s/ Robert A. Fumerton\n Susan L. Saltzstein\n Robert A. Fumerton\n Jeffrey Geier\n Eryn M. Hughes\n\n SKADDEN, ARPS, SLATE,\n MEAGHER & FLOM LLP\n One Manhattan West\n New York, New York 10001\n Phone: (212) 735-3000\n Susan.Saltzstein@skadden.com\n Robert.Fumerton@skadden.com\n Jeffrey.Geier@skadden.com\n Eryn.Hughes@skadden.com\n\n Attorneys for Defendants Fortrea Holdings Inc.,\n Thomas Pike, and Jill McConnell\n\n\n\n\n13\n Because the Section 10(b) claim fails, the Section 20(a) claim necessarily fails. See ATSI Commc\u2019ns, Inc. v.\n Shaar Fund, Ltd., 493 F.3d 87, 108 (2d Cir. 2007).\n14\n Plaintiffs\u2019 footnote request for leave to amend (Opp. at 26 n.16) should be denied. Plaintiffs had a full opportunity to\n amend following the pre-motion letter, and their nonspecific request is insufficient. Noto v. 22nd Century Grp., Inc., 35\n F.4th 95, 107-08 (2d Cir. 2022).\n\n\n 11\n\f Case 1:25-cv-04630-KPF Document 71 Filed 04/09/26 Page 18 of 18\n\n\n\n\n LOCAL RULE 7.1(C) CERTIFICATION\n\n I, Robert A. Fumerton, hereby certify that the foregoing memorandum of law complies with the\n\nword count limitations set forth in Rule 7.1(c) of the Local Rules of the United States District Court for\n\nthe Southern District of New York, and contains 3,490 words, exclusive of the caption, table of\n\ncontents, table of authorities, table of exhibits, signature blocks, and this certificate.\n\n\n Dated: New York, New York\n April 9, 2026\n\n /s/ Robert A. Fumerton\n Robert A. 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INTRODUCTION ...............................................................................................................1\n\nII. STATEMENT OF FACTS ..................................................................................................2\n\n A. The Spin-Off and the TSA Exit Strategy Fraud.......................................................2\n\n B. The PSP/Backlog Fraud ...........................................................................................5\n\n C. Investors Learn the Truth .........................................................................................6\n\nIII. ARGUMENT .......................................................................................................................7\n\n A. Legal Standard .........................................................................................................7\n\n B. The AC Alleges False and Misleading Statements and Omissions .........................8\n\n 1. Defendants Misled Investors About Fortrea\u2019s TSA Exit Strategy...............8\n\n 2. Defendants Misled Investors About the PSPs and Fortrea\u2019s\n Backlog ......................................................................................................12\n\n 3. The PSLRA Safe Harbor Is Inapplicable ...................................................15\n\n 4. None of the Challenged Statements Are Corporate Optimism or\n Opinions .....................................................................................................17\n\n C. The AC Alleges a Strong Inference of Scienter.....................................................18\n\n 1. Defendants Knew or Recklessly Disregarded the Truth ............................19\n\n 2. The AC\u2019s FE Allegations Demonstrate Actual Knowledge ......................20\n\n 3. The Core-Operations Doctrine Supports an Inference of Scienter ............23\n\n 4. The AC Alleges Fortrea\u2019s Scienter ............................................................23\n\n 5. Viewed Holistically, the AC\u2019s Allegations Support Scienter ....................24\n\n D. The AC Alleges Loss Causation ............................................................................24\n\n E. The AC Pleads Section 20(a) Control Person Liability .........................................26\n\nIV. CONCLUSION ..................................................................................................................26\n\n\n\n\n -i-\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 3 of 36\n\n\n\n TABLE OF AUTHORITIES\n\n Page\n\nCASES\n\n380544 Can., Inc. v. Aspen Tech., Inc.,\n 544 F. Supp. 2d 199 (S.D.N.Y. 2008)......................................................................................26\n\nAltimeo Asset Mgmt. v. Qihoo 360 Tech. Co.,\n 19 F.4th 145 (2d Cir. 2021) .......................................................................................................8\n\nBarron v. Helbiz, Inc.,\n 2021 WL 4519887\n (2d Cir. Oct. 4, 2021) ...............................................................................................................26\n\nBell Atl. Corp. v. Twombly,\n 550 U.S. 544 (2007) ...................................................................................................................7\n\nBerson v. Applied Signal Tech., Inc.,\n 527 F.3d 982 (9th Cir. 2008) .............................................................................................17, 18\n\nBishins v. CleanSpark, Inc.,\n 2023 WL 112558\n (S.D.N.Y. Jan. 5, 2023)............................................................................................................25\n\nBratusov v. Comscore, Inc.,\n 2020 WL 3447989\n (S.D.N.Y. June 24, 2020).........................................................................................................12\n\nCarpenters Pension Tr. Fund of St. Louis v. Barclays PLC,\n 750 F.3d 227 (2d Cir. 2014)...........................................................................................8, 24, 25\n\nCity of Hollywood Police Officers\u2019 Ret. Sys. v. Henry Schein, Inc.,\n 552 F. Supp. 3d 406 (E.D.N.Y. 2021) .....................................................................................17\n\nCity of Pontiac Gen. Emps.\u2019 Ret. Sys. v. Lockheed Martin Corp.,\n 875 F. Supp. 2d 359 (S.D.N.Y. 2012)......................................................................................19\n\nCity of Providence v. Aeropostale, Inc.,\n 2013 WL 1197755\n (S.D.N.Y. Mar. 25, 2013) ........................................................................................................17\n\nConstr. Indus. & Laborers Joint Pension Tr. v. Carbonite, Inc.,\n 22 F.4th 1 (1st Cir. 2021) .........................................................................................................20\n\nCornwell v. Credit Suisse Grp.,\n 689 F. Supp. 2d 629 (S.D.N.Y. 2010)......................................................................................15\n\n\n - ii -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 4 of 36\n\n\n\n\n Page\n\nDocdeer Foundation v. BioNTech SE,\n 2025 WL 2781381\n (S.D.N.Y. Sep. 30, 2025) .........................................................................................................17\n\nDura Pharms., Inc. v. Broudo,\n 544 U.S. 336 (2005) .................................................................................................................24\n\nFreudenberg v. E*Trade Fin. Corp.,\n 712 F. Supp. 2d 171 (S.D.N.Y. 2010)......................................................................................14\n\nGanino v. Citizens Utils. Co.,\n 228 F.3d 154 (2d Cir. 2000)...............................................................................................17, 24\n\nGauquie v. Albany Molecular Rsch., Inc.,\n 2016 WL 4007591\n (E.D.N.Y. July 26, 2016) .........................................................................................................19\n\nGeisler v. Petrocelli,\n 616 F.2d 636 (2d Cir. 1980).......................................................................................................7\n\nGenesee Cnty. Emps.\u2019 Ret. Sys. v. DocGo Inc.,\n 773 F. Supp. 3d 62 (S.D.N.Y. 2025)........................................................................8, 12, 23, 26\n\nIn re Allergan PLC Sec. Litig.,\n 2019 WL 4686445\n (S.D.N.Y. Sep. 20, 2019) .........................................................................................................15\n\nIn re AppHarvest Sec. Litig.,\n 684 F. Supp. 3d 201 (S.D.N.Y. 2023)................................................................................20, 23\n\nIn re Avon Sec. Litig.,\n 2019 WL 6115349\n (S.D.N.Y. Nov. 18, 2019) ..................................................................................................17, 18\n\nIn re Danimer Sci., Inc. Sec. Litig.,\n 2023 WL 6385642\n (E.D.N.Y. Sep. 30, 2023) ...................................................................................................21, 22\n\nIn re Dentsply Sirona, Inc. Sec. Litig.,\n 2026 WL 124581\n (S.D.N.Y. Jan. 16, 2026)..........................................................................................................22\n\nIn re DraftKings Inc. Sec. Litig.,\n 650 F. Supp. 3d 120 (S.D.N.Y. 2023)......................................................................................15\n\n\n - iii -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 5 of 36\n\n\n\n\n Page\n\nIn re Gilat Satellite Networks, Ltd.,\n 2007 WL 2743675\n (E.D.N.Y. Sep. 18, 2007) .........................................................................................................13\n\nIn re Hain Celestial Grp., Inc. Sec. Litig.,\n 20 F.4th 131 (2d Cir. 2021) .....................................................................................................24\n\nIn re Hi-Crush Partners L.P. Sec. Litig.,\n 2013 WL 6233561\n (S.D.N.Y. Dec. 2, 2013)...........................................................................................................23\n\nIn re ITT Educ. Servs., Inc. Sec. & S\u2019holder Derivatives Litig.,\n 859 F. Supp. 2d 572 (S.D.N.Y. 2012)......................................................................................15\n\nIn re ITT Educ. Servs., Inc. Sec. Litig.,\n 34 F. Supp. 3d 298 (S.D.N.Y. 2014)........................................................................................16\n\nIn re Lottery.com, Inc. Sec. Litig.,\n 765 F. Supp. 3d 303 (S.D.N.Y. 2025)......................................................................................21\n\nIn re Nortel Networks Corp. Sec. Litig.,\n 238 F. Supp. 2d 613 (S.D.N.Y. 2003)......................................................................................13\n\nIn re NovaGold Res. Inc. Sec. Litig.,\n 629 F. Supp. 2d 272 (S.D.N.Y. 2009)..................................................................................9, 16\n\nIn re Omnicom Grp., Inc. Sec. Litig.,\n 597 F.3d 501 (2d Cir. 2010).....................................................................................................25\n\nIn re Petrobras Sec. Litig.,\n 116 F. Supp. 3d 368 (S.D.N.Y. 2015)......................................................................................17\n\nIn re Pretium Res. Inc. Sec. Litig.,\n 256 F. Supp. 3d 459 (S.D.N.Y. 2017),\n aff\u2019d, 732 F. App\u2019x 37 (2d Cir. 2018) ......................................................................................22\n\nIn re Scholastic Corp. Sec. Litig.,\n 252 F.3d 63 (2d Cir. 2001)...................................................................................................8, 13\n\nIn re Signet Jewelers Ltd. Sec. Litig.,\n 2018 WL 6167889\n (S.D.N.Y. Nov. 26, 2018) ........................................................................................................19\n\n\n\n\n - iv -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 6 of 36\n\n\n\n\n Page\n\nIn re Signet Jewelers Ltd. Sec. Litig.,\n 2019 WL 3001084\n (S.D.N.Y. July 10, 2019) .........................................................................................................25\n\nIn re Signet Jewelers Ltd. Sec. Litig.,\n 389 F. Supp. 3d 221 (S.D.N.Y. 2019)......................................................................................10\n\nIn re Turquoise Hill Res. Ltd. Sec. Litig.,\n 625 F. Supp. 3d 164 (S.D.N.Y. 2022)......................................................................................17\n\nLentell v. Merrill Lynch & Co.,\n 396 F.3d 161 (2d Cir. 2005).....................................................................................................10\n\nLoc. No. 38 Int\u2019l Bhd. of Elec. Workers Pension Fund v. Am. Express Co.,\n 724 F. Supp. 2d 447 (S.D.N.Y. 2010)......................................................................................21\n\nMakor Issues & Rts., Ltd. v. Tellabs Inc.,\n 513 F.3d 702 (7th Cir. 2008) ...................................................................................................24\n\nMartinek v. AmTrust Fin. Servs., Inc.,\n 2020 WL 4735189\n (S.D.N.Y. Aug. 14, 2020) ..................................................................................................16, 17\n\nMeyer v. Jinkosolar Holdings Co.,\n 761 F.3d 245 (2d Cir. 2014).....................................................................................................13\n\nMeyer v. Organogenesis Holdings Inc.,\n 727 F. Supp. 3d 368 (E.D.N.Y. 2024) .....................................................................................21\n\nNew Orleans Emps. Ret. Sys. v. Celestica, Inc.,\n 455 F. App\u2019x 10 (2d Cir. 2011) ...................................................................................19, 22, 23\n\nNguyen v. New Link Genetics Corp.,\n 297 F. Supp. 3d 472 (S.D.N.Y. 2018)......................................................................................18\n\nNoto v. 22nd Century Grp., Inc.,\n 35 F.4th 95 (2d Cir. 2022) .........................................................................................................8\n\nNovak v. Kasaks,\n 216 F.3d 300 (2d Cir. 2000).....................................................................................................19\n\nNutriband, Inc. v. Kalmar,\n 2020 WL 4059657\n (E.D.N.Y. July 20, 2020) .........................................................................................................20\n\n\n -v-\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 7 of 36\n\n\n\n\n Page\n\nOmnicare, Inc. v. Laborers Dist. Council Const. Indus. Pension Fund,\n 575 U.S. 175 (2015) ...........................................................................................................10, 18\n\nRoofers Loc. No. 149 Pension Fund v. Amgen Inc.,\n 751 F. Supp. 3d 330 (S.D.N.Y. 2024)......................................................................................12\n\nSan Antonio Fire & Police Pension Fund v. Dentsply Sirona Inc.,\n 732 F. Supp. 3d 300 (S.D.N.Y. 2024)................................................................................23, 25\n\nSec. & Exch. Comm\u2019n v. Farnsworth,\n 692 F. Supp. 3d 157 (S.D.N.Y. 2023)......................................................................................19\n\nSet Cap. LLC v. Credit Suisse Grp. AG,\n 996 F.3d 64 (2d Cir. 2021).......................................................................................................11\n\nSetzer v. Omega Healthcare Invs., Inc.,\n 968 F.3d 204 (2d Cir. 2020).....................................................................................................12\n\nSherman v. Abengoa, S.A.,\n 156 F.4th 152 (2d Cir. 2025) .............................................................................................14, 23\n\nSlayton v. Am. Express Co.,\n 604 F.3d 758 (2d Cir. 2010).....................................................................................................16\n\nSolomon v. Sprint Corp.,\n 2022 WL 889897\n (S.D.N.Y. Mar. 25, 2022) ........................................................................................................12\n\nTellabs, Inc. v. Makor Issues & Rts., Ltd.,\n 551 U.S. 308 (2007) ...........................................................................................................18, 24\n\nWang v. Cloopen Grp. Holding Ltd.,\n 661 F. Supp. 3d 208 (S.D.N.Y. 2023)......................................................................................16\n\nzCap Equity Fund LLC v. LuxUrban Hotels Inc.,\n 792 F. Supp. 3d 407 (S.D.N.Y. 2025)......................................................................................24\n\nSTATUTES, RULES, AND REGULATIONS\n\n15 U.S.C.\n \u00a778j(b) ..............................................................................................................................7, 8, 26\n \u00a778t(a) ......................................................................................................................................26\n\n17 C.F.R.\n \u00a7240.10b-5 .................................................................................................................................8\n\n - vi -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 8 of 36\n\n\n\n\n Page\n\nFederal Rules of Civil Procedure\n Rule 8(a)...................................................................................................................................24\n Rule 9(b) ..............................................................................................................................8, 20\n Rule 12(b)(6) ..............................................................................................................................7\n\nPrivate Securities Litigation Reform Act of 1995\n Pub. L. No. 104-67, 109 Stat. 737 (1995) ................................................................8, 15, 16, 20\n\n\n\n\n - vii -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 9 of 36\n\n\n\n\n Lead Plaintiffs Construction Industry Laborers Pension Fund and City of Pontiac\n\nReestablished General Employees\u2019 Retirement System (\u201cPlaintiffs\u201d) respectfully submit this\n\nopposition to the motion to dismiss the Amended Complaint (the \u201cAC,\u201d cited as \u201c\u00b6__,\u201d ECF 53) (the\n\n\u201cMotion,\u201d cited as \u201cMTD,\u201d ECF 64) filed by defendants Fortrea Holdings Inc. (\u201cFortrea\u201d or the\n\n\u201cCompany\u201d), Thomas Pike (\u201cPike\u201d), and Jill McConnell (\u201cMcConnell\u201d and, with Pike, the\n\n\u201cIndividual Defendants,\u201d and altogether, \u201cDefendants\u201d). 1\n\nI. INTRODUCTION\n\n Plaintiffs assert Exchange Act claims on behalf of a proposed class of investors who\n\npurchased or otherwise acquired Fortrea shares from July 5, 2023 through February 28, 2025 (the\n\n\u201cClass Period\u201d). After Fortrea\u2019s June 2023 spin-off (the \u201cSpin-Off\u201d) from Labcorp Holdings Inc.\n\n(\u201cLabcorp\u201d), its former parent company, Defendants needed to create a value proposition for\n\ninvestors of the new company. Their efforts to do so resulted in two separate but related frauds.\n\n First, Defendants misrepresented that they had developed a plan to decrease Fortrea\u2019s selling,\n\ngeneral and administrative expenses (\u201cSG&A\u201d), which they admitted were excessive (see, e.g., \u00b690),\n\nby the end of 2024, through exiting \u201cburdensome\u201d transition service agreements (\u201cTSAs\u201d) with\n\nLabcorp (the \u201cTSA Exit Strategy\u201d). \u00b6232. Instead of reducing SG&A, however, the third-party\n\nservice provider they retained, Cognizant Technology Solutions Corporation (\u201cCognizant\u201d), charged\n\nmore than Labcorp, as Defendants were well aware: Defendants approved numerous budget\n\noverages for payments to Cognizant throughout the Class Period, and approved cost models showing\n\nthat the TSA Exit Strategy would not achieve any cost savings for at least three years, much less\n\nyear-end 2024.\n\n\n\n1\n Capitalized terms not defined herein have the meanings assigned in the AC. Unless otherwise indicated, all internal\nquotations marks and citations are omitted and all emphasis is added.\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 10 of 36\n\n\n\n\n Second, Defendants deceived investors into believing that pre-spin projects (\u201cPSPs\u201d) \u2013 i.e.,\n\nprojects Fortrea acquired before the Spin-Off \u2013 would provide meaningful revenue for the Company\n\nfollowing the Spin-Off. Defendants failed to disclose, however, that these PSPs were aging,\n\nresulting in significantly diminishing profitability going forward. Indeed, Defendants knew this\n\nfrom the beginning of the Class Period, as they underwent a review of Fortrea\u2019s backlog that\n\npurportedly \u201censure[d] the robustness of everything that was in there.\u201d \u00b667. And it was \u201ccommon\n\nknowledge\u201d throughout the Company that, after the Spin-Off, the PSPs would not \u201cproduc[e] enough\n\nrevenue to carry the Company.\u201d \u00b673.\n\n Based on these misrepresentations, Defendants guided investors to lofty targets for adjusted\n\nEBITDA margin. The truth slowly emerged over the course of 20 months, however, culminating in\n\nthe FY24 earnings call on March 3, 2025, during which Defendants admitted the TSA Exit Strategy\n\nwas an abject failure, and that SG&A as a percentage of revenue would not decrease to the level of\n\nFortrea\u2019s peers. Defendants also admitted that the PSPs were \u201clate in their life cycle\u201d and had \u201cless\n\nrevenue and less profitability than expected for 2025.\u201d \u00b6179. Accordingly, Fortrea badly\n\nunderperformed in FY24, and there would be no improvement in FY25. In response, Fortrea\u2019s\n\ncommon stock value plummeted.\n\n Unable to meaningfully address the allegations in the AC, including credible allegations from\n\ntwo former employees (\u201cFEs\u201d), Defendants resort to straw-man arguments, mischaracterizations of\n\nthe AC\u2019s well-pleaded allegations, and counterfactual narratives. As discussed herein, these\n\narguments should be rejected.\n\nII. STATEMENT OF FACTS\n\n A. The Spin-Off and the TSA Exit Strategy Fraud\n\n Fortrea is a global contract research organization (\u201cCRO\u201d) that provides clinical trial\n\nmanagement solutions to its customers. \u00b62. In June 2023, Labcorp\u2019s Clinical Development and\n -2-\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 11 of 36\n\n\n\n\nCommercialization Services business was spun off and became Fortrea. \u00b6\u00b63, 51. As part of the\n\nSpin-Off, Fortrea and Labcorp entered into the TSAs, pursuant to which Labcorp provided Fortrea\n\nwith necessary business services. \u00b6\u00b652-54. Labcorp provided these services at cost, charging no\n\npremium. \u00b6\u00b6133, 153.\n\n Nevertheless, Fortrea\u2019s SG&A were significantly higher than those of its peers, a fact\n\nDefendants effectively conceded throughout the Class Period. \u00b6\u00b6100, 114. Fortrea\u2019s SG&A \u2013 which\n\nanalysts and investors closely monitored (\u00b6\u00b6121-132) \u2013 ballooned throughout FY23 and FY24 as a\n\npercentage of revenue (\u00b6\u00b682-86), and Defendants routinely identified the TSAs as the main driver of\n\nits SG&A, representing that the TSAs \u201cforce us into a cost structure that\u2019s higher than we would\n\nlike.\u201d \u00b690; see generally \u00b6\u00b686-93. Defendants parroted this excuse to investors at nearly every\n\nopportunity (\u00b6\u00b694-120), explaining, for example, that increases in SG&A were due to \u201cincrease[s] in\n\n[TSA] costs[.]\u201d \u00b688; see also \u00b6\u00b689, 92-93.\n\n To allay concerns from analysts and investors about Fortrea\u2019s viability as a standalone\n\ncompany, Defendants insisted that they had devised \u201cdetailed TSA exit plans\u201d to \u201cmove [Fortrea\u2019s]\n\nSG&A spend closer in line with peer benchmarks.\u201d \u00b694. The TSA Exit Strategy would involve\n\nimplementing necessary business systems, such that Fortrea would no longer need to rely on\n\nLabcorp, thereby decreasing SG&A and, in turn, increasing EBITDA margins. \u00b6100.\n\n Even before the Spin-Off, Defendants represented that, as Fortrea \u201cexit[s] TSAs over the next\n\n24 months [after the Spin-Off], stand-up costs will trend down[.]\u201d \u00b697. This cost reduction,\n\naccording to Defendants, would be possible because each TSA exit would be paired with \u201ca\n\nreplacement system or technology or process that is more cost effective.\u201d \u00b6103. Defendants\n\nreiterated the importance of the TSA Exit Strategy, referring to it as, inter alia, \u201cone of the most\n\nimportant things this year.\u201d \u00b6109.\n\n\n -3-\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 12 of 36\n\n\n\n\n Specifically, according to Defendants, the TSA Exit Strategy would cause SG&A to\n\ndecrease, leading to improved adjusted EBITDA margins, similar to those Fortrea enjoyed in 2022,\n\nwhen it was part of Labcorp. Defendants targeted 13% adjusted EBITDA margins \u201cexiting 2024\u201d\n\n(\u00b6222), as Fortrea purportedly replaced each TSA with a \u201csystem or technology or process that is\n\nmore cost effective.\u201d \u00b6220.\n\n But in or about July 2023, Defendants privately decided that, instead of establishing their\n\nown in-house infrastructure, they would replace the TSAs with services outsourced to Cognizant.\n\n\u00b6154. The Cognizant engagement was a sole-source contract, meaning there was no competitive\n\nbidding process. Id. Fortrea announced the Cognizant engagement months later, on January 4,\n\n2024. \u00b6141.\n\n When Defendants signed the deal with Cognizant, they knew it would merely shift their TSA\n\ncosts from Labcorp to Cognizant, resulting in similar, or higher, costs. \u00b6157. Nevertheless,\n\nDefendants touted the Cognizant deal to analysts and investors as a key part of the TSA Exit\n\nStrategy, which would \u201chelp bring IT costs down [and] result in TSA costs swap out and come in\n\nat a better rate.\u201d \u00b6127. Based on Defendants\u2019 representations regarding Cognizant, the market\n\nunderstood that \u201cSG&A costs should not be going up from here and they should be coming\n\ndown . . . , particularly towards the end of this year and into 2025.\u201d Id. (quoting Evercore\n\nanalysts).\n\n By the start of 2024, Fortrea had put into place a \u201cTSA Steering Committee\u201d that, inter alia,\n\ncreated \u201croad maps\u201d to track the status of each individual TSA exit. \u00b6\u00b6145-146. As part of that\n\neffort, the committee became aware, and made CFO McConnell aware, that Fortrea was routinely\n\nover-budget on costs paid to Cognizant. McConnell personally signed off on all budget increases for\n\n\n\n\n -4-\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 13 of 36\n\n\n\n\nthe TSA Exit Strategy, regardless of amount, and approved budget overages on payments to\n\nCognizant on numerous occasions, including in 2Q24, 3Q24, and 4Q24. \u00b6\u00b6147-149.\n\n B. The PSP/Backlog Fraud\n\n Before the start of the Class Period and the Spin-Off, Defendants represented to investors and\n\nanalysts that Fortrea had \u201ca large backlog\u201d of PSPs that would provide a strong foundation for future\n\nrevenues \u201cin years to come.\u201d \u00b6\u00b656, 58. Because Defendants highlighted Fortrea\u2019s backlog to\n\ninvestors before the Spin-Off, they were necessarily referring to the PSPs. \u00b659. By representing this\n\nbacklog as a source of \u201crevenue in years to come,\u201d Defendants conditioned investors to believe the\n\nPSPs would meaningfully contribute to the Company\u2019s future revenues. \u00b660. After the Spin-Off,\n\nDefendants emphasized that the Company\u2019s \u201clonger-term contract durations\u201d gave them \u201cconfidence\n\nand visibility into [its] future revenues.\u201d \u00b6200.\n\n Indeed, Defendants led investors and analysts to believe they had weeded out any\n\nnonperforming projects. On August 14, 2023, during the 2Q23 Earnings Call (and just a month into\n\nthe Class Period), Defendants explained that they had undertaken an extensive review of Fortrea\u2019s\n\nbacklog and identified \u201csome projects\u201d that were \u201cappropriate\u201d to remove from the backlog because\n\nDefendants \u201chadn\u2019t seen any revenue.\u201d \u00b665. Defendants assured the market that this review did not\n\nrequire \u201ca material adjustment,\u201d and that what remained, including the PSPs, was still \u201cvalid backlog\n\nfor the future.\u201d Id. According to Defendants, the review \u201censure[d] the robustness of everything\n\nthat was in\u201d the backlog. \u00b667. Importantly, because Defendants did not restate historical metrics for\n\nbacklog, there was \u201clittle information for investors to use for the purpose of making informed\n\ncomparisons that could help illustrate the company\u2019s operation progress.\u201d \u00b666. In other words,\n\ninvestors had to rely on Defendants\u2019 commentary about Fortrea\u2019s backlog to understand the impact\n\nof the PSPs on future revenue. Id.\n\n\n -5-\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 14 of 36\n\n\n\n\n After this review, Defendants continued to represent the purported strength of the backlog\n\n(\u00b6\u00b668-71), targeting revenue of over $3 billion for 2024, and citing the \u201cattractive backlog\u201d as a key\n\nreason that Fortrea remained \u201ca long-term value creation opportunity for [its] investors.\u201d \u00b671.\n\n C. Investors Learn the Truth\n\n The market began to learn the truth of Fortrea\u2019s financial condition on August 12, 2024,\n\nduring the 2Q24 Earnings Call. Defendants admitted that the Company could not achieve its\n\npreviously targeted 13% adjusted EBITDA margin for 4Q24, and represented that Fortrea would\n\ninstead \u201ctarget to deliver an adjusted EBITDA margin in the 11% to 12% range\u201d for 4Q24 and\n\nFY25. \u00b6265. Defendants also reported an underwhelming $662 million in revenue and $55 million\n\nin adjusted EBITDA for the quarter, a margin of just 8.3%. \u00b6266. They blamed the Company\u2019s\n\nlackluster performance on: (i) weak backlog from the pre-spin period, including \u201clater stage and\n\nlonger duration studies\u201d; and (ii) \u201chigher SG&A costs post spin to support operations as a public\n\ncompany,\u201d i.e., ballooning costs resulting from the doomed TSA Exit Strategy. \u00b6267.\n\n Consequently, on September 25, 2024, Jefferies lowered its price target for Fortrea from $25\n\nper share to $21, noting that \u201cTSA [c]ost [s]avings [are not] as [m]aterial as [o]ne [m]ight [t]hink.\u201d\n\n\u00b6271; \u00b6166. As an analyst from Jefferies explained, \u201cIT infrastructure costs to exit the TSAs are\n\nalready non-GAAPed out of adjusted EBITDA[, so] once TSAs are exited, [Fortrea] will just be\n\nreplacing TSA costs with internal operating costs[.]\u201d \u00b6271.\n\n Then, on December 4, 2024, Defendants shocked investors by announcing a self-imposed\n\n\u201cquiet period,\u201d withdrawing from several already-scheduled conferences. \u00b6272. Two days later, on\n\nDecember 6, 2024, Baird cut its per-share price target for Fortrea from $35 to $28. \u00b6273. In\n\nexplaining its decision, Baird cited, inter alia, the \u201clack of clarity on the abrupt communications\n\ncourse change[.]\u201d Id. A few days later, on December 11, 2024, Citigroup reduced its per-share price\n\ntarget from $30 to $23, in part due to a lack of clarity on Fortrea\u2019s expected margins. \u00b6274.\n -6-\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 15 of 36\n\n\n\n\n Finally, on March 3, 2025, Defendants announced Fortrea\u2019s financial results for 4Q24 and\n\nFY24, revealing an adjusted EBITDA margin of just 8% for the quarter \u2013 nowhere close to the\n\npreviously guided 13%, nor even the revised 11-12%. \u00b6\u00b6276-277. For FY24, revenue was $2.69\n\nbillion and adjusted EBITDA was $202 million, for a margin of just 7.5%. \u00b6276. \u201c[E]ven more\n\ndisappointing,\u201d Fortrea revised its FY25 revenue guidance, implying adjusted EBITDA margin of\n\njust 6.7%, about half of the previously targeted 13%. \u00b6281 (quoting William Blair analysts).\n\n Defendants were forced to disclose the real cause of Fortrea\u2019s anemic financial performance:\n\n\u201cinefficiencies in the pre-spin portfolio and the inherited SG&A costs\u201d that Defendants were still\n\n\u201cactively working to reduce.\u201d \u00b6282. Defendants admitted that \u201c[m]any of the pre-[spin] projects\u201d\n\n(\u00b6183) \u201cha[d] a lot of hours in them already, and every incremental hour is less as a percentage of the\n\ntotal[.]\u201d \u00b6280. Defendants also admitted that the TSA Exit Strategy was wholly ineffectual.\n\nDespite having \u201cessentially exited from the TSA services,\u201d SG&A increased in 4Q24 quarter-over-\n\nquarter as both a standalone figure and as a percentage of revenue. \u00b6181.\n\n As result of Defendants\u2019 fraudulent conduct, the Company\u2019s common stock lost nearly three\n\nquarters of its value during the Class Period. \u00b6195.\n\nIII. ARGUMENT\n\n A. Legal Standard\n\n To avoid dismissal pursuant to Federal Rule of Civil Procedure (\u201cRule\u201d) 12(b)(6), the AC\n\nmust allege \u201cenough facts to state a claim\u201d that is \u201cplausible on its face.\u201d Bell Atl. Corp. v.\n\nTwombly, 550 U.S. 544, 570 (2007). This Court only \u201cassess[es] the legal feasibility of the\n\ncomplaint\u201d; it does not \u201cassay the weight of the evidence which might be offered in support thereof.\u201d\n\nGeisler v. Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980).\n\n To state a claim under Section 10(b) of the Exchange Act, Plaintiffs must plead: (1) a\n\nmaterial misrepresentation or omission; (2) in connection with a purchase or sale of a security;\n -7-\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 16 of 36\n\n\n\n\n(3) made with scienter; (4) reliance; (5) economic loss; and (6) loss causation. Carpenters Pension\n\nTr. Fund of St. Louis v. Barclays PLC, 750 F.3d 227, 232 (2d Cir. 2014). While Plaintiffs must also\n\nsatisfy the heightened pleading standards of Rule 9(b) and the Private Securities Litigation Reform\n\nAct of 1995 (\u201cPSLRA\u201d), the Second Circuit has cautioned that courts \u201cmust be careful not to\n\nmistake heightened pleading standards for impossible ones.\u201d Altimeo Asset Mgmt. v. Qihoo 360\n\nTech. Co., 19 F.4th 145, 150 (2d Cir. 2021). Plaintiffs do not need to plead \u201cdetailed evidentiary\n\nmatter.\u201d In re Scholastic Corp. Sec. Litig., 252 F.3d 63, 72 (2d Cir. 2001). The AC adequately\n\nalleges material misstatements and omissions, a strong inference of scienter, and loss causation.\n\n B. The AC Alleges False and Misleading Statements and Omissions\n\n A misstatement is actionable under Section 10(b) and SEC Rule 10b-5 thereunder if it\n\nincludes any \u201cuntrue statement of a material fact\u201d or omits \u201ca material fact necessary in order to\n\nmake the statements made, in light of the circumstances under which they were made, not\n\nmisleading.\u201d Noto v. 22nd Century Grp., Inc., 35 F.4th 95, 102 (2d Cir. 2022). \u201cAt the pleading\n\nstage, a plaintiff need not establish that each of the alleged misstatements or omissions is\n\n[materially] misleading in and of itself; rather, a plaintiff must only allege that the defendant\u2019s\n\nrepresentations, taken together and in context, would have misled a reasonable investor.\u201d Genesee\n\nCnty. Emps.\u2019 Ret. Sys. v. DocGo Inc., 773 F. Supp. 3d 62, 80 (S.D.N.Y. 2025) (Failla, J.) (emphasis\n\nin original).\n\n 1. Defendants Misled Investors About Fortrea\u2019s TSA Exit\n Strategy\n\n During the Class Period, Defendants assured investors that they had devised \u201cdetailed TSA\n\nexit plans\u201d to \u201cimprove [Fortrea\u2019s] SG&A cost as a percent of revenue.\u201d \u00b6\u00b6100-101. Defendants\n\nalso repeatedly represented that the TSA Exit Strategy would lead to 13% adjusted EBITDA margins\n\n\u201cexiting 2024.\u201d \u00b6222; see also \u00b6\u00b6230, 239. At nearly every opportunity, Defendants linked\n\n -8-\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 17 of 36\n\n\n\n\nFortrea\u2019s ballooning SG&A to the TSAs. \u00b6\u00b687-93. As CEO Pike explained, SG&A was\n\n\u201cinterrelated with exiting the TSAs,\u201d and investors would see the benefits \u201cemerging [] through\n\n[2024], but primarily late in the year as we exit the TSAs.\u201d \u00b6216. These statements are actionable\n\nbecause they led investors to believe the TSA Exit Strategy would cause SG&A to improve, when\n\nDefendants knew, but failed to disclose, that they had engaged Cognizant to provide these same\n\nservices at similar, if not higher, costs, and that Fortrea\u2019s payments to Cognizant were over budget.\n\nIn re NovaGold Res. Inc. Sec. Litig., 629 F. Supp. 2d 272, 299 (S.D.N.Y. 2009) (statements false\n\nwhen defendants knew costs on a project were \u201crunning over budget,\u201d but \u201ccontinued to tout\u201d the\n\nproject \u201cthroughout that year\u201d). None of Defendants\u2019 arguments regarding the falsity of the TSA\n\nstatements is availing.\n\n Defendants do not (because they cannot) meaningfully contest that Fortrea engaged\n\nCognizant to provide the TSA services for more than Labcorp was charging, or that Fortrea was\n\nroutinely over-budget on costs to Cognizant. Instead, Defendants conjure a narrative in which they\n\nnever expected the TSA Exit Strategy to directly reduce costs, but merely to \u201copen the door\u201d for\n\nfuture infrastructure cost savings. MTD at 13. This narrative is not only contrary to Defendants\u2019\n\nown Class Period representations (linking lower SG&A to exiting TSAs), but would still be false\n\nbecause Cognizant was the new infrastructure.\n\n Defendants made it clear throughout the Class Period that exiting the TSAs would \u2013 by the\n\nend of 2024 \u2013 decrease SG&A and improve margins. See \u00b6\u00b6216, 218, 220, 226, 230. They did not\n\ncharacterize these benefits as \u201cpotential future efficiencies\u201d (MTD at 14), but instead led investors to\n\nbelieve that the \u201cbenefits [would] emerge towards the end of [2024] . . . as [Fortrea] fully exit[ed] the\n\nTSA and adopt[ed] these more efficient infrastructures.\u201d \u00b6241. And although Defendants\n\nacknowledged the Cognizant contract on January 4, 2024 (\u00b6141), they did not disclose that it would\n\n\n -9-\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 18 of 36\n\n\n\n\nresult in increased, not decreased, costs. See Omnicare, Inc. v. Laborers Dist. Council Const. Indus.\n\nPension Fund, 575 U.S. 175, 192 (2015) (\u201c[L]iteral accuracy is not enough: An issuer must as well\n\ndesist from misleading investors by saying one thing and holding back another.\u201d).\n\n To the contrary, just six days later (on January 10, 2024), McConnell represented that Fortrea\n\npersonnel had been \u201ctasked with coming back with a replacement system or technology or process\n\n[for the TSAs] that [would be] more cost effective.\u201d \u00b6\u00b690, 220. But Defendants already knew that,\n\nbecause of the Cognizant contract, the replacement systems would not be \u201cmore cost effective\u201d or\n\n\u201cfit-for-purpose\u201d (\u00b6208), but instead would be less so. \u00b6160. Far from \u201cexiting arduous TSAs\u201d to\n\n\u201cdeliver[] a cost structure that [was] appropriate for a clinical services CRO\u201d (\u00b6210), through an\n\n\u201congoing process\u201d for achieving \u201cimproved efficiencies\u201d (MTD at 13), with corresponding\n\nreductions in SG&A, Fortrea had entered into a more costly agreement with Cognizant. 2\n\n Defendants respond that they did disclose that Labcorp had been providing TSA services to\n\nFortrea \u201cat cost.\u201d See MTD at 12, 16. But that did not stop them from representing \u2013 after they had\n\nalready entered the higher-cost contract with Cognizant \u2013 they could secure even \u201cmore cost\n\neffective\u201d TSA services elsewhere. \u00b6220. 3\n\n Defendants also contend that, because \u201c[m]argin includes both revenue and adjusted\n\nEBITDA,\u201d which involve inputs other than SG&A and TSA exits, their TSA-related statements\n\ncannot be shown to be false. MTD at 14-15. But Defendants themselves told investors that reduced\n\n2\n Although Defendants accuse Plaintiffs of ignoring the \u201csurrounding context\u201d of their statements (MTD at 12), these\nand similar misrepresentations, stated by Defendants and quoted in the AC, as well as Fortrea\u2019s contract with\nCognizant, are themselves the surrounding context. Yet Defendants fail to mention Cognizant by name even once,\ndespite over 40 references to it in the AC, instead making only passing references to a \u201cvendor.\u201d See, e.g., MTD at 10\nn.6 (regarding \u201cvendor\u201d). Thus, it is Defendants, not Plaintiffs, who are ignoring the critical surrounding context. See In\nre Signet Jewelers Ltd. Sec. Litig., 389 F. Supp. 3d 221, 230 (S.D.N.Y. 2019) (rejecting defendants\u2019 position that the\ncourt \u201cignore all context; just look at the statements in a vacuum; do not consider whether they comport (or contradict)\nthe company\u2019s other disclosures and conduct\u201d).\n3\n This stands in stark contrast to Lentell v. Merrill Lynch & Co., 396 F.3d 161 (2d Cir. 2005), where the plaintiff did\nnot explain \u201cto what extent those misrepresentations and omissions concealed the risk.\u201d Id. at 177; see also MTD at 15.\n\n - 10 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 19 of 36\n\n\n\n\nSG&A from the TSA Exit Strategy would improve adjusted EBITDA margin, expressly linking\n\nSG&A to adjusted EBITDA margin. During the 3Q23 Earnings Call, for example, when asked how\n\nFortrea could lower SG&A and increase margins by the end of FY24, McConnell replied: \u201cwe have\n\nbeen able to see some significant margin expansion opportunity with that SG&A benchmarking,\u201d\n\nwhich will \u201crequire a full exit from the TSAs . . . . So we will get benefit from some of the\n\nreductions and changes that we\u2019re making in SG&A.\u201d 4 \u00b6214. Defendants could not, however,\n\ncome close to achieving the promised 13% adjusted EBITDA margin, or even the revised 11-12%\n\nadjusted EBITDA margin, because Cognizant was more costly. 5\n\n Defendants also argue that they \u201cdisclose[d an] execution risk . . . that risk later\n\nmaterialize[d]\u201d (MTD at 15) when McConnell told investors that, for \u201cthese [TSA] exits, it\u2019s really\n\nwhat we replace them with.\u201d Id. (citing \u00b6220). By January 10, 2024 (\u00b690), however, when\n\nMcConnell made that purportedly exculpatory disclosure about a future risk, Defendants had already\n\nsigned the more costly deal with Cognizant. Thus, the purportedly future risk she disclosed \u2013 of an\n\nunsuccessful replacement for the TSAs \u2013 had already occurred. See Set Cap. LLC v. Credit Suisse\n\nGrp. AG, 996 F.3d 64, 85 (2d Cir. 2021). And not only did McConnell fail to disclose that already-\n\nexisting additional cost; she concealed it by representing that Fortrea personnel had \u201cbeen tasked\n\nwith coming back with a replacement system or technology or process that is more cost effective.\u201d\n\n\u00b6220. At that point, however, the Cognizant contract was a fait accompli.\n\n4\n Despite noting \u201cthe ratio of SG&A expense to revenue axiomatically is driven in significant part by revenue\u201d (MTD\nat 15), Defendants attempt to bolster their argument by noting that SG&A decreased in 1Q25 (after the Class Period).\nMTD at 15 n.14. But SG&A decreased because revenue decreased \u2013 and it was still significantly higher during 1Q25\nthan the beginning of the Class Period. \u00b684. Furthermore, the relevant metric, as Defendants conceded during the Class\nPeriod, is SG&A as a percentage of revenue. See \u00b6239 (\u201cWe see significant potential to expand margins by reducing\nSG&A expense as a percentage of revenue.\u201d). Thus, Defendants\u2019 claim that Fortrea\u2019s TSA expense decreased cuts\nagainst its own argument. MTD at 15 n.14. Even as TSA costs trended down, SG&A as a percentage of revenue\nremained elevated. \u00b684.\n5\n The statements regarding the TSA Exit Strategy\u2019s impact on adjusted EBITDA are also false because many of the\nTSA costs were \u201cnon-GAAPed out of adjusted EBITDA.\u201d \u00b6\u00b6166-176.\n\n - 11 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 20 of 36\n\n\n\n\n Finally, Defendants had an affirmative obligation to disclose that the TSAs would be\n\nreplaced by similar, if not higher, costs. 6 \u201cSecond Circuit law is clear that once a corporation\n\nchooses to speak on an issue, there is a duty to tell the whole truth.\u201d Solomon v. Sprint Corp., 2022\n\nWL 889897, at *6 (S.D.N.Y. Mar. 25, 2022). \u201cThe ultimate question . . . remains whether a\n\nreasonable investor could have been [misled] to believe something in contradiction to the omitted\n\nfacts.\u201d Roofers Loc. No. 149 Pension Fund v. Amgen Inc., 751 F. Supp. 3d 330, 347 (S.D.N.Y.\n\n2024). By discussing the TSA Exit Strategy and its purported benefits, Defendants put the issue \u201cin\n\nplay,\u201d and had a duty to disclose that Cognizant would cost the Company more, not less, than the\n\nTSAs. Setzer v. Omega Healthcare Invs., Inc., 968 F.3d 204, 214 n.15 (2d Cir. 2020). 7\n\n 2. Defendants Misled Investors About the PSPs and Fortrea\u2019s\n Backlog\n\n Preliminarily, Defendants mischaracterize one of their Class Period misstatements as pre-\n\nClass Period and purportedly inactionable. After the market closed on July 3, 2023, the first trading\n\nday before the July 5 start of the Class Period, Defendants falsely represented that their \u201clonger-term\n\ncontract durations give us confidence and visibility into our future revenues.\u201d \u00b6200. This statement\n\nwas misleading because it failed to disclose that older PSPs had diminished profitability. More to\n\nthe point, when \u201cmaterially false and misleading\u201d statements are made \u201cafter the close of the\n\nmarkets[,] . . . the relevant Class Period begins on . . . the first trading day after the allegedly false\n\n\n\n\n6\n Defendants\u2019 reliance (MTD at 16) on Bratusov v. Comscore, Inc., 2020 WL 3447989, at *11 (S.D.N.Y. June 24,\n2020) (Failla, J.), is misplaced. There, the complaint did \u201cnot commit [defendants] to a particular strategy for achieving\nits goal\u201d or allege knowledge \u201cthat the goal was not feasible.\u201d Id.\n\n7\n Defendants argue that the cost of Cognizant\u2019s services was immaterial to investors. MTD at 16 n.17. But\nDefendants conceded materiality by describing the TSA Exit Strategy as \u201cabsolutely essential\u201d and \u201creally critical.\u201d\n\u00b6\u00b6220, 245. In any event, \u201c[b]ecause materiality is a mixed question of law and fact, a complaint may not properly be\ndismissed on the ground that the alleged misstatements or omissions are not material unless they are so obviously\nunimportant to a reasonable investor that reasonable minds could not differ on the question of their importance.\u201d\nDocGo, 773 F. Supp. 3d at 81.\n\n - 12 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 21 of 36\n\n\n\n\nstatements\u201d \u2013 that is, July 5. In re Gilat Satellite Networks, Ltd., 2007 WL 2743675, at *6 (E.D.N.Y.\n\nSep. 18, 2007). This is not, therefore, a pre-Class Period statement. 8\n\n None of Defendants\u2019 other arguments are meritorious:\n\n First, Defendants misconstrue Plaintiffs\u2019 allegations. Plaintiffs do not allege that\n\nDefendants\u2019 statements are false because they miscalculated backlog. MTD at 17. Rather, they are\n\nfalse because Defendants repeatedly cited backlog as a valuable asset for the Company, but already\n\nknew, yet failed to disclose, that many of the PSPs were \u201clate in their lifecycle\u201d (\u00b6197), with\n\ndiminishing profitability. \u00b6\u00b6196-207. \u201c[O]nce a company speaks on an issue or topic, there is a duty\n\nto tell the whole truth.\u201d Meyer v. Jinkosolar Holdings Co., 761 F.3d 245, 250 (2d Cir. 2014).\n\n Second, Defendants told investors they \u201censure[d] the robustness of everything\u201d in the\n\nbacklog, including the PSPs, and that what remained was \u201cvalid backlog for the future.\u201d \u00b6\u00b665, 67.\n\nFrom this review, which occurred early in the Class Period (if not before) (id.), Defendants knew or\n\nshould have known, but failed to disclose, that the PSPs already had \u201ca lot of hours in them,\u201d\n\nresulting in diminishing profitability. \u00b6205. Thus, when Defendants repeatedly touted the PSPs and\n\nthe backlog as \u201cattractive\u201d (\u00b6206), representing that they had \u201cconfidence and visibility into\n\n[Fortrea\u2019s] future revenues\u201d (\u00b6200), they misled investors into believing the PSPs would\n\nmeaningfully contribute to future revenues. See In re Nortel Networks Corp. Sec. Litig., 238 F.\n\nSupp. 2d 613, 628 (S.D.N.Y. 2003) (finding representation of \u201cstrong order backlog\u201d to be\n\nactionable). Defendants\u2019 review of Fortrea\u2019s backlog demonstrates that their upbeat statements were\n\nnot \u201cbelieved to be true when made,\u201d but instead are actionably false. MTD at 18.\n\n\n\n\n8\n A June 6, 2023 statement Plaintiffs quote, that when investors \u201clook at [Fortreas\u2019s] backlog, [they]\u2019re looking at a\ncompany that has revenue in years to come,\u201d is pre-Class Period. \u00b6196. Nevertheless, it previews Defendants\u2019 use of the\nPSP backlog to give investors a misleadingly favorable view of Fortrea\u2019s prospects. See, e.g., Scholastic, 252 F.3d at 72\n(pre-class period statements may be relevant for other purposes, such as bolstering scienter).\n\n - 13 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 22 of 36\n\n\n\n\n Third, Defendants point to snippets of boilerplate warnings, such as that backlog is not \u201ca\n\nconsistent indicator of future revenue,\u201d as exculpatory. Defs\u2019 Ex. B (ECF 65-2) at 50; see also MTD\n\nat 18. But Defendants\u2019 argument misses the point. Their representations about the strength of\n\nFortrea\u2019s backlog (\u00b6\u00b6200, 202, 204, 206) are not misleading for failing to predict future revenue, but\n\nfor failing to disclose the present fact \u2013 known to Defendants through their review of Fortrea\u2019s\n\nbacklog in August 2023 (or earlier) (\u00b663) \u2013 that certain PSPs were already aging and subject to\n\ndiminishing returns. To the extent Defendants\u2019 risk disclosures even pertain to this particular risk,\n\nwhich is dubious, it was a risk that had already materialized. Put another way, these misstatements\n\nare actionable because Defendants touted Fortrea\u2019s backlog, while omitting material facts regarding\n\nthe present status of certain PSPs in the backlog. Freudenberg v. E*Trade Fin. Corp., 712 F. Supp.\n\n2d 171, 191 (S.D.N.Y. 2010) (\u201cthis is not a case of \u2018failure to predict\u2019 riskiness or future\u201d\n\nperformance).\n\n Fourth, the information from FE1 supports falsity, and Defendants\u2019 serious\n\nmischaracterization of Plaintiffs\u2019 allegations about FE1 do not change that fact. FE1 worked in\n\nTechnology Engagement for Labcorp and then Fortrea (as a Director, then Senior Director, then\n\nExecutive Director) for over 20 years, and all but a few days of the entire Class Period \u2013 not \u201cless\n\nthan a year,\u201d as Defendants contend. MTD at 18; contra \u00b672. According to FE1, Fortrea was not\n\nbringing in significant new business following the Spin-Off, but rather relied heavily on revenue\n\nfrom the PSPs. \u00b672. Indeed, this was \u201ccommon knowledge\u201d throughout the Company. \u00b673.\n\nAlthough Defendants, citing no authority, attempt to brush these well-pleaded allegations aside, the\n\nSecond Circuit recently credited similar allegations of a fact being \u201ccommonplace and widely known\n\nwithin the company.\u201d Sherman v. Abengoa, S.A., 156 F.4th 152, 160 (2d Cir. 2025); see also\n\n\n\n\n - 14 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 23 of 36\n\n\n\n\nCornwell v. Credit Suisse Grp., 689 F. Supp. 2d 629, 637-38 (S.D.N.Y. 2010) (crediting FE\n\nallegations that \u201ceveryone knew\u201d of problems).\n\n Fifth, the AC alleges actionable omissions relating to the PSPs. Defendants\u2019 review of\n\nFortrea\u2019s backlog at the start of the Class Period apprised them of the PSPs\u2019 status; thus, each of the\n\nPSP statements regarding the strength of the backlog was \u201cfalse or misleading when made\u201d for\n\nfailing to disclose that information. MTD at 19 (emphasis in original). Having chosen to speak\n\nabout the amount of the backlog (more than $7 billion (\u00b6\u00b6204, 206)) and the \u201cattractive[ness]\u201d of the\n\nbacklog (\u00b6206), as evidence of \u201ca long-term value creation opportunity\u201d (\u00b6204) and \u201clonger-term\n\ngrowth and margin expansion\u201d (\u00b6206), Defendants had a duty to reveal the full truth \u2013 that a material\n\ncomponent of that backlog was nearing the end of its lifecycle, and would not contribute to future\n\n\u201cvalue creation\u201d or \u201cgrowth and margin expansion.\u201d That omission was misleading and actionable. 9\n\nSee In re Allergan PLC Sec. Litig., 2019 WL 4686445, at *23 (S.D.N.Y. Sep. 20, 2019) (\u201c[E]ven a\n\nstatement that is literally true when viewed in isolation can be misleading in context if it leaves\n\ninvestors with a false impression.\u201d).\n\n 3. The PSLRA Safe Harbor Is Inapplicable\n\n Defendants challenge 21 statements as inactionable forward-looking statements protected by\n\nthe PSLRA\u2019s safe harbor. MTD at 9. But the AC does not allege that any arguably forward-looking\n\naspect of these statements is false. The AC makes clear that the relevant allegations relate solely to\n\nthe then-existing facts.\n\n For the challenged TSA statements, Defendants virtually ignore Plaintiffs\u2019 allegations\n\nregarding Cognizant. Defendants already knew, but failed to disclose, that the Cognizant deal would\n9\n Defendants\u2019 citations (MTD at 19) are unavailing because Defendants linked the PSPs to the backlog by touting\nFortrea\u2019s backlog prior to the Spin-Off. \u00b659; see also In re ITT Educ. Servs., Inc. Sec. & S\u2019holder Derivatives Litig., 859\nF. Supp. 2d 572, 579 (S.D.N.Y. 2012) (\u201c[T]hese statements are not misleading because they do not suggest that the\nundisclosed improper activity alleged by [p]laintiff was not occurring.\u201d); In re DraftKings Inc. Sec. Litig., 650 F. Supp.\n3d 120, 169 (S.D.N.Y. 2023) (\u201cSimply put, [the omissions and misleading statements] are different concepts.\u201d).\n\n - 15 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 24 of 36\n\n\n\n\nnot cause SG&A to decrease, even after fully exiting the TSAs. In re ITT Educ. Servs., Inc. Sec.\n\nLitig., 34 F. Supp. 3d 298, 306 (S.D.N.Y. 2014) (safe harbor not triggered when plaintiffs alleged \u201cat\n\nthe time the statement was made, it was already untrue\u201d); see, e.g., \u00b6\u00b6212, 214, 216, 232, 237.\n\nSimilarly, based on Defendants\u2019 review of Fortrea\u2019s backlog, they already knew the PSPs would not\n\nbe a source of meaningful revenue. \u00b6\u00b6196, 200, 206.\n\n Furthermore, the PSP and TSA statements regarding \u201ctargets or goals about future\n\nperformance\u201d (MTD at 9) are similarly unprotected because they failed to disclose the facts\n\nregarding the present status of the TSAs and PSPs, and thus are false and misleading \u201cregardless of\n\nwhether or not they were \u2018forecasts.\u2019\u201d NovaGold Res., 629 F. Supp. 2d at 301; see also, e.g., \u00b6\u00b6196,\n\n200, 208, 212, 216, 222, 236, 239, 241.\n\n Moreover, none of the statements in question was accompanied by meaningful cautionary\n\nlanguage. Defendants \u201cmust demonstrate that their cautionary language was not boilerplate and\n\nconveyed substantive information.\u201d Slayton v. Am. Express Co., 604 F.3d 758, 772 (2d Cir. 2010);\n\nMTD at 10. Defendants point to language warning of its \u201cdependence on third parties,\u201d and that\n\nbuilding systems could \u201ccost more or take longer than anticipated.\u201d MTD at 10. Similarly, Fortrea\n\nmerely cautioned that its \u201cbacklog . . . may not be indicative\u201d of future revenue. Id. This language\n\nwarned against risks that had already transpired. See Wang v. Cloopen Grp. Holding Ltd., 661 F.\n\nSupp. 3d 208, 228 (S.D.N.Y. 2023) (warnings of materialized risks not meaningful).\n\n In any event, as explained below, the AC alleges Defendants\u2019 actual knowledge of falsity,\n\nrendering the PSLRA safe harbor inapposite. Martinek v. AmTrust Fin. Servs., Inc., 2020 WL\n\n4735189, at *14 (S.D.N.Y. Aug. 14, 2020) (Failla, J.) (finding statements regarding defendants\u2019\n\n\n\n\n - 16 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 25 of 36\n\n\n\n\n\u201cexpectations\u201d actionable where \u201cat the time they held their expectations[,]\u201d defendants made their\n\nstatements \u201cwith actual knowledge that they were false or misleading\u201d); see infra \u00a7\u00a7II.C.1.-2. 10\n\n 4. None of the Challenged Statements Are Corporate Optimism\n or Opinions\n\n Defendants identify three snippets of challenged statements as statements of corporate\n\noptimism: (i) \u00b6200; (ii) \u00b6204; and (iii) \u00b6206. MTD 20. But \u201c[w]hether a representation is \u2018mere\n\npuffery\u2019 depends, in part, on the context in which it is made.\u201d In re Petrobras Sec. Litig., 116 F.\n\nSupp. 3d 368, 381 (S.D.N.Y. 2015); Ganino v. Citizens Utils. Co., 228 F.3d 154, 162 (2d Cir. 2000)\n\n(materiality \u201cnecessarily depends on all relevant circumstances of the particular case\u201d).\n\n Viewing these statements in full context, they were materially false and/or misleading when\n\nmade. \u00b6200 is misleading because Defendants said the projects \u201cextend over multiple years\u201d and\n\nhad \u201clonger-term contract durations,\u201d when they knew the PSPs already had \u201ca lot of hours in them.\u201d\n\n\u00b6201. \u00b6204 is false and misleading because Defendants identified the backlog as a key reason that\n\nFortrea \u201cremain[ed] . . . a long-term value creation opportunity,\u201d when they knew the PSPs already\n\nhad \u201ca lot of hours in them.\u201d \u00b6205. And \u00b6206 is false and misleading because Defendants identified\n\nthe backlog as a reason for growth, when Defendants knew the PSPs already had \u201ca lot of hours in\n\nthem.\u201d \u00b6207. See In re Turquoise Hill Res. Ltd. Sec. Litig., 625 F. Supp. 3d 164, 223 (S.D.N.Y.\n\n2022) (no puffery when, \u201cviewed in context,\u201d the statement \u201cwas addressed to the particular concern\n\nof investors\u201d). 11 Moreover, Defendants repeated these statements to investors, and \u201cwhen a\n\n\n\n10\n Even if any of the challenged statements were forward-looking, which they are not, the majority are misleading for\nomitting material existing facts, which exempts them from the safe harbor. City of Providence v. Aeropostale, Inc., 2013\nWL 1197755, at *12 (S.D.N.Y. Mar. 25, 2013); see, e.g., \u00b6\u00b6196-209, 212-219, 232.\n\n11\n While Defendants cite to Docdeer Foundation v. BioNTech SE, 2025 WL 2781381, at *14 (S.D.N.Y. Sep. 30, 2025)\n(Failla, J.), the puffery statement there concerned a \u201cpipeline,\u201d id., which provides less certainty than a backlog.\nCompare City of Hollywood Police Officers\u2019 Ret. Sys. v. Henry Schein, Inc., 552 F. Supp. 3d 406, 417 n.7 (E.D.N.Y.\n2021) (describing pipeline as \u201ca vague measure of sales opportunities not subject to uniform definition\u201d) with Berson v.\nApplied Signal Tech., Inc., 527 F.3d 982, 990 (9th Cir. 2008) (noting that backlog represents a \u201ccontractual entitlement\n - 17 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 26 of 36\n\n\n\n\ncompany makes repeated representations on the same topic, even where those representation[s]\n\nwould otherwise be puffery, the repetition itself communicates to investors what matters [are]\n\nparticularly important, and those statements may become material to investors.\u201d See In re Avon Sec.\n\nLitig., 2019 WL 6115349, at *16 (S.D.N.Y. Nov. 18, 2019).\n\n Nor are any of the challenged statements insulated as opinion. MTD at 20. \u00b6\u00b6224 and 234\n\nquote misrepresentations that exiting the TSAs will improve SG&A, which will in turn lead to 13%\n\nEBITDA margins. Similarly, \u00b6245 communicated: \u201cthe timing of those TSA exits is really critical\n\nbecause they are essential.\u201d Although these statements were couched as opinion, they all \u201ccontradict\n\nfacts known to [D]efendant[s]\u201d \u2013 that the Cognizant contract would result in higher costs \u2013 and are\n\ntherefore actionable. Nguyen v. New Link Genetics Corp., 297 F. Supp. 3d 472, 488 (S.D.N.Y.\n\n2018).\n\n In any event, as the Second Circuit has held, whether the statements are fact or opinion is of\n\nlittle significance; what matters is if the statements misled investors. Omnicare, 575 U.S. at 175\n\n(statements are actionable if a plaintiff identifies undisclosed \u201cparticular (and material) facts\u201d that\n\nwould mislead a reasonable investor). That is what occurred here.\n\n C. The AC Alleges a Strong Inference of Scienter\n\n In assessing whether the AC adequately pleads scienter, the Court must determine \u201cwhether\n\nall of the facts alleged, taken collectively, give rise to a strong inference of scienter, not whether any\n\nindividual allegation, scrutinized in isolation, meets that standard.\u201d Tellabs, Inc. v. Makor Issues &\n\nRts., Ltd., 551 U.S. 308, 322-23 (2007). The Court must conduct a \u201ccomparative assessment of\n\nplausible inferences, while constantly assuming the plaintiff\u2019s allegations to be true[.]\u201d Id. at 326-\n\n\nto perform certain work\u201d). As Defendants acknowledge, \u201cPlaintiffs complain about the backlog, not pipeline.\u201d MTD at\n18-19.\n\n\n\n\n - 18 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 27 of 36\n\n\n\n\n27. Where, as here, \u201cthe complaint alleges that defendants knew facts or had access to non-public\n\ninformation contradicting their public statements, recklessness is adequately pled for defendants who\n\nknew or should have known they were misrepresenting material facts with respect to the corporate\n\nbusiness.\u201d Sec. & Exch. Comm\u2019n v. Farnsworth, 692 F. Supp. 3d 157, 187 (S.D.N.Y. 2023)\n\n(Failla, J.).\n\n 1. Defendants Knew or Recklessly Disregarded the Truth\n\n The AC alleges Defendants\u2019 knowledge of, access to, and reckless disregard of information\n\ncontradicting their public statements regarding the TSAs and the PSPs. See Novak v. Kasaks, 216\n\nF.3d 300, 308 (2d Cir. 2000). As for the TSAs, Defendants repeatedly stressed the importance of the\n\nTSA Exit Strategy, calling it \u201ccritical\u201d (\u00b6\u00b6220, 234, 241, 245), \u201cessential\u201d (\u00b6245), and \u201cone of the\n\nmost important things this year\u201d (\u00b6109). Defendants referenced the TSAs on nearly every call with\n\nanalysts and investors, providing specific updates on the percentage of TSAs exited and the timing\n\nof purported benefits. \u00b6\u00b694-120; see also City of Pontiac Gen. Emps.\u2019 Ret. Sys. v. Lockheed Martin\n\nCorp., 875 F. Supp. 2d 359, 372 (S.D.N.Y. 2012) (\u201cspecificity\u201d of statements suggests defendants\n\nreceived \u201cspecific\u201d information); Gauquie v. Albany Molecular Rsch., Inc., 2016 WL 4007591, at\n\n*2-*3 (E.D.N.Y. July 26, 2016) (same). Moreover, analysts asked about the status of the TSA Exit\n\nStrategy and SG&A throughout the Class Period, and Defendants consistently provided misleading\n\nanswers to reassure the market. New Orleans Emps. Ret. Sys. v. Celestica, Inc., 455 F. App\u2019x 10, 14\n\n(2d Cir. 2011) (defendants \u201cwould have been alert to information concerning\u201d key subject \u201cabout\n\nwhich investors and analysts often inquired\u201d); In re Signet Jewelers Ltd. Sec. Litig., 2018 WL\n\n6167889, at *16 (S.D.N.Y. Nov. 26, 2018) (statements to \u201cplacate the market\u201d support scienter); see\n\nalso, e.g., \u00b6\u00b6116, 127, 175, 214, 226, 228, 236-237.\n\n As for the PSPs, Defendants admit to undertaking a review of Fortrea\u2019s backlog before\n\nAugust 2023. \u00b6\u00b663-67. Defendants conceded that the review \u201censure[d] the robustness of\n - 19 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 28 of 36\n\n\n\n\neverything that was in there.\u201d \u00b667. Following this review, Defendants continued to tout the\n\npurported strength of Fortrea\u2019s backlog. \u00b671; see also Constr. Indus. & Laborers Joint Pension Tr.\n\nv. Carbonite, Inc., 22 F.4th 1, 9 (1st Cir. 2021) (\u201c[T]he company thought it important enough to\n\nwarrant two specific plugs from top management, thereby creating a very strong inference that the\n\nsenior executives who gave those apparently prepared remarks . . . would have paid at least some\n\nattention to the [matter].\u201d).\n\n The Individual Defendants\u2019 positions within the Company also support scienter. Nutriband,\n\nInc. v. Kalmar, 2020 WL 4059657, at *11 (E.D.N.Y. July 20, 2020) (\u201c[G]iven that the Individual\n\nDefendants were the highest-ranking executives of the Corporate Defendants, it would strain[]\n\ncredulity to believe they were not involved (and aware of) these misrepresentations.\u201d).\n\n 2. The AC\u2019s FE Allegations Demonstrate Actual Knowledge\n\n Plaintiffs buttress the AC\u2019s scienter allegations with highly credible allegations from two\n\nFEs. Unable to contest the AC\u2019s FE allegations, Defendants mischaracterize these allegations in an\n\nattempt to downplay them. But \u201ccourts consider and take as true the statements of\n\n[confidential] witnesses at this stage, even when applying the heightened standards of Rule 9(b) and\n\nthe PSLRA.\u201d In re AppHarvest Sec. Litig., 684 F. Supp. 3d 201, 261 (S.D.N.Y. 2023).\n\n First, contrary to Defendants\u2019 assertions (MTD at 23), the AC pleads the FE allegations with\n\nthe requisite particularity. FE1 worked for Labcorp and then Fortrea as Director, then Senior\n\nDirector, and finally Executive Director of Technology Engagement for nearly 21 years. \u00b672. FE1\n\nparticipated in weekly TSA Steering Committee meetings to discuss the TSA Exit Strategy and track\n\nthe projected costs for each individual TSA, and personally sent budget overage requests regarding\n\nCognizant to McConnell for approval. \u00b6\u00b6145-149. FE2 worked as Category Manager for IT,\n\nProcurement Director, or Director of Purchasing from July 2016 to June 2024. \u00b6152. FE2 oversaw\n\nIT management and the purchasing of certain hardware, software, and other applications, many of\n - 20 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 29 of 36\n\n\n\n\nwhich were covered by the TSAs. Id. And, in or about July 2023, FE2 was shown cost models\n\napproved by McConnell showing that the Cognizant deal would take three or more years before the\n\nCompany would realize SG&A savings after exiting the TSAs. \u00b6\u00b6153-159. Accordingly, the AC\n\nmore than adequately alleges \u201cthe roles occupied by the witnesses with sufficient particularity to\n\nsupport the probability that a person in the position occupied by the source would possess the\n\ninformation alleged.\u201d In re Lottery.com, Inc. Sec. Litig., 765 F. Supp. 3d 303, 328 (S.D.N.Y. 2025).\n\n Against this factual backdrop, Defendants\u2019 citations are inapposite. MTD at 23. Defendants\n\ncite Meyer v. Organogenesis Holdings Inc., 727 F. Supp. 3d 368 (E.D.N.Y. 2024), for the\n\nproposition that FE allegations are deficient where they fail to allege direct communication between\n\nthe FEs and defendants. But both FE1 and FE2 recounted specific information made available to the\n\nIndividual Defendants demonstrating that their statements were false, information the Individual\n\nDefendants approved. \u00b6\u00b672-74, 145-159; contra Organogenesis, 727 F. Supp. 3d at 396 (\u201cthe FEs\u2019\n\nstatements fail to identify any information that directly contradicted the alleged actionable\n\nstatements and fail to connect the Individual Defendants to any [such] information\u201d).\n\n Defendants\u2019 attempt (MTD at 23) to compare the AC\u2019s allegations to those in Local No. 38\n\nInternational Brotherhood of Electrical Workers Pension Fund v. American Express Co., 724 F.\n\nSupp. 2d 447 (S.D.N.Y. 2010), is equally misplaced. There, plaintiffs relied on allegations from\n\n\u201clow-level employees\u201d and \u201coutside contractors.\u201d Id. at 460. And although one former employee\n\nwas alleged to have provided reports to the individual defendants, \u201cthe Complaint [did] not describe\n\ntheir contents.\u201d Id. at 457. Here, both FE1 and FE2 directly reported to C-suite executives (\u00b6\u00b6145,\n\n156), and the AC describes specific reports and their contents, i.e., the cost models and budget\n\noverages, 12 that the Individual Defendants received and of which they approved. \u00b6\u00b672-74, 145-159.\n\n\n12\n Even Defendants\u2019 authority recognizes that where, as here, plaintiffs identify \u201cspecific, contemporaneous reports or\nstatements showing [d]efendants did not believe their projections when they were made,\u201d actual knowledge is alleged.\n - 21 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 30 of 36\n\n\n\n\n Defendants, apparently conceding the credibility of the AC\u2019s FE allegations, then argue that\n\nthe FE allegations do not establish scienter even if accepted as true. MTD at 24. For the TSA\n\nstatements, FE1 does not, as Defendants suggest, summarily report that the Company was over-\n\nbudget to one vendor, nor that \u201cthe Company signed off on certain budget overages.\u201d Id. Instead,\n\nFE1 reported that McConnell, on multiple occasions (listing the specific time periods), approved\n\nbudget overages on payments to Cognizant \u2013 meaning that McConnell not only knew that Cognizant\n\nwas charging more than Labcorp, but also knew Fortea was over-budget on SG&A as part of the\n\nTSA Exit Strategy. \u00b6\u00b6147-149. FE1 also stated that the TSA Steering Committee had \u201croad maps\u201d\n\nthat tracked the progress of each TSA exit, including the projected costs and timelines for each\n\nindividual TSA. \u00b6146. FE1 further reported that exiting the TSAs would produce virtually no\n\ninfrastructure or hardware costs savings by the end of 2024. \u00b6150; see In re Dentsply Sirona, Inc.\n\nSec. Litig., 2026 WL 124581, at *16 (S.D.N.Y. Jan. 16, 2026) (crediting allegations where direct\n\nreport of defendant instructed confidential witness to create internal reports that would have alerted\n\nthem to the company\u2019s problems).\n\n Similarly, FE2 detailed \u201ccost models\u201d demonstrating that the Cognizant deal would not yield\n\nany savings for at least three years, and McConnell saw, and approved of, these cost models. \u00b6159;\n\nsee also Celestica, 455 F. App\u2019x at 13 (crediting former employee allegations that defendants saw\n\n\u201cspreadsheets . . . detailing the extent\u201d of the company\u2019s problems). FE2 further stated that it would\n\nhave been more cost-effective and efficient for Fortrea to transition the TSA services from Labcorp\n\nin-house or to another provider, as opposed to outsourcing these services to Cognizant, which had\n\nhigher costs than FE2 believed were necessary. \u00b6156.\n\n\n\nIn re Danimer Sci., Inc. Sec. Litig., 2023 WL 6385642, at *7 (E.D.N.Y. Sep. 30, 2023); see also In re Pretium Res. Inc.\nSec. Litig., 256 F. Supp. 3d 459, 473 (S.D.N.Y. 2017), aff\u2019d, 732 F. App\u2019x 37 (2d Cir. 2018).\n\n - 22 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 31 of 36\n\n\n\n\n As for the PSP statements, FE1 recounted that it was well known throughout the Company\n\nthat the PSPs had little work left on them, and that, since the Spin-Off, the backlog of PSPs simply\n\nwas not producing enough revenue to carry the Company. \u00b6\u00b673-74; see also Abengoa, 156 F.4th at\n\n160. And \u201ccourts have found at the pleading stage that the accounts of confidential witnesses\n\nsupport a [c]ompany-wide inference.\u201d AppHarvest, 684 F. Supp. 3d at 262.\n\n 3. The Core-Operations Doctrine Supports an Inference of\n Scienter\n\n The core-operations doctrine, which \u201csimply reflects the commonsense assumption that\n\nexecutives are likely to know more about things central to their business,\u201d further buttresses the\n\nalready-strong inference of scienter. San Antonio Fire & Police Pension Fund v. Dentsply Sirona\n\nInc., 732 F. Supp. 3d 300, 319-20 (S.D.N.Y. 2024). The TSA Exit Strategy and the PSPs were\n\n\u201cmatters critical to the long term viability of the company and events affecting a significant source of\n\nincome.\u201d In re Hi-Crush Partners L.P. Sec. Litig., 2013 WL 6233561, at *26 (S.D.N.Y. Dec. 2,\n\n2013); see \u00b6\u00b6196, 204, 220, 234, 241, 245, 255. Moreover, SG&A, revenue, and adjusted EBITDA\n\nwere \u201ckey to measuring [Fortrea\u2019s] financial performance and was a subject about which investors\n\nand analysts often inquired.\u201d Celestica, 455 F. App\u2019x at 14.\n\n 4. The AC Alleges Fortrea\u2019s Scienter\n\n As this Court has held, \u201cscienter by management-level employees is generally sufficient to\n\nattribute scienter to corporate defendants.\u201d DocGo, 773 F. Supp. 3d at 88. Pike and McConnell\n\nwere \u201cplainly acting within the scope of [their] employment when speaking on behalf of [Fortrea] at\n\nvarious conferences and corporate events[,]\u201d and therefore their \u201cscienter can be imputed to the\n\n[C]ompany.\u201d Id.\n\n\n\n\n - 23 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 32 of 36\n\n\n\n\n 5. Viewed Holistically, the AC\u2019s Allegations Support Scienter\n\n The AC\u2019s scienter allegations must be considered holistically, not individually. See In re\n\nHain Celestial Grp., Inc. Sec. Litig., 20 F.4th 131, 138 (2d Cir. 2021).13 Viewed in totality, the AC\u2019s\n\nallegations support a strong inference of scienter by alleging: (i) Defendants\u2019 repeated statements\n\nregarding the TSAs and PSPs; (ii) the importance of the TSAs and PSPs to Fortrea\u2019s business;\n\n(iii) the high ranking positions of the Individual Defendants within the Company; and (iv) the\n\nIndividual Defendants\u2019 access to, and knowledge of, specific information. 14\n\n Although Plaintiffs\u2019 inference of culpability need only be \u201cat least as compelling\u201d as\n\nDefendants\u2019 non-culpable inference, Tellabs, 551 U.S. at 324, here it is far more compelling.\n\nDefendants contend the more compelling inference is that \u201cDefendants set targets, encountered\n\noperational challenges, and disclosed results.\u201d MTD at 25. Viewed holistically, however, the most\n\ncompelling inference is that, following the Spin-Off, Defendants sold investors a false bill of goods\n\nthat they could decrease costs and rely on contracts from their former parent company when they\n\nknew they could not, and they delayed telling the truth as long as they could. Makor Issues & Rts.,\n\nLtd. v. Tellabs Inc., 513 F.3d 702, 710 (7th Cir. 2008) (defendants \u201cconceal[ed] bad news in the hope\n\nthat it will be overtaken by good news . . . like embezzling in the hope [of] winning at the track\u201d).\n\n D. The AC Alleges Loss Causation\n\n The loss causation pleading standard is \u201cnot meant to impose a great burden upon a\n\nplaintiff,\u201d and may be pleaded pursuant to Rule 8(a). Dura Pharms., Inc. v. Broudo, 544 U.S. 336,\n\n346 (2005). \u201cPlaintiffs need not demonstrate on a motion to dismiss that the corrective disclosure\n\n\n13\n Contrary to Defendants\u2019 assertions (MTD at 21-22), Plaintiffs are not required to plead motive. See Citizens Utils.,\n228 F.3d at 170.\n14\n Pike\u2019s resignation after the fraud, which analysts called \u201csudden,\u201d \u201csurpris[ing],\u201d and \u201cunexpected\u201d (\u00b6190), further\nsupports an inference of scienter. See zCap Equity Fund LLC v. LuxUrban Hotels Inc., 792 F. Supp. 3d 407, 442\n(S.D.N.Y. 2025).\n\n - 24 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 33 of 36\n\n\n\n\nwas the only possible cause for decline in the stock price.\u201d Barclays, 750 F.3d at 233 (emphasis in\n\noriginal).\n\n On the 2Q24 Earnings Call, investors learned that, despite being on track to exit all of the\n\nTSAs by the end of 2024, Fortrea would not achieve its previously targeted 13% adjusted EBITDA\n\nmargin by the end of FY24, nor at all in 2025. \u00b6\u00b6265-268. On this news, Fortrea\u2019s share price fell\n\n20.35%. \u00b6164. Even this disclosure, however, concealed the full truth, as Defendants told investors\n\nthat Fortrea still expects to \u201cbegin to see benefits emerge towards the end of the year with other\n\nimprovements planned for 2025 and beyond as we fully exit the TSA and adopt these more efficient\n\ninfrastructures[.]\u201d Id.; Dentsply, 732 F. Supp. 3d at 325 (earlier corrective disclosure \u201cdidn\u2019t fully\n\nreveal the fraud\u2019s scope or continuing effects\u201d).\n\n Next, the September 25, 2024 Jeffries Report, which caused a 12% decline in the Company\u2019s\n\nstock price (\u00b6271), is not \u201c[a] negative . . . characterization of previously disclosed facts\u201d (MTD at\n\n25) (quoting In re Omnicom Grp., Inc. Sec. Litig., 597 F.3d 501, 512 (2d Cir. 2010)), but is instead a\n\n\u201cthird-party analys[is] of [Fortrea\u2019s] financials, which contradict[ed] representations made by\n\n[D]efendants.\u201d Bishins v. CleanSpark, Inc., 2023 WL 112558, at *12 (S.D.N.Y. Jan. 5, 2023); In re\n\nSignet Jewelers Ltd. Sec. Litig., 2019 WL 3001084, at *17 (S.D.N.Y. July 10, 2019) (\u201c[An analyst\n\nreport] was not, as [d]efendants contend, merely a journalist\u2019s negative opinion, but an analysis of\n\nhow and why [defendant company\u2019s] underlying business was weaker than most people realized\n\n[and therefore qualified as corrective].\u201d); see also \u00b6\u00b6166-176. Similarly, the December 6 and 11,\n\n2024 declines provided additional context on the negative connotations of the Company\u2019s self-\n\nimposed \u201cquiet period.\u201d \u00b6\u00b6272-274. 15\n\n\n15\n There is no corrective disclosure on November 8, 2024 because Defendants stated: \u201c[t]here are some places . . .\nparticularly with our IT infrastructure, where because of the work that we\u2019re doing with Cognizant. . . . there will be\nsome improvements, but you\u2019ll see more of those come out over the course of next year[.]\u201d \u00b6175.\n\n - 25 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 34 of 36\n\n\n\n\n Finally, in a materialization of the concealed risks, on March 3, 2025, Defendants were\n\nforced to reveal that, even though they had \u201cessentially exited from the TSAs,\u201d they achieved an\n\nadjusted EBITDA margin of only 8%, and that SG&A increased compared to the previous quarter.\n\n\u00b6\u00b6181-182. Defendants also revealed they were now targeting mid-7% EBITDA margins in 2025.\n\n\u00b6183. Defendants did not merely reiterate that the Company was moving towards a reduced-cost\n\ninfrastructure, but instead revealed that the TSA Exit Strategy would not contribute to reducing\n\nSG&A at all. MTD at 26. The market clearly understood this as a revelation of new information, as\n\na Jefferies analyst noted: \u201cTSA exits lay the foundation for SG&A cost reductions, but those are not\n\nhelping \u201825 margins.\u201d \u00b6184. Moreover, Defendants\u2019 claim that the slower burn was a \u201cnew\u201d\n\ndiscovery, and not a revelation of previously concealed information, MTD at 26, is a factual\n\nargument that cannot be determined at the pleading stage. The AC alleges that Defendants knew\n\nabout the PSPs no later than their \u201creview\u201d of the backlog before August 2023. \u00b665. The Court is\n\nrequired to accept these well-pleaded allegations as true. DocGo, 773 F. Supp. 3d at 78.\n\n E. The AC Pleads Section 20(a) Control Person Liability\n\n Defendants contend that since the AC fails to plead a predicate Section 10(b) violation or the\n\nIndividual Defendants\u2019 culpable participation, Plaintiffs\u2019 Section 20(a) claim fails. MTD at 26. As\n\nset forth above, however, Plaintiffs have pled a Section 10(b) claim. See 380544 Can., Inc. v. Aspen\n\nTech., Inc., 544 F. Supp. 2d 199, 231 (S.D.N.Y. 2008). Furthermore, the AC alleges the Individual\n\nDefendants\u2019 scienter, and thus their culpable participation. DocGo, 773 F. Supp. 3d at 93-94.\n\nIV. CONCLUSION\n\n For the forgoing reasons, Defendants\u2019 Motion should be denied in its entirety. 16\n\n\n16\n Should the Court find the AC to be deficient in any respect, Plaintiffs respectfully request leave to amend. See\nBarron v. Helbiz, Inc., 2021 WL 4519887, at *3 (2d Cir. Oct. 4, 2021) (leave to amend should be \u201cfreely give[n]\u201d).\nLeave to amend is especially warranted should the Court accept any argument that Defendants did not detail in their pre-\nmotion conference letter (ECF 54).\n\n - 26 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 35 of 36\n\n\n\n\nDATED: March 19, 2026 Respectfully submitted,\n\n ROBBINS GELLER RUDMAN\n & DOWD LLP\n DAVID A. ROSENFELD\n MARK T. MILLKEY\n JONATHAN A. OHLMANN\n\n\n /s/ David A. Rosenfeld\n DAVID A. ROSENFELD\n\n 58 South Service Road, Suite 200\n Melville, NY 11747\n Telephone: 631/367-7100\n drosenfeld@rgrdlaw.com\n mmillkey@rgrdlaw.com\n johlmann@rgrdlaw.com\n\n Counsel for Lead Plaintiffs\n\n ASHERKELLY\n CYNTHIA J. BILLINGS-DUNN\n 25800 Northwestern Highway, Suite 1100\n Southfield, MI 48075\n Telephone: 248/746-2710\n cbdunn@asherkellylaw.com\n\n Additional Counsel\n\n\n\n\n - 27 -\n\f Case 1:25-cv-04630-KPF Document 68 Filed 03/19/26 Page 36 of 36\n\n\n\n\n CERTIFICATE OF WORD COUNT\n\n I hereby certify that the foregoing memorandum of law complies with the formatting and\n\nword-count limitations pursuant to Rule 4.B of Your Honor\u2019s Individual Rules of Practice in Civil\n\nCases and Rule 7.1 of the United States District Court for the Southern District of New York\n\nbecause it contains 8,720 words.\n\n\n /s/ David A. Rosenfeld\n DAVID A. 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Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 1 of 36\n\n\n\n\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n----------------------------------- x\nLUCAS DESLANDE, Individually and on :\nBehalf of All Others Similarly Situated, :\n : Civil Action No. 1:25-cv-04630-KPF\n Plaintiff, :\n :\n vs. :\n :\nFORTREA HOLDINGS INC., THOMAS PIKE,:\nand JILL MCCONNELL, :\n :\n Defendants. :\n :\n----------------------------------- x\n\n\n\n\n MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS\u2019\n MOTION TO DISMISS THE AMENDED COMPLAINT\n\n\n\n\n Susan L. Saltzstein\n Robert A. Fumerton\n Jeffrey S. Geier\n Eryn M. Hughes\n SKADDEN, ARPS, SLATE,\n MEAGHER & FLOM LLP\n One Manhattan West\n New York, New York 10001\n (212) 735-3000\n\n Attorneys for Defendants Fortrea Holdings Inc.,\n Thomas Pike, and Jill McConnell\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 2 of 36\n\n\n\n\n TABLE OF CONTENTS\n\n Page\n\nTABLE OF AUTHORITIES ....................................................................................................... iii\n\nPRELIMINARY STATEMENT ................................................................................................... 1\n\nSTATEMENT OF FACTS............................................................................................................ 3\n\n A. Fortrea\u2019s Business and Spin-off from Labcorp.......................................................... 3\n\n B. Fortrea Publicly Disclosed the Transition Plan, the TSA Framework, and\n Execution Risk ...................................................................................................... 4\n\n C. Fortrea Explained that TSA Exit Would Be a Step Towards Expected\n SG&A Cost Improvements................................................................................... 5\n\n D. Fortrea\u2019s Backlog and PSPs ................................................................................. 6\n\n E. Fortrea Discloses Financial Results and Updates Projections ................................ 7\n\nARGUMENT .............................................................................................................................. 7\n\nI. PLAINTIFFS FAILS TO PLEAD THE EXISTENCE OF AN ACTIONABLE\n MISSTATEMENT OR OMISSION................................................................................... 8\n\n A. The Vast Majority of the Challenged Statements Are Inactionable\n Forward-Looking Statements ............................................................................... 9\n\n 1. These Forward-Looking Statements Were Accompanied By\n Meaningful Cautionary Language ........................................................... 10\n\n 2. Plaintiffs Have Not Pled Defendants Had Actual Knowledge That\n The Statements Were False..................................................................... 11\n\n B. Plaintiffs\u2019 TSA Allegations Do Not Identify Any Actionable\n Misstatement or Omission .................................................................................. 12\n\n C. Plaintiffs\u2019 PSP Allegations Do Not Identify Any Actionable Misstatement\n or Omission ....................................................................................................... 17\n\n D. Fortrea\u2019s Statements of Corporate Optimism or Opinion Are Not\n Actionable.......................................................................................................... 20\n\nII. PLAINTIFFS FAIL TO ALLEGE A STRONG INFERENCE OF SCIENTER ................... 21\n\n A. Plaintiffs\u2019 Miscellaneous Allegations Do Not Give Rise to a Strong\n Inference of Scienter .......................................................................................... 21\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 3 of 36\n\n\n\n\n B. The Former Employee Allegations Do Not Establish Scienter ................................. 23\n\n C. Non Culpable Inferences Are More Compelling ................................................. 25\n\nIII. PLAINTIFFS FAIL TO PLEAD LOSS CAUSATION .................................................. 25\n\nIV. PLAINTIFFS\u2019 SECTION 20(A) CLAIM SHOULD BE DISMISSED ........................... 26\n\nCONCLUSION.......................................................................................................................... 27\n\n\n\n\n ii\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 4 of 36\n\n\n\n\n TABLE OF AUTHORITIES\n\n Page(s)\n\n CASES\n\nAbramson v. Newlink Genetics Corp.,\n965 F.3d 165 (2d Cir. 2020) ...................................................................................................... 21\n\nArk. Public Employees Retirement System v. Bristol-Myers Squibb Co.,\n28 F.4th 343 (2d Cir. 2022) ....................................................................................................... 10\n\nATSI Communications, Inc. v. Shaar Fund, Ltd.,\n493 F.3d 87 (2d Cir. 2007) ................................................................................................ 3, 7, 25\n\nIn re Barrick Gold Corp. Securities Litigation,\n341 F. Supp. 3d 358 (S.D.N.Y. 2018) ........................................................................................ 22\n\nBay Harbour Management LLC v. Carothers,\n282 F. App\u2019x 71 (2d Cir. 2008) ................................................................................................. 16\n\nBratusov v. Comscore, Inc.,\n2020 WL 3447989 (S.D.N.Y. June 24, 2020) ...................................................................... 16, 23\n\nCampo v. Sears Holdings Corp.,\n635 F. Supp. 2d 323 (S.D.N.Y. 2009), aff\u2019d, 371 F. App\u2019x 212 (2d Cir. 2010) .......................... 22\n\nChapman v. Mueller Water Products, Inc.,\n466 F. Supp. 3d 382 (S.D.N.Y. 2020) ........................................................................................ 24\n\nIn re Chicago Bridge & Iron Co. N.V. Securities Litigation,\n2018 WL 2382600 (S.D.N.Y. May 24, 2018) .............................................................................. 9\n\nIn re Citigroup Inc. Securities Litigation,\n753 F. Supp. 2d 206 (S.D.N.Y. 2010) ........................................................................................ 22\n\nCity of Providence v. Aeropostale, Inc.,\n2013 WL 1197755 (S.D.N.Y. Mar. 25, 2013) .............................................................................. 9\n\nCity of Warren Police & Fire Retirement System v. Foot Locker, Inc.,\n412 F. Supp. 3d 206 (E.D.N.Y. 2019)........................................................................................ 20\n\nDamri v. LivePerson, Inc.,\n772 F. Supp. 3d 430 (S.D.N.Y. 2025) ........................................................................................ 23\n\nIn re Danimer Sci., Inc. Sec. Litig., 2023 WL 6385642 (E.D.N.Y. Sept. 30, 2023), aff\u2019d\nsub nom. Swanson v. Danimer Sci., Inc., 2024 WL 4315109 (2d Cir. Sept. 27, 2024) ................ 11\n\n\n\n iii\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 5 of 36\n\n\n\n\nDocdeer Foundation v. BioNTech SE,\n2025 WL 2781381 (S.D.N.Y. Sept. 30, 2025) ................................................... 10, 17, 20, 22, 26\n\nIn re DraftKings Inc. Securities Litigation,\n650 F. Supp. 3d 120 (S.D.N.Y. 2023) ........................................................................................ 19\n\nIn re DRDGOLD Ltd. Securities Litigation,\n472 F. Supp. 2d 562 (S.D.N.Y. 2007) .......................................................................................... 7\n\nDura Pharmaceuticals, Inc. v. Broudo,\n544 U.S. 336 (2005) .............................................................................................................. 1, 25\n\nECA, Local 134 IBEW Joint Pension Trust of Chicago v. JPMorgan Chase Co.,\n553 F.3d 187 (2d Cir. 2009) .......................................................................................... 20, 21, 22\n\nIn re Est\u00e9e Lauder Co., Inc. Securities Litigation,\n2025 WL 965686 (S.D.N.Y. Mar. 31, 2025) ................................................................................ 9\n\nIn re Express Scripts Holdings Co.,\n773 F. App\u2019x 9 (2d Cir. 2019) ................................................................................................... 12\n\nIn re Farfetch Ltd. Securities Litigation,\n802 F. Supp. 3d. 652 (S.D.N.Y. 2025) ....................................................................................... 22\n\nFila v. Pingtan Marine Enterprise Ltd.,\n195 F. Supp. 3d 489 (S.D.N.Y. 2016) ........................................................................................ 25\n\nFresno County Employees\u2019 Retirement Ass\u2019n v. comScore, Inc.,\n268 F. Supp. 3d 526 (S.D.N.Y. 2017) ........................................................................................ 21\n\nGlaser v. The9, Ltd.,\n772 F. Supp. 2d 573 (S.D.N.Y. 2011) .................................................................................. 21, 23\n\nHaw. Structural Ironworkers Pension Trust Fund v. AMC Entertainment Holdings, Inc.,\n422 F. Supp.3d 821 (S.D.N.Y. 2019) ......................................................................................... 11\n\nIn re IAC/InterActiveCorp Securities Litigation,\n478 F. Supp. 2d 574 (S.D.N.Y. 2007) ........................................................................................ 12\n\nIn re ITT Educational Services, Inc. Securities& Shareholder Derivatives Litigation,\n859 F. Supp. 2d 572 (S.D.N.Y. 2012) ........................................................................................ 19\n\nJackson v. Halyard Health, Inc.,\n2018 WL 1621539 (S.D.N.Y. Mar. 30, 2018) ............................................................................ 23\n\nIn re Keyspan Corp. Securities Litigation,\n383 F. Supp. 2d 358 (E.D.N.Y. 2003)........................................................................................ 16\n\n\n\n iv\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 6 of 36\n\n\n\n\nLattanzio v. Deloitte & Touche LLP,\n476 F.3d 147 (2d Cir. 2007) ...................................................................................................... 17\n\nLentell v. Merrill Lynch & Co.,\n396 F.3d 161, 173 (2d Cir. 2005)................................................................................... 15, 18, 25\n\nIn re Lions Gate Entertainment Corp. Securities Litigation,\n165 F. Supp. 3d 1 (S.D.N.Y. 2016)............................................................................................ 17\n\nLipow v. Net1 UEPS Technologies, Inc.,\n131 F. Supp. 3d 144 (S.D.N.Y. 2011) ........................................................................................ 22\n\nLocal No. 38 International Bhd. of Electrical Workers Pension Fund v. American\nExpress Co.,\n724 F. Supp. 2d 447 (S.D.N.Y. 2010), aff\u2019d, 430 F. App\u2019x 63 (2d Cir. 2011) ...................... 22, 23\n\nIn re Lululemon Securities Litigation,\n14 F. Supp. 3d 553 (S.D.N.Y. 2014), aff\u2019d, 604 F. App\u2019x 62 (2d Cir. 2015) .............................. 18\n\nMacquarie Infrastructure Corp. v. Moab Partners, L.P.,\n601 U.S. 257 (2024) .................................................................................................................. 16\n\nMartin v. Quartermain,\n732 F. App\u2019x 37 (2d Cir. 2018) ................................................................................................. 12\n\nIn re Merrill Lynch & Co. Research Reports Securities Litigation,\n568 F. Supp. 2d 349 (S.D.N.Y. 2008) ........................................................................................ 15\n\nIn re Merrill Lynch & Co. Research Reports Securities Litigation,\n273 F. Supp. 2d 351 (S.D.N.Y. 2003), aff\u2019d, 396 F.3d 161 (2d Cir. 2005) ................................... 3\n\nMeyer v. Organogenesis Holdings Inc.,\n727 F. Supp. 3d 368 (E.D.N.Y. 2024)........................................................................................ 23\n\nIn re Nokia Corp. Securities Litigation,\n2021 WL 1199030 (S.D.N.Y. Mar. 29, 2021) ........................................................................ 8, 20\n\nIn re Nokia Oyj (Nokia Corp.) Securities Litigation,\n423 F. Supp. 2d 364 (S.D.N.Y. 2006) ........................................................................................ 25\n\nNovak v. Kasaks,\n216 F.3d 300 (2d Cir. 2000) ................................................................................................ 18, 23\n\nOmnicare, Inc. v. Laborers District Council Construction Industry Pension Fund,\n575 U.S. 175 (2015) ........................................................................................................ 8, 16, 20\n\nIn re Omnicom Group, Inc. Securities Litigation,\n597 F.3d 501 (2d Cir. 2010) ...................................................................................................... 25\n\n v\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 7 of 36\n\n\n\n\nIn re Openwave Systems Securities Litigation,\n528 F. Supp. 2d 236 (S.D.N.Y. 2007) ........................................................................................ 17\n\nIn re Petrobras Securities Litigation,\n116 F. Supp.3d 368 (S.D.N.Y. 2015) ......................................................................................... 20\n\nIn re Philip Morris International Inc. Securities Litigation,\n89 F.4th 408 (2d Cir. 2023) ......................................................................................................... 7\n\nIn re Pretium Resources Inc. Securities Litigation,\n256 F. Supp. 3d 459 (S.D.N.Y. 2017), aff\u2019d, 732 F. App\u2019x 37 (2d Cir. 2018) ............................ 24\n\nPrime Mover Capital Partners L.P. v. Elixir Gaming Technologies, Inc.,\n548 F. App\u2019x 16 (2d Cir. 2013) ................................................................................................. 26\n\nRombach v. Chang,\n355 F.3d 164 (2d Cir. 2004) .................................................................................... 10, 16, 19, 25\n\nSEC v. Farnsworth,\n692 F. Supp. 3d 157 (S.D.N.Y. 2023) ........................................................................................ 20\n\nSEC v. Rio Tinto plc,\n41 F.4th 47 (2d Cir. 2022) ........................................................................................................... 8\n\nSteamship Trade Ass\u2019n of Baltimore-International Longshoreman\u2019s Ass\u2019n Pension Fund\nv. Olo Inc.,\n704 F. Supp. 3d 429 (S.D.N.Y. 2023) ........................................................................................ 11\n\nSchiro v. Cemex, S.A.B. de C.V.,\n396 F. Supp. 3d 283 (S.D.N.Y. 2019) ........................................................................................ 24\n\nSetzer v. Omega Healthcare Investors, Inc.,\n968 F.3d 204 (2d Cir. 2020) ...................................................................................................... 16\n\nShemian v. Research In Motion Ltd.,\n2013 WL 1285779 (S.D.N.Y. Mar. 29, 2013), aff\u2019d, 570 F. App\u2019x 32 (2d Cir. 2014) ................ 19\n\nSherman v. Abengoa, S.A.,\n156 F.4th 152 (2d Cir. 2025) ..................................................................................................... 24\n\nSingh v. Cigna Corp.,\n918 F.3d 57 (2d Cir. 2019) .................................................................................................... 7, 12\n\nIn re Skechers USA, Inc. Securities Litigation,\n444 F. Supp. 3d 498 (S.D.N.Y. 2020) ........................................................................................ 15\n\nSlayton v. American Express Co.,\n604 F.3d 758 (2d Cir. 2010) .............................................................................................. 8, 9, 11\n\n vi\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 8 of 36\n\n\n\n\nSmith v. PureCycle Technologies, Inc.,\nNo. 23-CV-8605 (JGK), 2024 WL 5186586 (S.D.N.Y. Dec. 20, 2024) ..................................... 18\n\nIn re STMicroelectronics N.V. Securities Litigation,\n2025 WL 2644241 (S.D.N.Y. Sept. 15, 2025) ........................................................................... 12\n\nTongue v. Sanofi,\n816 F.3d 199 (2d Cir. 2016) ...................................................................................................... 20\n\nIn re Virtu Financial, Inc. Securities Litigation,\n770 F. Supp.3d 482 (E.D.N.Y. 2025)......................................................................................... 20\n\nIn re Weight Watchers International Inc. Securities Litigation,\n504 F. Supp. 3d 224 (S.D.N.Y. 2020) ........................................................................................ 10\n\nWilbush v. Ambac Financial Group, Inc.,\n271 F. Supp. 3d 473 (S.D.N.Y. 2017) ........................................................................................ 23\n\n STATUTES\n\n15 U.S.C. \u00a7 78u-4(b)(1)............................................................................................................... 8\n\n15 U.S.C. \u00a7 78u-5(c)(1)......................................................................................................... 9, 11\n\n\n\n\n vii\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 9 of 36\n\n\n\n\n Defendants Fortrea Holdings Inc. (\u201cFortrea\u201d or the \u201cCompany\u201d), Thomas Pike, and Jill\n\nMcConnell (collectively, \u201cDefendants\u201d) respectfully submit this memorandum of law in support\n\nof their motion to dismiss the Amended Complaint (the \u201cComplaint\u201d) (ECF No. 53).1\n\n PRELIMINARY STATEMENT\n This action represents an attempt by Plaintiffs to manufacture a securities fraud action out\n\nof Fortrea\u2019s fully disclosed post-spin-off transition process. As part of Fortrea\u2019s July 2023\n\nseparation from Labcorp Holdings, Inc. (\u201cLabcorp\u201d), the Company inherited legacy contracts\n\nand systems and entered into publicly disclosed, time-limited Transition Services Agreements\n\n(\u201cTSAs\u201d) under which Labcorp would continue providing certain services while Fortrea built\n\ninfrastructure designed for its standalone business. When Fortrea later encountered execution\n\nchallenges and revised its outlook, Plaintiffs filed this action in an attempt to transform the\n\nfederal securities laws into a system of \u201cbroad insurance against market losses,\u201d an approach the\n\nSupreme Court has expressly rejected. Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 345 (2005).\n\nUnfortunately for Plaintiffs, the Complaint does not come close to satisfying the heightened\n\npleading standards applicable to securities claims and should be dismissed in its entirety.\n\n In support of their legally insufficient Complaint, Plaintiffs advance two theories of\n\nfalsity. First, the bulk of the Complaint is directed at Fortrea\u2019s forward-looking statements\n\nconcerning the fully-disclosed TSAs, pursuant to which Labcorp (which is not a global\n\ntechnology or administrative service provider) would continue to provide certain services to\n\nFortrea during the transition. Plaintiffs point to forward looking statements regarding selling,\n\n\n\n1\n Citations to the Complaint are in the form of \u201c\u00b6 __.\u201d Exhibits attached to the Declaration of Robert A. Fumerton\n are cited herein as \u201cEx. __.\u201d Pincites for all exhibits reference the original pagination at the bottom of the page.\n All internal quotation marks and citations are omitted, and all emphases in quotations are added, unless\n otherwise indicated.\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 10 of 36\n\n\n\n\ngeneral, & administrative expenses (\u201cSG&A\u201d) and margin improvements that Fortrea foresaw\n\nfor coming years as it became a standalone company, and attempt to recast those statements into\n\nguarantees that exiting the TSAs would provide instant cost savings and margin improvements.\n\nIn reality, Fortrea properly distinguished between one-time costs and ongoing targets and\n\nexplained that it anticipated future SG&A and margin improvements would follow exiting the\n\nTSA and deployment of its new built-for-purpose systems. The Company also disclosed that its\n\nanticipated margin improvements would flow from several different drivers, including improved\n\nrevenue. The Complaint confuses one-time and ongoing costs within SG&A and Plaintiffs have\n\nnot adequately alleged the falsity of any of Fortrea\u2019s actual statements.\n\n Plaintiffs\u2019 alternate theory is that Fortrea supposedly misled investors about revenue\n\nexpected from its backlog of pre-spin projects (\u201cPSPs\u201d). But Plaintiffs do not dispute the\n\naccuracy of Fortrea\u2019s disclosed backlog figures, nor do they allege that Fortrea guaranteed\n\nrevenue realization on any particular timeline. Instead, Plaintiffs rely on Fortrea\u2019s later\n\nexplanation that certain PSPs were burning more slowly in 2025 than had been expected. Fortrea,\n\nhowever, consistently disclosed that its backlog consisted of multi-year contracts, that\n\nconversion timing could vary, and that backlog is \u201cnot\u201d a \u201cconsistent indicator of future\n\nrevenue.\u201d (Ex. A at 16, 75; Ex. B at 50; Ex. C at 39; Ex. D at 36; Ex. E at 56.) A later update\n\nabout timing does not transform accurate statements into misrepresentations of fact. Once again,\n\nPlaintiffs have not adequately alleged the falsity of any of Fortrea\u2019s actual statements.\n\n Although the Court need not reach the issue given the absence of an actionable false or\n\nmisleading statement, Plaintiffs\u2019 claims also fail because they have not pleaded a strong\n\ninference of scienter, much less with the requisite particularity. They allege no motive or stock\n\nsales, or contemporaneous facts showing that Defendants knew any statement was false when\n\n\n\n 2\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 11 of 36\n\n\n\n\nmade. Instead, Plaintiffs rely on vague confidential-witness allegations disconnected from the\n\nallegations of falsity, generalized claims that issues were \u201cwell known,\u201d and bald assertions that\n\nDefendants \u201cknew or recklessly disregarded\u201d certain statements were false because of their\n\npositions. (\u00b6\u00b6 73, 250.) Far from supporting a cogent inference of fraud, the Complaint depicts\n\nmanagement doing exactly what the securities laws contemplate: warning of risks, updating\n\ninvestors as circumstances evolved, and revising expectations when execution proved more\n\ndifficult than anticipated.\n\n Finally, Plaintiffs fail to plead loss causation. None of the events they identify revealed\n\nthe falsity of any prior statement, but instead reflect Fortrea\u2019s ongoing disclosures about\n\nexecution challenges and evolving, forward-looking expectations during a fully disclosed\n\ntransition process.\n\n Given that Plaintiffs fail to plead an actionable misstatement or omission, scienter, or loss\n\ncausation, the Complaint should be dismissed in its entirety with prejudice.\n\n STATEMENT OF FACTS2\n\nA. Fortrea\u2019s Business and Spin-off from Labcorp\n\n Fortrea is a global contract research organization (\u201cCRO\u201d) providing clinical\n\ndevelopment services to pharmaceutical, biotechnology, and medical device companies. (\u00b6 2.)\n\nBefore July 2023, Fortrea operated as part of Labcorp as its Clinical Development and\n\nCommercialization Services business. (\u00b6 3.) In June 2023, Fortrea spun off from Labcorp,\n\nbecoming a standalone public company. (Id.)\n\n\n2\n The facts set forth herein are drawn from the allegations in the Complaint, documents incorporated by\n reference, matters of which judicial notice may be taken, and documents integral to the Complaint. See In re\n Merrill Lynch & Co. Rsch. Reps. Sec. Litig., 273 F. Supp. 2d 351, 356-57 (S.D.N.Y. 2003), aff\u2019d, 396 F.3d 161\n (2d Cir. 2005). The Court may also consider \u201clegally required public disclosure documents filed with the SEC,\n and documents possessed by or known to the plaintiff and upon which it relied in bringing the suit.\u201d ATSI\n Commc\u2019ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007).\n\n\n 3\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 12 of 36\n\n\n\n\nB. Fortrea Publicly Disclosed the Transition Plan, the TSA Framework, and Execution Risk\n\n Labcorp\u2019s initial spin announcement explained that \u201cthere [would] be ongoing transition\n\nand commercial arrangements to provide for a seamless delivery of services to the customers and\n\nother stakeholders of the Labcorp and the Clinical Development business[.]\u201d (\u00b6 48.) Among the\n\nmultitude of tasks confronting Fortrea, the spin-off required Fortrea to establish independent\n\nsystems, infrastructure, and corporate functions that had historically been provided by Labcorp.\n\n(\u00b6\u00b6 11, 54.) To facilitate the separation, Fortrea entered into a series of TSAs under which\n\nLabcorp would continue to provide certain services\u2013such as information technology, finance,\n\nand human resources\u2013at cost for a limited period while Fortrea built standalone capabilities. (\u00b6\u00b6\n\n52-55.) Fortrea agreed to pay \u201cfees based on the direct and indirect costs associated with\n\nrendering those services, at no less than cost,\u201d and that the TSAs \u201cwould not extend later than\n\nJune 30, 2025, two years after the effective date of the Spin-Off.\u201d (\u00b6\u00b6 53, 133.) Thus, from the\n\nvery beginning of Fortrea, the market was fully informed of the TSAs, their limited duration and\n\nthat services provided thereunder would be billed at Labcorp\u2019s cost. Labcorp, however, is not\n\nalleged to have been a technology service provider, and the systems provided pursuant to the\n\nTSAs had been developed for Labcorp\u2019s business needs, not for Fortrea as a standalone\n\ncompany.\n\n Fortrea also disclosed that replacing the TSAs would require significant operational\n\ninvestment: \u201cTSA inefficiencies reflect the impact of the incremental costs of obtaining services\n\nunder the transition services agreement compared to the estimated cost of performing those\n\nfunctions internally.\u201d (Ex. A at 73.) Fortrea also explained that it \u201canticipated that the TSA\n\narrangements [would] be phased out over a 24-month period as [Fortrea] develop[ed] the\n\nnecessary infrastructure and capabilities to perform these functions internally.\u201d (Id.) Consistent\n\n\n\n 4\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 13 of 36\n\n\n\n\nwith that messaging, Fortrea stated that its near-term capital allocation \u201cprioriti[es]\u201d included\n\n\u201cinfrastructure investments to enable timely exit of the TSAs with Labcorp.\u201d (\u00b6 97.)\n\nC. Fortrea Explained that TSA Exit\n Would Be a Step Towards Expected SG&A Cost Improvements\n\n Fortrea repeatedly explained that exiting the TSAs and deploying its newly developed\n\nsystems was an important step towards expected future SG&A cost improvements. For example,\n\nduring the 3Q23 Earnings Call, Defendant McConnell stated that Fortrea had \u201cdetailed plans for\n\nthe changes we can make to improve our SG&A cost as a percent of revenue[,]\u201d but that \u201c[t]he\n\nimprovements will come in phases over the next few years as some are heavily dependent upon\n\nexit of the TSA agreement.\u201d (\u00b6 100.) Fortrea cautioned that exiting individual TSAs would not\n\nimmediately drive margins: \u201cthe ones that we\u2019ve come out [of] aren\u2019t going to\u2014in and of\n\nthemselves do a lot in terms of the margin,\u201d because \u201cit\u2019s really what we replace them with.\u201d\n\n(Ex. F at 9.)\n\n Fortrea also explained the larger context of future potential cost savings: \u201cWe do need to\n\ninvest more in supporting technology and the spin and the exit from the parent will allow us to\n\ncompletely revise our software suite. There is also an opportunity for greater productivity while\n\nreducing technology costs. We also see procurement facility savings and will align operations\n\ncost with revenues more effectively.\u201d (Ex. G at 8.) The next quarter Fortrea stated, \u201cAs we have\n\nmentioned, much of this is focused on reducing high costs in IT, but also improving how we use\n\ntechnology throughout the business. We will benefit from the more modern tools being deployed\n\nin our industry now, along with AI and automation.\u201d (Ex. H at 7.)\n\n Fortrea also cautioned that forward-looking statements regarding its performance were\n\nsubject to \u201cknown and unknown risks and uncertainties,\u201d including risks arising from \u201cthe\n\nimpacts of becoming an independent public company\u201d and its \u201creliance on Labcorp . . . and third\n\n\n 5\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 14 of 36\n\n\n\n\nparties\u201d for \u201cIT, accounting, finance, legal, human resources, and other services critical to our\n\nbusinesses\u201d during and following the transition period. (Ex. B at 4; see also Ex. E at 4.) Fortrea\n\nwarned that establishing standalone accounting, enterprise resource planning, and other\n\nmanagement systems \u201ccould cost more or take longer than anticipated,\u201d and that the operational\n\nand systems separation from Labcorp was \u201ccomplex and involves numerous systems and\n\njurisdictions.\u201d (Id.)\n\nD. Fortrea\u2019s Backlog and PSPs\n\n Fortrea also fully disclosed the backlog of PSPs that it inherited following the spin, which\n\nit defined as \u201canticipated future revenue from business awards that either have not started, or that\n\nare in process and have not been completed.\u201d (\u00b6 57.) In its FY23 Form 10-K, Fortrea cautioned\n\nthat it did \u201cnot believe that, as a sole measure, our backlog is a consistent indicator of future\n\nrevenue,\u201d because backlog is affected by \u201cthe variable size and duration of the projects.\u201d ( Ex. B\n\nat 50.) Similar disclosures were made throughout the putative class period. (See, e.g., Ex. E at\n\n56.) Fortrea also explained that backlog conversion depended on assumptions regarding trial\n\nprogress, customer decisions, and contract modifications, that projects \u201cmay be canceled or\n\ndelayed,\u201d and Fortrea generally has \u201cno contractual right to the full amount of the future revenue\n\nreflected in our backlog\u201d in the event of termination or changes in scope. (Ex. B at 25, 50; Ex. E\n\nat 27.) Fortrea further warned that \u201c[t]he rate at which our backlog converts to revenue may vary\n\nover time,\u201d and that revenue recognition on \u201clarger, more global projects could be slower,\u201d\n\nincluding due to extended coordination between award and contract execution and delays in\n\nregulatory approvals. (Ex. B at 25; Ex. E at 27.) Fortrea was transparent about revenue pressure\n\nbeing attributable to the \u201cquantity and burn rate of new business wins pre-Spin\u201d and \u201cchallenges\n\nof mix.\u201d (Ex. C at 39; see also Ex. D at 36 (revenues pressured due to \u201cthe mix of later stage and\n\nlonger duration studies in our portfolio.\u201d).)\n 6\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 15 of 36\n\n\n\n\nE. Fortrea Discloses Financial Results and Updates Projections\n\n Throughout the putative Class Period, Fortrea reported quarterly results reflecting the\n\ncosts and operational challenges of operating as a newly independent company. (\u00b6\u00b6 167-196.) In\n\nMay 2024, Fortrea reduced revenue guidance, citing \u201cslower study start-up due to the therapeutic\n\nmix and certain biotech programs\u201d and \u201clower-than-anticipated first quarter book-to-bill . . . .\u201d (\u00b6\n\n70.) In August 2024, Fortrea revised expectations again, explaining that \u201cthe challenges of the\n\nseparation and the time it is taking to optimize our commercial approach and operational\n\nexecution has led to a slower return to growth and margin expansion than we originally\n\nanticipated.\u201d (Ex. I at 8.) Fortrea confirmed that as it exited the TSAs and implemented its stand-\n\nalone systems, management conducted a \u201cdeeper analysis of full-service projects and other\n\ninputs to longer-term forecasts[,]\u201d which took time to confirm and resulted in updated\n\nexpectations for 2025. (\u00b6 280.) With respect to the PSPs, Fortrea disclosed that inherited pre-spin\n\nprojects were \u201cextended in duration\u201d and \u201cwell into their life cycle,\u201d creating margin headwinds\n\ndue to \u201cinefficiencies in the pre-[spin] portfolio and the inherited SG&A costs . . . .\u201d (\u00b6 183.)\n\nFortrea later explained that those projects had \u201ca lot of hours in them already,\u201d resulting in a\n\n\u201cslower burn\u201d\u2014\u201c[i]t\u2019s not so much less backlog; it\u2019s slower burn.\u201d (\u00b6\u00b6 24, 280.)\n\n ARGUMENT\n\n To state a claim under Section 10(b), Plaintiffs must allege, among other things: (1) a\n\nmaterial misstatement or omission; (2) scienter; and (3) loss causation. See Singh v. Cigna Corp.,\n\n918 F.3d 57, 62 (2d Cir. 2019); In re Philip Morris Int\u2019l Inc. Sec. Litig., 89 F.4th 408, 417 (2d Cir.\n\n2023). Plaintiffs must also satisfy the heightened pleading requirements of Rule 9(b) and the\n\nPSLRA, which require that the Complaint plead the circumstances constituting the alleged fraud\n\nwith particularity. See ATSI Commc\u2019ns, Inc., 493 F.3d at 99; Philip Morris, 89 F.4th at 416-17; In\n\nre DRDGOLD Ltd. Sec. Litig., 472 F. Supp. 2d 562, 567 (S.D.N.Y. 2007).\n\n 7\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 16 of 36\n\n\n\n\nI. PLAINTIFFS FAIL TO PLEAD THE EXISTENCE OF AN ACTIONABLE\n MISSTATEMENT OR OMISSION\n\n Plaintiffs identify allegedly false or misleading statements falling into two categories: (i)\n\nstatements concerning Fortrea\u2019s TSA exit strategy and anticipated SG&A efficiencies from\n\nmoving to \u201cfit-for-purpose\u201d infrastructure (\u00b6\u00b6 208-46), and (ii) statements concerning Fortrea\u2019s\n\nPSP backlog and future revenue visibility. (\u00b6\u00b6 196-207.) Plaintiffs have not adequately pleaded\n\nthat any statement is actionable.3\n\n To meet the heightened pleading standard of the PSLRA, a plaintiff must \u201cspecify each\n\nstatement alleged to have been misleading\u201d and \u201cthe reason or reasons why the statement is\n\nmisleading.\u201d 15 U.S.C. \u00a7 78u-4(b)(1). Whether a statement is misleading must be assessed \u201cin\n\nlight of all its surrounding text,\u201d \u201cin its full context,\u201d and from the perspective of a \u201creasonable\n\ninvestor.\u201d Omnicare, Inc. v. Laborers Dist. Council Constr. Indus. Pension Fund, 575 U.S. 175,\n\n190 (2015). A plaintiff must plead particularized facts showing that challenged statements were\n\nfalse or misleading when made, not merely that later developments disappointed expectations.\n\nSee In re Nokia Corp. Sec. Litig., 2021 WL 1199030, at *14 (S.D.N.Y. Mar. 29, 2021).\n\nAllegations of \u201cfraud by hindsight\u201d are insufficient as a matter of law. Slayton v. Am. Express\n\nCo., 604 F.3d 758, 776 (2d Cir. 2010).\n\n\n\n\n3\n To the extent Plaintiffs assert scheme liability under Rule 10b-5(a) or (c), that claim fails because Plaintiffs\n allege no deceptive conduct apart from the alleged misstatements and omissions, which must be analyzed under\n Rule 10b-5(b). SEC v. Rio Tinto plc, 41 F.4th 47, 54-55 (2d Cir. 2022).\n\n\n\n\n 8\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 17 of 36\n\n\n\n\nA. The Vast Majority of the Challenged Statements\n Are Inactionable Forward-Looking Statements\n\n As a threshold issue, the vast majority of the statements challenged by Plaintiffs are\n\nforward-looking statements protected by the PSLRA safe harbor,4 which makes such statements\n\ninactionable if (1) the statement is identified as forward-looking and accompanied by meaningful\n\ncautionary language, or (2) the plaintiff fails to plead facts showing that the speaker made the\n\nstatement with actual knowledge that it was false or misleading. 15 U.S.C. \u00a7 78u-5(c)(1). The\n\nsafe harbor is \u201cwritten in the disjunctive.\u201d Slayton, 604 F.3d at 766\n\n Here, both the TSA and PSP challenged statements are forward-looking on their face,\n\nincluding those concerning expected future revenue visibility, anticipated margin improvement,\n\ntargeted EBITDA levels, the expected timing and impact of exiting TSAs, and anticipated\n\nbenefits from moving to \u201cfit-for-purpose\u201d infrastructure. (\u00b6\u00b6 196, 200, 206, 208, 212, 214, 216,\n\n218, 220, 222, 224, 226, 228, 230, 232, 234, 237, 239, 241, 243, 245.)5 Likewise, Plaintiffs cite\n\nto statements concerning targets or goals about future performance, including references to\n\n\u201crevenue in years to come\u201d (\u00b6 196), \u201cconfidence and visibility into our future revenues\u201d (\u00b6 200),\n\n\u201cexpect[ations] to be on track with . . . exiting 2024 . . . at a run rate around a 13% EBITDA\n\nmargin\u201d (\u00b6 222), improvements expected to emerge \u201cover time,\u201d \u201cin phases\u201d and \u201cthrough the\n\nyear\u201d (\u00b6\u00b6 208, 212, 216, 236, 239, 241), and SG&A efficiencies tied to replacing TSAs with\n\n\n4\n Each source of the challenged statements expressly identified them as \u201cforward-looking statements\u201d subject to\n significant risks and uncertainties that could cause actual results to differ materially from our current\n expectations\u201d and incorporated Fortrea\u2019s risk disclosures filed with the SEC. (See, e.g., Exs. G, H, I, J at 2; Ex.\n K at 2, 7; Ex. F at 1, 5.)\n5\n Plaintiffs identify one statement they contend encompassed a representation of present fact in their pre-motion\n letter (ECF No. 55 (\u201cPML\u201d) at 2, citing \u00b6 204.), That statement is inactionable puffery and not alleged to be\n false. Plaintiffs\u2019 reliance on In re Chicago Bridge & Iron Co. N.V. Sec. Litig., 2018 WL 2382600 (S.D.N.Y.\n May 24, 2018) therefore is unavailing. See id. at *8 (statements included present facts). And, as explained\n below, Plaintiffs have not identified any omissions, rendering the remainder of their citations inapposite. See\n City of Providence v. Aeropostale, Inc., 2013 WL 1197755, at *12 (S.D.N.Y. Mar. 25, 2013); In re Est\u00e9e\n Lauder Co., Inc. Sec. Litig., 2025 WL 965686, at *7 (S.D.N.Y. Mar. 31, 2025).\n\n\n 9\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 18 of 36\n\n\n\n\n\u201cmore fit-for-purpose infrastructure\u201d (\u00b6 208, 218). Because these statements are quintessential\n\nforward-looking statements, they cannot form the basis of securities fraud under the PSLRA safe\n\nharbor. See Docdeer Found. v. BioNTech SE, 2025 WL 2781381, at *12-13 (S.D.N.Y. Sept. 30,\n\n2025) (\u201c[P]rojections of revenue or income and future economic performance\u201d are forward-\n\nlooking statements.)\n\n 1. These Forward-Looking Statements Were Accompanied By\n Meaningful Cautionary Language\n\n With respect to the TSA exits and forecasted future cost improvements, Fortrea\n\ncautioned its \u201cdependence on third parties\u201d and \u201cability to establish and develop\u201d systems could\n\n\u201ccost more or take longer than anticipated.\u201d (Ex. B at 4.) With respect to the PSPs and backlog,\n\nFortrea cautioned that its \u201cbacklog . . . may not be indicative of [its] future revenues and [it]\n\nmight not realize all of the anticipated future revenue reflected in [its] backlog.\u201d (Id.) Fortrea\n\nincluded specific disclosures concerning the very risks about which Plaintiffs complain.6 The\n\ncited statements therefore are inactionable pursuant to the safe harbor. See, e.g., Ark. Pub. Emps.\n\nRet. Sys. v. Bristol-Myers Squibb Co., 28 F.4th 343, 355, 357 (2d Cir. 2022) (affirming dismissal\n\nwhere \u201cthe relevant risk . . . was fully disclosed.\u201d); In re Weight Watchers Int\u2019l Inc. Sec. Litig.,\n\n\n\n\n6\n Plaintiffs argue that the safe harbor is inapplicable because the risks supposedly already had transpired,\n asserting that the supposed fact that \u201cthe PSPs had \u2018a lot of hours in them\u2019\u201d and one vendor \u201cwas chronically\n over budget\u201d already existed. (PML at 3.) Plaintiffs\u2019 allegations of falsity, however, concern statements about\n future SG&A savings, margin improvement and revenue generation from backlog, not the specific number of\n hours on projects or the budget for a vendor. This distinction is illustrated by the case Plaintiffs cite. See\n Rombach v. Chang, 355 F.3d 164, 173-74 (\u201cA company that operates 119 separate facilities nationwide is\n bound to have problems assimilating this or that property, to have disputes over payments with vendors and\n landlords, and to have some bills unpaid by reason of contested amounts or spot episodes of illiquidity; the\n allegations in the complaint are consistent with unremarkable circumstances short of financial peril or\n instability.\u201d).\n\n\n 10\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 19 of 36\n\n\n\n\n504 F. Supp. 3d 224, 255 (S.D.N.Y. 2020) (warnings \u201cdisclose[d] the exact risk of which\n\nPlaintiffs complain\u201d).7\n\n 2. Plaintiffs Have Not Pled Defendants Had Actual Knowledge That The\n Statements Were False\n\n To plead actual knowledge under the PSLRA\u2019s safe harbor, Plaintiffs must allege\n\nparticularized facts showing that Defendants knew their statements were false or misleading\n\nwhen made. 15 U.S.C. \u00a7 78u-5(c)(1)(B)(i). \u201c[T]he scienter requirement for forward-looking\n\nstatements is stricter than for statements of current fact.\u201d Slayton, 604 F.3d at 773. To meet this\n\nhigh standard, Plaintiffs must allege \u201cspecific, contemporaneous reports or statements\u201d\n\ndemonstrating that Defendants did not believe their stated expectations or knew that the\n\nprojections were unattainable when made. In re Danimer Sci., Inc. Sec. Litig., 2023 WL\n\n6385642, at *7 (E.D.N.Y. Sept. 30, 2023), ) aff\u2019d sub nom. Swanson v. Danimer Sci., Inc., 2024\n\nWL 4315109 (2d Cir. Sept. 27, 2024; see also S.S. Trade Ass\u2019n of Balt.-Int\u2019l Longshoreman\u2019s\n\nAss\u2019n Pension Fund v. Olo Inc., 704 F. Supp. 3d 429, 443-44 (S.D.N.Y. 2023). Allegations that\n\nDefendants may have known of some issues affecting future performance are insufficient. See\n\nSlayton, 604 F.3d at 776.\n\n Here, Plaintiffs claim that Defendants approved budget overages for a vendor and had\n\nseen an unidentified model in 2023 that projected cost savings from a particular project would\n\ntake three years to realize. (PML at 3, citing \u00b6 159.) But, as explained in more detail below (see\n\ninfra \u00a7 II.C), Plaintiffs\u2019 former employee (\u201cFE\u201d) allegations do not establish the falsity of any\n\nstatement, let alone that anyone knew the statements were false when made. Rather, the FE\n\n\n\n7\n Fortrea\u2019s risk disclosures are far more specific that the \u201cgeneral warnings in AMC\u2019s SEC forms, about\n \u2018execution risks\u2019 relating to AMC\u2019s acquisitions [and] unspecified \u2018known . . . risks [and] uncertainties\u2019\u201d at\n issue in the case cited by Plaintiffs. See Haw. Structural Ironworkers Pension Trust Fund v. AMC Ent.\n Holdings, Inc., 422 F. Supp.3d 821, 847 (S.D.N.Y. 2019) (alterations in original).\n\n\n 11\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 20 of 36\n\n\n\n\nallegations either are consistent with Fortrea\u2019s public statements, or fail to speak to the issues\n\nalleged by Plaintiffs. Plaintiffs have not shown with specificity that Defendants had acted with\n\nactual knowledge that the statements were false or misleading.8\n\nB. Plaintiffs\u2019 TSA Allegations Do Not Identify\n Any Actionable Misstatement or Omission\n\n Plaintiffs allege Fortrea purportedly failed to disclose that TSA services would be\n\nreplaced with similar, if not higher costs, and that internal cost models allegedly showed that\n\ncertain replacement arrangements would take years to yield savings. (\u00b6\u00b6 209, 223-46.) Plaintiffs\n\nfurther contend that several statements misleadingly suggested that exiting the TSAs was the\n\nprimary constraint on reducing SG&A and achieving margin improvement. (\u00b6 238.)\n\n In evaluating the statements at issue, a court should consider the actual statements and\n\nsurrounding context, not plaintiff\u2019s characterization of the statements. See In re Express Scripts\n\nHoldings Co., 773 F. App\u2019x 9, 12 (2d Cir. 2019); Martin v. Quartermain, 732 F. App\u2019x 37, 41-\n\n42 (2d Cir. 2018); Singh, 918 F.3d at 63; see also In re IAC/InterActiveCorp Sec. Litig., 478 F.\n\nSupp. 2d 574, 585 (S.D.N.Y. 2007) (\u201cNor should a court accept allegations that are contradicted\n\nor undermined by other more specific allegations in the complaint or by written materials\n\nproperly before the court.\u201d). Here, Plaintiffs have failed to allege that a single TSA statement\n\nwas false when made.\n\n First, Plaintiffs attempt to assert falsity by claiming that because Labcorp provided\n\nservices at cost (which was disclosed), exiting the TSAs \u201cwould not cause the Company\u2019s\n\nSG&A to decrease.\u201d (\u00b6 157.) From this faulty premise, Plaintiffs allege the falsity of numerous\n\n\n\n\n8\n Again, the facts alleged here can be contrasted with the case relied upon by Plaintiffs (PML at 3), where the\n former employee was alleged to have reported the items at issue directly to the Chief Executive Officer. See In\n re STMicroelectronics N.V. Sec. Litig., 2025 WL 2644241, at *2 (S.D.N.Y. Sept. 15, 2025).\n\n\n 12\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 21 of 36\n\n\n\n\nstatements, claiming that exiting the TSAs \u201cwould merely result in replacing TSA service costs\n\nwith similar, if not higher, infrastructure costs from Fortrea itself for third-party service\n\nproviders.\u201d (See \u00b6\u00b6 209, 211, 213, 215, 217, 219, 223, 225, 227, 229, 231, 233, 235, 240, 242,\n\n244, 246.) But Plaintiffs\u2019 claims rewrite Fortrea\u2019s disclosures, which do not promise an\n\ninstantaneous reduction of SG&A expense upon exiting a TSA,9 but instead explain that Fortrea\n\nexpected future SG&A improvements as it replaced TSAs \u201cwith more fit-for-purpose\n\ninfrastructure\u201d and that margin improvements would occur \u201cover time.\u201d (\u00b6 208.) Indeed, as\n\nPlaintiffs concede, Fortrea explained that \u201c[t]he improvements will come in phases over the next\n\nfew years\u201d (\u00b6 212) and that \u201cowners have been tasked with coming back with a replacement\n\nsystem or technology or process that is more cost effective.\u201d (\u00b6 220; see also \u00b6\u00b6 210, 214, 216,\n\n218, 226, 228, 230, 234, 237, 239, 241, 243, 245.) Read in context, Fortrea clearly explained that\n\nexiting the TSAs would open the door to a more cost optimized structure as Fortrea implemented\n\nnewly designed fit-for-purpose systems allowing it to operate more efficiently.10 Thus, Plaintiffs\u2019\n\nbald allegations that the statements were false because replacing the TSA would result in\n\n\u201csimilar, if not higher, infrastructure costs\u201d from a \u201cthird-party service provider\u201d (\u00b6\u00b6 215, 217,\n\n219)\u2013or suggestion that Labcorp\u2019s systems could not be improved upon because they were\n\nprovided at cost (\u00b6\u00b6 223, 242, 246)\u2013are misaligned with Fortrea\u2019s actual disclosures, which\n\nspeak to an ongoing process that would allow improved efficiencies from the newly developed\n\nsystems (Compare \u00b6 12 (incorrectly asserting that Defendants\u2019 statements could only be true if\n\n\n\n\n9\n There would be some improvement in expenses as exiting the TSAs would mean that Fortrea no longer would\n need to pay both for the TSA and the design and implementation of its new systems.\n10\n Fortrea\u2019s characterization of exiting the TSAs as being \u201ckey,\u201d \u201ccritical,\u201d or \u201cessential\u201d to future margin\n improvement (\u00b6\u00b6 218, 220, 228, 230, 245) are consistent. These statements do not assert that TSA exit was the\n sole driver of margin improvement, nor do they represent that TSA exit alone would guarantee cost reductions.\n\n\n 13\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 22 of 36\n\n\n\n\nthey could \u201cimplement services cheaper than at the cost provided by Labcorp.\u201d); see also \u00b6\u00b6 97,\n\n138, 139.)\n\n Second, Plaintiffs recast their mistaken claim that the TSAs could not be improved upon\n\ninto allegations that any forecast about SG&A or margin improvements also must have been\n\nfalse when made. Many of the statements identified by Plaintiffs, however, speak about future\n\nSG&A or margin improvement, following exit from the TSAs and implementation of the new fit-\n\nfor-purpose systems. (See, e.g., \u00b6 212 (\u201cimprovements will come in phases over the next few\n\nyears\u201d); \u00b6 218 (2024 \u201cis really how do we make sure we exit those TSAs, start moving towards a\n\nmore fit-for-purpose infrastructure\u201d); \u00b6 228 (\u201cTSA exits allow us to start to make some of the\n\nmore significant changes around SG&A\u201d); \u00b6 239 (potential to improve SG&A \u201cover time once\n\nwe fully exit the TSA services and can transition to lower cost replacement infrastructure\u201d); see\n\nalso \u00b6\u00b6 208, 210, 214, 220, 224, 230, 234, 237, 241, 245.) Contrary to Plaintiffs\u2019 allegations,\n\nFortrea\u2019s disclosures speak to the development of a fit-for-purpose structure that would lead to\n\npotential future efficiencies.11\n\n Third, Plaintiffs\u2019 attempt to bootstrap their TSA arguments into an assertion that SG&A\n\nor margin forecasts must have been false when made ignores Fortrea\u2019s actual disclosures and the\n\ncomponents of the ratios they cite. Margin includes both revenue and adjusted EBITDA, both of\n\nwhich involve many metrics beyond TSA exits. (See \u00b6 171 (net income to adjusted EBITDA\n\n\n11\n Plaintiffs term this argument \u201cpuzzling\u201d in their pre-motion letter (PML at 1 n.2), asserting that \u201cDefendants\n also repeatedly assured investors that the TSA Exit Strategy would reduce expenses, leading to 13% EBITDA\n margins \u2018exiting 2024\u2019 and that the \u2018TSA exit trajectory\u2019 was \u2018really key to unlocking the SG&A\n improvement.\u201d (Id. at 1-2 (citations omitted).) The disclosures they cite, however, contain no such assurances.\n (See \u00b6 222 (discussing \u201cheadwinds of lower full-service clinical sales, elevated infrastructure costs and the\n transition services agreement\u201d and continues to state that the Company was \u201cworking to mitigate these\n headwinds and we expect to be on track with the previously shared margin improvement target of exiting 2024\n and entering 2025 at a run rate around 13% adjusted EBITDA margin.\u201d); \u00b6 230 (\u201cthere\u2019s a lot of opportunity in\n SG&A and exiting those TSAs at the tail end of this year will give us that opportunity for 2025\u201d); \u00b6 239\n (potential margin improvement \u201cover time once we fully exit the TSA services and can transition to lower cost\n replacement infrastructure.\u201d).)\n\n\n 14\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 23 of 36\n\n\n\n\nreconciliation).)12 Likewise, the ratio of SG&A expense to revenue axiomatically is driven in\n\nsignificant part by revenue.13 And the forward-looking margin forecasts about which Plaintiffs\n\ncomplain reflect that Fortrea expected near term margin improvements to come from areas other\n\nthan TSA exits. (See \u00b6 222 (efforts to mitigate \u201cheadwinds of lower full-service clinical sales,\n\nelevated infrastructure costs and the transition services agreement\u201d); \u00b6 224 (margin forecast\n\nassumes \u201cquarterly book-to-bill metrics of at least 1.2x and exiting our TSAs per our current\n\nplans.\u201d); \u00b6 226 (margin growth in back half of 2024 \u201cweighted a little bit more to revenue\n\ngrowth\u201d); \u00b6 237 (most margin improvement would come from gross margin \u201cbecause the\n\nCompany would not yet have exited the TSAs.\u201d).)14 That Fortrea later revised its margin forecast\n\ndoes not make any of these statements false.\n\n Fourth, Fortrea explained that exiting individual TSAs would not, standing alone, drive\n\nmargin improvement because \u201cit\u2019s really what we replace them with.\u201d (\u00b6 220.) Where a company\n\ndiscloses execution risk and that risk later materializes, the securities laws do not impose\n\nliability. See Lentell v. Merrill Lynch & Co., 396 F.3d 161, 177 (2d Cir. 2005); Merrill Lynch &\n\nCo., 568 F. Supp. 2d 349, 360 (S.D.N.Y. 2008).15\n\n\n\n\n12\n Plaintiffs\u2019 observation that adjusted EBITDA was reported \u201cwithout the impact of \u2018one-time\u2019 costs\u201d (\u00b6 173) is\n consistent. Adjusted EBITDA margin improvements can be driven by many factors unrelated to TSA exits.\n13\n SG&A cost improvements also were not limited to TSA exits. (See \u00b6 232 (\u201cwe\u2019re pushing even harder on\n expense controls and cost improvements in operations and SG&A.\u201d)).\n14\n Although Plaintiffs attempt to disguise it by focusing on ratios, Plaintiffs\u2019 chart reflects that SG&A expense did\n decrease in the first quarter of 2025, as did its TSA expense. (See \u00b6 84.)\n15\n Although largely beside the point, see In re Skechers USA, Inc. Sec. Litig., 444 F. Supp. 3d 498, 521 (S.D.N.Y.\n 2020) (analyst reports cannot make non-actionable statements actionable), Plaintiffs also misportray analyst\n commentary. William Blair cautioned that Fortrea\u2019s margin outlook carried significant \u201cexecution risk.\u201d (Ex. L\n at 1.) Jefferies similarly emphasized that margin improvement depended on revenue productivity rather than\n cost cutting alone. (Ex. M at 1.) Deutsche Bank likewise noted that \u201c[n]ear term margins\u201d would remain\n pressured, with \u201cthe majority of SG&A improvement\u201d expected in 2025. (Ex. N at 2.).\n\n\n 15\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 24 of 36\n\n\n\n\n Fifth, Plaintiffs\u2019 alternate attempt to cast their claim as one of omission fails. Plaintiffs\n\nclaim that Fortrea failed to disclose that TSA services would be replaced with similar, if not\n\nhigher costs. (\u00b6\u00b6 209, 211, 213, 215, 217, 219, 221, 223.) Setting aside that the fact that\n\nLabcorp\u2019s service under the TSA was provided at cost was fully disclosed (see supra),16\n\nadditional disclosure is required \u201conly when necessary to make . . . statements made, in the light\n\nof the circumstances under which they were made, not misleading.\u201d Macquarie Infrastructure\n\nCorp. v. Moab Partners, L.P., 601 U.S. 257, 264 (2024). \u201cWhether a statement is misleading\n\nmust be assessed \u201cin light of all its surrounding text,\u201d \u201cin its full context,\u201d and from the\n\nperspective of a \u201creasonable investor.\u201d Omnicare, Inc., 575 U.S. at 190. Plaintiffs\u2019 omission\n\ntheory fails for the very same reason as its misstatement theory: Fortrea\u2019s disclosures were not\n\nfalse when made, and no further disclosure was necessary to make them not misleading. See\n\nBratusov v. Comscore, Inc., 2020 WL 3447989, at *10-12 (S.D.N.Y. June 24, 2020) (Failla, J.).17\n\n In the end, to plead a claim for securities fraud Plaintiffs must plead particularized facts\n\nshowing challenged statements \u201cwere false or misleading when made.\u201d Rombach, 355 F.3d at\n\n175. They have not done so. And pleading fraud by hindsight, which is all Plaintiffs have done,\n\nis insufficient as a matter of law. Bay Harbour Mgmt. LLC v. Carothers, 282 F. App\u2019x 71, 75 (2d\n\nCir. 2008).\n\n\n\n\n16\n \u201cEven at the pleading stage, dismissal is appropriate where the complaint is premised on the nondisclosure of\n information that was actually disclosed.\u201d In re Keyspan Corp. Sec. Litig., 383 F. Supp. 2d 358, 377 (E.D.N.Y.\n 2003).\n17\n As explained in the case cited by Plaintiffs, \u201c[w]e do not understand these references to the \u2018whole truth\u2019 and to\n speaking \u2018completely\u2019 to describe a duty to disclose all the facts that pertain to a subject (many of which would\n be immaterial), but instead to describe a duty not to omit material facts whose omission, in light of what was\n stated, would be misleading.\u201d Setzer v. Omega Healthcare Inv., Inc., 968 F.3d 204, 214 n.15 (2d Cir. 2020).\n\n\n 16\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 25 of 36\n\n\n\n\nC. Plaintiffs\u2019 PSP Allegations Do Not\n Identify Any Actionable Misstatement or Omission\n\n Plaintiffs\u2019 allegations concerning PSP backlog fare no better. Two of those predate the\n\nputative class period and cannot be the source of a securities fraud claim. (See \u00b6\u00b6 196, 200). See\n\nLattanzio v. Deloitte & Touche LLP, 476 F.3d 147, 153 (2d Cir. 2007); In re Lions Gate Ent.\n\nCorp. Sec. Litig., 165 F. Supp. 3d 1, 16-17 (S.D.N.Y. 2016); In re Openwave Sys. Sec. Litig., 528\n\nF. Supp. 2d 236, 253-54 (S.D.N.Y. 2007). In any event, those statements, as well as the\n\nremaining three, distill to statements that Fortrea had a backlog of a specified amount (\u00b6\u00b6 204,\n\n206), had contracts that extended over multiple years (\u00b6\u00b6 196, 200) and had restated its backlog\n\nto remove projects with no current revenue and to incorporate known scope changes. (\u00b6 202.)\n\nNone of these statements is alleged to be false.\n\n Plaintiffs do not dispute the accuracy of Fortrea\u2019s disclosed backlog metrics, nor that\n\nFortrea had contracts that extended for multiple years. Indeed, Plaintiffs admit that Fortrea\n\nconverted significant backlog into revenue during the putative class period. (\u00b6 59.) See Docdeer\n\nFound., 2025 WL 2781381, at *12 (accurate historical information does not create implicit\n\npromise as to future success). Plaintiffs also do not dispute that Fortrea restated its backlog in\n\n2023 as part of the spinoff to remove contracts that no longer had current revenue.18\n\n Instead, Plaintiffs purport to show falsity by pointing to a later disclosure \u201cthat the pre-\n\nspin projects, many late in their lifecycle, have less revenue and less profitability expected for\n\n2025,\u201d which Fortrea further explained: \u201c[i]t\u2019s not so much less backlog; it\u2019s slower burn and\n\nthat\u2019s the difference in \u201825\u201d and that certain contracts \u201chave a lot of hours in them already, and\n\nevery incremental hour is less as a percentage of the total, and that causes them to burn more\n\n\n18\n Removing contracts that have no current revenue from the backlog is far different than forecasting which\n contracts might experience slower that expected burn years in the future.\n\n\n 17\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 26 of 36\n\n\n\n\nslowly.\u201d (\u00b6 280; see also \u00b6\u00b6 201, 203, 205, 207.) That the backlog conversion in 2025 turned out\n\ndifferently than expected does not demonstrate the falsity of any of these statements. See Novak\n\nv. Kasaks, 216 F.3d 300, 309 (2d Cir. 2000); In re Lululemon Sec. Litig., 14 F. Supp. 3d 553, 571\n\n(S.D.N.Y. 2014), (\u201cA statement believed to be true when made, but later shown to be false, is\n\ninsufficient.\u201d), aff\u2019d, 604 F. App\u2019x 62 (2d Cir. 2015).\n\n Moreover, Fortrea expressly warned that backlog is \u201cnot\u201d a \u201cconsistent indicator of future\n\nrevenue\u201d and is affected by \u201cthe variable size and duration of projects.\u201d (Ex. B, FY23 Form 10-K\n\nat 50.) Fortrea also cautioned investors throughout the class period about the \u201cneed to expend\n\nsignificant efforts and costs\u201d to replace TSAs. (Id.; see also Ex. A at 26 (\u201cincluding potentially\n\nmaterially in excess of those estimated in the transition services agreement\u201d.) Indeed, Fortrea\n\nfurther explained in its 2024 quarterly filings that revenue pressure reflected the mix and burn\n\nrate of PSPs. (Ex. C at 39; Ex. D at 36.) Materialization of a disclosed risk does not constitute\n\nsecurities fraud. Lentell, 396 F.3d at 177; Smith v. PureCycle Techs., Inc., No. 23-CV-8605\n\n(JGK), 2024 WL 5186586, at *9-10 (S.D.N.Y. Dec. 20, 2024).\n\n Plaintiffs\u2019 reliance on an unidentified FE who purportedly worked in \u201cTechnology\n\nEngagement\u201d for less than a year who allegedly stated that it was \u201cwell known . . . that the trials\n\nand other projects associated with the Pre-Spin Projects had little work left on them\u201d and \u201cwas\n\nnot producing enough revenue to carry the Company\u201d does not alter the analysis. (\u00b6\u00b6 72-73.) FE1\n\nis not alleged to have opined that Fortrea included anything inappropriate in its disclosed backlog\n\nfigures. Rather, FE1 complains that the PSPs were \u201cnot producing enough revenue to carry the\n\nCompany\u201d(\u00b6 73) and that FE1 wanted but did not receive \u201cmore color on the Company\u2019s\n\npipeline of new contracts.\u201d (\u00b6 74.) Fortrea, however, is not alleged to have stated that the PSP\n\n\n\n\n 18\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 27 of 36\n\n\n\n\ncontracts were sufficient to \u201ccarry\u201d the Company, and Plaintiffs complain about the backlog, not\n\npipeline.\n\n Nor have Plaintiffs identified an actionable omission relating to the PSPs. In sweeping\n\nfashion, Plaintiffs conclude that each of the PSP statements was false because Fortrea\n\npurportedly failed to disclose \u201cthat the Pre-Spin Projects, many late in their lifecycle, already had\n\n\u2018a lot of hours in them\u2019 and, under their terms, would provide less revenue and less profitability\n\non an annual basis going forward.\u201d (\u00b6 205; see also \u00b6\u00b6 197, 201, 203, 207.) But a plaintiff must\n\nplead particularized facts showing that challenged statements were false or misleading when\n\nmade, not merely that later developments disappointed expectations. Rombach, 355 F.3d at 175;\n\nShemian v. Rsch. In Motion Ltd., 2013 WL 1285779, at *21 (S.D.N.Y. Mar. 29, 2013), (plaintiffs\n\nmust plead \u201csufficient facts regarding the existence and timing of Defendants\u2019 knowledge of\n\ndefects to give rise to a duty to disclose.\u201d) aff\u2019d, 570 F. App\u2019x 32 (2d Cir. 2014). Absent from the\n\nComplaint is any particularized allegation that Fortrea knew that it would later come to pass that\n\ncertain projects were burning more slowly than had been anticipated based on then-available\n\ninformation. Plaintiffs also have failed to allege that any of the truthful statements made by\n\nFortrea about its backlog were rendered false by an alleged omission. A plaintiff must plead a\n\n\u201cdirect connection between Defendants\u2019 statements\u201d and the allegedly omitted facts. In re ITT\n\nEduc. Servs., Inc. Sec. & S\u2019holder Derivatives Litig., 859 F. Supp. 2d 572, 579 (S.D.N.Y. 2012);\n\nsee also In re DraftKings Inc. Sec. Litig., 650 F. Supp. 3d 120, 169 n.20 (S.D.N.Y. 2023). Here,\n\nthe alleged omissions are disconnected from Fortrea\u2019s statements about the size of the backlog\n\n(which Plaintiffs do not dispute) or the fact that many of Fortrea\u2019s contracts were multiple year\n\ncontracts (which Plaintiffs also do not contest).\n\n\n\n\n 19\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 28 of 36\n\n\n\n\nD. Fortrea\u2019s Statements of Corporate Optimism or Opinion Are Not Actionable\n\n Many of the challenged statements also fail to state a claim for additional reasons.\n\nStatements describing Fortrea as \u201ca great partner\u201d and \u201ca long-term value creation opportunity\u201d\n\n(\u00b6 204), having \u201cconfidence and visibility into [its] future revenues\u201d (\u00b6 200), having an\n\n\u201cattractive\u201d backlog or is \u201ccommit[ed] to longer-term growth.\u201d (\u00b6 206) are classic examples of\n\n\u201cvague pronouncements of corporate optimism\u201d In re Nokia Corp. Sec. Litig., 2021 WL\n\n1199030, at *17 n.16, that \u201ccannot have misled a reasonable investor.\u201d ECA, Loc. 134 IBEW\n\nJoint Pension Tr. of Chicago v. JPMorgan Chase Co., 553 F.3d 187, 206 (2d Cir. 2009); see also\n\nDocdeer Found., 2025 WL 2781381, at *14 (statements describing an \u201cexpanded broad pipeline\u201d\n\nwere puffery); City of Warren Police & Fire Ret. Sys. v. Foot Locker, Inc., 412 F. Supp. 3d 206,\n\n221 (E.D.N.Y. 2019).19\n\n Likewise, Plaintiffs\u2019 attempt to challenge statements of opinion also fails. (See \u00b6\u00b6 118,\n\n175, 224, 234, 245.) To plead a claim based on an opinion, a plaintiff \u201cmust identify particular\n\n(and material) facts going to the basis for the issuer\u2019s opinion\u2014facts about the inquiry the issuer\n\ndid or did not conduct or the knowledge it did or did not have\u2014whose omission makes the\n\nopinion statement at issue misleading to a reasonable person reading the statement fairly and in\n\ncontext.\u201d Tongue v. Sanofi, 816 F.3d 199, 209 (2d Cir. 2016) (quoting Omnicare, Inc., 575 U.S.\n\nat 194). An opinion \u201cis not necessarily misleading when an issuer knows, but fails to disclose,\n\n\n\n19\n The cases cited by Plaintiffs are not to the contrary. See SEC v. Farnsworth, 692 F. Supp. 3d 157, 181\n (S.D.N.Y. 2023) (Failla, J.) (statements were \u201cattempts to address concerns about specific elements of the\n Companies\u2019 financial situation and business model, rather than general boasting of general characteristics about\n the business\u201d); In re Virtu Fin., Inc. Sec. Litig., 770 F. Supp. 3d 482, 501 (E.D.N.Y. 2025) (\u201cTo ascertain\n whether the challenged statements are \u2018determinate, verifiable statements,\u2019 as opposed to puffery, courts look\n for an \u2018objective, black-and-white standard.\u2019\u201d); In re Petrobras Sec. Litig., 116 F. Supp. 3d 368, 381 (S.D.N.Y.\n 2015) (statements \u201cwere made repeatedly in an effort to reassure the investing public about the Company\u2019s\n integrity\u201d). Indeed, there are no allegations that the Company was not on track for exiting the TSAs by the end\n of 2024 (\u00b6\u00b6 118, 175, 245) or that a streamlined cost structure would not enable the Company to reduce SG&A\n expenses. (\u00b6\u00b6 224, 234.)\n\n\n 20\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 29 of 36\n\n\n\n\nsome fact cutting the other way.\u201d Id. at 210.20 For the reasons explained above, Plaintiffs have\n\nfailed to plead with particularity that any of the opinion statements were known to be false at the\n\ntime they were made.\n\nII. PLAINTIFFS FAIL TO ALLEGE A STRONG INFERENCE OF SCIENTER\n\n Although the Court need not reach the issue, Plaintiffs\u2019 claims fail for the independent\n\nreason that they have not pled \u201cwith particularity facts giving rise to a strong inference\u201d that each\n\nDefendant acted with scienter, i.e., \u201can intent \u2018to deceive, manipulate, or defraud.\u2019\u201d ECA, 553 F.\n\n3d at 206 (quoting Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 313 (2007)). To\n\nmeet the onerous pleading standard, the inference of scienter \u201cmust be \u2018more than merely\n\nplausible or reasonable\u2014it must be cogent and at least as compelling as any opposing inference\n\nof nonfraudulent intent.\u2019\u201d Id. Plaintiffs must allege particularized facts showing either (1) that\n\ndefendants had the motive and opportunity to commit fraud, or (2) strong circumstantial\n\nevidence of conscious misbehavior or recklessness.\u201d ECA, 553 F.3d at 198. Plaintiffs make no\n\neffort to show motive\u2014there are no allegations of specific stock sales or other personal gains\u2014\n\nand Plaintiffs\u2019 attempt to show conscious misbehavior or recklessness falls flat.\n\nA. Plaintiffs\u2019 Miscellaneous Allegations\n Do Not Give Rise to a Strong Inference of Scienter\n\n Unable to show motive, Plaintiffs resort to a hodgepodge of allegations distilling to a\n\nlegally insufficient claim that the Defendants should have known of the falsity of their\n\nstatements. Glaser v. The9, Ltd., 772 F. Supp. 2d 573, 588 (S.D.N.Y. 2011). To plead scienter,\n\nhowever, \u201cPlaintiffs would have to show, at the least, conduct which is highly unreasonable and\n\n\n\n\n20\n Unlike the cases cited by Plaintiffs, there are no facts pled establishing that the Defendants did not believe the\n statements were true. See Abramson v. Newlink Genetics Corp., 965 F.3d 165, 177 (2d Cir. 2020); Fresno Cnty.\n Emps.\u2019 Ret. Ass\u2019n v. comScore, Inc., 268 F. Supp. 3d 526, 547 (S.D.N.Y. 2017).\n\n\n 21\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 30 of 36\n\n\n\n\nwhich represents an extreme departure from the standards of ordinary care.\u201d ECA, 553 F.3d at\n\n202-03. They have not done so.\n\n First, Plaintiffs\u2019 \u201ccore operations\u201d argument fails, (see \u00b6 255), as \u201c[c]ourts have required\n\nthat the operation in question constitute nearly all of a company\u2019s business . . . .\u2019\u201d In re Barrick\n\nGold Corp. Sec. Litig., 341 F. Supp. 3d 358, 374 (S.D.N.Y. 2018) (finding company\u2019s largest\n\nmine, accounting for 70% of gold production, insufficient). Clinical development contracts\n\nconstitute Fortrea\u2019s business\u2014not transitional service agreements. (See \u00b6\u00b6 43-44.) Regardless,\n\nthe core operations doctrine \u201cdoes not independently establish scienter.\u201d Lipow v. Net1 UEPS\n\nTechs., Inc., 131 F. Supp. 3d 144, 163 (S.D.N.Y. 2015); see also Docdeer Found., 2025 WL\n\n2781381, at *16.\n\n Nor can Plaintiffs allege scienter based on Defendants\u2019 high-level positions. (See \u00b6\u00b6 38,\n\n249.) See also In re Farfetch Ltd. Sec. Litig., 802 F. Supp. 3d. 652 (S.D.N.Y. 2025); Lipow, 131\n\nF. Supp. 3d at 163. Even taken together, allegations based on core operations and high-level\n\npositions are too \u201cgeneral\u201d and therefore \u201cundisputedly insufficient to satisfy the heightened\n\npleading standard.\u201d Campo v. Sears Holdings Corp., 635 F. Supp. 2d 323, 336 (S.D.N.Y. 2009),\n\naff\u2019d, 371 F. App\u2019x 212 (2d Cir. 2010); see also Barrick Gold Corp., 341 F. Supp. 3d at 373. Nor\n\ncan Plaintiffs cure these defects by alleging, in general terms, that certain information was\n\navailable through internal systems or models. See Loc. No. 38 Int\u2019l Bhd. of Elec. Workers\n\nPension Fund v. Am. Express Co., 724 F. Supp. 2d 447, 461 (S.D.N.Y. 2010), aff\u2019d, 430 F.\n\nApp\u2019x 63 (2d Cir. 2011); In re Citigroup Inc. Sec. Litig., 753 F. Supp. 2d 206, 245 (S.D.N.Y.\n\n2010).\n\n Plaintiffs\u2019 last-ditch effort to cast Defendant Pike\u2019s resignation in May 2025\u2014months\n\nafter any purported materialization of disclosed risk\u2014as evidence of scienter also is legally\n\n\n\n 22\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 31 of 36\n\n\n\n\ninsufficient. (\u00b6 261); Wilbush v. Ambac Fin. Grp., Inc., 271 F. Supp. 3d 473, 499 (S.D.N.Y.\n\n2017) (resignations were not \u201c\u2018highly unusual [or] suspicious\u2019 when defendants \u2018resigned . . .\n\nseveral months after the Class Period ended\u2019\u201d); see also Bratusov, 2020 WL 3447989, at *15.\n\nB. The Former Employee Allegations Do Not Establish Scienter\n\n Plaintiffs additionally attempt to use confidential witness allegations as the basis to\n\nestablish scienter. (\u00b6\u00b6 145-59, 258.) As a threshold issue, Plaintiffs do not describe these\n\npurported sources \u201cwith sufficient particularity to support the probability that a person in the\n\nposition occupied by the source would possess the information alleged.\u201d Novak, 216 F.3d at 314;\n\nDamri v. LivePerson, Inc., 772 F. Supp. 3d 430, 450-51 (S.D.N.Y. 2025). None of the FEs is\n\nalleged to have held a position that would plausibly provide insight into Fortrea\u2019s senior-level\n\ndecision-making, 21 nor do Plaintiffs allege that any FE had direct discussions with or attended\n\nany meeting with the Individual Defendants. See Meyer v. Organogenesis Holdings Inc., 727 F.\n\nSupp. 3d 368, 396 (E.D.N.Y. 2024); Loc. No. 38, 724 F. Supp. 2d at 460 (rejecting \u201canecdotes\n\nand conclusory statements\u201d from \u201crank-and-file\u201d employees); Jackson v. Halyard Health, Inc.,\n\n2018 WL 1621539, at *9 (S.D.N.Y. Mar. 30, 2018) (\u201cPlaintiffs\u2019 vague references to \u2018senior\n\nleadership\u2019 and \u2018senior management\u2019 do not suffice to tie the Individual Defendants to any\n\ninformation that was conveyed.\u201d); Glaser, 772 F. Supp. 2d at 591 (\u201c[C]onclusory statements that\n\ndefendants \u2018were aware\u2019 of certain information . . . or \u2018should have\u2019 had such knowledge is\n\ninsufficient\u201d).\n\n\n\n\n21\n Plaintiffs claim that FE1 participated in weekly \u201cTSA Steering Committee\u201d meetings, which included the Chief\n Information Officer who in turn, \u201cwas a direct report of defendant Pike and a colleague of defendant\n McConnell[.]\u201d (\u00b6 145.) Plaintiffs claim this made \u201cFE1 just one level removed from the Individual Defendants.\u201d\n (Id.) FE2, allegedly a procurement employee, appears even further removed. (See \u00b6 156 (FE2 \u201cvoiced concerns\n to their direct superior and Fortrea\u2019s Chief Procurement Officer[.]\u201d).)\n\n\n 23\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 32 of 36\n\n\n\n\n Even if the FE allegations could be credited, they do not establish scienter. At most, FE1\n\nis alleged to have stated that the Company was overbudget on costs paid to one vendor because\n\nthe vendor was \u201cnickel-and-diming\u201d the Company and that the Company signed off on certain\n\nbudget overages. (\u00b6 148.) Even taken at face value, these allegations say nothing about Fortrea\u2019s\n\nstrategy of attempting to reduce SG&A expense over time as the TSA exits occurred or how the\n\nsupposed \u201cnickel-and-diming\u201d impacted any forecast or disclosed metric. Likewise, FE2 is\n\nalleged to have disagreed with the retention of a vendor and to have seen an unspecified cost\n\nmodel showing that the shift to a vendor would take three years to realize cost savings. (\u00b6 159.)\n\nBut the purported model22 would have been consistent with the Company\u2019s statements that\n\nefficiencies would materialize \u201cover the next few years\u201d and \u201cin phases.\u201d (\u00b6 212; see also \u00b6\u00b6 208\n\n239, 241.) As to the backlog, FE1\u2019s assertion that PSP pressures were \u201ccommon knowledge\u201d (\u00b6\u00b6\n\n73, 258(a)) provides no specific facts explaining who supposedly knew, when they knew, or how\n\nsuch knowledge could be imputed to Defendants. Courts routinely reject \u201c\u2018vague and\n\nconclusory\u2019\u201d confidential witness allegations that information was \u201c\u2018common knowledge within\n\nthe company.\u2019\u201d Chapman v. Mueller Water Prods., Inc., 466 F. Supp. 3d 382, 399-400\n\n(S.D.N.Y. 2020) (citations omitted) (\u201cpretty much everyone\u201d was aware); Schiro v. Cemex,\n\nS.A.B. de C.V., 396 F. Supp. 3d 283, 305 (S.D.N.Y. 2019) (\u201ceveryone . . . knew\u201d). By contrast,\n\nwhere confidential witness allegations are credited, they identify concrete internal practices,\n\nspecific projects or data, contemporaneous timing, and direct contradictions of public\n\nstatements\u2014none of which is alleged here. See Sherman v. Abengoa, S.A., 156 F.4th 152, 160\n\n(2d Cir. 2025).\n\n\n22\n Where Plaintiffs contend Defendants had access to contrary information, they must \u201cspecifically identify the\n reports or statements containing this information.\u201d In re Pretium Res. Inc. Sec. Litig., 256 F. Supp. 3d 459, 473\n (S.D.N.Y. 2017), aff\u2019d, 732 F. App\u2019x 37 (2d Cir. 2018).\n\n\n 24\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 33 of 36\n\n\n\n\nC. Non Culpable Inferences Are More Compelling\n\n Where, as here, Plaintiffs fail to plead motive, fail to identify contemporaneous\n\ncontradictory facts, and rely instead on later-disclosed challenges and revised expectations, the\n\nmore compelling inference is non-fraudulent: Defendants set targets, encountered operational\n\nchallenges, and disclosed results. (See, e.g., \u00b6\u00b6 175, 222, 280.) Defendants\u2019 pattern of\n\ncontemporaneous risk disclosures, ongoing updates, and eventual revisions is fundamentally\n\ninconsistent with an inference that they acted with intent to deceive. Rombach, 355 F.3d at 176;\n\nIn re Nokia Oyj (Nokia Corp.) Sec. Litig., 423 F. Supp. 2d 364, 407 (S.D.N.Y. 2006).\n\nIII. PLAINTIFFS FAIL TO PLEAD LOSS CAUSATION\n\n Dismissal is also independently warranted because no causal link connects any alleged\n\nmisstatements to any purported loss. See Dura Pharms., Inc, 544 U.S. at 345-46. Plaintiffs\n\ncannot simply point to a price decline following negative news; they must plead facts\n\ndemonstrating that the negative news revealed \u201cthe truth\u201d about a prior misstatement or\n\nomission. Lentell, 396 F.3d at 177. The loss must be \u201cforeseeable and caused by the\n\nmaterialization of the risk concealed by the fraudulent statement.\u201d ATSI Commc\u2019ns, Inc., 493\n\nF.3d at 107.\n\n First, the 2Q24 Earnings call did not disclose that any prior statement was false. Rather, it\n\ndisclosed only that Fortrea\u2019s transition plans and execution efforts were progressing more slowly\n\nthan anticipated\u2014precisely the type of risk Fortrea had repeatedly warned could materialize as a\n\nnewly independent company. (See \u00b6\u00b6 266-268.) Second, the September 25, 2024 Jeffries Report\n\nPlaintiffs identify as a corrective disclosure is nothing more than \u201c[a] negative . . .\n\ncharacterization of previously disclosed facts,\u201d which \u201cdoes not constitute a corrective disclosure\n\nof anything but the [author\u2019s] opinions.\u201d In re Omnicom Grp., Inc. Sec. Litig., 597 F.3d 501, 512\n\n(2d Cir. 2010); Fila v. Pingtan Marine Enter. Ltd., 195 F. Supp. 3d 489, 498 (S.D.N.Y. 2016).\n\n 25\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 34 of 36\n\n\n\n\n Third, Plaintiffs also concede that on November 8, 2024\u2014consistent with Fortrea\u2019s prior\n\ndisclosures\u2014Fortrea reiterated that exiting the TSAs would not result in \u201can immediate switch\u201d\n\nto \u201cmassively reduced SG&A.\u201d (\u00b6 175.) There is no alleged stock-price decline that day. And\n\nPlaintiffs\u2019 allegations of price drops on December 6 and 11, 2024 are also untethered to any\n\ncorrective disclosure revealing the falsity of the challenged statements. (\u00b6 272-75.)\n\n Finally, Plaintiffs point to a stock price drop on March 3, 2025, following Fortrea\u2019s\n\nrevision of guidance. Fortrea\u2019s revised projections are not corrective disclosures. See Prime\n\nMover Cap. Partners L.P. v. Elixir Gaming Techs., Inc., 548 F. App\u2019x 16, 18 (2d Cir. 2013)\n\n(revised projections not corrective because it did not reveal a prior misstatement but only\n\n\u201csuggested that defendants had not had reliable information\u201d at the time.) Indeed, Plaintiffs\n\nadmit that the relevant information regarding the TSAs already was public by this date. And,\n\nrather than \u201cadmit[] that the TSA Exit Strategy was a failure\u201d (\u00b6 283), Fortrea actually explained,\n\njust as it had stated in the past, that it was moving toward programs designed to reduce expenses\n\nand optimize spend with its own post-TSA enterprise systems. (See Ex. J at 6.) As to the\n\nbacklog, Fortrea explained that the alleged \u201cslower burn\u201d of certain pre-spin projects was\n\nidentified during Fortrea\u2019s implementation of its new operating environment, not as the\n\nrevelation of any previously concealed fact. (\u00b6 280.) A disclosure describing management\u2019s\n\ndiscovery of execution dynamics during implementation is not corrective because it does not\n\n\u201creveal to the market the falsity of the prior [statements].\u201d Prime Mover Cap. Partners L.P., 548\n\nF. App\u2019x at 17.\n\nIV. PLAINTIFF\u2019S SECTION 20(A) CLAIM SHOULD BE DISMISSED\n\n For the reasons described above, Plaintiffs have not sufficiently alleged a primary\n\nviolation of Section 10(b) or culpable participation by the Individual Defendants. Accordingly,\n\nthe Section 20(a) claim fails. See Docdeer Found., 2025 WL 2781381, at *11.\n 26\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 35 of 36\n\n\n\n\n CONCLUSION\n For the foregoing reasons, the Complaint should be dismissed with prejudice.\n\n\n\nDated: New York, New York Respectfully submitted,\n January 28, 2026\n\n /s/ Robert A. Fumerton\n Susan L. Saltzstein\n Robert A. Fumerton\n Jeffrey Geier\n Eryn M. Hughes\n\n SKADDEN, ARPS, SLATE,\n MEAGHER & FLOM LLP\n One Manhattan West\n New York, New York 10001\n Phone: (212) 735-3000\n Susan.Saltzstein@skadden.com\n Robert.Fumerton@skadden.com\n Jeffrey.Geier@skadden.com\n Eryn.Hughes@skadden.com\n\n Attorneys for Defendants Fortrea Holdings Inc.,\n Thomas Pike, and Jill McConnell\n\n\n\n\n 27\n\f Case 1:25-cv-04630-KPF Document 64 Filed 01/28/26 Page 36 of 36\n\n\n\n\n LOCAL RULE 7.1(C) CERTIFICATION\n\n I, Robert A. Fumerton, hereby certify that the foregoing memorandum of law complies with the\n\nword count limitations set forth in Rule 7.1(c) of the Local Rules of the United States District Court for\n\nthe Southern District of New York, and contains 8,750 words, exclusive of the caption, table of\n\ncontents, table of authorities, table of exhibits, signature blocks, and this certificate.\n\n\n Dated: New York, New York\n January 28, 2026\n\n /s/ Robert A. Fumerton\n Robert A. Fumerton\n\n\n\n\n 28\n\f","ocr_status":2,"date_upload":"2026-05-15T01:40:17.903321-07:00","document_number":"64","attachment_number":null,"pacer_doc_id":"127038970435","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Memorandum of Law in Support of Motion","acms_document_guid":""}],"date_created":"2026-01-28T21:07:14.341404-08:00","date_modified":"2026-01-28T21:07:14.351603-08:00","date_filed":"2026-01-28","time_filed":"22:13:11","entry_number":64,"recap_sequence_number":"2026-01-28.001","pacer_sequence_number":242,"description":"","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/451947688/","id":451947688,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70441800/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/466804432/","id":466804432,"tags":[],"absolute_url":"/docket/70441800/65/deslande-v-fortrea-holdings-inc/","date_created":"2026-01-28T21:07:11.969741-08:00","date_modified":"2026-05-18T07:38:21.525212-07:00","sha1":"3b775a7d4cdd8e519e56faaf0dce6517086bc3d8","page_count":3,"file_size":197616,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:25-cv-04630-KPF Document 65 Filed 01/28/26 Page 1 of 3\n\n\n\n\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n----------------------------------- x\nLUCAS DESLANDE, Individually and on :\nBehalf of All Others Similarly Situated, :\n : Civil Action No. 1:25-cv-04630-KPF\n Plaintiff, :\n :\n vs. :\n :\nFORTREA HOLDINGS INC., THOMAS PIKE,:\nand JILL MCCONNELL, :\n :\n Defendants. :\n :\n----------------------------------- x\n\n DECLARATION OF ROBERT A. FUMERTON\n IN SUPPORT OF DEFENDANTS\u2019 MOTION TO DISMISS THE\n AMENDED CLASS ACTION COMPLAINT\n\n I, Robert A. Fumerton, pursuant to 28 U.S.C. \u00a7 1746, hereby declare as follows:\n\n 1. I am a member of the bar of this Court and of the firm Skadden, Arps, Slate,\n\nMeagher & Flom LLP, counsel for Defendants Fortrea Holdings Inc. (\u201cFortrea\u201d), Thomas Pike,\n\nand Jill McConnell.\n\n 2. I respectfully submit this Declaration in support of Defendants\u2019 Motion to\n\nDismiss the Amended Class Action Complaint, filed concurrently herewith, and to transmit true\n\nand correct copies of the following documents referenced in the accompanying memorandum of\n\nlaw:\n\n Exhibit A ................... Excerpts of Fortrea\u2019s 8-K Exh. 99.1 (July 3, 2023), full document\n available at\n https://www.sec.gov/Archives/edgar/data/1965040/000196504023\n 000021/exhibit991-10x12ba.htm\n\n Exhibit B ................... Excerpts of Fortrea\u2019s Fiscal Year 2023 Form 10-K (Mar. 13,\n 2024), full document available at\n https://www.sec.gov/ix?doc=/Archives/edgar/data/0001965040/00\n 0196504024000010/ftre-20231231.htm\n\fCase 1:25-cv-04630-KPF Document 65 Filed 01/28/26 Page 2 of 3\n\n\n\n\nExhibit C ................... Excerpts of Fortrea\u2019s Second Quarter 2024 10-Q (Aug. 12, 2024),\n full document available at\n https://www.sec.gov/ix?doc=/Archives/edgar/data/0001965040/00\n 0196504024000054/ftre-20240630.htm\n\nExhibit D ................... Excerpts of Fortrea\u2019s Third Quarter 2024 10-Q (Nov. 8, 2024), full\n document available at\n https://www.sec.gov/ix?doc=/Archives/edgar/data/0001965040/00\n 0196504024000064/ftre-20240930.htm\n\n\nExhibit E ................... Excerpts of Fortrea\u2019s Fiscal Year 2024 Form 10-K (Mar. 3, 2025),\n full document available at\n https://www.sec.gov/ix?doc=/Archives/edgar/data/0001965040/00\n 0196504025000015/ftre-20241231.htm\n\nExhibit F.................... Transcript of JPMorgan Healthcare Conference (Jan. 10, 2024)\n\nExhibit G ................... Transcript of Fortrea\u2019s Second Quarter 2023 Earnings Call (Aug.\n 14, 2023)\n\nExhibit H ................... Transcript of Fortrea\u2019s Third Quarter 2023 Earnings Call (Nov. 13,\n 2023)\n\nExhibit I .................... Transcript of Fortrea\u2019s Second Quarter 2024 Earnings Call (Aug.\n 12, 2024)\n\nExhibit J .................... Transcript of Fortrea\u2019s Third Quarter 2024 Earnings Call (Nov. 8,\n 2024)\n\nExhibit K ................... Transcript of Barclays Global Healthcare Conference (Mar. 12,\n 2024)\n\nExhibit L ................... William Blair Equity Research, Fortrea Holdings Inc.: Feeling\n Incrementally More Positive on the Back of Strong Bookings, but\n We Remain Cautious Around Near-Term Margin Outlook, (Mar.\n 11, 2024)\n\nExhibit M .................. Jefferies Equity Research, Fortrea Inc.: 4 Key Insights: FTRE\n 4Q23 (Mar. 11, 2024)\n\nExhibit N ................... Deutsche Bank Research, Fortrea Company Update: Year One\n Post Spin a Tale of Two Halves, (Mar. 11, 2024)\n\n\n\n\n 2\n\f Case 1:25-cv-04630-KPF Document 65 Filed 01/28/26 Page 3 of 3\n\n\n\n\n I declare under penalty of perjury that the foregoing is true and correct.\n\nExecuted on January 28, 2026, in New York, New York.\n\n /s/ Robert A. Fumerton\n Robert A. Fumerton\n\n\n\n\n 3\n\f","ocr_status":1,"date_upload":"2026-05-15T01:37:52.745915-07:00","document_number":"65","attachment_number":null,"pacer_doc_id":"127038970482","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Declaration in Support of Motion","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327874/","id":479327874,"tags":[],"absolute_url":"/docket/70441800/65/1/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:50.942306-07:00","date_modified":"2026-05-18T05:25:52.938608-07:00","sha1":"284d7aece7113101baef819424feff3123d5712f","page_count":6,"file_size":337423,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.1.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:25-cv-04630-KPF Document 65-1 Filed 01/28/26 Page 1 of 6\n\n\n\n\n Exhibit A\n\f Case 1:25-cv-04630-KPF Document 65-1 Filed 01/28/26 Page 2 of 6\n\n\n\n\n UNITED STATES\n SECURITIES AND EXCHANGE COMMISSION\n WASHINGTON, D.C. 20549\n\n FORM 8-K\n CURRENT REPORT\n\n PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n June 29, 2023\n (Date of earliest event reported)\n\n\n Fortrea Holdings Inc.\n (Exact Name of Registrant as Specified in its Charter)\n\n\n\n Delaware 001-41704 XX-XXXXXXX\n (State or other jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)\n\n\n 8 Moore Drive\n Durham, North Carolina 27709\n (Address of principal executive offices) (Zip Code)\n\n\n (Registrant\u2019s telephone number including area code) 877-495-0816\n\n Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the\n following provisions:\n\n \u2610 Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)\n \u2610 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)\n \u2610 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))\n \u2610 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))\n\n\nSecurities registered pursuant to Section 12(b) of the Exchange Act.\nTitle of Each Class Trading Symbol Name of exchange on which registered\nCommon Stock, $0.001 par value FTRE The NASDAQ Stock Market LLC\n\nIndicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (\u00a7230.405 of this\nchapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (\u00a7240.12b-2 of this chapter).\nEmerging growth company \u2610\nIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with\nany new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. \u2610\n\f Case 1:25-cv-04630-KPF Document 65-1 Filed 01/28/26 Page 3 of 6\n\nTable of Contents\n\n\n\n\nCompetition\n\n Our operations in the drug development services industry involve high levels of competition, consisting of hundreds of small, limited-scope\nservice providers and a smaller number of large full-service drug development companies. While the industry has seen an increasing level of\nconsolidation over the past several years, primarily driven by the larger full-service providers, it remains highly fragmented.\n\n Our main competition consists of these small and large CROs, as well as in-house departments of pharmaceutical, biotechnology, and medical\ndevice companies and, to a lesser extent, select universities and teaching hospitals and site management organizations. Our services have\nperiodically experienced heightened competition, including competition among CROs for both customers and potential acquisitions. We believe\nthat our significant therapeutic expertise, global reach, integrated model, customer service strategies, access to data, and operational strengths\ndifferentiate us from our competitors across all of our segments.\n\n Our major competitors include IQVIA, ICON, Parexel, PPD, a subsidiary of Thermo Fisher Scientific Inc., Medpace Holdings, and Syneos\nHealth. We believe our success with customers has been rooted in transparent partnerships that offer agile solutions and support speed to market.\nWe believe we are positioned to be more flexible and customer focused than our larger competition while offering the global scale that our smaller\ncompetition lacks.\n\nBacklog and Net New Business\n\n Our backlog represents anticipated revenue for work not yet completed or performed under executed contracts and other forms of written\nconfirmation, where there is sufficient or reasonable certainty about the customer\u2019s ability and intent to fund and commence the services within\ntwelve months. We adjust backlog for foreign currency fluctuations and exclude from backlog revenue that has been recognized as revenue in our\nstatements of operations. Our backlog was $8.6 billion, $8.1 billion, and $8.9 billion at December 31, 2022 and 2021 and March 31, 2023, respectively.\n\n We add net new business to backlog based on the aforementioned criteria. Additionally, each period we evaluate previously awarded projects\nto adjust for modifications, cancellations, foreign currency fluctuations, and other items. Net new business varies from period to period depending\non numerous factors, including customer award volume, sales performance, and overall health of the biopharmaceutical industry, among others.\nWhile customers with whom we have had long-standing relationships have continued to award new orders to us, we have experienced some\nfluctuations in our net new business award levels over the last few quarters driven, we believe, by recent macroeconomic factors affecting the\nindustry and customer hesitation ahead of the spinoff. Some clients have indicated that they are waiting until after the spinoff is complete to award\nnew business. Our net new business awards were $3.7 billion, $3.4 billion and $3.7 billion for the years ended December 31, 2022, 2021 and 2020,\nrespectively, and $3.8 billion and $3.4 billion for the trailing twelve months ended March 31, 2023 and 2022, respectively.\n\n We do not believe that, as a sole measure, our backlog and net new business are consistent indicators of future revenue because they have\nbeen, and likely will continue to be, affected by a number of factors, including the variable size and duration of projects, many of which are\nperformed over several years, and changes to the scope of work during the course of projects. Additionally, projects may be canceled or delayed\nby the customer or regulatory authorities. We generally do not have a contractual right to the full amount of the contract award reflected in our\nbacklog. If a customer cancels a contract, we generally will be reimbursed for the costs we have incurred. For more information about risks related to\nour backlog see \u201cRisk Factors-Risks Relating to Our Business-Our backlog might not be indicative of our future revenues, and we might not realize\nall of the anticipated future revenue reflected in our backlog.\u201d\n\nSales, Customer Service, and Marketing\n\n Our global sales and customer service organization provides dedicated customer coverage across pharmaceutical, biotechnology, and medical\ndevices industries. This includes a range of solutions such as, but not limited to, clinical trials, biomarkers, technology services, and other services.\nOur total staff base of approximately 21,000 includes a highly focused, experienced, and trained team of professional business development and\ncustomer\n\n\n\n\n 16\n\f Case 1:25-cv-04630-KPF Document 65-1 Filed 01/28/26 Page 4 of 6\n\nTable of Contents\n\n\n\n\n RISK FACTORS\n\n The following are certain risk factors that could affect our business, financial condition, results of operations, and cash flows. The risks that\nare highlighted below are not the only risks that we face. You should carefully consider each of the following risks and all of the other\ninformation contained in this information statement. Some of these risks relate principally to our spinoff from Labcorp, while others relate\nprincipally to our business and the industry in which we operate or to the securities markets generally and ownership of our common stock. If\nany of the following risks actually occur, our business, financial condition, results of operations, or cash flows could be negatively affected.\n\n Risks Relating to the Spinoff\n\nWe may not realize the potential benefits from the spinoff.\n\n We may not realize the potential benefits that we expect from our spinoff from Labcorp. We have described those anticipated benefits\nelsewhere in this information statement. See \u201cThe Spinoff-Reasons for the Spinoff.\u201d In addition, as described elsewhere in this information\nstatement, we will incur additional costs related to our separation from Labcorp. We also expect to incur additional ongoing costs related to\noperating as an independent public company and replacing the services previously provided by Labcorp. The costs associated with performing or\noutsourcing these functions may exceed our expectations. A significant increase in the costs of performing or outsourcing these functions could\nmaterially and adversely affect our business, financial condition, results of operations, and cash flows.\nWe have no history operating as an independent public company. We will incur additional expenses to create or supplement the corporate\ninfrastructure necessary to operate as an independent public company and we will experience increased ongoing costs in connection with\nbeing an independent public company.\n\n Our business has historically used Labcorp's corporate infrastructure and services to support our business functions. A portion of the\nexpenses related to establishing and maintaining this infrastructure has been charged to us on a cost-allocation basis. Except as described under\nthe caption \u201cRelationship with Labcorp After the Spinoff,\u201d after the distribution date we will no longer have access to Labcorp's infrastructure or\nservices and we will need to establish or supplement our own. We may experience increased pricing in our supplier relationships for similar services\ndue to lower volume requirements when we separate from Labcorp. The operational, financial, information system, and logistical separation from\nLabcorp is complex and involves numerous systems and jurisdictions. Following the spinoff, Labcorp will continue to provide some services to us\non a transitional basis pursuant to a transition services agreement. For more information regarding the transition services agreement, see\n\u201cRelationship with Labcorp After the Spinoff-Agreements Between Labcorp and Us-Transition Services Agreement.\u201d However, we cannot assure\nyou that all such functions will be successfully executed by Labcorp during the transition period. Also, we will have to expend significant efforts\nand costs (including potentially materially in excess of those estimated in the transition services agreement) to (i) replace or otherwise upgrade our\nsystems, including our IT and enterprise resource planning systems, (ii) implement additional financial, IT, and management controls, (iii) implement\nreporting systems and procedures, (iv) hire additional management, IT, accounting, finance, legal, human resources, and other administrative staff\nand third-party service providers, (v) establish employee benefit programs, (vi) create a board of directors and corporate governance programs, (vii)\ncarry out audit, tax and legal functions, and (vii) establish banking and credit facility arrangements. Any interruption in these services could have a\nmaterial adverse effect on our business, financial condition, results of operations, and cash flows. In addition, at the end of this transition period, to\nthe extent we are unable to perform particular functions ourselves, we will need to hire third parties to perform these functions on our behalf.\nOur historical combined and pro forma financial information are not necessarily indicative of our future financial condition, results of\noperations, or cash flows nor do they reflect what our financial condition, results of operations, or cash flows would have been as an\nindependent public company during the periods presented.\n\n The historical combined financial information we have included in this information statement does not necessarily reflect what our financial\ncondition, results of operations, or cash flows would have been as an\n\n\n\n\n 26\n\f Case 1:25-cv-04630-KPF Document 65-1 Filed 01/28/26 Page 5 of 6\n\nTable of Contents\n\n\n\n\nYear ended December 31, 2022\n\n Pro forma net\nIn millions except per share amounts income\nPro forma as shown above $ 58.4\nManagement adjustments\n Synergies (1) 15.0\n Dis-synergies\n Operational dis-synergies(2) (8.2)\n Incremental stock compensation(3) (24.6)\n TSA inefficiencies (4) (15.0)\nTotal Management adjustments $ (32.8)\nTax effect of Management adjustments 8.0\nPro forma net income after Management adjustments $ 33.6\nWeighted average number of basic and diluted common shares outstanding 91.1\nPro forma basic and diluted earnings per share $ 0.37\n__________________\n(1) The synergies represent lower expected cost in certain areas such as, HR support and procurement services and technology, than the amounts historically allocated\n from Labcorp to the CDCS business and included in our historical financial results and non-GAAP information. This adjustment reflects management\u2019s estimate of\n the future effect of the spin on our standalone operating costs.\n(2) The operational dis-synergies represent cost in certain areas such as marketing, management, and public company related finance services that the company\n expects to exceed the amount of CDCS business cost previously allocated from Labcorp and included in our historical financial results and non-GAAP information.\n This adjustment reflects management\u2019s estimate of the future effect of the spin on our standalone operating costs.\n(3) CDCS is expected to incur additional stock compensation expense related to the incremental personnel and adjustments to compensation levels to reflect the\n responsibilities of employees in a standalone entity.\n(4) TSA inefficiencies reflect the impact of the incremental costs of obtaining services under the transition services agreement compared to the estimated cost of\n performing those functions internally. It is anticipated that the TSA arrangements will be phased out over a 24 month period as CDCS develops the necessary\n infrastructure and capabilities to perform these functions internally.\n\n\n\n\n 73\n\f Case 1:25-cv-04630-KPF Document 65-1 Filed 01/28/26 Page 6 of 6\n\nTable of Contents\n\n\n\n\n These expenses were allocated to the Company based on direct usage when identifiable or, when not directly identifiable, on the basis of\nproportional net revenues or headcount or other reasonable driver, as applicable. The Company considers the basis on which the expenses have\nbeen allocated to reasonably reflect the utilization of services provided to, or the benefit received by, the Company during the periods presented.\nHowever, the allocations may not reflect the expenses the Company would have incurred as an independent company for the periods presented.\nActual costs that may have been incurred if the Company had been a standalone company would depend on a number of factors, including the\norganizational structure, whether functions were outsourced or performed by employees, and strategic decisions made in areas such as IT and\ninfrastructure. For a period following the spinoff, however, some of these functions will continue to be provided by Labcorp under a planned\ntransition services agreement.\n\n The actual costs of services represented by these allocations may vary significantly from the amounts allocated to the Company in the\naccompanying financial statements.\n\n Ukraine/Russia Conflict\n\n As a result of the ongoing conflict between Russia and Ukraine, we determined that all receivables from companies located in Russia and all\nlong-lived assets related to our Russia and Ukraine operations were impaired. Furthermore, we incurred additional costs in an effort to support our\nemployees impacted by the conflict.\n\n Seasonality\n\n Our business is seasonal. Revenue tends to be lowest in the first half, and especially the first quarter, of each year. Because of this seasonality,\nour results of operations for the first half of the year, and the first quarter, in particular, may not be indicative of the results of operations that may\nbe achieved for subsequent quarters or the full year. We believe that first quarter 2023 revenue and margins were especially impacted by (i) a large\nFSP contract loss (as discussed further below)\u037e (ii) the provision for credit losses on certain biotech receivables\u037e (iii) slower backlog conversion\nrates impacted by (a) continued staffing challenges, including increased times to fill recruitment in certain therapeutic areas (primarily respiratory)\nand select geographies and (b) customer hesitation ahead of our spinoff and (iv) recent macroeconomic factors affecting the industry, in addition to\nthe seasonal nature of our business.\n\nBacklog and Net New Business\n\n Our backlog represents anticipated revenue for work not yet completed or performed under executed contracts and other forms of written\nconfirmation, where there is sufficient or reasonable certainty about the customer\u2019s ability and intent to fund and commence the services within\ntwelve months. We adjust backlog for foreign currency fluctuations and exclude from backlog revenue that has been recognized as revenue in our\nstatements of operations. Our backlog was $8.6 billion, $8.1 billion and $8.9 billion at December 31, 2022, and 2021 and March 31, 2023, respectively.\n\n We add net new business to backlog based on the aforementioned criteria. Additionally, each period we evaluate previously awarded projects\nto adjust for modifications, cancellations, foreign currency fluctuations, and other items. Net new business varies from period to period depending\non numerous factors, including customer award volume, sales performance, and overall health of the biopharmaceutical industry, among others.\nWhile customers with whom we have had long-standing relationships have continued to award new orders to us, we have experienced some\nfluctuations in our net new business award levels over the last few quarters driven, we believe, by recent macroeconomic factors affecting the\nindustry and customer hesitation ahead of the spinoff. Some clients have indicated that they are waiting until after the spinoff is complete to award\nnew business. Our net new business awards were $3.7 billion, $3.4 billion and $3.7 billion for the years ended December 31, 2022, 2021 and 2020,\nrespectively and $3.8 billion and $3.4 billion for the trailing twelve months ended March 31, 2023 and 2022, respectively.\n\n We do not believe that, as a sole measure, our backlog and net new business are consistent indicators of future revenue because they have\nbeen, and likely will continue to be, affected by a number of factors, including the variable size and duration of projects, many of which are\nperformed over several years, and changes to the scope of\n\n\n\n\n 75\n\f","ocr_status":2,"date_upload":"2026-05-15T01:38:05.236074-07:00","document_number":"65","attachment_number":1,"pacer_doc_id":"127038970483","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit A - Fortrea's 8-K, Exh. 99.1 (July 3, 2023) (Excerpted)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327875/","id":479327875,"tags":[],"absolute_url":"/docket/70441800/65/2/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:50.977373-07:00","date_modified":"2026-05-18T05:35:23.912199-07:00","sha1":"8447a8d596c396310e672ff4b1b69367853c93cf","page_count":5,"file_size":2048551,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.2.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.2.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:25-cv-04630-KPF Document 65-2 Filed 01/28/26 Page 1 of 5\n\n\n\n\n Exhibit B\n\fTable of Contents Case 1:25-cv-04630-KPF Document 65-2 Filed 01/28/26 Page 2 of 5\n\n\n\n\n UNITED STATES\n SECURITIES AND EXCHANGE COMMISSION\n Washington, D.C. 20549\n __________________________________\n\n FORM 10-K\n __________________________________\n(Mark One)\nx ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n For the fiscal year ended December 31, 2023\n OR\no TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n For the transition period from _____ to _____\n Commission file number 001-04321\n __________________________________\n\n Fortrea Holdings Inc.\n (Exact name of registrant as specified in its charter)\n __________________________________\n\n Delaware XX-XXXXXXX\n (State or other jurisdiction of (I.R.S. Employer\n incorporation or organization) Identification No.)\n\n\n 8 Moore Drive, Durham, North Carolina 27709\n\n (Address of Principal Executive Offices) (Zip Code)\n\n (877) 495-0816\n Registrant's telephone number, including area code\nSecurities registered pursuant to Section 12(b) of the Act:\n\n Title of each class Trading Symbol(s) Name of each exchange on which registered\n Common Stock, $0.001 par value FTRE The Nasdaq Stock Market LLC\n\nSecurities registered pursuant to section 12(g) of the Act: None\nIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x\nIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes o No x\n\fTable of Contents\n Case 1:25-cv-04630-KPF Document 65-2 Filed 01/28/26 Page 3 of 5\n\n\n\n\n Cautionary Statement Concerning Forward-Looking Statements\n\n This Form 10-K and other materials we have filed or will file with the Securities and Exchange Commission (the \u201cSEC\u201d) include or will include\nforward-looking statements. Some of the forward-looking statements can be identified by the use of terms such as \u201cbelieves,\u201d \u201cexpects,\u201d \u201cmay,\u201d \u201cwill,\u201d\n\u201cshould,\u201d \u201ccould,\u201d \u201cseeks,\u201d \u201capproximately,\u201d \u201cintends,\u201d \u201cplans,\u201d \u201cestimates,\u201d \u201canticipates,\u201d or other comparable terms. These forward-looking statements\ninclude all matters that are not related to present facts or current conditions or that are not historical facts. They appear in a number of places throughout\nthis Form 10-K and include statements regarding our intentions, beliefs, or current expectations concerning, among other things, our results of operations,\nfinancial condition, liquidity, prospects and growth strategies, and the industries in which we operate and include, without limitation, statements relating to\nour future performance.\n\n Forward-looking statements are subject to known and unknown risks and uncertainties, many of which are beyond our control. We caution you that\nforward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and industry\ndevelopment may differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-K. In addition, even if\nour results of operations, financial condition and liquidity, and industry development are consistent with the forward-looking statements contained in this\nForm 10-K, those results or developments may not be indicative of results or developments in subsequent periods. A number of important factors could\ncause actual results to differ materially from those contained in or implied by the forward-looking statements, including the risks and uncertainties\ndiscussed in Item 1A. Risk Factors of this document. Factors that could cause actual results to differ from those reflected in forward-looking statements\nrelating to our operations and business include, among other things: the impacts of becoming an independent public company; our reliance on Labcorp to\nprovide financial reporting and other financial and accounting information for periods prior to the Spin through the end of the relevant transition\nagreements, as well as IT, accounting, finance, legal, human resources, and other services critical to our businesses; our dependence on third parties\ngenerally to provide services critical to our businesses throughout the transition period and beyond; the risk that establishment of our accounting, enterprise\nresource planning, and other management systems post the transition period could cost more or take longer than anticipated; the impact of the rebranding of\nthe Company; our ability to successfully implement our business strategies and execute our long-term value creation strategy; risks and expenses associated\nwith our international operations and currency fluctuations; our customer or therapeutic area concentrations; any further deterioration in the\nmacroeconomic environment, which could lead to defaults or cancellations by our customers; the risk that our backlog and net new business may not grow\nto the extent we anticipate over the time period we anticipate, that such measures may not be indicative of our future revenues and that we might not realize\nall of the anticipated future revenue reflected in our backlog; our ability to generate sufficient net new business awards, or the risk that net new business\nawards are delayed, terminated, reduced in scope, or fail to go to contract; the risk that we may underprice our contracts, overrun our cost estimates, or fail\nto receive approval for, or experience delays in documentation of change orders; our ability to complete divestiture of Endpoint Clinical and Fortrea Patient\naccess businesses on time or at all and our ability to realize the full purchase price and benefits of the transaction; and other factors described from time to\ntime in documents that we file with the SEC.\n\n All forward-looking statements are made only as of the date of this Form 10-K and we do not undertake any obligation, other than as may be required\nby law, to update or revise any forward-looking statements to reflect future events or developments. Comparisons of results for current and any prior\nperiods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as\nhistorical data. For a further discussion of the risks relating to our business, see the Item 1A. Risk Factors of this document.\n\n\n\n\n 4\n\fTable of Contents\n Case 1:25-cv-04630-KPF Document 65-2 Filed 01/28/26 Page 4 of 5\n\n\n\n\nplace to reduce our exposure to such risks, but if we fail to follow these policies and guidelines we may suffer reputational damage, loss of customer\nrelationships and business, monetary damages, fines, and other governmental actions.\n\nOur customer or therapeutic area concentration may have a material adverse effect on our business, financial condition, results of operations or cash\nflows.\n\n If any large customer decreases or terminates its relationship with us, our business, financial condition, results of operations or cash flows could be\nmaterially adversely affected. For the year ended December 31, 2023, our top ten customers based on revenue accounted for approximately 47% of our\nconsolidated revenue and our top ten customers based on backlog accounted for approximately 53% of our total backlog. For the year ended December 31,\n2023, one customer accounted for approximately 10.6% of revenue. It is possible that an even greater portion of our revenues will be attributable to a\nsmaller number of customers in the future, including as a result of our entering into strategic provider relationships with customers. Also, consolidation in\nour potential customer base results in increased competition for important market segments and fewer available customer accounts.\n\n Additionally, conducting multiple clinical trials and providing other development or post-approval services for different customers in a single\ntherapeutic class involving drugs with the same or similar chemical action may adversely affect our business if some or all of the trials or services are\ncanceled because of new scientific information or regulatory judgments that affect the drugs as a class. Further, concentration in a particular therapeutic\nclass could cause trials we are conducting for our customers to compete with one another for limited resources (e.g., patients, academic interest, funding),\nwhich could impact the successful completion or timely execution of these studies, and therefore our business.\n\nOur customers may experience insufficient funding to complete their clinical trials.\n\n Clinical trials can cost hundreds of millions of dollars. A contraction in available funding sources for life science companies can make it harder for our\ncustomers to fund the costs of clinical trials. There is a risk that we may initiate clinical trials for our customers, and then customers become unwilling or\nunable to fund our services or the completion of the clinical trial as a whole. In such a situation, it may be necessary for us to complete or wind down the\nclinical trial at our own expense due to regulatory or ethical obligations. In these circumstances, we may incur substantial costs and expend resources\nwithout compensation from our customer due to their lack of funds, bankruptcy or other negative financial circumstances.\n\nOur backlog might not be indicative of our future revenues, and we might not realize all of the anticipated future revenue reflected in our backlog.\n\n Our backlog consists of anticipated revenue awarded from contract and pre-contract commitments that are supported by written communications. Once\nwork begins on a project, revenue is recognized over the duration of the project, provided the award has gone to contract. Projects may be canceled or\ndelayed by the customer or delayed by regulatory authorities for reasons beyond our control. To the extent projects are delayed, the timing of our revenue\ncould be adversely affected. In addition, if a customer terminates a contract, we typically would be entitled to receive payment for all services performed up\nto the termination date and subsequent customer authorized services related to terminating the canceled project. Typically, however, we have no contractual\nright to the full amount of the future revenue reflected in our backlog in the event of a contract termination or subsequent changes in scope that reduce the\nvalue of the contract. The duration of the projects included in our backlog, and the related revenue recognition, typically range from a few months to\nseveral years. Our backlog might not be indicative of our future revenues, and we might not realize all the anticipated future revenue reflected in that\nbacklog. A number of factors may affect the backlog, including:\n\n \u2022 the size, complexity, and duration of projects or strategic relationships\u037e\n \u2022 the cancellation or delay of projects\u037e\n \u2022 the failure of one or more business awards to go to contract\u037e and\n \u2022 changes in the scope of work during the course of projects.\n\n\n\n 25\n\fTable of Contents\n Case 1:25-cv-04630-KPF Document 65-2 Filed 01/28/26 Page 5 of 5\n\n\n\n\nIncremental Independent Public Company Expenses\n\n The consolidated and combined statements of operations include costs for certain centralized functions and programs provided and administered by\nLabcorp that were allocated to us in the periods presented prior to the Spin. These centralized functions and programs include, but are not limited to, legal,\ntax, treasury, risk management, sales expenses, IT, human resources, finance, supply chain, executive leadership and stock-based compensation.\n\n These expenses were allocated to us based on direct usage when identifiable or, when not directly identifiable, on the basis of proportional net\nrevenues or headcount or other reasonable driver, as applicable. We consider the basis on which the expenses have been allocated to reasonably reflect the\nutilization of services provided to, or the benefit received by, us during the periods presented. However, the allocations may not reflect the expenses we\nwould have incurred as an independent company for the periods presented. Actual costs that may have been incurred if we had been a standalone company\nwould depend on a number of factors, including the organizational structure, whether functions were outsourced or performed by employees, and strategic\ndecisions made in areas such as IT and infrastructure. For a period following the Separation, however, some of these functions will be provided by Labcorp\nunder transition services agreements.\n\n The actual costs of services represented by these allocations may vary significantly from the amounts allocated to us in the accompanying financial\nstatements.\n\nBacklog and Net New Business\n\n Our backlog consists of anticipated future revenue from business awards that either have not started, or that are in process and have not been\ncompleted. Our backlog also reflects any cancellation or adjustment activity related to these awards. The average duration of our contracts will fluctuate\nfrom period to period based on the contracts comprising our backlog at any given time. The majority of our contracts contain early termination provisions\nthat typically require notice periods ranging from 30 to 90 days. We adjust backlog for foreign currency fluctuations and exclude from backlog revenue that\nhas been recognized as revenue in our statements of operations. Our backlog was $7.4 billion as of December 31, 2023.\n\n We do not believe that, as a sole measure, our backlog is a consistent indicator of future revenue because it has been, and likely will continue to be,\naffected by a number of factors, including the variable size and duration of projects, many of which are performed over several years, and changes to the\nscope of work during the course of projects. Additionally, projects may be canceled or delayed by the customer or regulatory authorities. We generally do\nnot have a contractual right to the full amount of the contract award reflected in our backlog. If a customer cancels a contract, we generally will be\nreimbursed for the costs we have incurred. For more information about risks related to our backlog see \u201cRisk Factors\u2014Risks Relating to Our Business\u2014\nOur backlog might not be indicative of our future revenues, and we might not realize all of the anticipated future revenue reflected in our backlog.\u201d\n\n The following Management\u2019s Discussion and Analysis of Financial Condition and Results of Operations is intended to help you understand our results\nof operations for the years ended December 31, 2023, 2022 and 2021.\n\nResults of Operations for the years ended December 31, 2023, 2022 and 2021\n\n The following tables present the financial measures that management considers to be the most significant indicators of the Company's performance.\n\n Revenues\n\n Years Ended December 31,\n 2023 2022 2021 2023/2022 change 2022/2021 change\nClinical Services $ 2,839.5 $ 2,825.4 $ 2,763.5 0.5 % 2.2 %\nEnabling Services 269.5 270.7 294.0 (0.4)% (7.9)%\nTotal $ 3,109.0 $ 3,096.1 $ 3,057.5 0.4 % 1.3 %\n\n\n\n\n 50\n\f","ocr_status":2,"date_upload":"2026-05-15T01:38:13.865433-07:00","document_number":"65","attachment_number":2,"pacer_doc_id":"127038970484","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit B - Fortrea FY 2023 Form 10-K (Mar. 13, 2024) (Excerpted)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327876/","id":479327876,"tags":[],"absolute_url":"/docket/70441800/65/3/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:50.991964-07:00","date_modified":"2026-05-18T05:35:25.849781-07:00","sha1":"0d13488a05ab3a97c613eb63dc17e475a30c54cf","page_count":3,"file_size":2644985,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.3.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.3.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:25-cv-04630-KPF Document 65-3 Filed 01/28/26 Page 1 of 3\n\n\n\n\n Exhibit C\n\f Case 1:25-cv-04630-KPF Document 65-3 Filed 01/28/26 Page 2 of 3\n\n\n\n\n UNITED STATES\n SECURITIES AND EXCHANGE COMMISSION\n Washington, D.C. 20549\n\n FORM 10-Q\n\n \u2612 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n For the quarterly period ended June 30, 2024\n OR\n\n \u2610 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n For the transition period from ______ to ______\n\n Commission File Number 001-41704\n\n FORTREA HOLDINGS INC.\n (Exact name of registrant as specified in its charter)\n\n Delaware XX-XXXXXXX\n (I.R.S. Employer\n (State or other jurisdiction of incorporation or organization) Identification No.)\n 8 Moore Drive Durham, North Carolina\n 27709\n (Address of principal executive offices) (Zip Code)\n\n (Registrant's telephone number, including area code) (480)-295-7600\n\n\nSecurities registered pursuant to Section 12(b) of the Act.\n\nTitle of each class Trading Symbol(s) Name of each exchange on which registered\nCommon Stock, $0.001 par value FTRE The NASDAQ Stock Market LLC\n\nIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such\nshorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o\n\nIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (\u00a7232.405 of this chapter)\nduring the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o\n\fTable of Contents\n Case 1:25-cv-04630-KPF Document 65-3 Filed 01/28/26 Page 3 of 3\n\n\n\nCapital Partners, pursuant to which the Seller agreed to sell, and to cause its affiliates to sell, certain assets relating to its Enabling Services Segment (the \u201cTransaction\u201d), including the sale of equity\ninterests of Fortrea Patient Access Inc. and its subsidiaries and Endpoint Clinical, Inc. and its subsidiaries. The final adjusted purchase price for the Transaction was $340.0, subject to customary\npurchase price adjustments, with $295.0 paid at closing and $45.0 to be paid upon achievement of certain transition-related milestones, which includes certain services provided through a Transition\nServices Agreement. The Transaction closed during the second quarter of 2024. The decision to sell such assets relating to the Enabling Services Segment represented a strategic shift that had a\nsignificant effect on the Company's results and operations and assets and liabilities for the periods presented. As a result, the Company has classified the assets related to the Enabling Services\nSegment as assets from discontinued operations and liabilities from discontinued operations on the condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023. The operations\nof the Enabling Services Segment have been classified as income or loss from discontinued operations on the condensed consolidated and combined statements of operations for all periods presented.\n\nBacklog and Net New Business\n\n Our backlog consists of anticipated future revenue from business awards that either have not started, or that are in process and have not been completed. Our backlog also reflects any\ncancellation or adjustment activity related to these awards. The average duration of our contracts will fluctuate from period to period based on the contracts comprising our backlog at any given time.\nThe majority of our contracts contain early termination provisions that typically require notice periods ranging from 30 to 90 days. We adjust backlog for foreign currency fluctuations and exclude\nfrom backlog revenue that has been recognized as revenue in our statements of operations. Our backlog was $7.4 billion as of June 30, 2024.\n\n We do not believe that, as a sole measure, our backlog is a consistent indicator of future revenue because it has been, and likely will continue to be, affected by a number of factors, including the\nvariable size and duration of projects, many of which are performed over several years, and changes to the scope of work during the course of projects. Additionally, projects may be canceled or\ndelayed by the customer or regulatory authorities. We generally do not have a contractual right to the full amount of the contract award reflected in our backlog. If a customer cancels a contract, we\ngenerally will be reimbursed for the costs we have incurred. For a further discussion of the risks relating to our business, see the \u201cRisk Factors\u201d section of our Annual Report on Form 10-K.\n\nRESULTS OF CONTINUING OPERATIONS\n\n Three and Six Months Ended June 30, 2024 compared with Three and Six Months Ended June 30, 2023\n\n The following tables present the financial measures that management considers to be the most significant indicators of the Company's performance.\n\n Revenues\n Three Months Ended June 30, Six Months Ended June 30,\n 2024 2023 Change 2024 2023 Change\nRevenues $ 662.4 $ 725.1 (8.6)% $ 1,324.5 $ 1,419.0 (6.7)%\n\n The Company\u2019s revenues for the three months ended June 30, 2024 were $662.4, a decrease of 8.6% from revenues of $725.1 in the corresponding period in 2023. The change in revenues was\ndue to a decrease in organic revenues of 8.3% and unfavorable foreign currency translation of 0.3%. The Company defines organic growth as the change in revenues excluding the year over year\nimpact of acquisitions, divestitures and currency. The 8.3% decrease in organic revenues was primarily driven by decreased pass through revenues and lower service revenues resulting from the\nquantity and burn rate of new business wins pre-Spin, and the challenges of mix.\n\n The Company\u2019s revenues for the six months ended June 30, 2024 were $1,324.5, a decrease of 6.7% from revenues of $1,419.0 in the corresponding period in 2023. The change in revenues was\ndue to a decrease in organic revenues of 6.6% and unfavorable foreign currency translation of 0.1%. The 6.6% decrease in organic revenues was primarily driven by lower service revenues resulting\nfrom the quantity and burn rate of new business wins pre-Spin, and the challenges of mix and decreased pass through revenues.\n\n\n\n\n 39\n\f","ocr_status":2,"date_upload":"2026-05-15T01:38:25.264475-07:00","document_number":"65","attachment_number":3,"pacer_doc_id":"127038970485","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit C - Fortrea's Q2 2024 10-Q (Aug. 12, 2024) (Excerpted)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327877/","id":479327877,"tags":[],"absolute_url":"/docket/70441800/65/4/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:51.010349-07:00","date_modified":"2026-05-18T05:35:28.435888-07:00","sha1":"54d7bcc8dae527a1920ce42ce11fac1962980884","page_count":3,"file_size":1612210,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.4.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.4.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:25-cv-04630-KPF Document 65-4 Filed 01/28/26 Page 1 of 3\n\n\n\n\n Exhibit D\n\f Case 1:25-cv-04630-KPF Document 65-4 Filed 01/28/26 Page 2 of 3\n\n\n\n\n UNITED STATES\n SECURITIES AND EXCHANGE COMMISSION\n Washington, D.C. 20549\n\n FORM 10-Q\n\n \u2612 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n For the quarterly period ended September 30, 2024\n OR\n\n \u2610 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n For the transition period from ______ to ______\n\n Commission File Number 001-41704\n\n FORTREA HOLDINGS INC.\n (Exact name of registrant as specified in its charter)\n\n Delaware XX-XXXXXXX\n (I.R.S. Employer\n (State or other jurisdiction of incorporation or organization) Identification No.)\n 8 Moore Drive Durham, North Carolina\n 27709\n (Address of principal executive offices) (Zip Code)\n\n (Registrant's telephone number, including area code) (480)-295-7600\n\n\nSecurities registered pursuant to Section 12(b) of the Act.\n\nTitle of each class Trading Symbol(s) Name of each exchange on which registered\nCommon Stock, $0.001 par value FTRE The NASDAQ Stock Market LLC\n\nIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934\nduring the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing\nrequirements for the past 90 days. Yes x No o\n\nIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of\nRegulation S-T (\u00a7232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such\nfiles). Yes x No o\n\fTable of Contents\n Case 1:25-cv-04630-KPF Document 65-4 Filed 01/28/26 Page 3 of 3\n\n\n\n\nSale of Assets Relating to the Enabling Services Segment\n\n On March 9, 2024, the Company, together with its wholly-owned subsidiary, Fortrea Inc. (the \u201cSeller\u201d), entered into an Asset Purchase Agreement (the\n\u201cPurchase Agreement\u201d) with Endeavor Buyer LLC, an affiliate of Arsenal Capital Partners, pursuant to which the Seller agreed to sell, and to cause its\naffiliates to sell, certain assets relating to its Enabling Services Segment (the \u201cTransaction\u201d), including the sale of equity interests of Fortrea Patient Access\nInc. and its subsidiaries and Endpoint Clinical, Inc. and its subsidiaries. The final adjusted purchase price for the Transaction was $340.0, subject to\ncustomary purchase price adjustments, with $295.0 paid at closing and $45.0 to be paid upon achievement of certain transition-related milestones, which\nincludes certain services provided through a Transition Services Agreement. The Transaction closed during the second quarter of 2024. The decision to sell\nsuch assets relating to the Enabling Services Segment represented a strategic shift that had a significant effect on the Company's results and operations and\nassets and liabilities for the periods presented. As a result, the Company has classified the assets related to the Enabling Services Segment as assets from\ndiscontinued operations and liabilities from discontinued operations on the condensed consolidated balance sheet as of December 31, 2023. The operations of\nthe Enabling Services Segment have been classified as income or loss from discontinued operations on the condensed consolidated and combined statements\nof operations for all periods presented.\n\nBacklog and Net New Business\n\n Our backlog consists of anticipated future revenue from business awards that either have not started, or that are in process and have not been completed.\nOur backlog also reflects any cancellation or adjustment activity related to these awards. The average duration of our contracts will fluctuate from period to\nperiod based on the contracts comprising our backlog at any given time. The majority of our contracts contain early termination provisions that typically\nrequire notice periods ranging from 30 to 90 days. We adjust backlog for foreign currency fluctuations and exclude from backlog amounts that have been\nrecognized as revenue in our statements of operations. Our backlog was $7.6 billion as of September 30, 2024.\n\n We do not believe that, as a sole measure, our backlog is a consistent indicator of future revenue because it has been, and likely will continue to be,\naffected by a number of factors, including the variable size and duration of projects, many of which are performed over several years, and changes to the\nscope of work during the course of projects. Additionally, projects may be canceled or delayed by the customer or regulatory authorities. We generally do not\nhave a contractual right to the full amount of the contract award reflected in our backlog. If a customer cancels a contract, we generally will be reimbursed\nfor the costs we have incurred. For a further discussion of the risks relating to our business, see the \u201cRisk Factors\u201d section of our Annual Report on Form 10-\nK.\n\nRESULTS OF CONTINUING OPERATIONS\n\n Three and Nine Months Ended September 30, 2024 compared with Three and Nine Months Ended September 30, 2023\n\n The following tables present the financial measures that management considers to be the most significant indicators of the Company's performance.\n\n Revenues\n Three Months Ended September 30, Nine Months Ended September 30,\n 2024 2023 Change 2024 2023 Change\nRevenues $ 674.9 $ 713.8 (5.4)% $ 1,999.4 $ 2,132.8 (6.3)%\n\n The Company\u2019s revenues for the three months ended September 30, 2024 were $674.9, a decrease of 5.4% from revenues of $713.8 in the corresponding\nperiod in 2023. The change in revenues was due to a decrease in organic revenues of 5.7%, partially offset by favorable foreign currency translation of 0.2%.\nThe Company defines organic growth as the change in revenues excluding the year over year impact of acquisitions, divestitures and currency. The 5.7%\ndecrease in organic revenues was primarily driven by decreased pass through costs and lower service revenues resulting from the quantity and burn rate of\nnew business wins pre-Spin, along with the mix of later stage and longer duration studies in our portfolio.\n\n\n\n\n 36\n\f","ocr_status":2,"date_upload":"2026-05-15T01:38:30.363792-07:00","document_number":"65","attachment_number":4,"pacer_doc_id":"127038970486","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit D - Fortrea's Q3 2024 10-Q (Nov. 8, 2024) (Excerpted)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327878/","id":479327878,"tags":[],"absolute_url":"/docket/70441800/65/5/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:51.030679-07:00","date_modified":"2026-05-18T05:35:31.046849-07:00","sha1":"2f1595ba1273a33ca2e936273bcc1cec240921cc","page_count":5,"file_size":2549585,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.5.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.5.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:25-cv-04630-KPF Document 65-5 Filed 01/28/26 Page 1 of 5\n\n\n\n\n Exhibit E\n\fTable of Contents\n Case 1:25-cv-04630-KPF Document 65-5 Filed 01/28/26 Page 2 of 5\n\n\n\n\n UNITED STATES\n SECURITIES AND EXCHANGE COMMISSION\n Washington, D.C. 20549\n __________________________________\n\n FORM 10-K\n __________________________________\n(Mark One)\nx ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n For the fiscal year ended December 31, 2024\n OR\no TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n For the transition period from _____ to _____\n Commission file number 001-04321\n __________________________________\n\n Fortrea Holdings Inc.\n (Exact name of registrant as specified in its charter)\n __________________________________\n\n Delaware XX-XXXXXXX\n (State or other jurisdiction of (I.R.S. Employer\n incorporation or organization) Identification No.)\n\n\n 8 Moore Drive, Durham, North Carolina 27709\n\n (Address of Principal Executive Offices) (Zip Code)\n\n (877) 495-0816\n Registrant's telephone number, including area code\nSecurities registered pursuant to Section 12(b) of the Act:\n\n Title of each class Trading Symbol(s) Name of each exchange on which registered\n Common Stock, $0.001 par value FTRE The Nasdaq Stock Market LLC\n\nSecurities registered pursuant to section 12(g) of the Act: None\nIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x\nIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes o No x\n\fTable of Contents\n Case 1:25-cv-04630-KPF Document 65-5 Filed 01/28/26 Page 3 of 5\n\n\n\n\n Cautionary Statement Concerning Forward-Looking Statements\n\n This Form 10-K and other materials we have filed or will file with the Securities and Exchange Commission (the \u201cSEC\u201d) include or will include forward-looking statements. Some of the\nforward-looking statements can be identified by the use of terms such as \u201cbelieves,\u201d \u201cexpects,\u201d \u201cmay,\u201d \u201cwill,\u201d \u201cshould,\u201d \u201ccould,\u201d \u201cseeks,\u201d \u201capproximately,\u201d \u201cintends,\u201d \u201cplans,\u201d \u201cestimates,\u201d\n\u201canticipates,\u201d or other comparable terms. These forward-looking statements include all matters that are not related to present facts or current conditions or that are not historical facts. They appear in a\nnumber of places throughout this Form 10-K and include statements regarding our intentions, beliefs, or current expectations concerning, among other things, our results of operations, financial\ncondition, liquidity, prospects and growth strategies, and the industries in which we operate and include, without limitation, statements relating to our future performance.\n\n Forward-looking statements are subject to known and unknown risks and uncertainties, many of which are beyond our control. We caution you that forward-looking statements are not guarantees\nof future performance and that our actual results of operations, financial condition and liquidity, and industry development may differ materially from those made in or suggested by the forward-\nlooking statements contained in this Form 10-K. In addition, even if our results of operations, financial condition and liquidity, and industry development are consistent with the forward-looking\nstatements contained in this Form 10-K, those results or developments may not be indicative of results or developments in subsequent periods. A number of important factors could cause actual\nresults to differ materially from those contained in or implied by the forward-looking statements, including the risks and uncertainties discussed in Part I, Item 1A. \u201cRisk Factors\u201d of this document.\nFactors that could cause actual results to differ from those reflected in forward-looking statements relating to our operations and business include, among other things: the impacts of becoming and\nour limited operating history as an independent public company; our ability to maintain financial reporting and other financial and accounting information following the Spin due to the end of the\nrelevant 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\ncritical to our businesses; the risk that establishment of our accounting, enterprise resource planning, and other management systems post the transition period could cost more or take longer than\nanticipated; the impact of building our brand and increasing our value; our ability to successfully implement our business strategies and execute our long-term value creation strategy; risks and\nexpenses associated with our international operations and currency fluctuations; our customer or therapeutic area concentrations; any deterioration in the macroeconomic environment, which could\nlead to defaults or cancellations by our customers; the risk that our backlog and net new business may not grow to the extent we anticipate over the time period we anticipate, that such measures may\nnot be indicative of our future revenues and that we might not realize all of the anticipated future revenue reflected in our backlog; our ability to generate sufficient net new business awards, or the\nrisk that net new business awards are delayed, terminated, reduced in scope, or fail to go to contract; the risk that we may underprice our contracts, overrun our cost estimates, or fail to receive\napproval for, or experience delays in documentation of change orders; our ability to complete divestiture of Endpoint Clinical and Fortrea Patient access businesses on time or at all and our ability to\nrealize the full purchase price and benefits of the transaction; and other factors described from time to time in documents that we file with the SEC.\n\n All forward-looking statements are made only as of the date of this Form 10-K and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-\nlooking statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future\nperformance, unless expressed as such, and should only be viewed as historical data. For a further discussion of the risks relating to our business, see the Part I, Item 1A. \u201cRisk Factors\u201d of this\ndocument.\n\n\n\n\n 4\n\fTable of Contents\n Case 1:25-cv-04630-KPF Document 65-5 Filed 01/28/26 Page 4 of 5\n\n\n\nOur backlog might not be indicative of our future revenues, and we might not realize all of the anticipated future revenue reflected in our backlog.\n\n Our backlog consists of anticipated revenue awarded from contract and pre-contract commitments that are supported by written communications. Once work begins on a project, revenue is\nrecognized over the duration of the project, provided the award has gone to contract. Projects may be canceled or delayed by the customer or delayed by regulatory authorities for reasons beyond our\ncontrol. To the extent projects are delayed, the timing of our revenue could be adversely affected. In addition, if a customer terminates a contract, we typically would be entitled to receive payment for\nall services performed up to the termination date and subsequent customer-authorized services related to terminating the canceled project. Typically, however, we have no contractual right to the full\namount of the future revenue reflected in our backlog in the event of a contract termination or subsequent changes in scope that reduce the value of the contract. The duration of the projects included\nin our backlog, and the related revenue recognition, typically range from a few months to several years. Our backlog might not be indicative of our future revenues, and we might not realize all the\nanticipated future revenue reflected in that backlog. A number of factors may affect the backlog, including:\n\n \u2022 the size, complexity, and duration of projects or strategic relationships\u037e\n \u2022 the cancellation or delay of projects\u037e\n \u2022 the failure of one or more business awards to go to contract\u037e and\n \u2022 changes in the scope of work during the course of projects.\n The rate at which our backlog converts to revenue may vary over time. The revenue recognition on larger, more global projects could be slower than on smaller, more regional projects for a\nvariety of reasons, including, but not limited to, an extended period of coordination from the time the project is awarded and the actual execution of the contract, as well as an increased timeframe for\nobtaining the necessary regulatory approvals.\n\n Our backlog as of December 31, 2024 was $7.7 billion. Although an increase in backlog will generally result in an increase in revenues over time, an increase in backlog at a particular point in\ntime does not necessarily correspond directly to an increase in revenues during any particular period, or at all. The extent to which contracts in backlog will result in revenue depends on many factors,\nincluding, but not limited to, delivery against project schedules, scope changes, contract terminations and the nature, duration, and complexity of the contracts, and can vary significantly over time.\n\nIncreased competition, including price competition, could have a material adverse effect on our revenues and profitability.\n\n We operate in a highly competitive industry. Competitors in the CRO industry range from hundreds of smaller CROs to a limited number of large CROs with global capabilities. Our main\ncompetition consists of these small and large CROs, as well as in-house departments of pharmaceutical, biotechnology and medical device companies and, to a lesser extent, select universities and\nteaching hospitals. Our services have from time to time experienced periods of increased price competition that had an adverse effect on our revenues and profitability. There is competition among\nCROs for both customers and potential acquisition candidates. Additionally, few barriers to entering the CRO industry further increases possible new competition. These competitive pressures may\naffect the attractiveness or profitability of our services and could adversely affect our financial results.\n\n\n\n 27\n\fTable of Contents\n Case 1:25-cv-04630-KPF Document 65-5 Filed 01/28/26 Page 5 of 5\n\n\n\nSale of Assets Relating to the Enabling Services Segment\n\n On March 9, 2024, the Company, together with its wholly-owned subsidiary, Fortrea Inc. (the \u201cSeller\u201d), entered into an Asset Purchase Agreement (the \u201cPurchase Agreement\u201d) with Endeavor\nBuyer LLC, an affiliate of Arsenal Capital Partners, pursuant to which the Seller agreed to sell, and to cause its affiliates to sell, certain assets relating to its Enabling Services Segment (the\n\u201cTransaction\u201d), including the sale of equity interests of Fortrea Patient Access Inc. and its subsidiaries and Endpoint Clinical, Inc. and its subsidiaries. The final adjusted purchase price for the\nTransaction was $340.0, subject to customary purchase price adjustments, with $295.0 paid at closing and $45.0 to be paid upon achievement of certain transition-related milestones, which includes\ncertain services provided through a Transition Services Agreement. The Transaction closed during the second quarter of 2024. Estimated proceeds of $285.2, resulted in a loss on disposal of $19.6,\nsubject to further adjustment based on customary purchase price adjustments. The decision to sell such assets relating to the Enabling Services Segment represented a strategic shift that had a\nsignificant effect on the Company's results and operations and assets and liabilities for the periods presented. As a result, the Company has classified the assets related to the Enabling Services\nSegment as assets from discontinued operations and liabilities from discontinued operations on the consolidated balance sheet as of December 31, 2023. The operations of the Enabling Services\nSegment have been classified as income or loss from discontinued operations on the consolidated and combined statements of operations for all periods presented.\n\nBacklog\n\n Our backlog consists of anticipated future revenue from business awards that either have not started, or that are in process and have not been completed. Our backlog also reflects any\ncancellation or adjustment activity related to these awards. The average duration of our contracts will fluctuate from period to period based on the contracts comprising our backlog at any given time.\nThe majority of our contracts contain early termination provisions that typically require notice periods ranging from 30 to 90 days. We adjust backlog for foreign currency fluctuations and exclude\nfrom backlog amounts that have been recognized as revenue in our statements of operations. Our backlog was $7.7 billion as of December 31, 2024.\n\n We do not believe that, as a sole measure, our backlog is a consistent indicator of future revenue because it has been, and likely will continue to be, affected by a number of factors, including the\nvariable size and duration of projects, many of which are performed over several years, and changes to the scope of work during the course of projects. Additionally, projects may be canceled or\ndelayed by the customer or regulatory authorities. We generally do not have a contractual right to the full amount of the contract award reflected in our backlog. If a customer cancels a contract, we\ngenerally will be reimbursed for the costs we have incurred. For more information about risks related to our backlog see \u201cRisk Factors\u2014Risks Relating to Our Business\u2014Our backlog might not be\nindicative of our future revenues, and we might not realize all of the anticipated future revenue reflected in our backlog.\u201d\n\n The following Management\u2019s Discussion and Analysis of Financial Condition and Results of Operations is intended to help you understand our results of operations for the years ended\nDecember 31, 2024, 2023 and 2022.\n\nResults of Continuing Operations for the years ended December 31, 2024, 2023 and 2022\n\n The following tables present the financial measures that management considers to be the most significant indicators of the Company's performance.\n\n Revenues\n\n Years Ended December 31,\n 2024 2023 2022 2024/2023 change 2023/2022 change\nRevenues $ 2,696.4 $ 2,842.5 $ 2,837.0 (5.1)% 0.2 %\n\n\n\n\n 56\n\f","ocr_status":2,"date_upload":"2026-05-15T01:38:37.129844-07:00","document_number":"65","attachment_number":5,"pacer_doc_id":"127038970487","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit E - Fortrea's FY 24 Form 10-K (Mar. 3, 2025) (Excerpted)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327879/","id":479327879,"tags":[],"absolute_url":"/docket/70441800/65/6/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:51.048126-07:00","date_modified":"2026-05-18T05:35:04.816139-07:00","sha1":"1f27e6ed7d584d60c4cbed051af0aa92a78e99e3","page_count":13,"file_size":381135,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.6.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.6.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 1 of 13\n\n\n\n\n Exhibit F\n\f Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 2 of 13\n Page 1 of 12\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n\n\n\n\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n FD (Fair Disclosure) Wire\n January 10, 2024 Wednesday\n\n\nCopyright 2024 Electronic format, layout and metadata, copyright 2023 VIQ Media Transcript, Inc. ALL RIGHTS\nRESERVED.\nCopyright 2024 Refinitiv. An LSEG business. ALL RIGHTS RESERVED.\nLength: 7056 words\n\nBody\n\n\nCorporate Participants\n* Jill McConnell\nFortrea Holdings Inc. - CFO\n* Thomas H. Pike\nFortrea Holdings Inc. - CEO, President & Chairman\nConference Call Participants\n* Casey Rene Woodring\nJPMorgan Chase & Co, Research Division - Research Analyst\nPresentation\nCASEY RENE WOODRING, RESEARCH ANALYST, JPMORGAN CHASE & CO, RESEARCH\nDIVISION: Welcome, everybody, to the JPMorgan Healthcare Conference. My name is Casey Woodring\nfrom the Life Science Tools & Diagnostics team. I'm pleased to introduce Fortrea here. We have CEO,\nTom Pike, CFO, Jill McConnell. And they'll be doing a presentation here followed by Q&A. So with that,\ntake it away, guys.\nTHOMAS H. PIKE, CEO, PRESIDENT & CHAIRMAN, FORTREA HOLDINGS INC.: Great. Thank\nyou, Casey. Good afternoon, everybody, Wednesday. So everybody is, I'm sure, starting to slow down a\nlittle bit. We'll see if we can go fast to keep you on your schedules. Forward-looking statements. We may\nmake some forward-looking statements, you have all the usual stuff here.\nThe thing about Fortrea, we do focus a lot on our mission. Our mission really is how do we bring life-\nchanging patients to -- I'm life-changing medicines to patients faster but the thing that's important about\nthis slide is we are about solutions. We're not just about medicines.\nWe're not in that business of creating product. We want to bring solutions that actually help transform this\nindustry over the next 5 years. With respect to the market that we have, this slide hasn't changed too much\n\f Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 3 of 13\n Page 2 of 12\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n\nover the last number of years. You've seen consistent growth associated with R&D spend. You've seen a\nlarge market opportunity, you see in different organizations, you'll see a slightly different number, but all\nof us are going after a very large market that's made up of 2 things: R&D growth, and then some increase\nin the outsourcing that's taking place in the industry, very attractive.\nOn the right side of this, I do have a few themes that are relevant that are to now. First, '24, '25, might be a\nlittle bit slower growth than we've historically seen. You've seen this in some of the analyst reports as\nwell. I think we think it's going to be about a 4% to 5% growth year across the industry. Some of this is\ncoming after in the post-COVID environment, perhaps post GLP-1 as we're coming to conclusion on\nsome of those studies. And we're starting to go into a market that -- it's a solid market, but not the growth\nthat we typically see, which is high single digits in the market.\nThat being said, like many of the analysts say, we do believe that this market will continue to grow at\nthose high single-digit rates as we go out in the out years because we continue to have a huge amount of\ninnovation on the product side.\nAnd then at the same time, we are continuing to see outsourcing opportunities, and that will continue to\ndrive growth of our CRO sector. In terms of RFPs and in terms of the marketplace, for us, in Fortrea, it's\nhealthy. Remember, we're a $3 billion organization in revenues. We're not an enormous organization. So\nwe're big enough to be able to do really large full-service outsourcing. We're big enough to be able to do\nFSP. We're large enough to work with the largest pharmaceutical firms.\nWe're small and nimble enough to be able to work with the biotechs. So for us, at our size, the number of\nRFPs, the flow of RFPs as we say, looks healthy. With respect to the bottom issue here, we do think that\nsome of the issues you hear about, whether it's Inflation Reduction Act, even some of the cuts associated\nwith some of the pharmaceutical firms generally create opportunities. There's been a number of questions\nhere today about whether we're getting near another patent cliff type moment and some discussion about\nthe next few years. But in general, having been through one of those before, a leading CRO, in general,\nthat creates opportunities for CROs because the pharmaceutical firms are trying to variabilize costs during\nthose periods of time.\nSo again, sometimes these short-term issues actually turn into positives for this industry. With respect to\nthis company, it's an interesting company. It's a new company. So we spun out of Labcorp in very late in\nJune, literally the last minute of June we spun out of Labcorp. However, this is a 30-plus-year-old\ncompany, one of the first CROs, one the largest CROs, if you meet one of our project teams, you might\nmeet Dr. Michael George, who's been with us for 25 years or so, you might meet one of our executives,\nTerry, who's been with us over 20 years. So we have a deep root system here that is really rooted in\nscience and high-quality practices.\nOver the years, Labcorp made quite a number of investments after the acquisition. You can see in addition\nto things like pharmacovigilance capabilities. We also made a major acquisition of an organization called\nChiltern and Chiltern actually gave us global capabilities that were stronger than what we had in the core\nCovance, Labcorp root system of this company. And then there were continuing investments that brought\nthis organization to a size of about 19,000 people.\nSo we say, built through decades of experience because we have a tremendous medical team. We have a\ntremendous operational team, and we've been doing this a long time. We just haven't been doing it as\nFortrea. With respect to our business platform, we are a large 19,000-person organization. We're very\nclinically focused. So about 95% of our business is really focused on Phase I through Phase IV in\ndifferent ways. We are focused in all therapeutic areas. We actually cross about 20 therapeutic areas, but\nwe are strongest in oncology in terms of percentage of our mix. That's a place you want to be in this\nindustry because I think you all know that's the largest segment for clinical research, so it's a place you\n\f Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 4 of 13\n Page 3 of 12\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n\nwant to be and we do have great strength in all of them, but there are some areas that we're going to\ncontinue to try to build.\nWe've just hired a terrific leader in CNS to try to expand our market share there. I think we've been a little\nunderpenetrated in some areas like metabolism. We'll continue to focus there. So we have a wide breadth.\nWe have some great specialties, but there's still more opportunity for us.\nIn terms of the business segments, we are in clinical pharmacology. That's also known as Phase I. We\nhave built-for-purpose centers. Those are very attractive. And so we're a leader in that area with a great\nclient list. We do have Phase II, Phase III, Phase IV real-world evidence capabilities associated with\ntraditional clinical development, if you will, the larger projects. We have a segment called enabling\nservices, and this has a number of technology-related businesses and we may get into a case, we can talk\nabout a little bit more, but as some technology businesses and historical business that Covance was a\nleader in called Patient Access. And then finally, who do we serve? We're about half big pharma, about\nhalf biotech, and we are a leader in medical device.\nWith respect to our strategies, we've spent the spring talking to the pharmaceutical firms, larger\npharmaceutical firms trying to understand what they want, trying to understand the capabilities they're not\ngetting from our competitors. And we put together this list of strategies that are evidenced on this slide.\nI'm not going to talk about them all today for time, but let me hit on a couple of them. Complementary\ntech strategies. If you saw the press release that we just did yesterday, it's a good example of this.\nIf you saw the one we did with Medidata a few weeks ago, it's a good example of this. The tech side of\nour business in clinical research has fundamentally changed over the last 5 or 6 years where we have\nlarger players spending large amounts to really be leaders in technology in this large sector. So we've had\nVeeva come in. We've had Advarra come in. Advarra works more from the site side, Veeva works more\nacross the clinical trials with all sizes of pharmaceutical firms. We're bringing them together in a unique\nway to make it simpler at a site to use technology. We can get into that a little bit more, but it's a good\nexample of what we're trying to do is really facilitate practical creative solutions. We'll add our own\nintellectual property where it makes sense, but we're going to leverage the leaders in technology.\nAnother one I'll mention here is another press release you may have seen a couple of weeks ago associated\nwith sites. So over the last few years, in between Quintiles and then coming here to Fortrea, I've been\ndoing a lot of work on innovations around use of AI at sites, around site management organizations,\ndirect-to-patient activities and one of the things that came to believe is we have fundamental opportunities\nto improve how we interact with sites as CROs.\nAnd so we have an initiative now where we're trying to do what we can to simplify, to supplement, to help\nthe sites to be more effective. The sites have been heavily impacted by things like the great resignation by\nCOVID, by being closed. And we're really trying to help them be more efficient. We call it the last mile\nlike the telecommunications industry.\nThey talk about the last mile is to your curb -- from your curb to your home and it's the hardest part of\ntelecommunications. In the same way in our business, the most challenging part for us to control is the\nsite. So we're solving that problem.\nWith respect to next-generation data strategies, we have a new strategy for this. I think times have\nchanged. Proprietary data is not enough. We've had an explosion of investments around data over the last,\nagain, 6 or 7 years, a lot of it private equity driven, some of it driven by large companies. And so now it's\nnot about having your own data, it's really about stacking it together and getting insights out of it.\n\f Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 5 of 13\n Page 4 of 12\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n\nSo what we do is we leverage the LabCorp data, which we still have unique access to. We leverage our\nown data. But then we're using other data as well and putting it into. We have relationships with a number\nof providers in different areas. Some of them much more narrow and focused in a particular therapeutic\narea like a ConcertAI. Some of them are broader like a Comodo, but essentially, what we're doing is\nworking together with a number of providers to really bring insights to different organizations associated\nwith data.\nYou can see on the right what we believe it's actually a broader data set, improved speed and agility, we're\nable to do things like we have a really unique piece of software that helps identify diverse populations and\nwhere we may be able to go to fill those diversity needs and then we do have our own direct-to-patient\ncapabilities as well.\nAnother thing I'll talk about and the last thing I'll talk about before handing over to Jill McConnell is the\ncommercial evolution. As you can imagine, as part of a larger organization that had a big central lab, had\na preclinical business, the sales organization was fundamentally different within LabCorp than it's going\nto be at Fortrea. And what we've done is we've hired a top executive who's done commercial activities\nbefore for both one of the largest CROs as well as other businesses where he's been an executive and he is\nin the process of working with us to really transform that commercial organization.\nWhat we're doing is a whole range of things from putting in world-class processes where every week we\nlook at all of the larger deals, we look at how they're positioned. We look at who's making the decision.\nWe look at our pricing, everything about a deal we look at as an executive team, make sure we're\nengaging properly but we're doing a lot more.\nWe're also bringing the medical talent to bear on these opportunities. We're getting the medical talent out\nin the field to work in early engagement. We're changing the way we do strategies to make sure we're\nmore commercially savvy. We're essentially doing everything we can to bring the best of Fortrea to these\nopportunities and it's fundamentally different. We like to say everyone is in sales here. Those of you who\nknow me know I'm out with customers regularly. I expect all my executives to be. And so when you\ninteract with Fortrea, you're interacting with an organization that is customer focused.\nI think we covered most of the stuff here. A couple of things I'd add, we are looking at large pharma, we\nhave new approaches to penetrate additional large pharmaceutical firms, we are continuing to be a partner\nof choice and think about offerings that are effective for biotechs because we know it's a very different\nvalue proposition. Very importantly, we focused on the mix of business here.\nSo historically, One of the things I'm sure Casey is going to talk to us about and Jill may talk about a little\nbit here is the margins of this business have not been comparable to the margin of our peers. And part of\nthat is making sure we consistently have a good mix of attractive business running through here.\nSo we've had a huge focus, change sales incentives and other things on getting the right mix of business\nhere. Finally, agile processes and decision-making, we can make decisions fast. We can respond quickly.\nThere aren't many layers here. The leadership team gets customers so this has been a tremendous part of\nour evolution and I think we're well into it. You probably saw that we just announced, we've had book-to-\nbills that exceed 1.2 in our first 2 quarters as an independent company. And we're going to continue to\ndrive that transformation over the next year to try to add some consistency and effectiveness to the\ncommercialization process.\nSo I think with that, I'm going to hand to the CFO, Jill here.\nJILL MCCONNELL, CFO, FORTREA HOLDINGS INC.: Okay. Thanks, Tom. So I'm just going to\ntouch on very quickly in my few slides about the progress that we've made post-spin because Tom\n\f Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 6 of 13\n Page 5 of 12\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n\ncommented on the margin and yes, I will address it, it will be remiss if I didn't in my role. But I think that\nthe first point here around the leaders in the organization, we really made some significant changes. There\nwere some good strong leaders within the organization. But Tom brought in a number of individuals. We\ntalked about the commercial leader, for example, and we're really doing things very differently.\nWe've had a very positive market response to the organization. Customers are really excited, actually\ncustomers that we haven't worked with historically are reaching out and asking for conversations. We'll\nsee where that goes. But I think we've had really good reception. We clearly are getting a seat at the table\nwhen it comes to all the opportunities that are out there.\nTom already talked about the 1.2. So we're seeing really good progress in that book-to-bill, which is really\nessential. I'll talk about that a bit more on the margin value. But the pipeline is solid, as Tom said, and\nthat's really key for us to continue to fill that we can go forward.\nThe next point, what I'll call out here is we also know that one of the best ways to get new business\nawards is do a great job of delivering on the ones you're working on. So we have the whole organization\nfocused on that and operational excellence, which will tie into the margin stuff, I'll touch on a little bit\nmore in a moment.\nThose TSAs in the press release that came out Monday morning, we talked about the fact that we exited\nabout 40% to them in our first 6 months as a stand-alone company, slightly ahead of schedule. 2024 is the\nmore complex year. There are -- this is where all the system technology ones that we really have to exit\nand those are the ones that are really key to unlocking a lot of that margin optimization.\nSo those are a big focus for us this year, but we feel good about where we started. And we continue to\nmake targeted organic investments, small ones, but Tom talked about some of the magnet talent. Some of\nthe partnerships that we've been doing. So we feel really good about our progress in the first 6 months. I'm\nnot going to drain this slide, but I think 2023 was really about laying the right foundation as we go\nforward. And '24 is really how do we make sure we exit those TSAs, start moving towards a more fit-for-\npurpose infrastructure. I think we were part of an organization that was predominantly lab-based and so a\nlot of the tools that came with us are more fit for that, rightly so.\nBut now we need to build things that are more appropriate for our CRO. We did a study late Q3, early Q4\naround our SG&A because we had a very strong belief that we were not aligned with our peers on a\nbenchmarking basis. That study proved that to be true and there's significant opportunity there. So we\nhave that opportunity in front of us for 2024. And we're just looking at our workforce productivity. Some\nof that will come through us better utilizing the resource we have, but some of that is just putting more\nrevenue through the funnel. And that to the far right, we're thinking about how does 2024 really unlock\nthe more significant margin expansion in 2025 and beyond.\nWe want to be in that range where we're hitting that 1.2 every single quarter from a book-to-bill\nperspective, continuing to do some organic investments to further differentiate. And I think that last point\nis important, we do still have this medium-term commitment to getting to 2.5x, 3x leverage. Where we are\nright now is not where we want to be longer term and we'll be looking to manage that more as we go\nforward from a capital allocation perspective.\nSo I think on revenue growth and margin expansion, the most important things to call out here, Tom\nmentioned, we are not where we need to be relative to our peers. When you think about that journey over\ntime, we're thinking of it roughly half on SG&A and cost optimization and the other half around really\nrevenue growth and better utilization of our revenue recognized or revenue-generating individuals.\n\f Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 7 of 13\n Page 6 of 12\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n\nSo I think the first couple of points here, we've talked a lot about the environment, the pipeline. We are\nreally looking at performance differently within the organization. Every month we're getting together and\nnot just talking about the financials, but really operational delivery, quality metrics and that's been really\nimportant in terms of everyone understanding what are the most important things that are in front of us in\nthat next 4 weeks and what are we all doing and making sure we break down some of the silos that might\nhave existed previously.\nWe did late in Q3, early Q4, initiated some initial cost structure reductions. We're starting to see some of\nthe benefits of those late in 2023. And as I mentioned, we did this benchmarking exercise, which is really\nhelpful in terms of setting that roadmap for us to move our SG&A more in line with peers, some\nsignificant opportunity there.\nJust have a couple of quick slides here, we really wanted to call out our Quality Organization. We think\nit's important to understand Tom talked about our 30-year heritage, our Head of Quality is someone who\nalso was Head of Quality, led quality at another large CRO previously. She's got a phenomenal team. It's\nreally integrated into everything we do. And it's very important part of where we are. We're in hundreds of\naudits every year. We've got a lot of robust system around that. We use that technology and automation to\nmake sure we're on top of it.\nSo we're -- this is something that's really important to all of us, and we understand that this really critical\nfor our customers to continue to work with us, and we take it very seriously at Fortrea. We've been\npleased over the last few years. I'll just highlight a couple that were more relevant in terms of 2023. We\nhad multiple of our employees be nominated for PharmaTimes and some winners in the -- PharmaTimes\nResearchers of the year and Americas multiple awards, really excited about that.\nOur CRO leadership award capabilities and actually Medidata down there, the next digital innovation, it\nwas really around how we were starting to bring more use of real-world evidence to our clinical trials\nversus some of the more traditional ways of working them, and that's something that we're working with\nthem on closely as we think about some of the things Tom talked about how to make things easier for sites\nand move the medicines through the funnel faster.\nAnd my very last slide is just around governance and ESG. We obviously were part of an organization\nwhere there was an ESG program that made a lot of sense for them. I think we're working on what does\nthat look like. We're very different from the organization that we left. A couple of things that I just called\nout here. Obviously, things like privacy, data security, they're paramount to our license to operate. The\nenvironmental piece is really important, particularly with a lot of our customers. We hear that and our\nemployees and so we're looking at something where we figure out how we do that in a way that's\nappropriately balanced for us as an organization, but meets the expectations of our stakeholders.\nAnd then under social, really that diversity and inclusion in clinical trials, that's a mandate now by many\nof the regulatory agencies, and we think we've got some really great insights how to do that better. So\nwe're looking forward to building something here that's sustainable and fit for purpose for us going\nforward.\nAnd with that, I think we will move to questions.\nQuestions and Answers\nCASEY RENE WOODRING: Great. Thank you for that overview. Maybe just to start, and you guys\ntalked about it a bit on the 4Q preannounced book-to-bill, the 1.2. Can you talk about how bookings\nshaped up exiting the year relative to expectations and then maybe split out that activity between different\ncustomer groups, like SMID versus large pharma orders trend?\n\f Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 8 of 13\n Page 7 of 12\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n\nTHOMAS H. PIKE: Sure. I think overall, Casey, we're really pleased with how this organization has\nresponded. If you looked historically, because we're part of a larger organization, there were ups and\ndowns in the book-to-bill of this particular organization -- and with this concentrated effort we've had a\ncommercial transformation involvement of the executive team, the first 2 quarters ended up with this\nconsistent 1.2 book-to-bill. I suspect a number of people in here know that, that is a marker that we all try\nto hit as CROs because that means high single-digit growth at a minimum over the coming years.\nAnd so we're really pleased with that. The RFP flow has returned to the organization since we've spun.\nThe RFPs, as we look at them right now for this quarter look like a solid foundation for us as long as we\nexecute against them, which is always the challenge in these businesses. As long as we execute against\nthem, we have a solid flow. So from our vantage point, it's a solid book of opportunities and they are\ndiverse.\nThey continue to be about what we are as an organization. We're about half biotech and about half larger\npharma. And we continue to see a similar mix associated with our opportunities.\nCASEY RENE WOODRING: Got it. That's helpful. In the book-to-bill preannouncement, you did call\nout impact from a small biotech client. Should we think about this impact more related to 1Q or\nsomething the company will have to work through the first half of '24 and then stepping back, just do you\nsee this as an overhang at all? And maybe walk through what you learned through that review process and\nsome of the customer feedback since?\nTHOMAS H. PIKE: Yes. Thanks for bringing that up. I mean I think anybody who's been in business for\na while knows that you sometimes encounter unexpected things. And unfortunately, there was a press\nrelease from a biotech -- a promising biotech firm that, that press release had a little run in the media. The\nmedia ran with some of the information in the press release. And it caused to me, it caused us to be placed\nin a bad light potentially on a couple of studies that we're doing with them.\nAnd what we ended up doing, and it was in that press release, we did an assessment of the situation. We\ntried to look at our own conduct. Were there any issues as the media was implying in its remarks. And we\nbrought in an independent expert, Dr. McNair, who we never known before, I've never known her. And\nshe's highly qualified ex Chief Medical Officer at WCG, teaches at a Boston University, masters in\nbioethics, she looked at all of our information and felt that the conduct that we had associated with those\nstudies was strong. It was appropriate for the industry. And actually, Accelerants' oversight was\nappropriate as well.\nAnd so unfortunately, this issue that happened did spill into our contracts and opportunities and toward\nthe very end of the year, we had a couple of contracts that we lost because of this matter and we are\nhoping, to your point about what is the impact of that. We're hoping with the combination of the expert\nreport and really constructive discussions with that customer.\nI'm personally trying to really help because I think for the biotech industry and for CROs, the most\nconstructive thing is if we hold hands and deal with the challenges of this industry together. I'm hoping\nthat it was an event that is like an asterisk, doesn't affect our book-to-bill. We're hoping if it has any effect,\nit was only Q1. Right now, as I told you, we have enough in our pipeline that if we work hard and things\ngo our way, we'll be able to deliver that 1.2.\nBut we felt like we had to be candid about it. We're always going to be candid about this business. I mean\none of the things about a spin that's interesting is you are going through some transitions that other people\naren't going through. So we're committed to having real transparency, whether it's about a TSA, whether\nit's about something like this, we're committed to real transparency so you can understand our journey as\ninvestors.\n\f Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 9 of 13\n Page 8 of 12\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n\nAnd so I'm hoping with the constructive discussions and with things going on that's all behind us and it's\njust an asterisk, and we kind of forget we ever talked about it.\nCASEY RENE WOODRING: Got it. That all makes sense. So yesterday, one of the larger CROs in the\nspace talked about SMID biotech demand sort of attenuating a bit in 4Q after growing sequentially the\npast couple of quarters. Can you just talk about your exposure in the SMID space what you're hearing\nfrom customers there? And how would you assess the cautiousness in the space that some of the others are\ncalling out in CROs? Like are you seeing the same thing? Maybe just kind of talk about your...\nTHOMAS H. PIKE: I think what we generally see is in biotech is pretty consistent with the reports out\nthere that indicate that it's not a tremendous funding environment, but it's a solid funding environment and\nso in terms of what we see and at our size, and Casey and I were talking about this on the way in, it's very\ninteresting when you're the size we are, you're an up and comer, you're interesting to pharmaceutical\nfirms, we are seeing enough opportunity that we can continue to have that mix of 50-50 biotech and large\npharma and continue to build relationships and win. I think if we were larger, it might look different but\nour bucket just isn't as big to fill. So from our vantage point, it looks like there's enough opportunity of\norganizations that are interested in Fortrea to be able to deliver the results that investors hope and so\nprobably where I'd leave it on that.\nCASEY RENE WOODRING: What's your take on the current state of the large pharma customer\ndemand? peers have talked about relative resilience there despite IRA impacts, pipeline reprioritizations,\nbudget tightening. Is that something you would agree with? What gives you confidence in CRO spend\nfrom large pharma to kind of sustaining in 2024?\nTHOMAS H. PIKE: Yes, I would agree with that characterization. I think our larger pharmaceutical firms\nare continuing to try to drive innovation. They're doing it through some combination of their own in-house\nresearch plus really looking at biotechs. By the way, Casey, I think we think it's a nice potential tailwind\nwhen you start seeing acquisitions of biotechs by large pharma because that means more money will be\npulled into the biotech sector. So we think that both of those things are healthy signs in terms of large\npharma.\nThere are some individual company issues. We haven't been affected by those. So in our particular case,\nwe haven't been affected by those. But overall, I'm pleased to see, and I think if you listen to what's come\nout of this conference, I'm pleased to see pretty healthy R&D pipelines and activities from the larger\npharmaceutical firms and spend as we go forward.\nCASEY RENE WOODRING: Got it. And then just on the TSAs, as you noted, 40% exited by the end of\nthe year, how much of a margin lift should we expect from that to begin the year? And do you have a\nbetter idea in terms of the cadence of when the remaining 60% are going to roll off over the course of the\nyear?\nTHOMAS H. PIKE: I'll introduce Jill here in a slightly different way. One of the benefits we have as an\norganization is she actually ran the spin program for LabCorp before we before we came up and spun out.\nAnd so she really has a great understanding of both the challenges and opportunities of these TSAs and\ncoming out of them and what it can do for our business to be an independent company. So I've gave you\nthat intro, you take that.\nJILL MCCONNELL: Thanks, Tom. So I think in terms of the TSAs, the 40% is a dollar amount, it's\nprobably not necessarily reflective of the complexity of the whole suite of TSAs, Clearly, the ones that we\nhave in 2024 because they relate to our systems, our technology, the infrastructure end user computing\nthat those are going to take a bit more time. So we do -- we have detailed exit plans for everyone. They're\nreally scheduled to roll off in tranches, starting with the second quarter in Q3, Q4, as you can imagine.\n\f Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 10 of 13\n Page 9 of 12\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n\nBut we are -- we've also announced recently, we're working with a couple of external partners, Cognizant,\nin particular, who are helping us with that because we know that we are going to need that additional\nsupport to be able to do timely manner.\nWhat that really -- so I would say the ones that we've come out aren't going to -- in and of themselves do a\nlot in terms of the margin. But these exits, it's really what we replace them with. And so every single one\nthose exits, those owners have been tasked with coming back with a replacement system or technology or\nprocess that is more cost effective and so really, as we go through, we've talked a little bit about where we\nthink we would exit 2024, getting through all those TSAs is really critical to unlocking that next step in\nmargin expansion versus like individual TSAs in particular.\nI'll maybe just quickly give an example. If you think about an ERP system, we've been able to do some\nthings. You have to have certain types of roles because we're so reliant on our former parent there, you\ncan maybe move those roles to somewhere where there are lower cost, but you can't really not have those\ntypes of roles.\nAnd so hopefully, as you're building some of those new systems, you build in more automation so that the\nroles that you have are a lot more productive going forward, if that makes sense.\nCASEY RENE WOODRING: Got you. And then maybe just stepping back, what do you think explains\nthe margin gap versus peers? And is there anything structurally holding Fortrea back from realizing peer\nmargins?\nTHOMAS H. PIKE: I'll start on that. I think fundamentally, if you look at the mix of our business and if\nwe continue to sell the mix that we have, our mix looks like some of the largest CROs, and so we don't\nsee anything structurally there that prevents us from getting to those margins. The pricing has been\ndisciplined over time. We do price in that band that the other CROs tend to price in. So it's not a pricing\nproblem in particular. It seems to be a combination of a few things.\nHistorically, Covance and then into LabCorp did put some things like technology into the gross margin\nand so the costs associated with gross margin. So our gross margins are actually a little bit better from a\ncomparator than they look, but our SG&A is actually a little bit worse than it looked and so one thing is\ntrying to reduce our technology costs associated with the organization.\nWe do have SG&A opportunities and then the other primary thing is if you think about global clinical\ntrials, many times, people have heard me, I refer to it in a way like a package delivery network or like a\nlarge manufacturing plant. To be able to run a global clinical trial, and they're typically in 20 to 30\ncountries, you have to have a pretty big footprint to do it. And you're running literally hundreds of these\ntrials, pretty big footprint and that footprint, the more you feed it, the more efficient it is. So these\nrevenues that we've had over the past number of years being up and down in terms of full service\noutsourcing have created a relatively lower utilization of those resources than our peers.\nSo as we go forward here, we think about half of that margin gap is driving more revenue through the\ncurrent enterprise and about half comes out through operating and SG&A improvements over time. But\nwe see no reason why this organization can't be similar to our competition in terms of margin\nimprovement over the next several years.\nCASEY RENE WOODRING: Wanted to touch on FSP works. So a lot of your peers have noted a shift\ntowards FSP in a way from full service contracts but Fortrea noticed the opposite in bookings last quarter,\ndid you see that again in 4Q and maybe help frame up this mix shift just from a margin standpoint?\n\f Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 11 of 13\n Page 10 of 12\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n\nTHOMAS H. PIKE: Our bookings were, again, they were the mix we wanted. So that means that it had an\nappropriate full service mix and really appropriate mix across the board. We actually did have a\nparticularly strong quarter for clinical pharmacology, which was nice to see. And again, I think some of it\nis the way we focused our sales team and some of it is the opportunities that we see. So just based on the\ncustomers that we talk to, we seem to have -- and our size, it seems like there's adequate growth in each of\nthose areas to feed a business that will grow its margins and grow and expand its topline over time, too.\nCASEY RENE WOODRING: Got it. Maybe just taking a step back, during the Analyst Day in June, you\npointed to a near-term CRO market growth rate of 3% to 5% and a longer-term growth rate of 6% to 9%.\nToday, you kind of -- you mentioned 3% to 5%, is that the right benchmark to use for 2024? And then just\nkind of talk about what would need to happen for Fortrea to kind of come in line with that market growth\nrate for next year?\nTHOMAS H. PIKE: Yes. Two things. And Jill, you may want to add to this. First, we do think longer\nterm, we'll get back to that 6% to 9%. We do think coming post COVID, it probably is this 3% to 5%,\nmaybe 4%, somewhere in that range for the industry overall. The way we've started to think about it is\nreally a tale of 2 halves. So if you think of the people who have gotten to know us a little bit know that the\nspin year So the spin was announced in July of 2022, and following that, there was a softness in sales in\nthe business for about a year right to when we spun. And so with that softness, it's going to take about\nanother year for it to really work its way out of the system. So the good bookings that we've had these last\n2 quarters will really start showing themselves in Q3 of '24.\nAnd so we think you'll start seeing real margin improvement toward those industry levels in the second\nhalf of this year in particular, as Jill said, when -- as we exit the TSAs, you'll really fully be able to see it\nbecause we're going to be held back for margin improvement until we're out of those TSAs, which kind of\nforce us into a cost structure that's higher than we would like. And so a tale of 2 halves, first half should\nlook different than the second half. First half is going to be less attractive, second half, you'll really start\nseeing the progress on the topline and the bottom line.\nCASEY RENE WOODRING: Got it. That's helpful. And then you touched on enabling services during\nthe presentation. Can you just elaborate on how should we think about this business, both next year and\nover the longer term, what are the growth drivers there? And what's the margin profile look like?\nTHOMAS H. PIKE: Yes, there are two attractive businesses. There's a bunch of businesses in there, but\nthere's two that are particularly attractive. It's interesting. It may seem like a bit of a backwater but pretty\ngood percentage of every major pharmaceutical product is available to patients through programs like a\nPatient Access program where patients who are indigents who don't have the money or don't have the\ninsurance are able to get the drugs throughout the mechanisms.\nSo Patient Access is a multi-billion dollar market, were Covance had been a leader but it's been under\ninvested in terms of CRM systems and other things over the last several years. That being said, there's\nbeen some new investments in terms of non-commercial pharmacies and some big wins there. So\nbasically, what we need to do with that business is improve some of the technology capabilities and then\nreally execute the non-commercial pharmaceutical piece of a non-commercial pharmacy piece of it and I\nthink if we do that, that's a business that historically was -- had contribution margin that was above some\nof our other business units.\nSame thing with -- there's a business that's actually -- we call it IRT in the business, also randomization.\nSo it's essentially the kind of tools that help with drug supply and randomization in a doctor's office. The\norganization that is their endpoint was one of the leaders, that's another market that's attractive. It's\ngrowing. It's one that typically produces margins that are at or above normal clinical margins and that\n\f Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 12 of 13\n Page 11 of 12\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n\nbusiness is actually going through one those product cycles where they've been developing their next-\ngeneration product. It's not going to roll out until 2024, mid-2024.\nSo you'll start to see that green shoots in that business, we think, in 2024 of that next-generation product.\nIt's interesting. The leader we have there knows that business very well, and he really believes it's a next-\ngeneration improvements. Cloud-based has other capabilities that will allow us to pick up share there. So\ntwo good businesses, both need some work, both probably won't contribute much in '24, to be honest with\nyou, Casey.\nCASEY RENE WOODRING: Okay. Looks like we have couple of minutes left here. Just quickly, any\nupdate on the LabCorp relationship? Just how should we think about that moving forward? And is the\nprogression there?\nTHOMAS H. PIKE: Yes. I think it's strong. I mean, they have an interest. We were spun out. Most of the\nexecutives end up being shareholders in Fortrea, given the nature of it. And I have a really warm\nrelationship with the CEO of LabCorp, I think the [world of]. And so while they're a really important\npartner in terms of coming out of the TSAs and we have other things we're working on together, I think\nthat relationship is one is going to weather all this and help us get through this next 1.5 years of exiting\nfrom them.\nCASEY RENE WOODRING: Okay. We have a minute left to -- does anybody have any questions from\nthe audience? Okay. Maybe one last one. Tom, Jill, what do you think is the most misunderstood part of\nthe Fortrea story? And then what are you most excited about for 2024?\nTHOMAS H. PIKE: Wow, that's almost like a surprise question. That's end of a surprise. I think --\nactually, I think our story is really starting to resonate with people. That there is an opportunity in the\nindustry for a midsized CRO. So somebody who's not the largest CRO to be more innovative, but be it\nthat goldilocks size, where we're just big enough but not too big to really service this industry. And in the\nbeginning, I think there were some questions about that. But our book-to-bills, the interest we're getting\nfrom customers is really starting to create belief both in the customers and certainly in our organization\nthat this is an organization that can be really successful.\nSo I think overall, I don't underestimate us. I think we're going to have a great ride over the next few\nyears, and we do have the kind of team that has the opportunity and ability to change this industry.\nCASEY RENE WOODRING: Got it. We'll leave it at that. Thank you to the Fortrea team for joining us\ntoday. Thank you all for joining and enjoy the rest of the conference. Thank you.\n[Refinitiv, an LSEG business, reserves the right to make changes to documents, content, or other\ninformation on this web site without obligation to notify any person of such changes.\nIn the conference calls upon which Event Transcripts are based, companies may make projections or other\nforward-looking statements regarding a variety of items. Such forward-looking statements are based upon\ncurrent expectations and involve risks and uncertainties. Actual results may differ materially from those\nstated in any forward-looking statement based on a number of important factors and risks, which are more\nspecifically identified in the companies' most recent SEC filings. Although the companies may indicate\nand believe that the assumptions underlying the forward-looking statements are reasonable, any of the\nassumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results\ncontemplated in the forward-looking statements will be realized.\nTHE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL\nREPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL AND WHILE\n\f Case 1:25-cv-04630-KPF Document 65-6 Filed 01/28/26 Page 13 of 13\n Page 12 of 12\n Fortrea Holdings Inc at JPMorgan Healthcare Conference - Final\n\nEFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE\nMATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE\nSUBSTANCE OF THE CONFERENCE CALLS. IN NO WAY DOES REFINITIV OR THE\nAPPLICABLE COMPANY OR THE APPLICABLE COMPANY ASSUME ANY RESPONSIBILITY\nFOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION\nPROVIDED ON THIS WEB SITE OR IN ANY EVENT TRANSCRIPT. USERS ARE ADVISED TO\nREVIEW THE APPLICABLE COMPANY'S CONFERENCE CALL ITSELF AND THE APPLICABLE\nCOMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.]\n\nClassification\nLanguage: ENGLISH\n\n\nPublication-Type: Transcript\n\n\nTranscript: 011024a15843350.750\n\n\nSubject: EXECUTIVES (91%); HOLDING COMPANIES (90%); INDUSTRY ANALYSTS (77%);\nASSOCIATIONS & ORGANIZATIONS (73%); COVID CORONAVIRUS (66%)\n\n\nCompany: JPMORGAN CHASE & CO (96%)\n\n\nTicker: JPM (LSE) (96%); JPM (NYSE) (96%)\n\n\nIndustry: NAICS522110 COMMERCIAL BANKING (96%); NAICS523150 INVESTMENT\nBANKING AND SECURITIES INTERMEDIATION (96%); NAICS523999 MISCELLANEOUS\nFINANCIAL INVESTMENT ACTIVITIES (96%); NAICS551111 OFFICES OF BANK HOLDING\nCOMPANIES (96%); SIC6022 STATE COMMERCIAL BANKS (96%); SIC6211 SECURITY\nBROKERS, DEALERS, & FLOTATION COMPANIES (96%); SIC6712 OFFICES OF BANK\nHOLDING COMPANIES (96%); CONFERENCE CALLS (78%); INDUSTRY ANALYSTS (77%)\n\n\nLoad-Date: January 14, 2024\n\n\n End of Document\n\f","ocr_status":1,"date_upload":"2026-05-15T01:38:42.070754-07:00","document_number":"65","attachment_number":6,"pacer_doc_id":"127038970488","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit F - Transcript of JPMorgan Healthcare Conference (Jan. 10, 2024)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327880/","id":479327880,"tags":[],"absolute_url":"/docket/70441800/65/7/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:51.061757-07:00","date_modified":"2026-05-18T05:33:48.321806-07:00","sha1":"2f20e0570b82fbc3d9639b82fae3d60351515f5d","page_count":17,"file_size":377116,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.7.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.7.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":"2026-05-15T01:40:11.599403-07:00","document_number":"65","attachment_number":7,"pacer_doc_id":"127038970489","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit G - Transcript of Fortrea's Q2 2023 Earnings Call (Aug. 14, 2023)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327881/","id":479327881,"tags":[],"absolute_url":"/docket/70441800/65/8/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:51.079126-07:00","date_modified":"2026-05-18T05:34:37.107370-07:00","sha1":"40c54329614d6e2b3ce80bf6b75eca4aa5692b4d","page_count":15,"file_size":385062,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.8.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.8.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":"2026-05-15T01:40:32.896647-07:00","document_number":"65","attachment_number":8,"pacer_doc_id":"127038970490","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit H - Transcript of Fortrea's Q3 2023 Earnings Call (Nov. 13, 2023)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327882/","id":479327882,"tags":[],"absolute_url":"/docket/70441800/65/9/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:51.098958-07:00","date_modified":"2026-05-18T05:33:11.087305-07:00","sha1":"e5cb3046f8a2e6446a0b9ac0f7e40bfa278e793b","page_count":23,"file_size":401448,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.9.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.9.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 1 of 23\n\n\n\n\n Exhibit I\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 2 of 23\n Page 1 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\n\n\n\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n FD (Fair Disclosure) Wire\n August 12, 2024 Monday\n\n\nCopyright 2024 Electronic format, layout and metadata, copyright 2023 VIQ Media Transcript, Inc. ALL RIGHTS\nRESERVED.\nCopyright 2024 Refinitiv. An LSEG business. ALL RIGHTS RESERVED.\nLength: 11392 words\n\nBody\n\n\nCorporate Participants\n* Hima Inguva\nFortrea Holdings Inc - Head of IR & Corporate Development\n* Tom Pike\nFortrea Holdings Inc - CEO, President & Chairman\n* Jill McConnell\nFortrea Holdings Inc - CFO\nConference Call Participants\n* Dave Windley\nJefferies LLC - Analyst\n* Patrick Donnelly\nCitigroup Inc. - Analyst\n* Luke Sergott\nBarclays - Analyst\n* Elizabeth Anderson\nEvercore ISI - Analyst\n* Justin Bowers\nDeutsche Bank - Analyst\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 3 of 23\n Page 2 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\n* Max Smock\nWilliam Blair - Analyst\n* Charles Rhyee\nTD Cowen - Analyst\n* Wilhelm Meyer\nGoldman Sachs - Analyst\n* Eric Coldwell Coldwell\nRobert W. Baird & Co. Incorporated - Analyst\n* Michael Ryskin\nBofA Securities - Analyst\nPresentation\nOPERATOR: Ladies and gentlemen, thank you for standing by, and welcome to Fortrea second quarter\n2024 earnings conference call. (Operator Instructions) Please be advised that today's conference is being\nrecorded.\nI would like now to turn the conference over to your speaker today, Hima Inguva, Head of Investor\nRelations and Corporate Development. Please go ahead.\nHIMA INGUVA, HEAD OF IR & CORPORATE DEVELOPMENT, FORTREA HOLDINGS INC:\nGood morning, and thank you for joining Fortrea's second quarter 2024 earnings conference call. I am\nHima Inguva, Head of Investor Relations and Corporate Development at Fortrea. On the call with me\ntoday are our CEO, Tom Pike; CFO, Jill McConnell. The call is being webcasted and the slides\naccompanying today's presentation have been posted to our Investor Relations page fortrea.com.\nDuring this call, we'll make certain forward-looking statements within the meaning of Private Securities\nLitigation Reform Act of 1995. These statements are subject to significant risks and uncertainties that\ncould cause actual results to differ materially from our current expectations.\nWe strongly encourage you to review the reports filed with the SEC regarding these risks and\nuncertainties, in particular, those that are described in the cautionary statement regarding forward-looking\nstatements and risk factors in our press release and presentation that we posted on the website.\nPlease note that any forward-looking statements represent our views as of today August 12, 2024, and that\nwe assume no obligation to update the forward-looking statements even if estimates change. During this\ncall, we'll also be referring to certain non-GAAP financial measures.\nThese non-GAAP measures are not superior to or a replacement for the comparable GAAP measures, but\nwe believe these measures help investors gain a more complete understanding of results. A reconciliation\nof such non-GAAP financial measures to the most directly comparable GAAP measures is available in the\nearnings press release and earnings call presentation slides provided in connection with today's call.\nWith that, I'd like to turn it over to our CEO, Tom Pike. Tom?\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 4 of 23\n Page 3 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nTOM PIKE, CEO, PRESIDENT & CHAIRMAN, FORTREA HOLDINGS INC: Good morning,\neveryone. Welcome to the call. Let me start by saying that Fortrea had a solid quarter of execution and\nprogress on our strategic objectives despite some difficulty predicting when biotech opportunities with\ncontract that impacted our book to bill.\nAs you know, Fortrea is a pure-play CRO that offers end to end solutions for clinical trials across Phases 1\nthrough IV. We have a strong track record of delivering high quality services to our customers, ranges\nfrom small biotech startups to large pharma companies.\nWe believe we have a strong value proposition in the market as we combined 30 years of experience, deep\nscientific expertise, operational excellence and innovative technology to deliver faster, better, more cost-\neffective outcomes for our customers. We also have a diversified and balanced portfolio of projects and a\nhealthy mix of short and long-term contracts as well as broad exposure to different geographies and\nindications.\nIn the second quarter, we saw some positive signs of improvements in our business. Let me share with\nyou some of the highs and lows of the quarter and then we'll talk in more detail about what we see for our\nsecond half bookings.\nFirst, the highlights. We signed several deals and partnerships with top 20 pharma customers, including\none new full-service outsourcing partnership. The other deals are solid footholds into larger customers.\nOur pipeline of opportunities continues to improve in both value and mix, and our win rates are solid.\nMore on that on a couple of minutes.\nWe've exited about 60% of the TSA agreements with our former parent and are making good progress on\nthe most difficult part, the transition of software, servers and other technology. We delevered the balance\nsheet and finally, we have a clear line of sight to improving our margins while delivering quality work and\nstarted planning for 2025.\nI will give you some detail on some of these highlights and Jill will fill in on others. Our new offerings\nand approaches to partnering with large pharma are gaining traction. This quarter, we beat out four of the\nbig six CROs to be selected as one of only two providers in an attractive full-service partnership with a\nlarger pharmaceutical firm.\nThe customer noted how Fortrea showed up differently to the opportunities than others under\nconsideration. The increased bookings and revenue from this win should be felt in 2025. As I mentioned,\nwe had some nice wins in a couple of other large pharma firms too.\nIn one situation would be two larger incumbents take over an important clinical services opportunity and\nconsolidate what was three vendors into one. We also got a nice win at foothold and a third even larger\npharmaceutical firm. We've begun to see additional opportunities from these customers.\nOur clinical pharmacology business continues to be strong with attractive book to bills, customers and\nindications. We're also seeing increasing momentum in transferring the impressive relationships we have\nin clinical pharmacology and Phase Ib and II. We have a significant number of opportunities and have\nincreased our win rate where decisions have been made.\nThese relationships are based on the deep scientific knowledge we've brought to the table working in\nsome inspiring new modalities that include metabolic, neuro-degenerative, immunology and more. We\nhad some good wins in biotech in areas such as oncology, ophthalmology and dermatology.\nRecently, I met with the CEO of an ophthalmology biotech, who has a great product, and they raved about\nour success to date with an important and challenging trial.\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 5 of 23\n Page 4 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nIn the second quarter, we also announced two offerings that reflect areas of strength Fortrea. The first was\nour diversity and inclusion solution, which is designed to expand patient access to clinical trials and\naddress the US FDA requirements to increase enrollment of underrepresented populations in clinical\ntrials.\nThis solution incorporates our consulting expertise, real-world evidence data, comprehensive planning,\nimplementation and measurement methodology. We've had a very nice response to this solution and have\ngained significant experience in this area, working on more than 40 diversity action plans in the past year.\nGreater productivity in clinical trials has become critical for the industry and Fortrea is centering itself on\nthis value proposition. We are developing changes to roles, processes, partnerships and technology. As\npart of this effort, another offering that we announced in the second quarter was the launch of our AI\nInnovation Studio which will develop and deploy AI and ML technologies to drive productivity, quality\nand enhance site and patient experiences as well as safety and clinical research.\nFortrea's Innovation Studio is a fresh take on AI for CROs, very forward looking and collaborative, it's\nstill cost effective. I'm looking forward to seeing what productivity ideas emerge from the studio in\ncollaboration with our forward-leaning customers. We're hoping to share some of this with investors and\nanalysts later this year.\nIn another development, our therapeutic strategy leaders who are some of our key medical doctors now\nprepare strategies for increasing our impact and share in various therapeutic areas to identify the movers\nand shakers, interesting mechanisms as well as what we need to do and offerings we need to have to\nincrease our share of the pie with biotechs and large pharma.\nOverall, we're strengthening our offerings, and it's getting noticed. Fortrea was recognized in the second\nquarter for the first time as an independent company with CRO Leadership Awards sponsored by clinical\nleader in four categories capabilities, expertise, quality and reliability. These awards are based on an\nindependent survey, which compiled feedback that customers provide on CROs that they have worked\nwith on a project during the past 16 months.\nNow let me address the low light of the quarter that spills into some of our other results. Our book-to-bill\nfor this quarter was just under [1.] Since we're a new public company, we'll drive to give you more color\non what happened.\nDuring Q2, we said to you if we execute, we can meet our target of 1.2 book-to-bill. Let me explain why\nwe thought that our pipeline at the beginning of Q2 was larger than any quarter since the beginning of\n2022. In fact, it was 11% higher than the average of the three prior quarters, and our win rates have been\nsolid.\nOverall, about half of our work is with biotechs. We're experienced at working with biotech companies\nand are optimistic about our capability to deliver attractive biotech solutions that fuel growth for Fortrea.\nAt the same time, contracting in this space can be uncertain, and we're finding it is harder to predict when\nthe final contract will be executed.\nIn the first half, our mix was slanted toward biotech. We're making changes to address the disappointing\npredictions and bookings these past two quarters. Unfortunately, two quarters of sub 1.2 bookings impacts\nour guidance and some other key targets.\nNow let me turn to our pipeline for the back half of the year. As I mentioned, our pipeline beginning of\nQ2 was 11% greater than our average of the prior three quarters. In Q3 and Q4 of last year, we delivered\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 6 of 23\n Page 5 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nthat 1.2 book-to-bill or better. The pipeline at the beginning of this quarter Q3 is even greater than it was\nin Q2.\nIn fact, it's 7.5% greater than it was. It also as more large pharma, which is encouraging. We're seeing our\nlarge pharma partners coming through their internal processes with RFP flow returning. We also feel good\nabout Q4.\nAs we sit here today, the second half overall has more qualified opportunities than any upcoming two\nquarters since we've been public, the pipeline is very attractive. In addition, the new and refreshed\npartnership should contribute more opportunities in 2025.\nNow let me hand over to Jill, she will comment on the numbers in more detail on our transformation and\nmargin improvement programs. Then I'll wrap up with some comments about the remainder of the year\nand 2025.\nJILL MCCONNELL, CFO, FORTREA HOLDINGS INC: Thank you, Tom, and thank you to everyone\nfor joining us today. Before we get into the details of the quarter, I want to acknowledge some of the work\nwe have already done over the past year, exiting around 60% of our TSA services with our former parent,\ncompleting the divestiture of our non-core Enabling Services businesses and materially improving our\nbalance sheet.\nThese are important building blocks for us to create long-term value for all our stakeholders. Upon the\nclosing of the Enabling Services divestiture and executing on our receivables securitization facility in the\nquarter. We significantly reduced our balance sheet leverage by paying down around $500 million of spin-\nrelated debt.\nWe have improved our capital structure and have ample headroom between our current ratios and our debt\ncovenants. We have laid the right foundation for continued transformation. I will start with providing a\ndetailed breakdown of the financial performance of our core business this quarter. Then I will walk you\nthrough the components that we are using to enhance profit margins and the adjusted EBITDA margin\nbridge we provided.\nI will share progress on our commercial transformation and expectations for the remainder of 2024,\nincluding the components that are driving improved adjusted EBITDA margins for the second quarter and\nthat we believe will drive improved EBITDA margins for the second half of 2024. And finally, I will\ndiscuss our outlook for 2025.\nAs a reminder, all of my remarks relate to continuing operations following the divestiture of our Enabling\nServices businesses unless I note otherwise, revenues of $662.4 million declined 8.6% year on year. This\nwas driven by lower pass-through revenues compared to historical highs and lower service fee revenues.\nThe pass-through decline is largely driven by lower pass-throughs on the biomarker studies we have\npreviously called out, which are now normalizing given their stage in the project lifecycle.\nOur second quarter service fee revenue continues to be impacted by a combination of factors, primarily\nlower new business awards in the pre-spin period, along with the mix shift towards later stage and longer\nduration studies, particularly in oncology. Note that we did see mid-single digit sequential growth in\nservice fees in line with our expectations.\nOn a GAAP basis, direct costs in the quarter decreased 7.6% year over year, primarily due to lower pass-\nthrough costs. SG&A in the quarter was higher year over year by 59.7%, primarily due to incremental\none-time costs incurred for exiting the TSA with our former parent.\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 7 of 23\n Page 6 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nThe company reclassified $33.1 million from direct costs to SG&A expenses in the prior year comparison\nperiod, primarily related to information technology costs and certain non-clinic facility charges. For the\nsecond quarter, you will see SG&A as a percentage of revenue on a GAAP basis at 23.6%.\nHowever, it contains approximately $54 million of one-time costs related to the continued separation from\nour former parent. Excluding spin-related one-time costs in both quarters, underlying SG&A as a\npercentage of revenue was relatively flat to the first quarter. We see significant potential to expand\nmargins by reducing SG&A expense as a percentage of revenue over time once we fully exit the TSA\nservices and can transition to lower cost replacement infrastructure.\nNet interest expense for the quarter was $45.2 million. However, this is comprised of actual interest\nexpense of approximately $33 million and the remainder being the write-off of a portion of the debt\nissuance discount based on the debt prepayment in the quarter.\nAs noted previously, we are targeting quarterly interest and related fees expense to decline substantially\ngoing forward due to the debt paydown. When looking at the annualized interest expense using debt\noutstanding, securitization usage and rates in effect at the end of the second quarter 2024, estimated\nannual total cash interest and securitization costs are targeted to be approximately 18% lower compared to\nthe annualized cost at the end of the first quarter of 2024.\nTurning to our tax rate, the effective tax rate for continuing operations for the quarter was negative 12.1%,\nprimarily due to the combined effect of a forecasted pretax loss in 2024 given our large one-time costs, a\nchange in the valuation allowance and earnings mix.\nDuring the second quarter, we recognized tax expense of $10.7 million in continuing operations, primarily\ndue to a forecasted valuation allowance on our deferred tax asset related to disallowed interest expense.\nWe have plans that we expect could improve our overall tax position over time.\nOur book-to-bill for the trailing 12 months since the spin is 1.16 times and for this quarter it was 0.96\ntimes. Our backlog at around $7.4 billion has grown 5.6% since the spin. As part of our work in the first\nquarter of this year to disentangle the Enabling Services businesses for reporting as discontinued\noperations, we became aware of historical misstatements of certain financial line items, which we\nidentified.\nThe overall impact of these adjustments is not considered material to any given year. As previously\ndiscussed, we are continuing to bolster our financial control environment through personnel additions and\nprocess improvements.\nContinuing operations, adjusted EBITDA for the quarter of $55.2 million decreased 23.2% year over year\ncompared to adjusted EBITDA of $71.9 million in the prior year period. Note that adjusted EBITDA more\nthan doubled compared to the first quarter of 2024, increasing by 103.7% on a sequential basis.\nAdjusted EBITDA margin for the second quarter was 8.3% compared to 9.9% in the prior year period.\nAdjusted EBITDA margin in the quarter was negatively impacted by lower service fee revenues from the\nlower awards during the pre-spin year, the mix of longer duration studies and higher SG&A costs post\nspin to support operations as a public company.\nThese were partially offset by the benefit from the restructuring program we initiated in the third quarter\nof 2023, which is continuing into 2024. In the second quarter of 2024, adjusted net loss of $2.3 million\ndecreased 105% compared to adjusted net income of $46.1 million in the prior year period. Adjusted net\nloss for both basic and diluted share for the quarter was $0.03 compared to adjusted net income of $0.52\nin the prior year period.\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 8 of 23\n Page 7 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nTurning to customer concentration. In our continuing operations, our top 10 customers represented\nslightly more than half of our second quarter 2024 revenues. One customer accounted for 13.2% of\nrevenues. As I comment on cash flows, note these relate to Fortrea in total as we have not segregated cash\nflows from discontinued operations.\nFor the first six months ended June 30, 2024, we reported $248.1 million in cash flow from operating\nactivities compared to $148.1 million generated in the prior year. Cash flow benefited from the sale of\nreceivables under the securitization facility and an increase in unearned revenue, partially offset by the\ndecrease in net income.\nFree cash flow was $227.6 million compared to $122.3 million in the first six months of 2023. Net\naccounts receivable and unbilled services for continuing operations were $637.9 million as of June 30,\n2024, compared to $941 million as of March 31, 2024. Days sales outstanding from continuing operations\nwas 54 days as of June 30, 2024, 43 days lower than March 31, 2024.\nThe reduction versus the first quarter is primarily due to the sale of receivables through our securitization\nfacility, lower average billings and to a lesser extent, an increase in advances. We continue to make\nchanges to our contracting and order-to-cash processes to enable further improvements to our DSO profile\nover time.\nDuring the quarter, we prepaid $275 million of term loans from the initial divestiture proceeds with the\nmajority $211 million used to prepay term loan B, which has a higher cost of debt. We also used $229\nmillion of the proceeds from our securitization facility to further pay down term loan B and our revolver.\nAnd as a result, reduced total debt by $504 million from the end of the first quarter, ending the second\nquarter with $1.14 billion in gross debt.\nWe have been and for the foreseeable future, we expect to be fully compliant with the financial\nmaintenance covenants of our credit agreement. We have considerable room under our covenant ratios\ndue to the debt paydown, the exclusion of securitization usage from the calculations and the benefit of the\nadd-backs permitted under the credit agreement. We ended the quarter with more than $0.5 billion of\nliquidity.\nOur capital allocation priorities are unchanged focusing in the near term on infrastructure investments for\ntimely exit of the transition services agreement with our former parent, targeted investments to drive\norganic growth and improved productivity and then debt repayment. Our target for net leverage ratio\ncontinues to be 2.5 to 3 times over the medium term.\nNow I will provide an update on our transformation program. We continue to make progress on our\njourney towards improving financial results, while we increase the longer-term health and performance of\nFortrea. We've now exited around 60% of our TSA services with our former parent, and we have robust\nplans in place to exit the majority of the remaining TSA services by year end with a limited number of\nbeing exited early in 2025 to ensure business continuity through year-end.\nWe are continuing with programs to reduce costs, including a restructuring program we introduced in the\nthird quarter of 2023, which is continuing into 2024. The improvement in overall adjusted EBITDA this\nquarter is benefiting from these programs as the service fee revenue growth we delivered dropped through\nstrongly to the bottom line as we expected.\nOn SG&A, while we have made initial progress in IT already, we are continuing to prepare for more\nefficient supporting organizations over time. In a few areas, we began -- we expect to begin to see benefits\nemerge towards the end of the year with other improvements planned for 2025 and beyond as we fully\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 9 of 23\n Page 8 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nexit the TSA and adopt these more efficient infrastructures. As you can see from our SG&A expense line\nitem, this is critical for us to be competitive with our peers.\nOn operational execution, we continue to enhance productivity by compressing our time to study start-up\nand accelerating achievement of milestones through targeted investments and project management\ncapabilities. We remain laser focused on building our backlog with the right mix and volume of new\nbusiness awards.\nTo that end, we are continuing to invest in resources and tools for our commercial organization and are\nensuring senior leadership are intrinsically involved in the competitive selling process by leveraging their\nrelationships and experiences.\nI will now cover our updated guidance for continuing operations. For full year 2024, we are lowering the\nmidpoint of our revenues to $2.725 billion with a range of $2.7 billion to $2.75 billion. The adjustment to\nrevenue guidance largely reflects the lower recent pass-through trends we have been seeing, in particular\ndue to the biomarker studies I mentioned earlier, and the impact to service revenues due to the lower-than-\nexpected new business awards in the first half of the year.\nAs a result of these headwinds, we now expect to have an overall revenue decline versus 2023 of around\n4% with the second half being improved versus the first half, but down slightly versus the prior year.\nGiven that a portion of the revenue reduction is expected to be service fee revenues, we are reducing our\nadjusted EBITDA target to a range of $220 million to $240 million. In spite of the lower adjusted\nEBITDA range, we are targeting to show continued improvement sequentially through the remainder of\nthe year, both in service fee revenue and in adjusted EBITDA.\nLet me bridge this improvement for you as seen on slide 9 of our investor presentation. You'll see that we\ndelivered $82.3 million of adjusted EBITDA in the first half of the year. Using this as a run rate would\ngive you a full year adjusted EBITDA of around $165 million.\nTo get to our revised midpoint of $230 million, we are targeting service fee revenue growth to contribute\n$40 million to $50 million, along with continued operational and SG&A optimization to contribute $15\nmillion to $25 million.\nMargin optimization is anticipated to be a combination of gross margin improvements, given the\nrestructuring programs we have implemented improvements in facilities and other operating costs and\nreductions in our IT spend. In achieving this, we would target to deliver an adjusted EBITDA margin in\nthe 11% to 12% range for the fourth quarter of 2024.\nNow, let me share some implications of our results and these guidance changes to our view of 2025\nadjusted EBITDA based on our modeling. We are now targeting the adjusted EBITDA margin for 2025 to\nbe more likely in the 11% to 12% range. While this is below the 13% we had been targeting previously, it\nwould represent a roughly 300 basis points improvement at the midpoint versus 2024 and broadly a 30%\nto 40% increase in adjusted EBITDA dollars delivered.\nIn addition, we are targeting a return to positive cash flow in 2025, given the expected reduction in spend\nrelated to the separation from our former parent. The challenges of the separation and the time it is taking\nto optimize our commercial approach and operational execution has led to a slower return to growth and\nmargin expansion than we originally anticipated.\nBut make no mistake, with a backlog of more than $7 billion, a global talented team of more than 16,000\nclinical development professionals and full independence to unlock future optimization insight, we remain\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 10 of 23\n Page 9 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\na great partner for our growing customer base, a rewarding place to work for our employees and a long-\nterm value creation opportunity for our investors.\nWe are relentlessly focused on driving innovation and efficiency in clinical development, and we are\ngaining significant traction with customers, which is opening doors to new opportunities. As a pure-play\nCRO, we are diligently executing our transformation strategy to drive substantial margin expansion and\nunlock significant value for our shareholders.\nNow I'll turn it back to Tom for the remainder of his remarks.\nTOM PIKE: Thank you, Jill. In closing, let me provide some thoughts about the remainder of the year and\n2025. Regarding the second half of 2024, as I mentioned, our pipeline of opportunities has grown and has\nmore large pharma, which should be more predictable.\nIn both the third and fourth quarter, we have attractive qualified opportunities to close and contract. If we\nexecute, we feel confident that across the two upcoming quarters, we can average 1.2 book-to-bill. Q4\nlooks stronger than Q3. We will continue to do everything we can to meet a 1.2 book-to-bill or better in\nthe third and fourth quarters.\nAnd let me pick up on Jill's discussion of 2025. We have a programmatic approach to increase sales and\nimprove operating margins for delivering for customers with quality. We now understand the investments\nrequired and are planning to make them. If we hit our target book-to-bills, as Jill said, we're modeling\nmore than 30% improvement to adjusted EBITDA dollars next year.\nIn 2025, we'll complete our exit from our former parent and those heavy one-time costs. We also expect to\nturn cash flow positive in 2025. I acknowledge this is a different financial trajectory than the one we had\nhoped, but it is still a very attractive increase in adjusted EBITDA in a short period time.\nLet me step back and tell you why I'm so confident in Fortrea. Because I get to see the Fortrea in action.\nAs I get direct customer feedback on our performance and how we show up from executives. We work\nhard here. We press our innovative offerings, and we seek to exceed our customers' expectations.\nWhen customers take the time to get to know us. They see us as innovative, agile and they know the\nmanagement team is accessible to them. Internally, I meet with teams working on exiting our former\nparent, divesting Enabling Services and improving our delivery and margins.\nThey also work hard. They resolve issues and they meet deadlines. I meet with their AI and IT leaders\nregularly. We push for practical innovation while reducing overall IT costs. There's work to do, but this is\nthe right team to do it.\nFor instance, Jill and I meet weekly with teams driving our sales process. We reviewed larger and more\nimportant deals. We press for critical thinking and what I call ferocious debates among friends to develop\ncompelling solutions. We're getting better all the time.\nIn my career, I've turned around businesses and I've grown businesses. Let me share this services firms\nand CROs in particular can be sort of like flywheels. If you know what a flywheel is, you know it takes\neffort and time to get it spinning.\nAs Jim Collins has written, you put a great team in place, you confront the brutal facts and then you create\na culture of discipline around execution. We're doing that here at Fortrea. Once the flywheel is spinning,\nmomentum is a very powerful thing. We can go on a multiyear journey to create value. Other CROs have,\nand we will too.\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 11 of 23\n Page 10 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nIn summary, Fortrea had a very solid quarter of execution and progress. We're well positioned for growth\nand value creation in the future. We will get that flywheel going and build momentum. You think about it,\nwe de-levered. We doubled EBITDA from Q1 to Q2. We had some big relationship wins in large pharma.\nWe have a record pipeline as a public company, and we're anticipating more than a 30% increase in\nadjusted EBITDA next year.\nIn closing, I'd like to recognize the tremendous team of professionals we have working here at Fortrea.\nWe have navigated our first year as an independent entity and the team has remained focused and\ndedicated to our patients fired mission.\nI appreciate their commitment and their expertise when we deliver solutions that bring life-changing\ntreatments to patients faster, creating value for all of our stakeholders.\nOperator, can you please open the line up for questions? Thank you.\nQuestions and Answers\nOPERATOR: (Operator Instructions) Dave Windley, Jefferies.\nDAVE WINDLEY, ANALYST, JEFFERIES LLC: Hi, good morning. Thanks for taking my questions.\nYou did hit the doubling of EBITDA in 2Q, which I thought was going to be the hardest hurdle for you to\nhit. I wanted to dig into some of the moving parts from the P&L on the first question.\nSo you mentioned that service fee revenue was up mid-single digits, which since total revenue is basically\nflat, means that pass throughs were down by the same amount. Could you quantify that? And how much\nshould we think about that being a factor that continues through the second half? Thanks.\nJILL MCCONNELL: Yeah. Thanks for the question, Dave. We won't quantify, but I will say those\nbiomarker studies in particular is really significant. What we saw at the end of Q -- in this period, same\nquarter last year, we saw basically high single digits impact from that study and it kind of quadrupled over\nthe last few quarters and then was back down more in line with what we saw in the same quarter last year.\nAnd so, in particular that one, we think most of the fluctuations of that we have now worked their way\nthrough, and we have been saying all along that the key to us being able to drive the improvement in\nadjusted EBITDA will come from service fee revenues growing.\nAnd so that we're pleased to see that it was in line with what we expected for the quarter. And that's what\nwe're projecting as we look over, as you can see, you saw the bridge that took you from Q1 to Q2 on our\npresentation. But obviously similar results, we're expecting in terms of that magnitude for the remainder\nof the year.\nDAVE WINDLEY: Another way to come out this maybe is, again, revenue basically flat sequentially,\noperating costs down by about $28 million. What were the drivers of that? You had talked on the last\nquarter about expanding some of the cost takeout the restructuring that you mentioned in the prepared\nremarks, I assume some of it was that, did you get a full quarter impact of that? And how much of that\ncontinues kind of laps into the second half or into the third quarter specifically?\nJILL MCCONNELL: Yeah. We didn't get a full quarter of it because some of the additional pieces that\nwe've been tacking onto that program really started in the second quarter so that some of the additional\nbenefit that you'll see in Q3 and Q4 from that program actually has continued through the third quarter.\nSo you probably wouldn't see the full benefit of that until in the last quarter of the year, but that's part of\nthe improvement. We also -- I called out that there have been some improvements in our IT spend that\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 12 of 23\n Page 11 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nwe've seen as we've gone through the course of the year, most of the SG&A improvements are very back-\nend heavy, but we are seeing some of those things help us as well.\nAnd it's been just really tight cost management. I'm still meeting every single week to review every single\nhire in the company, all the travel expense. So we really just been trying to be very disciplined about costs\nin this period while revenues continue to be relatively suppressed.\nDAVE WINDLEY: Okay. Last one for me. In the bookings numbers, again, wondering the composition\nof this, was this just lower new wins or given some of the moving parts and changes in estimates,\nincluding your forward revenue estimate around pass throughs.\nDid you take like an outsized pass-through reset or effectively cancellation in the quarter that influence\nthe overall book to bill? Thanks. That's all for me.\nTOM PIKE: Hi, Dave, it's Tom. It was really just normal bookings. There were no major cancellations\nand no unusual events in terms of those pass throughs. But I think the bottom line there is just that we are\nhaving some difficulty predicting exactly when biotechs are going to contract and we are finding with\nthem being about 50% of our exposure from a revenue standpoint, and in this quarter, they were much\nhigher exposure in terms of the opportunities.\nWe have to do a better job of understanding exactly what the timelines are and then figure out what we\ncan do to influence those timelines.\nSo as you heard, the pipeline is actually quite strong. I would worry about this business is if the pipeline\nwas strong, but the pipeline is strong. Some important wins from large pharma that will give us more of a\nfloor. But unfortunately, in this quarter, we just didn't deliver in terms of these biotech opportunities to the\nlevel that I think we could have.\nOPERATOR: Patrick Donnelly, Citi.\nPATRICK DONNELLY, ANALYST, CITIGROUP INC.: Hey, guys. Thanks for taking the questions.\nTom, maybe to pick up on where you finished there. I mean, it sounds like you guys are feeling pretty\ngood about the pipeline to your point. Pipeline looks pretty good to start to Q2 and the book-to-bill came\nin light.\nYou're talking about the building book-to-bill, certainly over one, two in 4Q. Can you just talk about, I\nguess, the confidence level, the visibility just given the last couple of calls that come up, like in spite of\nthat stronger pipeline what gives you the confidence that book-to-bill does in fact build off of this\npipeline?\nTOM PIKE: Yeah. Hi, Patrick. I think the difference is we've looked at it in a lot of detail. And you can\nimagine that we're all over this given what's going on is that we look at that composition in terms of large\npharma opportunities, biotech opportunities. We also look at what's been awarded and needs to be\ncontracted versus what's more speculative.\nAnd in these upcoming quarters, we have quite a number of midsize and larger opportunities from large\npharma. And we do have a number of things that are awarded and need to be contracted. And that gives us\nmore confidence in what we see.\nAgain, to some degree, I hate to acknowledge this, but we're learning a little bit more about having this\nmuch biotech exposure, at least I am. And I think what we're doing is we're really revising our procedures\nthere to trying to really understand exactly what those dates are for contracting and then exactly what we\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 13 of 23\n Page 12 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\ncan do about them because the ability to influence them is a key part of what we tried to do as a sales\nteam.\nBut this upcoming two quarters with more large pharma exposure gives us some confidence because large\npharma firms have a tendency to be more consistent in their scheduling and more predictable because of\nthe amount of experience they have and how they've done their approval process.\nSo that's what makes us feel good about second half of the year. Certainly, I'm disappointed with the Q2\nnumber. But again, the pipeline looks strong and then the mix of opportunities in some of these larger\npharma relationships give us some internal confidence that we're in a good position as we go forward.\nPATRICK DONNELLY: Maybe one for Jill, just on the 2025 conversation there. It sounds like margin in\nanymore in that 11% to 12% range. But still, to your point, I think 30%, 40% dollar growth. Can you just\ntalk about the levers to get there. I mean, how much of it is contingent on a certain level of top line growth\nversus cost outs. If you can talk gross margins, SG&A, that's all comparable, but I just want to talk a little\nbit about the bridge to get to that new margin number. Thank you, guys.\nJILL MCCONNELL: Yeah. Sure, Patrick. So it's really going to come from two things, right. In terms of\nthe use, roughly [300], it'll be split about half and half based on what we see today, half coming from\ngross margin improvements, but more so from really driving productivity and improving our processes in\nthe project delivery space.\nAnd then the other half will come from SG&A improvements. We've been talking about the fact that we\nneed to get really through those TSAs and be fully exited to start to see some of that value and the dollars\ncoming out in SG&A. And so, we're expecting it to be split between those two things.\nOPERATOR: Luke Sergott, Barclays.\nLUKE SERGOTT, ANALYST, BARCLAYS: Great, thanks. I just wanted to follow up on Patrick's\nquestion there from -- on the 25 number. So I think if you kind of just do the math there and back it out of\n35% midpoint growth in EBITDA and you had like 11.5% operating margin. That implies roughly a\nrevenue number around $2.7 billion, which is comes into the low end of your guide.\nSo one is that it is my math correct there? And then two, is it like something to do with expected elevated\npass-through coming off continuing to come off as we saw in this quarter? And just any color there,\nwhat's actually going on between the dynamics?\nJILL MCCONNELL: Yeah. I think it is -- you're right. It's really that mix as we continue to expect pass\nthroughs to moderate as we go through the course of the year and then servicing revenues fees picking up.\nWe did have strong book-to-bills in the back half of last year. So we're starting to see some of that come\nthrough but in terms of top line numbers, it's been largely offset by what we're seeing in terms of lower\npass-through trends.\nLUKE SERGOTT: Okay, great. And then I guess more high level on market demand side, can you talk --\nwe've seen like some weakness here in drug discovery side, especially on the safety assessment, and you\nguys just talked about seeing good bookings in clin pharm. So kind of where does that fit within the\noverall workflow?\nI know it's more late-phase focused, but study starts continues to be softer. Just kind of where you start\nseeing -- if there is going to be any pressure there on the late-stage pipeline?\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 14 of 23\n Page 13 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nTOM PIKE: Yeah. What we see is pretty consistent with actually what Dave Windley wrote in one of his\nrecent notes and that's at the early (technical difficulty) what am I going to say? But it's true, but we see\npretty consistent. So in early -- so in Phase I, it is a little bit soft demand among biotechs.\nBut what we've done over the past year is to continue to increase our exposure to some of the more\nattractive larger players in pharma. And what we see is there is a group of pharmaceutical firms that are\nactually spending quite a bit more on R&D, and we're pretty well positioned with the number of those\nfirms plus picking up some new customers in the Phase I spot that are out of again larger pharma.\nSo I think for us what's happening is we're just well viewed and well positioned, and that's giving us a bit\nof an advantage we look at the clinical pharmacology. That being said, we also see the same thing that's\ngenerally being discussed in the industry that Phase II and Phase III is being prioritized.\nAnd so, given that it's being prioritized, we're seeing for company like ours with the exposure we have,\nwe're seeing plenty of demand for Phase II, Phase III type studies. So I think I generally agree with that\ncommentary that's out there about how the industry is going. But again, given that we're mostly exposed\nto Phase II, III and IV, that is benefit for us.\nOPERATOR: Elizabeth Anderson, Evercore.\nELIZABETH ANDERSON, ANALYST, EVERCORE ISI: Maybe just piggybacking off of what Luke\nwas just asking, how have you found the pricing environment in the recent -- maybe pipeline and some of\nyour recent wins and if you could differentiate between biotech and pharma for that? That would be super\nhelpful.\nTOM PIKE: Yeah. Thanks, Elizabeth. In terms of biotech pricing, I think it continues to be consistent\nwith what it's been and that's good market-based pricing. And we occasionally see somebody step in to\nbuy something there in biotech but for the most part, it's solid, disciplined pricing in that marketplace.\nAnd then in large pharma, similar to the commentary of some of our competitors, we generally are seeing\nfull-service outsourcing be reasonable market-based pricings. You should know that Fortrea tries to go for\nmarket-based pricing. And what I mean by that is there's probably some band at reasonable prices out\nthere and we tried to be in that band where we maintain our margins, but we deliver good value for the\ncustomer.\nWe do see in FSP some situations where a competitor is really lowering prices. Luckily, as we've\ndiscussed on prior calls, we're not as exposed to these really large volume FSP deals as some of our\ncompetitors are. And so, personally I have been around this industry for a while, I don't think that's\nsustainable. But we are seeing FSP in the largest situations be very, very competitive. So does that help,\nElizabeth?\nELIZABETH ANDERSON: That's super great commentary. Thank you for that. Maybe just as a follow\nup. The back half guide, I think implies a backlog burn of about 9.4%-ish. And I just mean it obviously\nthat's a little bit of an acceleration versus what we saw in the first half of the year, but down year on year.\nSo how do we just and you think about that and why is that [kind of the right] level? Is there sort of\nstudies that are coming forward that you know, that have started to burn already. Like you could just give\nus any more color on why that's the right burn rate, that would be great.\nJILL MCCONNELL: Sure, Elizabeth. Yeah. I think it's two things. One, as you say, I mentioned what we\nwon in the second half of last year is starting to come into the pipeline. And we are being really focused\non those new projects in particular and ensuring we execute them as rapidly as fast as possible, getting\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 15 of 23\n Page 14 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nsites initiated, getting to those patient enrollment milestones where we can start to also build in addition to\nrecognizing revenue.\nSo those are important things. So you have the combination of that plus the work. Tom and I talked --\nTom talked about us being on the sales call. We're also on weekly project review calls and we're going\nthrough and looking at all large projects come forward every week and we talk through and understanding\nwhere they are and trying to do what we can to get any barriers out of the way, whether it's resourcing or\nleadership engagement or working with customers in terms of trying to get decisions.\nSo those two things are really allowing us to start to drive some momentum and how we're burning\nthrough our backlog. It's a little bit of an uptick. It's a constant -- it's a constant battle that we're making\ninto trying to grow revenue. But against those two things, we're seeing some initial progress.\nOPERATOR: Justin Bowers, DB.\nJUSTIN BOWERS, ANALYST, DEUTSCHE BANK: Hi, good morning, everyone. Tom, can you talk a\nlittle bit how you're positioning Fortrea in biotech versus large pharma and maybe discuss some of the\nsteps you're taking in terms of the commercial transformation and how are you going to market?\nTOM PIKE: Yeah. Thanks, Justin. In terms of biotech, we have this strong medical expertise that we\ninherited from Covance over time and some excellent physicians, excellent strategists. We were just on a\ncall the other day where our lead strategist actually did her PhD in this specific mechanism, an indication\nof the project and had some really innovative ideas.\nSo when it comes to biotech, what we're really trying to do is figure out how we can with quality shorten\ntheir time lines and really bring the medical scientific expertise, how we can help them with the protocol\ndevelopment to make sure that we reduce protocol amendments and give them the site investigator\nrelationships and access that it's hard to get to small biotech.\\\nWith large pharma, it's interesting. They're -- as I just alluded to in my comments, they're very interested\nin productivity right now. We're seeing some of the consultants for the industry really pushing\nproductivity. It's a discussion topic, whether they're increasing their spending on R&D or not.\nAnd so, what we're really doing is leaning into how does Fortrea with being a relatively agile company,\nhow do we help them be more productive? And so, as I said in my remarks, we've decided this is\nsomething I've been passionate about for a long time. And so, we've really decided to center ourselves.\nSo not just -- for instance, investing in AI generally, but how do we improve the productivity of some of\nthe more expensive parts of the clinical trial, such as the interaction with CRAs around sites or reducing\nprotocol amendments around that has secondary effect costs throughout the trial. So with big pharma,\nwe're really trying to center ourselves in this productivity discussion.\nWith biotech, it's more acceleration, scientific support, real-world evidence to integration, those types of\nthings. Does that help Justin? I know it's a little detailed for an earnings call, but maybe it gives you a\nsense.\nJUSTIN BOWERS: Yeah, appreciate it. And then just a follow-up for maybe you and Jill, on the\nbookings, were there any delays or pushouts from 2Q into second half of the year? I mean, you talked\nabout some awards that were not yet contracted.\nAnd then, should we just think of this is being just given the size of the organization and where you are\nnow, like is -- should we just think of the bookings as just being a little more volatile from quarter to\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 16 of 23\n Page 15 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nquarter. But at the end of the year, you can maybe get back to the 1.2 on average, is that like where we are\nin the cycle right now over the next, call it, like four to six quarters?\nTOM PIKE: Let me start on that. I do think that we are -- to your last point there, we're trying to get to a\npoint where we have a trailing 12 months of 1.2 so that we have that ongoing amount of bookings that\nreally helps us grow. And so, I do think for better or worse, what you're seeing in fact is a little more\nvolatility than we would like.\nBut again, the key thing is the pipeline is strong right now. I don't know, Jill, if you'd comment more on\nthat. But I think we should be able to with the efforts we're doing at predictability and then the\nrelationships we're developing, I think we're expecting to be able to get greater consistency here.\nJILL MCCONNELL: That's obviously the target. I think we called out the one in the first quarter because\nit happened so late and it was it was large, and we had had confirmation from them that it was going to\nhappen and then it didn't at the last minute.\nSo I think I don't want to be talking about pushes from quarter to quarter. We're just targeting consistently\ngetting to that 1.2 over time. And with the pipeline that we see for the second half, we believe we've got\nthe mechanism to do that.\nOPERATOR: Max Smock, William Blair.\nMAX SMOCK, ANALYST, WILLIAM BLAIR: Thanks for taking my questions. Wanted to just drill in a\nlittle bit more into your commentary around small biotech and decision-making process there. Can you\ngive us a sense for just how those decision-making timelines have change across this year? It seems like\nfunding really trailed off in June and July.\nJust wondering if you're seeing biotech becoming even more cost conscious in the last couple of months\nin particular? And what do you get the sense these customers are waiting to see in order to feel more\ncomfortable about moving these programs forward here in the near future? Thank you.\nTOM PIKE: Yeah. I think cost consciousness was -- they've always been pretty cost conscious because\nthere are on a budget year, maybe 2021, '22 is a little bit of an exception, but generally, they've been\npretty cost conscious.\nI do think we're seeing more involvement of different elements of the organization, whether it's the board,\nwhether it's more interaction with the top executives in the company that are causing the biotechs to just\nsome have an anticipated schedule. And then at least from what we're seeing, then have that anticipated\nschedule slip through these further discussions.\nAs Jill said, it's difficult. I don't think -- the fact that we now have a larger pipeline because of some of\nthese slower processes doesn't make us want to promise you anymore, but there's no question that the\ndecision for us is over the last say four to six quarters have gotten a little bit slower in biotech because\nthey're just a little bit more careful with their budgets.\nMAX SMOCK: Understood. Thank you. And then maybe just a quick follow-up from me here on burn\nrate. Wondering if employee retention, if you can get some commentary around how that has tracked so\nfar here in 2024 and what impact turnover has had on the lower-than-expected burn rate that we've seen\nover the last couple of quarters here. Thank you.\nJILL MCCONNELL: So I know we've been talking towards the end of last year and early this year that\nwe were seeing attrition levels well below pre-COVID norms. They may be moved up just slightly, but\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 17 of 23\n Page 16 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nthey're really in line with the industry. Nothing significant there. We don't think that's a significant factor\nin terms of the burn rate.\nI mean, for us, it's really about continuing to focus on the productivity enhancements, greater execution\naround and the delivery and making sure that we unlock the barriers and for our teams to be able to\ndeliver the projects as efficiently as possible. We're not seeing attrition be a big factor.\nOPERATOR: Charles Rhyee, TD Cowen.\nCHARLES RHYEE, ANALYST, TD COWEN: Thanks for taking the question. I wanted to -- Tom,\nmaybe just go into a little bit more. You talked about the cause just that biotech has always been mindful\nof spending and obviously, some of your peers have also talked about some cautiousness. How much do\nyou think it's maybe on the macro environment that lack of the rate cuts that we have been seeing that\nplayed a bigger part? Has that come up in discussions?\nAnd then secondly, maybe for Jill, if we think about the EBITDA margin guide implied for the 2025\nrevenue growth, how much of that is predicated on hitting the 1.2 book-to-bill in the back half of the year,\nlike what -- maybe you can give us a sense on maybe some of the sensitivity. Can you still get there? If\nyou're a little short or is it that at least 1.2 is required? Thanks.\nTOM PIKE: Thanks, Charles. I think I'd summarize the biotech market as being solid. So it is consistent\nwith prior quarters, consistent with this year that it is a solid environment. And then in terms of the larger\npharma, we really do see three groups of them. We see those that are growing, those that are slow growth\nor flattish. And then those that are flat to declining.\nWe actually see different behaviors in those different groups. And so, we think about our targeting of\nthem very differently. And so, again, biotech being more than 60% of the R&D market these days and\nbeing where a lot of the innovation is happening continues to be a big target, be solid and attractive for us\nat Fortrea, big part of our history.\nBut then we're being very careful because the large pharma market is really pretty distinct and how it's\nreacting with some actually increasing full-service outsourcing, some pressing for savings and\nproductivity and then some actually restructuring simultaneously. So Charles, that help on the market\noverall and how we're thinking about it.\nCHARLES RHYEE: Yeah. Maybe before Jill, you talk about the margins, just to follow up on that Tom,\nyou mentioned earlier in your comments, you went to big pharma engagement. And you said that the\ncomments that Fortrea presented differently. Maybe you can provide more details on how you presented\ndifferently, like what did they kind of call out?\nTOM PIKE: It's a number of factors. It's largely alignment with their values of where they're going. So\nwhen you look at what we're trying to do at Fortrea, this focus on productivity, this focus on how we can\nbe more effective at supporting their need to accelerate drug development. We're getting very good\nfeedback about that.\nAnd then the other, frankly, is that our management, it's not just me and Jill, frankly, it's as you go down\nthrough levels of this organization it's all quite aligned. They do like what we're doing in artificial\nintelligence.\nWe have some concepts here that we'd like to show to you guys later in the year associated with how we\nthink about technology, how we think about simplifying and making more efficient the CRA's job, how\nwe're trying to use hubbing and centralization to lower the overall cost and they're excited to collaborate\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 18 of 23\n Page 17 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nwith us over the coming few years in terms of how we can trying to get greater productivity into clinical\nresearch.\nCHARLES RHYEE: Okay. Let me now and I'll pick up on your question, I mean, yes, we are working\nvery hard to deliver on average across the back half that 1.2 times book-to-bill that will be very important.\nWe would have margin expansion if we are able to be a little bit less than that.\nBut I think to get to those levels, that's really important because, as you know, getting revenue through the\nfunnel is very critical and being able to bring in those new projects where we can apply the new\ntechniques and methodologies, we're doing is really important. So we are very much working towards\ngetting that 1.2 times to be able to get to the 2025 targets.\nOPERATOR: Matt Sykes. Goldman Sachs.\nWILHELM MEYER, ANALYST, GOLDMAN SACHS: Good morning. This is [Wilhelm Meyer] on for\nMatt. Thank you for taking our questions. You touched on the cost savings a little bit on Dave's question,\nbut just to dig a little deeper there, is there scope to continue to drive costs lower than you previously\nexpected given the revenue and booking trends this year and maybe some overcapacity you've\nexperienced?\nI guess, put differently, how are you thinking about balancing cutting costs and expanding margins while\nbeing ready to absorb greater demand when it comes through?\nJILL MCCONNELL: You've hit the nail on the head on that last point there, right. We are trying to be\nvery, very disciplined and think about how we balance improving the bottom line with making sure,\nhearing the feedback from our customers and the things we need. We know when we show up,\nparticularly at large pharma opportunities, they expect you to have a global footprint and be able to\nproduce work in any country that they are looking for support.\nSo it is a balancing act. We know there's opportunity to take out further costs in SG&A. We're very\nfocused on that. We've talked about that historically. You can see it in our SG&A. Even the underline as a\npercent of revenue, we've talked about the fact that in IT in particular, we're working hard to bring down\nthe cost.\nBut we're trying to be really thoughtful. Think about things like Tom had mentioned with the AI and ML,\nhow we can use that to also improve productivity. So it is a balancing act. We're certainly being mindful\nof costs as we go forward, while we try to be prepared for what we hope will be significant growth in the\nfuture.\nWILHELM MEYER: That's helpful. Thank you. And then one more quick one on our side. Given the\ndispersion between pharma and biotech in the discussions this quarter, longer term, how are you thinking\nabout the customer mix split between biotech and pharma? Are you still aiming for that [50-50] split? Or\nis your thought process evolving there? Thank you.\nTOM PIKE: Yeah. Thanks, Welh. I think we would like to continue on with this mix. We like this mix\nbecause the large pharma gives you that consistency of opportunities. And clearly, as you can tell from\nthis call, we want to consistently deliver for you and for our people and our customers. So you get that\nconsistency with large pharma.\nAnd frankly, we also think that some of the things that we're doing around productivity benefit the\nbiotechs as well on the other hand, the biotech market is rich. It is growing. It is getting investment, and it\nis expected to continue to grow as a proportion of the overall R&D spend.\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 19 of 23\n Page 18 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nI certainly in my discussions, big pharma, you certainly continue to have a lot of interest and trying to\nlook at the assets that are attractive and the large pharma is looking to biotech for a lot of its innovation.\nAnd so, we think continuing to serve that market.\nWe have a history of it. You'll know that Covance had acquired Chiltern. Chiltern was very biotech, 100%\nbiotech focused, really. And so, we have a lot of good skills for biotechs and we hope to keep that [50-50]\nmix going.\nOPERATOR: Eric Coldwell, Baird.\nERIC COLDWELL COLDWELL, ANALYST, ROBERT W. BAIRD & CO. INCORPORATED: Thank\nyou. First, I think I have three questions. What was the breakdown of the $54 million spin-related cost\nhere in the quarter. Why was that up over 3x quarter over quarter? And what is the expected level in 3Q\nand 4Q?\nJILL MCCONNELL: Sure, Eric. I'll take that one. We were expecting it to increase. We're not expecting\nto be at that level quarterly for the remainder of the year. But we knew that it was going to ramp over the\ncourse of the year because of the fact that the heavy lift in terms of the, particularly the IT transitions that\nwe were doing, those were where the majority of the costs.\nSo the vast majority of that, probably 80% of it is IT related type costs and the rest would be supporting\nthe other groups. But I mean, it's all those things around transitioning servers. We've got about 30% of\nthose transitions. The team is working hard and there are more than 1,000 of those. It's the applications,\nthe hundreds of applications that we're working on.\nWe've talked openly about the fact they're replacing our ERP and HCM. So it's really all of the cost to\nhelp support those coming across. So we are expecting we don't have spend on in Q3 and Q4, but not to\nthe extent we would (technical difficulty) at the moment, based on our projections, this will be the highest\nquarter, but there still will be spent in the third and fourth quarters.\nTOM PIKE: When you say less Jill, are you talking I mean, is it $40 million, $20 million, what -- could\nyou put a sense for how to go into the next quarter, what to --\nJILL MCCONNELL: Yeah. I think it's probably still going to be -- it's not going to be as low as it was in\nfirst quarter, but it won't be as high as it was in second quarter, just to -- I think if you think about the\naverage of that, that's probably a fair approximation.\nTOM PIKE: Okay. And then was there a bonus reversal benefit to 2Q and is there an accrual reduction\nimpact that you would call out that's incremental driving the second half?\nJILL MCCONNELL: There was a very small amount that we unwound in Q2, but that wasn't the biggest\ndriver of the improvement from an adjusted EBITDA perspective, it was really small. I mean, obviously,\nyes, we have publicly said that we are reducing our future accruals because of the fact that we are below\nwhere we were expecting to be for the year. So that is a little bit of a benefit in the second half, but it\nwasn't a big driver of the 2Q performance from an adjusted EBITDA perspective.\nERIC COLDWELL COLDWELL: I'm just trying to get a sense on the comp as you go into 2025 and if\nyou were to move back to normal accruals in '25, obviously from a lower level than was previously\nexpected. But what kind of a year-over-year headwind might that be? And is that factored into the 11% to\n12% EBITDA guidance?\nJILL MCCONNELL: It is factored in (multiple speakers) yes, preliminary outlook. It is factored into that.\nIt will be a headwind that we'll have to work to overcome. And that's part of the work that we're doing\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 20 of 23\n Page 19 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nacross the teams. And we did talk a little bit about that the benefits of that restructuring program because\nwe're continuing to work through that through this quarter, not really seeing full benefits of that towards\nthe end of this year.\nThat will help offset some of that as we go into next year. But that is also a headwind that we're working\ntowards with the efficiency and productivity programs that we have in place. We know it's important to be\nable to get back to that.\nTOM PIKE: The demand is higher commencing as it's planned.\nHIMA INGUVA: Yes, it is part of it.\nERIC COLDWELL COLDWELL: Okay. And I know I said I had three questions. I guess there's\nprobably a few more sub-parts to these, but on the last one, you've said you were making changes to get\nthe bookings going. You've talked a bit around that.\nBut are there any specific details you could give us, changes in the terms you're offering, changes pricing\nchanges in sales force focus leadership? Is there some kind of more specific detail you could give us\nanecdotal commentary that we could track besides more of what I would say was a higher-level discussion\nso far, at least it felt like that to me?\nTOM PIKE: Yeah, Eric, I appreciate that. I'm glad you asked, too, because we are not making price\nconcessions to increase sales. We're not doing anything out of market associated with extending terms or\nanything like that. So we are really trying to stay in market and has the value proposition of working with\nus.\nAs I was alluding to in the earlier discussions with our strategies, with our medical expertise, with the\ninvestigator relationships that we have, with the technologies, like the [ad board, Vivo] relationship, that's\npretty unique that we have. We're really trying to press into selling with that not by making price\nconcessions. So I'm glad you asked about that.\nWith respect to specifics, yeah, I think there are a couple of things. First, we are improving the discipline\nof our weekly and monthly meetings associated with sales and the predictability. We're going to make a\ncouple of changes to how we predict the second half of the quarter and look at probabilities a little bit\ndifferently than we have been.\nWe had gone into a certain methodology, and now we're going to use a couple of different methodologies\nto try to predict. But the key is what you don't want to do is you don't want to predict you're going to be\n0.96, what you want to do is figure out the way to get at 1.2. So the key is really working with the teams\nto really try to understand the decision processes and then how we can influence them and make them\nwork.\nThe other thing that we're looking at and I'll calender for next year, and it's incorporated in the numbers\nthat Jill is describing is actually potential of increasing our resources associated with going after biotech in\nparticular. And do we inherited a sales force of a certain size and so we're thinking should we go ahead\nand have more resources exposed to biotech in certain geographies. So we're looking at that right now.\nSo we've got a number of things. I guess the last thing I'd say is we are looking at the use of AI in both\ntargeting and RFP development. There are some tools out there that you may be aware of that incorporates\nsome elements. So we're looking at what those tools can do, but then also looking at how can we enhance\nthat with some of the skills we have in-house. So does that helps, Eric?\nERIC COLDWELL COLDWELL: Yeah. Thank you. That's helpful. I appreciate it.\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 21 of 23\n Page 20 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nOPERATOR: Michael Ryskin, Bank of America Securities.\nMICHAEL RYSKIN, ANALYST, BOFA SECURITIES: Great. Thanks for squeezing me in, I'll just limit\nit to one given the time. I want to go back to this comment on pipeline converting to orders both in 2Q and\nlater in the year, talking about the swing between pharma and biotech.\nSo just I mean, it sounds like there is you talked about predicting -- differently predicting when biotechs\nconvert, but doesn't sound like those were canceled out right or fell through. So just to confirm all that\nbiotech that was in the pipeline that didn't convert in 2Q, is it still in the pipeline?\nIs there still sort of part of your second half outlook as you talked about heavy biotech lean in 2Q, but\nmore pharma lean entering 3Q. So I'm just wondering if the biotech didn't convert and it's still there, is\nthat part of the equation for the second half? And then just how much does that really swing quarter to\nquarter in terms of the pipeline, the composition of it because that's something that's been really volatile\nand what are the factors driving that?\nTOM PIKE: I mean, our reality is that a lot of it is delayed decision-making. So it is in fact, in the third\nand fourth quarter. So that's one of the things that makes our pipeline look great. But what is addition to\nthat is that we have some things that we knew were going to be late in the year award and contract with\nlarge pharma and those are coming into sight now too for Q3 and Q4. So that's what makes us feel good\nabout the second half of the year.\nIn terms of the volatility, I think we are finding there's a little seasonality. This seems to be -- perhaps it's\nintroduced by the reprioritization and some of the internal processes taking place in large pharma that are\ncausing more second half awards and first half awards, at least in the companies that we're working with.\nBut you saw this last year, you see it this year. I'm not sure I really want to call it a trend yet, though. It\nmay be more just a temporal thing that's happened in 2024 than it is a long-term trend because historically\npharma firms are pretty balanced through the year. Large pharma is pretty balanced through the year with\na potential of a little increase in Q4 as they're trying to finish up their budgets. So I don't want to call it a\nlong-term trend yet, but it certainly happens to be something that we saw in 2024.\nOPERATOR: I show no further questions at the queue at this time. I would now like to turn the call back\nover to Tom for closing remarks.\nTOM PIKE: Thank you very much. We appreciate your interest in us and support. Again, it's been a good\nquarter for things like de-levering, doubling EBITDA, some of these big relationship wins, and we have a\nstrong pipeline. So we appreciate your interest and support and look forward to talking to you next\nquarter. Thank you.\nOPERATOR: This concludes today's conference call. Thank you for participating. You may now\ndisconnect.\n[Refinitiv, an LSEG business, reserves the right to make changes to documents, content, or other\ninformation on this web site without obligation to notify any person of such changes.\nIn the conference calls upon which Event Transcripts are based, companies may make projections or other\nforward-looking statements regarding a variety of items. Such forward-looking statements are based upon\ncurrent expectations and involve risks and uncertainties. Actual results may differ materially from those\nstated in any forward-looking statement based on a number of important factors and risks, which are more\nspecifically identified in the companies' most recent SEC filings. Although the companies may indicate\nand believe that the assumptions underlying the forward-looking statements are reasonable, any of the\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 22 of 23\n Page 21 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\nassumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results\ncontemplated in the forward-looking statements will be realized.\nTHE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL\nREPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL AND WHILE\nEFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE\nMATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE\nSUBSTANCE OF THE CONFERENCE CALLS. IN NO WAY DOES REFINITIV OR THE\nAPPLICABLE COMPANY OR THE APPLICABLE COMPANY ASSUME ANY RESPONSIBILITY\nFOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION\nPROVIDED ON THIS WEB SITE OR IN ANY EVENT TRANSCRIPT. USERS ARE ADVISED TO\nREVIEW THE APPLICABLE COMPANY'S CONFERENCE CALL ITSELF AND THE APPLICABLE\nCOMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.]\n\nClassification\nLanguage: ENGLISH\n\n\nPublication-Type: Transcript\n\n\nTranscript: 081224a16060698.798\n\n\nSubject: COMPANY ACTIVITIES & MANAGEMENT (92%); PRESS RELEASES (91%); BUSINESS\nNEWS (90%); COMPANY EARNINGS (90%); EXECUTIVES (90%); HOLDING COMPANIES\n(90%); TRANSCRIPTS (78%); FORTUNE 500 COMPANIES (77%); SECURITIES & OTHER\nINVESTMENTS (75%); LITIGATION (50%)\n\n\nCompany: GOLDMAN SACHS GROUP INC (90%); CITIGROUP INC (84%); JEFFERIES LLC\n(72%); ROBERT W BAIRD & CO INC (71%); DEUTSCHE BANK AG (57%)\n\n\nTicker: GS (NYSE) (90%); 8710 (TSE) (84%); C (BMV) (84%); C (NYSE) (84%); DB (NYSE) (57%);\nDBETN (JSE) (57%); DBK (BIT) (57%); DBK (FRA) (57%); DEUT (JSE) (57%)\n\n\nIndustry: NAICS523150 INVESTMENT BANKING AND SECURITIES INTERMEDIATION (90%);\nNAICS523940 PORTFOLIO MANAGEMENT AND INVESTMENT ADVICE (90%); SIC6211\nSECURITY BROKERS, DEALERS, & FLOTATION COMPANIES (90%); SIC6282 INVESTMENT\nADVICE (90%); SIC6289 SERVICES ALLIED WITH THE EXCHANGE OF SECURITIES OR\nCOMMODITIES, NEC (90%); SIC6798 REAL ESTATE INVESTMENT TRUSTS (90%);\nNAICS522110 COMMERCIAL BANKING (84%); NAICS522210 CREDIT CARD ISSUING (84%);\nSIC6081 BRANCHES & AGENCIES OF FOREIGN BANKS (57%); CONFERENCE CALLS (91%);\nINVESTOR RELATIONS (90%); ACCOUNTING (89%); SECURITIES & OTHER INVESTMENTS\n(75%); METADATA MANAGEMENT (73%)\n\n\nLoad-Date: August 14, 2024\n\f Case 1:25-cv-04630-KPF Document 65-9 Filed 01/28/26 Page 23 of 23\n Page 22 of 22\n Q2 2024 Fortrea Holdings Inc Earnings Call - Final\n\n\n\nEnd of Document\n\f","ocr_status":1,"date_upload":"2026-05-15T01:39:52.010239-07:00","document_number":"65","attachment_number":9,"pacer_doc_id":"127038970491","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit I - Transcript of Fortrea's Q2 2024 Earnings Call (Aug. 12, 2024)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327883/","id":479327883,"tags":[],"absolute_url":"/docket/70441800/65/10/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:51.112629-07:00","date_modified":"2026-05-18T05:33:48.508138-07:00","sha1":"714c9b43eba4f15e64d3ba44a2b2cfc0ecc88e82","page_count":20,"file_size":390711,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.10.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.10.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":"2026-05-15T01:39:54.634992-07:00","document_number":"65","attachment_number":10,"pacer_doc_id":"127038970492","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit J - Transcript of Fortrea's Q3 2024 Earnings Call (Nov. 8, 2024)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327884/","id":479327884,"tags":[],"absolute_url":"/docket/70441800/65/11/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:51.128589-07:00","date_modified":"2026-05-18T05:33:23.182914-07:00","sha1":"7935b3426954d1cf602a1f12e0dedebb8a7e0fb4","page_count":9,"file_size":341169,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.11.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.11.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:25-cv-04630-KPF Document 65-11 Filed 01/28/26 Page 1 of 9\n\n\n\n\n Exhibit K\n\f Case 1:25-cv-04630-KPF Document 65-11 Filed 01/28/26 Page 2 of 9\n Page 1 of 8\n Fortrea Holdings Inc at Barclays Global Healthcare Conference - Final\n\n\n\n\n Fortrea Holdings Inc at Barclays Global Healthcare Conference - Final\n FD (Fair Disclosure) Wire\n March 12, 2024 Tuesday\n\n\nCopyright 2024 Electronic format, layout and metadata, copyright 2023 VIQ Media Transcript, Inc. ALL RIGHTS\nRESERVED.\nCopyright 2024 Refinitiv. An LSEG business. ALL RIGHTS RESERVED.\nLength: 3997 words\n\nBody\n\n\nCorporate Participants\n* Hima B. Inguva\nFortrea Holdings Inc. - Head of IR & Corporate Development\n* Jill McConnell\nFortrea Holdings Inc. - CFO\n* Thomas H. Pike\nFortrea Holdings Inc. - CEO, President & Chairman\nPresentation\nTHOMAS H. PIKE, CEO, PRESIDENT & CHAIRMAN, FORTREA HOLDINGS INC.: I want to get\nstarted and to make sure we don't shortchange anybody. I'm Tom Pike, I'm CEO of Fortrea. We are the\nspin-out of LabCorp's Clinical Services Division. We've spun-out for about 8 months now. And so we've\nbeen an independent company, but our heritage is in a company called Covance, which is one of the real\ninnovators in the CRO industry and one of the leaders since 1990s.\nSo we have an interesting company, interesting story. I'm told that everybody here understands the CRO\nindustry pretty well. And what I love about this industry and the reason that I came back after running\nQuintiles to run 1 of these companies, is because the backdrop for this type of company is so great, and\nthese companies can be very successful in that backdrop.\nThe general backdrop is that we are clinical services firms that grow because the R&D associated with\npharmaceutical firms has been growing for basically forever. And the growth of pharmaceutical R&D\ncontinues to be probably on the order of 3% to 5% this year. And historically, it has grown in the high\nsingle digits for years in terms of what we do, that growth in our industry really has two components to it.\nIt's innate growth associated with R&D, but it's also been an increase in outsourcing. So you've seen the\ncombination of those two result in 3% to 5% or high single-digit growth for many of the last 30 years, and\nwe expect this trend to continue.\n\f Case 1:25-cv-04630-KPF Document 65-11 Filed 01/28/26 Page 3 of 9\n Page 2 of 8\n Fortrea Holdings Inc at Barclays Global Healthcare Conference - Final\n\nWe don't see large pharmaceutical firms taking on a huge amount of staff to do more clinical research.\nThey're relying on companies like us to do that with them around the world. And then the biotechs very\nmuch rely on us in terms of clinical services.\nNow turning to Fortrea, of course, there are may be forward-looking statements here. We are a company\nthat spun out of LabCorp, Covance used to have two arms. They had a clinical services arm or that\nservices piece. They have what we call a central lab in this business. That's stayed with LabCorp. We have\nabout 18,000 people in this company. We're global. We operate in 100 countries. We have 700 medical\ndocks. We have 1,500 PhDs. This company is a real player in this industry.\nIn terms of the spin, it was completed in record time. Actually, my colleague, Jim Connell led it from the\nLabCorp side. She had been CFO of this group before that. They pulled her out to lead it. I'm proud to say\nthat she did that on time, and it's great that she is with us because 1 of the big activities now is getting the\nrest of the way out of LabCorp. And since he knows the internals of all this from looking at it for last year,\nshe's the best person to help us get fully out of LabCorp.\nWe immediately created an investment and differentiation strategy to coming to this business felt like it\nwasn't differentiated enough. And it was an interesting mix. It was actually a mix of some skills that were\non the bench and hadn't really been in the game. We had the 700 medical docs, many of who have been in\nthis industry for 25 or 30 years, did hundreds of trials, but they weren't out at customers enough. So what\nwe did is we brought some of those talents from the organization and then at the same time, created an\ninvestment thesis that many of you have seen in terms of our investments that range from things like more\nmagnet talent.\nso this is talent that's so good that the pharmaceutical industry notices that we have this talent and wants to\nbring us in. Also areas like site differentiation, how can we differentiate when we work with investigator\nsites. Now you've seen some progress on that with our site advisory boards and the augmented services.\nWe have strategies associated with technology. We knew with people like Veeva here spending $250 or\nmore million on technology that a CRO can't be a technology leader in this business, it's really going to\nfall to those high-quality vendors.\nSo we complement, we don't compete with those vendors, and then we develop intellectual property\nwhere we want -- where it adds value on top of it. Same thing in data. Years ago when we created IQVIA,\nas they were the only game in town. They and Optum were the only two games in town associated with\ndata. Now there are probably 100, certainly tens of data providers. You have people like ConcertAI who\nfocus on oncology data.\nSo our goal there is also to complement, not compete with data. We don't need to own data, we need to be\nreally good at using it and making sure that we mine it effectively and use tools against it to help our\ncustomers. So we complement, don't compete with technology and data providers. So we've got this\nwhole differentiation strategy.\nYou may have seen it in our Investor Day, but it is paying dividends in terms of the relationships we have\nwith customers, the focus of the business, and you'll hear more about that. We had to commercially\ntransform two. As you can imagine, being a division of a division with a huge lab, the focus was not on\nclinical services. One of the first things that Jill and I did when we took over in July is we changed the\nincentive strategy. So we changed to focus more on the most attractive parts of our business from a\ngrowth and margin standpoint, which is largely full-service outsourcing.\nBut we did other things, too. Some of you in the audience know this industry very well, and we weren't\nengaging early enough with customers who weren't using all that medical expertise with biotechs. And so\nall of this part of our commercial transformation that I'd say we're in probably the third or fourth inning\n\f Case 1:25-cv-04630-KPF Document 65-11 Filed 01/28/26 Page 4 of 9\n Page 3 of 8\n Fortrea Holdings Inc at Barclays Global Healthcare Conference - Final\n\nof, but it's already producing results, a 1.3 book-to-bill in the last quarter and $1.27 since we've been\nindependent company.\nWe developed a road map. I think any of you who are interested in us understand the same thing we do\nand not that we're really a margin appreciation story. This company traditionally has been subindustry\npeers, the spin has made it even more difficult in terms of margins. So we have a very clear road map both\nin operating and SG&A transformation. We picked some partners to help us through that.\nSo we picked Cognizant and Accenture. Cognizant is helping us with the more technology-oriented\naspects of getting out of LabCorp. And then Accenture is helping us with some other technology, mainly\nour ERP, and they're also helping us with security. And then finally, we put together an experienced\nmanagement team. We took some folks from the parent company like Phil and then added other really\nexperienced great players. I think we have a world-class management team, and we also have a great\nboard.\nWith respect to 2024, so what are we doing this year? So last year, we were really setting up, getting\nthings started, starting the commercial transformation. Now we're really focused -- refocusing the business\non Phase I to IV clinical development, including real-world evidence in some of the consulting.\nNow those of you who saw our earnings announcement yesterday showed that we just announced that we\nare divesting the two key businesses in the enabling Services segment. We can talk about this a bit more\nin our Q&A, but we're divesting those 2. They are good businesses, very good businesses, but they do\nneed a lot of attention and a fair amount of capital. And we think the real value creation here is\nconcentrating on our clinical businesses. So we're starting on that journey this year.\nIt also gives us a little bit of extra capital, deal with our debt situation. But I think we're excited about that,\nand we think those two businesses have a great home with Arsenal. In terms of the commercial\ntransformation, it's still going on before coming down here last night after our earnings call, Jill and I met\nfor 1.5 hours with a customer. And that is a big part of what we're doing.\nYou should -- we should see more progress in terms of building our pipeline, how we engage, and I hope,\ncontinue to drive these book-to-bills that you've seen. We're continuing these investments. So they're not\ndone yet. We've started on the investments, as I described. but we're adding to it more specificity around\nAI. So that same customer that we were talking about, one of the things they're going to do today is\nthey're going to see our AI experts talking about how AI can potentially help transform the clinical\nservices industry.\nAnd so I may not talk about all of that here just because of competitive issues, but we have a terrific AI\nleader groups, people in that. We have tremendous -- I think for our industry, we have some of the best\nthinkers associated with technology, artificial intelligence, et cetera. That's going to be a key part of our\ndrive going forward. Capital structure and SG&A improvement, clearly something that we're focused on.\nAnd again, I think we'll talk about that a little bit more in the question and answer, but Joe can take you\nthrough how we're looking to drive improvements in those areas. And then finally, the most -- one of the\nmost important things this year is that we will be exiting the transition service agreements from our\nformer parent company. And this is really what unlocks the opportunity to improve the margins in the\nSG&A here. Again, we'll talk about that a little more.\nFinally, 2025, what do we want to be? We want to be the CRO of choice for our customers. That's biotech\nand selected you large pharma. Now I say selected only in that in our size, we can't do everyone, but we\ndo serve about 50% large pharma, about 50% biotech. We want to keep that ratio. So as we grow, we\nwant to continue to work with large pharma and also biotech. And we just think we've got the perfect\n\f Case 1:25-cv-04630-KPF Document 65-11 Filed 01/28/26 Page 5 of 9\n Page 4 of 8\n Fortrea Holdings Inc at Barclays Global Healthcare Conference - Final\n\ncombination. What large pharma does for you is it gives you that consistent backlog. You know that you\nhave a lot of products coming because you're preferred with them. And what biotech does for you\nprobably gives you a little bit better margins, you do a little more innovation there, and then you can bring\nthat back to the larger pharmaceutical firms. So we want to keep that mix -- if we have any TSAs left, we\nshould be exiting them.\nAnd then importantly, we removed kind of an overhang on the business. When you do a spin, essentially,\nyou indemnify your parent associated with tax issues and other issues. It's just part of what they do, they\nput the liabilities on you, part of that. So we would essentially extinguish all of those indemnities and that\nkind of overhang that we would have on the business when we exit all the TSAs.\nWe're going to keep investing in differentiation, keep focusing on the commercial organization. This is\n2025, continue to -- we'll really start driving the post-TSA operating and SG&A efficiencies. And as it\nsays on the bottom, we're expect to start getting to market leverage ratios closer to 3 towards the end of\n2025.\nSomething that Jill and I have been explicit on though is that we are trying to exit 2024 at about a 13%\nEBITDA margin. This is where this company was in 2022 before the spin. And we believe if we exit\nthose TSAs, we keep working on these levers and we bring revenue back to this business, we can do that\nso that we're at that level as we go into 2025 and then Jill can describe a little bit how -- we've given some\nmodeling information to people on our earnings call, we could talk a little bit more about 2025 as well.\nSo given that Barclays helped us with the transaction, we actually don't have Luke as our interviewer\ntoday as we normally would. So we're in that unusual situation. So our Head of Investor Relations, Hima\nis going to ask us questions and start us off and then she'll take some questions from the audience. So\nHima, over to you.\nQuestions and Answers\nHIMA B. INGUVA, HEAD OF IR & CORPORATE DEVELOPMENT, FORTREA HOLDINGS INC.:\nThank you, Tom. So Tom, maybe we'll start off with the enabling the that you announced yesterday.\nMaybe if you could talk about -- give us some color on the strategic rationale behind the deal and what led\nyou to this point?\nTHOMAS H. PIKE: Yes, yes. Essentially, last fall, we did a strategic review, and we really looked as we\nlooked across the investments and what the different business needed. We decided that our investments\nand our management focus, to be honest with you, it's really best placed in these clinical businesses Phase\nI to Phase IV. If you look at these businesses, the trading multiples in the private markets are high.\nIt's very attractive -- the most attractive part of our business when you look at when we speak to book\nbills, that is really on the clinical segment of our business. And then the other two businesses are great\nbusinesses, but something like patient access, it's really targeted towards that 10% of commercial\npharmaceuticals that goes to patients who need access to those products.\nIt's a very different business, not really aligned in with us. And then the endpoint business is what we call\nit's a randomization tool -- and they can be very good businesses, but they're going through a transition to\nintroducing new technology generation. And just given the investment and attention that they need and the\nnature of randomization business, we thought if we had the right partner, those two can flourish better\nwith that partner.\nI think in Arsenal, we found that partner. Probably everyone here knows Arsenal. They've certainly got a\ngood history of really being able to develop businesses in this sector. And so we're excited about them\n\f Case 1:25-cv-04630-KPF Document 65-11 Filed 01/28/26 Page 6 of 9\n Page 5 of 8\n Fortrea Holdings Inc at Barclays Global Healthcare Conference - Final\n\ntaking those two businesses forward. But ultimately, what it lets us do is we focus on the business. We put\nour investments where we want. We think it's attractive both to our customers and to investors.\nAnd then finally, it does let us deal with our leverage with a little bit of flexibility.\nHIMA B. INGUVA: Next question we ask you Jill, the one that is on (inaudible). So if you can maybe\ntalk about your margin trajectory for 2024 and '25, you've exited 40% of TSAs at the end of 2023. So how\ndo you see the incremental margin mention opportunity in 2004 from exiting the remaining.\nJILL MCCONNELL, CFO, FORTREA HOLDINGS INC.: Sure. So in the call yesterday, I talked about\nhave for 2024. And so in the first half, we still have kind of the headwinds from the year with the soft\nsales that we had the soft commitment and business awards that was in that period of July of '22 through\nJune of '23. That's going to really manifest most strongly, particularly in Q1. And then we're going to see\nthat in the second half, we get back more to market growth, which we're saying roughly in that 3% to 5%\nbased on the book-to-bills that we've delivered over the last two quarters as a solid pipeline that we see in\nfront of us in 2024. And I guided around the fact that a midpoint about $300 million, you could see about\n1/3 of that in the first half more so in the second quarter and then the majority of that in the second half.\nSo that improvement in the second half is largely driven by that revenue. We have been transparent about\nthe fact that we've held on to some cost of sales resource essentially are people that generate revenue in\nanticipation of the growth if we would let them go and then have to hire them back a couple once later,\nyou're going to pay 20% more. And so we've held on to those people.\nSo that growth in the second half largely doesn't need additional resources to support it. So it will drop\nthrough pretty strongly. The -- as are really more so coming very much at the end of the year, and they\nreally unlock the SG&A margin expansion into 2025. So we've shared that in the first quarter, we're going\nto start to report our cost of sales and our SG&A more in line with our peers.\nIt was done a bit differently as part of LabCorp you're going to see that there's a lot of opportunity in\nSG&A and exiting those TSAs at the tail end of this year will give us that opportunity for 2025. And as\nTom mentioned, we said we expect to exit this year on that 13% trajectory and we would expect to\ncontinue that through 2025.\nHIMA B. INGUVA: Great. And when you think about the longer term, you're a CFO, to be longer term,\nright, how do you see margins evolving? Is there anything structurally different or more superior?\nJILL MCCONNELL: No, we don't think so at all. In fact, I think the focus on the Clinical Services\nbusinesses allows us to more closely match some of our peers, probably when you get to the really, really\nhigh teams in low 20s, there is a little bit of scale mostly around your corporate cost, just being right over\na larger volume of revenue. But other than that, which I would say is relatively small, we still believe high\nteens but absolutely appropriate margin for us over time.\nHIMA B. INGUVA: Great. So switching over to Tom, maybe if you could talk about a little bit about\nyour recent conversations with customers? And any feedback you've received for spin, any feedback you\nhave received at the end of the year?\nTHOMAS H. PIKE: Thank you. I think those of you who have followed us know that as we spun we were\ngetting a lot of comments about the spin and there was concern. And one of the reasons that sales were off\nat July 2022 to June of '23 period is because of concerns about the spin, within about 6 weeks of the spin,\nwe stopped hearing that. And I have to say now, it feels very much that we're at the table, and we're at the\ntable with the largest CROs in terms of opportunities with big pharma in terms of biotech. We have a solid\npipeline.\n\f Case 1:25-cv-04630-KPF Document 65-11 Filed 01/28/26 Page 7 of 9\n Page 6 of 8\n Fortrea Holdings Inc at Barclays Global Healthcare Conference - Final\n\nWe were -- we have disclosed or disclosed in the earnings call that our pipeline is solid for Q1. We're\nobviously late in the quarter. We still have to execute because the way the CRO business works and some\nof you know it well, you have a lot coming at the very end of the quarter. And so -- but if we execute well,\nwe can be at our target book-to-bill and -- but the exciting thing, honestly, is our whole team is energized\nby the access for getting the leading pharmaceutical firms and great biotech firms. So I'm really pleased\nwith our progress on that since becoming an independent company. If you think about it, nobody knew\nFortrea a year ago, right? It was an idea. Now our name is around and well understood.\nHIMA B. INGUVA: Thank you. In the last few minutes, we'd like taking audience questions.\nTHOMAS H. PIKE: Hima has a few more prepared in the space.\nHIMA B. INGUVA: Yes. Tom, maybe -- if you could talk about differentiation between FSP and full\nservice, given all the disruption that's going on in...\nTHOMAS H. PIKE: It's interesting. Those of you who follow this industry know that we have these two\nprimary service models on the clinical side. One is full service outsourcing, where really the CRO takes\nover pretty much control of a project and drives the project independently with the support of the sponsor.\nAnd then the other model is FSP with much more resource focused where it's a bit more of a staffing\nbusiness for project managers or CRAs or other elements that data management people will essentially be\nstaffed to that sponsor -- what we've seen over the last decade is quite a bit of growth from the latter\nmodel to that FSP model.\nInterestingly, as we look at it today, for a company of our size, and I want to emphasize that, for a\ncompany of our size, we are seeing sponsors still move in both directions. The meeting we had yesterday\nwas the sponsor who traditionally has done virtually all FSP, who is now looking at adding full-service\noutsourcing. And so we're seeing that -- we're seeing some of the largest, most successful companies that\nhave in stores start looking at outsourcing because some of them have had such successful products in the\nlast couple of years, are moving into new therapeutic areas, and they realize it's more efficient to do full\nservice. That being said, you're still seeing some of the largest companies being very focused on FSP and\na few people moving more towards it.\nSo it's a really interesting thing in our business. It's probably -- it is push and pull, some are moving\ntowards full service outsourcing, some are FSP. I think what we want to do as a company, though, if you\nthink about what we're trying to do with our size, trying to improve our margins, it's to continue to focus\non that full service outsourcing piece -- and then where we think it makes sense, we will definitely do FSP\n2.\nLike we just won a really interesting FSP with a very large and successful leading pharmaceutical firm\nthat gives us a foot in the door there. But then on the other hand, we heard this opportunity last night,\nwhere we're working on full service. So our goal is to kind of keep our mix and use FSP where it's\nappropriate to do it effectively, but then also continue to focus on the full service outsourcing.\nHIMA B. INGUVA: Thank you. We have 1 minute, if you have any closing remarks?\nTHOMAS H. PIKE: Well, I guess that's a long time for closing remarks, but it is good to end early. For\nsurely, we get a lot of stuff done. So we often end things early. I do think we remain super excited. We've\nput together a great leadership team considering where we are. And if you listened to our earnings call\nyesterday, I tried to tick off some of the things we've accomplished in the past year, Jill, with the spin\nteam up to the spin and then since we've done it. I mean we're moving at an incredible pace.\n\f Case 1:25-cv-04630-KPF Document 65-11 Filed 01/28/26 Page 8 of 9\n Page 7 of 8\n Fortrea Holdings Inc at Barclays Global Healthcare Conference - Final\n\nWe're really establishing this brand. We're at the table with leading pharmaceutical firms and their\nexecutive teams. who are really interesting to buy our tech. We've got the plans and already have started\nto work on the cost structure elements. We've put in place the partners to do it. We're working closely\nwith our former partner or a former parent to get out of the TSAs.\nSo given where we are today and where our margins are, I feel like the growth we're putting through us --\nand then the plans and actual activities we have improve margins are going to make this one of the most in\ninvestment stories over the next couple of years. We do appreciate your interest, and you can always\ncontact Hima to get more information to get access to us. So with that, thank you.\nHIMA B. INGUVA: Thank you very much. Thank you, everyone.\n[Refinitiv, an LSEG business, reserves the right to make changes to documents, content, or other\ninformation on this web site without obligation to notify any person of such changes.\nIn the conference calls upon which Event Transcripts are based, companies may make projections or other\nforward-looking statements regarding a variety of items. Such forward-looking statements are based upon\ncurrent expectations and involve risks and uncertainties. Actual results may differ materially from those\nstated in any forward-looking statement based on a number of important factors and risks, which are more\nspecifically identified in the companies' most recent SEC filings. Although the companies may indicate\nand believe that the assumptions underlying the forward-looking statements are reasonable, any of the\nassumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results\ncontemplated in the forward-looking statements will be realized.\nTHE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL\nREPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL AND WHILE\nEFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE\nMATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE\nSUBSTANCE OF THE CONFERENCE CALLS. IN NO WAY DOES REFINITIV OR THE\nAPPLICABLE COMPANY OR THE APPLICABLE COMPANY ASSUME ANY RESPONSIBILITY\nFOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION\nPROVIDED ON THIS WEB SITE OR IN ANY EVENT TRANSCRIPT. USERS ARE ADVISED TO\nREVIEW THE APPLICABLE COMPANY'S CONFERENCE CALL ITSELF AND THE APPLICABLE\nCOMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.]\n\nClassification\nLanguage: ENGLISH\n\n\nPublication-Type: Transcript\n\n\nTranscript: 031224a15894295.795\n\n\nSubject: EXECUTIVES (91%); COMPANY ACTIVITIES & MANAGEMENT (90%); HOLDING\nCOMPANIES (90%); BUSINESS NEWS (79%); INDUSTRY SECTOR PERFORMANCE (75%);\nMEDICAL RESEARCH (73%); BIOTECHNOLOGY SECTOR PERFORMANCE (70%); TRENDS\n(66%); EXPERIMENTATION & RESEARCH (60%)\n\f Case 1:25-cv-04630-KPF Document 65-11 Filed 01/28/26 Page 9 of 9\n Page 8 of 8\n Fortrea Holdings Inc at Barclays Global Healthcare Conference - Final\n\n\nCompany: LABORATORY CORP OF AMERICA HOLDINGS (57%); COVANCE INC (56%)\n\n\nTicker: LH (NYSE) (57%)\n\n\nIndustry: NAICS621511 MEDICAL LABORATORIES (57%); SIC8071 MEDICAL LABORATORIES\n(57%); NAICS541380 TESTING LABORATORIES AND SERVICES (56%); SIC8731 COMMERCIAL\nPHYSICAL & BIOLOGICAL RESEARCH (56%); PHARMACEUTICALS & BIOTECHNOLOGY\n(90%); MEDICAL & DIAGNOSTIC LABORATORIES (89%); PHARMACEUTICALS INDUSTRY\n(89%); BIOTECHNOLOGY SECTOR PERFORMANCE (70%); PHARMACEUTICAL\nPREPARATION MFG (65%)\n\n\nLoad-Date: March 25, 2024\n\n\n End of Document\n\f","ocr_status":1,"date_upload":"2026-05-15T01:39:58.861475-07:00","document_number":"65","attachment_number":11,"pacer_doc_id":"127038970493","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit K - Transcript of Barclays Global Healthcare Conference (Mar. 12, 2024)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327885/","id":479327885,"tags":[],"absolute_url":"/docket/70441800/65/12/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:51.144781-07:00","date_modified":"2026-05-18T05:39:45.106816-07:00","sha1":"52a4bbf6347e61091ba526a6ada40e5a99947c46","page_count":8,"file_size":2410254,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.12.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.12.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:25-cv-04630-KPF Document 65-12 Filed 01/28/26 Page 1 of 8\n\n\n\n\n Exhibit L\n\f Case 1:25-cv-04630-KPF Document 65-12 Filed 01/28/26 Page 2 of 8\n Equity Research\n Healthcare | Pharmaceutical Outsourcing & Services\n\n March 11, 2024 Max Smock, CFA +1 312 364 8336\n msmock@williamblair.com\n Christine Rains +1 312 364 8217\n Fortrea Holdings Inc. crains@williamblair.com\n\n\n Feeling Incrementally More Positive on the Back of Strong Bookings, but Stock Rating: Market Perform\n We Remain Cautious Around Near-Term Margin Outlook\n Symbol: FTRE (NASDAQ)\n Price: $36.41 (52-Wk.: $25-$38)\n What Happened? Market Value (M): $3,271\n Fortrea reported fourth-quarter results and held its earnings call on Monday, March 11. Dividend/Yield: $0.00/0.00%\n Revenue of $775 million (+1.8% year-over-year) was slightly below our $777 million Fiscal Year End: December\n estimate (Street: $779 million), with lower-than-expected clinical services revenue ($710 2023A 2024E 2025E\n million versus our $713 million estimate) partly offset by modestly better-than-expected Estimates\n performance in enabling services ($66 million versus our $65 million estimate). However, Sales (M) Q1 $764.2 $753.8 $819.8\n net new business awards of $923 million came in well above our $855 million estimate, Q2 $793.0 $792.2 $825.0\n Q3 $776.4 $803.6 $833.6\n leading to a book-to-bill of 1.30 times in the quarter (versus our estimate of 1.20 times). Q4 $775.4 $814.5 $840.9\n Below the top line, adjusted EBITDA of $67 million came in below our $72 million estimate FY $3,109.0 $3,164.1 $3,319.3\n (Street also modeled $72 million), as did adjusted EPS ($0.19 versus our $0.24 target; Street: EBITDA Q1 $57.1 $34.6 $84.3\n $0.23). Fortrea also issued initial 2024 guidance, calling for revenue in the range of $3,140 (M) Adjusted\n Q2 $72.5 $63.6 $89.2\n million to $3,205 million (versus our previous estimate of $3,199 million; Street: $3,205 Q3 $70.5 $91.9 $112.4\n million) and adjusted EBITDA between $280 million and $320 million (versus our previous Q4 $67.2 $105.9 $119.3\n estimate of $325 million; Street: $318 million). Lastly, the company announced that it will FY $267.3 $296.0 $405.3\n divest essentially all of its enabling services segment to private equity firm Arsenal Capital EPS AdjustedQ1 $0.46 $(0.10) $0.36\n Q2 $0.52 $0.18 $0.40\n Partners for total expected consideration of $345 million, with the deal expected to close in Q3 $0.24 $0.41 $0.58\n the second quarter of 2024. A full summary of results versus our and consensus estimates as Q4 $0.19 $0.54 $0.64\n well as a summary of our model updates are provided at the end of this note. FY $1.40 $1.03 $1.98\n Valuation\n Our Take EV/Sales 1.5x 1.5x 1.4x\n EV/EBITDA 17.8x 16.0x 11.7x\n We\u2019re admittedly a bit conflicted about Fortrea\u2019s update. On one hand, bookings meaningfully FY P/E 26.0x 35.3x 18.4x\n exceeded expectations and the top-line portion of the company\u2019s initial 2024 outlook looks\n reasonable in light of the better-than-expected bookings in the fourth quarter, positive Trading Data (FactSet)\n macro commentary from peers, an encouraging rebound in the XBI year-to-date, and strong Shares Outstanding (M): 88.8\n Float (M): 88.6\n biotech funding data so far in 2024. In addition, we like Fortrea\u2019s decision to divest its\n Avg. Daily Volume (90-day): 987,267\n enabling services business, which we believe makes sense from a strategic perspective as it\n should enable the company to both improve its capital structure and focus its investments Financial Data (FactSet)\n and innovation on clinical research services. On the other hand, it is hard to overlook the Book Value Per Share (MRQ): $19.58\n Enterprise Value (M): $4,749\n execution risk embedded in the aggressive margin ramp-up expected by the end of 2024,\n especially in light of the adjusted EBITDA miss observed in the fourth quarter. And while we Two-Year Price Performance Chart\n do not see structural issues that would prevent Fortrea from generating adjusted EBITDA $40\n\n margins in line with peers longer term, we remain concerned that expectations for margin\n $35\n expansion near term are too aggressive. All in, we are incrementally more positive around the\n outlook for Fortrea from here on the back of its strong bookings in the quarter, but with its\n $30\n\n\n\n stock only trading at a modest discount to the average for its closest clinical CRO peers (18.4x $25\n\n\n\n our 2025 adjusted EPS estimate versus 20.0x average for ICON [ICLR $332.38; Outperform] $20\n Jul-23 Sep-23 Nov-23 Jan-24 Mar-24\n\n\n and IQVIA [IQV $258.58; Outperform]), its valuation does not seem meaningful enough to Sources: FactSet, William Blair & Company estimates\n justify the execution risk that we believe is present over the next few years. As a result, we\n reiterate our Market Perform rating.\n\nBased in Durham, North Carolina, Fortrea is a global CRO providing comprehensive Phase I through Phase IV\nbiopharmaceutical product and medical device services, patient access solutions, and other enabling services.\n\nPlease refer to important disclosures on pages 5 \u2013 7. Analyst certification is on page 5.\nWilliam Blair or an affiliate does and seeks to do business with companies covered in its research reports. As a\nresult, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of\nthis report. This report is not intended to provide personal investment advice. The opinions and recommendations\nherein do not take into account individual client circumstances, objectives, or needs and are not intended as\nrecommendations of particular securities, financial instruments, or strategies to particular clients. The recipient of\nthis report must make its own independent decisions regarding any securities or financial instruments mentioned\nherein.\n\f Case 1:25-cv-04630-KPF Document 65-12 Filed 01/28/26 Page 3 of 8\n\n William Blair\n\nKey Takeaways\n\nStrong bookings and demand momentum expected to drive a return to market growth in the second half of 2024.\nManagement\u2019s tone surrounding its demand outlook was notably more positive than when the company last updated investors at\na competitor conference in early January. While we were concerned that highly publicized issues with one of its customer\u2019s trials\nwould derail momentum in the fourth quarter, bookings of $923 million came in well above our $855 million estimate, leading to an\nimpressive 1.30x book-to-bill for the period (versus our 1.20x estimate). Notably, management indicated that momentum has carried\ninto 2024, with the company\u2019s solid pipeline of opportunities putting it in good shape to maintain a book-to-bill ratio above 1.20x\nmoving forward. Despite this momentum, Fortrea\u2019s top-line outlook for 2024 only calls for modest growth (roughly 1% to 3%), with\na decline in service fee revenue in the first half of the year expected due to a less favorable mix of business wins during the spin year\nthat ran from July 2022 through June 2023. However, by the back half of the year management expects growth to return to being in line\nwith overall expected CRO market growth of roughly 3% to 5%.\n\nFiscal 2024 adjusted EBITDA guide disappoints, but aggressive second-half margin ramp-up sets the stage for significant\ngrowth in 2025. Fortrea is targeting an adjusted EBITDA margin of 9.5% at the midpoint in 2024, which falls significantly short of\nour previous 10.2% target and the consensus target of 9.9%. However, the company maintained its goal of exiting 2024 with a roughly\n13.0% adjusted EBITDA margin run-rate, implying an impressive 430-basis-point ramp-up over the course of the year. Management\nexpects roughly one-third of total adjusted EBITDA dollars to be delivered in the first half, weighed down by the company\u2019s remaining\nTSAs with LabCorp (exited 40% of TSAs by volume, but most cost-intensive IT arrangements remain) and staff retention costs in\nanticipation of second-half growth. While management fell short of committing to additional adjusted EBITDA margin expansion\nfrom its targeted 2024 exit rate of 13% in 2025, we believe there should be ample room for margin expansion, as top-line growth\naccelerates and the company exits the remaining 60% of its TSAs, streamlines its cost infrastructure, optimizes its resource utilization,\nand continues to invest in cost-saving automation technologies.\n\nFortrea sheds enabling service segment to focus on core clinical operations. Fortrea announced that it entered into an agreement\nto divest its enabling service segment assets, namely its endpoint clinical (provides randomization and trial supply management\nsolutions) and patient access (provides patient support, product access, affordability and adherence solutions) businesses to private\nequity firm Arsenal Capital Partners. Arsenal will pay $345 million for the segment (around 11.5 times expected 2024 segment\nadjusted EBITDA), with $295 million to be paid at closing and $50 million to be paid upon achievement of certain transition-related\nmilestones. The deal is expected to close in the second calendar quarter of 2024, after which Fortrea will report results in one\nconsolidated clinical services segment. Fortrea plans to use the majority of the proceeds to pay down its existing debt and move its net\nleverage ratio from its current level at 5.7 times trailing-12-month adjusted EBITDA closer to its medium-term target of 2.5 to 3 times.\nWhile we thought Fortrea\u2019s enabling service segment solutions were attractive, we like the divestiture, which removes the impact\nof more cyclical services and should allow management to tell a cleaner story and focus its attention on execution in its core clinical\nservices business, while at the same time enabling the company to improve its capital structure.\n\nRisks\nFortrea has a limited history of operating as a standalone business; the company could continue to lose share because of execution\nissues and spin-related disruptions; the weak biotech funding environment could lead to a decrease in R&D spending by\nbiopharmaceutical companies; the company has a high debt burden in comparison to its earnings; and outsourcing penetration rates\ncould reach a ceiling.\n\n\n\n\n2 | Max Smock +1 312 364 8336\n\f Case 1:25-cv-04630-KPF Document 65-12 Filed 01/28/26 Page 4 of 8\n\n William Blair\n\n\n Fortrea\n Quarter Review\n Fourth Quarter 2023 Summary Results\n Q4'23 Q4'23 Q4'23 Q4'22\n Variance Variance\n $s in millions, except EPS actual estimate actual actual\n Net new business awards $ 923 $ 855 $ 67 $ 923 $ - $ 923\n Y/y change (%) NA NA NA NA -% NA\n Net book-to-bill (quarter) 1.30x 1.20x 0.10x 1.30x 0.00x 1.30x\n Ending backlog 7,392 7,207 185 7,392 - 7,392\n Y/y change (%) NA NA NA NA -% NA\n Backlog conversion rate 10.0% 10.0% - bps 10.0% -% 1,000 bps\n Revenue 775 777 (2) 775 762 14\n Y/y change (%) 1.8% 2.1% (30) bps 1.8% NA NA\n Direct costs 656 645 10 656 600 56\n Gross profit 120 132 (12) 120 162 (42)\n Gross margin 15.4% 17.0% (160) bps 15.4% 21.2% (580) bps\n Selling, general and administrative 53 60 (7) 53 52 1\n % of revenue 6.8% 7.7% (90) bps 6.8% 6.8% - bps\n Y/y change (%) NA 15.8% NA NA NA NA\n Adjusted EBITDA 67 72 (5) 67 110 (43)\n Adjusted EBITDA margin 8.7% 9.3% (60) bps 8.7% 14.4% (570) bps\n Y/y change (%) NA (34.2%) NA NA NA NA\n Depreciation 8 10 (2) 8 7 1\n Adjusted EBIT 59 63 (3) 59 103 (44)\n Interest expense/(income) 35 35 (0) 35 - 35\n Other expense/(income) - - - - - -\n Income tax expense/(benefit) 8 7 1 8 21 (13)\n Adjusted net income 17 21 (4) 17 82 (65)\n Shares outstanding 90 89 0 90 89 1\n Adjusted EPS 0.19 0.24 (0.05) 0.19 0.92 (0.74)\n Y/y change (%) NA (74.4%) NA NA NA NA\n\n Consensus Estimates\n Q4'23 Q4'23 Fav/(unfav)\n $s in millions, except EPS actual consensus variance\n Revenue $ 775 $ 779 $ (4)\n Adjusted EBITDA 67 72 (5)\n Adjusted EPS 0.19 0.23 (0.05)\n Note: This is a summary table. Not all line items and adjustments are included, so numbers may not sum.\n. Sources: Company reports, FactSet, and William Blair Equity Research\n\n\n\n\n3 | Max Smock +1 312 364 8336\n\f Case 1:25-cv-04630-KPF Document 65-12 Filed 01/28/26 Page 5 of 8\n\n William Blair\n\n\n Fortrea\n Model Changes\n Fourth Quarter 2023 Model Changes\n 2023A 2024E 2025E\n Current Previous Current Previous\n Actual results Change Change\n $s in millions, except EPS estimate estimate estimate estimate\n Net new business awards NA $ 3,556 $ 3,516 $ 41 $ 3,754 $ 3,683 $ 72\n Y/y change (%) NA NA NA NA 5.6% 4.8% 80 bps\n Net book-to-bill (TTM) NA 1.23x 1.20x 0.03x 1.23x 1.20x 0.03x\n Ending backlog 7,392 7,784 7,523 261 8,219 7,861 359\n Y/y change (%) NA 5.3% 4.4% 90 bps 5.6% 4.5% 110 bps\n Revenue 3,109 3,164 3,199 (35) 3,319 3,345 (26)\n Y/y change (%) 0.4% 1.8% 2.8% (110) bps 4.9% 4.6% 30 bps\n Direct costs 2,589 2,624 2,614 10 2,680 2,658 22\n Gross profit 520 540 585 (45) 639 687 (48)\n Gross margin 16.7% 17.1% 18.3% (120) bps 19.3% 20.5% (130) bps\n Selling, general and administrative 253 244 260 (16) 234 280 (47)\n % of revenue 8.1% 7.7% 8.1% (40) bps 7.0% 8.4% (130) bps\n Y/y change (%) 3.9% (3.8%) (0.3%) (350) bps (4.0%) 8.0% (1,200) bps\n Adjusted EBITDA 267 296 325 (29) 405 407 (2)\n Adjusted EBITDA margin 8.6% 9.4% 10.2% (80) bps 12.2% 12.2% 10 bps\n Y/y change (%) (34.0%) 10.8% 19.4% (870) bps 36.9% 25.0% 1,190 bps\n Depreciation 33 38 41 (3) 40 45 (5)\n Adjusted EBIT 235 258 284 (26) 366 362 4\n Interest expense/(income) 70 131 137 (6) 125 137 (12)\n Other expense/(income) - - - - - - -\n Income tax expense/(benefit) 40 34 37 (3) 60 56 4\n Adjusted net income 125 93 110 (17) 181 169 12\n Shares outstanding 89 90 90 1 91 91 1\n Adjusted EPS 1.40 1.03 1.23 (0.20) 1.98 1.86 0.11\n Y/y change (%) (58.8%) (26.4%) (15.5%) (1,080) bps 91.7% 51.8% 3,990 bps\n\n Consensus Estimates\n 2024E 2025E\n $s in millions, except EPS William Blair Consensus Variance William Blair Consensus Variance\n Revenue $ 3,164 $ 3,205 $ (41) $ 3,319 $ 3,368 $ (48)\n Adjusted EBITDA 296 327 (31) 405 409 (4)\n Adjusted EPS 1.03 1.06 (0.03) 1.98 1.81 0.17\n Note: This is a summary table. Not all line items and adjustments are included, so numbers may not sum.\n. Sources: Company reports, FactSet, and William Blair Equity Research\n\n\n\n\n4 | Max Smock +1 312 364 8336\n\f Case 1:25-cv-04630-KPF Document 65-12 Filed 01/28/26 Page 6 of 8\n\n William Blair\n\nIMPORTANT DISCLOSURES\n\nWilliam Blair or an affiliate is a market maker in the security of Fortrea Holdings Inc.\n\nWilliam Blair or an affiliate expects to receive or intends to seek compensation for investment banking services from Fortrea Holdings Inc. or\nan affiliate within the next three months.\n\nOfficers and employees of William Blair or its affiliates (other than research analysts) may have a financial interest in the securities of Fortrea\nHoldings Inc.\n\nThis report is available in electronic form to registered users via R*Docs\u2122 at https://williamblairlibrary.bluematrix.com or\nwww.williamblair.com.\n\nPlease contact us at +1 800 621 0687 or consult https://www.williamblair.com/equity-research/coverage for all disclosures.\n\nMax Smock attests that 1) all of the views expressed in this research report accurately reflect his/her personal views about any and all of\nthe securities and companies covered by this report, and 2) no part of his/her compensation was, is, or will be related, directly or indirectly,\nto the specific recommendations or views expressed by him/her in this report. We seek to update our research as appropriate. Other than\ncertain periodical industry reports, the majority of reports are published at irregular intervals as deemed appropriate by the research\nanalyst.\n\nDOW JONES: 38722.70\nS&P 500: 5123.69\nNASDAQ: 15939.60\n\n For t r e a H old in g s In c. Ra t in g H ist or y a s of 0 3 /0 8 /2 0 2 4\n powered by: BlueMat rix\n I:Mkt\n 01/05/24\n 40\n 38\n 36\n 34\n 32\n 30\n 28\n 26\n 24\n Apr 21 Jul 21 Oct 21 Jan 22 Apr 22 Jul 22 Oct 22 Jan 23 Apr 23 Jul 23 Oct 23 Jan 24\n\n\n Closing Price\n\n OP:Out perform Mkt :Market Perform UP:Under Perform NR:Not Rat ed I:Init iat ion of Coverage D:Dropped Coverage\n\n Source: Fact Set & William Blair\n\n\n\n\nAdditional information is available upon request.\n\nCurrent Rating Distribution (as of March 11, 2024):\nCoverage Universe Percent Inv. Banking Relationships * Percent\n\nOutperform (Buy) 70 Outperform (Buy) 7\nMarket Perform (Hold) 29 Market Perform (Hold) 3\nUnderperform (Sell) 1 Underperform (Sell) 0\n*Percentage of companies in each rating category that are investment banking clients, defined as companies for which William Blair has\nreceived compensation for investment banking services within the past 12 months.\n\nThe compensation of the research analyst is based on a variety of factors, including performance of his or her stock recommendations;\ncontributions to all of the firm\u2019s departments, including asset management, corporate finance, institutional sales, and retail brokerage; firm\nprofitability; and competitive factors.\n\n\n\n\n5 | Max Smock +1 312 364 8336\n\f Case 1:25-cv-04630-KPF Document 65-12 Filed 01/28/26 Page 7 of 8\n\n William Blair\n\nOTHER IMPORTANT DISCLOSURES\n\nStock ratings and valuation methodologies: William Blair & Company, L.L.C. uses a three-point system to rate stocks. Individual ratings reflect\nthe expected performance of the stock relative to the broader market (generally the S&P 500, unless otherwise indicated) over the next\n12 months. The assessment of expected performance is a function of near-, intermediate-, and long-term company fundamentals, industry\noutlook, confidence in earnings estimates, valuation (and our valuation methodology), and other factors. Outperform (O) - stock expected\nto outperform the broader market over the next 12 months; Market Perform (M) - stock expected to perform approximately in line with\nthe broader market over the next 12 months; Underperform (U) - stock expected to underperform the broader market over the next 12\nmonths; not rated (NR) - the stock is not currently rated. 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Copyright 2024, William Blair & Company, L.L.C.\nAll rights reserved.\n\nWilliam Blair & Company, L.L.C. licenses and applies the SASB Materiality Map\u00ae and SICSTM in our work.\n\n\n\n\n6 | Max Smock +1 312 364 8336\n\f Case 1:25-cv-04630-KPF Document 65-12 Filed 01/28/26 Page 8 of 8\n\n\nEquity Research Directory\nJohn Kreger, Partner Director of Research +1 312 364 8612 Scott Hansen Associate Director of Research +1 212 245 6526\nKyle Harris, CFA, Partner Operations Manager +1 312 364 8230\n\nCONSUMER ECONOMICS\nSharon Zackfia, CFA, Partner +1 312 364 5386 Richard de Chazal, CFA +44 20 7868 4489\nGroup Head\u2013Consumer\nLifestyle and Leisure Brands, Restaurants, Automotive/E-commerce ENERGY AND SUSTAINABILITY\nJon Andersen, CFA, Partner +1 312 364 8697 Jed Dorsheimer +1 617 235 7555\nConsumer Products Group Head\u2013Energy and Sustainability\n Generation, Efficiency, Storage\nPhillip Blee, CPA +1 312 801 7874\nHome and Outdoor, Automotive Parts and Services, Discount and Tim Mulrooney +1 312 364 8123\nConvenience Sustainability Services\nDylan Carden +1 312 801 7857\nConsumer Technology, Specialty Retail GLOBAL INDUSTRIAL INFRASTRUCTURE\n Larry De Maria, CFA +1 212 237 2753\nFINANCIAL SERVICES AND TECHNOLOGY Group Head\u2013Global Industrial Infrastructure\nAdam Klauber, CFA, Partner +1 312 364 8232 Industrial Machinery, Diversified, and Automation\nCo-Group Head\u2013Financial Services and Technology Louie DiPalma, CFA +1 312 364 5437\nFinancial Analytic Service Providers, Insurance Brokers, Property & Aerospace and Defense, Smart Cities\nCasualty Insurance\n Brian Drab, CFA, Partner +1 312 364 8280\nCristopher Kennedy, CFA +1 312 364 8596 Advanced Manufacturing, Industrial Technology\nFinancial Technology, Specialty Finance\n Ryan Merkel, CFA , Partner +1 312 364 8603\nJeff Schmitt +1 312 364 8106\n Building Products, Specialty Distribution\nWealthtech, Wealth Management, Capital Markets Technology\n TECHNOLOGY, MEDIA, AND COMMUNICATIONS\nHEALTHCARE\n Jason Ader, CFA, Partner +1 617 235 7519\nBiotechnology\n Co-Group Head\u2013Technology, Media, and Communications\nTim Lugo, Partner +1 415 248 2870 Infrastructure Software\nGroup Head\u2013Biotechnology\n Arjun Bhatia +1 312 364 5696\nSami Corwin, Ph.D. +1 312 801 7783 Co-Group Head\u2013Technology, Media, and Communications\nAndy T. Hsieh, Ph.D., Partner +1 312 364 5051 Software as a Service\nMyles R. Minter, Ph.D. +1 617 235 7534 Dylan Becker, CFA +1 312 364 8938\nMatt Phipps, Ph.D., Partner +1 312 364 8602 Software, Software as a Service\n\nHealthcare Technology and Services Jonathan Ho, Partner +1 312 364 8276\n Cybersecurity, Security Technology\nRyan S. Daniels, CFA, Partner +1 312 364 8418\nGroup Head\u2013Healthcare Technology and Services Maggie Nolan, CPA, Partner +1 312 364 5090\nHealthcare Technology, Healthcare Services IT Services\nMargaret Kaczor Andrew, CFA, Partner +1 312 364 8608 Matthew Pfau, CFA +1 312 364 8694\nMedical Technology Software as a Service\nBrandon Vazquez, CFA +1 212 237 2776 Jake Roberge +1 312 364 8056\nDental, Animal Health Software, Software as a Service\nLife Sciences Ralph Schackart III, CFA, Partner +1 312 364 8753\nMatt Larew, Partner +1 312 801 7795 Internet and Digital Media\nLife Science Tools, Bioprocessing, Healthcare Delivery\n Stephen Sheldon, CFA, CPA, Partner +1 312 364 5167\nAndrew F. Brackmann, CFA +1 312 364 8776 Vertical Technology \u2013 Real Estate, Education, Restaurant/Hospitality\nDiagnostics\nMax Smock, CFA +1 312 364 8336 EDITORIAL AND SUPERVISORY ANALYSTS\nPharmaceutical Outsourcing and Services Steve Goldsmith, Head Editor and SA +1 312 364 8540\n Audrey Majors, Editor and SA +1 312 364 8992\nGLOBAL SERVICES Beth Pekol Porto, Editor and SA +1 312 364 8924\nTim Mulrooney +1 312 364 8123 Lisa Zurcher, Editor and SA +44 20 7868 4549\nGroup Head\u2013Global Services Mubasil Chaudhry, Editor and SA +44 20 7868 4453\nCommercial Services, Staffing\nAndrew Nicholas, CPA +1 312 364 8689\nConsulting, HR Technology, Information Services\nTrevor Romeo, CFA +1 312 801 7854\nStaffing\n\f","ocr_status":2,"date_upload":"2026-05-15T01:40:04.195504-07:00","document_number":"65","attachment_number":12,"pacer_doc_id":"127038970494","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit L - William Blair Equity Research Analyst Report (Mar. 11, 2024)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327886/","id":479327886,"tags":[],"absolute_url":"/docket/70441800/65/13/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:51.171749-07:00","date_modified":"2026-05-18T05:34:54.355001-07:00","sha1":"08eda96f30431a9b929deac7aab7b0267167473b","page_count":10,"file_size":1730530,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.13.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.13.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:25-cv-04630-KPF Document 65-13 Filed 01/28/26 Page 1 of 10\n\n\n\n\n Exhibit M\n\f Case 1:25-cv-04630-KPF Document 65-13 Filed 01/28/26 Page 2 of 10\n\n\n\n\nUSA | Healthcare Services\n Equity Research\nFortrea Inc March 11, 2024\n\n\n\n4 Key Insights: FTRE 4Q23 ESTIMATE CHANGE\n\n\n RATING BUY\nInitial investor selloff this morning reflected disappointment around EBITDA\nmargin <9% and the price concessions disclosed in the EBITDA bridge. PRICE $36.41^\n\n\nHowever, by the close, mgt's clearly defined path to 13%+ EBITDA margins had PRICE TARGET | % TO PT $44.00 | +21%\n\n\nclearly resonated. The strategy: divesting Enabling Services to focus on full- 52W HIGH-LOW $38.47 - $24.93\n\n\nservice CRO, selectively discounting to win here while maintaining some excess FLOAT (%) | ADV MM (USD) 99.4% | 30.13\n\n\nheadcount to accommodate future growth. Reit Buy; maintain $44 PT (13.4x MARKET CAP $3.2B\n\n\n'25). TICKER FTRE\n\n ^Prior trading day's closing price unless otherwise\n noted.\nWhy Was '23 EBITDA Margin <9%? In '23, EBITDA margin decreased 450 bps y/y. Even before the\ncall, we and investors widely understood that FTRE's operating costs are higher than peers', in part\n CHANGE TO JEFe JEF vs CONS\ndue to Transition Service Agreements (TSAs) with LH. Today, mgt also pointed to sequentially lower\n 2024 2025 2024 2025\nattrition/higher FTEs through '23 and YTD. As a result, FTRE should have high incremental margin\nwith rev growth. During our callback, mgt further alluded to a 4Q decrease in services (605) revenue EBITDA -14% -11% -14% -5%\n\nvs. the growth reported y/y on 606 basis. Services revenue generates EBITDA; pass-throughs do EPS +66% +17% +5% +29%\n\nnot.\n 2024 ($) Q1 Q2 Q3 Q4 FY\nBridge to 13% EBITDA Margin in 4Q24 and Beyond. This is an explicit target from mgt. With 60% EPS 0.06 0.18 0.40 0.54 1.19\nof TSAs ($ value) left to be terminated, primarily in 2H, the areas for cost cuts are obvious. 1H24 PREV 0.71\nmay see depressed margins, however, bonus accrual is reinstated and soft 1H23 bookings may\nnot translate into enough revenue to fully utilize headcount. As such, mgt is expecting 1/3 of total\nEBITDA $ to fall in 1H vs. 2/3 in 2H. GM should improve particularly in 2H24 vs. SG&A cuts more\nmaterial in '25. Mgt plans revise its P&L geography of IT costs between SG&A vs. cost of services, to\nmore closely match industry norms. Currently, Cost of Sales is overstated and SG&A understated.\nThis is more congruent with duplicative IT/TSA costs.\n\nGlimpses of Mgt's Strategy. Despite the client concession FTRE backed out from adjusted EBITDA\n($5.5M in '23 growing to $7.0M in '24), FTRE appears to be behaving rationally with price. It wants\nto continue winning business for its capabilities, surgically competing on price while adjusting\nits cost structure behind the scenes. Along this vein, divesting Enabling Services makes perfect\nsense. The business was a drag on margins (and perhaps on Historic View backlog) last year. Mgt's\nquantification of the lost annualized contribution...$250M rev/$30M EBITDA...sounds high to us.\n\nKey Points on Demand and Bookings. 1) Mgt still sees a 1.2x as achievable in 1Q and 2024. 2)\nGetting to 1.2x in 1Q doesn't pull-forward and create a tougher \"lift\" in 2Q. 3) Business mix is fairly\nbalanced across pharma/biotech and full service/FSP/ClinPharm. 4) Mgt wants to be competitive\nbut, consistent with comments in Jan, is not chasing large-scale, tightly-priced FSP work where it\nis not adequately scaled. Mgt believes FTRE is pricing in line with competitors. Even if that is not\nfully accurate, it highlights massive cost inefficiencies in the business.\n\n\n\n\n (FY Dec) 2022A 2023A 2024E 2025E David Windley, CFA * | Equity Analyst\n (615) 963-8313 | dwindley@jefferies.com\n EBITDA (MM) 405.1 267.3 286.2 403.8\n Jonathan Lim, MD * | Equity Analyst\n Cons. EBITDA - 273.3 333.7 424.5\n (615) 963-8312 | jlim2@jefferies.com\n EPS 3.40 1.40 1.19 2.32\n Tucker Remmers * | Equity Associate\n Cons. EPS - 1.28 1.13 1.80 +1 (615) 963-8315 | tremmers@jefferies.com\n\n\nPlease see analyst certifications, important disclosure information, and information regarding the status of non-US analysts on pages 4 - 9 of this report.\n* Jefferies LLC / Jefferies Research Services, LLC\n\f Case 1:25-cv-04630-KPF Document 65-13 Filed 01/28/26 Page 3 of 10\n\n Fortrea Holdings Inc (FTRE)\n Equity Research\n March 11, 2024\n\nThe Long View: Fortrea Inc\nInvestment Thesis / Where We Differ Risk/Reward - 12 Month View\n\u2022 FTRE entered the public markets with multiple preexisting operational\n Upside : Downside\n challenges after years of underinvestment and the added burden of debt. 65\n 2.07 : 1\n\n\u2022 Even so, FTRE is a reputable midsized clinical CRO that performs 60 60 (+65%)\n\n surprisingly well in our annual sponsor survey, e.g, in terms of expertise 55\n\n with decentralized trials. 50\n\n\u2022 We believe the initial financial projections were overly optimistic re: FTRE's 45 44 (+21%)\n\n ability to reduce operational expenses as a standalone company. 40\n\n\u2022 We also disagree with many investors as to the root causes of FTRE's 35\n\n 30\n subpar EBITDA margins. The public narrative has been that the cost\n 25 25 (-31%)\n structure, especially wages, is too high. To us, topline productivity per head\n 20\n is the larger issue. 2024 +12 mo.\n\n\n\n\nBase Case, Upside Scenario, Downside Scenario,\n$44, +21% $60, +65% $25, -31%\n\u2022 FTRE's quarterly net book-to-bill (B2B) remains \u2022 FTRE sequentially improves net book-to-bill \u2022 FTRE's net book-to-bill (B2B) deteriorates and\n above 1.20x from hereon. (B2B) in 2024. FTRE fails to sustain >1.20x B2B ratios.\n\u2022 Clinical Services revenue growth reaches 3-5% \u2022 Clinical growth is 3-5% y/y throughout 2024 \u2022 Clinical revenue declines LSD% in 2024, as\n in 2H24 \u2022 Enabling Services is divested in 2Q24 and FTRE FTRE fails to find ways to utilize extra\n\u2022 Enabling Services is divested in 2Q24 realizes $50M in milestone payments headcount, i.e., productivity fails to improve\n\u2022 EBITDA margin rebounds to 10% by YE23 and \u2022 EBITDA margin improves >300 bps by YE24, \u2022 Enabling Services divestiture potentially is\n continues to improve in 2024, exiting YE24 at ending the year above mgt's 13% target delayed\n mgt's 13% target \u2022 2025E EBITDA: $489M; Target Multiple: 15.4x \u2022 EBITDA margin stays <10% through 2024\n\u2022 2025E EBITDA: $445M; Target Multiple: 13.4x \u2022 2025E EBITDA: $393M; Target Multiple: 10.5x\n\n\n\n\nSustainability Matters Catalysts\nTop Material Issue(s): 1) Human Rights & Community Relations: To ensure fairness for human \u2022 Demonstrating EBITDA margin improvement\ntrial subjects, CROs must validate protocols, maintain data integrity, and report adverse health\n \u2022 Exiting Labcorp Transition Service Agreements\nevents expeditiously. CROs can advance patient safety by leveraging insights to identify the most\nsuitable trial patients and effectively monitoring protocol adherence. In addition, diversity and (TSAs)\ninclusion in the recruitment process must be a key focus \u2014 underrepresentation of minority groups\nin clinical trials is an ongoing concern. 2) Employee Engagement, Diversity & Inclusion: Human\ncapital is core to any CRO's business model. Employees work directly with biopharma sponsors\nto develop and execute clinical trials and patient access programs. Maintaining a healthy work\nenvironment ensures that employees can work at their best.\nCompany Target(s): N/A\nQs to Management: 1) How does FTRE's patient recruitment engine optimize representation\nof diverse populations in clinical trials? 2) What employee retention, living wage, and career\ndevelopment programs does FTRE offer to maximize retention and employee satisfaction?\n\n\n\n\nPlease see important disclosure information on pages 4 - 9 of this report. 2\nThis report is intended for Jefferies clients only. Unauthorized distribution is prohibited.\n\f Case 1:25-cv-04630-KPF Document 65-13 Filed 01/28/26 Page 4 of 10\n\n Fortrea Holdings Inc (FTRE)\n Equity Research\n March 11, 2024\n\n\n\n\nExhibit 1 - FTRE Model\n FORTREA HOLDINGS INC.\n Earnings Model\n 1Q23 2Q23 3Q23 4Q23 2023 1Q24 2Q24 3Q24 4Q24 2024 1Q25 2Q25 3Q25 4Q25 2025\n FY December 2023 2024E 2025E 2026E\n Source: Jefferies LLC Q1 Q2 Q3 Q4 2023 Q1E Q2E Q3E Q4E 2024 Q1E Q2E Q3E Q4E 2025\n Net revenue $764,200 $793,000 $776,400 $775,400 $3,109,000 $763,812 $776,825 $732,965 $746,905 $3,020,507 $746,081 $761,815 $777,360 $793,621 $3,078,878\n\n Direct costs 636,200 649,400 647,300 655,700 2,588,600 653,539 658,847 605,157 601,727 2,519,270 603,302 613,740 623,931 634,602 2,475,575\n SG&A 78,000 80,800 78,900 98,900 336,600 93,603 89,371 73,331 73,979 330,284 73,151 73,932 75,441 77,019 299,542\n Unallocated adjustments 7,100 9,700 20,300 46,400 83,500 30,552 31,073 27,486 26,142 115,253 24,248 24,759 25,264 25,793 100,064\n EBITDA 57,100 72,500 70,500 67,200 267,300 47,223 59,679 81,964 97,340 286,206 93,876 98,903 103,253 107,794 403,824\n Depreciation 6,900 9,100 8,600 8,000 32,600 8,000 8,000 8,000 8,000 32,000 8,000 8,000 8,000 8,000 32,000\n Operating expenses 714,000 729,600 714,500 716,200 2,874,300 724,589 725,146 659,001 657,564 2,766,301 660,206 670,913 682,107 693,828 2,707,054\n EBIT 50,200 63,400 61,900 59,200 234,700 39,223 51,679 73,964 89,340 254,206 85,876 90,903 95,253 99,794 371,824\n Interest (expense)/income - (700) (34,600) (34,500) (69,800) (31,837) (29,923) (28,079) (27,562) (117,402) (27,070) (26,672) (26,475) (26,244) (106,460)\n Charges - - - - - - - - - - - - - - -\n FX (gain)/loss - other - - - - - - - - - - - - - - -\n Pretax income 50,200 62,700 27,300 24,700 164,900 7,386 21,756 45,885 61,778 136,804 58,806 64,231 68,778 73,550 265,364\n Taxes 9,900 16,400 6,000 8,100 40,400 1,809 5,330 10,095 13,591 30,825 12,937 14,131 15,131 16,181 58,380\n Equity investee\n Net income\n Adjustments\n Adjusted NI 40,300 46,300 21,300 16,600 124,500 5,576 16,426 35,790 48,187 105,979 45,869 50,100 53,647 57,369 206,984\n\n EPS\n EPS b/f charges $0.45 $0.52 $0.24 $0.19 $1.40 $0.06 $0.18 $0.40 $0.54 $1.19 $0.51 $0.56 $0.60 $0.64 $2.32\n Diluted shares 88,800 88,800 89,200 89,200 89,000 89,200 89,200 89,200 89,200 89,200 89,200 89,200 89,200 89,200 89,200\n\n Common Size:\n Net revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%\n Growth\n Direct costs 83.3% 81.9% 83.4% 84.6% 83.3% 85.6% 84.8% 82.6% 80.6% 83.4% 80.9% 80.6% 80.3% 80.0% 80.4%\n Gross margin 16.7% 18.1% 16.6% 15.4% 16.7% 14.4% 15.2% 17.4% 19.4% 16.6% 19.1% 19.4% 19.7% 20.0% 19.6%\n SG&A 10.2% 10.2% 10.2% 12.8% 10.8% 12.3% 11.5% 10.0% 9.9% 10.9% 9.8% 9.7% 9.7% 9.7% 9.7%\n Other -0.9% -1.2% -2.6% -6.0% -2.7% -4.0% -4.0% -3.8% -3.5% -3.8% -3.3% -3.3% -3.3% -3.3% -3.3%\n Adj. EBITDA margin 7.5% 9.1% 9.1% 8.7% 8.6% 6.2% 7.7% 11.2% 13.0% 9.5% 12.6% 13.0% 13.3% 13.6% 13.1%\n D&A 0.9% 1.1% 1.1% 1.0% 1.0% 3.0% 3.0% 3.0% 3.0% 1.1% 3.0% 3.0% 3.0% 3.0% 1.0%\n Total expenses 93.4% 92.0% 92.0% 92.4% 92.5% 94.9% 93.3% 89.9% 88.0% 91.6% 88.5% 88.1% 87.7% 87.4% 87.9%\n EBIT 6.6% 8.0% 8.0% 7.6% 7.5% 5.1% 6.7% 10.1% 12.0% 8.4% 11.5% 11.9% 12.3% 12.6% 12.1%\n Interest expense 0.0% -0.1% -4.5% -4.4% -2.2% -4.2% -3.9% -3.8% -3.7% -3.9% -3.6% -3.5% -3.4% -3.3% -3.5%\n Charges 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%\n FX (gain)/loss 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%\n Pretax income 6.6% 7.9% 3.5% 3.2% 5.3% 1.0% 2.8% 6.3% 8.3% 4.5% 7.9% 8.4% 8.8% 9.3% 8.6%\n Taxes 19.7% 26.2% 22.0% 32.8% 24.5% 24.5% 24.5% 22.0% 22.0% 22.5% 22.0% 22.0% 22.0% 22.0% 22.0%\n Equity investee 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%\n Net income 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%\n Adjusted net income 5.3% 5.8% 2.7% 2.1% 4.0% 0.7% 2.1% 4.9% 6.5% 3.5% 6.1% 6.6% 6.9% 7.2% 6.7%\n % Change\n Net Revenue -1.9% 0.0% 1.8% 1.8% 0.4% -0.1% -2.0% -5.6% -3.7% -2.8% -2.3% -1.9% 6.1% 6.3% 1.9%\n\n Direct Costs -0.3% 5.7% 8.8% 9.2% 5.8% 2.7% 1.5% -6.5% -8.2% -2.7% -7.7% -6.8% 3.1% 5.5% -1.7%\n SG&A 4.0% 13.5% 11.6% 57.2% 20.3% 20.0% 10.6% -7.1% -25.2% -1.9% -21.8% -17.3% 2.9% 4.1% -9.3%\n EBITDA -23.7% -37.1% -33.0% -38.8% -34.0% -17.3% -17.7% 16.3% 44.9% 7.1% 98.8% 65.7% 26.0% 10.7% 41.1%\n D&A 3.0% 33.8% 32.3% 14.3% 20.7% 15.9% -12.1% -7.0% 0.0% -1.8% 0.0% 0.0% 0.0% 0.0% 0.0%\n Total expenses 0.4% 6.6% 7.7% 8.7% 5.8% 1.5% -0.6% -7.8% -8.2% -3.8% -8.9% -7.5% 3.5% 5.5% -2.1%\n EBIT -26.3% -41.6% -37.3% -42.4% -37.9% -21.9% -18.5% 19.5% 50.9% 8.3% 118.9% 75.9% 28.8% 11.7% 46.3%\n Interest expense 4174.8% -18.8% -20.1% 68.2% -10.9% -5.7% -4.8% -9.3%\n Pretax income -26.3% -42.2% -72.3% -76.0% -56.4% -85.3% -65.3% 68.1% 150.1% -17.0% 696.2% 195.2% 49.9% 19.1% 94.0%\n Taxes -28.8% -26.8% -67.4% -61.8% -46.8% -81.7% -67.5% 68.2% 67.8% -23.7% 615.0% 165.1% 49.9% 19.1% 89.4%\n Net income\n Net income ex. charges -25.6% -46.2% -73.5% -79.7% -58.8% -86.2% -64.5% 68.0% 190.3% -14.9% 722.6% 205.0% 49.9% 19.1% 95.3%\n\n EPS\n EPS b/f Charges -25.6% -46.2% -73.6% -79.7% -58.9% -86.2% -64.7% 68.0% 190.3% -15.1% 722.6% 205.0% 49.9% 19.1% 95.3%\n GAAP Income Statement\n Revenues 764,200 793,000 776,400 775,400 3,109,000 763,812 776,825 732,965 746,905 3,020,507 746,081 761,815 777,360 793,621 3,078,878\n - - -\n Direct costs 636,200 649,400 647,300 655,700 2,588,600 653,539 658,847 605,157 601,727 2,519,270 603,302 613,740 623,931 634,602 2,475,575\n SG&A 78,000 80,800 78,900 98,900 336,600 93,603 89,371 73,331 73,979 330,284 73,151 73,932 75,441 77,019 299,542\n D&A 22,800 25,100 24,600 23,900 96,400 23,950 23,950 23,950 23,950 95,800 23,225 23,225 23,225 23,225 92,900\n Goodwill and other asset impairments - - - - - - - - - - - - - - -\n Restructuring and other charges 1,200 3,900 11,600 7,600 24,300 - - - - - - - - - -\n Operating expenses 738,200 759,200 762,400 786,100 3,045,900 771,092 772,169 702,438 699,656 2,945,354 699,678 710,897 722,597 734,846 2,868,017\n EBIT 26,000 33,800 14,000 (10,700) 63,100 (7,280) 4,656 30,528 47,249 75,153 46,403 50,919 54,764 58,776 210,861\n -\n Interest (expense)/income - (700) (34,600) (34,500) (69,800) (31,837) (29,923) (28,079) (27,562) (117,402) (27,070) (26,672) (26,475) (26,244) (106,460)\n FX (loss)/gain (5,500) 5,400 (900) 1,900 900 - - - - - - - - - -\n Other (expense)/income 600 400 3,600 2,300 6,900 - - - - - - - - - -\n Pretax income 21,100 38,900 (17,900) (41,000) 1,100 (39,117) (25,267) 2,448 19,686 (42,249) 19,333 24,247 28,289 32,532 104,401\n\n Taxes paid (benefit) 3,700 10,600 (4,800) (5,000) 4,500 (9,584) (6,190) 539 4,331 (10,904) 4,253 5,334 6,224 7,157 22,968\n GAAP Net Income 17,400 28,300 (13,100) (36,000) (3,400) (29,533) (19,077) 1,910 15,355 (31,345) 15,080 18,912 22,065 25,375 81,433\n effective tax rate 17.5% 27.2% 26.8% 12.2% 409.1% 24.5% 24.5% 22.0% 22.0% 25.8% 22.0%\n EPS $0.20 $0.32 ($0.15) ($0.40) -$0.04 ($0.33) ($0.21) $0.02 $0.17 -$0.35 $0.17 $0.21 $0.25 $0.29 $0.91\n Diluted shares 88,800 88,800 89,200 89,200 89,000 89,000 89,000 89,000 89,000 89,000 89,000 89,000 89,000 89,000 89,000\n.\nSource: Jefferies, Company data\n\n\n\n\nPlease see important disclosure information on pages 4 - 9 of this report. 3\nThis report is intended for Jefferies clients only. Unauthorized distribution is prohibited.\n\f Case 1:25-cv-04630-KPF Document 65-13 Filed 01/28/26 Page 5 of 10\n\n Fortrea Holdings Inc (FTRE)\n Equity Research\n March 11, 2024\n\n\n\n\nCompany Description\nFortrea Inc\nFortrea is the former Labcorp Drug Development clinical research organization. Spun off from Labcorp in 2023, it encompasses most of the Covance\nCRO that Labcorp acquired in 2014, less the preclinical operations (Labcorp Early Development).\n\n\nCompany Valuation/Risks\nFortrea Inc\nWe value Fortrea at 13.4x EV/'25 EBITDA, a discount to peers ICLR and IQV. We believe 2025 could be Fortrea's first full year of EBITDA margins\nin the teens as a public company. To get there, however, Fortrea must drive consistent margin improvement throughout 2024 by growing topline\nand cutting costs.\n\n\n\n\nAnalyst Certification:\nI, David Windley, CFA, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and\nsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views\nexpressed in this research report.\nI, Jonathan Lim, MD, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and\nsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views\nexpressed in this research report.\nI, Tucker Remmers, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) and subject\ncompany(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed\nin this research report.\nAs is the case with all Jefferies employees, the analyst(s) responsible for the coverage of the financial instruments discussed in this report receives\ncompensation based in part on the overall performance of the firm, including investment banking income. We seek to update our research as appropriate, but\nvarious regulations may prevent us from doing so. Aside from certain industry reports published on a periodic basis, the large majority of reports are published\nat irregular intervals as appropriate in the analyst's judgement.\n\n\nInvestment Recommendation Record\n(Article 3(1)e and Article 7 of MAR)\nRecommendation Published March 11, 2024 , 20:41 ET.\nRecommendation Distributed March 11, 2024 , 20:41 ET.\n\n\nCompany Specific Disclosures\n\nExplanation of Jefferies Ratings\nBuy - Describes securities that we expect to provide a total return (price appreciation plus yield) of 15% or more within a 12-month period.\nHold - Describes securities that we expect to provide a total return (price appreciation plus yield) of plus 15% or minus 10% within a 12-month period.\nUnderperform - Describes securities that we expect to provide a total return (price appreciation plus yield) of minus 10% or less within a 12-month period.\nThe expected total return (price appreciation plus yield) for Buy rated securities with an average security price consistently below $10 is 20% or more within a 12-\nmonth period as these companies are typically more volatile than the overall stock market. For Hold rated securities with an average security price consistently\nbelow $10, the expected total return (price appreciation plus yield) is plus or minus 20% within a 12-month period. For Underperform rated securities with an\naverage security price consistently below $10, the expected total return (price appreciation plus yield) is minus 20% or less within a 12-month period.\nNR - The investment rating and price target have been temporarily suspended. Such suspensions are in compliance with applicable regulations and/or Jefferies\npolicies.\nCS - Coverage Suspended. Jefferies has suspended coverage of this company.\nNC - Not covered. Jefferies does not cover this company.\nRestricted - Describes issuers where, in conjunction with Jefferies engagement in certain transactions, company policy or applicable securities regulations\nprohibit certain types of communications, including investment recommendations.\nMonitor - Describes securities whose company fundamentals and financials are being monitored, and for which no financial projections or opinions on the\ninvestment merits of the company are provided.\n\n\n\n\nPlease see important disclosure information on pages 4 - 9 of this report. 4\nThis report is intended for Jefferies clients only. Unauthorized distribution is prohibited.\n\f Case 1:25-cv-04630-KPF Document 65-13 Filed 01/28/26 Page 6 of 10\n\n Fortrea Holdings Inc (FTRE)\n Equity Research\n March 11, 2024\n\n\n\n\nValuation Methodology\nJefferies' methodology for assigning ratings may include the following: market capitalization, maturity, growth/value, volatility and expected total return over\nthe next 12 months. The price targets are based on several methodologies, which may include, but are not restricted to, analyses of market risk, growth rate,\nrevenue stream, discounted cash flow (DCF), EBITDA, EPS, cash flow (CF), free cash flow (FCF), EV/EBITDA, P/E, PE/growth, P/CF, P/FCF, premium (discount)/\naverage group EV/EBITDA, premium (discount)/average group P/E, sum of the parts, net asset value, dividend returns, and return on equity (ROE) over the\nnext 12 months.\nJefferies Franchise Picks\nJefferies Franchise Picks include stock selections from among the best stock ideas from our equity analysts over a 12 month period. Stock selection is based on\nfundamental analysis and may take into account other factors such as analyst conviction, differentiated analysis, a favorable risk/reward ratio and investment\nthemes that Jefferies analysts are recommending. Jefferies Franchise Picks will include only Buy rated stocks and the number can vary depending on analyst\nrecommendations for inclusion. Stocks will be added as new opportunities arise and removed when the reason for inclusion changes, the stock has met its\ndesired return, if it is no longer rated Buy and/or if it triggers a stop loss. Stocks having 120 day volatility in the bottom quartile of S&P stocks will continue to\nhave a 15% stop loss, and the remainder will have a 20% stop. Franchise Picks are not intended to represent a recommended portfolio of stocks and is not\nsector based, but we may note where we believe a Pick falls within an investment style such as growth or value.\n\n\nRisks which may impede the achievement of our Price Target\nThis report was prepared for general circulation and does not provide investment recommendations specific to individual investors. As such, the financial\ninstruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions based upon their specific\ninvestment objectives and financial situation utilizing their own financial advisors as they deem necessary. Past performance of the financial instruments\nrecommended in this report should not be taken as an indication or guarantee of future results. The price, value of, and income from, any of the financial\ninstruments mentioned in this report can rise as well as fall and may be affected by changes in economic, financial and political factors. If a financial instrument\nis denominated in a currency other than the investor's home currency, a change in exchange rates may adversely affect the price of, value of, or income derived\nfrom the financial instrument described in this report. In addition, investors in securities such as ADRs, whose values are affected by the currency of the\nunderlying security, effectively assume currency risk.\n\n\nOther Companies Mentioned in This Report\n \u2022 Fortrea Holdings Inc (FTRE: $36.41, BUY)\n\n Rating and Price Target History for: Fortrea Holdings Inc (FTRE) as of 03-08-2024\n\n 01/04/2024 I:BUY:$44.00\n 40\n 38\n 36\n 34\n 32\n 30\n 28\n 26\n 24\n Apr 21 Jul 21 Oct 21 Jan 22 Apr 22 Jul 22 Oct 22 Jan 23 Apr 23 Jul 23 Oct 23 Jan 24\n\n\n\n\nNotes: Each box in the Rating and Price Target History chart above represents actions over the past three years in which an analyst initiated on a company,\nmade a change to a rating or price target of a company or discontinued coverage of a company.\nLegend:\n\nI: Initiating Coverage\n\nD: Dropped Coverage\n\nB: Buy\n\nH: Hold\n\nUP: Underperform\n\n\n\n\nPlease see important disclosure information on pages 4 - 9 of this report. 5\nThis report is intended for Jefferies clients only. Unauthorized distribution is prohibited.\n\f Case 1:25-cv-04630-KPF Document 65-13 Filed 01/28/26 Page 7 of 10\n\n Fortrea Holdings Inc (FTRE)\n Equity Research\n March 11, 2024\n\n\n\n\nDistribution of Ratings IB Serv./Past12 Mos. JIL Mkt Serv./Past12 Mos.\n Count Percent Count Percent Count Percent\n\n BUY 1992 58.97% 350 17.57% 117 5.87%\n\n HOLD 1218 36.06% 115 9.44% 21 1.72%\n\n UNDERPERFORM 168 4.97% 4 2.38% 3 1.79%\n\n\n\n\nPlease see important disclosure information on pages 4 - 9 of this report. 6\nThis report is intended for Jefferies clients only. Unauthorized distribution is prohibited.\n\f Case 1:25-cv-04630-KPF Document 65-13 Filed 01/28/26 Page 8 of 10\n\n Fortrea Holdings Inc (FTRE)\n Equity Research\n March 11, 2024\n\n\n\n\nOther important disclosures\nOther Important Disclosures\nJefferies does business and seeks to do business with companies covered in its research reports, and expects to receive or intends to seek compensation for\ninvestment banking services among other activities from such companies. As a result, investors should be aware that Jefferies may have a conflict of interest\nthat could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.\nJefferies Equity Research refers to research reports produced by analysts employed by one of the following Jefferies Financial Group Inc. 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Unauthorized distribution is prohibited.\n\f","ocr_status":2,"date_upload":"2026-05-15T01:40:15.859652-07:00","document_number":"65","attachment_number":13,"pacer_doc_id":"127038970495","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit M - Jeffries Equity Research Analyst Report (Mar. 11, 2024)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479327887/","id":479327887,"tags":[],"absolute_url":"/docket/70441800/65/14/deslande-v-fortrea-holdings-inc/","date_created":"2026-05-15T01:37:51.188620-07:00","date_modified":"2026-05-18T05:35:43.535305-07:00","sha1":"536d55e103031ba3372ad899288e84e36b2e42d0","page_count":11,"file_size":379239,"filepath_local":"recap/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.14.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.643614/gov.uscourts.nysd.643614.65.14.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:25-cv-04630-KPF Document 65-14 Filed 01/28/26 Page 1 of 11\n\n\n\n\n Exhibit N\n\f Case 1:25-cv-04630-KPF Document 65-14 Filed 01/28/26 Page 2 of 11\n Deutsche Bank\n Research\n\n Rating Company Date\n 11 March 2024\n Hold Fortrea\n Company Update\n North America\n United States Reuters Bloomberg Exchange Ticker Price at 8 Mar 2024 (USD) 36.83\n FTRE.OQ FTRE US NSM FTRE\n Price Target (USD) 36.00\n Health Care\n 52-week range (USD) 37.72 - 25.11\n Life Science Tools &\n Diagnostics\n\n Year One Post Spin a Tale of Two Halves\n Valuation & Risks\n\n Justin Bowers\n Portfolio Manager Summary Research Analyst\n Fortrea (FTRE) stock closed down (1%), rebounding nicely from intraday lows of +1-212-250-2912\n down (9.3%) on 4Q results and its initial 2024 outlook. Key debates on the stock Ian Gelberg\n continue to center around the company's cost structure and margin outlook as the Research Associate\n company navigates the blocking and tackling post spin. On the top line, Fortrea\n continues to generate solid bookings under its first two quarters post spin and\n expects 1H24 to represent the trough for growth comps and anticipates returning Key changes\n to market growth (+3-5%) in 2H. Leadership cited a strong pipeline across all major EPS (USD) 1.27 to 1.04 \u2193 -17.5%\n end markets and is confident of delivering a 1.20x book-to-bill in 1Q and beyond Revenue (USDm) 3,188 to 3,159 \u2193 -0.9%\n with commercial execution. Source: Deutsche Bank\n\n\n The interim outlook on EBITDA margins is consistent with prior messaging with a\n 13% EBITDA margin targeted at 4Q exit and the base case full year margin in 2025.\n The midpoint of the 2024 outlook (ex the Enabling Solutions divestiture) is EBITDA\n margin of 9.5%, supported by improving direct costs and ~100 bps of SG&A\n improvements by the end of the year. While TSAs continue to weigh on margins, the\n company exited 40% of agreements in 2023 and is committed to further exit these\n TSAs over the next few years, with the most benefit accruing in 2025-2026.\n\n We are decreasing our 2024 earnings estimates meaningfully and increase our\n 2025 EPS / EBITDA by +2% / +3%, reflecting a (50 bps) decrease and +40 bps\n increase in our margin assumptions, respectively. We have also recast our model\n ahead of Fortrea's 1Q24 report to account for the company's reallocation of tech\n costs from COGS to SG&A starting in 1Q24. We assume this comprises\n approximately 500 bps of expense shifting from COGS to SG&A. We maintain our\n target price of $36 and our view from our note last week remains largely intact with\n an improved understanding of Fortrea's roadmap to long-term margin expansion.\n\n With respect the the Enabling Solutions divestiture, this is largely neutral to the out\n year estimates per our pro forma analysis; however, it should simplify Fortrea's\nDistributed on: 11/03/2024 22:26:13 GMT\n\n\n\n\n operating structure and free management resources.\n\n n 2024 Guidance: On top of Fortrea's initial 2024 guidance, management\n messaged a story of two halves in 2024. 1H24 includes suppressed revenue\n due to a decline in net new awards and unfavorable product mix impacting\n service fee revenue. Fortrea expects sequential top line improvement\n throughout the year with the largest step up into 2H24, exiting the year in-\n\n\n\n Deutsche Bank Securities Inc.\n IMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. Deutsche Bank does\n and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may\n have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single\n factor in making their investment decision. MCI (P) 041/10/2023.\n\n\n 7T2se3r0Ot6kwoPa\n\f Case 1:25-cv-04630-KPF Document 65-14 Filed 01/28/26 Page 3 of 11\n11 March 2024\nLife Science Tools & Diagnostics\nFortrea\n\n\n line with 3-5% market growth. 1/3rd of EBITDA will be delivered in 1H24 as\n the company works through staff retention and variable pay shifts while the\n remaining 2/3rds of EBITDA will be recognized in 2H24. The company\n targets a 13% EBITDA margin exiting 2024 with most of the improvement\n coming from revenue growth and a reduction in direct costs. It's important\n to note that the company's 2024 and 2025 estimates are excluding any\n impact from the divestiture of its Endpoint and Patient Access businesses.\n n Margin Story: We view Fortrea as a margin story, with the company's ability\n to achieve margin targets as the top debate among investors. Near term\n margins will continue to be impacted by ongoing TSA costs and staff\n retention before likely improving modestly throughout the year. The\n company forecasts 13% EBITDA margin exiting 2024 with accelerated\n improvements to direct costs in 2H24. While the company makes\n conscious efforts to manage SG&A expenses, messaging highlighted that\n the majority of SG&A improvement should come in 2025, subject to the\n timing of TSA exits. For 2025, Fortrea anticipates a floor of 13% EBITDA\n margin throughout the year, representing a full year expansion of 300bps.\n n Bookings: Fortrea achieved a 1.30x book to bill and 2% sequential backlog\n growth in the quarter. The company continued to see strong results across\n FSO and FSP, including strength in oncology and achieved early success in\n Phase 1 with GLP-1. While management noted that it did see a softness in\n bookings in December stemming from the independent review, it has not\n seen a material impact from the event in 1Q24. Leadership is comfortable\n with 1Q bookings and remains confident that it will reach its 1.20x book-to-\n bill target for the quarter.\n n Divestiture: Management believes that its divestiture of its Endpoint and\n Patient Access business will better align Fortrea as a pure play CRO with\n one Clinical Services business segment. Early guidance estimates a $250m\n and $30m impact to 2024 Revenue and EBITDA. Leadership explained an\n extensive strategic process including a fair amount of interest in both assets\n through several rounds of selection. Ultimately, Fortrea entered into the\n agreement with Arsenal given its track record in the healthcare space. The\n company will use proceeds from the sale to pay down debt, chipping away\n at its 2.5-3.0x mid term net leverage target. This is largely neutral to the out\n year estimates per our pro forma analysis; however, it should simplify\n Fortrea's operating structure and free management resources\n n Competitive Environment: Leadership shared that it continues to see\n strong opportunities across FSO and FSP among large biopharma and\n biotech customers. The company messaged that the biotech market has\n been stable since 2Q23 and that the outlook for funding in 2024 is positive\n alongside healthy customer trends in large biopharma. On pricing, Fortrea\n noted that it is experiencing standard industry pricing pressure and is not\n concerned with the pricing activity of any one competitor.\n\n\n\n\nNote: Figures 1 and 2 on following page\n\n\n\n\nPage 2 Deutsche Bank Securities Inc.\n\f Case 1:25-cv-04630-KPF Document 65-14 Filed 01/28/26 Page 4 of 11\n11 March 2024\nLife Science Tools & Diagnostics\nFortrea\n\n\n\n Figure 1: Comparison of DB Estimate Changes, Versus Consensus\n DB Estimates Prior Estimates Consensus\n 2024 2025 2024 2025 2024 2025\n Revenue $3,159 $3,277 $3,188 $3,307 $3,201 $3,350\n EBITDA $286 $361 $310 $352 $319 $388\n EPS $1.04 $1.80 $1.27 $1.76 $0.92 $1.94\n\n\n vs Prior Ests vs Consensus\n 2024 2025 2024 2025\n Revenue (0.9%) (0.9%) (1.3%) (2.2%)\n EBITDA (7.8%) 2.7% (10.3%) (6.9%)\n EPS (17.5%) 2.3% 13.6% (7.0%)\n\nSource : Deutsche Bank, Company Reports, Bloomberg Finance LP\n\n\n\n\n Figure 2: Fortrea Variance vs DBe, 4Q23\n\n\n 4Q23A 4Q23E Var\n\n Total ($m)\n Revenue $775 $777 (0.2%)\n Adj. EBITDA $67 $68 (0.6%)\n EPS $0.19 $0.23 (19.9%)\n EBITDA margin 8.7% 8.7% (0.0%)\n Gross margin 15.4% 17.0% (1.6%)\n % SG&A 6.8% 8.3% (1.5%)\n Tax rate 32.8% 22.0% 10.8%\n Diluted shares 89.7 88.8 1.0%\n\n\n Backlog Metrics ($m)\n Backlog $7,392 $7,279 1.6%\n QoQ Backlog growth 3.7% 2.1% 1.6%\n Net business wins $923 $855 7.9%\n Net book-to-bill 1.30x 1.20x 0.08x\n Net book-to-bill T9M 1.25x 1.21x 0.03x\n\n\n 2024 Guidance Guidance Street\n Revenue $3,173 $3,201 (0.9%)\n EBITDA $300 $319 (6.0%)\n\n\n\nSource : Deutsche Bank, Company Reports, Bloomberg Finance LP\n\n\n\n\nDeutsche Bank Securities Inc. Page 3\n\f Case 1:25-cv-04630-KPF Document 65-14 Filed 01/28/26 Page 5 of 11\n11 March 2024\nLife Science Tools & Diagnostics\nFortrea\n\n\n\n\nAppendix 1\nImportant Disclosures\n*Other information available upon request\n\nDisclosure checklist\nCompany Ticker Recent price* Disclosure\nFortrea FTRE.OQ 36.83 (USD) 08 Mar 2024 NA\n*Prices are current as of the end of the previous trading session unless otherwise indicated and are sourced from local exchanges via Reuters, Bloomberg and other vendors . Other\ninformation is sourced from Deutsche Bank, subject companies, and other sources. For disclosures pertaining to recommendations or estimates made on securities other than the primary\nsubject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at https://research.db.com/Research/Disclosures/\nEquityResearchDisclosures. Aside from within this report, important risk and conflict disclosures can also be found at https://research.db.com/Research/Disclosures/Disclaimer. Investors\nare strongly encouraged to review this information before investing.\n\n\nImportant Disclosures Required by U.S. Regulators\nDisclosures marked with an asterisk may also be required by at least one jurisdiction in addition to the United States.See\nImportant Disclosures Required by Non-US Regulators and Explanatory Notes.\n\n\nImportant Disclosures Required by Non-U.S. Regulators\nDisclosures marked with an asterisk may also be required by at least one jurisdiction in addition to the United States.See\nImportant Disclosures Required by Non-US Regulators and Explanatory Notes.\n\nFor disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this\nresearch, please see the most recently published company report or visit our global disclosure look-up page on our website\nat https://research.db.com/Research/Disclosures/EquityResearchDisclosures. Aside from within this report, important risk\nand conflict disclosures can also be found at https://research.db.com/Research/Disclosures/Disclaimer. Investors are strongly\nencouraged to review this information before investing.\n\nAnalyst Certification\nThe views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s) about the subject\nissuer and the securities of the issuer. In addition, the undersigned lead analyst(s) has not and will not receive any\ncompensation for providing a specific recommendation or view in this report. Justin Bowers.\n\n\n\n\nPage 4 Deutsche Bank Securities Inc.\n\f Case 1:25-cv-04630-KPF Document 65-14 Filed 01/28/26 Page 6 of 11\n11 March 2024\nLife Science Tools & Diagnostics\nFortrea\n\n\n Historical recommendations and target price: Fortrea (FTRE.OQ)\n(as of 03/08/2024)\n 50.00 Current Recommendations\n Buy\n Hold\n 40.00 Sell\n 1 Not Rated\n Suspended Rating\n Security price\n\n\n\n\n 30.00 ** Analyst is no longer at\n Deutsche Bank\n\n 20.00\n\n\n\n 10.00\n\n\n\n 0.00\n Jul '23 Aug '23 Sep '23 Oct '23 Nov '23 Dec '23 Jan '24 Feb '24 Mar '24\n Date\n\n1. 03/06/2024 Hold, Target Price Change USD 36.00, Current Price\n USD 36.38 Justin Bowers\n\u00a7\u00a7\u00a7\u00a7$$$$$\u00a7\u00a7\u00a7\u00a7\u00a7\n\n\n\n\n Equity Rating Key Equity rating dispersion and banking relationships\n\nBuy: Based on a current 12-month view of TSR, we\nrecommend that investors buy the stock.\nSell: Based on a current 12-month view of TSR, we\nrecommend that investors sell the stock.\nHold: We take a neutral view on the stock 12-months out and,\nbased on this time horizon, do not recommend either a Buy or\nSell.\nTSR = Total Shareholder Return. Percentage change in share\nprice from current price to projected target price plus\nprojected dividend yield\n\nNewly issued research recommendations and target prices\nsupersede previously published research.\n\n\n\n\nDeutsche Bank Securities Inc. Page 5\n\f Case 1:25-cv-04630-KPF Document 65-14 Filed 01/28/26 Page 7 of 11\n11 March 2024\nLife Science Tools & Diagnostics\nFortrea\n\n\n\nAdditional Information\nThe information and opinions in this report were prepared by Deutsche Bank AG or one of its affiliates (collectively 'Deutsche\nBank'). Though the information herein is believed to be reliable and has been obtained from public sources believed to be\nreliable, Deutsche Bank makes no representation as to its accuracy or completeness. Hyperlinks to third-party websites in this\nreport are provided for reader convenience only. Deutsche Bank neither endorses the content nor is responsible for the\naccuracy or security controls of those websites.\n\nEffective 13 October 2023, Deutsche Bank AG acquired Numis Corporation Plc and its subsidiaries (the \"Numis Group\"). Numis\nSecurities Limited (\"NSL\") is a member of the Numis Group and a firm authorised and regulated by the Financial Conduct\nAuthority (Firm Reference Number: 144822). Deutsche Bank AG provides clients with, amongst other services, Investment\nResearch services. NSL provides clients with, amongst other services, non-independent research services.\n\nDuring an initial integration process, the research departments of Deutsche Bank AG and NSL will remain operationally\ndistinct. Consequently, disclosures relating to conflicts of interest that may exist for Deutsche Bank AG and/or its affiliates do\nnot currently take into account the business and activities of the Numis Group. The conflicts of interest that may exist for the\nNumis Group, in relation to the provision of research, can be found on the Numis website at https://www.numis.com/legal-\nand-regulatory/conditions-and-disclaimers-that-govern-research-contained-in-the-research-pages-of-this-website. The\ndisclosures on this Numis webpage do not currently take into account the business and activities of Deutsche Bank AG and/or\nits affiliates which are not members of the Numis Group.\n\nAdditionally, any detailed conflicts of interest disclosures pertaining to a specific recommendation or estimate made on a\nsecurity mentioned in this report or which have been included in our most recently published company report or found on our\nglobal disclosure look-up page, do not currently take into account the business and activities of the Numis Group. Instead,\ndetails of detailed conflicts of interest disclosures for the Numis Group, relating to specific issuers or securities, can be found\nat: https://library.numis.com/regulatory_notice. The issuer/security-specific conflict of interest disclosures on this Numis\nwebpage do not take into account the business and activities of Deutsche Bank and/or its affiliates which are not members\nof the Numis Group.\n\nIf you use the services of Deutsche Bank in connection with a purchase or sale of a security that is discussed in this report, or\nis included or discussed in another communication (oral or written) from a Deutsche Bank analyst, Deutsche Bank may act as\nprincipal for its own account or as agent for another person.\n\nDeutsche Bank may consider this report in deciding to trade as principal. It may also engage in transactions, for its own account\nor with customers, in a manner inconsistent with the views taken in this research report. 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In addition to Catalyst Calls, analysts may occasionally discuss with our clients, and with\nDeutsche Bank salespersons and traders, trading strategies or ideas that reference catalysts or events that may have a near-\nterm or medium-term impact on the market price of the securities discussed in this report, which impact may be directionally\ncounter to the analysts' current 12-month view of total return or investment return as described herein. Deutsche Bank has\nno obligation to update, modify or amend this report or to otherwise notify a recipient thereof if an opinion, forecast or estimate\nchanges or becomes inaccurate. Coverage and the frequency of changes in market conditions and in both general and\ncompany-specific economic prospects make it difficult to update research at defined intervals. Updates are at the sole\ndiscretion of the coverage analyst or of the Research Department Management, and the majority of reports are published at\nirregular intervals. This report is provided for informational purposes only and does not take into account the particular\ninvestment objectives, financial situations, or needs of individual clients. It is not an offer or a solicitation of an offer to buy or\nsell any financial instruments or to participate in any particular trading strategy. Target prices are inherently imprecise and a\nproduct of the analyst's judgment. The financial instruments discussed in this report may not be suitable for all investors, and\ninvestors must make their own informed investment decisions. Prices and availability of financial instruments are subject to\nchange without notice, and investment transactions can lead to losses as a result of price fluctuations and other factors. If a\nfinancial instrument is denominated in a currency other than an investor's currency, a change in exchange rates may adversely\naffect the investment. Past performance is not necessarily indicative of future results. Performance calculations exclude\ntransaction costs, unless otherwise indicated. Unless otherwise indicated, prices are current as of the end of the previous\ntrading session and are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is also sourced from\nDeutsche Bank, subject companies, and other parties.\n\n\n\nPage 6 Deutsche Bank Securities Inc.\n\f Case 1:25-cv-04630-KPF Document 65-14 Filed 01/28/26 Page 8 of 11\n11 March 2024\nLife Science Tools & Diagnostics\nFortrea\n\n\nThe Deutsche Bank Research Department is independent of other business divisions of the Bank. Details regarding our\norganizational arrangements and information barriers we have to prevent and avoid conflicts of interest with respect to our\nresearch are available on our website (https://research.db.com/Research/) under Disclaimer.\n\nMacroeconomic fluctuations often account for most of the risks associated with exposures to instruments that promise to pay\nfixed or variable interest rates. For an investor who is long fixed-rate instruments (thus receiving these cash flows), increases\nin interest rates naturally lift the discount factors applied to the expected cash flows and thus cause a loss. The longer the\nmaturity of a certain cash flow and the higher the move in the discount factor, the higher will be the loss. Upside surprises in\ninflation, fiscal funding needs, and FX depreciation rates are among the most common adverse macroeconomic shocks to\nreceivers. But counterparty exposure, issuer creditworthiness, client segmentation, regulation (including changes in assets\nholding limits for different types of investors), changes in tax policies, currency convertibility (which may constrain currency\nconversion, repatriation of profits and/or liquidation of positions), and settlement issues related to local clearing houses are\nalso important risk factors. The sensitivity of fixed-income instruments to macroeconomic shocks may be mitigated by\nindexing the contracted cash flows to inflation, to FX depreciation, or to specified interest rates - these are common in\nemerging markets. The index fixings may - by construction - lag or mis-measure the actual move in the underlying variables\nthey are intended to track. 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Aside from within this report, important conflict disclosures can also be found at https://\nresearch.db.com/Research/ on each company's research page. Investors are strongly encouraged to review this information\nbefore investing.\n\nDeutsche Bank (which includes Deutsche Bank AG, its branches and affiliated companies) is not acting as a financial adviser,\nconsultant or fiduciary to you or any of your agents (collectively, \"You\" or \"Your\") with respect to any information provided in\nthis report. Deutsche Bank does not provide investment, legal, tax or accounting advice, Deutsche Bank is not acting as your\nimpartial adviser, and does not express any opinion or recommendation whatsoever as to any strategies, products or any other\ninformation presented in the materials. 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If this\nis not the case, or if You are an IRA or other retail investor receiving this directly from us, we ask that you inform us immediately.\n\nIn July 2018, Deutsche Bank revised its rating system for short term ideas whereby the branding has been changed to Catalyst\nCalls (\"CC\") from SOLAR ideas; the rating categories for Catalyst Calls originated in the Americas region have been made\nconsistent with the categories used by Analysts globally; and the effective time period for CCs has been reduced from a\nmaximum of 180 days to 90 days.\n\nUnited States: Approved and/or distributed by Deutsche Bank Securities Incorporated, a member of FINRA, NFA and SIPC.\nAnalysts located outside of the United States are employed by non-US affiliates that are not subject to FINRA regulations.\n\nEuropean Economic Area (exc. 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Details about the extent\nof our authorisation and regulation are available on request.\n\nHong Kong SAR: Distributed by Deutsche Bank AG, Hong Kong Branch except for any research content relating to futures\ncontracts within the meaning of the Hong Kong Securities and Futures Ordinance Cap. 571. Research reports on such futures\ncontracts are not intended for access by persons who are located, incorporated, constituted or resident in Hong Kong. The\nauthor(s) of a research report may not be licensed to carry on regulated activities in Hong Kong and, if not licensed, do not hold\nthemselves out as being able to do so. The provisions set out above in the 'Additional Information' section shall apply to the\nfullest extent permissible by local laws and regulations, including without limitation the Code of Conduct for Persons Licensed\nor Registered with the Securities and Futures Commission. 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Registration granted by SEBI and certification from NISM in no way guarantee performance of\nDEIPL or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all\nthe related documents carefully before investing. DEIPL may have received administrative warnings from the SEBI for\nbreaches of Indian regulations. Deutsche Bank and/or its affiliate(s) may have debt holdings or positions in the subject\ncompany. With regard to information on associates, please refer to the \"Shareholdings\" section in the Annual Report at: https://\nwww.db.com/ir/en/annual-reports.htm.\n\nJapan: Approved and/or distributed by Deutsche Securities Inc.(DSI). Registration number - Registered as a financial\ninstruments dealer by the Head of the Kanto Local Finance Bureau (Kinsho) No. 117. Member of associations: JSDA, Type II\nFinancial Instruments Firms Association and The Financial Futures Association of Japan. 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Before deciding on the purchase of financial\nproducts and/or services, customers should carefully read the relevant disclosures, prospectuses and other documentation.\n'Moody's', 'Standard Poor's', and 'Fitch' mentioned in this report are not registered credit rating agencies in Japan unless\nJapan or 'Nippon' is specifically designated in the name of the entity. Reports on Japanese listed companies not written by\nanalysts of DSI are written by Deutsche Bank Group's analysts with the coverage companies specified by DSI. Some of the\nforeign securities stated on this report are not disclosed according to the Financial Instruments and Exchange Law of Japan.\nTarget prices set by Deutsche Bank's equity analysts are based on a 12-month forecast period.\n\nKorea: Distributed by Deutsche Securities Korea Co.\n\nSouth Africa: Deutsche Bank AG Johannesburg is incorporated in the Federal Republic of Germany (Branch Register Number\nin South Africa: 1998/003298/10).\n\nSingapore: This report is issued by Deutsche Bank AG, Singapore Branch (One Raffles Quay #18-00 South Tower Singapore\n048583, 65 6423 8001), which may be contacted in respect of any matters arising from, or in connection with, this report.\nWhere this report is issued or promulgated by Deutsche Bank in Singapore to a person who is not an accredited investor, expert\ninvestor or institutional investor (as defined in the applicable Singapore laws and regulations), they accept legal responsibility\nto such person for its contents.\n\nTaiwan: Information on securities/investments that trade in Taiwan is for your reference only. Readers should independently\nevaluate investment risks and are solely responsible for their investment decisions. Deutsche Bank research may not be\ndistributed to the Taiwan public media or quoted or used by the Taiwan public media without written consent. Information on\nsecurities/instruments that do not trade in Taiwan is for informational purposes only and is not to be construed as a\nrecommendation to trade in such securities/instruments.\n\nQatar: Deutsche Bank AG in the Qatar Financial Centre (registered no. 00032) is regulated by the Qatar Financial Centre\nRegulatory Authority. Deutsche Bank AG - QFC Branch may undertake only the financial services activities that fall within the\nscope of its existing QFCRA license. Its principal place of business in the QFC: Qatar Financial Centre, Tower, West Bay, Level\n5, PO Box 14928, Doha, Qatar. This information has been distributed by Deutsche Bank AG. Related financial products or\nservices are only available only to Business Customers, as defined by the Qatar Financial Centre Regulatory Authority.\n\n\n\nPage 8 Deutsche Bank Securities Inc.\n\f Case 1:25-cv-04630-KPF Document 65-14 Filed 01/28/26 Page 10 of 11\n11 March 2024\nLife Science Tools & Diagnostics\nFortrea\n\n\nRussia: The information, interpretation and opinions submitted herein are not in the context of, and do not constitute, any\nappraisal or evaluation activity requiring a license in the Russian Federation.\n\nKingdom of Saudi Arabia: Deutsche Securities Saudi Arabia (DSSA) is a closed joint stock company authorized by the Capital\nMarket Authority of the Kingdom of Saudi Arabia with a license number (No. 37-07073) to conduct the following business\nactivities: Dealing, Arranging, Advising, and Custody activities. DSSA registered office is Faisaliah Tower, 17th Floor, King\nFahad Road - Al Olaya District Riyadh, Kingdom of Saudi Arabia P.O. Box 301806.\n\nUnited Arab Emirates: Deutsche Bank AG in the Dubai International Financial Centre (registered no. 00045) is regulated by\nthe Dubai Financial Services Authority. Deutsche Bank AG - DIFC Branch may only undertake the financial services activities\nthat fall within the scope of its existing DFSA license. Principal place of business in the DIFC: Dubai International Financial\nCentre, The Gate Village, Building 5, PO Box 504902, Dubai, U.A.E. This information has been distributed by Deutsche Bank\nAG. Related financial products or services are available only to Professional Clients, as defined by the Dubai Financial Services\nAuthority.\n\nAustralia and New Zealand: This research is intended only for 'wholesale clients' within the meaning of the Australian\nCorporations Act and New Zealand Financial Advisors Act, respectively. Please refer to Australia-specific research disclosures\nand related information at https://www.dbresearch.com/PROD/RPS_EN-PROD/PROD0000000000521304.xhtml . Where\nresearch refers to any particular financial product recipients of the research should consider any product disclosure statement,\nprospectus or other applicable disclosure document before making any decision about whether to acquire the product. In\npreparing this report, the primary analyst or an individual who assisted in the preparation of this report has likely been in contact\nwith the company that is the subject of this research for confirmation/clarification of data, facts, statements, permission to use\ncompany-sourced material in the report, and/or site-visit attendance. Without prior approval from Research Management,\nanalysts may not accept from current or potential Banking clients the costs of travel, accommodations, or other expenses\nincurred by analysts attending site visits, conferences, social events, and the like. Similarly, without prior approval from\nResearch Management and Anti-Bribery and Corruption (\"ABC\") team, analysts may not accept perks or other items of value\nfor their personal use from issuers they cover.\n\nAdditional information relative to securities, other financial products or issuers discussed in this report is available upon\nrequest. This report may not be reproduced, distributed or published without Deutsche Bank's prior written consent.\n\nBacktested, hypothetical or simulated performance results have inherent limitations. Unlike an actual performance record\nbased on trading actual client portfolios, simulated results are achieved by means of the retroactive application of a backtested\nmodel itself designed with the benefit of hindsight. Taking into account historical events the backtesting of performance also\ndiffers from actual account performance because an actual investment strategy may be adjusted any time, for any reason,\nincluding a response to material, economic or market factors. The backtested performance includes hypothetical results that\ndo not reflect the reinvestment of dividends and other earnings or the deduction of advisory fees, brokerage or other\ncommissions, and any other expenses that a client would have paid or actually paid. No representation is made that any trading\nstrategy or account will or is likely to achieve profits or losses similar to those shown. Alternative modeling techniques or\nassumptions might produce significantly different results and prove to be more appropriate. Past hypothetical backtest results\nare neither an indicator nor guarantee of future returns. Actual results will vary, perhaps materially, from the analysis.\n\nThe method for computing individual E,S,G and composite ESG scores set forth herein is a novel method developed by the\nResearch department within Deutsche Bank AG, computed using a systematic approach without human intervention.\nDifferent data providers, market sectors and geographies approach ESG analysis and incorporate the findings in a variety of\nways. As such, the ESG scores referred to herein may differ from equivalent ratings developed and implemented by other ESG\ndata providers in the market and may also differ from equivalent ratings developed and implemented by other divisions within\nthe Deutsche Bank Group. Such ESG scores also differ from other ratings and rankings that have historically been applied in\nresearch reports published by Deutsche Bank AG. Further, such ESG scores do not represent a formal or official view of\nDeutsche Bank AG. It should be noted that the decision to incorporate ESG factors into any investment strategy may inhibit\nthe ability to participate in certain investment opportunities that otherwise would be consistent with your investment objective\nand other principal investment strategies. The returns on a portfolio consisting primarily of sustainable investments may be\nlower or higher than portfolios where ESG factors, exclusions, or other sustainability issues are not considered, and the\ninvestment opportunities available to such portfolios may differ. Companies may not necessarily meet high performance\nstandards on all aspects of ESG or sustainable investing issues; there is also no guarantee that any company will meet\nexpectations in connection with corporate responsibility, sustainability, and/or impact performance.\n\nCopyright \u00a9 2024 Deutsche Bank AG\n\n\n\n\nDeutsche Bank Securities Inc. Page 9\n\f Case 1:25-cv-04630-KPF Document 65-14 Filed 01/28/26 Page 11 of 11\n\n\n\n\n David Folkerts-Landau\n Group Chief Economist and Global Head of Research\n\n Pam Finelli Steve Pollard Jim Reid Tim Rokossa\n Global Chief Operating Officer Global Head of Company Global Head of Head of Germany\n Research Research and Sales Macro and Thematic Research Research\n\n\n Gerry Gallagher Matthew Barnard Peter Milliken Debbie Jones\n Head of European Head of Americas Head of APAC Global Head of\n Company Research Company Research Company Research Company Research ESG\n\n\n Sameer Goel Francis Yared George Saravelos Peter Hooper\n Global Head of EM & APAC Global Head of Rates Research Global Head of FX Research Vice-Chair of Research\n Research\n\n\nInternational Production Locations\nDeutsche Bank AG Deutsche Bank AG Deutsche Bank AG Deutsche Securities Inc.\nDeutsche Bank Place Equity Research Filiale Hongkong 2-11-1 Nagatacho\nLevel 16 Mainzer Landstrasse 11-17 International Commerce Centre, Sanno Park Tower\nCorner of Hunter & Phillip Streets 60329 Frankfurt am Main 1 Austin Road West,Kowloon, Chiyoda-ku, Tokyo 100-6171\nSydney, NSW 2000 Germany Hong Kong Japan\nAustralia Tel: (49) 69 910 00 Tel: (852) 2203 8888 Tel: (81) 3 5156 6000\nTel: (61) 2 8258 1234\nDeutsche Bank AG Deutsche Bank Securities Inc.\n21 Moorfields The Deutsche Bank Center\nLondon EC2Y 9DB 1 Columbus Circle\nUnited Kingdom New York, NY 10019\nTel: (44) 20 7545 8000 Tel: (1) 212 250 2500\n\f","ocr_status":1,"date_upload":"2026-05-15T01:40:17.590756-07:00","document_number":"65","attachment_number":14,"pacer_doc_id":"127038970496","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit N - Deutsche Bank Research Analyst Report (Mar. 11, 2024)","acms_document_guid":""}],"date_created":"2026-01-28T21:07:11.928670-08:00","date_modified":"2026-01-28T21:07:11.940110-08:00","date_filed":"2026-01-28","time_filed":"22:32:53","entry_number":65,"recap_sequence_number":"2026-01-28.001","pacer_sequence_number":245,"description":"","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/451815588/","id":451815588,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70441800/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/466667755/","id":466667755,"tags":[],"absolute_url":"","date_created":"2026-01-28T00:43:11.734108-08:00","date_modified":"2026-01-28T00:43:11.757134-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2026-01-28T00:43:11.707755-08:00","date_modified":"2026-01-28T00:43:11.707769-08:00","date_filed":"2025-12-29","time_filed":null,"entry_number":null,"recap_sequence_number":"2025-12-29.001","pacer_sequence_number":null,"description":"***NOTICE TO COURT REGARDING PROPOSED ORDER. 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