Good morning, ladies and gentlemen. I'm David King, Chairman of the Board of Laboratory Corporation of America Holdings and Chairman of the Annual Meeting. I'm happy to welcome you to the Annual Meeting of Shareholders. I'd also like to welcome those shareholders and other interested parties who are listening to this meeting via the Internet. Will the meeting now please come to order? Will all persons holding proxies to be recorded, please hand them to the ushers at this time. They will deliver them to the Inspector of Elections, and the Secretary will record the proceedings. Are there any proxies at this time? I would now like to introduce you to the members of the Board of Directors and our officers who are present today. I'm going to ask the directors, as I recognize them, to please stand: Kerrii B. Anderson, Jean-Luc Bélingard, Wendy E. Lane, Robert E. Mittelstaedt, Jr., Peter M.
Neupert, Arthur H. Rubenstein, Adam H. Schechter, M. Keith Weikel, R. Sanders Williams. We have a terrific board, and I'm delighted that they're all able to be here to attend the Annual Meeting and see you shareholders today. I'd now like to acknowledge our senior officers present today and again ask you to stand: Jay Boyle, Executive Vice President and Chief Operating Officer; Brad Hayes, Executive Vice President and Chief Financial Officer; Mark Brecher, Senior Vice President and Chief Medical Officer; Sam Eberts, Senior Vice President and Chief Legal Officer; Adam Feinstein, Senior Vice President, Corporate Development and Strategic Planning; Lisa Hoffman Starr, Senior Vice President, Human Resources. I see a number of our other senior officers here in the audience today as well. Also in the audience are Crawford Pounds and Joshua Adams, representing PricewaterhouseCoopers LLP, the independent accountants of the company.
They will be available to answer appropriate questions during the general question and answer period at the end of this meeting. The Board of Directors set March 11, 2013, as the date of record for this shareholders' meeting. We have here a record of shareholders as of that date. A duplicate record has been on file at the office of the company for the last 10 days, available for inspection by any shareholder at any time during usual business hours. I have been advised by the Inspector of Elections that immediately prior to the commencement of this meeting, at least 89% of the company's issued and outstanding shares are represented by proxy at today's meeting. Since a majority of the company's shares is represented here today, a quorum is present, and the business of the meeting may proceed.
I would like to ask that any shareholder making a motion or who seconds a motion, please state your name so that the record of our meeting will be complete. The Secretary has informed me that the notice for the meeting was duly and properly mailed. The Secretary will file affidavits of mailing of the notice of meeting, proxy card, and proxy statement with all records of the meeting. There are three items on the agenda to be voted on today: one, the election of directors; two, the non-binding advisory vote to approve executive compensation; and three, the ratification of the appointment of PricewaterhouseCoopers LLP as Laboratory Corporation of America Holdings independent accountants for the year ended December 31st, 2013. There will be a discussion period relating to each item immediately after its introduction.
We will attempt to ensure that everyone who then wishes to speak about the item will have a chance to be heard, and representatives of management will respond to questions. However, in the interest of time and because each of these issues has been fully discussed in the proxy statement, discussion on each item will be limited to five minutes. A ballot is available for stockholders who wish to vote in person. If you send in your proxy, you will have no need for a ballot unless you wish to change your vote. At the end of the discussion period relating to the appointment of independent accountants, the ballots will be collected and delivered to the Inspector of Elections. The company has appointed Steve Anderson to be the Inspector of Elections. He is familiar with the duties and responsibilities of an Inspector of Elections at a stockholders' meeting.
He will report the results after all proxies and ballots have been tabulated. Although ballots are available, it will facilitate the job of the Inspector in counting the votes if you use a proxy card. Does anyone wish to have a ballot or proxy card at this time? Seeing none, the first item is the election of directors. The nominees and their qualifications are described in the proxy statement dated March 28, 2013, available to all stockholders of record as of March 11, 2013. Mr. Hayes, will you please present the proposal to elect directors?
I move that the directors be elected pursuant to the following resolution: resolved that each of David P. King, Kerrii B. Anderson, Jean-Luc Bélingard, Wendy E. Lane, Robert E. Mittelstaedt, Jr., Peter M. Neupert, Arthur H. Rubenstein, Adam H. Schechter, M. Keith Weikel, and R. Sanders Williams be and hereby is elected as a director of the company to serve until his or her successor is duly elected and qualified.
I second the motion.
The meeting is now open for discussion relating to the election of directors. Is there any discussion? Seeing none, the second item is the non-binding advisory vote to approve executive compensation. Mr. Hayes, will you please present the proposal to approve executive compensation?
I move that the company's executive compensation be approved pursuant to the non-binding advisory vote and the following resolution: Resolved that the company's executive compensation be approved.
I second the motion.
The meeting is open for discussion relating to the approval of the company's executive compensation. Is there any discussion? The third item is the ratification of the appointment of independent accountants for 2013. Mr. Hayes, will you please present the proposal to ratify the selection of accountants?
I move to ratify the appointment of the independent accountants for 2013 pursuant to the following resolution: Resolved that the appointment of PricewaterhouseCoopers LLP as independent accountants for the fiscal year ending December 31st, 2013, be ratified.
I second the motion.
The meeting is open for discussion relating to the selection of independent accountants. Is there any discussion? Seeing none, I declare the polls shall now be open for voting. Will all those who wish to vote please mark and sign their proxies or ballots and hand them to the Inspector of Elections? As I mentioned earlier, if you have already given your proxy, you do not need to sign a ballot or a new proxy card unless you wish to change your vote. Are there any proxies or ballots to be collected at this time? Seeing none, the Inspector of Elections will please report. I am advised that the Inspector of Elections has completed the count of the votes and is ready to report the results to the Secretary. Will the Secretary please present the report of the Inspector of Elections?
The Inspector of Elections has reported to me that the shares of Laboratory Corporation of America Holdings Common Stock outstanding on the record date and represented at the meeting, at least 93% of the shares voted are present in person or by proxy and have voted for the election of the nominated directors. At least 92% of the shares voted are present in person or by proxy and have voted to approve the company's executive compensation, and at least 98% have voted for the ratification of the appointment of independent accountants for 2013. Accordingly, the motions for the election of the nominated directors, the approval of the company's executive compensation, and the ratification of the appointment of independent accountants for 2013 are passed. A final and complete tally of the votes will be provided by the Inspector of Elections.
Thank you, Mr. Eberts. The Secretary will file the final report of the Inspector of Election with the records of the meeting in the record books of the company. This closes the formal portion of the meeting. I would now like to make a brief presentation on the company, after which I would be happy to answer any questions you may have. The presentation is also available via 's website. As we think about our company and the long-term opportunity, we are at the hub of the development and evolution of healthcare. We service a highly attractive market. We have a clear stated mission, a well-developed and executed five-pillar strategy, and strong and solid financial fundamentals. We are a premier healthcare services company at the hub of where healthcare is going.
Our mission statement is to be a trusted knowledge partner for our stakeholders, leading to growth in our business and continued creation of shareholder value. How do we do this? We execute this through our five-pillar strategy. The first pillar of our strategy is that we deploy our capital to investments that enhance our business and return capital to shareholders. Over the years 2001 to 2012, you see that we have significantly increased our free cash flow with a 10.3% free cash flow CAGR. The black line is the share count, so we have, over that period of time, reduced our share count, generating very solid growth in free cash flow per share. As you see from the blue line, our operating cash flow continues to be exceptionally strong.
As a result, we have the resources to invest in the business, grow the company, and return capital to our shareholders. If you look at how we have deployed our capital over the last five years, approximately since 2008, we have 50/50 split the cash that we have generated between acquisitions and repurchase of shares, which is how we return capital to shareholders. Since 2008, we've deployed over $2 billion toward repurchase of shares, which is a direct return of capital to our shareholders, and about $2 billion toward significant acquisitions such as Genzyme Genetics, Orchid Cellmark, and MEDTOX Scientific. Our second pillar is that we enhance our IT capabilities to improve the physician and patient experience. We've spent a considerable amount of resources and effort building out our LabCorp Beacon platform.
What that gives us is a rich web portal and mobility framework for physicians, enhanced efficiency and service in terms of online appointment scheduling, the ability for physicians to do express orders, our AccuDraw tool, our trademarked AccuDraw tool, which allows our phlebotomists to consistently draw the right amount of specimen in the right tube at the right time for the patient, integrated results and enhanced our reporting capabilities, great analytic tools for our physicians, and a service-oriented architecture that allows us to build out in a modular fashion on a very stable platform. We also have developed and implemented this year the LabCorp Patient Portal, so patients can receive their lab results, make online appointments, and pay bills, and do a variety of other convenient services, including manage their own health from our patient-facing web portal.
Our third pillar is continuing to improve efficiency to offer the most compelling value in laboratory services. We are always looking at the cost side of the equation. We are the only laboratory of our size and scale that is completely standardized in terms of our instrumentation, our billing system, our lab system across all of our platforms. Any LabCorp lab that runs a test for you, same instruments, same reference ranges, same values for the doctor, which allows consistency in patient care. We've also optimized our supply chain.
We are intently focused on automating the pre-analytics, and on the right-hand side, you see our Propel splitting and sorting robot, which is operational in our Burlington facility, which allows us to process specimens more efficiently, reduce turnaround time, reduce reagent usage, reduce the amount of specimen that we use, and provide faster, quicker, better service to our physicians and patients. Our fourth pillar is scientific innovation at appropriate pricing. This is a list of some of the major advances by LabCorp in companion diagnostics, personalized medicine, and women's health.
These are areas in which we continue to lead the industry, first to market, or when we bring new tests to market, we look at ourselves as the gold standard for doing the clinical trial, conducting the validation, bringing innovation to the market, but in a way that is beneficial to patients, cost-effective for our payer partners, and allows physicians to deliver better care. Finally, our fifth pillar, which is development over the long term of our knowledge services. Clearly, healthcare is changing fundamentally, and the center of gravity is changing as we move away from the independent physician office toward health systems, integrated delivery networks, ACOs, patient-centered medical homes, mega practices where physician practices are 500 doctors, and managed care collaboration with and even ownership of all of the above varieties of service delivery methods.
We think about the things that we have done over time to build our position in the system. On the left-hand side are the acquisitions, the IT capabilities, and the science that are core values of our five-pillar strategy. On the right-hand side are innovation, the innovation that we have delivered. Beacon LBS, which is a decision support tool at the point of lab orders. Our Litholink decision support at the point of results tool focused on kidney stones, chronic kidney disease, cardiovascular, and bone disease. Our ability to deliver interpretations, which will grow over time as we move into next-generation sequencing technology, but now is focused not only around our IT but also around the genetic counselors who we acquired as part of the Genzyme Genetics acquisitions.
The educational tools and the rich content that we will populate Beacon and our patient portal with for physicians and patients. Obviously, we're very proud of our financial performance, our five-year revenue CAGR of almost 7%, and our five-year EPS CAGR of almost 9%. Our aspiration over time is to continue to show not only strong revenue but strong earnings growth as we deliver value to our shareholders on the top line and the bottom line. That concludes my presentation, and at this time, I would be happy to answer any questions you may have. We will attempt to ensure that everyone who wishes to speak will have a chance to be heard, and representatives of management will respond to questions.
In the interest of time, we will ask that each individual ask one question at a time, and we will limit discussion on each question to five minutes. As a reminder, the Q&A session is being webcast live this morning. Are there any questions at this time? Yes, sir. If you'll wait for the microphone, that way they'll be able to hear you over the webcast.
I'm Pat Raffert from Warrenton, North Carolina. Good morning.
Good morning.
The new healthcare bill and operation seems to be causing many of the hospitals and other operations that we serve to go back and start rebeefing up their operations. How competitive is that, and how much of a threat from the new hospital healthcare laws and all changes is it to us on our cost-competitive basis?
I think from a cost-competitiveness perspective, we are far superior to hospitals and smaller providers just because of our size, our scale, and our efficiency. We have certainly seen over the last couple of years hospitals acquiring physician practices. As you may remember, we went through this trend back in the 1980s. As hospitals acquire physician practices, sometimes they will insource the laboratory services that have been going to independent laboratories. In the long run, though, the transition in payment models from fee-for-service to bundled payment or value-based payment models and our breadth of menu, our cost efficiency, and our scale will cause the market to move back to us.
In the long term, we will be better positioned to gain share from hospitals and other competitors because of the development of our knowledge tools, because of our size, because of our scale, because of our efficiency, because of the breadth of our test menu, and because as other providers start to feel the financial pressure of having to care for patients with payment based on outcomes and not on a fee-for-service system, we will be a very, very attractive partner to be able to provide the highest quality laboratory services at the most effective cost. It's a very good question. Thank you. Any other questions at this time? If not, I will entertain a motion to adjourn the meeting.
I move that the meeting be adjourned.
I second the motion.
Will all in favor please say aye?
Aye.
Any opposed? The meeting is adjourned. Thank you all for attending this morning. Have a great day.