DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION | 9 Months Ended | |
Sep. 30, 2013 | Oct. 18, 2013 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 30-Sep-13 | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | QUEST DIAGNOSTICS INC | |
Entity Central Index Key | 1022079 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 145,426,953 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Statement [Abstract] | ||||
Net revenues | $1,787,140 | $1,821,748 | $5,389,527 | $5,608,797 |
Operating costs and expenses: | ||||
Cost of services | 1,088,503 | 1,081,017 | 3,274,013 | 3,292,105 |
Selling, general and administrative | 422,963 | 416,854 | 1,289,370 | 1,324,191 |
Amortization of intangible assets | 20,158 | 18,577 | 59,198 | 56,210 |
Gain on sale of royalty rights | -474,138 | 0 | -474,138 | 0 |
Other operating expense, net | 40,177 | 680 | 35,892 | 500 |
Total operating costs and expenses | 1,097,663 | 1,517,128 | 4,184,335 | 4,673,006 |
Operating income | 689,477 | 304,620 | 1,205,192 | 935,791 |
Other income (expense): | ||||
Interest expense, net | -39,968 | -40,809 | -119,754 | -124,661 |
Equity earnings in unconsolidated joint ventures | 4,904 | 4,662 | 18,303 | 19,643 |
Other income, net | 2,922 | 2,502 | 6,571 | 6,003 |
Total non-operating expenses, net | -32,142 | -33,645 | -94,880 | -99,015 |
Income from continuing operations before taxes | 657,335 | 270,975 | 1,110,312 | 836,776 |
Income tax expense | 245,874 | 103,978 | 413,702 | 320,266 |
Income from continuing operations | 411,461 | 166,997 | 696,610 | 516,510 |
Income from discontinued operations, net of taxes | 2,406 | 4,541 | 35,497 | 10,016 |
Net income | 413,867 | 171,538 | 732,107 | 526,526 |
Less: Net income attributable to noncontrolling interests | 8,724 | 8,456 | 25,717 | 26,621 |
Net income attributable to Quest Diagnostics | 405,143 | 163,082 | 706,390 | 499,905 |
Amounts attributable to Quest Diagnostics' stockholders: | ||||
Income from continuing operations | 402,737 | 158,541 | 670,893 | 489,889 |
Income from discontinued operations, net of taxes | 2,406 | 4,541 | 35,497 | 10,016 |
Net income attributable to Quest Diagnostics | $405,143 | $163,082 | $706,390 | $499,905 |
Earnings per share attributable to Quest Diagnostics' common stockholders - basic: | ||||
Income from continuing operations | $2.68 | $0.99 | $4.36 | $3.07 |
Income from discontinued operations, per basic share | $0.02 | $0.03 | $0.23 | $0.07 |
Net income | $2.70 | $1.02 | $4.59 | $3.14 |
Earnings per share attributable to Quest Diagnostics' common stockholders - diluted: | ||||
Income from continuing operations | $2.66 | $0.98 | $4.32 | $3.04 |
Income from discontinued operations, per diluted share | $0.02 | $0.03 | $0.23 | $0.07 |
Net income | $2.68 | $1.01 | $4.55 | $3.11 |
Weighted average common shares outstanding: | ||||
Basic | 149,625 | 158,783 | 153,477 | 158,518 |
Diluted | 150,920 | 160,702 | 154,795 | 160,064 |
Dividends per common share | $0.30 | $0.17 | $0.90 | $0.51 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $413,867 | $171,538 | $732,107 | $526,526 |
Other comprehensive income (loss): | ||||
Currency translation | 4,592 | 22,288 | -26,059 | 21,321 |
Market valuation, net of tax | -31 | -161 | 274 | 84 |
Net deferred loss on cash flow hedges, net of tax | 210 | 210 | 630 | 630 |
Other, net of tax | 10 | 0 | 2,847 | 0 |
Other comprehensive income (loss) | 4,781 | 22,337 | -22,308 | 22,035 |
Comprehensive income | 418,648 | 193,875 | 709,799 | 548,561 |
Less: Comprehensive income attributable to noncontrolling interests | 8,724 | 8,456 | 25,717 | 26,621 |
Comprehensive income attributable to Quest Diagnostics | $409,924 | $185,419 | $684,082 | $521,940 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets | ||
Cash and cash equivalents | $158,280 | $295,586 |
Accounts receivable, net of allowance for doubtful accounts of $238,865 and $235,747 at September 30, 2013 and December 31, 2012, respectively | 920,833 | 867,010 |
Inventories | 85,187 | 93,050 |
Deferred income taxes | 152,831 | 174,209 |
Prepaid expenses and other current assets | 108,517 | 90,950 |
Current assets held for sale | 0 | 40,192 |
Total current assets | 1,425,648 | 1,560,997 |
Property, plant and equipment, net | 749,355 | 755,831 |
Goodwill | 5,628,808 | 5,535,848 |
Intangible assets, net | 903,899 | 872,172 |
Other assets | 219,829 | 204,631 |
Non-current assets held for sale | 0 | 354,384 |
Total assets | 8,927,539 | 9,283,863 |
Liabilities and Stockholders' Equity | ||
Accounts payable and accrued expenses | 994,292 | 1,016,191 |
Short-term borrowings and current portion of long-term debt | 244,703 | 9,404 |
Current liabilities held for sale | 0 | 22,008 |
Total current liabilities | 1,238,995 | 1,047,603 |
Long-term debt | 3,122,208 | 3,354,173 |
Other liabilities | 694,741 | 635,558 |
Non-current liabilities held for sale | 0 | 60,800 |
Quest Diagnostics stockholders’ equity: | ||
Common stock, par value $0.01 per share; 600,000 shares authorized at both September 30, 2013 and December 31, 2012; 215,364 shares and 215,075 shares issued at September 30, 2013 and December 31, 2012, respectively | 2,154 | 2,151 |
Additional paid-in capital | 2,306,433 | 2,370,677 |
Retained earnings | 5,259,665 | 4,690,378 |
Accumulated other comprehensive (loss) income | -7,988 | 14,320 |
Treasury stock, at cost; 69,972 shares and 56,744 shares at September 30, 2013 and December 31, 2012, respectively | -3,717,583 | -2,914,479 |
Total Quest Diagnostics stockholders' equity | 3,842,681 | 4,163,047 |
Noncontrolling interests | 28,914 | 22,682 |
Total stockholders' equity | 3,871,595 | 4,185,729 |
Total liabilities and stockholders' equity | $8,927,539 | $9,283,863 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $238,865 | $235,747 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 600,000 | 600,000 |
Common stock, shares, issued | 215,364 | 215,075 |
Treasury stock, shares | 69,972 | 56,744 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ||
Net income | $732,107 | $526,526 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 210,983 | 215,300 |
Provision for doubtful accounts | 204,101 | 208,360 |
Deferred income tax (benefit) provision | -3,098 | 139 |
Stock-based compensation expense | 24,107 | 43,087 |
Excess tax benefits from stock-based compensation arrangements | -3,566 | -3,810 |
Gain on sale of royalty rights | -474,138 | 0 |
Loss on sale of businesses, net | 17,400 | 0 |
Other, net | -668 | -5,350 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -252,441 | -231,375 |
Accounts payable and accrued expenses | -76,798 | -56,134 |
Income taxes payable | 76,967 | 32,311 |
Termination of interest rate swap agreements | 0 | 71,820 |
Other assets and liabilities, net | -13,308 | 5,881 |
Net cash provided by operating activities | 441,648 | 806,755 |
Cash flows from investing activities: | ||
Business acquisitions, net of cash acquired | -179,895 | -50,574 |
Proceeds from sale of businesses | 296,333 | 0 |
Proceeds from sale of royalty rights | 474,279 | 0 |
Capital expenditures | -155,467 | -122,318 |
Increase in investments and other assets | -1,610 | -2,098 |
Net cash provided by (used in) investing activities | 433,640 | -174,990 |
Cash flows from financing activities: | ||
Proceeds from borrowings | 789,623 | 715,000 |
Repayments of debt | -757,234 | -1,222,036 |
Purchases of treasury stock | -994,102 | -149,996 |
Exercise of stock options | 98,057 | 143,945 |
Excess tax benefits from stock-based compensation arrangements | 3,566 | 3,810 |
Dividends paid | -141,001 | -81,034 |
Distributions to noncontrolling interests | -21,381 | -24,112 |
Other financing activities, net | -7,356 | 9,542 |
Net cash used in financing activities | -1,029,828 | -604,881 |
Net change in cash and cash equivalents | -154,540 | 26,884 |
Add: Decrease in cash and cash equivalents included in assets held for sale | 17,234 | 0 |
Cash and cash equivalents, beginning of period | 295,586 | 164,886 |
Cash and cash equivalents, end of period | $158,280 | $191,770 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock, at Cost | Non-controlling Interests |
In Thousands | |||||||
Balance, value at Dec. 31, 2011 | $3,714,999 | $2,146 | $2,347,518 | $4,263,599 | ($8,067) | ($2,912,324) | $22,127 |
Balance, shares at Dec. 31, 2011 | 157,420 | ||||||
Net income | 526,526 | 499,905 | 26,621 | ||||
Other comprehensive income (loss), net of tax | 22,035 | 22,035 | |||||
Dividends declared | -81,239 | -81,239 | |||||
Distributions to noncontrolling interests | -24,112 | -24,112 | |||||
Issuance of common stock under benefit plans, value | 15,663 | 8 | 2,457 | 13,198 | |||
Issuance of common stock under benefit plans, shares | 1,112 | ||||||
Stock-based compensation expense | 43,087 | 40,322 | 2,765 | ||||
Exercise of stock options, value | 143,945 | -13,809 | 157,754 | ||||
Exercise of stock options, shares | 3,090 | ||||||
Shares to cover employee payroll tax withholdings on stock issued under benefit plans, value | -19,859 | -3 | -19,856 | ||||
Shares to cover employee payroll tax withholdings on stock issued under benefit plans, shares | -344 | ||||||
Tax benefits associated with stock-based compensation plans | 4,845 | 4,845 | |||||
Purchases of treasury stock, value | -149,996 | -149,996 | |||||
Purchases of treasury stock, shares | -2,561 | ||||||
Other | 1,687 | 1,687 | |||||
Balance, value at Sep. 30, 2012 | 4,197,581 | 2,151 | 2,361,477 | 4,682,265 | 13,968 | -2,888,603 | 26,323 |
Balance, shares at Sep. 30, 2012 | 158,717 | ||||||
Balance, value at Dec. 31, 2012 | 4,185,729 | 2,151 | 2,370,677 | 4,690,378 | 14,320 | -2,914,479 | 22,682 |
Balance, shares at Dec. 31, 2012 | 158,331 | ||||||
Net income | 732,107 | 706,390 | 25,717 | ||||
Other comprehensive income (loss), net of tax | -22,308 | -22,308 | |||||
Dividends declared | -137,103 | -137,103 | |||||
Distributions to noncontrolling interests | -21,381 | -21,381 | |||||
Issuance of common stock under benefit plans, value | 15,591 | 5 | 1,992 | 13,594 | |||
Issuance of common stock under benefit plans, shares | 781 | ||||||
Stock-based compensation expense | 24,107 | 21,355 | 2,752 | ||||
Exercise of stock options, value | 98,057 | -6,602 | 104,652 | 7 | |||
Exercise of stock options, shares | 2,006 | ||||||
Shares to cover employee payroll tax withholdings on stock issued under benefit plans, value | -10,085 | -2 | -10,083 | ||||
Shares to cover employee payroll tax withholdings on stock issued under benefit plans, shares | -176 | ||||||
Tax benefits associated with stock-based compensation plans | -906 | -906 | |||||
Purchases of treasury stock, value | -994,102 | -70,000 | -924,102 | ||||
Purchases of treasury stock, shares | -15,550 | ||||||
Other | 1,889 | 1,889 | |||||
Balance, value at Sep. 30, 2013 | $3,871,595 | $2,154 | $2,306,433 | $5,259,665 | ($7,988) | ($3,717,583) | $28,914 |
Balance, shares at Sep. 30, 2013 | 145,392 |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2013 | |
Description of Business (Abstract) | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS |
Background | |
Quest Diagnostics Incorporated and its subsidiaries ("Quest Diagnostics" or the "Company") is the world's leading provider of diagnostic information services ("DIS") providing insights that empower and enable patients, physicians, hospitals, integrated delivery networks, health plans, employers and others to make better healthcare decisions. The Company offers the broadest access in the United States to DIS through its nationwide network of laboratories and Company-owned patient service centers and the Company is the leading provider of DIS, including routine testing, esoteric or gene-based testing and anatomic pathology testing. The Company provides interpretive consultation through the largest medical and scientific staff in the industry, with hundreds of M.D.s and Ph.D.s, primarily located in the United States, many of whom are recognized leaders in their fields. The Company's Diagnostic Solutions ("DS") businesses offers a variety of solutions for life insurers and healthcare providers. The Company is the leading provider of risk assessment services for the life insurance industry. In addition, the Company is a leading provider of testing for clinical trials. The Company's diagnostics products business manufactures and markets diagnostic products. In addition, the Company offers healthcare organizations and clinicians robust information technology solutions. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation | |
The interim consolidated financial statements reflect all adjustments which in the opinion of management are necessary for a fair statement of results of operations, comprehensive income, financial condition, cash flows and stockholders' equity for the periods presented. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. The interim consolidated financial statements have been compiled without audit. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s 2012 Annual Report on Form 10-K. | |
The year-end balance sheet data was derived from the audited financial statements as of December 31, 2012, but does not include all the disclosures required by accounting principles generally accepted in the United States (“GAAP”). | |
The Company completed the sale of its OralDNA salivary-diagnostics business ("OralDNA") during the fourth quarter of 2012. In April 2013, the Company completed the sale of its HemoCue diagnostics products business ("HemoCue"). During the third quarter of 2006, the Company completed its wind-down of NID, a test kit manufacturing subsidiary, and classified the operations of NID as discontinued operations. The accompanying consolidated statements of operations and related disclosures have been recast to report the results of OralDNA and HemoCue as discontinued operations for the three and nine months ended September 30, 2013 and 2012. See Note 14 for a further discussion of discontinued operations. | |
The Company completed the sale of its Enterix colorectal cancer screening test business (“Enterix”) in September 2013. The Enterix business has not been reclassified to discontinued operations due to the level of continuing involvement in the Enterix business subsequent to its sale. | |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Earnings Per Share | |
The Company's unvested restricted common stock and unvested restricted stock units that contain non-forfeitable rights to dividends are participating securities and, therefore, are included in the earnings allocation in computing earnings per share using the two-class method. Basic earnings per common share is calculated by dividing net income, adjusted for earnings allocated to participating securities, by the weighted average number of common shares outstanding. Diluted earnings per common share is calculated by dividing net income, adjusted for earnings allocated to participating securities, by the weighted average number of common shares outstanding after giving effect to all potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the dilutive effect of outstanding stock options and performance share units granted under the Company's Amended and Restated Employee Long-Term Incentive Plan and its Amended and Restated Non-Employee Director Long-Term Incentive Plan. Earnings allocable to participating securities include the portion of dividends declared as well as the portion of undistributed earnings during the period allocable to participating securities. | |
Adoption of New Accounting Standards | |
On January 1, 2013, the Company adopted a new accounting standard issued by the Financial Accounting Standards Board ("FASB") related to the testing of indefinite-lived intangible assets, other than goodwill, for impairment. Similar to the guidance related to the testing of goodwill for impairment, an entity testing an indefinite-lived intangible asset for impairment has the option to perform a qualitative assessment before calculating the fair value of the asset. If, after assessing the totality of events and circumstances an entity determines that it is not more-likely-than-not that the indefinite-lived intangible asset is impaired, the entity would not be required to perform the quantitative impairment test. However, if the qualitative assessment indicates that it is more-likely-than-not that the fair value of the asset is less than its carrying amount, then the quantitative assessment must be performed. An entity is permitted to perform the qualitative assessment on none, some or all of its indefinite-lived intangible assets and may also bypass the qualitative assessment and begin with the quantitative assessment of indefinite-lived intangible assets for impairment. The adoption of this new standard did not have a material impact on the Company’s consolidated financial statements. | |
On January 1, 2013, the Company adopted a new accounting standard issued by the FASB that adds new disclosure requirements for amounts reclassified out of accumulated other comprehensive income ("AOCI"). The total changes in AOCI must be disaggregated between reclassification adjustments and current period other comprehensive income. This new standard also requires an entity to present reclassification adjustments out of AOCI either on the face of the income statement or in the notes to the financial statements based on their source and the income statement line items affected by the reclassification. This standard is effective prospectively for the Company for interim and annual periods beginning on January 1, 2013. The adoption of this new standard did not have a material impact on the Company’s consolidated financial statements. | |
New Accounting Pronouncements | |
In March 2013, the FASB issued a new accounting standard on foreign currency matters that clarifies the guidance of a parent company's accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. Under this new standard, a parent company that ceases to have a controlling financial interest in a foreign subsidiary or group of assets within a foreign entity shall release any related cumulative translation adjustment into net income only if a sale or transfer results in complete or substantially complete liquidation of the foreign entity. This standard shall be applied prospectively and will become effective for the Company on January 1, 2014. The Company expects that the adoption of this standard will not have a material effect on its consolidated financial statements. | |
In July 2013, the FASB issued a new accounting standard to permit the use of the Fed Funds Effective Swap Rate to be used as an alternative benchmark interest rate for hedge accounting purposes in interest rate derivatives. The new standard is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The new standard is not expected to have a material effect on the Company's consolidated financial statements. | |
In July 2013, the FASB issued a new accounting standard on the financial statement presentation of unrecognized tax benefits. The new standard provides that a liability related to an unrecognized tax benefit would be presented as a reduction of a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. The new standard becomes effective for the Company on January 1, 2014 and it should be applied prospectively to unrecognized tax benefits that exist at the effective date with retrospective application permitted. The Company's analysis indicates that the adoption of this standard will not have a material effect on its consolidated financial statements. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||
EARNINGS (LOSS) PER SHARE | EARNINGS PER SHARE | |||||||||||||||
The computation of basic and diluted earnings per common share was as follows (in thousands, except per share data): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Amounts attributable to Quest Diagnostics’ stockholders: | ||||||||||||||||
Income from continuing operations | $ | 402,737 | $ | 158,541 | $ | 670,893 | $ | 489,889 | ||||||||
Income from discontinued operations, net of taxes | 2,406 | 4,541 | 35,497 | 10,016 | ||||||||||||
Net income attributable to Quest Diagnostics’ common stockholders | $ | 405,143 | $ | 163,082 | $ | 706,390 | $ | 499,905 | ||||||||
Income from continuing operations | $ | 402,737 | $ | 158,541 | $ | 670,893 | $ | 489,889 | ||||||||
Less: Earnings allocated to participating securities | 1,484 | 645 | 2,410 | 1,951 | ||||||||||||
Earnings available to Quest Diagnostics’ common stockholders – basic and diluted | $ | 401,253 | $ | 157,896 | $ | 668,483 | $ | 487,938 | ||||||||
Weighted average common shares outstanding – basic | 149,625 | 158,783 | 153,477 | 158,518 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Stock options and performance share units | 1,295 | 1,919 | 1,318 | 1,546 | ||||||||||||
Weighted average common shares outstanding – diluted | 150,920 | 160,702 | 154,795 | 160,064 | ||||||||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders – basic: | ||||||||||||||||
Income from continuing operations | $ | 2.68 | $ | 0.99 | $ | 4.36 | $ | 3.07 | ||||||||
Income from discontinued operations | 0.02 | 0.03 | 0.23 | 0.07 | ||||||||||||
Net income | $ | 2.7 | $ | 1.02 | $ | 4.59 | $ | 3.14 | ||||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders – diluted: | ||||||||||||||||
Income from continuing operations | $ | 2.66 | $ | 0.98 | $ | 4.32 | $ | 3.04 | ||||||||
Income from discontinued operations | 0.02 | 0.03 | 0.23 | 0.07 | ||||||||||||
Net income | $ | 2.68 | $ | 1.01 | $ | 4.55 | $ | 3.11 | ||||||||
Earnings per common share are computed independently for each quarterly period. Therefore, the sum of quarterly earnings per common share will not equal earnings per common share for the nine months ended September 30, 2013. | ||||||||||||||||
The following securities were not included in the calculation of diluted earnings per share due to their antidilutive effect (shares in thousands): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Stock options and performance share units | 1,527 | 1,317 | 1,690 | 1,925 | ||||||||||||
INVIGORATE_PROGRAM
INVIGORATE PROGRAM | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||
INVIGORATE PROGRAM | INVIGORATE PROGRAM | |||||||||||||||
During 2012, the Company committed to a course of action related to a multi-year program called Invigorate which is designed to reduce its cost structure. The Invigorate program is intended to address continued reimbursement pressures and labor and benefit cost increases, free up additional resources to invest in science, innovation and other growth initiatives, and enable the Company to improve operating profitability and quality. In connection with this program, the Company also launched a voluntary retirement program to certain eligible employees, which was essentially completed at the end of the first quarter of 2013. The Invigorate program is currently expected to be principally completed by the end of 2014. | ||||||||||||||||
As part of the Invigorate program, the Company launched a major management restructuring aimed at driving operational excellence and restoring growth. The key element of this organizational change is to eliminate the complexity associated with the Company's prior structure, including reducing management layers, so that the Company can better focus on customers and speed decision-making. The new organization is designed to align around future growth opportunities, improve execution and leverage company-wide infrastructure to maximize value and efficiency. The majority of the organizational changes became effective on January 1, 2013. The Company has completed the elimination of at least three layers from the organization, and has reduced approximately 450 management positions from the Company through the end of the third quarter of 2013 associated with this initiative. The Company expects to eliminate a total of approximately 500 management positions by the end of 2013. | ||||||||||||||||
The following table provides a summary of the Company's pre-tax restructuring and integration charges associated with the Invigorate program and other employee separation costs for the three and nine months ended September 30, 2013: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Employee separation costs | $ | 24,827 | $ | 27,866 | $ | 66,182 | $ | 31,550 | ||||||||
Facility-related costs | 4,172 | 414 | 5,415 | 414 | ||||||||||||
Asset impairment charges | — | 1,147 | — | 1,147 | ||||||||||||
Accelerated vesting of stock-based compensation | — | 3,030 | 1,284 | 3,030 | ||||||||||||
Total restructuring charges | 28,999 | 32,457 | 72,881 | 36,141 | ||||||||||||
Other integration costs | $ | 7,945 | $ | 2,431 | $ | 21,202 | $ | 5,241 | ||||||||
Total restructuring and integration charges | $ | 36,944 | $ | 34,888 | $ | 94,083 | $ | 41,382 | ||||||||
Of the total employee separation costs incurred in the three and nine months ended September 30, 2013, $1.0 million and $19.5 million, respectively, represent costs associated with the Company's management layer reduction initiative, and $0.4 million and $4.7 million, respectively, represent costs incurred under the Company's voluntary retirement program. In connection with further restructuring efforts, the Company entered into agreements to outsource certain aspects of support functions. As a result of these agreements, the Company incurred approximately $16.5 million of employee separation costs in the three and nine months ended September 30, 2013 related to this initiative. The remaining employee separation costs incurred during the three and nine months ended September 30, 2013 represent other actions the Company has taken to restructure its business. | ||||||||||||||||
Of the total employee separation costs incurred in the three and nine months ended September 30, 2012, $20.6 million and $23.3 million, respectively, represent costs incurred under the Company's voluntary retirement program. | ||||||||||||||||
Of the total $36.9 million in restructuring and integration charges incurred during the three months ended September 30, 2013, $10.4 million and $26.5 million was recorded in cost of services and selling, general and administrative expenses, respectively. Of the total $94.1 million in restructuring and integration charges incurred during the nine months ended September 30, 2013, $37.1 million and $57.0 million was recorded in cost of services and selling, general and administrative expenses, respectively. | ||||||||||||||||
Of the total $34.9 million in restructuring and integration charges incurred during the three months ended September 30, 2012, $19.8 million and $15.1 million was recorded in cost of services and selling, general and administrative expenses, respectively. Of the total $41.4 million in restructuring and integration charges incurred during the nine months ended September 30, 2012, $25.7 million and $15.7 million was recorded in cost of services and selling, general and administrative expenses, respectively. | ||||||||||||||||
In addition to the restructuring and integration charges noted above, the Company incurred approximately $2.4 million and $8.5 million in the three and nine months ended September 30, 2013, respectively, primarily associated with professional fees incurred in connection with further restructuring our business and integration costs associated with recent acquisitions. | ||||||||||||||||
The Company incurred approximately $9.7 million and $28.8 million in the three and nine months ended September 30, 2012, respectively, primarily associated with professional fees incurred in connection with further restructuring our business and integration costs associated with recent acquisitions. | ||||||||||||||||
These charges were primarily recorded in the Company's DIS business for all periods presented. | ||||||||||||||||
The following table summarizes activity in the restructuring liability as of September 30, 2013 and December 31, 2012: | ||||||||||||||||
Employee Separation Costs | Facility-Related Costs | Total | ||||||||||||||
Balance, December 31, 2012 | $ | 40,018 | $ | 257 | $ | 40,275 | ||||||||||
Current period charges | 66,182 | 5,415 | 71,597 | |||||||||||||
Other / adjustments | 2,915 | — | 2,915 | |||||||||||||
Less: | ||||||||||||||||
Cash payments | (59,229 | ) | (575 | ) | (59,804 | ) | ||||||||||
Balance, September 30, 2013 | $ | 49,886 | $ | 5,097 | $ | 54,983 | ||||||||||
BUSINESS_ACQUISITION
BUSINESS ACQUISITION | 9 Months Ended |
Sep. 30, 2013 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITION | BUSINESS ACQUISITIONS |
Acquisition of Businesses from UMass Memorial Medical Center | |
On January 2, 2013, the Company completed the acquisition of the clinical outreach and anatomic pathology businesses of UMass Memorial Medical Center ("UMass"). This purchase was the first step in a series of transactions between the parties whereby the two organizations expect to eventually have a financial stake in a new entity that will perform diagnostic information testing services in a defined territory within the state of Massachusetts. The assets acquired at the acquisition date primarily represent goodwill and intangible assets, principally comprised of customer-related intangibles (see Note 9). In addition the Company granted to UMass a call option and UMass granted to the Company a put option for UMass to acquire an 18.90% equity interest in a newly formed entity. The put and call options have a remaining vesting period of approximately 18 months (see Note 8). | |
Other Acquisitions | |
On May 15, 2013, the Company completed the acquisition of the toxicology and clinical laboratory business of Advanced Toxicology Network ("ATN") from Concentra, a subsidiary of Humana Inc. The assets acquired at the acquisition date primarily represent goodwill and intangible assets, principally comprised of customer-related intangibles (see Note 9). | |
On June 22, 2013, the Company completed the acquisition of certain lab-related clinical outreach service operations of Dignity Health ("Dignity"), a hospital system in California. The assets acquired at the acquisition date primarily represent goodwill and intangible assets, principally comprised of customer-related intangibles (see Note 9). | |
Pro Forma Combined Financial Information | |
Supplemental pro forma combined financial information has not been presented as the combined impact of the above acquisitions are not material to the Company’s consolidated financial statements. |
DISPOSITIONS
DISPOSITIONS | 9 Months Ended |
Sep. 30, 2013 | |
Disposal Groups [Abstract] | |
DISPOSITIONS | DISPOSITIONS |
Sale of Royalty Rights | |
As part of its acquisition of Celera in 2011, the Company gained rights to receive royalties on Ibrutinib, an experimental cancer therapy. In July 2013, the Company sold its right to receive royalties related to the commercialization of Ibrutinib for $485 million in cash. The Company has accounted for this transaction as a sale of royalty rights and recognized a pre-tax gain of $474 million, net of transaction costs, associated with this sale. | |
Sale of Enterix | |
In September 2013, the Company completed the sale of Enterix and recorded a pre-tax loss of approximately $40 million associated with the sale, which is included in other operating expense, net. The Enterix business has not been reclassified to discontinued operations due to the level of continuing involvement in the Enterix business subsequent to its sale. |
TAXES_ON_INCOME
TAXES ON INCOME | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | |
TAXES ON INCOME | TAXES ON INCOME |
Income tax expense for the three months ended September 30, 2013 and 2012 was $246 million and $104 million, respectively. Income tax expense for the nine months ended September 30, 2013 and 2012 was $414 million and $320 million, respectively. The increase in income tax expense for both the three and nine months ended September 30, 2013, compared to the prior year period, is primarily due to approximately $176 million of income tax expense associated with the gain on sale of royalty rights (see Note 6). |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS | |||||||||||||||
The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis: | ||||||||||||||||
Basis of Fair Value Measurements | ||||||||||||||||
Quoted | Significant | Significant | ||||||||||||||
Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | ||||||||||||||
Markets for | Inputs | |||||||||||||||
Identical | ||||||||||||||||
Assets / | ||||||||||||||||
Liabilities | ||||||||||||||||
September 30, 2013 | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Trading securities | $ | 49,226 | $ | 49,226 | $ | — | $ | — | ||||||||
Cash surrender value of life insurance policies | 27,842 | — | 27,842 | — | ||||||||||||
Put option | 5,300 | — | — | 5,300 | ||||||||||||
Available-for-sale equity securities | 1,062 | — | — | 1,062 | ||||||||||||
Total | $ | 83,430 | $ | 49,226 | $ | 27,842 | $ | 6,362 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation liabilities | $ | 81,180 | $ | — | $ | 81,180 | $ | — | ||||||||
Interest rate swaps | 26,982 | — | 26,982 | — | ||||||||||||
Call option | 7,770 | — | — | 7,770 | ||||||||||||
Total | $ | 115,932 | $ | — | $ | 108,162 | $ | 7,770 | ||||||||
Basis of Fair Value Measurements | ||||||||||||||||
Quoted | Significant | Significant | ||||||||||||||
Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | ||||||||||||||
Markets for | Inputs | |||||||||||||||
Identical | ||||||||||||||||
Assets / | ||||||||||||||||
Liabilities | ||||||||||||||||
December 31, 2012 | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Trading securities | $ | 52,283 | $ | 52,283 | $ | — | $ | — | ||||||||
Cash surrender value of life insurance policies | 25,018 | — | 25,018 | — | ||||||||||||
Interest rate swaps | 830 | — | 830 | — | ||||||||||||
Available-for-sale equity securities | 612 | — | — | 612 | ||||||||||||
Foreign currency forward contracts | 403 | — | 403 | — | ||||||||||||
Total | $ | 79,146 | $ | 52,283 | $ | 26,251 | $ | 612 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation liabilities | $ | 82,218 | $ | — | $ | 82,218 | $ | — | ||||||||
Interest rate swaps | 3,129 | — | 3,129 | — | ||||||||||||
Total | $ | 85,347 | $ | — | $ | 85,347 | $ | — | ||||||||
A full description regarding the Company's fair value measurements is contained in Note 6 to the Consolidated Financial Statements in the Company's 2012 Annual Report on Form 10-K. | ||||||||||||||||
Investments in available-for-sale equity securities consist of the revaluation of an existing investment in unregistered common shares of a publicly-held company. This investment is classified within Level 3 because the unregistered securities contain restrictions on their sale, and therefore, the fair value measurement reflects a discount for the effect of the restriction. | ||||||||||||||||
In connection with the acquisition of certain businesses of UMass, the Company granted to UMass a call option and UMass granted to the Company a put option for UMass to acquire an 18.90% equity interest in a newly formed entity. The put and call options are derivative instruments that have a remaining vesting period of approximately 18 months and their fair values have been measured using a combination of discounted cash flows and the Black-Scholes-Merton option pricing model (See Note 5). | ||||||||||||||||
The following table provides a reconciliation of the beginning and ending balances of assets and liabilities using significant unobservable inputs: | ||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | ||||||||||||||||
(Level 3) | ||||||||||||||||
Available-for-Sale Equity Securities | Put Option Derivative Asset | Total | ||||||||||||||
Balance, December 31, 2012 | $ | 612 | $ | — | $ | 612 | ||||||||||
Purchases, additions and issuances | — | 8,250 | 8,250 | |||||||||||||
Total gains (losses) - realized/ unrealized: | ||||||||||||||||
Included in earnings | — | (2,950 | ) | (2,950 | ) | |||||||||||
Included in other comprehensive income (loss) | 450 | — | 450 | |||||||||||||
Transfers in and out of Level 3 | — | — | — | |||||||||||||
Balance, September 30, 2013 | $ | 1,062 | $ | 5,300 | $ | 6,362 | ||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | ||||||||||||||||
(Level 3) | ||||||||||||||||
Call Option Derivative Liability | ||||||||||||||||
Balance, December 31, 2012 | $ | — | ||||||||||||||
Purchases, additions and issuances | 10,808 | |||||||||||||||
Total (gains) losses - realized/ unrealized: | ||||||||||||||||
Included in earnings | (3,038 | ) | ||||||||||||||
Transfers in and out of Level 3 | — | |||||||||||||||
Balance, September 30, 2013 | $ | 7,770 | ||||||||||||||
The unrealized gains and losses included in earnings for the nine months ended September 30, 2013 are reported in other non-operating income. | ||||||||||||||||
The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable and accrued expenses approximate fair value based on the short maturities of these instruments. At September 30, 2013, the fair value of the Company’s debt was estimated at $3.6 billion, which exceeded the carrying value by $253 million. At December 31, 2012, the fair value of the Company's debt was estimated at $3.8 billion, which exceeded the carrying value by $481 million. Principally all of the Company's debt is classified within Level 1 of the fair value hierarchy because the fair value of the debt is estimated based on rates currently offered to the Company with identical terms and maturities, using quoted active market prices and yields, taking into account the underlying terms of the debt instruments. |
GOODWILL_AND_INTANGIBLE_ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS | |||||||||||||||||||||||||
The changes in goodwill for the nine months ended September 30, 2013 and for the year ended December 31, 2012 are as follows: | ||||||||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
Balance at beginning of period | $ | 5,535,848 | $ | 5,795,765 | ||||||||||||||||||||||
Goodwill acquired during the period | 130,192 | 28,144 | ||||||||||||||||||||||||
Goodwill impairment and write-off associated with sale of businesses during the period | (37,103 | ) | (85,173 | ) | ||||||||||||||||||||||
Reclassification to non-current assets held for sale | — | (218,795 | ) | |||||||||||||||||||||||
(Decrease) increase related to foreign currency translation | (129 | ) | 15,907 | |||||||||||||||||||||||
Balance at end of period | $ | 5,628,808 | $ | 5,535,848 | ||||||||||||||||||||||
Approximately 90% of the Company’s goodwill as of September 30, 2013 and December 31, 2012 was associated with its DIS business. | ||||||||||||||||||||||||||
For the nine months ended September 30, 2013, goodwill acquired was principally associated with the UMass, Dignity and ATN acquisitions, which is deductible for tax purposes. These acquisitions also resulted in $94.9 million of intangible assets, principally comprised of customer-related intangibles (see Note 5). | ||||||||||||||||||||||||||
For the nine months ended September 30, 2013, goodwill written-off was associated with the sale of Enterix. In addition, intangible assets associated with the sale of Enterix with a net book value of $5.6 million were written-off. For further details regarding the sale of Enterix, see Note 6. | ||||||||||||||||||||||||||
For the year ended December 31, 2012, goodwill acquired was principally associated with the acquisition of S.E.D. Medical Laboratories. Approximately $28 million and $19 million, respectively, represented goodwill, which is deductible for tax purposes, and intangible assets, principally comprised of customer-related intangibles. | ||||||||||||||||||||||||||
For the year ended December 31, 2012, goodwill impairment was associated with HemoCue and the write-off of goodwill was associated with the sale of OralDNA during the fourth quarter of 2012. For further details regarding goodwill included in non-current assets held for sale, see Note 18 to the Consolidated Financial Statements in the Company's 2012 Annual Report on Form 10-K. | ||||||||||||||||||||||||||
Intangible assets at September 30, 2013 and December 31, 2012 consisted of the following: | ||||||||||||||||||||||||||
Weighted | September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||
Period | ||||||||||||||||||||||||||
(in Years) | ||||||||||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | |||||||||||||||||||||
Amortization | Amortization | |||||||||||||||||||||||||
Amortizing intangible assets: | ||||||||||||||||||||||||||
Customer-related intangibles | 18 | $ | 657,901 | $ | (200,194 | ) | $ | 457,707 | $ | 566,701 | $ | (173,516 | ) | $ | 393,185 | |||||||||||
Non-compete agreements | 4 | 41,731 | (24,405 | ) | 17,326 | 38,551 | (17,123 | ) | 21,428 | |||||||||||||||||
Technology | 14 | 119,440 | (25,714 | ) | 93,726 | 131,040 | (25,144 | ) | 105,896 | |||||||||||||||||
Other | 8 | 143,807 | (54,086 | ) | 89,721 | 141,818 | (37,634 | ) | 104,184 | |||||||||||||||||
Total | 16 | 962,879 | (304,399 | ) | 658,480 | 878,110 | (253,417 | ) | 624,693 | |||||||||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||||||||
Tradenames | 244,000 | — | 244,000 | 246,200 | — | 246,200 | ||||||||||||||||||||
In-process research and development | 120 | — | 120 | 120 | — | 120 | ||||||||||||||||||||
Other | 1,299 | — | 1,299 | 1,159 | — | 1,159 | ||||||||||||||||||||
Total intangible assets | $ | 1,208,298 | $ | (304,399 | ) | $ | 903,899 | $ | 1,125,589 | $ | (253,417 | ) | $ | 872,172 | ||||||||||||
Amortization expense related to intangible assets was $20.2 million and $18.6 million for the three months ended September 30, 2013 and 2012, respectively. For the nine months ended September 30, 2013 and 2012, amortization expense related to intangible assets was $59.2 million and $56.2 million, respectively. | ||||||||||||||||||||||||||
The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of September 30, 2013 is as follows: | ||||||||||||||||||||||||||
Year Ending December 31, | ||||||||||||||||||||||||||
Remainder of 2013 | $ | 19,932 | ||||||||||||||||||||||||
2014 | 76,657 | |||||||||||||||||||||||||
2015 | 65,335 | |||||||||||||||||||||||||
2016 | 58,980 | |||||||||||||||||||||||||
2017 | 56,000 | |||||||||||||||||||||||||
2018 | 48,751 | |||||||||||||||||||||||||
Thereafter | 332,825 | |||||||||||||||||||||||||
Total | $ | 658,480 | ||||||||||||||||||||||||
FINANCIAL_INSTRUMENTS
FINANCIAL INSTRUMENTS | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | ||||||||||||
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS | |||||||||||
The Company uses derivative financial instruments to manage its exposure to market risks for changes in interest rates and foreign currencies. This strategy includes the use of interest rate swap agreements, forward starting interest rate swap agreements, treasury lock agreements and foreign currency forward contracts to manage its exposure to movements in interest and currency rates. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. These policies prohibit holding or issuing derivative financial instruments for speculative purposes. The Company does not enter into derivative financial instruments that contain credit-risk-related contingent features or requirements to post collateral. | ||||||||||||
A summary of the fair values of derivative instruments in the consolidated balance sheets is stated in the table below: | ||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||
Balance Sheet | Fair Value | Balance Sheet | Fair Value | |||||||||
Classification | Classification | |||||||||||
Derivatives Designated as Hedging Instruments | ||||||||||||
Asset Derivatives: | ||||||||||||
Interest rate swaps | Other assets | $ | — | Other assets | $ | 830 | ||||||
Liability Derivatives: | ||||||||||||
Interest rate swaps | Other liabilities | 26,982 | Other liabilities | 3,129 | ||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||
Asset Derivatives: | ||||||||||||
Put option | Other assets | 5,300 | Other assets | — | ||||||||
Foreign currency forward contracts | Other current assets | — | Other current assets | 403 | ||||||||
5,300 | 403 | |||||||||||
Liability Derivatives: | ||||||||||||
Call option | Other liabilities | 7,770 | Other liabilities | — | ||||||||
Total Net Derivatives Liabilities | $ | (29,452 | ) | $ | (1,896 | ) | ||||||
A full description regarding the Company's use of derivative financial instruments is contained in Note 13 to the Consolidated Financial Statements in the Company's 2012 Annual Report on Form 10-K. | ||||||||||||
Interest Rate Risk | ||||||||||||
The Company is exposed to interest rate risk on its cash and cash equivalents and its debt obligations. Interest income earned on cash and cash equivalents may fluctuate as interest rates change; however, due to their relatively short maturities, the Company does not hedge these assets or their investment cash flows and the impact of interest rate risk is not material. The Company's debt obligations consist of fixed-rate and variable-rate debt instruments. The Company's primary objective is to achieve the lowest overall cost of funding while managing the variability in cash outflows within an acceptable range. In order to achieve this objective, the Company has entered into interest rate swaps. Interest rate swaps involve the periodic exchange of payments without the exchange of underlying principal or notional amounts. Net settlements between the counterparties are recognized as an adjustment to interest expense. | ||||||||||||
Interest Rate Derivatives – Cash Flow Hedges | ||||||||||||
The Company has entered into various interest rate lock agreements and forward starting interest rate swap agreements to hedge part of the Company's interest rate exposure associated with the variability in future cash flows attributable to changes in interest rates. The total net loss, net of taxes, recognized in accumulated other comprehensive (loss) income, related to the Company's cash flow hedges as of September 30, 2013 and December 31, 2012 was $6.2 million and $6.8 million, respectively. The loss recognized on the Company's cash flow hedges for the three and nine months ended September 30, 2013 and 2012, as a result of ineffectiveness, was not material. The net amount of deferred losses on cash flow hedges that is expected to be reclassified from accumulated other comprehensive (loss) income into earnings within the next twelve months is $1.3 million. | ||||||||||||
Interest Rate Derivatives – Fair Value Hedges | ||||||||||||
The Company maintains various fixed-to-variable interest rate swaps to convert a portion of the Company's long-term debt into variable interest rate debt. These derivative financial instruments are accounted for as fair value hedges of a portion of the Senior Notes due 2015, 2016, 2020 and 2021. In prior years, the Company entered into various fixed-to-variable interest rate swap agreements with an aggregate notional amount of $550 million and variable interest rates based on six-month LIBOR plus 0.54% and one-month LIBOR plus 1.33%. In July 2012, the Company monetized the value of these interest rate swap assets by terminating the hedging instruments. The asset value, including accrued interest through the date of termination, was $71.8 million and the amount to be amortized as a reduction of interest expense over the remaining terms of the hedged debt instruments was $65.2 million. Immediately after the termination of these interest rate swaps, the Company entered into new fixed-to-variable interest rate swap agreements on the same Senior Notes. The fixed-to-variable interest rate swap agreements that the Company entered into in July 2012 have an aggregate notional amount of $550 million and variable interest rates based on six-month LIBOR plus 2.3% and one-month LIBOR plus 3.6%. During the fourth quarter of 2012, the Company entered into additional fixed-to-variable interest rate swap agreements with an aggregate notional amount of $400 million and variable interest rates based on one-month LIBOR plus a spread ranging from 3.4% to 5.1%. These derivative financial instruments are accounted for as fair value hedges on a portion of the Senior Notes due 2015 and a portion of the Senior Notes due 2021. | ||||||||||||
The interest rate swaps associated with the Senior Notes due 2015, 2016, 2020 and 2021 are classified as liabilities with an aggregate fair value of $27 million at September 30, 2013. The interest rate swaps associated with the Senior Notes due 2016 are classified as assets with a fair value of $0.8 million at December 31, 2012. The interest rate swaps associated with the Senior Notes due 2015, 2020, and 2021 are classified as liabilities with an aggregate fair value of $3.1 million at December 31, 2012. Since inception, the fair value hedges have been highly effective; therefore, there is no impact on earnings for the three and nine months ended September 30, 2013 and 2012 as a result of hedge ineffectiveness. | ||||||||||||
Foreign Currency Risk | ||||||||||||
The Company had previously been exposed to market risk for changes in foreign exchange rates primarily under certain intercompany receivables and payables. The Company historically used foreign exchange forward contracts to mitigate the exposure of the eventual net cash inflows or outflows resulting from these intercompany transactions. As a result of the HemoCue disposition, this foreign currency risk has largely been eliminated. The Company's remaining foreign exchange exposure is not material to the Company's consolidated financial condition. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Stockholders' Equity Attributable to Parent [Abstract] | ||||||||||||||||
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY | |||||||||||||||
Components of Comprehensive Income | ||||||||||||||||
The market valuation adjustments represent unrealized holding gains (losses) on available-for-sale securities, net of taxes. The net deferred loss on cash flow hedges represents deferred losses on the Company’s interest rate related derivative financial instruments designated as cash flow hedges, net of amounts reclassified to interest expense (see Note 10). For the three and nine months ended September 30, 2013 and 2012, the tax effects related to the market valuation adjustments and deferred losses were not material. Foreign currency translation adjustments are not adjusted for income taxes since they relate to indefinite investments in non-U.S. subsidiaries. | ||||||||||||||||
Changes in Accumulated Other Comprehensive (Loss) Income by Component | ||||||||||||||||
The changes in accumulated other comprehensive (loss) income by component for the nine months ended September 30, 2013 and 2012 were as follows: | ||||||||||||||||
Foreign | Market Value | Deferred Loss | Accumulated Other Comprehensive (Loss) Income | |||||||||||||
Currency | Adjustment | |||||||||||||||
Translation | ||||||||||||||||
Adjustment | ||||||||||||||||
Balance, December 31, 2012 | $ | 25,463 | $ | (4,326 | ) | $ | (6,817 | ) | $ | 14,320 | ||||||
Other comprehensive income before reclassifications | 2,702 | 274 | — | 2,976 | ||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | (28,761 | ) | 2,847 | 630 | (25,284 | ) | ||||||||||
Net current period other comprehensive (loss) income | (26,059 | ) | 3,121 | 630 | (22,308 | ) | ||||||||||
Balance, September 30, 2013 | $ | (596 | ) | $ | (1,205 | ) | $ | (6,187 | ) | $ | (7,988 | ) | ||||
Foreign | Market Value | Deferred Loss | Accumulated Other Comprehensive (Loss) Income | |||||||||||||
Currency | Adjustment | |||||||||||||||
Translation | ||||||||||||||||
Adjustment | ||||||||||||||||
Balance, December 31, 2011 | $ | 943 | $ | (1,355 | ) | $ | (7,655 | ) | $ | (8,067 | ) | |||||
Other comprehensive income before reclassifications | 21,321 | 84 | — | 21,405 | ||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | — | — | 630 | 630 | ||||||||||||
Net current period other comprehensive income | 21,321 | 84 | 630 | 22,035 | ||||||||||||
Balance, September 30, 2012 | $ | 22,264 | $ | (1,271 | ) | $ | (7,025 | ) | $ | 13,968 | ||||||
For the nine months ended September 30, 2013, principally all of the gross foreign currency translation adjustment of $28.8 million and principally all of the gross market value adjustment of $3.8 million, associated with the completion of the sale of HemoCue, were reclassified from accumulated other comprehensive (loss) income to income from discontinued operations, net of taxes. The remaining gross foreign currency translation adjustment, associated with the completion of the sale of Enterix, was reclassified from accumulated other comprehensive (loss) income to other operating expense, net. The remaining gross market value adjustment and gross deferred loss were reclassified from accumulated other comprehensive (loss) income to interest expense, net on the accompanying consolidated statements of operations. | ||||||||||||||||
For the nine months ended September 30, 2012, the gross deferred loss was reclassified from accumulated other comprehensive (loss) income to interest expense, net on the accompanying consolidated statements of operations. | ||||||||||||||||
Dividend Program | ||||||||||||||||
During each of the first three quarters of 2012, the Company's Board of Directors declared a quarterly cash dividend of $0.17 per common share and in November 2012, declared an increase in the quarterly cash dividend from $0.17 per common share to $0.30 per common share. This 76% increase raises the annual dividend rate to $1.20 per common share from $0.68 per common share and represents a three-fold increase from the annual rate in effect in 2011. During each of the first three quarters of 2013, the Company's Board of Directors declared a quarterly cash dividend of $0.30 per common share. | ||||||||||||||||
Share Repurchase Plan | ||||||||||||||||
In August 2013, the Company’s Board of Directors authorized the Company to repurchase an additional $1 billion of the Company’s common stock, increasing the total available authorization at that time to $1.3 billion. The share repurchase authorization has no set expiration or termination date. | ||||||||||||||||
On April 19, 2013, the Company entered into an accelerated share repurchase agreement ("ASR") with a financial institution to repurchase $450 million of the Company’s common stock as part of the Company’s Common Stock repurchase program. The ASR is structured as a combination of two transactions: (1) a treasury stock repurchase and (2) a forward contract which permits the Company to purchase shares immediately with the final purchase price of those shares determined by the volume weighted average price of the Company's common stock during the purchase period, less a fixed discount. Under the ASR agreement, the Company paid $450 million to the financial institution and received 7.6 million shares of common stock, resulting in a final price per share of $59.46. The Company initially received 7.2 million shares of its common stock during the second quarter of 2013 and an additional 0.4 million shares upon completion of the ASR agreement during the third quarter of 2013. As of June 30, 2013, the Company recorded this transaction as an increase to treasury stock of $405 million, and recorded the remaining $45 million as a decrease to additional paid-in capital in the Company's Consolidated Balance Sheets. Upon completion of the ASR agreement in the third quarter of 2013, the Company reclassified the $45 million to treasury stock from additional paid-in capital on our Consolidated Balance Sheets. | ||||||||||||||||
On September 4, 2013, the Company entered into an ASR agreement with a financial institution to repurchase $350 million of the Company’s common stock as part of the Company’s Common Stock repurchase program. The ASR is structured as a combination of two transactions: (1) a treasury stock repurchase and (2) a forward contract which permits the Company to purchase shares immediately with the final purchase price of those shares determined by the volume weighted average price of the Company's common stock during the purchase period, less a fixed discount. For the three and nine months ended September 30, 2013, the Company repurchased 4.7 million shares of its common stock under the ASR at an initial price of $59.93 per share for a total of $280 million, which represents approximately 80 percent of the total shares expected to be repurchased under the ASR. The forward contract will settle the remaining shares upon the completion of the ASR in the fourth quarter of 2013. The Company recorded this transaction as an increase to treasury stock of $280 million, and recorded the remaining $70 million as a decrease to additional paid-in capital in the Company's Consolidated Balance Sheets at September 30, 2013. The $70 million recorded in additional paid-in capital will be reclassified to treasury stock upon completion of the ASR. | ||||||||||||||||
In addition to the ASRs previously discussed, the Company repurchased shares of its common stock on the open market. For the three months ended September 30, 2013, the Company repurchased 2.2 million shares of its common stock at an average price of $59.06 per share for $132 million. For the nine months ended September 30, 2013, the Company repurchased 3.3 million shares of its common stock at an average price of $58.66 per share for $194 million. | ||||||||||||||||
At September 30, 2013, $871 million remained available under the Company’s share repurchase authorizations. | ||||||||||||||||
For the three and nine months ended September 30, 2013, the Company reissued 0.8 million and 2.3 million shares, respectively, for employee benefit plans. | ||||||||||||||||
For the three months ended September 30, 2012, the Company repurchased 832 thousand shares of its common stock at an average price of $60.12 per share for a total of $50 million. For the nine months ended September 30, 2012, the Company repurchased 2.6 million shares of its common stock at an average price of $58.57 per share for a total of $150 million. For the three and nine months ended September 30, 2012, the Company reissued 1.2 million and 3.4 million shares, respectively, for employee benefit plans. |
SUPPLEMENTAL_CASH_FLOW_OTHER_D
SUPPLEMENTAL CASH FLOW & OTHER DATA | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||||||||||
SUPPLEMENTAL CASH FLOW & OTHER DATA | SUPPLEMENTAL CASH FLOW & OTHER DATA | |||||||||||||||
Supplemental cash flow data for the three and nine months ended September 30, 2013 and 2012 is as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Depreciation expense | $ | 48,810 | $ | 51,310 | $ | 151,705 | $ | 154,939 | ||||||||
Amortization expense | 20,159 | 19,961 | 59,278 | 60,361 | ||||||||||||
Interest paid | 51,767 | 47,390 | 135,738 | 129,380 | ||||||||||||
Income taxes paid | 127,294 | 89,338 | 332,232 | 292,147 | ||||||||||||
Assets acquired under capital leases | — | 1,215 | 2,411 | 4,170 | ||||||||||||
Businesses acquired: | ||||||||||||||||
Fair value of assets acquired | — | — | 241,016 | 50,800 | ||||||||||||
Fair value of liabilities assumed | — | — | 10,962 | 269 | ||||||||||||
Fair value of net assets acquired | — | — | 230,054 | 50,531 | ||||||||||||
Merger consideration paid (payable), net | (54 | ) | 6 | (50,159 | ) | 43 | ||||||||||
Cash paid for business acquisitions | (54 | ) | 6 | 179,895 | 50,574 | |||||||||||
Less: Cash acquired | — | — | — | — | ||||||||||||
Business acquisitions, net of cash acquired | $ | (54 | ) | $ | 6 | $ | 179,895 | $ | 50,574 | |||||||
Supplemental continuing operations data for the statement of operations for the three and nine months ended September 30, 2013 and 2012 is as follows: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Depreciation expense | $ | 48,810 | $ | 50,627 | $ | 151,481 | $ | 152,882 | ||||||||
Interest expense | (40,657 | ) | (41,451 | ) | (121,722 | ) | (126,583 | ) | ||||||||
Interest income | 689 | 642 | 1,968 | 1,922 | ||||||||||||
Interest expense, net | (39,968 | ) | (40,809 | ) | (119,754 | ) | (124,661 | ) | ||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES |
The Company has a line of credit with a financial institution totaling $85 million for the issuance of letters of credit (the “Letter of Credit Line”). The Letter of Credit Line, which is renewed annually, matures on November 18, 2013. | |
In support of its risk management program, to ensure the Company’s performance or payment to third parties, $60 million in letters of credit were outstanding at September 30, 2013. The letters of credit primarily represent collateral for current and future automobile liability and workers’ compensation loss payments. | |
Contingent Lease Obligations | |
The Company is subject to contingent obligations under certain leases and other instruments incurred in connection with real estate activities and other operations associated with LabOne, Inc., which the Company acquired in 2005, and certain of its predecessor companies. No liability has been recorded for any of these potential contingent obligations. See Note 17 to the Consolidated Financial Statements contained in the Company’s 2012 Annual Report on Form 10-K for further details. | |
Other Legal Matters | |
The Company is involved in various legal proceedings. Some of the proceedings against the Company involve claims that could be substantial in amount. | |
In addition to the matters described below, in the normal course of business, we have been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with our activities as a provider of diagnostic testing, information and services. These legal actions may include lawsuits alleging negligence or other similar legal claims. These actions could involve claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages, and could have an adverse impact on our client base and reputation. | |
We are also involved, from time to time, in other reviews, investigations and proceedings by governmental agencies regarding our business, including, among other matters, operational matters, which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. The number of these reviews, investigations and proceedings has increased in recent years with regard to many firms in the healthcare services industry, including our Company. | |
In November 2009, the U.S. District Court for the Southern District of New York partially unsealed a civil complaint, U.S. ex rel. Fair Laboratory Practices Associates v. Quest Diagnostics Incorporated, filed against the Company under the whistleblower provisions of the federal False Claims Act. The complaint alleged, among other things, violations of the federal Anti-Kickback Statute and the federal False Claims Act in connection with the Company's pricing of laboratory services. The complaint seeks damages for alleged false claims associated with laboratory tests reimbursed by government payers, treble damages and civil penalties. In March 2011, the district court granted the Company's motion to dismiss the relators' complaint and disqualified the relators and their counsel from pursuing an action based on the facts alleged in the complaint; the relators filed a notice of appeal. In July 2011, the government filed a notice declining to intervene in the action and the Court entered a final judgment in the Company's favor. The relators' appeal is pending. | |
In November 2010, a putative class action entitled Seibert v. Quest Diagnostics Incorporated, et al. was filed against the Company and certain former officers of the Company in New Jersey state court, on behalf of the Company's sales people nationwide who were over forty years old and who either resigned or were terminated after being placed on a performance improvement plan. The complaint alleges that the defendants' conduct violates the New Jersey Law Against Discrimination ("NJLAD"), and seeks, among other things, unspecified damages. The defendants removed the complaint to the United States District Court for the District of New Jersey. The plaintiffs filed an amended complaint that added claims under ERISA. The Company filed a motion seeking to limit the application of the NJLAD to only those members of the purported class who worked in New Jersey and to dismiss the individual defendants. The motion was granted. The only remaining NJLAD claim is that of the named plaintiff. Both parties have filed summary judgment motions. The defendants' motion was granted in part, but denied as to an ERISA claim, and the plaintiff's motion was denied. The plaintiff recently moved for class certification of the ERISA claim. | |
In 2010, a purported class action entitled In re Celera Corp. Securities Litigation was filed in the United States District Court for the Northern District of California against Celera Corporation and certain of its directors and current and former officers. An amended complaint filed in October 2010 alleges that from April 2008 through July 22, 2009, the defendants made false and misleading statements regarding Celera's business and financial results with an intent to defraud investors. The complaint was further amended in 2011 to add allegations regarding a financial restatement. The amended complaint seeks unspecified damages on behalf of an alleged class of purchasers of Celera's stock during the period in which the alleged misrepresentations were made. The Company's motion to dismiss the complaint was denied. The parties are engaged in discovery. | |
In August 2011, the Company received a subpoena from the U.S. Attorney for the Northern District of Georgia seeking various business records, including records related to the Company's compliance program, certain marketing materials, certain product offerings, and test ordering and other policies. The Company is cooperating with the request. | |
In January 2012, a putative class action entitled Beery v. Quest Diagnostics Incorporated was filed in the United States District Court for the District of New Jersey against the Company and a subsidiary, on behalf of all female sales representatives employed by the defendants from February 17, 2010 to the present. The amended complaint alleges that the defendants discriminate against these female sales representatives on account of their gender, in violation of the federal civil rights and equal pay acts, and seeks, among other things, injunctive relief and monetary damages. The Company's motion to compel arbitration was granted and the case was dismissed. In the arbitration, the plaintiffs requested to proceed on a class basis. The Company objected to the plaintiffs' request. | |
In September 2009, the Company received a subpoena from the Michigan Attorney General's Office seeking documents relating to the Company's pricing and billing practices as they relate to Michigan's Medicaid program. The Company cooperated with the requests. In January 2012, the State of Michigan intervened as a plaintiff in a civil lawsuit, Michigan ex rel. Hunter Laboratories LLC v. Quest Diagnostics Incorporated, et al., filed in Michigan Superior Court. The suit, originally filed by a competitor laboratory, alleges that the Company overcharged Michigan's Medicaid program. The Company's motion to dismiss the complaint was denied. The parties are engaged in discovery. Hunter Laboratories LLC filed similar lawsuits in Georgia, Massachusetts, Nevada and Virginia; in each of those lawsuits, the state attorney general’s office has not intervened. | |
In March 2011, prior to the Company's acquisition of Celera, several putative class action lawsuits were filed by shareholders of Celera against the Company, Celera, and the directors of Celera in the Court of Chancery of Delaware and in California. The suits allege that Celera's directors breached their fiduciary duties in connection with the Company's proposed acquisition of Celera, and that the Company aided and abetted those alleged breaches. The parties reached a settlement, and the Court of Chancery of Delaware certified a settlement class and approved the settlement over the objection of a Celera shareholder, BVF Partners L.P. On appeal of the Court of Chancery's decision, the Supreme Court of the State of Delaware affirmed the certification of the settlement class and approval of the settlement, but determined that BVF Partners L.P. should have been afforded the right to “opt out” of the settlement and pursue its claims. Following this decision, in July 2013, Biotechnology Value Fund, L.P. and others filed a lawsuit in the United States District Court for the Northern District of California against the Company, Celera, former directors of Celera and Credit Suisse Securities (USA) LLC (“Credit Suisse”) alleging federal securities laws violations and breach of fiduciary duty claims against Celera, its directors and Credit Suisse. The complaint also alleges that the Company and Credit Suisse aided and abetted those breaches. The Company filed a motion to dismiss the complaint. | |
In July 2012, a putative class action entitled Mt. Lookout Chiropractic Center Inc. v. Quest Diagnostics Incorporated, et al. ("Mt. Lookout") was filed in the United States District Court for the District of New Jersey against the Company, two of its subsidiaries and others. In June 2013, the plaintiff voluntarily dismissed the action and filed a new complaint in state court in Illinois. The new complaint alleges that the defendants violated the federal Telephone Consumer Protection Act by sending fax advertisements without permission and without the required opt-out notice, and seeks monetary damages and injunctive relief. The parties have reached a settlement that the court has preliminarily approved. | |
In addition, the Company and certain of its subsidiaries have received subpoenas from one state agency and from the Department of Health and Human Services Office of Inspector General and is cooperating with their requests. | |
The federal or state governments may bring claims based on new theories as to the Company's practices which management believes to be in compliance with law. In addition, certain federal and state statutes, including the qui tam provisions of the federal False Claims Act, allow private individuals to bring lawsuits against healthcare companies on behalf of government or private payers. The Company is aware of certain pending individual or class action lawsuits, and has received several subpoenas, related to billing practices filed under the qui tam provisions of the Civil False Claims Act and/or other federal and state statutes, regulations or other laws. The Company understands that there may be other pending qui tam claims brought by former employees or other "whistle blowers" as to which the Company cannot determine the extent of any potential liability. | |
Management cannot predict the outcome of such matters. Although management does not anticipate that the ultimate outcome of such matters will have a material adverse effect on the Company's financial condition, given the high degree of judgment involved in establishing loss estimates related to these types of matters, the outcome of such matters may be material to the Company's results of operations or cash flows in the period in which the impact of such matters is determined or paid. | |
These matters are in different stages. Some of these matters are in their early stages. Matters may involve responding to and cooperating with various government investigations and related subpoenas. As of September 30, 2013, the Company believes that there are no losses related to the Other Legal Matters described above that are probable, or, if a loss is probable, it cannot be reasonably estimated. While the Company believes that a reasonable possibility exists that losses may have been incurred related to the Other Legal Matters described above, based on the nature and status of these matters, potential losses, if any, cannot be estimated. | |
Reserves for Legal Matters | |
Reserves for legal matters, unrelated to those described in "Other Legal Matters," totaled less than $5 million at both September 30, 2013 and December 31, 2012. | |
Reserves for General and Professional Liability Claims | |
As a general matter, providers of clinical testing services may be subject to lawsuits alleging negligence or other similar legal claims. These suits could involve claims for substantial damages. Any professional liability litigation could also have an adverse impact on the Company's client base and reputation. The Company maintains various liability insurance coverages for, among other things, claims that could result from providing, or failing to provide, clinical testing services, including inaccurate testing results, and other exposures. The Company's insurance coverage limits its maximum exposure on individual claims; however, the Company is essentially self-insured for a significant portion of these claims. Reserves for such matters, including those associated with both asserted and incurred but not reported claims, are established by considering actuarially determined losses based upon the Company's historical and projected loss experience. Such reserves totaled approximately $124 million and $110 million as of September 30, 2013 and December 31, 2012, respectively. Management believes that established reserves and present insurance coverage are sufficient to cover currently estimated exposures. Management cannot predict the outcome of any claims made against the Company. Although management does not anticipate that the ultimate outcome of any such proceedings or claims will have a material adverse effect on the Company's financial condition, given the high degree of judgment involved in establishing accruals for loss estimates related to these types of matters, the outcome may be material to the Company's results of operations or cash flows in the period in which the impact of such claims is determined or paid. |
DISCONTINUED_OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Discontinued Operations [Abstract] | ||||||||||||||||
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS | |||||||||||||||
The Company completed the sale of OralDNA in December 2012 and completed the sale of HemoCue in April 2013. Results of operations for OralDNA, HemoCue and NID have been reported as discontinued operations for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||||
Discontinued operations, net of taxes, for the nine months ended September 30, 2013 includes a gain of $13.5 million (including foreign currency translation adjustments, partially offset by income tax expense and transaction costs) associated with the sale of HemoCue. In addition, income from discontinued operations, net of taxes for the nine months ended September 30, 2013, includes discrete tax benefits of $19.8 million associated with favorable resolution of certain tax contingencies related to our NID business. | ||||||||||||||||
Summarized financial information for the discontinued operations is set forth below: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net revenues | $ | — | $ | 29,689 | $ | 27,543 | $ | 85,907 | ||||||||
Income from discontinued operations before taxes | 2,886 | 4,427 | 24,960 | 8,579 | ||||||||||||
Income tax (expense) benefit | (480 | ) | 114 | 10,537 | 1,437 | |||||||||||
Income from discontinued operations, net of taxes | $ | 2,406 | $ | 4,541 | $ | 35,497 | $ | 10,016 | ||||||||
The remaining balance sheet information related to OralDNA and NID was not material at September 30, 2013 and December 31, 2012. |
BUSINESS_SEGMENT_INFORMATION
BUSINESS SEGMENT INFORMATION | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION | |||||||||||||||
Clinical testing is an essential element in the delivery of healthcare services. Physicians use clinical testing to assist in the detection, diagnosis, evaluation, monitoring and treatment of diseases and other medical conditions. The Company's DIS business includes its clinical testing operations which are generally categorized as clinical laboratory testing and anatomic pathology services. Clinical laboratory testing generally is performed on whole blood, serum, plasma and other body fluids, such as urine, and specimens such as microbiology samples. Anatomic pathology services are principally for the detection of cancer and are performed on tissues, such as biopsies, and other samples, such as human cells. Customers of the DIS business include patients, physicians, hospitals, employers, governmental institutions and other commercial clinical laboratories. The DIS business accounted for greater than 90% of net revenues from continuing operations in 2013 and 2012. | ||||||||||||||||
All other operating segments are included in the Company's DS business and consist of its risk assessment services, clinical trials testing, healthcare information technology, and diagnostics products businesses. The Company's risk assessment services business provides underwriting support services to the life insurance industry including electronic data collection, specimen collection and paramedical examinations, laboratory testing, medical record retrieval, case management, motor vehicle reports, telephone inspections, prescription histories and credit checks. The Company's clinical trials testing business provides clinical testing performed in connection with clinical research trials on new drugs, vaccines and certain medical devices. The Company's healthcare information technology business is a provider of clinical connectivity and data management solutions for healthcare organizations and clinicians that can help improve patient care and medical practice. The Company's diagnostics products business manufactures and markets products that enable healthcare professionals to make healthcare diagnoses, including products for testing for the professional market. | ||||||||||||||||
During the first quarter of 2013, the Company acquired certain operations of UMass, which is included in the Company's DIS business. During the second quarter of 2013, the Company acquired the operations of ATN and Dignity, which are included in the Company's DIS business. During the third quarter of 2013, the Company completed the sale of Enterix, which was included in all other operating segments. | ||||||||||||||||
On April 19, 2006, the Company decided to discontinue NID’s operations. The Company completed the sale of OralDNA in the fourth quarter of 2012 and completed the sale of HemoCue in the second quarter of 2013. The results of operations for NID, OralDNA and HemoCue have been classified as discontinued operations for all periods presented. See Note 14 for further details regarding discontinued operations. | ||||||||||||||||
At September 30, 2013, substantially all of the Company’s services are provided within the United States, and substantially all of the Company’s assets are located within the United States. | ||||||||||||||||
The following table is a summary of segment information for the three and nine months ended September 30, 2013 and 2012. Segment asset information is not presented since it is not used by the chief operating decision maker at the operating segment level. Operating earnings (loss) of each segment represents net revenues less directly identifiable expenses to arrive at operating income for the segment. General management and administrative corporate expenses, the amortization of intangibles assets, other miscellaneous operating income and expenses, the third quarter of 2013 gain on sale of the Ibrutinib royalty rights and loss on sale of Enterix (see Note 6), are included in general corporate activities below. Certain general operating expenses in 2012 have been reclassified to conform to the current year presentation. The accounting policies of the segments are the same as those of the Company as set forth in Note 2 to the Consolidated Financial Statements contained in the Company’s 2012 Annual Report on Form 10-K and Note 2 to the interim consolidated financial statements. | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net revenues: | ||||||||||||||||
DIS business | $ | 1,646,809 | $ | 1,686,908 | $ | 4,970,366 | $ | 5,192,451 | ||||||||
All other operating segments | 140,331 | 134,840 | 419,161 | 416,346 | ||||||||||||
Total net revenues | $ | 1,787,140 | $ | 1,821,748 | $ | 5,389,527 | $ | 5,608,797 | ||||||||
Operating earnings (loss): | ||||||||||||||||
DIS business | $ | 293,540 | $ | 349,671 | $ | 886,685 | $ | 1,071,188 | ||||||||
All other operating segments | 22,461 | 11,251 | 53,443 | 42,055 | ||||||||||||
General corporate activities | 373,476 | (56,302 | ) | 265,064 | (177,452 | ) | ||||||||||
Total operating income | 689,477 | 304,620 | 1,205,192 | 935,791 | ||||||||||||
Non-operating expenses, net | (32,142 | ) | (33,645 | ) | (94,880 | ) | (99,015 | ) | ||||||||
Income from continuing operations before taxes | 657,335 | 270,975 | 1,110,312 | 836,776 | ||||||||||||
Income tax expense | 245,874 | 103,978 | 413,702 | 320,266 | ||||||||||||
Income from continuing operations | 411,461 | 166,997 | 696,610 | 516,510 | ||||||||||||
Income from discontinued operations, net of taxes | 2,406 | 4,541 | 35,497 | 10,016 | ||||||||||||
Net income | 413,867 | 171,538 | 732,107 | 526,526 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 8,724 | 8,456 | 25,717 | 26,621 | ||||||||||||
Net income attributable to Quest Diagnostics | $ | 405,143 | $ | 163,082 | $ | 706,390 | $ | 499,905 | ||||||||
SUBSEQUENT_EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENT |
On October 7, 2013, the Company completed the acquisition of ConVerge Diagnostic Services, LLC ("ConVerge"). ConVerge is a leading full-service laboratory providing clinical, cytology and anatomic pathology testing services to patients, physicians and hospitals in New England. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The interim consolidated financial statements reflect all adjustments which in the opinion of management are necessary for a fair statement of results of operations, comprehensive income, financial condition, cash flows and stockholders' equity for the periods presented. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. The interim consolidated financial statements have been compiled without audit. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s 2012 Annual Report on Form 10-K. |
The year-end balance sheet data was derived from the audited financial statements as of December 31, 2012, but does not include all the disclosures required by accounting principles generally accepted in the United States (“GAAP”). | |
The Company completed the sale of its OralDNA salivary-diagnostics business ("OralDNA") during the fourth quarter of 2012. In April 2013, the Company completed the sale of its HemoCue diagnostics products business ("HemoCue"). During the third quarter of 2006, the Company completed its wind-down of NID, a test kit manufacturing subsidiary, and classified the operations of NID as discontinued operations. The accompanying consolidated statements of operations and related disclosures have been recast to report the results of OralDNA and HemoCue as discontinued operations for the three and nine months ended September 30, 2013 and 2012. See Note 14 for a further discussion of discontinued operations. | |
The Company completed the sale of its Enterix colorectal cancer screening test business (“Enterix”) in September 2013. The Enterix business has not been reclassified to discontinued operations due to the level of continuing involvement in the Enterix business subsequent to its sale. | |
Use Of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Earnings Per Share | The Company's unvested restricted common stock and unvested restricted stock units that contain non-forfeitable rights to dividends are participating securities and, therefore, are included in the earnings allocation in computing earnings per share using the two-class method. Basic earnings per common share is calculated by dividing net income, adjusted for earnings allocated to participating securities, by the weighted average number of common shares outstanding. Diluted earnings per common share is calculated by dividing net income, adjusted for earnings allocated to participating securities, by the weighted average number of common shares outstanding after giving effect to all potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the dilutive effect of outstanding stock options and performance share units granted under the Company's Amended and Restated Employee Long-Term Incentive Plan and its Amended and Restated Non-Employee Director Long-Term Incentive Plan. Earnings allocable to participating securities include the portion of dividends declared as well as the portion of undistributed earnings during the period allocable to participating securities. |
Adoption of New Accounting Standards | On January 1, 2013, the Company adopted a new accounting standard issued by the Financial Accounting Standards Board ("FASB") related to the testing of indefinite-lived intangible assets, other than goodwill, for impairment. Similar to the guidance related to the testing of goodwill for impairment, an entity testing an indefinite-lived intangible asset for impairment has the option to perform a qualitative assessment before calculating the fair value of the asset. If, after assessing the totality of events and circumstances an entity determines that it is not more-likely-than-not that the indefinite-lived intangible asset is impaired, the entity would not be required to perform the quantitative impairment test. However, if the qualitative assessment indicates that it is more-likely-than-not that the fair value of the asset is less than its carrying amount, then the quantitative assessment must be performed. An entity is permitted to perform the qualitative assessment on none, some or all of its indefinite-lived intangible assets and may also bypass the qualitative assessment and begin with the quantitative assessment of indefinite-lived intangible assets for impairment. The adoption of this new standard did not have a material impact on the Company’s consolidated financial statements. |
On January 1, 2013, the Company adopted a new accounting standard issued by the FASB that adds new disclosure requirements for amounts reclassified out of accumulated other comprehensive income ("AOCI"). The total changes in AOCI must be disaggregated between reclassification adjustments and current period other comprehensive income. This new standard also requires an entity to present reclassification adjustments out of AOCI either on the face of the income statement or in the notes to the financial statements based on their source and the income statement line items affected by the reclassification. This standard is effective prospectively for the Company for interim and annual periods beginning on January 1, 2013. The adoption of this new standard did not have a material impact on the Company’s consolidated financial statements. | |
New Accounting Pronouncements | In March 2013, the FASB issued a new accounting standard on foreign currency matters that clarifies the guidance of a parent company's accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. Under this new standard, a parent company that ceases to have a controlling financial interest in a foreign subsidiary or group of assets within a foreign entity shall release any related cumulative translation adjustment into net income only if a sale or transfer results in complete or substantially complete liquidation of the foreign entity. This standard shall be applied prospectively and will become effective for the Company on January 1, 2014. The Company expects that the adoption of this standard will not have a material effect on its consolidated financial statements. |
In July 2013, the FASB issued a new accounting standard to permit the use of the Fed Funds Effective Swap Rate to be used as an alternative benchmark interest rate for hedge accounting purposes in interest rate derivatives. The new standard is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The new standard is not expected to have a material effect on the Company's consolidated financial statements. | |
In July 2013, the FASB issued a new accounting standard on the financial statement presentation of unrecognized tax benefits. The new standard provides that a liability related to an unrecognized tax benefit would be presented as a reduction of a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. The new standard becomes effective for the Company on January 1, 2014 and it should be applied prospectively to unrecognized tax benefits that exist at the effective date with retrospective application permitted. The Company's analysis indicates that the adoption of this standard will not have a material effect on its consolidated financial statements. | |
Derivative Financial Instruments | The Company uses derivative financial instruments to manage its exposure to market risks for changes in interest rates and foreign currencies. This strategy includes the use of interest rate swap agreements, forward starting interest rate swap agreements, treasury lock agreements and foreign currency forward contracts to manage its exposure to movements in interest and currency rates. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. These policies prohibit holding or issuing derivative financial instruments for speculative purposes. The Company does not enter into derivative financial instruments that contain credit-risk-related contingent features or requirements to post collateral. |
Interest Rate Risk | The Company is exposed to interest rate risk on its cash and cash equivalents and its debt obligations. Interest income earned on cash and cash equivalents may fluctuate as interest rates change; however, due to their relatively short maturities, the Company does not hedge these assets or their investment cash flows and the impact of interest rate risk is not material. The Company's debt obligations consist of fixed-rate and variable-rate debt instruments. The Company's primary objective is to achieve the lowest overall cost of funding while managing the variability in cash outflows within an acceptable range. In order to achieve this objective, the Company has entered into interest rate swaps. Interest rate swaps involve the periodic exchange of payments without the exchange of underlying principal or notional amounts. Net settlements between the counterparties are recognized as an adjustment to interest expense. |
Foreign Currency Risk | The Company had previously been exposed to market risk for changes in foreign exchange rates primarily under certain intercompany receivables and payables. The Company historically used foreign exchange forward contracts to mitigate the exposure of the eventual net cash inflows or outflows resulting from these intercompany transactions. As a result of the HemoCue disposition, this foreign currency risk has largely been eliminated. The Company's remaining foreign exchange exposure is not material to the Company's consolidated financial condition. |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The computation of basic and diluted earnings per common share was as follows (in thousands, except per share data): | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Amounts attributable to Quest Diagnostics’ stockholders: | ||||||||||||||||
Income from continuing operations | $ | 402,737 | $ | 158,541 | $ | 670,893 | $ | 489,889 | ||||||||
Income from discontinued operations, net of taxes | 2,406 | 4,541 | 35,497 | 10,016 | ||||||||||||
Net income attributable to Quest Diagnostics’ common stockholders | $ | 405,143 | $ | 163,082 | $ | 706,390 | $ | 499,905 | ||||||||
Income from continuing operations | $ | 402,737 | $ | 158,541 | $ | 670,893 | $ | 489,889 | ||||||||
Less: Earnings allocated to participating securities | 1,484 | 645 | 2,410 | 1,951 | ||||||||||||
Earnings available to Quest Diagnostics’ common stockholders – basic and diluted | $ | 401,253 | $ | 157,896 | $ | 668,483 | $ | 487,938 | ||||||||
Weighted average common shares outstanding – basic | 149,625 | 158,783 | 153,477 | 158,518 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Stock options and performance share units | 1,295 | 1,919 | 1,318 | 1,546 | ||||||||||||
Weighted average common shares outstanding – diluted | 150,920 | 160,702 | 154,795 | 160,064 | ||||||||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders – basic: | ||||||||||||||||
Income from continuing operations | $ | 2.68 | $ | 0.99 | $ | 4.36 | $ | 3.07 | ||||||||
Income from discontinued operations | 0.02 | 0.03 | 0.23 | 0.07 | ||||||||||||
Net income | $ | 2.7 | $ | 1.02 | $ | 4.59 | $ | 3.14 | ||||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders – diluted: | ||||||||||||||||
Income from continuing operations | $ | 2.66 | $ | 0.98 | $ | 4.32 | $ | 3.04 | ||||||||
Income from discontinued operations | 0.02 | 0.03 | 0.23 | 0.07 | ||||||||||||
Net income | $ | 2.68 | $ | 1.01 | $ | 4.55 | $ | 3.11 | ||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following securities were not included in the calculation of diluted earnings per share due to their antidilutive effect (shares in thousands): | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Stock options and performance share units | 1,527 | 1,317 | 1,690 | 1,925 | ||||||||||||
INVIGORATE_PROGRAM_Tables
INVIGORATE PROGRAM (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||
Schedule of Pre-Tax Restructuring and Integration Charges | The following table provides a summary of the Company's pre-tax restructuring and integration charges associated with the Invigorate program and other employee separation costs for the three and nine months ended September 30, 2013: | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Employee separation costs | $ | 24,827 | $ | 27,866 | $ | 66,182 | $ | 31,550 | ||||||||
Facility-related costs | 4,172 | 414 | 5,415 | 414 | ||||||||||||
Asset impairment charges | — | 1,147 | — | 1,147 | ||||||||||||
Accelerated vesting of stock-based compensation | — | 3,030 | 1,284 | 3,030 | ||||||||||||
Total restructuring charges | 28,999 | 32,457 | 72,881 | 36,141 | ||||||||||||
Other integration costs | $ | 7,945 | $ | 2,431 | $ | 21,202 | $ | 5,241 | ||||||||
Total restructuring and integration charges | $ | 36,944 | $ | 34,888 | $ | 94,083 | $ | 41,382 | ||||||||
Schedule of Activity of Restructuring Liability | The following table summarizes activity in the restructuring liability as of September 30, 2013 and December 31, 2012: | |||||||||||||||
Employee Separation Costs | Facility-Related Costs | Total | ||||||||||||||
Balance, December 31, 2012 | $ | 40,018 | $ | 257 | $ | 40,275 | ||||||||||
Current period charges | 66,182 | 5,415 | 71,597 | |||||||||||||
Other / adjustments | 2,915 | — | 2,915 | |||||||||||||
Less: | ||||||||||||||||
Cash payments | (59,229 | ) | (575 | ) | (59,804 | ) | ||||||||||
Balance, September 30, 2013 | $ | 49,886 | $ | 5,097 | $ | 54,983 | ||||||||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value Measurements | The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis: | |||||||||||||||
Basis of Fair Value Measurements | ||||||||||||||||
Quoted | Significant | Significant | ||||||||||||||
Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | ||||||||||||||
Markets for | Inputs | |||||||||||||||
Identical | ||||||||||||||||
Assets / | ||||||||||||||||
Liabilities | ||||||||||||||||
September 30, 2013 | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Trading securities | $ | 49,226 | $ | 49,226 | $ | — | $ | — | ||||||||
Cash surrender value of life insurance policies | 27,842 | — | 27,842 | — | ||||||||||||
Put option | 5,300 | — | — | 5,300 | ||||||||||||
Available-for-sale equity securities | 1,062 | — | — | 1,062 | ||||||||||||
Total | $ | 83,430 | $ | 49,226 | $ | 27,842 | $ | 6,362 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation liabilities | $ | 81,180 | $ | — | $ | 81,180 | $ | — | ||||||||
Interest rate swaps | 26,982 | — | 26,982 | — | ||||||||||||
Call option | 7,770 | — | — | 7,770 | ||||||||||||
Total | $ | 115,932 | $ | — | $ | 108,162 | $ | 7,770 | ||||||||
Basis of Fair Value Measurements | ||||||||||||||||
Quoted | Significant | Significant | ||||||||||||||
Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | ||||||||||||||
Markets for | Inputs | |||||||||||||||
Identical | ||||||||||||||||
Assets / | ||||||||||||||||
Liabilities | ||||||||||||||||
December 31, 2012 | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Trading securities | $ | 52,283 | $ | 52,283 | $ | — | $ | — | ||||||||
Cash surrender value of life insurance policies | 25,018 | — | 25,018 | — | ||||||||||||
Interest rate swaps | 830 | — | 830 | — | ||||||||||||
Available-for-sale equity securities | 612 | — | — | 612 | ||||||||||||
Foreign currency forward contracts | 403 | — | 403 | — | ||||||||||||
Total | $ | 79,146 | $ | 52,283 | $ | 26,251 | $ | 612 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation liabilities | $ | 82,218 | $ | — | $ | 82,218 | $ | — | ||||||||
Interest rate swaps | 3,129 | — | 3,129 | — | ||||||||||||
Total | $ | 85,347 | $ | — | $ | 85,347 | $ | — | ||||||||
Reconciliation of Beginning and Ending Balances of Assets Unobservable Inputs | The following table provides a reconciliation of the beginning and ending balances of assets and liabilities using significant unobservable inputs: | |||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | ||||||||||||||||
(Level 3) | ||||||||||||||||
Available-for-Sale Equity Securities | Put Option Derivative Asset | Total | ||||||||||||||
Balance, December 31, 2012 | $ | 612 | $ | — | $ | 612 | ||||||||||
Purchases, additions and issuances | — | 8,250 | 8,250 | |||||||||||||
Total gains (losses) - realized/ unrealized: | ||||||||||||||||
Included in earnings | — | (2,950 | ) | (2,950 | ) | |||||||||||
Included in other comprehensive income (loss) | 450 | — | 450 | |||||||||||||
Transfers in and out of Level 3 | — | — | — | |||||||||||||
Balance, September 30, 2013 | $ | 1,062 | $ | 5,300 | $ | 6,362 | ||||||||||
Reconciliation of Beginning and Ending Balances of Liabilities Unobservable Inputs | ||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | ||||||||||||||||
(Level 3) | ||||||||||||||||
Call Option Derivative Liability | ||||||||||||||||
Balance, December 31, 2012 | $ | — | ||||||||||||||
Purchases, additions and issuances | 10,808 | |||||||||||||||
Total (gains) losses - realized/ unrealized: | ||||||||||||||||
Included in earnings | (3,038 | ) | ||||||||||||||
Transfers in and out of Level 3 | — | |||||||||||||||
Balance, September 30, 2013 | $ | 7,770 | ||||||||||||||
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||
Changes in Goodwill, Net | The changes in goodwill for the nine months ended September 30, 2013 and for the year ended December 31, 2012 are as follows: | |||||||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
Balance at beginning of period | $ | 5,535,848 | $ | 5,795,765 | ||||||||||||||||||||||
Goodwill acquired during the period | 130,192 | 28,144 | ||||||||||||||||||||||||
Goodwill impairment and write-off associated with sale of businesses during the period | (37,103 | ) | (85,173 | ) | ||||||||||||||||||||||
Reclassification to non-current assets held for sale | — | (218,795 | ) | |||||||||||||||||||||||
(Decrease) increase related to foreign currency translation | (129 | ) | 15,907 | |||||||||||||||||||||||
Balance at end of period | $ | 5,628,808 | $ | 5,535,848 | ||||||||||||||||||||||
Intangible Assets Excluding Goodwill | ||||||||||||||||||||||||||
Intangible assets at September 30, 2013 and December 31, 2012 consisted of the following: | ||||||||||||||||||||||||||
Weighted | September 30, 2013 | December 31, 2012 | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||
Period | ||||||||||||||||||||||||||
(in Years) | ||||||||||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | |||||||||||||||||||||
Amortization | Amortization | |||||||||||||||||||||||||
Amortizing intangible assets: | ||||||||||||||||||||||||||
Customer-related intangibles | 18 | $ | 657,901 | $ | (200,194 | ) | $ | 457,707 | $ | 566,701 | $ | (173,516 | ) | $ | 393,185 | |||||||||||
Non-compete agreements | 4 | 41,731 | (24,405 | ) | 17,326 | 38,551 | (17,123 | ) | 21,428 | |||||||||||||||||
Technology | 14 | 119,440 | (25,714 | ) | 93,726 | 131,040 | (25,144 | ) | 105,896 | |||||||||||||||||
Other | 8 | 143,807 | (54,086 | ) | 89,721 | 141,818 | (37,634 | ) | 104,184 | |||||||||||||||||
Total | 16 | 962,879 | (304,399 | ) | 658,480 | 878,110 | (253,417 | ) | 624,693 | |||||||||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||||||||
Tradenames | 244,000 | — | 244,000 | 246,200 | — | 246,200 | ||||||||||||||||||||
In-process research and development | 120 | — | 120 | 120 | — | 120 | ||||||||||||||||||||
Other | 1,299 | — | 1,299 | 1,159 | — | 1,159 | ||||||||||||||||||||
Total intangible assets | $ | 1,208,298 | $ | (304,399 | ) | $ | 903,899 | $ | 1,125,589 | $ | (253,417 | ) | $ | 872,172 | ||||||||||||
Future Amortization Expense Intangible Assets | The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of September 30, 2013 is as follows: | |||||||||||||||||||||||||
Year Ending December 31, | ||||||||||||||||||||||||||
Remainder of 2013 | $ | 19,932 | ||||||||||||||||||||||||
2014 | 76,657 | |||||||||||||||||||||||||
2015 | 65,335 | |||||||||||||||||||||||||
2016 | 58,980 | |||||||||||||||||||||||||
2017 | 56,000 | |||||||||||||||||||||||||
2018 | 48,751 | |||||||||||||||||||||||||
Thereafter | 332,825 | |||||||||||||||||||||||||
Total | $ | 658,480 | ||||||||||||||||||||||||
FINANCIAL_INSTRUMENTS_Tables
FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended | |||||||||||
Sep. 30, 2013 | ||||||||||||
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | ||||||||||||
Schedule of the fair values of derivative instruments | A summary of the fair values of derivative instruments in the consolidated balance sheets is stated in the table below: | |||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||
Balance Sheet | Fair Value | Balance Sheet | Fair Value | |||||||||
Classification | Classification | |||||||||||
Derivatives Designated as Hedging Instruments | ||||||||||||
Asset Derivatives: | ||||||||||||
Interest rate swaps | Other assets | $ | — | Other assets | $ | 830 | ||||||
Liability Derivatives: | ||||||||||||
Interest rate swaps | Other liabilities | 26,982 | Other liabilities | 3,129 | ||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||
Asset Derivatives: | ||||||||||||
Put option | Other assets | 5,300 | Other assets | — | ||||||||
Foreign currency forward contracts | Other current assets | — | Other current assets | 403 | ||||||||
5,300 | 403 | |||||||||||
Liability Derivatives: | ||||||||||||
Call option | Other liabilities | 7,770 | Other liabilities | — | ||||||||
Total Net Derivatives Liabilities | $ | (29,452 | ) | $ | (1,896 | ) |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Equity [Abstract] | ||||||||||||||||
Schedule of Changes in Accumulated Other Comprehensive Income by Component | The changes in accumulated other comprehensive (loss) income by component for the nine months ended September 30, 2013 and 2012 were as follows: | |||||||||||||||
Foreign | Market Value | Deferred Loss | Accumulated Other Comprehensive (Loss) Income | |||||||||||||
Currency | Adjustment | |||||||||||||||
Translation | ||||||||||||||||
Adjustment | ||||||||||||||||
Balance, December 31, 2012 | $ | 25,463 | $ | (4,326 | ) | $ | (6,817 | ) | $ | 14,320 | ||||||
Other comprehensive income before reclassifications | 2,702 | 274 | — | 2,976 | ||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | (28,761 | ) | 2,847 | 630 | (25,284 | ) | ||||||||||
Net current period other comprehensive (loss) income | (26,059 | ) | 3,121 | 630 | (22,308 | ) | ||||||||||
Balance, September 30, 2013 | $ | (596 | ) | $ | (1,205 | ) | $ | (6,187 | ) | $ | (7,988 | ) | ||||
Foreign | Market Value | Deferred Loss | Accumulated Other Comprehensive (Loss) Income | |||||||||||||
Currency | Adjustment | |||||||||||||||
Translation | ||||||||||||||||
Adjustment | ||||||||||||||||
Balance, December 31, 2011 | $ | 943 | $ | (1,355 | ) | $ | (7,655 | ) | $ | (8,067 | ) | |||||
Other comprehensive income before reclassifications | 21,321 | 84 | — | 21,405 | ||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | — | — | 630 | 630 | ||||||||||||
Net current period other comprehensive income | 21,321 | 84 | 630 | 22,035 | ||||||||||||
Balance, September 30, 2012 | $ | 22,264 | $ | (1,271 | ) | $ | (7,025 | ) | $ | 13,968 | ||||||
SUPPLEMENTAL_CASH_FLOW_OTHER_D1
SUPPLEMENTAL CASH FLOW & OTHER DATA (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||||||||||
Supplemental Cash Flow and Other Data | Supplemental cash flow data for the three and nine months ended September 30, 2013 and 2012 is as follows: | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Depreciation expense | $ | 48,810 | $ | 51,310 | $ | 151,705 | $ | 154,939 | ||||||||
Amortization expense | 20,159 | 19,961 | 59,278 | 60,361 | ||||||||||||
Interest paid | 51,767 | 47,390 | 135,738 | 129,380 | ||||||||||||
Income taxes paid | 127,294 | 89,338 | 332,232 | 292,147 | ||||||||||||
Assets acquired under capital leases | — | 1,215 | 2,411 | 4,170 | ||||||||||||
Businesses acquired: | ||||||||||||||||
Fair value of assets acquired | — | — | 241,016 | 50,800 | ||||||||||||
Fair value of liabilities assumed | — | — | 10,962 | 269 | ||||||||||||
Fair value of net assets acquired | — | — | 230,054 | 50,531 | ||||||||||||
Merger consideration paid (payable), net | (54 | ) | 6 | (50,159 | ) | 43 | ||||||||||
Cash paid for business acquisitions | (54 | ) | 6 | 179,895 | 50,574 | |||||||||||
Less: Cash acquired | — | — | — | — | ||||||||||||
Business acquisitions, net of cash acquired | $ | (54 | ) | $ | 6 | $ | 179,895 | $ | 50,574 | |||||||
Schedule of Cash Flow, Supplemental Disclosures, Continuing Operations | Supplemental continuing operations data for the statement of operations for the three and nine months ended September 30, 2013 and 2012 is as follows: | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Depreciation expense | $ | 48,810 | $ | 50,627 | $ | 151,481 | $ | 152,882 | ||||||||
Interest expense | (40,657 | ) | (41,451 | ) | (121,722 | ) | (126,583 | ) | ||||||||
Interest income | 689 | 642 | 1,968 | 1,922 | ||||||||||||
Interest expense, net | (39,968 | ) | (40,809 | ) | (119,754 | ) | (124,661 | ) | ||||||||
DISCONTINUED_OPERATIONS_Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Discontinued Operations [Abstract] | ||||||||||||||||
Summarized Financial Information for Discontinued Operations | Summarized financial information for the discontinued operations is set forth below: | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net revenues | $ | — | $ | 29,689 | $ | 27,543 | $ | 85,907 | ||||||||
Income from discontinued operations before taxes | 2,886 | 4,427 | 24,960 | 8,579 | ||||||||||||
Income tax (expense) benefit | (480 | ) | 114 | 10,537 | 1,437 | |||||||||||
Income from discontinued operations, net of taxes | $ | 2,406 | $ | 4,541 | $ | 35,497 | $ | 10,016 | ||||||||
BUSINESS_SEGMENT_INFORMATION_T
BUSINESS SEGMENT INFORMATION (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||
Summary of Segment Reporting Information by Segment | The following table is a summary of segment information for the three and nine months ended September 30, 2013 and 2012. Segment asset information is not presented since it is not used by the chief operating decision maker at the operating segment level. Operating earnings (loss) of each segment represents net revenues less directly identifiable expenses to arrive at operating income for the segment. General management and administrative corporate expenses, the amortization of intangibles assets, other miscellaneous operating income and expenses, the third quarter of 2013 gain on sale of the Ibrutinib royalty rights and loss on sale of Enterix (see Note 6), are included in general corporate activities below. Certain general operating expenses in 2012 have been reclassified to conform to the current year presentation. The accounting policies of the segments are the same as those of the Company as set forth in Note 2 to the Consolidated Financial Statements contained in the Company’s 2012 Annual Report on Form 10-K and Note 2 to the interim consolidated financial statements. | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net revenues: | ||||||||||||||||
DIS business | $ | 1,646,809 | $ | 1,686,908 | $ | 4,970,366 | $ | 5,192,451 | ||||||||
All other operating segments | 140,331 | 134,840 | 419,161 | 416,346 | ||||||||||||
Total net revenues | $ | 1,787,140 | $ | 1,821,748 | $ | 5,389,527 | $ | 5,608,797 | ||||||||
Operating earnings (loss): | ||||||||||||||||
DIS business | $ | 293,540 | $ | 349,671 | $ | 886,685 | $ | 1,071,188 | ||||||||
All other operating segments | 22,461 | 11,251 | 53,443 | 42,055 | ||||||||||||
General corporate activities | 373,476 | (56,302 | ) | 265,064 | (177,452 | ) | ||||||||||
Total operating income | 689,477 | 304,620 | 1,205,192 | 935,791 | ||||||||||||
Non-operating expenses, net | (32,142 | ) | (33,645 | ) | (94,880 | ) | (99,015 | ) | ||||||||
Income from continuing operations before taxes | 657,335 | 270,975 | 1,110,312 | 836,776 | ||||||||||||
Income tax expense | 245,874 | 103,978 | 413,702 | 320,266 | ||||||||||||
Income from continuing operations | 411,461 | 166,997 | 696,610 | 516,510 | ||||||||||||
Income from discontinued operations, net of taxes | 2,406 | 4,541 | 35,497 | 10,016 | ||||||||||||
Net income | 413,867 | 171,538 | 732,107 | 526,526 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 8,724 | 8,456 | 25,717 | 26,621 | ||||||||||||
Net income attributable to Quest Diagnostics | $ | 405,143 | $ | 163,082 | $ | 706,390 | $ | 499,905 | ||||||||
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Income from continuing operations | $402,737 | $158,541 | $670,893 | $489,889 |
Income from discontinued operations, net of taxes | 2,406 | 4,541 | 35,497 | 10,016 |
Net income attributable to Quest Diagnostics’ common stockholders | 405,143 | 163,082 | 706,390 | 499,905 |
Less: Earnings allocated to participating securities | 1,484 | 645 | 2,410 | 1,951 |
Earnings available to Quest Diagnostics' common stockholders - basic and diluted | $401,253 | $157,896 | $668,483 | $487,938 |
Weighted average common shares outstanding - basic | 149,625 | 158,783 | 153,477 | 158,518 |
Stock options and performance share units | 1,295 | 1,919 | 1,318 | 1,546 |
Weighted average common shares outstanding - diluted | 150,920 | 160,702 | 154,795 | 160,064 |
Income from continuing operations, per basic share | $2.68 | $0.99 | $4.36 | $3.07 |
Income from discontinued operations, per basic share | $0.02 | $0.03 | $0.23 | $0.07 |
Net income , per basic share | $2.70 | $1.02 | $4.59 | $3.14 |
Income from continuing operations, per diluted share | $2.66 | $0.98 | $4.32 | $3.04 |
Income from discontinued operations, per diluted share | $0.02 | $0.03 | $0.23 | $0.07 |
Net income, per diluted share | $2.68 | $1.01 | $4.55 | $3.11 |
Stock options and performance share units not included due to their antidilutive effect | 1,527 | 1,317 | 1,690 | 1,925 |
INVIGORATE_PROGRAM_Narrative_D
INVIGORATE PROGRAM (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
positions | layer | |||
positions | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Management layers eliminated | 3 | |||
Number of positions eliminated | 450 | 450 | ||
Expected number of positions eliminated | 500 | |||
Total restructuring and integration charges | $36,900,000 | $34,900,000 | $94,100,000 | $41,400,000 |
Cost of Services [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and integration charges | 10,400,000 | 19,800,000 | 37,100,000 | 25,700,000 |
Selling, General and Administrative Expenses [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and integration charges | 26,500,000 | 15,100,000 | 57,000,000 | 15,700,000 |
Professional Fees Incurred in Connection with Further Restructuring and Integration [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Adiditional costs | 2,400,000 | 9,700,000 | 8,500,000 | 28,800,000 |
Invigorate Program [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and integration charges | 36,944,000 | 34,888,000 | 94,083,000 | 41,382,000 |
Management Layer Reduction Initiative [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Incurred cost | 1,000,000 | 19,500,000 | ||
Voluntary Retirement Program (Invigorate Program) [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Incurred cost | 400,000 | 20,600,000 | 4,700,000 | 23,300,000 |
Support Function Outsourcing [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Incurred cost | 16,500,000 | 16,500,000 | ||
Other Restructuring Initiatives [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Incurred cost | $6,900,000 | $25,500,000 |
INVIGORATE_PROGRAM_PreTax_Rest
INVIGORATE PROGRAM (Pre-Tax Restructuring and Integration Charges) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring charges | ($71,597) | |||
Total restructuring and integration charges | 36,900 | 34,900 | 94,100 | 41,400 |
Invigorate Program [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Employee Separation Costs | 24,827 | 27,866 | 66,182 | 31,550 |
Facility-related costs | 4,172 | 414 | 5,415 | 414 |
Asset impairment charges | 0 | 1,147 | 0 | 1,147 |
Accelerated vesting of stock-based compensation | 0 | 3,030 | 1,284 | 3,030 |
Total restructuring charges | 28,999 | 32,457 | 72,881 | 36,141 |
Other integration costs | 7,945 | 2,431 | 21,202 | 5,241 |
Total restructuring and integration charges | $36,944 | $34,888 | $94,083 | $41,382 |
INVIGORATE_PROGRAM_Activities_
INVIGORATE PROGRAM (Activities of Restructuring Liabilities) (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Restructuring Reserve [Roll Forward] | |
Balance, beginning of period | $40,275 |
Current period charges | 71,597 |
Other / adjustments | 2,915 |
Cash payments | -59,804 |
Balance, end of period | 54,983 |
Employee Separation Costs [Member] | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning of period | 40,018 |
Current period charges | 66,182 |
Other / adjustments | 2,915 |
Cash payments | -59,229 |
Balance, end of period | 49,886 |
Facility-Related Costs [Member] | |
Restructuring Reserve [Roll Forward] | |
Balance, beginning of period | 257 |
Current period charges | 5,415 |
Other / adjustments | 0 |
Cash payments | -575 |
Balance, end of period | $5,097 |
BUSINESS_ACQUISITION_Details
BUSINESS ACQUISITION (Details) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2013 | Jan. 02, 2013 | |
Put Option [Member] | Call Option [Member] | UMass Memorial Medical Center (UMass) [Member] | |
Business Acquisition [Line Items] | |||
Percentage of equity interest expected to be divested | 18.90% | ||
Vesting period for derivative instrument | 18 months | 18 months |
DISPOSITIONS_Details
DISPOSITIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 1 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jul. 18, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Ibrutinib [Member] | Ibrutinib [Member] | Enterix [Member] | |||||
Royalty Agreement Terms [Member] | Royalty Agreement Terms [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from sale of intangible assets | $485,000,000 | ||||||
Gain on sale of royalty rights | 474,138,000 | 0 | 474,138,000 | 0 | 474,000,000 | ||
Loss on sale of businesses, net | ($17,400,000) | $0 | $40,000,000 |
TAXES_ON_INCOME_Details
TAXES ON INCOME (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Taxes [Line Items] | ||||
Income tax expense | $245,874 | $103,978 | $413,702 | $320,266 |
Royalty Agreement Terms [Member] | Ibrutinib [Member] | ||||
Income Taxes [Line Items] | ||||
Income tax expense | $176,000 |
FAIR_VALUE_MEASUREMENTS_Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Jan. 02, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
UMass Memorial Medical Center (UMass) [Member] | Put Option [Member] | Call Option [Member] | |||
Business Acquisition [Line Items] | |||||
Percentage of equity interest expected to be divested | 18.90% | ||||
Vesting period for derivative instrument | 18 months | 18 months | |||
Fair value of debt | $3,600,000,000 | $3,800,000,000 | |||
Debt Instrument Fair Value In Excess Of Carrying Value Of Debt | $253,000,000 | $481,000,000 |
FAIR_VALUE_MEASUREMENTS_Recogn
FAIR VALUE MEASUREMENTS (Recognized Assets and Liabilities at Fair Value) (Details) (Recurring Basis [Member], USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | $49,226 | $52,283 |
Cash surrender value of life insurance policies | 27,842 | 25,018 |
Available-for-sale equity securities | 1,062 | 612 |
Total assets | 83,430 | 79,146 |
Deferred compensation liabilities | 81,180 | 82,218 |
Total liabilities | 115,932 | 85,347 |
Quoted Prices in Active Markets for Identical Assets / Liabilities, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 49,226 | 52,283 |
Cash surrender value of life insurance policies | ||
Available-for-sale equity securities | ||
Total assets | 49,226 | 52,283 |
Deferred compensation liabilities | ||
Total liabilities | ||
Significant Other Observable Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | ||
Cash surrender value of life insurance policies | 27,842 | 25,018 |
Available-for-sale equity securities | ||
Total assets | 27,842 | 26,251 |
Deferred compensation liabilities | 81,180 | 82,218 |
Total liabilities | 108,162 | 85,347 |
Significant Unobservable Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | ||
Cash surrender value of life insurance policies | ||
Available-for-sale equity securities | 1,062 | 612 |
Total assets | 6,362 | 612 |
Deferred compensation liabilities | ||
Total liabilities | 7,770 | |
Put Option [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 5,300 | |
Put Option [Member] | Quoted Prices in Active Markets for Identical Assets / Liabilities, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | ||
Put Option [Member] | Significant Other Observable Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | |
Put Option [Member] | Significant Unobservable Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 5,300 | |
Interest Rate Swaps [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 830 | |
Derivative instruments, liabilities | 26,982 | |
Interest Rate Swaps [Member] | Quoted Prices in Active Markets for Identical Assets / Liabilities, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | ||
Derivative instruments, liabilities | 0 | |
Interest Rate Swaps [Member] | Significant Other Observable Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 830 | |
Derivative instruments, liabilities | 26,982 | |
Interest Rate Swaps [Member] | Significant Unobservable Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | ||
Derivative instruments, liabilities | 0 | |
Call Option [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, liabilities | 7,770 | |
Call Option [Member] | Quoted Prices in Active Markets for Identical Assets / Liabilities, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, liabilities | ||
Call Option [Member] | Significant Other Observable Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, liabilities | ||
Call Option [Member] | Significant Unobservable Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, liabilities | 7,770 | |
Foreign Currency Forward Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 403 | |
Derivative instruments, liabilities | 3,129 | |
Foreign Currency Forward Contracts [Member] | Quoted Prices in Active Markets for Identical Assets / Liabilities, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | ||
Derivative instruments, liabilities | ||
Foreign Currency Forward Contracts [Member] | Significant Other Observable Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 403 | |
Derivative instruments, liabilities | 3,129 | |
Foreign Currency Forward Contracts [Member] | Significant Unobservable Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | ||
Derivative instruments, liabilities |
FAIR_VALUE_MEASUREMENTS_Reconc
FAIR VALUE MEASUREMENTS (Reconciliation of Beginning and Ending Balances of Assets Unobservable Inputs) (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning Balance | $612 |
Purchases, additions and issuances | 8,250 |
Included in earnings | -2,950 |
Included in other comprehensive income (loss) | 450 |
Transfers in and out of Level 3 | 0 |
Ending Balance | 6,362 |
Available-for-sale Equity Securities [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning Balance | 612 |
Purchases, additions and issuances | 0 |
Included in earnings | 0 |
Included in other comprehensive income (loss) | 450 |
Transfers in and out of Level 3 | 0 |
Ending Balance | 1,062 |
Put Option Derivative Assets [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning Balance | 0 |
Purchases, additions and issuances | 8,250 |
Included in earnings | -2,950 |
Included in other comprehensive income (loss) | 0 |
Transfers in and out of Level 3 | 0 |
Ending Balance | $5,300 |
FAIR_VALUE_MEASUREMENTS_Reconc1
FAIR VALUE MEASUREMENTS (Reconciliation of Beginning and Ending Balances of Liabilities Unobservable Inputs) (Details) (Call Option Derivative Liability [Member], USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Call Option Derivative Liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning Balance | $0 |
Purchases, additions and issuances | 10,808 |
Included in earnings | -3,038 |
Transfers in and out of Level 3 | 0 |
Ending Balance | $7,770 |
GOODWILL_AND_INTANGIBLE_ASSETS2
GOODWILL AND INTANGIBLE ASSETS (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||||
Goodwill, Balance at beginning of period | $5,535,848,000 | $5,795,765,000 | $5,795,765,000 | ||
Goodwill acquired during the period | 130,192,000 | 28,144,000 | |||
Goodwill impairment and write-off associated with sale of businesses during the period | -37,103,000 | -85,173,000 | |||
Goodwill reclassified to non-current assets held for sale | 0 | -218,795,000 | |||
(Decrease) Increase related to foreign currency translation | -129,000 | 15,907,000 | |||
Goodwill, Balance at end of period | 5,628,808,000 | 5,628,808,000 | 5,535,848,000 | ||
Portion of goodwill associated with the DIS business | 90.00% | 90.00% | 90.00% | ||
Amortizing intangible assets, Cost | 1,208,298,000 | 1,208,298,000 | 1,125,589,000 | ||
Amortizing intangible assets, Accumulated Amortization | -304,399,000 | -304,399,000 | -253,417,000 | ||
Amortizing intangible assets, Net | 903,899,000 | 903,899,000 | 872,172,000 | ||
Amortization expense related to intangible assets | 20,158,000 | 18,577,000 | 59,198,000 | 56,210,000 | |
Remainder of 2013 | 19,932,000 | 19,932,000 | |||
Future Amortization Expense, 2014 | 76,657,000 | 76,657,000 | |||
Future Amortization Expense, 2015 | 65,335,000 | 65,335,000 | |||
Future Amortization Expense, 2016 | 58,980,000 | 58,980,000 | |||
Future Amortization Expense, 2017 | 56,000,000 | 56,000,000 | |||
Future Amortization Expense, 2018 | 48,751,000 | 48,751,000 | |||
Future Amortization Expense, Thereafter | 332,825,000 | 332,825,000 | |||
Future Amortization Expense, Total | 658,480,000 | ||||
Intangible Assets Not Subject to Amortization - Tradenames [Member] | |||||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||||
Amortizing intangible assets, Cost | 244,000,000 | 244,000,000 | 246,200,000 | ||
Amortizing intangible assets, Accumulated Amortization | |||||
Amortizing intangible assets, Net | 244,000,000 | 244,000,000 | 246,200,000 | ||
Intangible Assets Not Subject to Amortization - In-Process Research and Development [Member] | |||||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||||
Amortizing intangible assets, Cost | 120,000 | 120,000 | 120,000 | ||
Amortizing intangible assets, Accumulated Amortization | |||||
Amortizing intangible assets, Net | 120,000 | 120,000 | 120,000 | ||
Intangible Assets Not Subject to Amortization - Other [Member] | |||||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||||
Amortizing intangible assets, Cost | 1,299,000 | 1,299,000 | 1,159,000 | ||
Amortizing intangible assets, Accumulated Amortization | |||||
Amortizing intangible assets, Net | 1,299,000 | 1,299,000 | 1,159,000 | ||
Customer-related intangibles [Member] | |||||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||||
Weighted Average Amortization Period | 18 years | ||||
Amortizing intangible assets, Cost | 657,901,000 | 657,901,000 | 566,701,000 | ||
Amortizing intangible assets, Accumulated Amortization | -200,194,000 | -200,194,000 | -173,516,000 | ||
Amortizing intangible assets, Net | 457,707,000 | 457,707,000 | 393,185,000 | ||
Non-compete agreements [Member] | |||||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||||
Weighted Average Amortization Period | 4 years | ||||
Amortizing intangible assets, Cost | 41,731,000 | 41,731,000 | 38,551,000 | ||
Amortizing intangible assets, Accumulated Amortization | -24,405,000 | -24,405,000 | -17,123,000 | ||
Amortizing intangible assets, Net | 17,326,000 | 17,326,000 | 21,428,000 | ||
Technology [Member] | |||||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||||
Weighted Average Amortization Period | 14 years | ||||
Amortizing intangible assets, Cost | 119,440,000 | 119,440,000 | 131,040,000 | ||
Amortizing intangible assets, Accumulated Amortization | -25,714,000 | -25,714,000 | -25,144,000 | ||
Amortizing intangible assets, Net | 93,726,000 | 93,726,000 | 105,896,000 | ||
Other [Member] | |||||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||||
Weighted Average Amortization Period | 8 years | ||||
Amortizing intangible assets, Cost | 143,807,000 | 143,807,000 | 141,818,000 | ||
Amortizing intangible assets, Accumulated Amortization | -54,086,000 | -54,086,000 | -37,634,000 | ||
Amortizing intangible assets, Net | 89,721,000 | 89,721,000 | 104,184,000 | ||
Total Amortizing Intangible Assets [Member] | |||||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||||
Weighted Average Amortization Period | 16 years | ||||
Amortizing intangible assets, Cost | 962,879,000 | 962,879,000 | 878,110,000 | ||
Amortizing intangible assets, Accumulated Amortization | -304,399,000 | -304,399,000 | -253,417,000 | ||
Amortizing intangible assets, Net | 658,480,000 | 658,480,000 | 624,693,000 | ||
Enterix [Member] | |||||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||||
Finite-lived and indefinite-lived intangible assets write-off | 5,600,000 | ||||
UMass, Dignity and ATN (Combined) [Member] | |||||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||||
Purchase price allocation, intangible assets | 94,900,000 | 94,900,000 | |||
SED Medical Laboratories [Member] | |||||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||||
Purchase price allocation, intangible assets | 19,000,000 | ||||
Goodwill deductible for tax purposes | $28,000,000 |
FINANCIAL_INSTRUMENTS_Details
FINANCIAL INSTRUMENTS (Details) (USD $) | 9 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Jul. 31, 2012 | Dec. 31, 2011 | Jul. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Jul. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | |
Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | Not Designated as Hedging Instrument [Member] | Not Designated as Hedging Instrument [Member] | Not Designated as Hedging Instrument [Member] | Not Designated as Hedging Instrument [Member] | Not Designated as Hedging Instrument [Member] | Not Designated as Hedging Instrument [Member] | Not Designated as Hedging Instrument [Member] | Not Designated as Hedging Instrument [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Senior Notes Due 2016 [Member] | |||
Interest Rate Swaps [Member] | Interest Rate Swaps [Member] | Interest Rate Swaps [Member] | Interest Rate Swaps [Member] | Interest Rate Swaps [Member] | Interest Rate Swaps [Member] | Put Option [Member] | Put Option [Member] | Foreign Currency Forward Contracts [Member] | Foreign Currency Forward Contracts [Member] | Call Option [Member] | Call Option [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Interest Rate Swaps [Member] | |||||||||
Other assets [Member] | Other assets [Member] | Other liabilities [Member] | Other liabilities [Member] | Other assets [Member] | Other assets [Member] | Other current assets [Member] | Other current assets [Member] | Other liabilities [Member] | Other liabilities [Member] | ||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||
Derivative assets | $0 | $830,000 | $5,300,000 | $403,000 | $5,300,000 | $0 | $0 | $403,000 | |||||||||||||||||||
Derivatives liabilities | 26,982,000 | 3,129,000 | 7,770,000 | 0 | |||||||||||||||||||||||
Derivatives fair value, net | -29,452,000 | -1,896,000 | |||||||||||||||||||||||||
Accumulated net loss from designated or qualifying cash flow hedges | 6,200,000 | 6,800,000 | |||||||||||||||||||||||||
Net amount of deferred gains and losses on cash flow hedges that is expected to be reclassified within the next 12 months | 1,300,000 | ||||||||||||||||||||||||||
Description of variable rate basis | six-month LIBOR | one-month LIBOR | six-month LIBOR | one-month LIBOR | one-month LIBOR | ||||||||||||||||||||||
Variable interest rate | 2.30% | 3.40% | 0.54% | 3.60% | 1.33% | 5.10% | |||||||||||||||||||||
Derivative asset designated as hedging instrument fair value on termination | 71,800,000 | ||||||||||||||||||||||||||
Amount to be amortized as a reduction of interest expense | 65,200,000 | ||||||||||||||||||||||||||
Derivative, Notional Amount | 400,000,000 | 550,000,000 | 550,000,000 | ||||||||||||||||||||||||
Derivative asset designated as hedging instrument fair value | 800,000 | ||||||||||||||||||||||||||
Derivative instruments, liabilities | $27,000,000 | $3,100,000 |
STOCKHOLDERS_EQUITY_Narrative_
STOCKHOLDERS' EQUITY (Narrative) (Details) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||
Aug. 31, 2013 | Nov. 30, 2012 | Oct. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | |
Accelerated Share Repurchase Program [Member] | Accelerated Share Repurchase Program [Member] | Accelerated Share Repurchase Program [Member] | Accelerated Share Repurchase Program [Member] | Share Repurchases Open Market [Member] | Share Repurchases Open Market [Member] | Share Repurchases Open Market [Member] | Share Repurchases Open Market [Member] | HemoCue [Member] | Accumulated Translation Adjustment [Member] | |||||||||||||
HemoCue [Member] | ||||||||||||||||||||||
Stockholder's Equity Narrative [Details] | ||||||||||||||||||||||
Currency translation adjustments | $4,592,000 | $22,288,000 | ($26,059,000) | $21,321,000 | $28,800,000 | |||||||||||||||||
Other Comprehensive Income (Loss), before Tax | 3,800,000 | |||||||||||||||||||||
Dividend program | $0.30 | $0.17 | $0.30 | $0.17 | $0.30 | $0.30 | $0.30 | $0.17 | $0.17 | |||||||||||||
Original dividend payable per share | $0.17 | |||||||||||||||||||||
Treasury stock aquired repurchase program | 1,000,000,000 | |||||||||||||||||||||
Share repurchase authorization remaining available | 1,300,000,000 | 871,000,000 | ||||||||||||||||||||
Treasury stock acquired accelerated share repurchase, final purchase price | 350,000,000 | 450,000,000 | 450,000,000 | |||||||||||||||||||
Treasury Stock Acquired Accelerated Share Repurchase Final Shares | 7,600,000 | |||||||||||||||||||||
Treasury stock acquired accelerated share repurchase, final purchase price, per share | $59.46 | |||||||||||||||||||||
Treasury stock shares acquired | 2,200,000 | 832,000 | 3,300,000 | 2,600,000 | ||||||||||||||||||
Treasury stock value acquired cost method | 994,102,000 | 149,996,000 | 132,000,000 | 50,000,000 | 194,000,000 | 150,000,000 | ||||||||||||||||
Treasury Stock Acquired Accelerated Share Repurchase Initial Shares | 4,700,000 | 7,200,000 | ||||||||||||||||||||
Accelerated share repurchase arrangement adjustment, shares | 400,000 | |||||||||||||||||||||
Treasury stock acquired accelerated share repurchase, initial price per share | $59.93 | |||||||||||||||||||||
Treasury stock acquired average cost per share | $59.06 | $60.12 | $58.66 | $58.57 | ||||||||||||||||||
Reissuance of shares for employee benefit plan | 800,000 | 1,249,000 | 2,300,000 | 3,400,000 | ||||||||||||||||||
Percentage increase in the quarterly cash dividend | 76.00% | |||||||||||||||||||||
Annual common stock dividend rate | $1.20 | $0.68 | ||||||||||||||||||||
Treasury stock acquired accelerated share repurchase, initial aggregate cost | 280,000,000 | 405,000,000 | ||||||||||||||||||||
Percentage of total underlying shares under the ASR agreement initially delivered at trade date. | 80.00% | |||||||||||||||||||||
Accelerated Share Repurchase Program, Adjustment | $45,000,000 | $70,000,000 | $45,000,000 |
STOCKHOLDERS_EQUITY_Schedule_o
STOCKHOLDERS' EQUITY (Schedule of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance | $14,320 | ($8,067) | ||
Other comprehensive income before reclassifications | 2,976 | 21,405 | ||
Amounts reclassified from accumulated other comprehensive (loss) income | -25,284 | 630 | ||
Net current period other comprehensive (loss) income | 4,781 | 22,337 | -22,308 | 22,035 |
Balance | -7,988 | 13,968 | -7,988 | 13,968 |
Accumulated Translation Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance | 25,463 | 943 | ||
Other comprehensive income before reclassifications | 2,702 | 21,321 | ||
Amounts reclassified from accumulated other comprehensive (loss) income | -28,761 | 0 | ||
Net current period other comprehensive (loss) income | -26,059 | 21,321 | ||
Balance | -596 | 22,264 | -596 | 22,264 |
Market Value Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance | -4,326 | -1,355 | ||
Other comprehensive income before reclassifications | 274 | 84 | ||
Amounts reclassified from accumulated other comprehensive (loss) income | 2,847 | 0 | ||
Net current period other comprehensive (loss) income | 3,121 | 84 | ||
Balance | -1,205 | -1,271 | -1,205 | -1,271 |
Deferred Loss [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance | -6,817 | -7,655 | ||
Other comprehensive income before reclassifications | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive (loss) income | 630 | 630 | ||
Net current period other comprehensive (loss) income | 630 | 630 | ||
Balance | ($6,187) | ($7,025) | ($6,187) | ($7,025) |
SUPPLEMENTAL_CASH_FLOW_OTHER_D2
SUPPLEMENTAL CASH FLOW & OTHER DATA (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Supplemental Cash Flow Elements [Abstract] | ||||
Depreciation expense | $48,810 | $51,310 | $151,705 | $154,939 |
Amortization expense | 20,159 | 19,961 | 59,278 | 60,361 |
Interest paid | 51,767 | 47,390 | 135,738 | 129,380 |
Income taxes paid | 127,294 | 89,338 | 332,232 | 292,147 |
Assets acquired under capital leases | 0 | 1,215 | 2,411 | 4,170 |
Fair value of assets acquired | 0 | 241,016 | 50,800 | |
Fair value of liabilities assumed | 0 | 0 | 10,962 | 269 |
Fair value of net assets acquired | 0 | 230,054 | 50,531 | |
Merger consideration paid (payable), net | -54 | 6 | -50,159 | 43 |
Cash paid for business acquisitions | -54 | 6 | 179,895 | 50,574 |
Less: Cash acquired | 0 | 0 | 0 | 0 |
Business acquisitions, net of cash acquired | ($54) | $6 | $179,895 | $50,574 |
SUPPLEMENTAL_CASH_FLOW_OTHER_D3
SUPPLEMENTAL CASH FLOW & OTHER DATA (Continuing Operations) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Supplemental Cash Flow and Other Data [Line Items] | ||||
Depreciation expense | $48,810 | $51,310 | $151,705 | $154,939 |
Interest expense, net | -39,968 | -40,809 | -119,754 | -124,661 |
Segment, Continuing Operations [Member] | ||||
Supplemental Cash Flow and Other Data [Line Items] | ||||
Depreciation expense | 48,810 | 50,627 | 151,481 | 152,882 |
Interest expense | -40,657 | -41,451 | -121,722 | -126,583 |
Interest income | 689 | 642 | 1,968 | 1,922 |
Interest expense, net | ($39,968) | ($40,809) | ($119,754) | ($124,661) |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Line of credit | $85 | |
Letters of Credit Outstanding, Amount | 60 | |
Litigation reserves | 5 | 5 |
Self-insurance reserves | $124 | $110 |
DISCONTINUED_OPERATIONS_Detail
DISCONTINUED OPERATIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net revenues | $0 | $29,689,000 | $27,543,000 | $85,907,000 |
Income from discontinued operations before taxes | 2,886,000 | 4,427,000 | 24,960,000 | 8,579,000 |
Income tax (expense) benefit | -480,000 | 114,000 | 10,537,000 | 1,437,000 |
Income from discontinued operations, net of taxes | 2,406,000 | 4,541,000 | 35,497,000 | 10,016,000 |
HemoCue [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | 13,500,000 | |||
NID [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Discrete tax benefits | $19,800,000 |
BUSINESS_SEGMENT_INFORMATION_D
BUSINESS SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting Information [Line Items] | ||||
Percentage of net revenues from the DIS business | 90.00% | 90.00% | ||
Total net revenues | $1,787,140 | $1,821,748 | $5,389,527 | $5,608,797 |
Total operating income | 689,477 | 304,620 | 1,205,192 | 935,791 |
Non-operating expenses, net | -32,142 | -33,645 | -94,880 | -99,015 |
Income from continuing operations before taxes | 657,335 | 270,975 | 1,110,312 | 836,776 |
Income tax expense | 245,874 | 103,978 | 413,702 | 320,266 |
Income from continuing operations | 411,461 | 166,997 | 696,610 | 516,510 |
Income from discontinued operations, net of taxes | 2,406 | 4,541 | 35,497 | 10,016 |
Net income | 413,867 | 171,538 | 732,107 | 526,526 |
Less: Net income attributable to noncontrolling interests | 8,724 | 8,456 | 25,717 | 26,621 |
Net income attributable to Quest Diagnostics | 405,143 | 163,082 | 706,390 | 499,905 |
DIS business | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 1,646,809 | 1,686,908 | 4,970,366 | 5,192,451 |
Total operating income | 293,540 | 349,671 | 886,685 | 1,071,188 |
All other operating segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total net revenues | 140,331 | 134,840 | 419,161 | 416,346 |
Total operating income | 22,461 | 11,251 | 53,443 | 42,055 |
General corporate expenses [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total operating income | $373,476 | ($56,302) | $265,064 | ($177,452) |